Corrective Action Plans

Finding 537368 (2024-013)

Significant Deficiency 2024

State of Vermont

VT

Questioned Costs Cash Management Matching / Level of Effort / Earmarking § 200.303 § 200.343

Reference Number: 2024-013 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Agency of Transportation Federal Program: Federal Transit Cluster Assistance Listing Number: 20.500, 20.507, 20.526 Award Number and Year: VT-04-0021-01 (3/14/2013 – 6/30/2016) Complianc...

Reference Number: 2024-013 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Agency of Transportation Federal Program: Federal Transit Cluster Assistance Listing Number: 20.500, 20.507, 20.526 Award Number and Year: VT-04-0021-01 (3/14/2013 – 6/30/2016) Compliance Requirement: Cash Management, Period of Performance Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Recommendation: We recommend that VTrans review and enhance grant closeout procedures and internal controls to ensure that grants are closed out timely. We further recommend that VTrans review and enhance procedures and internal controls over cash management to ensure that cash draws are performed only against grants for which the period of performance has not expired. Views of responsible officials: Management agrees with the finding. Corrective Action Plan: The following factors contributed to the noncompliance: VTrans experienced staff turnover, at which point close out processes were missed in 2016. This resulted in a grant remaining with an open status in the TrAMS system well beyond the period of performance. During the 2024 review by program staff, a drawdown was inadvertently processed for this grant with the expired period of performance. At the time, VTrans lacked a formal, documented grant closeout process for FTA grants in the TrAMS system. Additionally, there was a breakdown in communication between the Accounts Receivable (AR) team and the Public Transit Program team regarding period of performance eligibility prior to processing the draw. VTrans has taken the following steps to strengthen internal controls and prevent recurrence of this issue: 1. Formalized Closeout Procedures: VTrans has implemented a structured grant closeout process for the AOT Public Transit Program that clearly defines responsibilities, timelines, and verification steps to ensure all federal awards are closed timely and in compliance with FTA requirements. This process assigns specific tasks to designated staff members and ensures that no drawdowns occur after the period of performance has ended. 2. Annual Period of Performance Review: VTrans has established and documented an annual review process for FTA grant periods of performance. This review has been formally integrated into the Agency’s Public Transit cash management procedures, ensuring that grant end dates are proactively monitored, and necessary extensions or closeouts are addressed before expiration. 3. Enhanced Communication and Documentation: VTrans has updated the internal Excel file used to facilitate communication between the Public Transit Program team and the AR team. The file now includes a designated column for period of performance, ensuring that all drawdowns are reviewed for eligibility before processing. This is also addressed in an update to the Agency’s Public Transit cash management procedure memo. VTrans will coordinate with FTA to determine the appropriate resolution for these funds. Any necessary repayment or adjustments will be completed in accordance with FTA guidance. At this time, FTA has not requested the funds be returned. Scheduled Completion Date of Correction Action Plan: All corrective actions will be implemented as of March 1, 2025. Contacts for Corrective Action Plan: Ross MacDonald, Public Transit Director ross.macdonald@vermont.gov

View Audit 348596 Questioned Costs: $1

Finding 537367 (2024-012)

Significant Deficiency 2024

State of Vermont

VT

Matching / Level of Effort / Earmarking Special Tests & Provisions Significant Deficiency § 200.303

Reference Number: 2024-012 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Agency of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Award Number and Year: FFY2023 – FFY2024 Compliance Requirement: Special Tes...

Reference Number: 2024-012 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Agency of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Award Number and Year: FFY2023 – FFY2024 Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Recommendation: VTrans should review and enhance procedures and internal controls to ensure that it obtains weekly certified payrolls from all contractors. Views of responsible officials: Management agrees with the finding. Corrective Action Plan: The Daily Work Reports (DWRs) submitted by the contractor concluded the outstanding punchlist items in June 2023, and in September 2023 a subcontractor submitted a DWR to AOT. The project went through Completion and Acceptance (C&A) in December 2023. The C&A process required confirmation that payrolls were received but did not include a final complete-verification step before project closeout. As a result, missing payroll certifications went unnoticed. Additionally, the Civil Rights team was unaware of the subcontractor’s work report since their review is triggered by certified payroll submissions, not DWRs. VTrans is updating the C&A checklist to require final confirmation that all certified payrolls have been received before project closeout, with coordination from the Civil Rights team if any are missing. This checklist is to be verified by both the Resident Engineer and the Regional Engineer. To further strengthen compliance, VTrans Construction will focus on education, and revise pre-construction meeting templates to emphasize that federal wage reporting requirements apply to all work on a project. Additionally, VTrans Civil Rights will reinforce these requirements in annual contractor training to ensure Prime and Subcontractors fully understand their payroll reporting responsibilities. VTrans will also remain cognizant of projects and DWRs submitted by new subcontractors and actively work to educate contractors at this point to prevent future payroll omissions. Scheduled Completion Date of Corrective Action Plan: All corrective actions will be implemented as of April 1, 2025. Contacts for Corrective Action Plan: Douglas Bonneau, VTrans Construction Engineer douglas.bonneau@vermont.gov

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Finding 537366 (2024-011)

Significant Deficiency 2024

State of Vermont

VT

Subrecipient Monitoring Reporting § 200.208 § 200.303 § 200.332 § 200.425 § 200.513

Reference Number: 2024-011 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Agency of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Award Number and Year: FFY2023 – FFY2024 Compliance Requirement: Subrecipien...

Reference Number: 2024-011 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Agency of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Award Number and Year: FFY2023 – FFY2024 Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Recommendation: VTrans should review and enhance internal controls and procedures to ensure that all required federal award information is included in subawards and that on-site subrecipient monitoring is conducted timely per the terms of its subrecipient monitoring plan. Views of responsible officials: Management agrees with the finding. Corrective Action Plan: Missing Federal Award Date: The Contract Administration, Grants Unit addressed the deficiency of missing federal award dates during the FY23 State Single Audit (in effect as of 1/12/2024). As part of the updated award execution process, the Grants Unit now verifies that all awards include the federal award date and applicable FAIN number. Awards executed prior to the implementation of this process are being updated during amendments to ensure compliance. Subrecipient Monitoring: The root cause of the subrecipient monitoring deficiency was staffing shortages, which affected the Agency of Transportations (AOT) ability to meet monitoring requirements on time. The AOT monitoring requirements have been transitioned from the Audit Bureau to the Contract Administration, Grants Unit. The Grants Unit has already identified and will prioritize Subrecipients based on the last date monitored. Workflow modifications to include efficiencies are also in progress. These efficiencies will help with timeliness. The revisions to the monitoring activities will be in the VTrans Granting Plan effective July 1, 2025. Scheduled Completion Date of Corrective Action Plan: All corrective actions will be implemented as of July 1, 2025. Contacts for Corrective Action Plan: Tricia Scribner, Administrative Services Manager III tricia.scribner@vermont.gov

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Finding 537362 (2024-010)

Significant Deficiency 2024

State of Vermont

VT

Questioned Costs Allowable Costs / Cost Principles Period of Performance § 200.303 § 200.308 § 200.309 § 200.403

Reference Number: 2024-010 Prior Year Finding: 2023-008; 2022-017 Federal Agency: U.S. Department of Labor State Agency: Vermont Department of Labor Federal Program: Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Period: Admin 24A55UI000063 (10/1/2023-12/31/2026), DUA 23A6...

Reference Number: 2024-010 Prior Year Finding: 2023-008; 2022-017 Federal Agency: U.S. Department of Labor State Agency: Vermont Department of Labor Federal Program: Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Period: Admin 24A55UI000063 (10/1/2023-12/31/2026), DUA 23A60UD000013 (7/14/2023 - 7/14/2026) Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Recommendation: We recommend the Department review and enhance its procedures and controls to ensure that prior to charging costs to the program, they are incurred within an award’s allowable period of performance. Views of responsible officials: Management agrees with the finding. Corrective Action Plan: The Department will review its procedures and internal controls and update as necessary to ensure that expenditures are incurred within the allowable period of performance for respective awards. It should be noted that during the period of performance for which this audit was conducted there were a large number of personnel changes and shifts. The position that was responsible for the majority of these duties retired in January 2024. We proactively hired for her replacement a year before she retired. Over the course of the year our replacement took over more and more duties. In the process of this replacement, we have completed a tremendous amount of evaluation of our assigned duties, processes, workflow, training, and documentation. Not only in this role, but we are also undergoing a division and business unit wide analysis of our internal controls and workflow. It should also be noted that the UI admin funds are considered ‘formula funds’ from the US DOL. We are expected to run this program year-round with no gaps in service or performance. The funding that we receive from US DOL is based on an antiquated formula that breaks down the amount that is budgeted by Congress between 52 state and territories. We generally do not receive enough funding for the entire year. Also, with the recent trend of Congress to utilize the tool of the Continuing Resolution our funding is often ambiguous until most of the program year is over. We have at times seen our funding cut once a budget had been passed by Congress even though there was only about 3 months left in the program year. We are still expected to run this program and ‘find other sources of funding’. This does make the adherence to the period of performance challenging. However, as we evaluate our internal controls and procedures over the coming months, we will make note of every opportunity to strengthen this function to ensure that all charges applied to program funds are relevant, within the period of performance of the award, and are correctly reviewed and signed. Scheduled Completion Date of Corrective Action Plan: April 1, 2025 Contacts for Corrective Action Plan: Chad Wawrzyniak, Financial Director II chad.wawrzyniak@vermont.gov

View Audit 348596 Questioned Costs: $1

Finding 537361 (2024-009)

Significant Deficiency 2024

State of Vermont

VT

Questioned Costs Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking § 200.303 § 200.403

Reference Number: 2024-009 Prior Year Finding: 2023-007; 2022-016 Federal Agency: U.S. Department of Labor State Agency: Vermont Department of Labor Federal Program: Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Period: DUA 23A60UD000013 (7/14/2023 - 7/14/2026) Compliance...

Reference Number: 2024-009 Prior Year Finding: 2023-007; 2022-016 Federal Agency: U.S. Department of Labor State Agency: Vermont Department of Labor Federal Program: Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Period: DUA 23A60UD000013 (7/14/2023 - 7/14/2026) Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Recommendation: We recommend the Department reviews and enhances its procedures and controls regarding payment processing to ensure that, prior to charging costs to the program, they are supported and reviewed by a supervisor who is knowledgeable of the regulations regarding allowable program costs and that documentation of the review is maintained. Views of responsible officials: Management agrees with the finding. Corrective Action Plan: The Department will review its procedures and internal controls and update as necessary to ensure that expenditures are adequately reviewed and signed off on. It should be noted that during the period of performance for which this audit was conducted there were a large number of personnel changes and shifts. The position that was responsible for the majority of these duties retired in January 2024. We proactively hired for her replacement a year before she retired. Over the course of the year our replacement took over more and more duties. In the process of this replacement, we have completed a tremendous amount of evaluation of our assigned duties, processes, workflow, training, and documentation. Not only in this role, but we are also undergoing a division and business unit wide analysis of our internal controls and workflow. Scheduled Completion Date of Corrective Action Plan: April 1, 2025 Contacts for Corrective Action Plan: Chad Wawrzyniak, Financial Director II chad.wawrzyniak@vermont.gov

View Audit 348596 Questioned Costs: $1

Finding 537360 (2024-008)

Material Weakness 2024

State of Vermont

VT

Internal Control / Segregation of Duties Material Weakness Reporting § 200.303

Reference Number: 2024-008 Prior Year Finding: 2023-005; 2022-012; 2020-009 Federal Agency: Department of Labor State Agency: Vermont Department of Labor Federal Program: Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Period: State UC, UCFE, UCX, TRA UI393002355A50 (10/202...

Reference Number: 2024-008 Prior Year Finding: 2023-005; 2022-012; 2020-009 Federal Agency: Department of Labor State Agency: Vermont Department of Labor Federal Program: Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Period: State UC, UCFE, UCX, TRA UI393002355A50 (10/2022-9/30/2023), TRA 24A55UT000024 (10/1/2023-9/30/2024), RESEA UI380102260A50 (1/1/2022-9/30/2024) RESEA 23A60UR000010 (1/1/2023-9/30/2025), Admin UI393532355A50 (10/1/2022-12/31/2025), Admin 24A55UI000063 (10/1/2023-12/31/2026), ARPA Fraud UI370952155A50 (9/1/2021-8/31/2025), ARPA Equity UI370952155A50 (10/1/2022-10/31/2025), CARES UI347462055A50 (4/1/2021-6/30/2025), DUA 23A60UD000013 (7/14/2023 - 7/14/2026) Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Recommendation: We recommend that policies and procedures be implemented to ensure that all financial and performance reports are accurate, agree with supporting documentation, and are reviewed by an authorized State official prior to submission. We also recommend that supporting documentation and evidence of supervisory review is maintained and available for audit. Views of responsible officials: Management agrees with the finding. Corrective Action Plan: The Department is currently undergoing a division and business unit wide analysis of our internal controls and procedures. As part of that effort, the Department will review internal controls and update as necessary to ensure that all required reports are filed timely and accurately and that reports are reviewed and approved by authorized State officials prior to submission. Scheduled Completion Date of Corrective Action Plan: June 30, 2025 Contacts for Corrective Action Plan: Chad Wawrzyniak, Financial Director II chad.wawrzyniak@vermont.gov

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Finding 537359 (2024-007)

Significant Deficiency 2024

State of Vermont

VT

Allowable Costs / Cost Principles Subrecipient Monitoring Period of Performance § 200.303 § 200.308 § 200.309 § 200.403

Reference Number: 2024-007 Prior Year Finding: No Federal Agency: U.S. Department of Defense State Agency: Vermont State Military Department Federal Program: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing Number: 12.401 Award Number and Period: W912LN2421001 (10...

Reference Number: 2024-007 Prior Year Finding: No Federal Agency: U.S. Department of Defense State Agency: Vermont State Military Department Federal Program: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing Number: 12.401 Award Number and Period: W912LN2421001 (10/1/2023 – 9/20/2024) Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Recommendation: The Department should review and enhance its procedures and internal controls to ensure that it charges expenditures to the program that are incurred within an award’s allowable period of performance. Views of responsible officials: Management agrees with the finding. Corrective Action Plan: The Department agrees with this finding and will implement the following: • Update Accounts Payable Standard Operating Procedures to include instructions for determining the appropriate Federal Fiscal year for coding and paying vendor invoices. • Distribute updated procedures and train staff to ensure understanding of Period of Performance reporting requirements. • Update Vision query to include the Invoice Date field. Current reports used for preparing the SF-270 only include the Vision transaction date, therefore the preparer and reviewer are not able to determine the performance dates of individual transactions based on this report alone and rely on proper coding of the Class field during voucher entry. Adding the Invoice Date to the report will improve the department’s ability to QC the SF-270 for period of performance discrepancies prior to submission for reimbursement. • The Financial Director will perform quarterly audits of this Vision report to identify any improper reporting. Any errors identified will be corrected with a journal voucher and subsequently corrected on the next SF-270. Scheduled Completion Date of Corrective Action Plan: April 15, 2025 Contacts for Corrective Action Plan: Kim Fedele, Financial Director kimberly.fedele@vermont.gov

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Finding 537343 (2024-027)

Significant Deficiency 2024

State of Vermont

VT

Allowable Costs / Cost Principles § 200.303 § 200.403

Reference Number: 2024-027 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services State Agency: Department of Human Resources Agency of Human Services Federal Program: SNAP Cluster Temporary Assistance for Needy Families Child Support Servi...

Reference Number: 2024-027 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services State Agency: Department of Human Resources Agency of Human Services Federal Program: SNAP Cluster Temporary Assistance for Needy Families Child Support Services Medicaid Cluster Assistance Listing Number: 10.551, 10.561, 93.558, 93.563, 93.775, 93.777, 93.778 Award Number and Year: 4VT400406 (10/1/2022 – 9/30/2023) 4VT402513 (10/1/2023 – 9/30/2024) 2301VTTANF (10/1/2022 – 9/30/2023) 2401VTTANF (10/1/2023 – 9/30/2024) 2401VTSCSS (10/1/2023 – 9/30/2024) 2305VT5MAP (10/1/2022 – 9/30/2023) Compliance Requirement: Allowable Activities/Allowable Costs - Payroll Type of Finding: Significant Deficiency in Internal Control Over Compliance Recommendation: We recommend that the Department review and enhance procedures and internal controls to ensure that VTHR uses rates of pay for attorneys that align with the maximum pay rates established by the Attorney Pay Plan. Views of responsible officials: Management agrees with the finding. Corrective Action Plan: The language in the attorney play plan will be clarified to be consistent with long-standing Department of Human Resources’ interpretation of the maximum hourly rate for certain attorney job titles. Specifically, the “whichever is lower” clause will be deleted from Staff Attorney III, Staff Attorney IV, and General Counsel I descriptions. This will leave the limiting language to be “or up to Department/Agency Head’s Salary.” This will allow the maximum salary to be capped at the department head’s salary, which is the intention of the pay plan. In addition, the compensation team will continue to audit all salary actions to ensure that no pay action will exceed the intended maximum salary. The Compensation Division of the Department of Human Resources will make these changes and publish the updated Attorney Pay Plan according to the agreed schedule. Scheduled Completion Date of Corrective Action Plan: The Corrective Action Plan will be completed by February 1, 2025. Contacts for Corrective Action Plan: Douglas Pine, Deputy Director doug.pine@vermont.gov

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Finding 537342 (2024-026)

Significant Deficiency 2024

State of Vermont

VT

Questioned Costs Cash Management Reporting § 200.303 § 200.514

Reference Number: 2024-026 Prior Year Finding: 2023-023 Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: SNAP Cluster Temporary Assistance for Needy Families CCDF Cluster Assistance Listing...

Reference Number: 2024-026 Prior Year Finding: 2023-023 Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services State Agency: Department of Finance and Management Federal Program: SNAP Cluster Temporary Assistance for Needy Families CCDF Cluster Assistance Listing Number: 10.551, 10.561, 93.558, 93.575, 93.596 Award Number and Year: 4VT400406 (10/1/2022 – 9/30/2023) 4VT402513 (10/1/2023 – 9/30/2024) 2301VTTANF (10/1/2022 – 9/30/2023) 2401VTTANF (10/1/2023 – 9/30/2024) 2301VTCCDD (10/1/2022 – 9/30/2025) 2401VTCCDD (10/1/2023 – 9/30/2026) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Recommendation: We recommend that Finance review and enhance its internal controls and procedures over the CMIA Annual Report to ensure that it verifies the correct interest rate is applied and that State and Federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding. Corrective Action Plan: The current available rate at the time of calculation, review, entry, and moving to draft were all accurate to what U.S. Treasury had available at the time. The rate was updated on December 3rd, after our submissions had already been locked via the draft process in the CMIAS portal done on November, 26th. The process was not fully submitted due to issues with the CMIAS portal not allowing us to submit which has been extensively documented via multiple email chains with U.S. Treasury CMIA over the past two years. Finance and Management will take a screenshot of the CMIA interest rate page dated on the review date of the CMIA Annual Report submissions from departments to ensure that we maintain the historical rate posted to the U.S. Treasury CMIA page at the time of review. Additionally, AHS will take their own screenshots of the CMIA Interest Rate page from U.S. Treasury website on the date of their Annual Report Summary submissions for record and to show that the rate from this time was checked and applied to the current year’s program. If during the review, there is any discrepancy between the review screen of the rates and the calculations screenshot of the rates; the calculation spreadsheets will be kicked back to AHS to be updated. Scheduled Completion Date of Corrective Action Plan: November 30, 2025 Contacts for Corrective Action Plan: Jordan Black-Deegan, Statewide Grants Administrator jordan.black-deegan@vermont.gov Sarena Boland, Financial Manager III sarena.boland@vermont.gov

View Audit 348596 Questioned Costs: $1

Finding 537341 (2024-006)

Significant Deficiency 2024

State of Vermont

VT

Procurement, Suspension & Debarment § 200.219 § 200.303 § 200.324

Reference Number: 2024-006 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Human Services Federal Program: SNAP Cluster Assistance Listing Number: 10.551, 10.561 Award Number and Year: 4VT400406 (10/1/2022 – 9/30/2023) 4VT402513 (10/1/2023 – 9/30/2024) C...

Reference Number: 2024-006 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Human Services Federal Program: SNAP Cluster Assistance Listing Number: 10.551, 10.561 Award Number and Year: 4VT400406 (10/1/2022 – 9/30/2023) 4VT402513 (10/1/2023 – 9/30/2024) Compliance Requirement: Procurement Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that it maintains documentation that it competitively procures contracts and that it performs a cost analysis for all procurement actions in accordance with Agency of Administration Bulletin No. 3.5 and federal requirements. Views of Responsible Officials: Management agrees with the finding. Corrective Action Plan: Due to the unique nature of a tropical storm hitting Vermont in 2011, which flooded the Waterbury State Office Complex (the Complex), all state operations were forced to temporarily move from the Complex to another facility while damages to the structure were remedied. Due to the significant number of records needing to be moved, the records in question may have been lost in this transition. Since then, we have instituted a new process that requires all bid submissions to be received and stored electronically. All bid submissions, cost analysis, and scoring of the bids are now kept in our electronic files instead of hard copy preventing physical damage or loss of records. Scheduled Completion Date of Corrective Action Plan: Completed and in full effect since December 31, 2020. Contacts for Corrective Action Plan: Melanie Rutledge, Financial Director I melanie.rutledge@vermont.gov Melanie Smit, Administrative Services Director I melanie.smit@vermont.gov Megan Smeaton, Financial Director IV megan.smeaton@vermont.gov Peter Moino, AHS Director of Internal Audit peter.moino@vermont.gov

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Finding 537340 (2024-005)

Significant Deficiency 2024

State of Vermont

VT

Special Tests & Provisions Significant Deficiency Matching / Level of Effort / Earmarking § 200.303

Reference Number: 2024-005 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Human Services Federal Program: SNAP Cluster Assistance Listing Number: 10.551, 10.561 Award Number and Year: 4VT400406 (10/1/2022 – 9/30/2023) 4VT402513 (10/1/2023 – 9/30/2024) C...

Reference Number: 2024-005 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Human Services Federal Program: SNAP Cluster Assistance Listing Number: 10.551, 10.561 Award Number and Year: 4VT400406 (10/1/2022 – 9/30/2023) 4VT402513 (10/1/2023 – 9/30/2024) Compliance Requirement: Special Tests and Provisions – EBT Card Security Type of Finding: Significant Deficiency in Internal Control Over Compliance Recommendation: We recommend that the Agency review and enhance internal controls to ensure that it maintains documentation of the daily/weekly reconciliation of destroyed EBT cards. Views of responsible officials: Management agrees with the finding. Corrective Action Plan: Cards were automatically printing at 1:00 AM which presented many opportunities for errors. The printers can only hold 100 cards in their hoppers and only print on one printer at a time. If there were more than 100 cards to be printed the printer(s) would error out and subsequently drop cards from the print file and/or print duplicates when the errors were corrected once someone was in the office. We have now updated the print jobs to print at 9:00 AM when a trained EBT staff member is there to monitor the printing. Additionally, we have a system in place to rotate printing on the 3 printers monthly to spread the wear and tear evenly. Increases to opened card inventory, decreases in the opened card inventory due to printing, and decreases in the opened card inventory due to shredded cards are included on the daily “Card Count” Excel that is then converted to a PDF for signatures through DocuSign. This daily “Card Count” Excel is updated and verified by EBT personnel to ensure that the remaining opened card inventory is reflective of what was added to the opened card inventory, what was printed, and what was shredded. Printed card counts on this “Card Count” Excel and PDF will be reflective of the daily “EBT Printing Reports” that are auto generated and e-mailed to the EBT staff. When there are excessive shredded cards (more than 5) EBT personnel will create a detailed e-mail to verify the day’s events with IT personnel. Once verified by the IT personnel, the e-mail will be a part of the DocuSign packet for the “Card Count” PDF to explain and backup the events from that particular day. The “Card Count” Excel and PDF is produced by the EBT staff person in the office to physically oversee that day’s printing. EBT staff rotate days that they are in the office; meaning that the EBT Financial Manager and the Financial Director of Operations verify that the rolling count is correct each week on Thursday’s and Wednesday’s (respectively) as they are in the office to process the printed cards. Scheduled Completion Date of Corrective Action Plan: EBT personnel have implemented the above e-mail attachment to the “Card Count” PDF solution as of November 2024. Contacts for Corrective Action Plan: Katherine Lettieri, Financial Manager III katherine.lettieri@vermont.gov Kristina Roy, Admin Services Coordinator I kristina.roy@vermont.gov Peter Moino, AHS Director of Internal Audit peter.moino@vermont.gov

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Finding 537339 (2024-004)

Material Weakness 2024

State of Vermont

VT

Questioned Costs Eligibility Reporting § 200.303

Reference Number: 2024-004 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Human Services Federal Program: SNAP Cluster Assistance Listing Number: 10.551, 10.561 Award Number and Year: 4VT400406 (10/1/2022 – 9/30/2023) 4VT402513 (10/1/2023 – 9/30/2024) C...

Reference Number: 2024-004 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Human Services Federal Program: SNAP Cluster Assistance Listing Number: 10.551, 10.561 Award Number and Year: 4VT400406 (10/1/2022 – 9/30/2023) 4VT402513 (10/1/2023 – 9/30/2024) Compliance Requirement: Special Tests and Provisions – ADP System for SNAP Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Recommendation: We recommend that the Agency review and enhance procedures and controls to ensure that eligibility case reviews are performed timely and are properly documented. Views of responsible officials: Management agrees with the finding. Corrective Action Plan: In the past year, the Economic Services Division has been slightly restructured with the creation of six new District Director Positions. This change is a positive one as it provides additional support in the districts and also allows the central office Operations team to focus more on systems and closer collaboration with programs to ensure clear communication and training for field staff. This change has resulted in a further need to clearly define the roles and expectations of the District Director positions compared to the Operations staff. One highlighted area relevant to this corrective action plan is updates to the Supervisory Case Review (SCR) Guide to clearly delineate roles and responsibilities and ensure that SCRs are completed timely and completely. The SCR Guide has been updated accordingly. Further corrective action includes: • Presentation of the SCR audit findings and updated SCR Guide by Operations and the Food and Nutrition team to District Directors and Supervisors. • Creation by the Food and Nutrition team of training for Supervisors and District Directors about the SCR process. This training will be presented at the next District Directors meeting on 3/12/2025 as well as at the ESD Division Leadership meeting on 3/21/2025 to Supervisors. • Requirement for all newly hired District Supervisors or Directors to complete the SCR Training. This training will be mandatory for all staff who are required to complete monthly Supervisory Case Reviews and tracked through the Learning Management System. Scheduled Completion Date of Corrective Action Plan: March 21, 2025 Contacts for Corrective Action Plan: Jessica Duranleau, ESD Program Manager jessica.duranleau@vermont.gov Peter Moino, AHS Director of Internal Audit peter.moino@vermont.gov

View Audit 348596 Questioned Costs: $1

Finding 537338 (2024-003)

Material Weakness 2024

State of Vermont

VT

Subrecipient Monitoring Material Weakness Reporting § 200.303

Reference Number: 2024-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Agriculture Federal Program: Dairy Business Innovation Initiatives Assistance Listing Number: 10.176 Award Number and Year: AM200100XXXXG081 (9/30/2020 – 9/30/2024), 21DBIVT1004 (...

Reference Number: 2024-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Agriculture Federal Program: Dairy Business Innovation Initiatives Assistance Listing Number: 10.176 Award Number and Year: AM200100XXXXG081 (9/30/2020 – 9/30/2024), 21DBIVT1004 (10/31/2021 – 10/30/2024), AM22DBIVT1015 (9/30/2022 – 9/29/2025), AM21DBIVT1011 (9/30/2022 – 9/29/2026), 23DBIVT1018 (9/30/2023 – 9/29/2026) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Recommendation: We recommend the Agency develop procedures and internal controls to ensure that all required subawards and subaward modifications are reported timely to FSRS in accordance with FFATA requirements and that all previously issued subawards are reported. Views of responsible officials: Management agrees with the finding. Corrective Action Plan: The business office will ensure that subrecipient grants containing federal funding that meet the FFATA reporting threshold are marked as “FFATA reportable” upon grant execution in the Agency’s grants and contracts workbook. The Financial Directors will then confirm that all executed agreements that meet the FFATA reporting requirement have been entered and submitted into the appropriate Federal system by the last business day of each month. Scheduled Completion Date of Corrective Action Plan: April 30, 2025 Contacts for Corrective Action Plan: Amy Mercier, Financial Director amy.mercier@vermont.gov Karen Mae Smith, Financial Director karenmae.smith@vermont.gov

View Audit 348596

Finding 537324 (2024-003)

Material Weakness 2024

Southwestern Consolidated School District of Shelby County

IN

Special Tests & Provisions Subrecipient Monitoring Material Weakness § 200.303

Information on the federal program: Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers and Years (or O...

Information on the federal program: Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Material Noncompliance, Qualified Opinion Condition and Context: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements. The School Corporation had one project for roof repairs that was funded with ESSER III (84.425U) grant awards and was subject to the Davis-Bacon requirements. The School was not able to provide an executed contract containing the required wage rate requirements clause, nor did the School obtain the required weekly certified payroll reports from the contractor to monitor compliance with Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. The total project cost disbursed during the audit period was $443,300, which included materials and labor. Contact Person Responsible for Corrective Action: Jamison Wilkins Contact Phone Number: 317-729-5746 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: On September 18, 2024 a corrective action plan was submitted to and approved by the USDE. That action plan included that attestation that the superintendent had watched the necessary webinars and will meet Davis-Bacon requirements on all future projects. Anticipated Completion Date: Resolved

View Audit 348592

Finding 537320 (2024-005)

Material Weakness 2024

Southwestern Consolidated School District of Shelby County

IN

School Nutrition Programs Internal Control / Segregation of Duties Cash Management § 200.303

Information on the federal program: Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers)...

Information on the federal program: Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Condition and Context: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the cash management compliance requirement. During the testing of claim reimbursements, we noted for two monthly reimbursements in a sample of six claims that the claim reimbursements were not being reviewed by an independent individual before being submitted to IDOE. In March 2023, the School Corporation implemented a review control over the monthly claim reimbursement. The lack of controls was isolated to the period of July 2022 through February 2023 during fiscal year 2023. For all six claims tested, we agreed the number of meals claimed for reimbursement to underlying meal system reports without exception. Contact Person Responsible for Corrective Action: Brisha Dunbar Contact Phone Number: 317-729-5122 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: Food Service Director Brisha Dunbar will complete the claims reimbursement form each month. Once completed it will be reviewed by the business manager for correct amounts before submitting the request for reimbursement. The FSD will print out the claims and both she and the reviewer will initial the form. Anticipated Completion Date: Ongoing, effective 03/24/2025

View Audit 348592

Finding 537314 (2024-001)

Material Weakness 2024

Tipton Community School Corporation

IN

School Nutrition Programs Internal Control / Segregation of Duties Eligibility § 200.303

FINDING 2024-001 (Auditor Assigned Reference Number) Finding Subject: Child Nutrition Cluster - Eligibility Contact Person Responsible for Corrective Action: Brook Cleaver Contact Phone Number and Email Address: (765) 675-2147 Ext 3316; bcleaver@tcsc.k12.in.us Views of Responsible Officials: We conc...

FINDING 2024-001 (Auditor Assigned Reference Number) Finding Subject: Child Nutrition Cluster - Eligibility Contact Person Responsible for Corrective Action: Brook Cleaver Contact Phone Number and Email Address: (765) 675-2147 Ext 3316; bcleaver@tcsc.k12.in.us Views of Responsible Officials: We concur that there was not a documented control in place to ensure that timely eligibility determinations were made for direct certification eligibility determinations. Description of Corrective Action Plan: Etrition is our new system for the 2024-25 school year. Weekly, Susie Moore, kitchen manager, checks the state website for any direct certification file pulls. The file is saved by date and is used to import direct certs into the Etrition program on that same day. Each Friday, eligibility determination notices are issued via email to the parent or guardian email listed in the school’s information system, Powerschool. If such an email does not exist in the information system, a hard copy of the notice is mailed to the household. Duplicate copies will be retained in our files. Etrition syncs with PowerSchool at midnight each day successfully changing student lunch statuses. Benefit notifications will be reviewed by a second person and checked against the direct cert file pull to verify for accuracy. Income applications will work in a similar fashion, wherein we will retain evidence of the eligibility notices being sent to households. A binder of all notices will be kept on file. Anticipated Completion Date: Immediately - 3/4/2025

View Audit 348580

Finding 537284 (2024-003)

Material Weakness 2024

North Gibson School Corporation

IN

Subrecipient Monitoring Internal Control / Segregation of Duties Matching / Level of Effort / Earmarking § 200.303 § 200.334 § 200.77 § 200.78

FINDING 2024-003 Finding Subject: Title I Grants to Local Educational Agencies-Eligibility Contact Person Responsible for Corrective Action: Dr. Eric Goggins, Superintendent Contact Phone Number and Email Address: 812-385-4851; egoggins@ngsc.k12..in.us Views of Responsible Officials: We concur with ...

FINDING 2024-003 Finding Subject: Title I Grants to Local Educational Agencies-Eligibility Contact Person Responsible for Corrective Action: Dr. Eric Goggins, Superintendent Contact Phone Number and Email Address: 812-385-4851; egoggins@ngsc.k12..in.us Views of Responsible Officials: We concur with the finding. Explanation and Reasons for Disagreement: Not applicable Description of Corrective Action Plan: The food service director will do monthly eligibility reporting through the food service software to determine any free, reduced, paid, or direct certification eligibility changes. Change reports will be generated and provided to each building secretary on a monthly basis. Copies of each school’s eligibility changes will be provided to Marissa Breidenbaugh (HR Coordinator/Administrative Secretary) in the district office. Marissa will provide a deadline for all schools to update eligibility. On the deadline date, she will review each students Harmony demographics to ensure that the changes in eligibility have been recorded. The assistant superintendent will continue to develop the Title I application collaboratively with non-public schools. This development will include continued review of eligibility and enrollment data to ensure that it agrees with all supporting documentation. Anticipated Completion Date: This corrective action plan was implemented on March 3, 2025 and will continue to be implemented with the next Title I grant application process beginning approximately May 2025. INDIANA STATE

View Audit 348533

Finding 537247 (2024-001)

Significant Deficiency 2024

Marion County Board of Education

GA

Procurement, Suspension & Debarment § 200.303 § 200.318 § 200.320

FA 2024-001 Improve Controls over Procurement, Suspension and Debarment Compliance Requirement: Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through E...

FA 2024-001 Improve Controls over Procurement, Suspension and Debarment Compliance Requirement: Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education Assistance Listing Number and Title: 84.027 - Special Education Grants to States 84.173 - Special Education Preschool Grants Federal Award Number: H027A220073 (Year: 2023), H027A230073 (Year: 2024), H173A220081 (Year: 2023), H173A230081 (Year: 2024), Questioned Costs: None Identified Description: A review of expenditures charged to the Special Education Cluster revealed that the School District's internal control procedures were not operating appropriately to ensure that the School District's procurement and suspension and debarment procedures were followed. Corrective Action Plans: To improve controls over procurement and suspension and debarment within our federal programs, we will: 1. Conduct an audit review training session in which we will review the audit findings, the corrective action plan, and the proper procedures for procurement and suspension and debarment. Attendance will be mandatory for all employees involved in the purchasing process for federal programs. A sign-in sheet will be used to document attendance. 2. Require all employees who are involved in the purchasing process for federal programs to review the Federal Programs Handbook annually and sign an attestation that they have done so. 3. Create a checklist that must be completed as part of the purchasing process for federal programs requisitions. This checklist will include steps found in the procurement and suspension and debarment policies set forth in the Federal Programs Handbook. Completed checklists will be maintained with voucher packets for each requisition. Estimated Completion Date: 6/30/2025 Contact Person: Nicole Price, Finance Director Telephone: 229-649-2234 Email: price.nicole@marion.k12.ga.us

View Audit 348458

Finding 537246 (2024-003)

Material Weakness 2024

City of Fairfield

CA

Procurement, Suspension & Debarment Subrecipient Monitoring § 200.214 § 200.303 § 200.318 § 200.327

Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance, Material Noncompliance Views of Responsible Officials: We concur. Corrective Action Plan: The City’s grant policy requires compliance with grant guidelines, referencing CFR 200.303(a) and directing staff to ...

Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance, Material Noncompliance Views of Responsible Officials: We concur. Corrective Action Plan: The City’s grant policy requires compliance with grant guidelines, referencing CFR 200.303(a) and directing staff to the SAM.gov website and CFR 200 guidelines. However, the department that applied for and accepted the grant failed to include CFR 200 Appendix II in the Professional Services Agreement and did not document the review of contractor status on SAM.gov. To address this, the City will provide targeted training for departments and staff involved in grants, focusing on compliance with grant policies, special provisions, and proper documentation of actions. Responsible Individual(s): Anna Guiles, Assistant Community Development Director Anticipated Completion Date: To be completed by 3/31/2025

View Audit 348452

Finding 537245 (2024-002)

Significant Deficiency 2024

City of Fairfield

CA

Questioned Costs Matching / Level of Effort / Earmarking § 200.303 § 200.306 § 200.430

Matching, Level of Effort and Earmark Significant Deficiency in Internal Control over Compliance, Instance of Noncompliance We concur. Corrective Action Plan: The City was not provided with payroll registers or pay stub copies for the in‐kind local match contribution from Solano County and the Travi...

Matching, Level of Effort and Earmark Significant Deficiency in Internal Control over Compliance, Instance of Noncompliance We concur. Corrective Action Plan: The City was not provided with payroll registers or pay stub copies for the in‐kind local match contribution from Solano County and the Travis Community Consortium. However, the City did maintain hourly tracking for the two agencies when they attended meetings and used a lower pay rate, as outlined in the approved grant budget, when reporting back to the agencies. The required 10% in‐kind match was exceeded by $9,224.28, with a portion of the $30,000 mentioned above included in the excess match. Additionally, the grant had a pay rate cap of $87 for one of the County employees, so using the actual pay rate to calculate the in‐kind match was not permitted. The City will collaborate with the other agencies to obtain better documentation for the shared local match. Responsible Individual(s): Liz Aptekar, Assistant to the City Manager Anticipated Completion Date: To be completed by 6/30/2025

View Audit 348452 Questioned Costs: $1

Finding 532016 (2024-104)

Significant Deficiency 2024

State of Texas C/o Comptroller of Public Accounts

TX

Procurement, Suspension & Debarment Subrecipient Monitoring Allowable Costs / Cost Principles § 200.303

Corrective Action Plan: The Red Hat Enterprise Linux (RHEL) Extended Life Cycle Support license for UTMB’s 51 PeopleSoft RHEL7 servers was received on Friday 10/4/2024 for service dates through 6/30/2025. Furthermore, these servers will be updated to RHEL9 in the first half of 2025. Implementati...

Corrective Action Plan: The Red Hat Enterprise Linux (RHEL) Extended Life Cycle Support license for UTMB’s 51 PeopleSoft RHEL7 servers was received on Friday 10/4/2024 for service dates through 6/30/2025. Furthermore, these servers will be updated to RHEL9 in the first half of 2025. Implementation Date: October 4, 2024 Responsible Person: Darwin VanDyke, IT Services – Director of Administrative & Research Information Systems

View Audit 348386

Finding 530405 (2024-026)

Significant Deficiency 2024

State of Texas C/o Comptroller of Public Accounts

TX

Procurement, Suspension & Debarment Subrecipient Monitoring § 200.214 § 200.303

Corrective action plan: The Purchasing and Historically Underutilized Business Services (PHS) unit within PCS will provide additional mandatory training to staff responsible for vendor compliance checks. PHS will also revise the current Vendor Compliance Checks Procedure to include the evidence re...

Corrective action plan: The Purchasing and Historically Underutilized Business Services (PHS) unit within PCS will provide additional mandatory training to staff responsible for vendor compliance checks. PHS will also revise the current Vendor Compliance Checks Procedure to include the evidence required to document compliance, including the run date. Furthermore, PHS management will establish a process for reviewing and approving the Form 1400 Procurement Checklist, regardless of the monetary value, to guarantee that vendor compliance checks are executed accurately and timely and in advance of covered transactions. Implementation dates: March 31, 2025 Responsible persons: Sonya Bebley, Director of Purchasing and Historically Underutilized Business Services, Procurement and Contract Services Department

View Audit 348386

Finding 530404 (2024-025)

Significant Deficiency 2024

State of Texas C/o Comptroller of Public Accounts

TX

Procurement, Suspension & Debarment § 200.303

Corrective action plan: IT has updated Standard Operating Procedure 742-Promoting Code to Production, to clarify IT policy on separation of duties for staff who develop code and those that promote code. Implementation dates: February 10, 2025 Responsible persons: Thomas Beckley, Scheduled Releases...

Corrective action plan: IT has updated Standard Operating Procedure 742-Promoting Code to Production, to clarify IT policy on separation of duties for staff who develop code and those that promote code. Implementation dates: February 10, 2025 Responsible persons: Thomas Beckley, Scheduled Releases Director and Richard Yashewski, Maintenance & Operations Director

View Audit 348386

Finding 530399 (2024-024)

Significant Deficiency 2024

State of Texas C/o Comptroller of Public Accounts

TX

Subrecipient Monitoring § 200.1 § 200.303 § 200.332 § 200.339

Corrective action plan: N/A Implementation dates: N/A Responsible persons: Tim Urbanovsky, Director of Accounting & Financial Reporting Services

View Audit 348386

Finding 530397 (2024-023)

Significant Deficiency 2024

State of Texas C/o Comptroller of Public Accounts

TX

Reporting § 200.303

Corrective action plan: TVC’s will ensure that all VES’s approved grant documents are retained not only in TVC’s Finance Department but also in the TVC’s VES program in the event of management turnover. Implementation dates: February 2025 Responsible persons: Michelle Nall, Chief Financial Office...

Corrective action plan: TVC’s will ensure that all VES’s approved grant documents are retained not only in TVC’s Finance Department but also in the TVC’s VES program in the event of management turnover. Implementation dates: February 2025 Responsible persons: Michelle Nall, Chief Financial Officer, and Anna Baker, Director of Veteran Employment Services

View Audit 348386

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