Corrective Action Plans

2023-010 – Material Weakness & Noncompliance, Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance: FEMA Disaster Grants (ALN 97.036) Corrective Action: Develop an improved detailed tracking system for force account labor and materials. Require contemporaneous documentation of payroll and invoices tied to FEMA projects. Grants Officer to oversee federal disaster recovery funds. Timeline: New procedures adopted October 2025; effective for any new FEMA claims. Responsible Party: Grants Officer in coordination with relevant departments

2023-3 Allowable costs-credit cards – Assistance Listing Number 11.307 Recommendation: We recommend that management implement a more robust internal control system to ensure all federal expenditures are supported by proper documentation. Explanation of disagreement with audit finding: We believe the costs referred to were indeed for allowable expenses under the federal program. We will however start to maintain all original source documentation. Action taken in response to finding: Management has required all original source documentation be maintained regardless of dollar amount. Name of contact person responsible for corrective action: Anthony Wigglesworth, Executive Director Corrective action plan has been implemented in 2025.

FINDING 2023-003 Finding Subject: COVID-19-Education Stabilization Fund - Reporting Summary of Finding: The School Corporation was required to submit an annual data report to the Indiana Department of Education (IDOE) via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports and two ESSER III reports, for a total of six reports. The annual data reports were prepared by the Treasurer. Due to the lack of effective internal controls one of the six annual data reports was not supported by the School Corporation’s records. For the ESSER III, Year 2 report, which covered the period of July 1, 2021 to June 30, 2022, total expenses per the report were $688,778. However, the School Corporation’s ledger had total expenses for the award, for that time period, of $784,638. The lack of controls and noncompliance were isolated to the ESSER III, Year 2 report. Contact Person Responsible for Corrective Action: Leslie Rittenhouse Contact Phone Number and Email Address: 765-395-3341 Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: As the finding and error occurred in one entry of one report the district will continue the practice of having a second party review financial system data against report entries. The error in this instance was a misunderstanding of the entry. A secondary review of reporting guidelines and entries will take place prior to submission of any ESSER Data Reporting. Anticipated Completion Date: Upon the next submission of ESSER Data reporting.

The Auditor’s Office will work with the Commissioner’s Office and Prosecutor’s Office to implement the required policies.

Finding Number 2023-018 Subject Heading (Financial) or AL no. and program name (Federal) 20.509 - Formula Grants for Rural Areas Planned Corrective Action We concur with the auditor’s recommendations. As of SFY 2025, OMPT has revised its procedures to strengthen internal controls and ensure payroll expenditures are charged to the appropriate grant. A project was established for each FTA grant program to receive payroll charges based on actual charges. Training was provided to OMPT staff on June 28, 2024. Anticipated Completion Date 7/1/2025 Responsible Contact Person Eric Rose/Bobby Parkinson

Corrective Actions Taken or Planned Management concurs with the finding and is currently in the process of updating the accounting system to incorporate grant-specific specific tracking codes to further align with federal reporting standards. As part of a layered approach to internal controls, Excel worksheets will continue to be used as a supplementary monitoring tool, providing an additional cross-check to the system-generated reports. Responsible person: Jackie Ramirez, Operations & Finance Associate Director Expected Implementation date: November 20, 2025

2023-005 – Inadequate Policies and Procedures (Significant Deficiency in Internal Controls over Compliance) Recommendation: We recommend the College establish the required written procedures for federal monies and have them available to all personnel who work with federal programs. Action Taken: The 2022-2023 fiscal year was entirely encompassed by the separation Memorandum of Understanding (MOU) of March 2022 and then the final release settlement in December 2023. It is important to note that Southeast New Mexico College was a newly established independent community college, having formally separated from New Mexico State University (NMSU) as of April 2022. During this transition period, many administrative processes, including federal grant compliance procedures, were in the process of being developed, transitioned, and implemented independently from NMSU systems. As a result, certain policies, procedures, and documentation processes were not yet fully established or operational at the time of the audit. Unfortunately, due to the untimely receipt of the completed audit report, the College did not have the opportunity to review and begin addressing several of the findings until well after the end of the audit period. While the College is committed to corrective action, the delayed delivery of the audit limited the ability to implement corrective measures earlier. The College is working proactively to ensure that these issues are resolved going forward. Corrective Action Taken / Planned: • Policy Development o The institution will develop comprehensive written policies and procedures to address compliance requirements related to 2 CFR 200, Subparts D and E of the Uniform Guidance and approved by institutional leadership by July 31, 2025. • Policy Review and Approval o Draft policies will be reviewed by VP of Business and Finance and approved by institutional leadership by August 31, 2025. • Training o Relevant personnel will be trained on the new policies and procedures to ensure consistent understanding and compliance. • Implementation o The institution will fully implement the new procedures by August 31, 2025, and will ensure all departments involved with federal awards are following them. • Ongoing Review: o Policies and procedures will be reviewed annually, and updates will be made as necessary to ensure continued compliance with federal regulations. Due Date of Completion: August 31, 2025 Responsible Official: Carolyn Kasdorf, Vice President for Business and Finance (or appropriate official), Karla Volpi, Dean of Business and Finance, Rebecca Silva, Director of Finance, Lisa Ryan, Restricted Funds Manager

2023-003 Internal Controls and Compliance over Allowable Costs (Significant Deficiency) Recommendation: Review process should be reevaluated and employees retrained to ensure that only actual hours worked from timesheets are charged to grant. Corrective Action: The Finance Department was restructured in August 2024 and the finance staff involved in payroll preparation and review were trained in Allies in Hope’s processes on recording payroll costs to the grants and other funding sources. Responsible Parties: Robert Marchbanks, Chief Financial Officer Date Corrected: August 2024

The Municipality Administration is committed to identify the control of deficiency that allowed for the deficiency to happen. Additionally, the administration is committed to implementing the correct control sturcture to prevent the situation from happening in the future. The Municipality Management will continue the search of supporting documentation of the highlighted transactions. New proposed contrl strucure to be evaluated by Municipality for adequacy. The Municipality ensures the compliance with the Disaster Grants disbursement policies.

The Municipality Administration is committed to identify the control of deficiency that allowed for the deficiency to happen. Additionally, the administration is committed to implementing the correct control structure to prevent the situation from happening in the future. The Municipality Management will continue the search of supporting documentation of the highlighted transactions. New proposed control structure to be evaluated by Municipality for adequacy. The Municipality ensures the compliance with the Coronavirus State and Local Fiscal Recovery Funds Assistance disbursement policies.

In regard to the village not having a written policy in place for the requirements outlined in the Code of Federal Regulations regarding the villages received Coronavirus funding, as previously stated the village does not routinely receive federal funds and was not aware at the time of having such a policy. The village is currently working with the village solicitor to rectify this issue. A new policy will be implemented to resolve this issue. – Mayor M. Shane Patrone

2023-001 Supporting Documentation and Approval of Disbursements Contact Person – Erin Metcalf, Finance Director Description of Corrective Action – Since that time, the organization has developed an invoice and payment process. This ensures proper disbursement and approval processes and supporting documentation are obtained for expenses incurred. We will ensure that the expenses for the grants are reviewed monthly and will make the correct adjustments on a timely basis to ensure that the funds are approved and paid in accordance with the grant documents. Completion Date – June 30, 2025 Root Cause – New program procedures were not in place

VIEWS OF RESPONSIBLE OFFICIALS It is recommended, among other things, to establish internal controls that provide certainty, effective monitoring, data validation, and accountability for those employees who execute the reporting processes. To this end, the personnel responsible will be convened and written processes will be issued to expedite the information requests and ensure their rapid submission. This will be in accordance with both state and federal regulations. Once the agreements are finalized, they will be submitted to the auditing firm. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Socioeconomic Development of the Family (ADSEF, by its Spanish Acronym)

VIEWS OF RESPONSIBLE OFFICIALS The Department of the Family has initiated several corrective actions. Since the first months of Fiscal Year 2024, the Accounting Department has started a review of unliquidated obligations on a monthly basis, canceling any invalid obligations and reporting them in the FY 2024 SSA-4513 report. In fact, Budget and Finance staff had multiple working sessions with PR-DDS personnel to identify and write-off unliquidated obligations that were no longer current. Also, we conducted training for finance and budget staff on accounting controls and administrative cost reporting to ensure compliance with federal regulations. Includes a review of 2 CFR Part 225 on allowable costs (direct allowable and indirect allocable, the difference between direct and indirect costs), reasonable and allocable costs. In addition, we addressed issues of unliquidated obligations (Consultative Examinations (CE) and Medical Evidence of Record (MER), among others). Nevertheless, beginning the first quarter of FY2026, following recent staffing changes in the Finance Department, we are in the process of re-training our team to ensure that unliquidated obligations are reviewed every month and invalid commitments are promptly canceled. To reinforce these practices, the Department of the Family will also deliver a series of new workshops to relevant staff outlining the procedures and best practices for SSA-4513 preparation and POMS compliance. IMPLEMENTATION DATE September 2025 RESPONSIBLE PERSON Office of the Secretariat

VIEWS OF RESPONSIBLE OFFICIALS Review the accounting system to ensure consistency with SF– 425 reporting. Establish a protocol for the review and approval of financial reports. Designate a financial compliance officer to validate reports prior to submission. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Families and Children (ADFAN, by the Spanish Acronym)

VIEWS OF RESPONSIBLE OFFICIALS ADSEF has controls and procedural manuals related to data collection. As part of the digitization project process, ADSEF seeks to standardize procedures and ensure the organization and proper location of documents within the files. Annexes IMPLEMENTATION DATE Up to Date RESPONSIBLE PERSON Administration for Socioeconomic Development of the Family (ADSEF, by its Spanish Acronym) AUDITORS’ COMMENT ADSEF did not provide us with a manual describing the data collection process as requested during the auditing procedures. An unsigned and undated Manual was attached to the Corrective Action Plan. Also, ADSEF was required to provide us with the corresponding participant worksheet appendix and the physical file to corroborate the information included in the report. ADSEF provided us with evidence of the hand-completed forms; however, we were not provided with the physical files to validate the information included in each document. This represents a scope limitation.

VIEWS OF RESPONSIBLE OFFICIALS It is recommended, among other things, to establish internal controls that provide certainty, effective monitoring, data validation, and accountability for those employees who execute the reporting processes. To this end, the personnel responsible will be convened and written processes will be issued to expedite the information requests and ensure their rapid submission. This will be in accordance with both state and federal regulations. Once the agreements are finalized, they will be submitted to the auditing firm. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Socioeconomic Development of the Family (ADSEF, by its Spanish Acronym)

VIEWS OF RESPONSIBLE OFFICIALS It is recommended, among other things, to establish internal controls that provide certainty, effective monitoring, data validation, and accountability for those employees who execute the reporting processes. To this end, the personnel responsible will be convened and written processes will be issued to expedite the information requests and ensure their rapid submission. This will be in accordance with both state and federal regulations. Once the agreements are finalized, they will be submitted to the auditing firm. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Socioeconomic Development of the Family (ADSEF, by its Spanish Acronym)

VIEWS OF RESPONSIBLE OFFICIALS Based on the audit report submitted, it is recommended that the Cash Management Section Procedures Manual be amended, and that the segregation of employee duties be identified. To this end, work has begun on reading and amending the Manual. It will be updated considering both state and federal regulations. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Socioeconomic Development of the Family (ADSEF, by its Spanish Acronym)

VIEWS OF RESPONSIBLE OFFICIALS In Process Develop an operational procedures manual for each program under Uniform Guidance. Include flow outlining key processes. Assign personnel responsible for each function and establish periodic review mechanisms. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Families and Children (ADFAN, by the Spanish Acronym)

VIEWS OF RESPONSIBLE OFFICIALS It is recommended, among other things, to establish internal controls that provide certainty, effective monitoring, data validation, and accountability for those employees who execute the reporting processes. To this end, the personnel responsible will be convened and written processes will be issued to expedite the information requests and ensure their rapid submission. This will be in accordance with both state and federal regulations. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Socioeconomic Development of the Family (ADSEF, by its Spanish Acronym)

VIEWS OF RESPONSIBLE OFFICIALS It is recommended, among other things, to establish internal controls that provide certainty, effective monitoring, data validation, and accountability for those employees who execute the reporting processes. To this end, the personnel responsible will be convened and written processes will be issued to expedite the information requests and ensure their rapid submission. This will be in accordance with both state and federal regulations. Once the agreements are finalized, they will be submitted to the auditing firm. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Socioeconomic Development of the Family (ADSEF, by its Spanish Acronym)

VIEWS OF RESPONSIBLE OFFICIALS Develop and deliver a comprehensive training program for all relevant staff (finance staff, program staff interacting with subgrantees, procurement staff) on the requirements of 2 CFR 200, with a particular focus on subgrantee monitoring and procurement standards. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Doris Jiménez, Finance Director Administration for the Care and Comprehensive Development of Children (ACUDEN, by its Spanish Acronym)

VIEWS OF RESPONSIBLE OFFICIALS It is recommended, among other things, to establish internal controls that provide certainty, effective monitoring, data validation, and accountability for those employees who execute the reporting processes. To this end, the personnel responsible will be convened and written processes will be issued to expedite the information requests and ensure their rapid submission. This will be in accordance with both state and federal regulations. Once the agreements are finalized, they will be submitted to the auditing firm. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Socioeconomic Development of the Family (ADSEF, by its Spanish Acronym)

Finding 2023-003 - Material Weakness in Internal Control over Compliance and Material Noncompliance (Qualified Opinion) - Inadequate Tracking of Expenditures and Retention of Documentation: Activities Allowed or Unallowed: Allowable Costs/Cost Principles and Reporting (A/B/L) for Assistance Listing Number 19.510 and 93.567 Criteria: The Code of Federal Regulations (CFR) Section 200.510(b) states in part, “The auditee must also prepare a schedule of federal expenditures for the period covered by the auditee’s consolidated financial statements which must include the total Federal awards expended as determined in accordance with 200.502.” Also, in accordance with CFR Section 200.302(b) - Financial Management, the auditees financial management system must provide 1) identification of all federal awards received and expended; 2) accurate, current, and complete disclosure of the financial results of each federal award or program; 3) records that identify adequately the source and application of funds for federally‐funded activities; 4) effective control over, and accountability for, all funds, property, and other assets; 5) comparison of expenditures with budget amounts for each Federal award; 6) written procedures to implement the requirements of section 200.305 and; 7) written procedures for determining the allowability of costs in accordance with Subpart E and the terms and conditions of the Federal award. Recipients of federal awards must submit accurate, complete and timely financial and performance reports. The Organization should have internal controls designed to ensure compliance with those provisions. The Organization should retain sufficient documentation such as invoice and allocation support for expenditures to retain documentation for audit purposes. Condition: During detail testing of expenditures, it was noted that the Organization did not maintain adequate documentation to support how certain costs were allocated to the federal program. Several transactions lacked sufficient detail, such as invoice or expense reimbursement form. Several expenditures selected for testing did not obtain sufficient approval by an individual at the Organization. It was noted that quarterly reports provided to the federal program were not reviewed by an individual at the Organization prior to submission to ensure accurate report of expenditures. Cause: The Organization does not have an adequate system in place to ensure quarterly reports have sufficient supporting documentation, proper approval/review, and accurate reporting prior to submission. Responsibilities for expenditure tracking were not clearly assigned, and there was no formal review process in place. The Organization is not following their Document Retention Policy. Effect: The effect of this condition increases the possibility that quarterly financial reports are misstated or inaccurate and increase the risk of noncompliance with federal requirements. The effect of this condition also increases the risk that expenditures are unallowable per the grant, federal regulations, or cost principles due to the insufficient support of proper approval retained. Questioned costs: None Repeat Finding: Yes - 2022-004 Recommendation: Policies and procedures should be in place to ensure quarterly financial reports are properly supported, accurately reported, and adequately approved and reviewed. A formal review process should be established to ensure compliance. The Organization should following the Document Retention Policy that was put in place and required by law. Management Response: There is no disagreement with the audit finding. Management has taken steps to address these deficiencies in fiscal year 2025 including but not limited to: the implementation of a new accounting system that includes document retention and review/sign off logs, the engagement of a third-party CPA firm to provide client advisory and accounting services and the review and updating of accounting policies and procedures for best practices. Responsible Person for Corrective Action Plan: Marc Hall, Director of Operations Implementation Date for Corrective Action Plan: Fiscal year 2025