Corrective Action Plans

2023-002 Compliance and Internal Controls over Allowable Costs (Significant Deficiency) Assistance Listing Number 64.033 VA Supportive Services for Veteran Families, VA Supportive Services for Veteran Families – Shallow Subsidy, and VA Supportive Services for Veteran Families – Legal Services 2021-2022 and 2022-2023 Funding U.S. Department of Veteran Affairs Recommendation: The Agency should update its payroll allocation spreadsheets to agree with the approved timesheets per payroll period to ensure only allowable payroll costs are charged to grants. Corrective Action: The Agency had a turnover of finance staff in 2022-23 that created an inconsistent review of the allocation spreadsheet. CRR did not receive reimbursements from any grantor due to an error in the allocation calculations. The allocation spreadsheet and timesheets will be reconciled as part of the monthly close. Responsible Party: Senior Accountant and Director of Human Resources Date Expected to be Corrected: Immediately If the U.S. Department of Treasury and U.S. Department of Veteran Affairs have any questions regarding this plan, please contact Nkechi “Nikki” Agwuenu, new CEO, at 713.754.7083

Recommendation: We recommend that the Authority implements a control to ensure that the preliminary SEFA is mostly accurate so that the correct programs are tested. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: In order to facilitate timely and accurate preparation of the SEFA for the Harris County Housing Authority (HCHA) March 31 fiscal year end, a reconciliation of pass-thru revenues in the general ledger will be performed. In addition, HCHA will make sure to include grant-specific coding in the charts of accounts in order to identify specific and eligible items. The HCHA will also review grants included in the previous year’s SEFA to determine if they should be included in the current year SEFA. In situations where expenditures reported in the SEFA are not the same as the expenditures reported in the general ledger (due to outstanding loan balances, timing of grant awards, expenditures incurred in a prior period, etc.), a reconciliation will be provided to the as notes to the SEFA. Name(s) of the contact person(s) responsible for corrective action: Melissa Quijano, Executive Director Planned completion date for corrective action plan: March 31, 2024

Finding 2023-001 Federal Agency Name: US Department of Health & Human Services, California Department of Social Services Program Name: Child Care and Development Fund Cluster CFDA #93.575 Finding Summary: The Commission has not established written procedures for determining allowability of costs in accordance with Subpart E- Cost principles or the conditions of the Federal award. Responsible Individuals: Debora Dickerson-Sims, Chief Financial Officer Corrective Action Plan: Review current policies and procedures to revise or develop new procedures for determining allowability of costs in accordance with Subpart E – Cost principles or the conditions of the Federal award. Anticipated Completion Date: June 30, 2024

The Hannibal School District received millions of one-time federal grant monies to assist with expenditures incurred as a result of the effects of the coronavirus pandemic. Although these funds were hugely helpful, minimal guidance was available. This is not a finding that has been presented to us in the past. The school district has received federal and state grants annually that are reconciled to the appropriate project codes and this process will be diligently followed as in prior years. For example, the district was awarded the Immediate Responses Services grant in Fall 2023. The expenditure project codes for this grant have been provided by grant guidance and any and all expenditures will be coded using these expenditures codes. This should prevent any need for future journal entries moving forward. This process is an example of the systematic process that will be followed for all grants.

This following is submitted as our management response to the audit finding regarding Allowable Costs Reporting in the District’s FY23 Audit. At the close of Fiscal Year 2023, the District submitted a payment request for federal ESSER reimbursement, encompassing eligible employee expenses spanning multiple years in accordance with ESSER guidelines. However, an administrative oversight became apparent, as the expense codes and ASBRs for the relevant years had not been amended to align with the represented expenditures. To address this, the District is undertaking a meticulous correction process through adjusting journal entries. This corrective action will ensure that the expense codes accurately reflect the corresponding project codes and Fiscal Year expenditures. Simultaneously, the ASBRs for the affected years will be resubmitted, aligning with the requisite financial standards. Looking ahead, the District is instituting a proactive measure to prevent recurrence. The superintendent, or a designated district representative, will verify that the District's accounting software records, as compiled by the District Bookkeeper, impeccably mirror the accurate totals for expense codes, incorporating the requisite accounting codes, including project codes. This validation will be a prerequisite before any future reimbursement request for federal funds is submitted, ensuring a heightened level of precision and compliance in financial reporting. These measures underscore the District's commitment to fiscal accountability, rectifying oversights, and fortifying internal controls to uphold the integrity of financial processes. The district will begin immediately implementing the revised proactive measures and is in the process of rectifying the noted issues with corrective journal entries. This process will be updated prior to January 15, 2024. Should you need anything further from the district, please do not hesitate to contact me.

Background: One repeat finding from the 2022 fiscal year audit was identified on the Schedule of Expenditures and Federal Awards during 2023 fiscal year end audit conducted by Aldrich CPAs + Advisors LLP (Aldrich). For fiscal year 2022, Aldrich performed an audit on the major program Disaster Grants – Public Assistance (Presidentially Declared Disasters) for the monies received from the Department of Homeland Security passed through the Oregon Office of Emergency Management awarded to the City for the February 2021 Ice Storm. Management recognizes the importance of adequate procedures and internal control oversight and has rectified this finding. Management’s response and corrective plan of action for the finding follows. Finding 2023-001: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition: City of Oregon City has not developed written procedures for determining the allowability of costs. Cause: Administration did not have written procedures for determining the allowability of costs. Effect: Unallowable costs could be charged to the program. Questioned Costs: None   Perspective: Written procedures for determining the allowability of costs is integral to the proper design of internal controls. However, the results of audit procedures did not detect any costs which are not allowable charged to the program. Recommendations: Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Responsible Official: Matt Zook, Finance Director Views of Responsible Officials: Management understands the requirement for written procedures for determining the allowability of costs. A formal policy and procedure was approved and adopted August 22, 2023. The opportunity to identify this finding arose due to new management staff and a new audit firm engage with the June 30, 2022 audit, and we appreciate the opportunity to improve compliance.

Corrective Action Plan: AlaHA will accomplish the following: 1) Send guidance to hospital systems with multiple facilities reported on their 941s that they should retain general ledger detail reconciliations to support the funds received. 2) Request the hospital involved in the exception cited for not having submitted general ledger evidence submit additional support for the reconciliation they submitted. 3) Should a similar tranche of funds become available in the future, AlaHA will ensure disbursements are not made before receipt of general ledger evidence to support the amount reported by the hospital. Target Date: For items 1 & 2 in the corrective action plan, November 6, 2023.

Albuquerque Health Care for the Homeless, Inc.’s Finance Team will work to ensure that Policy and Procedure 4011 regarding the use of corporate credit cards is followed. All management staff that have organizational corporate cards will be retrained by the Accounting Manager on the importance of obtaining itemized receipts. In the event a receipt is lost, regardless of verifying the legitimacy of the purchase with the direct supervisor, the finance team will ensure that the expense is not charged to any federal funding. Persons Responsible: Leon Paboucek, Accounting Manager Estimated Completion Date: October 25, 2023

I am acknowledging the finding of the Federal Audit team in which an error in my spreadsheet was documented resulting in requesting a recurring expenditure on two different pay requests. The correction was made the day of the audit through coding other expenditures matching the qualifying expenditures. In the future, the district spreadsheets will include review by the bookkeeper and superintendent to ensure the fund pay requests are correct and not repeated. By multiple review and the addition of PO number and date of pay request this will easily define a possible "doubling up" of items for a pay request. This was one finding and all other accounts reviewed were correct and accurate. Additional expenditures were corrected and easily matched the grant funds obtained through reimbursement. The new procedure will begin immediately. Tara Lewis Superintendent

Management is currently confident with the abilities of the accounting staff to prepare interim financial statements. The District has also accepted the additional risk associated with the auditor drafting year-end financial statements including the notes to the financial statements. Management will review, approve, and take responsibility for the financial statements.

Findings: Major Federal Program Audit Significant Deficiency Written Uniform Guidelines Policies and Procedures Recommendation: We recommend Crowhaven Apartments, Inc. draft and adopt written procedures in accordance with Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and are in process of developing and implementing the appropriate policies and procedures.

FINDINGS- MAJOR FEDERAL AWARD PROGRAMS AUDIT Material Weakness U.S. Department of Education- Education Stabilization Fund Under the Coronavirus Aid, Relief and Economic Security Act- AL 84.425 Finding No.: 2023-007 Condition: The District did not maintain adequate financial reocrds in accordance with 2 CFR 200.302(b)(3). Recommendation: The District should maintain adequate financial reocrds capable of adequately identifying the source and application of grant funds in accordance with 2 CFR 200.302(b)(3). Action Taken: The District concurs with the recommendation. The District will work to maintain records capable of adequately identifying the source and application of grant funds.

The city will implement procedures to ensure preparation of the SEFA and retention of all required federal grants documentation , including ARPA reporting.

The city will strengthen controls over federal expeditures by implementing procurement procedures, documentation standards, and eligibility verification processes consistent with federal requirements.

2022-012 Financial Statement Reconciliations/Tie-In Procedures Material Weakness Recommendation: The Housing Authority should adopt written reconciliation and tie-in procedures into its financial policies and procedures manual. These policies should require timely reconciliations to take place as defined under policy. Action Taken: The Housing Authority agrees with this finding and will implement this recommendation within 120 days of this audit report.

Management agrees with the finding and is in the process of revising internal controls to address SEFA preparation.

Department of Housing and Urban Development and Department of Veterans Affairs 2022-008 Federal Program Name: Emergency Solutions Grant Program and VA Homeless Providers Grant and Per Diem Program Assistance Listing Number: 14.231 and 64.024 Recommendation: We recommend the Organization develop a system of internal controls to ensure that salaries and related payroll expenses are tracked to reasonably reflect the actual time spent working on the programs. In addition we recommend that management retain all documents including evidence of review and approval for all expenditures of federal funds until the latter of the legally required retention period or completion of required audits. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management has implemented internal control procedures to strengthen payroll allocation practices and documentation retention for federally funded expenditures. The Organization has established a process to ensure that salaries and payroll-related costs charged to federal programs are supported by appropriate time tracking and allocation documentation that reasonably reflects actual time worked on each program. Supervisory review and approval requirements have been implemented to validate payroll allocations and supporting documentation. Additionally, the Organization has reinforced documentation retention standards by requiring retention of all federal expenditure support, including invoices, approvals, reconciliations, and evidence of review, in accordance with federal retention requirements and audit availability standards. Name(s) of the contact person(s) responsible for corrective action: Ryan Ross, Executive Director Planned completion date for corrective action plan: March 31, 2026

Recommendations: Management should enhance its internal control procedures to ensure all disbursements and payroll transactions charged to the federal program are supported by complete and properly approved documentation consistent with 2 CFR Part 200 and the operating contract. This includes retaining invoices, approvals, check copies, personnel files, and pay-rate authorizations. Management should assign clear responsibility for recordkeeping, implement periodic reviews for completeness, and provide staff training on documentation and retention expectations. Views of responsible officials and planned corrective actions: Management agrees with the findings and will ensure that all original supporting documents are maintained at the organization’s office in a secure location for a minimum of three years after an independent audit, and that every transaction is properly authorized and documented before expending monetary resources. Anticipated Completion Date: May 1, 2024

CORRECTIVE ACTION PLAN (Concerning Finding 2022-007) Contact Person Responsible for Corrective Action: Carrie Castonguay, Town Manager Corrective Action: The Treasurer, Town Manager and Select Board has taken the following actions to address finding 2022-007 The current Town Manager was appointed by the Select Board on August 14, 2023, and had no knowledge of this material weakness. She is an experienced Manager and has drafted a new Procurement Policy that addresses this deficiency. This policy was approved and implemented by the Select Board on January 23, 2024. Anticipated Completion Date: Completed January 23, 2024.

Recommendation We recommend that management: ▪ Implement procedures requiring complete supporting documentation for all costs charged to federal awards ▪ Ensure costs are reviewed for allowability, reasonableness, and allocability prior to recording ▪ Establish and document formal cost allocation methodologies ▪ Require approval and documentation of all journal entries affecting federal programs ▪ Provide training to staff on Uniform Guidance cost principles (2 CFR 200 Subpart E) ▪ Conduct periodic internal reviews to ensure compliance

Recommendation We recommend that management: ▪ Implement formal procedures to ensure complete documentation of all program activities ▪ Maintain records demonstrating that activities are authorized and aligned with program objectives ▪ Establish centralized recordkeeping and retention policies ▪ Perform ongoing monitoring and review of program activities ▪ Train staff on federal compliance requirements and documentation expectations

Item 2022.006 - Cash Manaaement Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Repeat Finding Yes Action Taken Island Health Care will take the following actions to address this recommendation: • Prepare written procedures to document the process for Drawdown requests, including the initial review, documented approval process, submission to the funding agency, and the recording of the drawdown in the accounting system immediately after submission • Maintain detailed records of all drawdown requests, supporting documentation, approvals, and correspondence • Conduct regular internal reviews of drawdown activities to ensure compliance with procedures and maintain audit trail • Review drawdown procedures annually to ensure they remain current with funding agency guidelines and best practices

Management acknowledges this finding and agrees that during the period under audit-while the organization was experiencing rapid growth and increased program activity-our documentation and approval processes did not consistently keep pace with operational demands. Since that time, we have taken significant steps to strengthen accounting procedures and internal controls, reinforce our invoice approval policies, and ensure all expenditures charged to Federal awards are properly reviewed and authorized prior to processing. We have enhanced our Accounts Payable workflow by implementing standardized process approval requirements, added additional leadership staffing and oversight within the Finance and Accounting team and provided targeted training to all personnel involved in invoice processing to ensure understanding of Federal cost principles and documentation standards. These corrective actions have improved our control environment since the audit period, and management is committed to continuing to develop and maintain strong financial controls and to prevent recurrence of this issue.

Condition: The District has not adopted written policies or procedures regarding procurements or the determination of allowable costs in accordance with the Uniform Guidance. Criteria: 2 CFR 200.302(b)(7), 2 CFR 200.318(a), and 2 CFR 200.319(d). Cause of Condition: Unfamiliarity with requirements stated in 2 CFR 200 of the Uniform Guidance.Effect of Condition: Effect is a state of noncompliance which may impact future grant awards or failure to identify and reject un-allowed costs charged to grant programs. Questioned Costs: none. Recommendation: Draft and adopt policies and procedures to become compliant with Uniform Guidance. Corrective Action Plan: Agency policies and procedures, including a guidance template will be clearly defined to ensure compliance with Uniform Guidance. All department managers and administrative staff will attend training and routine follow-up training on purchasing policies and procedures. A sign in sheet will be required for those attending. Contact Person: Grant Accounting Specialist Anticipated Completion Date: 01/31/2026

Condition: 1- Gross payroll calculations could not be supported for several employees tested due to missing pay rate support. 2- Gross payroll calculations could not be supported for several employees tested due to missing timesheets. 3- Classification errors were noted in 2 of 11 periods tested (34 of 86 individuals tested). Criteria: Generally accepted control procedure and 2 CFR 200.302 Cause of Condition: Missing documentation resulted in conditions 1 and 2. The cause of the classification differences between the accounting department’s payroll worksheet and the general ledger postings are unknown. Due to staff turnover, the cause could not be determined. Effect of Condition: Employees may be paid at unapproved rates or for unworked time. Classification errors may result in over/under charging grant programs.Questioned Costs: Condition 1: Known: $ 412.54 Questioned: $ 5,580.24 Condition 2: Known: $ 20,357.31 Questioned: n/a Condition 3: Known: $ 91,593.05 Questioned: n/a Recommendation: We recommend: - Records be retained to support all transactions recorded to the general ledger. - Department managers review and approve all payroll-related source documents (personnel action forms, timesheets, etc.) prior to finalizing the payroll run. - Administrative manager review and approve payroll worksheet prior to finalizing the payroll run and posting to the general ledger. Corrective Action Plan: Beginning January 2025, the District strengthened payroll documentation and review procedures to ensure compliance with 2 CFR 200.302. Personnel Action Forms and timesheets will be required, approved by department managers, and retained electronically for all employees. The Administrative staff reviews and approves payroll worksheets prior to posting to the general ledger. All department managers and administrative staff will attend training and routine follow-up training on purchasing policies and procedures. A sign in sheet will be required for those attending. Contact Person: Grant Accounting Specialist Anticipated Completion Date: 01/31/2026