Corrective Action Plans

The Board agrees with this deficiency. However, the Board has not received Federal financial assistance in over 20 years that would require the Board to be subject to a Single Audit. The Board will internally develop written financial management system requirements or hire an outside grant writing manager to assist in developing written fiscal policies.

FINDING 2025-002 Finding Subject: COVID-19 - Education Stabilization Fund - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Summary of Finding: The School Corporation was unable to provide proper documentation for 5 out of the 25 claims selected for control testing. The School Corporation was unable to provide proper documentation to support the determination of the amount of the teachers total salary that was allocated to the federal award. Contact Person Responsible for Corrective Action: Melissa Raaf Contact Phone Number and Email Address: (812) 649-2591 / missy.raaf@sspencer.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: In the future the School Corporation will ensure that all proper documentation is saved in a binder or electronically. Anticipated Completion Date: Effective FY 2025/2026

The Town recognized its lack of understanding of Uniform Guidance as it relates to federal grant programs and hired an outside consultant on August 1 6, 2022, to administer the federal grants to ensure that the Town would comply with all federal program requirements. The Town was led to believe that they were in compliance with all federal program requirements. The Town will develop, formally adopt, and implement written policies and procedures to comply with Uniform Guidance (2 CFR 200).

Significant Deficiency Item 2025-007 - Cash Management - U.S. Department of Health and Human Services, Health Center Program Cluster (Assistance Listing Number 93.224/93.527) Notice of Award Number 6 H80CS00505-23-04, 6 H2ECS45602-02-04, 1 H8LCS50772-01-00 and 6 HBHCS46163-03-01 During our audit, we noted that there is no evidence of review and approval of drawdowns from the Health Center Program Cluster and the supporting records. Recommendation: We recommend that LBUCC implement a policy that requires all drawdowns and supporting documents to be reviewed and that such review and approval be documented. Action Taken: LBUCC revised the drawdown policy which now includes a review and approval from the CFO and the process is documented. Effectivity Date: Implemented 12/3/2025.

2025-001 Reporting US Department of Education – AL #s10.553, 10.555, 10.559 and 10.582 Child Nutrition Cluster Condition: The District submitted monthly child nutrition reimbursement claims that contained inaccurate meal counts for multiple months during the fiscal year. Specifically, the District overstated reimbursable meal counts due to errors in including non-reimbursable meals served. Additionally, the claims were not subject to an independent review prior to submission to ensure accuracy and completeness. Name of Contact Person: Ann Berman, Business Manager Plan of Action: The District will revisit the internal control processes surrounding the grant reporting and reimbursement process to ensure meal count information submitted is within program requirements of Child Nutrition Cluster programs. In the event there are questions surrounding meal count and other information subject to reporting, the District will continue to rely on timely guidance from external governmental accounting consultants, the Oregon Department of Revenue, and the Oregon Department of Education.

Management's Response/Planned Corrective Action: The Controller will ensure a process of dual review/approval on reporting is followed going forward to aid in identifying any reporting inconsistencies or misunderstanding of reporting instructions. This will be undertaken immediately.

Finance department will set up the coding process and begin including Departments that match project codes for all federal programs. Corrective Action Owner: Lisa Peacock, Comptroller with assistance from the Senior Accountant, and report to Francesca Rattray, CEO

Corrective Action Plan for Federal Award Audit Finding 2025-001 Finding Title: Allowable Costs/Cost Principles – Improper expenditure recognition Federal Program: Title II, Part A, Teacher & Principal Training and Recruiting Assistant Listing Number: 84.367A Federal Agency Name: U.S. Department of Education Passed-Through Agency Name: Texas Department of Education Type of Finding: Significant Deficiency in Internal Control over Compliance Description of Corrective Action The District acknowledges the internal control system did not timely detect the improper recognition of expenditures in the incorrect fiscal period. It is important to emphasize that the expenditures identified were ultimately removed from the current year activity and were excluded from the year-end reimbursement request. The District commits to strengthening its year-end closing procedures and providing comprehensive training to address the noted deficiency in monitoring and review. The following actions will be taken: Mandatory Staff Training on Expenditure Cut-off and Accruals The District will develop and implement mandatory, targeted training for all personnel responsible for processing, recording, reconciling, and reviewing federal grant expenditures, with a specific focus on year-end cut-off procedures and proper expense recognition (accruals versus prepaid expenses). Implementation of Formal Grant Expenditure Cut-off Review Procedure A formalized closing procedure will be implemented for all federal awards, ensuring a mandatory, documented review of expenditures and payables near the fiscal year-end. Persons Responsible Timothy Momanyi, Chief Financial Officer Thania Gonzalez, Assistant Superintendent of Business and Finance Anticipated Completion Date The initial staff training will occur by May 31, 2026. The full implementation of the new procedures, with documented adherence by all responsible staff, will be complete by June 30, 2026, ensuring the new controls are fully operational before the close of the 2025-2026 fiscal year.

Finding: 2025-001 Incomplete Tenant Records - Section 8 HCV Program (ALN 14.871) Condition: 1. For one (I) tenant, income verification was not performed for the current During our review of forty ( 40) tenant files under the Section 8 Housing Choice Voucher (HCV) Program, we identified multiple instances of missing documentation and compliance lapses: year, and prior year income was rolled forward. The HUD-50058 (Family Report) form was reviewed in the PIC system but was not present in the tenant file. 2. For one (I) tenant, the Approved Lease, HUD-52517 (Request for Tenancy Approval), and HUD-52641 (HAP Contract) forms were not present in the tenant file. Recommendation: We recommend that the Housing Authority strengthen internal controls over tenant file documentation by implementing a standardized checklist to ensure all required forms and records are consistently retained. Staff should receive periodic training on HUD documentation and compliance requirements to reinforce expectations and reduce errors. Management should also conduct routine internal reviews to verify that income verification and lease documentation are properly completed and maintained. These measures will help ensure that tenant eligibility and payment determinations are adequately supported and compliant with federal regulations. Planned Corrective Action: To address these findings, the Housing Authority will implement a standardized checklist for all tenant file changes, ensuring that all required forms and records are consistently retained. The Program Administrator and staff will conduct monthly reviews of completed re-examinations to verify that all necessary documentation is present and properly filed. All paperwork related to annual re­exams, transfers, move-ins, and interims will be scanned into the Lindsey software system within five working days of receipt, prior to physical filing. The Program Administrator will organize monthly training sessions on HCY/S8 program requirements, with participation tracked to ensure all staff attend. Weekly spot checks will be performed to confirm that the checklist is being used appropriately. These actions will be supported by updated training materials, access to the Lindsey software, and dedicated staff time for audits and training. To mitigate risks such as incomplete documentation, missed scanning deadlines, or low training attendance, the Housing Authority will implement pre-audit checklists, set automated reminders for staff, and make training mandatory. Management will monitor the implementation of these corrective actions and conduct follow-up reviews to ensure sustained compliance with HUD regulations.

2025-002 – Lack of Written Policies and Procedures. Auditor Description of Condition and Effect. Although the Village has processes in place to cover these areas, and drafts of formal written policies covering the above items that address all of the area required by the Uniform Guidance have been developed, these policies have not yet been formally approved and adopted by the Village. As a result of this condition, the Village did not fully comply with the Uniform Guidance applicable to the above noted grants. Auditor Recommendation. We recommend that the Village review and approve the draft policies as soon as practical, but no later than the end of fiscal year 2026. Corrective Action. The Village has prepared a policies and procedures manual for the federal grant programs, which will be approved by the Village Council before the end of fiscal year 2026. Responsible Person. Vicki Burrell, Village Clerk. Anticipated Completion Date: February 2026.

This problem only applied to the HHS program that was eliminated in December 2023. All other programs that we contract with are paid in arrears and there are no advances. We have proposed a settlement agreement with HHS to eliminate the overpayment and interest. Benjie Read will be responsible for the settlement agreement, by October 31, 2026.

1. Responsible Person: Auditor-Controller 2. Corrective action plan: The County agrees with the finding and recommendation. The County Auditor’s office will work with department heads to establish a formalized policy of tracking timely reporting and correspondence procedures with grantors in the case of delayed reporting. In addition, the County will appropriately allocate employee resources to ensure compliance with deadlines. 3. Anticipated implementation date: June 30, 2027

The reporting for these has been updated and submitted. In 2024, I was not a part of the e-mail directing these to me - corrected and now processed timely.

2024-012 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.

Finding Number 2024-111 Subject Heading (Financial) or AL no. and program name (Federal) 93.323: Epidemiology and Laboratory Capacity for Infectious Diseases Planned Corrective Action Management agrees with this finding. To mitigate this issue going forward, the established network drive for FFR supporting documentation retention will now be reviewed at closeout of each FFR to ensure all detailed schedules are centrally retained and accessible prior to certification. Anticipated Completion Date 6/30/2026 Responsible Contact Person Kimberly Courtney, Director of Accounting

Finding Number 2024-110 Subject Heading (Financial) or AL no. and program name (Federal) 93.268: Immunizations Cooperative Agreements Planned Corrective Action Management agrees with this finding. To mitigate this issue going forward, the established network drive for FFR supporting documentation retention will now be reviewed at closeout of each FFR to ensure all detailed schedules are centrally retained and accessible prior to certification. Anticipated Completion Date 6/30/2026 Responsible Contact Person Kimberly Courtney, Director of Accounting

Finding 2024-005: Reporting (Title V, CFDA 93.U01) Material Weakness (Repeat Finding: 2021-005, 2022-005, 2023-005) Condition: The Organization could not provide required Title Vreports, including the financial report, activity narrative, third-party income report, GPRA/GPRAMA, urban data standards report, and property inventory. Corrective Action: • Build a federal reportingcalendar listing every required Title Vreport, its due date, data source, and responsible preparer. • Assign a designated preparer and a second-level reviewer for each report prior to submission. • Retain a copy of each submitted report, with the submission confirmation, in a centralized compliance file. • Provide staff training on Title V reporting obligations and the underlying contract requirements. Responsible Party: Chief Financial Officer/ Grant Director Anticipated Completion Date: Reporting calendar in place by October 15, 2026; first fully compliant reporting cycle Q1 2027

Finding 2024-004: Procurement and Suspension and Debarment (Title V, CFDA 93.U01) Material Weakness (Repeat Finding: 2021-004, 2022-004, 2023-004)Condition: Because Title V expenditures lacked transaction-level detail, the auditor could not select procurement transactions for testing or verify that vendors were screened for suspension/debarment prior to contract award. Corrective Action: • Adopt a written procurement policy aligned with Uniform Guidance thresholds (micro-purchase, simplified acquisition, formalprocurement); this policy is in progress and pendingboard approval. • Require and document a System for Award Management (SAM.gov) check, or an equivalent vendor certification, before anyfederally funded contract or purchase order is issued. • Retain SAM.gov screening printouts/certifications with the procurement file for each Title V vendor. • Apply the GLrestructuring from Finding 2024-003 so procurement transactions are individually identifiable for testing. Responsible Party: Chief Financial Officer Anticipated Completion Date: Procurement policy adopted by November 15, 2026; SAM screening process in effect for all new Title V vendors by December 1, 2026

Finding 2024-003: Activities Allowed and Unallowed, Allowable Costs, Period of Performance (Title V, C FDA 93. U0 1) Material Weakness (Repeat Finding: 2021-003, 2022-003, 2023-003) Condition: Title V expenditures were recorded through summary journal entries without transactionlevel detail, preventing the auditor from selecting a valid sample or testing compliance. A disclaimed opinion on compliance was issued for this major program. Questioned costs are undetermined due to scope limitation. Corrective Action: • Restructure the chart of accounts/ GL coding so every Title V transaction is individually recorded and traceable to source documentation, rather than aggregated into journal entries. • Require program/grant coding at the point of transaction entry (accounts payable, payroll allocation, purchasing) rather than after the fact. • Implement a quarterly internal review reconciling Title V ledger detail to the approved Title V budget and contract terms. • Provide finance staff training on Uniform Guidance recordkeeping requirements (2 CFR §200.302, §200.333) specific to federal award transactions. Responsible Party: Chief Financial Officer Anticipated Completion Date: GL restructuring to be implemented concurrent with the Organization's new fund accounting system (Blackbaud Financial Edge NXT), implementation kickoff August 13, 2026; complete by March 31, 2027, with the first fully traceable Title V transaction month in April 2027

Management will improve internal processes and controls to include the following: Creation of a subset of general ledger codes for unallowed program costs, Management review of program expenditure requests prior to payment, and Annual Uniform Guidance compliance training.

Management will improve internal processes and controls to include the following: Monthly review of program expenditures for overall grant period, Quarterly reconciliation of voided checks against program drawdown invoices, and Annual Uniform Guidance compliance training.

FINDING 2024-009 Finding Subject: ESSER Grant Contact Person Responsible for Corrective Action: Superintendent and Treasurer Contact Phone Number and Email Address: Kyle Neukam; 812-752-8921; kneukam@scsd2.k12.in.us Casey Cheatham; 812-752-8949; ccheatham@scsd2.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The ESSER program has concluded and corrections were made following leadership changes. Financial activity was reviewed and adjusted where possible. Reimbursement requests are now tied to general ledger activity with full documentation. The prior practice of correcting errors through transfers has been discontinued. Controls implemented apply to all future grants and monitoring is ongoing. Anticipated Completion Date: May 2026

FINDING 2024-008 Finding Subject: Special Education Cluster (IDEA) Contact Person Responsible for Corrective Action: Superintendent and Treasurer Contact Phone Number and Email Address: Kyle Neukam; 812-752-8921; kneukam@scsd2.k12.in.us Casey Cheatham; 812-752-8949; ccheatham@scsd2.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The School Corporation partnered with Mazi Education for oversight. Separate funds are maintained for each project year. Payroll mapping has been corrected and reimbursement requests are based on ledger activity with supporting documentation. Transfers are documented and restricted. Monitoring procedures ensure ongoing compliance. The School Corporation has implemented procedures designed to strengthen the control environment, improve risk assessment and information and communication processes, enhance control activities, and provide ongoing monitoring to ensure compliance with Special Education grant requirements and timely identification and correction of deficiencies. Anticipated Completion Date: August 2026

FINDING 2024-006 Finding Subject: Title I Grants Contact Person Responsible for Corrective Action: Superintendent and Treasurer Contact Phone Number and Email Address: Kyle Neukam; 812-752-8921; kneukam@scsd2.k12.in.us Casey Cheatham; 812-752-8949; ccheatham@scsd2.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The School Corporation partnered with Mazi Education to provide oversight of grant compliance. Separate funds are maintained for each grant and project year. Payroll mapping has been corrected to ensure proper allocation. Reimbursement requests are based on general ledger activity and supported by documentation. Transfers are restricted and documented. The School Corporation has implemented procedures designed to strengthen the control environment, improve risk assessment and information and communication processes, enhance control activities, and provide ongoing monitoring to ensure compliance with federal grant requirements and timely identification and correction of deficiencies. Anticipated Completion Date: August 2026

We agree with the recommendations offered for the relevant programs and will establish and implement policies that provide for documentary evidence of review of applicable reports by qualified individuals to ensure the timely submission of required reports to applicable federal agencies that can be easily reconciled to the underlying accounting records. The anticipated completion date is October 2026.