Corrective Action Plans

CONDITION: The Regional Office of Education No. 39 manually maintains and stores its inventory of property and equipment. Asset details in the property records include only the description of the property, acquisition date, and cost of the property. The other minimum requirements specified by the Code are not included in the property records. Moreover, the Regional Office of Education No. 39 was unable to properly account for the results of its physical inventory count and only performed partial reconciliation. PLAN: The ROE will combine the current inventory documents to provide a complete detailed accounting of all property and equipment which will provide both the required information for federal funds as well as a reconciliation to the capital outlay disclosures within the financial statements. Physical inventory will be taken each year with additions and deletions recorded and signed off on by management. These documents will be recorded and stored each year for review. ANTICIPATED DATE OF COMPLETION: The anticipated date of completion is January 2025. CONTACT PERSON: Jill Reedy, Regional Superintendent

CONDITION: The Regional Office of Education No. 39 did not submit or timely submit the required reports to the Illinois State Board of Education in compliance with the grant award agreement. PLAN: The ROE management will provide close oversight for the timely submission of grant expenditures and performance reports. Checklist, due dates, and reminders are shared from the Regional Superintendent to the Business Office Manager and Program Directors. Management will review the grant report submissions in IWAS for accuracy and completion before approving and submitting to ISBE. ANTICIPATED DATE OF COMPLETION: Implemented January 2024 CONTACT PERSON: Jill Reedy, Regional Superintendent

Finding 2023-04 Failure to Create and Implement Effective Internal Controls over Federal Compliance Condition: The Organization failed to develop, implement, and monitor an appropriate system of internal controls that ensure compliance in relevant compliance categories. Audit procedures required the assessment of internal controls over Allowable Activities, Allowable Costs, Period of Performance, Procurement, Suspension, and Debarment. In all compliance requirement categories assessed, it was determined that the Organization had no system of internal controls in place to properly offset the risks involved. It is likely that all other compliance requirement categories not assessed during the audit also have material weaknesses. Ultimately, this failure to implement an effective system of internal controls has led to the Organization having multiple instances of noncompliance and material questioned costs. Corrective Actions Taken or Planned: - A licensed CPA firm will provide monthly compliance reports covering critical federal compliance categories. These reports will serve as an ongoing tool to identify risks, track compliance, and document corrective measures where needed. - Develop and implement a system of internal controls to address federal compliance requirements. This framework will include the following components: + Written Policies and Procedures: Establish clear, written policies and procedures for all key compliance categories, ensuring alignment with federal regulations. + Approval and Documentation Process: Require VOICES' executive team to review, approve, and document all activities, expenditures, and procurement processes related to federal funding. + Segregation of Duties: Assign roles and responsibilities to staff to ensure adequate segregation of duties for reviewing and approving federal transactions. - Implement procedures to verify all vendors against the Suspension and Debarment list prior to procurement, ensuring compliance with federal guidelines. Maintain detailed procurement records that include procurement method, vendor selection justification, and award documentation. - Provide mandatory compliance training for all relevant staff to increase understanding of federal requirements and internal control processes. The training will cover key areas such as allowable costs, period of performance, procurement rules, and documentation standards.

2023-007 Assistance Listing No. 96.001 , 96.006 and Social Security Disability lnsurance Cluster Type of Compliance Requirement: Period of Performance lnternal controls over period of performance were not consistentlv performed Response: Of the five instances noted in the auditor's "Period of Performance" test work, we concur with four. With one of the sample items, however, we argue that since the service was invoiced on a State Fiscal Year, it was impractical to further split the invoice into the various appropriate Federal periods of performance, especially given the way those specific invoices are allocated between other shared program areas within our agency, etc. Corrective Action Plan: Our agency takes these findings seraously and will continue to evaluate ways of improving controls. At a minimum, it is our intent to increase and provide additional training to the staff overseeing and approving these types of transactions so that they can accurately apply transactions to the appropriate periods. This was something we had already begun (i.e. provrding additional guidance and training to stafD during the current fiscal year. So, we hope our agency is already on a corrective path. But, we will continue to push for more training in the immediate future and strive for improvement in all other aspects. We also think it is important to note that, of the findings identifled by the auditors related to "Period of Performance," those items were discovered out of a total sample size oI 120 items (i.e. 60 sample items related to thejr "Period of Performance" test work and 60 sample items related to "General Disbursements" test work). So, a slightly larger sample size than that of the 60 referenced in the auditor's schedule of flndings. Additionally, the auditor's sample appeared to selectively target the specific periods and transactions that would have been most susceptible to these types of potential errors. And, although we are not objecting to the way in which the sample was selected, we would.just point out that this approach of sample selection may not be truly reflective of a purely random sample covering all transactions across the entire fiscal year. Therefore, although we ultimately concur with the findings here, we do not necessarily believe these results paint the fairest picture on the overall effectiveness of our agency's controls across the more than '100,000 transactions that would have been processed during the period of audit for this program. Again, we take these findings seriously. But, based on the audit test work and results, we feel the controls we have in place are ultimately working adequately enough to mitigate the potential for material misstatements. Regardless, we will continue to monitor and evaluate our controls to help further reduce the risk of these types of issues moving forward. Planned completion date for corrective action plan: lmmediately. But, additional training for managers to be provided by September 30, 2024.

2023-008 Assistance Listing No. 96.001, 96.006 and Social Security Disability lnsurance Cluster Type of Compliance Requirement: Allowable Costs lnternal Controls gtver glant disbursements were not consistently performed Response: There is no disagreement with the audit finding. Corrective Action Plan: Item is isolated and immaterial. And, we feel effective controls are in place to mitigate the likelihood of this type of error. We have also, since, reached out to the vendor to redeem the $14 associated with this transaction. However, we will continue to monitor and reinforce, with our managers, the importance of being vigilant during their review and approval processes for this type of situatlon. Planned completion date for corrective action plan: lmmediately Name(s) of the contact person(s) responsible for corrective actions: Andy Salin Finance Director 601-853-5220.

2023-026 Strengthen Controls to Ensure Compliance with Federal Monitoring Requirements ALN #21.023 We acknowledge the finding. The Mississippi Department of Finance and Administration was not appropriated funds for this program nor was the agency given any authority for the administration for the program. As such, DFA was not in a position to assess eligibility determinations or perform monitoring. DFA drew down funds on behalf of Mississippi Home Corp in light of an impending federal deadline. Mississippi Home Corporation had eligibility and fraud prevention policies in place for the ARPA programs. These policies included, but are not limited to, contracting with a third-party law firm to review all applications with a three-tier review system, monitoring with random sample selections for every 10% completed, employing an internal, qualitycontrol auditor, and reviewing any applications submitted that were greater than $10,000. As a result of their monitoring, MHC was able to identify suspicious applications and report them to the Mississippi Attorney General for investigation. MHC continues to report all expenditures directly to U.S. Treasury on a quarterly basis. It is also worth noting that the program stopped taking applications in September of 2022 which was prior to the issuance of the 2022 Single Audit Report that was released on July 31, 2023. Thus, policies and controls in place could not be changed for this. DFA is taking the position that corrective action is no longer necessary for these funds. Corrective Action: A. The Mississippi Department of Finance and Administration is taking the position that corrective action is no longer necessary. The program stopped taking applications in September of 2022, which is prior to the current 2023 single audit report dated November 21, 2024. Policies and controls in place could not be changed for this. B. N/A C. N/A D. The Emergency Rental Assistance program stopped taking applications September of 2022.

2023-025 Response: Strengthen Controls to Ensure Compliance with Eligibility Requirements for the Emergency Rental Assistance Program (ERA). ALN# 21.023 We acknowledge the finding. The Mississippi Department of Finance and Administration was not appropriated funds for this program nor was the agency given any authority for the administration for the program. As such, DFA was not in a position to assess eligibility determinations or perform monitoring. DFA drew down funds on behalf of Mississippi Home Corp in light of an impending federal deadline. Mississippi Home Corporation had eligibility and fraud prevention policies in place for the ARPA programs. These policies included, but are not limited to, contracting with a third-party law firm to review all applications with a three-tier review system, monitoring with random sample selections for every 10% completed, employing an internal, qualitycontrol auditor, and reviewing any applications submitted that were greater than $10,000. As a result of their monitoring, MHC was able to identify suspicious applications and report them to the Mississippi Attorney General for investigation. MHC continues to report all expenditures directly to U.S. Treasury on a quarterly basis. It is also worth noting that the program stopped taking applications in September of 2022 which was prior to the issuance of the 2022 Single Audit Report that was released on July 31, 2023. Thus, policies and controls in place could not be changed for this. DFA is taking the position that corrective action is no longer necessary for these funds. Corrective Action: A. The Mississippi Department of Finance and Administration is taking the position that corrective action is no longer necessary. The program stopped taking applications in September of 2022, which is prior to the current 2023 single audit report dated November 21, 2024. Policies and controls in place could not be changed for this. B . N/A C. N/A D. The Emergency Rental Assistance program stopped taking applications September of 2022.

Reference Number: 2023-002 Prior Year Finding: Yes, 2022-023 Federal Agency: U.S. Department of Labor Department Name: Mississippi Department of Employment Security Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: 7/1/22 – 6/30/23 Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance – Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. 2 CFR section 200.332 also states that pass-through entities must: (d) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: 1) The subrecipient's prior experience with the same or similar subawards; 2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; 3) Whether the subrecipient has new personnel or new or substantially changed systems; 4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (e) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521 Management decision. (f) Verify that every subrecipient is audited as required by Subpart F - Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501 Audit requirements. Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Mississippi Department of Employment Security (MDES) was unable to provide documentation of subaward agreements and monitoring activities performed. Context: Six subrecipients were selected for testing and the following exceptions were noted:  1 of 6 subawards was not available for audit. Auditors were unable to verify if the subaward contained all required information nor if it was reviewed and approved by appropriate program staff prior to issuance.  For 3 of 6 subrecipients, MDES was unable to provide documentation that it performed monitoring activities nor that it ensured the subrecipients were audited as required by Subpart F. Questioned costs: Undetermined. Cause: Internal controls were not sufficient to ensure that copies of subaward agreements were maintained and available for audit, nor that it maintained documentation of subrecipient monitoring activities performed. Effect: Auditors were unable to verify that subawards were issued in accordance with Federal requirements nor that the subrecipients had been adequately monitored and were audited as required by Subpart F. Recommendation: MDES should review and enhance internal controls and procedures to ensure that it maintains copies of all subaward agreements, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed for all subrecipients. Copies of subawards and documentation of subrecipient monitoring activities should be readily available for audit. Views of responsible officials: MDES Response MDES concurs with this finding. Corrective Action Plan: a. MDES Plan: MDES will establish a checklist to verify receipt of the documents responsive to this compliance requirement. Using the checklist, MDES will ensure that all documents indicated in this finding will be readily available for the auditors as early as possible in the audit process. Additionally, MDES will develop a timeline and plan for the submission of documentation to ensure timely review. b. Contact Person Responsible: Director of Grant Management. c. Anticipated Corrective Action Plan Completion Date: July 31, 2024.

Reference Number: 2023-001 Prior Year Finding: No Federal Agency: U.S. Department of Labor Department Name: Mississippi Department of Employment Security Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: 7/1/22 – 6/30/23 Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report firsttier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Mississippi Department of Employment Security (MDES) did not report subaward information to FSRS within thirty days after issuing the subaward or subaward amendment. Context: Nine subawards were selected for testing which included five original subawards and four amendments. We noted the following exceptions:  1 of 9 subawards should have been reported by 11/30/2022 but was not reported before the end of FY 2023. The subaward was subsequently reported in February 2024.  3 of 9 subawards should have been reported by 5/31/2023 but were not reported before the end of FY 2023. The subawards were subsequently reported in February 2024.  4 of 9 subawards should have been reported no later than 2/28/2023 but they were reported on 3/29/2023, or 29 days late. Cause: MDES’s procedures and controls were not sufficient to ensure that subawards were reported to FSRS no later than the end of the month following the month of issuance. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend MDES establish procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance of each subaward. Views of responsible officials: MDES Response MDES concurs that the program year 2022 subawards were not entered into the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) within thirty days of subaward issuance. The practice of MDES has been to enter all subawards into the FSRS at one time and later perform a look back to determine the adjustments needed to bring the reported balances up or down based on subaward amendments made during the year. Specifically, for program year 2022 subawards, the initial entry into FSRS was on 3/29/2023 with the post award adjustment entry made February 23, 2024. Corrective Action Plan: a. MDES Plan: MDES will strengthen controls around FSRS reporting to ensure subawards are reported to FSRS within thirty days of issuance. MDES will also monitor subaward amendments and ensure they are reported within thirty days of issuance. Entries into the FSRS will be reviewed by the supervisor to ensure compliance. This process is effective immediately. b. Contact Person Responsible: Comptroller. c. Anticipated Corrective Action Plan Completion Date: July 15, 2024.

Reference Number: 2023-003 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Mississippi Department of Employment Security Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: 7/1/22 – 6/30/23 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Compliance – Per 20 CFR parts 680, 681, 682, and 683, state workforce agencies must ensure that individuals are eligible to participate in the program. Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Mississippi Department of Employment Security (MDES) was unable to provide documentation that the eligibility determination for a participant had been reviewed and approved. Context: Documentation for one of forty participants selected for testing did not contain a supervisor’s signature indicating that it had been reviewed and approved. Questioned costs: Undetermined. Cause: Internal controls were not sufficient to ensure that documentation supporting participant eligibility was reviewed and approved by a supervisor. Effect: Failure to ensure that all eligibility documentation is properly reviewed and approved could result in ineligible individuals participating in the program. Recommendation: MDES should review and enhance internal controls and procedures to ensure that participant eligibility documentation is properly reviewed and approved by a supervisor. Views of responsible officials: MDES Response MDES concurs with this finding and recommendation. These incidents were isolated and non-reoccurring. MDES will implement procedures to require a review of all eligibility documents for completeness. Corrective Action Plan: a. MDES Action Plan: MDES will require, as a compensating control for each file to contain a checklist of required documentation that will be reviewed and approved by the supervisor responsible for the respective job center. MDES will verify internal compliance with these procedures over the next quarter. b. Contact Person Responsible: Director of Grant Management. c. Anticipated Corrective Action Plan Completion Date: MDES will complete this corrective action on or before September 30, 2024.

Reference Number: 2023-001 Prior Year Finding: No Federal Agency: U.S. Department of Labor Department Name: Mississippi Department of Employment Security Federal Program: Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: 7/1/22 – 6/30/23 Compliance Requirement: Special Tests and Provisions – UI Benefit Payments Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Compliance: The State Workforce Agency (SWA) is required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is DOL’s quality control system designed to assess the accuracy of UI benefit payments and denied claims, unless the SWA is exempted from such requirement (20 CFR section 602.22). The program estimates error rates, that is, numbers of claims improperly paid or denied, and dollar amounts of benefits improperly paid or denied, by projecting the results from investigations of statistically sound random samples to the universe of all claims paid and denied in a state. Specifically, the SWA’s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt, and in-depth investigations to determine if the administration of the UC program is consistent with state and federal law (20 CFR section 602.21(d)). As presented in the ET Handbook No. 395, the investigation involves a review of state agency records, as well as contacting the claimant, employers, and third parties (either inperson, by telephone, or by fax) to conduct new and original fact-finding related to all of the information pertinent to the paid or denied claim that was sampled. BAM investigators review cases for adherence to federal and state law as well as official policy. The following time limits are established for completion of all cases for the year. (The "year" includes all batches of weeks ending in the calendar year.): • a minimum of 70 percent of cases must be completed within 60 days of the week ending date of the batch; • 95 percent of cases must be completed within 90 days of the week ending date of the batch; • a minimum of 98 percent of cases for the year must be completed within 120 days of the ending date of the calendar year. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Mississippi Department of Employment Security (MDES) was unable to provide documentation that case reviews were reviewed and approved by investigator staff. Context: One of forty cases selected for testing did not have documentation of investigator review and approval. Questioned costs: Undetermined. Cause: The Department’s internal controls were not sufficient to ensure that it maintained documentation of investigator review and approval for all BAM case reviews. Effect: Incomplete documentation of BAM case reviews could delay the detection and correction of inaccurate benefit payments and denied claims. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that documentation of investigator review, and approval of all BAM case reviews is maintained. Views of responsible officials: MDES Response MDES concurs with this finding. Corrective Action Plan: a. MDES Plan: MDES will provide additional training to BAM investigative staff and supervisors to remind them of the importance of complying with federal regulations requiring all investigative staff to document their work on the final approved reviews of the BAM cases with a signature. b. Contact Person Responsible: Director Unemployment Insurance – Tax. c. Anticipated Corrective Action Plan Completion Date: July 31, 2024.

2023-004 Federal Award Subrecipient Monitoring – Material Non-Compliance and Material Weakness in Internal Control over Compliance Recommendation: The Organization should establish written policies and procedures regarding the contracting and monitoring of subrecipients that are in line with Uniform Guidance requirements, as well as establish organizational controls to ensure that such policies and procedures are being followed. Action Taken: Management concurs with the finding and has defined corrective action to address it. Staff have reviewed policies and procedures already in place to ensure compliance of subrecipient monitoring. The Fiscal department has subsequently conducted a fiscal desk review of the subrecipient in question for FY 22/23 and no findings were found. Standard Operating Processes were updated to ensure all subrecipients are fiscally monitored based on the Risk Assessment Determination level. The above identified corrective action was implemented in July 2024. Stacey Wilson, Fiscal Director, has implemented a monitoring calendar for fiscal and Program Director’s will be responsible for ensuring subrecipients are monitored.

2023-003 Federal Award Special Reporting – Federal Funding Accountability and Transparency Act (FFATA) – Material Non-Compliance and Material Weakness in Internal Controls over Compliance Recommendation: The Organization should establish written policies and procedures regarding review of grant agreements for compliance requirements along with written policies and procedures for first-tier subawards including tracking and proper internal control procedures. Action Taken: Management concurs with the finding and has defined corrective action to address it. We have identified gaps in our reporting processes and worked to implement changes to ensure compliance with special reporting requirements. Policies and procedures will be updated regarding special reporting requirements. The Fiscal department will also be responsible for reviewing all contracts to identify all compliance requirements. Tracking procedures will be implemented to ensure reports are filed timely. The above identified corrective action was implemented in July 2024. Stacey Wilson, Fiscal Director, has implemented a tracking system for the FFATA.

U.S Department of Homeland Security Staffing for Adequate Fire and Emergency Response (SAFER) – 97.083 Management’s Response: During 2024, management worked with the Fire Department and Payroll to ensure only straight time was coded to this grant and no overtime was charged to this grant. This was a finding in 2022 but we were not aware until the audit was completed in 2024 there was an issue the existing payroll system was not flagging. This has been corrected in in 2024 and should not be a recurring issue. Views of Responsible Officials and Corrective Action: The reason for recurrence is the finding was communicated late in the prior year. Management will work with stakeholders so that only the allowed costs are used as the basis of the reimbursement packet. We have also created fencing around allowed costs and period of performance in our new ERP system. Management will ensure this is addressed by December 31, 2024. Responsible Official: Dr. Shelley Kneuvean Chief Financial Officer Unified Government of Wyandotte County & Kansas City KS

U.S Department of Treasury COVID 19 – Coronavirus State and Local Fisal Recovery Funds – 21.027 Management’s Response: There was a change in the position of CFO and the Unified Government did not have access to the US Treasury system for a period of time to upload the report. The UG finance team worked with our outside contractor to gain access; and upon getting access to the system, immediately uploaded the form. This was caused by turnover in staff and is not reoccurring. Views of Responsible Officials and Corrective Action: The reason for recurrence is the finding was communicated late in the prior year. In concert with our ARPA consultant, we were able to combine the City & County on the portal and report timely quarterly since this initial issue in the reporting portal will ensure this is addressed by December 31, 2025. Responsible Official: Dr. Shelley Kneuvean Chief Financial Officer Unified Government of Wyandotte County & Kansas City KS

U.S. Department of Health and Human Services, passed through Kansas Department of Aging Aging Cluster – ALN 93.045 – Special Programs for the Aging_Title III, Part C_Nutrition Services – 2301KSOAHD Management’s Response: The department had been using set percentage allocations for grants in the payroll system. They are working with payroll and IT to be able to do real time reporting on personnel, number of daily hours per grant. This should be implemented in 2025. Views of Responsible Officials and Corrective Action: The reason for recurrence is the finding was communicated late in the prior year and due to transition and turnover within the department's staff. Management agrees with the stated finding and has implemented a corrective action plan. Management will ensure this is addressed by December 31, 2025. Responsible Official: Dr. Shelley Kneuvean Chief Financial Officer Unified Government of Wyandotte County & Kansas City KS

U.S. Department of Health and Human Services, passed through Kansas Department of Aging Aging Cluster – ALN 93.044 - Special Programs for the Aging_Title III, Part B_Grants for Supportive Services and Senior Centers - 2301KSOASS ALN 93.045 – Special Programs for the Aging_Title III, Part C_Nutrition Services – 2301KSOAHD Management’s Response: The department of aging is reviewing its current process to track spending and earmarking. A new system for compliance monitoring is planned for early 2025. Views of Responsible Officials and Corrective Action: The reason for recurrence is the finding was communicated late in the prior year and due to transition and turnover within the department's staff. Management will put controls and processes in place to ensure earmarking is being monitored for compliance. Management will ensure this is addressed by December 31, 2025. Responsible Official: Dr. Shelley Kneuvean Chief Financial Officer Unified Government of Wyandotte County & Kansas City KS

U.S. Department of Health and Human Services, passed through Kansas Department of Aging Aging Cluster – ALN 93.044 - Special Programs for the Aging_Title III, Part B_Grants for Supportive Services and Senior Centers - 2301KSOASS ALN 93.045 – Special Programs for the Aging_Title III, Part C_Nutrition Services – 2301KSOAHD Management’s Response: The Aging Department will begin performing risk assessments in January 2025 for all subrecipients. All subrecipients will be required to submit monthly reports as well, which will be evaluated by the Aging Department staff to ensure compliance. Additionally, our current system includes a once-a-year compliance checklist with our subgrantee and is being updated for use in first quarter of 2025. Views of Responsible Officials and Corrective Action: The reason for recurrence is the finding was communicated late in the prior year and due to transition and turnover within the department's staff. Management will ensure this is addressed by December 31, 2025. Responsible Official: Dr. Shelley Kneuvean Chief Financial Officer Unified Government of Wyandotte County & Kansas City KS

U.S. Department of Health and Human Services, passed through Kansas Department of Aging Aging Cluster – ALN 93.044 - Special Programs for the Aging_Title III, Part B_Grants for Supportive Services and Senior Centers - 2301KSOASS ALN 93.045 – Special Programs for the Aging_Title III, Part C_Nutrition Services – 2301KSOAHD Management’s Response: Procurement began performing suspension and debarment checks on all vendors/contracts funded with grants in 2024. This process was implemented in the summer of 2024 as a result of the 2022 Single Audit Finding. Due to the audit not being completed prior to the completion of 2023, this finding was unknown to management. Upon being aware procurement was not doing the checks, immediate correction was undertaken. Checks are being done and documentation maintained in the purchasing file. The language has been included in bid documents as well. Views of Responsible Officials and Corrective Action: The reason for recurrence is the finding was communicated late in the prior year and due to transition and turnover within the department's staff. Procurement has begun the process of checking SAM.gov for debarment for potential suppliers. Also, departments have been informed of this required step for both suppliers and subrecipients. Downstream, need to evaluate if this language can be added to the contract templates. Management will ensure this is addressed by December 31, 2024. Responsible Official: Dr. Shelley Kneuvean Chief Financial Officer Unified Government of Wyandotte County & Kansas City KS

Financial Reporting and Review Process Description of the Finding: BSEDC did not have a secondary review process over the required financial reporting to Federal EDA. The lack of a secondary review process allowed for errors and omissions to go undetected, thus resulting in omission of $3,614 of loan origination fee income and interest income from federal program income calculations. Planned Corrective Actions: BSEDC’s Senior Director of Finance and Director of Business Finance/Program Finance Director have implemented processes for the Senior Director of Finance to perform a secondary review of the required reporting to Federal EDA before it is submitted. Timeline for Completion: BSEDC implemented the secondary review process in October 2024 with the completion and submission of the FY24 annual report to Federal EDA. Responsible Person or Party: BSEDC’s Senior Director of Finance and Director of Business Finance/Program Finance Director are both responsible for ensuring that the secondary review is complete before submitting reporting to Federal EDA.

The School District concurs with the findings reported in Finding 2023-004 and does not dispute the details reported under the Criteria or Specific Requirement section, Condition section, and Effect section of the report. Your findings identify charging of unallowable costs that involved federal funds received by the School District. You noted that the unallowable costs involved payment of employment compensation to an employee on multiple dates, during times and for reasons that were suspect and unauthorized. The School District also concurs with the guidance you provide in the Recommendation section of the report. Corrective actions are already being taken, and training has already begun. The School Board will adopt appropriate policies to ensure appropriate oversight over the manner in which funding is expended for employee compensation, including situations when the sources of funding involve federal awards that obligate the School District to meet specific control requirements. Currently, the School District is reviewing all uses of federal funds, starting with Title 1, the 21st Century Center Learning Center Cohort, and the Education Stabilization Fund. The following additional corrective steps will be taken by the Superintendent: 1. All change of job assignments, program assignments and/or employee compensation must be approved by the Superintendent and memorialized in writing as evidence of approval. The Human Resources Department shall cause the necessary documentation containing the Superintendent's approval to be prepared, signed, and maintained in employee payroll and personnel records, and ensure that employee compensation is paid when owed for the appropriate amount(s). 2. The Superintendent will require the employees, supervisors, and management operating or overseeing individual programs and operations to become and remain familiar with their respective program and/or operation requirements, including those that govern which costs are allowable/authorized and steps required to demonstrate compliance. 3. In light of the Findings, the Superintendent will also identify one or more key administrative staff members who will be tasked with overseeing the use of federal funds for Title I, the 21st Center Learning Center Cohort, and the Education Stabilization Fund. 4. The Superintendent will direct staff to immediately confer with general counsel and with appropriate federal or state agency points of contact when compliance steps or obligations are unknown or require clarification. 5. Individuals compensated through federal funds shall be obligated to comply with applicable rules as a condition of employment. No staff member will have lone or sole responsibility for administering or overseeing administration and/or payment of their own compensation from federal funding sources. 6. At least twice annually, the Superintendent shall direct a review of wheterher funds have been appropriately reused for costs that are authorized and allowable. Title I, the 21st Century Center Learning Center Cohort, the Education Stablization Fund, and other programs/operations where noncompliance is known or suspected will be reviewed at least four times during the following school year, or more frequently when deemed necessary by the Superintendent. Additional program or operation areas may be identified for review through random sampling. Training on the rules governing authorized and allowable costs and expenditures of federal funds shall occur by August 12, 2024, prior to the start of the 2024-2025 school term. Training will be conducted by the Superintendent (Sam Moore), CFO (DaVona Howard), general counsel (Doug Lawrence), members of the School District's business office staff and others designated by the Superintendent.

The Agency agrees with this finding. As part of the subaward review process, the Chief Financial Officer will ensure that first tier subawards are checked to see if FFATA reporting is needed based on the award amount. If FFATA reporting is required, the Chief Financial Officer will assign this task to the Assistant Director for Financial Compliance to ensure that reporting is completed to the FFATA Reporting System FSRS.

The Agency agrees with this finding. As part of the subaward review process, the Chief Financial Officer will ensure that first tier subawards are checked to see if FFATA reporting is needed based on the award amount. If FFATA reporting is required, the Chief Financial Officer will assign this task to the Assistant Director for Financial Compliance to ensure that reporting is completed to the FFATA Reporting System FSRS.

View of Responsible Officials and Corrective Action Plan – Management will monitor the review and approval procedures for reporting to ensure that reports are signed off to indicated and document that review and approval has been made.

The Business and Finance Department at ANHC has mandated, from all departments at ANHC, an approval form for all “Autopay” transactions to be signed by the ED immediately.