Corrective Action Plans

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

Condition: Support for expenditure transactions does not indicate approval from an appropriate manager with authority over the department/program. Auditor tested 57 transactions of which 17 did not include evidence of approval (excluding routine expenditures such as utility bills). Criteria: Generally accepted control procedures and 2 CFR 200.302. Cause of Condition: Initiating procurement transactions without proper approval or failing to document that approval was obtained prior to initiating the transaction. Effect of Condition: Unapproved charges, including potential unallowable costs, may be incurred and charged to the District, including federal or state programs. Additionally, the potential exists for fraud or errors to go undiscovered and uncorrected in a timely manner. Questioned Costs: none.Recommendation: We recommend that a purchase order or purchase requisition system be devised to ensure all expenditures, including those paid for by credit cards, are approved by an appropriate manager prior to making the purchase. Corrective Action Plan: Beginning January 2026, all purchases, including credit card transactions, will require Purchase approval by the Program Manager and administration prior to purchase. A Purchase Order tracking process will be implemented in Blackbaud Financial Edge NXT by April 2026 to ensure all expenditures are properly documented. 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. The Financial Procedures Manual will be created and updated by June 2026 to include revised procurement approval requirements. Contact Person: Grant Accounting Specialist Anticipated Completion Date: 06/01/2026

Condition: The District’s accounts payable process does not have a procedure that clearly documents when and by whom the expenditure was authorized nor does the process include cut-off procedures to apply the expenditure to the proper period. Criteria: Controls should be in place to ensure that expenses are recorded in the period in which the expenses are incurred and to ensure that staff with the appropriate level of authority approves the transaction. 2 CFR 200.302. Cause of Condition: Procurement transactions are initiated by several individuals within the District at times without review and approval by a District or program supervisor. Procurement transactions are not entered into the account system with the date the liability was incurred. Effect of Condition: Expenditures could be processed and paid without proper authorization and posted to an improper period. Questioned Costs: none. Recommendation: Develop procedures to ensure purchases are authorized prior to recording and paying the invoice. The procedures may include development of lines of authority whereby an individual is approved to authorize purchases up to a particular dollar threshold and require that all invoices/documentation be signed/initialed by authorized approver. Accounts payable process should include cutoff procedures to ensure expenditure is recorded in period that liability is incurred. Corrective Action Plan: Policies and procedures will be clearly defined both administratively and within each department to ensure purchases are authorized prior to recording and paying the invoice. The procedures will include development of lines of authority for approval and to authorize purchases, including up to a particular dollar threshold where applicable. The procedures will also require that all invoices/documentation, purchase order forms and packing slips be signed/initialed by authorized approver. Accounts payable process will include cutoff procedures to ensure expenditure is recorded in period that liability is incurred. 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

Management will enforce existing internal control procedures and train staff to maintain appropriate documentation.

Will have a policy for FEMA allowable expenditures in the future

Planned Corrective Action: The Organization will implement and reinforce a comprehensive system for retaining all invoices, payment records, and supporting documentation associated with federal awards. Additionally, the Organization will create and maintain a clear record retention policy. Invoice and Payment Documentation: • All invoices related to the federal program will be promptly reviewed and approved by the appropriate personnel to ensure they reflect allowable costs under the specific terms and conditions of the award. • Management will establish clear procedures for the proper recording and classification of payments, ensuring that they are linked directly to the corresponding federal program expenses. • All supporting documentation (e.g., purchase orders, contracts, receipts) will be retained in electronic formats within the accounting system, in accordance with the Organization’s record retention policy, ensuring availability for future audits or reviews. Retention and Accessibility: • The Organization will maintain a secure, organized filing system for all invoices and payments, ensuring that each record is easily accessible for audit purposes. This system will include electronic records that are stored in a centralized database, with restricted access to authorized personnel. • Retained invoices and payment documentation will be kept for the full duration required by federal regulations, typically for a period of at least seven years after the final expenditure report for the federal award has been submitted, or as otherwise required by the specific federal agency. Periodic Reviews and Monitoring: • To ensure ongoing compliance, Management will perform periodic reviews of federal program expenditures and documentation. This will include random sampling of invoices and payment records to confirm that they are complete, accurate, and in compliance with federal regulations. • In the event of any discrepancies or issues identified during these reviews, Management will take immediate corrective action to address the issue and prevent recurrence. By maintaining thorough records of all invoices and payments, the Organization aims to not only comply with federal audit requirements but also to ensure transparency, accountability, and sound financial management of federal funds.

Management will ensure that all nongrant expenditures are kept to a minimum until the cash balance of NVT is in excess of the unearned grant revenue and restricted fund balance. A large part of this problem in the current year was the amount of money paid to the Village’s accountants/consultant in prior years. This has been resolved and the new accountant’s fees are much more in line with reasonable amounts.