Corrective Action Plans

COVID-19 Block Grants for Community Mental Health Services - Assistance Listing No. 93.958 Recommendation: We recommend the County review its process over the allocation of payroll expenditures, based on time worked, to determine what adjustments to its system need to be made. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Aging and Adult Services Department will assess the payroll allocation process, and necessary adjustments will be made. Names of the contact persons responsible for corrective action: Aimee Espinoza, Auditor- Controller and Tarrah Shockley, Division Chief. Planned completion date for corrective action plan: June 30, 2024

COVID-19 Block Grants for Community Mental Health Services - Assistance Listing No. 93.958 Recommendation: We recommend the A&A and BHRS departments jointly review its procedures for recorded expenditures being allocated by the A&A department to the MHS grant to ensure that there is documentation supporting the allocation of expenditures and that it is retained. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Aging and Adult Services Department (A&A) and Behavioral Health Recovery Services (BHRS) will jointly review the procedures for recording expenditures allocated to MHS grants to ensure there is adequate documentation supporting the allocation of expenditures. Names of the contact persons responsible for corrective action: Aimee Espinoza, Auditor- Controller and Tarrah Shockley, Division Chief. Planned completion date for corrective action plan: June 30, 2024

National Farmworker Jobs Program - Assistance Listing No. 17.264 Recommendation: We recommend the County implement policies and procedures to ensure that FFATA reporting occurs for all subawards of $30,000 or more for all federal awards and that the reporting be performed timely. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: All County departments receiving federal funding will be notified about this requirement. Names of the contact persons responsible for corrective action: Aimee Espinoza, Auditor- Controller and Tarrah Shockley, Division Chief. Planned completion date for corrective action plan: June 30, 2024

The county will implement procedures to ensure when a contractor is paid with federal funds, sam.gov will be utilized to verify the entity has not been suspended or disbarred and such procedure will be documented.

Views of Responsible Officials: The Center will update its procurement policies and ensure staff are trained on all procedures and requires documentation. Name and Title of Responsible Official(s): Vibha Bhatia, Vice President of Finance and Operations Anticipated Completion Date: September 30, 2024

Views of Responsible Officials: The Center will implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. A policy will also be formalized and staff trained on new procedures. Name and Title of Responsible Official(s): Vibha Bhatia, Vice President of Finance and Operations Anticipated Completion Date: September 30, 2024

FINDING: 2023-002 Finding Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Summary of Finding: The P&E report was prepared by one employee without an oversight or review process in place to ensure accuracy. The report submitted was not mathematically accurate or complete. Per Resolution 2022-1028, approved on December 12, 2022, the City obligated funds for six separate projects totaling $2,257,927. However, the P&E report submitted on April 18, 2023 only included one project resulting in an understatement of total obligations of $1,807,927. Additionally for the one project submitted the key line items of “Current Period Expenditures”, “Total Cumulative Expenditures”, and “Current Period Obligations” as reported on the P&E report did not agree to the City’s financial ledger Contact Person Responsible for Corrective Action: Lynn M. Gorski, Clerk-Treasurer Contact Phone Number: 574-936-2124 Views of Responsible Official: We concur with the finding from SBOA. Description of Corrective Action Plan: There was very little training on how to enter information into the Treasury website for the 2022 year. When it was entered there was only one obligation in the amount of $68,609 even though Resolution No. 2022-1028 noted the intent on spend. Because of lack of training on entering the information it was understated. When the information was entered for the April 2024 report all obligations were entered. When the next report is processed, I will have another staff member verify what is entered prior to submission to the Treasury Department. Anticipated Completion Date: April 30, 2025 Lynn M. Gorski Title: Clerk-Treasurer Date: August 26, 2024

FINDING 2023-001 Finding Subject: COVID-19: Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Summary of Finding: The City did not have polices or procedures in place to verify that contractors were neither suspended nor debarred, or otherwise excluded or disqualified, from participating in federal assistance programs or activities. During the audit period, two covered transactions for goods or services that equaled or exceeded $25,000 paid from SLFRF funds were identified. For both of these transactions, the City did not verify the vendors' suspension and debarment status prior to payment. Contact Person Responsible for Corrective Action: Lynn M. Gorski, Clerk-Treasurer Contact Phone Number: 574-936-2124 Views of Responsible Official: We concur with the finding from SBOA. Description of Corrective Action Plan: There was no training on this procedure. At the October 2023 Clerk-Treasurer training this was a training for which I found out this is a requirement. After that meeting I implemented looking at Sam.gov for vendors to see if they were suspended or debarred. Going forward I will do my best to look at sam.gov for vendors prior to payment being made, along with a printout from sam.gov for the vendor being paid to be included with Accounts Payable Voucher for processing Anticipated Completion Date: September 30, 2024 Lynn M. Gorski Title: Clerk-Treasurer Date: August 26, 2024

Views of Responsible Officials: Management understands the need to ensure all accounts are reconciled in advance of the audit. The adjustment to tie out opening net assets has been addressed and corrected, and going forward will be recorded and confirmed prior to audit except for adjustments for K-1s received after the audit starts. For year-end investments balances, some K-1s are received during fieldwork. Since it is not feasible to prepare estimates of the K-1 amounts, the entries for the investment balance changes and corresponding adjustments for intercompany adjustments, management will prepare the entries as soon as K-1s are received and send to auditors. Since this is due to timing, not internal process, management respectfully requests that this process will not reflect negatively against the organization. For audit adjustments impacting the numbers on the Schedule of Federal Expenditures, the issues have been addressed and systems have been developed to ensure timely and accurate information. Management, including the Vice President of Finance and Business Development, and the Organization's contracted financials service providers have recorded these entries as of 7/9/2024.

FINDING: 2023-003 Finding Subject: COVID 19 – Coronavirus State and Local Fiscal Recovery Funds - Reporting Summary of Finding: An effective Internal Control System, which would include segregation of duties, was not in place at the City in order to ensure compliance with requirement related to the grant agreement and the reporting compliance requirement. Project and Expenditure reports were to be completed annually for the federal program by the City. In 2023, one employee prepared and submitted the annual report without evidence of a review by a second individual. Contact Person Responsible for Corrective Action: Deborah A. Longer, Clerk-Treasurer Contact Phone Number and Email Address: (219) 942-1940 clerk-treasurer@cityofhobart.org Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: While the City concurs with the finding, the Clerk-Treasurer also distributed the prepared 2023 report via email to the Mayor and the Common Council members prior to submittal, requesting their review and/or comments. When no comments were offered within a reasonable time, the Clerk-Treasurer submitted the report in a timely fashion as required. Future reporting activities will be distributed to the Mayor and the Council in a similar way but will require some type of response as evidence of their review prior to submittal. Anticipated Completion Date: August 27, 2024 Signed: Deborah A. Longer Deborah A. Longer, Clerk-Treasurer Date: August 27, 2024

FINDING: 2023-002 Finding Subject: COVID 19 – Coronavirus State and Local Fiscal Recovery Funds – Procurement and Suspension and Debarment Summary of Finding: Prior to entering into subawards and covered transactions with COVID 19 – Coronavirus State and Local Fiscal Recovery funds, recipients are required to verify that vendors are not suspended, debarred, or otherwise excluded. “Covered transactions” include but are not limited to contracts for goods and services awarded under a non-procurement transaction (i.e. grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. In the activity in 2023, two covered transactions tested had no documentation to show that suspension and debarment of the vendor was verified prior to entering into purchases of over $25,000. Contact Person Responsible for Corrective Action: Deborah A. Longer, Clerk-Treasurer Contact Phone Number and Email Address: (219) 942-1940 clerk-treasurer@cityofhobart.org Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: When entering into a covered transaction with a vendor, the City will require the vendor to provide proof that the business is not excluded or disqualified (i.e. suspended or debarred). Proof of this may be provided by: (a) Checking Excluded Parties List System (EPLS) SAM Exclusions; (b) collecting a Certification from the vendor; or (c) adding a clause or condition to the covered transaction with that vendor within the body of a contract or procurement agreement. Anticipated Completion Date: August 27, 2024 Signed: Deborah A. Longer Deborah A. Longer, Clerk-Treasurer Date: August 27, 2024

FINDING: 2023-001 Finding Subject: Equitable Sharing program – Procurement and Suspension and Debarment Summary of Finding: Prior to entering into subawards and covered transactions with Equitable Program funds, recipients are required to verify that vendors are not suspended, debarred, or otherwise excluded. “Covered transactions” include but are not limited to contracts for goods and services awarded under a nonprocurement transaction (i.e. grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. In the activity in 2023, three covered transactions tested had no documentation to show that suspension and debarment of the vendor was verified prior to entering inti purchases of over $25,000.. Contact Person Responsible for Corrective Action: Deborah A. Longer, Clerk-Treasurer Contact Phone Number and Email Address: (219) 942-1940 clerk-treasurer@cityofhobart.org Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: When entering into a covered transaction with a vendor, the City will require the vendor to provide proof that the business is not excluded or disqualified (i.e. suspended or debarred). Proof of this may be provided by: (a) Checking Excluded Parties List System (EPLS) SAM Exclusions; (b) collecting a Certification from the vendor; or (c) adding a clause or condition to the covered transaction with that vendor within the body of a contract or procurement agreement. Anticipated Completion Date: August 27, 2024 Signed: Deborah A. Longer Deborah A. Longer, Clerk-Treasurer Date: August 27, 2024

FINDING 2023-006 Finding Subject: COVID - 19: Coronavirus State and Local Fiscal Recovery Funds – US 12 Stormwater Drainage Improvement Project – Reporting Summary of Finding: The Michigan City Sanitary District did not design or implement a system of internal controls that would have prevented the omission of required progress reports, and lack of oversight process. Contact Person Responsible for Corrective Action: Mary Lynn Wall 219-873-1404 Ext 2006 Contact Phone Number and Email Address: 219-873-1404 Ext 2006 mlwall@emichigancity.com Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: The Sanitary District will review the federal grant requirements in order to ensure required reports are submitted in a timely manner. Reports will also be reviewed and documented by another employee prior to submission. Anticipated Completion Date: 08/26/2024

FINDING 2023-005 Finding Subject: COVID - 19: Coronavirus State and Local Fiscal Recovery Funds – US 12 Stormwater Drainage Improvement Project – Suspension and Debarment Summary of Finding: Prior to entering into subawards and covered transactions with SLFRF award funds, the City of Michigan City Sanitary District did not verify that such contractors and vendors were not suspended, debarred, or otherwise excluded. Contact Person Responsible for Corrective Action: Mary Lynn Wall Contact Phone Number and Email Address: 219-873-1404 Ext. 2006 mlwall@emichigancity.com Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: To bring the Sanitary District into compliance with effective internal controls with regards to suspension and debarment, the Sanitary District will verify Contractors and Vendors for suspension or debarment in Sam.gov for any contracts paid with Federal grant funds over $25,000. Verification will be documented by filing a screenshot from Sam.gov. Anticipated Completion Date: 08/26/2024

FINDING 2023-004 Finding Subject: COVID - 19: Coronavirus State and Local Fiscal Recovery Funds – Body Camera - Reporting Summary of Finding: The City did not design or implement a system of internal controls that would have prevented the omission of required progress reports, and lack of oversight process. Contact Person Responsible for Corrective Action: Mary Lynn Wall Contact Phone Number and Email Address: 219-873-1404 Ext. 2006 mlwall@emichigancity.com Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: The City department responsible for federal grant reporting will review the grant requirements in order to ensure required reports are submitted in a timely manner. Reports will also be reviewed and documented by another employee prior to submission. Anticipated Completion Date: 08/26/2024

FINDING 2023-003 Finding Subject: COVID - 19: Coronavirus State and Local Fiscal Recovery Funds – Body Camera – Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Summary of Finding: The City entered into a grant agreement on 03/03/2023 for the purchase of body cameras. The invoice for the body cameras was dated 10/28/2022, prior to approval from the state. The purchase was outside the period of performance. Contact Person Responsible for Corrective Action: Mary Lynn Wall Contact Phone Number and Email Address: 219-873-1404 Ext. 2006 mlwall@emichigancity.com Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: In order for the City to insure that internal controls are in place to prevent noncompliance with federal awards, the City Controller’s office will review and discuss with department personnel, all federal grant applications to ensure compliance with allowable costs and period of performance. Anticipated Completion Date: 08/26/2024

FINDING 2023-002 Finding Subject: COVID - 19: Coronavirus State and Local Fiscal Recovery Funds – Reporting – Internal Controls Summary of Finding: The City of Michigan City was not in compliance with effective internal controls related to submitting the P&E reports Contact Person Responsible for Corrective Action: Mary Lynn Wall Contact Phone Number and Email Address: 219-873-1404 mlwall@emichigancity.com Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: To bring the City into compliance with effective internal controls to ensure requirements related to the grant agreement and the reporting compliance requirements are satisfied, the City Controller will download from the Treasury website the project detail listing for the Deputy Controller to review and verify prior to submitting the report. Anticipated Completion Date: 08/26/2024

FINDING 2023-001 Finding Subject: COVID - 19: Coronavirus State and Local Fiscal Recovery Funds – Suspension and Debarment Summary of Finding: Prior to entering into subawards and covered transactions with SLFRF award funds, the City of Michigan City did not verify that such contractors and vendors were not suspended, debarred, or otherwise excluded. Contact Person Responsible for Corrective Action: Mary Lynn Wall Contact Phone Number and Email Address: 219-873-1404 Ext. 2006 mlwall@emichigancity.com Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: To bring the City into compliance with effective internal controls with regards to suspension and debarment, the City has updated the purchasing checklist, Exhibit A, clarifying the requirement for the Controller’s office to verify suspension or debarment in Sam.Gov. Anticipated Completion Date: August 26, 2024 INDIANA STATE BOARD OF ACCOUNTS 30 EXHIBIT A PURCHASING CHECKLIST CHOOSE THE APPROPRIATE SECTION BELOW SECTION I 1. Is this purchase a small purchase for capital equipment or opera􀆟ng supplies under $50,000? _____Yes (proceed to 2.) _____No (proceed to Sec􀆟on II) 2. Purchase less than $2,500 with sufficient funding in budget a. Inquire with at least two (2) vendors – must document date, who spoken with, what the quote is for, and price. b. Upload this checklist and two quotes to purchase order. 3. $2,500 ‐ $24,999 with sufficient funding in budget, you must submit wri􀆩en solicita􀆟ons, with detailed specifica􀆟ons, to at least two (2) vendors 4. $25,000 ‐ $49,999 you must submit wri􀆩en solicita􀆟ons, with detailed specifica􀆟ons, to at least three (3) vendors a. Obtain proof of funding from Controller’s Office. b. Controller’s office will verify suspension or debarment in Sam.Gov if needed 5. The quote or solicita􀆟on with detailed specifica􀆟ons and proof of funding must accompany the purchase order when submi􀆩ed _______________________________________________________________ Department Head Signature SECTION II – CAPITAL EQUIPMENT AND OPERATING SUPPLIES GREATER THAN $50,000 1. Is this purchase for capital equipment or opera􀆟ng supplies between $50,000 and $149,999.99? _____Yes (proceed to 1a.) _____No (proceed to 3.) a. Wri􀆩en solicita􀆟on with detailed specifica􀆟ons must be preapproved by Board of Works. b. Proof of Funding a􀆩ached (obtained from Controller’s Office). c. Date submi􀆩ed to BOW _____________________________ d. Signature of BOW President ________________________________________ 2. A􀅌er BOW approval, obtain quotes from three (3) vendors known to deal in the line of business. Upload this checklist and three quotes to purchase order. 3. The Controller’s Office will verify for suspension or debarment if Federal Funds are used. A􀆩ach Sam.Gov screen shot to purchase order. __________________________________________________________________ Department Head Signature INDIANA STATE BOARD OF ACCOUNTS 31 EXHIBIT A 4. If the purchase is greater than $150,000, the formal bid process must be followed. a. Wri􀆩en solicita􀆟on with detailed specifica􀆟ons must be preapproved by Board of Works. b. Proof of Funding a􀆩ached (obtained from Controller’s Office). c. Date submi􀆩ed to BOW _____________________________ d. Signature of BOW President ________________________________________ 5. Upload the awarded bid, proof of adver􀆟sing and this checklist to purchase order. 6. The Controller’s Office will verify for suspension or debarment if Federal Funds are used. A􀆩ach Sam.Gov screen shot to purchase order. __________________________________________________________ Department Head Signature SECTION III – SERVICE AGREEMENTS 1. Is the service agreement less than $5,000? _____Yes (proceed to 2.) _____No (proceed to 3.) 2. Service Agreement less than $5,000 a. Inquire with at least two (2) vendors – must document date, who spoken with, what the quote is for, and price. b. Upload this checklist and two quotes to purchase order. _______________________________________________________________ Department Head Signature 3. Service Agreement greater than $5,000. a. Wri􀆩en solicita􀆟on with detailed specifica􀆟ons must be preapproved by Board of Works. b. Proof of Funding a􀆩ached (obtained from Controller’s Office). c. Controller’s office will verify suspension or debarment if federal Funds are used. d. Date submi􀆩ed to BOW _____________________________ e. Signature of BOW President ________________________________________ 4. A􀅌er BOW approval, obtain quotes from three (3) vendors known to deal in the line of business. Upload this checklist and three quotes to purchase order. ___________________________________________________________ Department Head Signature INDIANA STATE BOARD OF ACCOUNTS 32 EXHIBIT A SECTION IV – PROFESSIONAL SERVICES (ACCOUNTING, ARCHITECTURAL, ENGINEERING, LEGAL OR OTHER ADVISORY SERVICES FOR WHICH A LICENSE IS NEEDED) 1. Wri􀆩en solicita􀆟on with detailed specifica􀆟ons must be preapproved by Board of Works a. Proof of Funding a􀆩ached (obtained from Controller’s Office). b. Controller’s office will verify suspension or debarment if Federal Funds are used. c. Date submi􀆩ed to BOW _____________________________ d. Signature of BOW President ________________________________________ 2. A􀅌er BOW approval, upload this checklist and specifica􀆟ons to purchase order. __________________________________________________________________ Department Head Signature SECTION V – LEASE AGREEMENTS IN THE AMOUNT OF $5,000 OR MORE AND DURATION OF ONE (1) YEAR OR LONGER 1. In addi􀆟on to the Quote and Bid process set forth above, any lease of equipment or capital (which includes but are not limited to vehicles, tools, machines, printers, computers, etc…) in the amount of $5,000 or more and of a dura􀆟on of one (1) year or longer, MUST first be approved by the Board of Works along with copies of any and all contracts. __________________________________________________________________ Department Head Signature INDIANA STATE

FINDING 2023-001 (Auditor Assigned Reference Number) Finding Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds – Suspension and Debarment Summary of Finding: Material Weakness, Modified Opinion An effective internal control system, which would include segregation of duties, was not in place at the County in order to ensure compliance with requirements related to the grant agreement and the following compliance requirements: Suspension and Debarment Contact Person Responsible for Corrective Action: Angela C. Birchmeier, County Auditor Contact Phone Number: (574) 935-8555 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: The County and Auditor’s office were made aware of the deficiency during the 2022 audit and made changes to the verification of a contractor is not suspended or debarred for any contract over $25,000.00. The Commissioners approved a form for the various departments to have signed by their vendors at the August 21, 2023 meeting. In the interim, we tried to verify contracts by checking the EPLS (Excluded Parties List System) or to identify a clause in the contract. Each individual department is responsible for having the form signed by the vendor to ensure they are not suspended or debarred and that document is included with the claim by the department when entered into the portal for payment. Anticipated Completion Date: We have already implemented this procedure effective April 2023. Angela C. Birchmeier Title: Marshall County Auditor Date: July 26, 2024

Texas Biomed agrees with late progress report submissions, though did obtain a letter from the EDA Project Manager confirming the EDA reviewed and accepted all required 2023 progress reports and that Texas Biomed was compliant with all reporting requirements in 2023. The late progress report submissions were a result of the consecutive departure of two senior Sponsored Program Administrators in early 2023 that had been assigned responsibility of submitting the EDA project deliverables. Their consecutive departure left a gap in oversight of the deliverable submission due to the manual tracking of such. As of June 2024, the EDA has implemented an online award management portal, EDGE, that sends automated notices/reminders in advance of reporting deliverable due dates, as well as past due notices for unsubmitted deliverables. Multiple Texas Biomed administrators have been assigned points of contact and recipients of these notices from EDGE. The points of contact include, Director, Assistant Director, and a post-award administrator in Sponsored Programs Administration (SPA), in addition to the Controller in the department of Finance. Additionally, the post-award administrator assigned to the EDA project(s) will add an Outlook calendar reminder/due date for deliverables that will include the Project Director, Assistant Director (SPA) and themselves to provide ample notice for preparation and submission of deliverables in a timely manner. Responsible Parties: Eduardo Meza, Director, Sponsored Programs Administration; Pamela Futch, Assistant Director, Post-Award, Sponsored Programs Administration Completion Date: September 30, 2024

The award subject to this finding was a novel award for Texas Biomed and, therefore, controls relative to the wage rate requirements were not in place. Texas Biomed relied on the general contractor awarded the construction project to facilitate compliance with the special tests and provisions; however, failed to validate that certified payrolls were provided as required. Texas Biomed has since implemented enhanced procedures and controls. Purchasing will ensure contracts subject to Davis Bacon Act requirements will clearly outline the responsibilities of the general contractor, as well as requiring flow down to subcontractors. For the Animal Care Complex project partially funded by the EDA award, Purchasing will request certified payrolls dating back to the start of the project from the contractor and subcontractors. Certified Payrolls will only be accepted via DOL form WH347. Texas Biomed has engaged an external project management firm to support extensive new construction underway or soon to commence on Texas Biomed’s campus. The consultant, as part of the scope of their engagement, will serve as the first reviewer of invoices and pay apps, and payment requests will not progress without their approval. The review will include verification of inclusion of necessary certified payrolls. Documentation will be saved in a shared Dropbox folder, where Texas Biomed Facilities personnel will review and sign off on the cover letter from the consultant, verifying Texas Biomed’s review of the necessary certified payrolls at that time. When the pay app is entered by Texas Biomed Accounts Payable in the automated system for invoice payment, the payment request will automatically route to a designated Texas Biomed Facilities staff member. This second staff member will provide a final review of the certified payrolls as a condition for approving the invoice for payment. Both Facilities staff members will have access to the certified payrolls and approval at each step will signify the necessary documentation has been received. If there is a lack of proper documentation, Facilities personnel will alert Accounts Payable of the reason for delay. Facilities personnel will follow up with the project management consultant and contractor to request additional backup when necessary. Responsible Parties: Amber Garcia, Facilities Operations Coordinator; Mike Merz, Principal Engineer; Patricia Thompson, Assistant Director, Materials Management Completion Date: December 31, 2024

Texas Biomed has detailed procurement policies in place that outline requirements relative to expenditures on federal awards. Historically, training of new employees in Purchasing and employees in other departments with purchasing-related responsibilities was provided periodically. Turnover in 2023 affecting the Purchasing department led to a failure to ensure adequate training was provided such that compliance responsibilities were clearly understood. With the implementation of a new P2P system in Q3 2024, training has been updated for the new system and will incorporate reminders of compliance requirements for federal awards. Separate trainings are planned for September 2024 for Purchasing staff and for staff in other departments involved in the purchasing process. Training will include requirements to obtain and document multiple quotes for purchases over $10,000 and to document sole source justification when there are no other viable suppliers for a purchase. Purchasing staff will review requisitions to ensure the appropriate documentation is saved with the Purchase Order in the purchasing system. Any new employees or temporary workers in the Purchasing department will be trained on the requirements before they are allowed to begin processing purchase requisitions. Responsible Parties: Eva Zepeda, Director, Finance; Patricia Thompson, Assistant Director, Materials Management Completion Date: September 30, 2024

Effective June 1, 2023 Texas Biomed implemented enhanced controls to ensure timely entry of subrecipient invoices into the financial system and timely approvals by Principal Investigators (PIs) of invoices. While these controls were operating effectively after the implementation date, turnover within the Accounts Payable team had not been anticipated and led to delayed payment processing. In mid-2024, Texas Biomed implemented a new electronic AP/invoice system as part of a comprehensive Enterprise Resource Planning system (and associated supporting systems) conversion to enhance efficiencies and functionality. With implementation of new systems, control enhancements enabled by the systems were implemented. This included setting up subawards as Purchase Orders, which enabled automation of a previously manual process to secure PI approval of invoices. Accounts Payable staff have been trained on how to properly enter subaward invoices into the system to trigger electronic routing to the PI for approval. While these steps will streamline the approval process, a further mitigating control will be implemented, with Accounts Payable staff periodically tracking approvals of pending subrecipient invoices and notifying the appropriate Sponsored Program Administrator for follow up with PIs in the event of delayed approvals. Responsible Parties: Eva Zepeda, Director, Finance; Michelle Hyde, Controller Completion Date: September 30, 2024

2023-002 – ALN #14.218 Community Development Block Grant/Entitlements Grant; Recommendation: We recommend that the City return the duplicate drawn funds to HUD. We recommend all drawdown requests are completed by appropriately trained employees and that all drawdowns are reviewed and approved by an appropriately personnel prior to submission to HUD. Corrective Action Planned: The City agrees with this finding. The City will work with HUD to repay the duplicated funds and implement additional review and approval procedures for drawdown requests. Person responsible for corrective action: Brandon Phillips, Finance Director Telephone: (256) 549-4715 Anticipated Completion Date: Corrective action will be implemented for the fiscal year ended September 30, 2024.

Federal Agency Name: Department of Homeland Security Program Name: Disaster Grants – Public Assistance Federal Financial Assistance Listing #97.036 Finding Summary: The Cooperative utilized a fringe benefit spreadsheet provided by FEMA where the information was not calculated correctly. Responsible Individuals: Jeff Birkeland, CEO Corrective Action Plan: The spreadsheet we received from FEMA was protected and we could not verify formulas or make changes. We assumed the spreadsheet to work correctly. Through the audit, however, we found that there is an error in a formula(s) having to do with overheads. We will ensure we are using the most up-to-date spreadsheet for fringe benefits on FEMA projects going forward. Anticipated Completion Date: This has been resolved and Steph went back through and updated the spreadsheets accordingly in August 2024