Corrective Action Plans

Finding Number: 2023‐001 Program Name/Assistance Listing Title: CDBG – Entitlement Grants Cluster Assistance Listing Number: 14.218 Contact Person: Linda Ayres, Community Resource Program Supervisor Anticipated Completion Date: March 2024 Planned Corrective Action: Management will strengthen the Town’s system of internal procedures by providing additional reporting measures for first‐tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). As of the date of this report, management has submitted reports for current subcontracts greater than $30,000 and will submit reports moving forward by the end of the month following the month in which subawards greater than $30,000 are awarded.

Department of Education 2023-018 Education Stabilization Fund – Assistance Listing No. 84.425C Condition: Property records did not contain accurate information related to certain equipment purchases. Recommendation: We recommend the institutions strengthen its controls and processes related to capturing information relating to equipment purchases and ensure that property records properly reflect the required information. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Property Management department has and will continue to double-check the information being entered into the University’s inventory system as it relates to equipment purchases and University property. The Property Management department will also ensure university departments are completing quarterly self-audits, verifying the information of all assets added to their inventory reports. To ensure this the Property Manager will increase communication reminding departments to check for any discrepancies of newly added assets. Name(s) of the contact person(s) responsible for corrective action: Tanya Donnell, Property Manager; Vance Siggers, Interim Vice President of Campus Operations; and Howard Brown, Vice President of Business and Finance. Planned completion date for corrective action plan: September 01, 2024. If the Department of Education has questions regarding this plan, please call Tanya Donnell, Property Control Manager at (601)979-6354.

Department of Education 2023-017 Education Stabilization Fund – Assistance Listing No. 84.425E, F, J, T (MUW) Condition: Annual Reporting: MUW could not provide evidence of review over the annual report submitted March 24, 2023. Quarterly Reporting: MUW submitted an out-of-date quarterly form for the quarter ending September 30, 2022. In addition, MUW could not provide evidence of review over the quarterly report submitted for the quarter ended September 30, 2022. Recommendation: We recommend the institutions strengthen their understanding of the reporting requirements established by the grant and ensure supporting documentation is maintained to substantiate amounts reported. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Grant Accountant will strengthen their understanding of the reporting requirements established by the grant and stay abreast of any changes/revisions to those reporting requirements. They will work in conjunction with the Director of Sponsored Programs. Additionally, the Grant Accountant has created a cover sheet that will be signed by the Vice President of Finance and Administration upon review of the report being submitted. The completed and signed form will serve as evidence that accompanying report has been reviewed. All documentation will be retained in University Accounting. Name(s) of the contact person(s) responsible for corrective action: Rachel Sudduth. Planned completion date for corrective action plan: March 21, 2024. If the Department of Education has questions regarding this plan, please call Susan Sobley at(662) 329-7214. 2023-017 Education Stabilization Fund - Assistance Listing No. Assistance Listing No. 84.425E, F, J, T (MVSU) Condition: Quarterly Reporting: MVSU could not provide evidence of review over the quarterly report submitted for the quarter ended June 30, 2022. Annual Reporting: MVSU could not provide evidence of review over the annual report submitted March 25, 2023. Recommendation: We recommend the institutions strengthen their understanding of the reporting requirements established by the grant and ensure supporting documentation is maintained to substantiate amounts reported. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The quarterly reports with supporting documentation have been submitted to the Director of Accounting and Vice President for Business and Finance review prior to the posting deadline. This action started with the quarterly report submitted for the quarter ending June 30, 2023. The deadline for posting this quarterly report was July 10, 2023. Additionally, the annual reports with supporting documentation will be submitted to the Director of Accounting and Vice President for Business and Finance in a timely manner for review and verification prior to the submission deadline. Name(s) of the contact person(s) responsible for corrective action: Samuel Melton Planned completion date for corrective action plan: July 10, 2023 If the U.S. Department of Education has questions regarding this plan, please call Samuel Melton at 662.254.3882.

Department of Education 2023-016 Education Stabilization Fund – Assistance Listing No. 84.425F Condition: We noted that the University does not have policies or procedures in place for compliance with suspension and debarment requirements. Recommendation: We recommend that the University ensure its policies and procedures over suspension and debarment are being enforced to ensure evidence of compliance to suspension and debarment regulations are maintained. This can include maintaining evidence that management reviewed the SAM.gov website, maintaining a certification from the vendor, or including a clause in contract with vendors that they are not suspended or debarred. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Director of Sponsored Programs and the Director of Purchasing will develop a policy and procedures that ensures the University is in compliance with the suspension and debarment requirements outlined in OMB Circular A-110, section 13. . Name(s) of the contact person(s) responsible for corrective action: Patricia Caston, Melissa Buxton. Planned completion date for corrective action plan: April 30, 2024 If the Department of Education has questions regarding this plan, please call Susan Sobley at (662) 329-7214.

Department of Education 2023-015 Education Stabilization Fund – Assistance Listing No. 84.425F Condition: The University drew funds in fiscal year 2022 for amounts earned in fiscal year 2022 but were not reported on the SEFA until fiscal year 2023. Recommendation: We recommend the institution review and revise its current reporting procedures and review requirements to ensure that federal expenditures are properly identified and classified. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: University Accounting will review and revise its current reporting procedures and review requirements to ensure that federal expenditures are properly identified and classified. Name(s) of the contact person(s) responsible for corrective action: Rachel Sudduth Planned completion date for corrective action plan: April 1, 2024 If the Department of Education has questions regarding this plan, please call Susan Sobley at 662-386-1403.

Department of Education 2023-014 Return of Title IV Funds, Assistance Listing No. 84.063, 84.268 Condition: The return of funds was calculated improperly. Auditors’ Recommendation: During CLA testing of Special Tests and Provisions. CLA noted that the university was not in compliance with federal financial aid regulations when a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV grant or loan assistance that the student earned as of the student’s withdrawal date (34CFR section 668.22). We recommend the university review the R2T4 requirements and implement procedures to ensure the R2T4 calculations are using the correct amount of term days and are accurately completed. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to the finding: The R2T4 process has been updated to include placing the requirement for exit counseling as a condition for submission of the withdrawal form. An additional notification will be sent after the R2T4 process has been completed. Name(s) of the contact person(s) responsible for corrective action: Ozie Ratcliff – Director of Financial Aid Planned completion date for a corrective action plan: The updated process will begin on 3/25/2024. If the Department of Education has questions regarding this plan, please contact Ozie Ratcliff at 601-979-3347.

Department of Education 2023-013 The Gramm-Leach-Bliley Act (GLBA)Compliance (ASU) Student Financial Aid Cluster – Assistance Listing No. 84.007, 84.033, 84.063, 84.268 Auditors’ Recommendation: The Institution is required to perform Safeguards that address the required areas noted in GLBA 16 CFR 314.4, which are (1) the Institution designated a Qualified Individual responsible for implementing and monitoring the Institution’s information security program, (2) the Institution’s written information security program addresses the required minimum seven elements. CLA identified that the organization does not meet compliance requirements outlined in the GLBA Safeguards Rule. The institution’s policy identifies a qualified individual (such as a CIO, ISO, CISO) responsible for the Information Security program. In addition, the written information security program (WISP) did not address certain required elements. CLA recommends that the safeguards are updated/performed per GLBA requirements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Center for Information Technology Services is moving towards completion of the GLBA 16 CFR 314.4 requirements: a) Fully Compliant b) Fully Compliant c) Partially Compliant d) Fully Compliant e) Fully Compliant f) Vendor Management policy and program in design g) Fully Compliant h) IR Plan in draft i) Not Completed To address “Qualified Individual”, the university has retained vCISO services of Pileum, reporting to the CIO. Pileum is providing annual risk assessments and assisting with authoring/auditing required controls, policy, procedures, and security program documentation. All in-progress requirements and the published university statement of compliance will be completed by May 31, 2024 Name(s) of the contact person(s) responsible for corrective action: Desmond L. Stewart, Interim Chief Information Officer Planned completion date for corrective action plan: May 31, 2024 If the U.S. Department of Education has questions regarding these plans, please call Juanita Edwards at 601-877-6672. 2023-013 The Gramm-Leach-Bliley Act (GLBA) Compliance (MVSU) Student Financial Aid Cluster – Assistance Listing No. 84.007, 84.033, 84.063, 84.268 Auditors’ Recommendation: The Institution is required to perform Safeguards that address the required areas noted in GLBA 16 CFR 314.4, which are (1) the Institution designated a Qualified Individual responsible for implementing and monitoring the Institution’s information security program, (2) the Institution’s written information security program addresses the required minimum seven elements. CLA identified that the organization does not meet the following compliance requirements outlined in the GLBA Safeguards Rule. (b.1b) The institution has been approved by the individual leading the information security program (b.3) The institution’s written information security program and verify the implementation of safeguards b.3.1 to b.3.8. (b.3.5) the institution's written information security program identifies the use of multi-factor authentication for individuals accessing sensitive information across systems. (b.3.7) the institution’s written information security program includes an adopted change management policy with procedures documented accordingly. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: We have engaged with Pileum Corporation, who have given us a Cybersecurity Scorecard. This scorecard evaluated on five NIST controls: 1. Identify, 2. Protect, 3. Detect, 4. Respond, and 5. Recover. The scorecard tells us what is: 1. Effectively controlled, 2. Gaps identified, and 3. Not implemented. According to this report, there are 60% of the items listed that are not yet implemented. One of the main points of interest is the lack of a comprehensive plan which fully addresses: 1. Information systems, including network and software design, as well as information processing, storage, transmission, and disposal and 2. Detecting, preventing and responding to attacks, intrusion, or other systems failures. We are making this a priority to complete by the end of December 2024. Name of the contact person responsible for corrective action: Dameon A. Shaw, Vice President for University Advancement, External Relations and Information Security. Planned completion date for corrective action plan: December 2024. If the Department of Education has any questions regarding this plan, please call Dameon Shaw at 662-254-3790.

Department of Education 2023-012 Direct Loan Exit Counseling Student Financial Aid Cluster – Assistance Listing No. 84.268 Auditors' Recommendation: During CLA testing of Eligibility. CLA noted that the University was not in compliance with the federal financial aid regulations all schools that participate in the Federal Student Aid programs are required to provide exit counseling to student borrowers who withdraw from school. This requirement is outlined in 34 CFR section 685.304. Specifically, exit counseling must be provided within 30 days after the school learns that the student borrower has withdrawn from school. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The R2T4 process has been updated to include better communication between the Director of Financial Aid and the University Registrar to monitor enrollment status changes and ensure that the information used for the R2T4 calculations is accurate. The Director of Financial Aid will review the staff members' processing of R2T4 calculations to ensure accuracy. Name of the contact person responsible for corrective action: Ozie Ratcliff – Director of Financial Aid Planned completion date for corrective action plan: Updated process will begin 3/25/2024. If the Department of Education has questions regarding this plan, please contact Ozie Ratcliff at 601-979-3347.

Department of Education 2023–011 Outstanding Student Refund Checks Student Financial Aid Cluster – Assistance Listing No. 84.007, 84.033, 84.063, 84.268 Auditors’ Recommendation: During CLA testing of Special Tests and Provisions. CLA noted that the University was not in compliance with the federal financial aid regulations requirement that any Title IV federal funds disbursed to a student or parent that have not received or negotiated must be returned to the appropriated federal financial aid program no later than 240 days after the check or electronic fund transfer (EFT) was issued. CLA recommends that the University review the requirement and implement a monitoring control to monitor the checks throughout the year. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Create a policy to address the following: Returned or unclaimed Title IV Refunds will be successfully delivered to recipients (students or parents) or returned to the appropriate federal agency after 180 days outstanding. Additional attempts may be made to contact recipients; however, all unclaimed funds will be returned to the appropriate aid program no later than 240 days after the initial disbursement. The Accounting Office will maintain an “Outstanding Title IV Refund Checks/EFT Returns” list that will be provided to the Bursar’s Office every month. The Bursar’s Office will review the “Outstanding Title IV Refund Checks/EFT Returns” list every month and follow the procedures below regarding the outstanding checks/EFT returns.  The Bursar’s Office will use all reasonable means to locate the student or parent whose Title IV refund checks or returns have become 120 days old.  If all attempts are not successful, any outstanding Title IV refunds checks that have become stale dated (over 180 days) will be voided. The Bursar’s Office will make an entry, after a check has been voided, debiting the student account, and crediting a designated account that the Accounting’s Office will specify. This entry will then be interfaced to the Finance General Ledger debiting Student AR and crediting “Unclaimed Title IV Account”.  The Bursar’s Office will then send an e-mail notice to the Financial Aid Office containing the student’s name, student ID number, Title IV program(s), aid year and dollar amount that has been credited to the “Unclaimed Title IV Account”.  Based on the information provided, funds will be returned to the appropriate aid program within 210 – 240 days.  The Financial Aid Office will make the appropriate change(s) to the Fiscal Operations Report and Application to Participate (FISAP).  The Accounting’s Office will reconcile the “Unclaimed Title IV Account” every month. Name(s) of the contact person(s) responsible for corrective action: Charlette Mock, Director of Accounting and Lucreta Tribune, Associate Vice President for Finance Planned completion date for corrective action plan: This plan will be implemented no later than April 2024, with ongoing review of the process. This process should be completely in effect by the end of the current fiscal year, June 30, 2024. If the U.S. Department of Education has questions regarding these plans, please call Juanita Edwards at 601-877-6672.

Department of Education 2023-010 NSLDS Enrollment Reporting (ASU) Student Financial Aid Cluster – Assistance Listing No. 84.007, 84.033, 84.063, 84.268 Auditors’ Recommendation: During CLA testing of Special Tests and Provisions. CLA noted that the University was not in compliance with the federal financial aid regulations. The school is required to report changes in the student’s enrollment status, the effective date of the status and an anticipated completion date. Changes in enrollment to less than half-time, graduated, or withdrawn status must be reported within 30 days. However, if a Roster file is expected within 60 days, you may provide the data on that Roster file (34CFR section 682.610). Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: We have made significant changes during fiscal year 2024 in the Office of Student Records to address controlled and non-compliance Title IV regulations. While significant changes were made, we recognize that additional improvements are needed. The Registrar will implement internal controls to ensure all Title IV requirements are met regarding enrollment reporting. In addition, the Registrar will create a student enrollment procedures manual and implement a monitoring process to ensure that enrollment statuses are reported accurately and timely to NSLDS. Name(s) of the contact person(s) responsible for corrective action: Kisha Bond Planned completion date for corrective action plan: The planned completion date for this corrective action will be August 2024. If the U.S. Department of Education has questions regarding these plans, please call Juanita Edwards at 601-877-6672. 2023-010 NSLDS Enrollment Reporting (JSU) Student Financial Aid Cluster – Assistance Listing No. 84.007, 84.033, 84.063, 84.268 Auditors’ Recommendation: During CLA testing of Special Tests and Provisions. CLA noted that the University was not in compliance with the federal financial aid regulations the school is required to report changes in the student’s enrollment status, the effective date of the status and an anticipated completion date. Changes in enrollment to less than half-time, graduated, or withdrawn status must be reported within 30 days. However, if a Roster file is expected within 60 days, you may provide the data on that Roster file (34CFR section 682.610). Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Jackson State University has an established and published academic calendar which guides the day-to-day academic operations and functions of the University. In some instances, the census and financial purge deadlines are extended to ensure students complete their registration requirements. When extensions are provided, the enrollment file is unable to be submitted timely and also causes delays in processing the Enrollment Error report. To alleviate the untimely submission of the Enrollment Report, different practices have been established to aid students in completing their registration before the published deadline and subsequently ensuring the Enrollment file is submitted by the deadline. The University will adhere to published deadlines to prevent delays in reporting and error resolution. The University will enhance semester onboarding by: • Begin purge process earlier in the semester to ensure timely enrollment verification for each semester. • Increase communications between Office of the Registrar and Office of Financial Aid to weekly checks to discover and resolve resolutions within a 5-day window. This ensures we will meet the 10-day resolution deadline. Name(s) of the contact person(s) responsible for corrective action: Ozie Ratcliff, Director of Financial Aid and Lekesha Tubbs, University Registrar. Planned completion date for corrective action plan: Updated process will begin 3/25/2024. If the U.S. Department of Education has questions regarding these plans, please call Ozie Ratcliff at 601-979-3347. 2023-010 NSLDS Enrollment Reporting (UMMC) Student Financial Aid Cluster – Assistance Listing No. 84.007, 84.033, 84.063, 84.268 Auditors’ Recommendation: During CLA testing of Special Tests and Provisions. CLA noted that the University was not in compliance with the federal financial aid regulations the school is required to report changes in the student’s enrollment status, the effective date of the status and an anticipated completion date. Changes in enrollment to less than half-time, graduated, or withdrawn status must be reported within 30 days. However, if a Roster file is expected within 60 days, you may provide the data on that Roster file (34CFR section 682.610). Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Office of Enrollment Management worked with DIS to create a supplement report (UMC RPT ST Student Academic Program Status Withdrawn, Dismissed or LOA-V2) to capture students whose enrollment status changes but is not picked up through monthly clearinghouse submissions. This report will run in tandem with our monthly clearinghouse report and any student with a status change not pulled on the clearinghouse report will be manually updated within the National Student Clearinghouse database by our Associate Director of Enrollment Services. These updates will then be reported to NSLDS, along with our monthly enrollment report. Name of the contact person responsible for corrective action: Dr. Emily Cole, Executive Director of Enrollment Management Planned completion date for corrective action plan: Effective immediately. The Office of Enrollment Management will begin utilizing the new report with the March enrollment file submitted to clearinghouse. If the U.S. Department of Education has questions regarding these plans, please call Julie Schwindt at 601-984-1058.

Department of Education 2023–009 Common Origination and Disbursement (COD) Student Financial Aid Cluster – Assistance Listing No. 84.007, 84.033, 84.063, 84.268 Condition: The Fall 2022 and Spring 2023 disbursement dates in COD for Parent Plus Direct Loans did not match the disbursement date on the student ledgers. Auditors’ Recommendation: During CLA testing of Eligibility. CLA noted that the University was not in compliance with the federal financial aid regulations COD reporting requirements, including reporting disbursements, adjustments, and cancellations in a timely and accurate manner. CLA recommend that the entity strengthen its internal controls to ensure that all disbursement dates are reported to COD correctly. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The financial aid office will conduct bi-weekly reviews of enrollment changes, including university withdrawals. In addition, bi- weekly reviews of adjustment completion will be done to ensure banner adjustments are sent to COD within 10-14 business days. Name of the contact person responsible for corrective action: Ozie Ratcliff – Director of Financial Aid Planned completion date for corrective action plan: Updated process will begin 3/25/2024. If the Department of Education has questions regarding this plan, please call Ozie Ratcliff at 601-979-3347.

Department of Health and Human Services 2023-008 Head Start Program – Assistance Listing No. 93.600 Condition: The University filed the Real Property Status Report SF-429 after the deadline. Recommendation: We recommend the institutions review and revise its current reporting procedures and review requirements to ensure that the reports are submitted accurately and timely. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Mississippi State University will review and revise the current reporting procedures for the SF 429: Real Property Status Report to ensure reports are submitted in accordance with established deadlines. Name(s) of the contact person(s) responsible for corrective action: Tucker, Director Sponsored Programs Planned completion date for corrective action plan: June 30, 2024 If the Department of Health and Human Services has questions regarding this plan, please call Jonathan Tucker at 662-325-1930.

Department of Health and Human Services 2023-007 FFATA Reporting – Reports filed past the deadline – Assistance Listing No. 93.211 Condition: FFATA reporting was not submitted timely Auditors’ Recommendation: We recommend the institution strengthens their understanding of the reporting requirements established by the grant and ensure reports are filed timely Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The respective Supervisor of Post-Award Accounting or the Accounting Specialist position which handles this responsibility reviews a fully executed sub-agreement and they identify or determine if the applicable award, whether new or an amendment, meets the FFATA threshold. If the award meets the prescribed threshold, essential data are compiled from each applicable sub-agreement(s) via an internal Post-Award sub-award tracking spreadsheet for entry into the FSRS.gov. Effective September 2023, the above stated process is being completed no more frequently than weekly, and no less frequently than monthly. Once all data has been successfully entered and uploaded, the Supervisor, Accounting Specialist, or designee will confirm that the report has been successfully submitted via an email. Beginning March 2024, submitted reports are saved on the shared drive in a FFATA folder organized by fiscal year and month. The submission date will be incorporated into the name of the file to specifically identify the date the report was successfully submitted. Effective March 2024, once the FFATA reporting process is complete, notification is also made via email to the appropriate management personnel regarding the completion of this entire process as an additional internal control and to ensure compliance of this reporting requirement as identified in 2 CFR Part 170. Name(s) of the contact person(s) responsible for corrective action: Julie Schwindt, Director, Post-Award Accounting Planned completion date for corrective action plan: March 31, 2024 If the Department of Health and Human Services has questions regarding this plan, please call Julie Schwindt at 601-984-1058.

Department of Health and Human Services 2023-006 Value-Based Medical Student Education Training Program – Assistance Listing No. 93.680 Condition: Federal cost share is not being tracked separately. Auditors’ Recommendation: We recommend the institution track cost share expenditures in a separate fund and perform periodic reviews to ensure the matching requirement is being met. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Campus grant administrators will be reminded that all mandatory and voluntary committed cost must be captured in Workday within the appropriate fund. Additionally, campus grant administrators will receive a Workday job aid to provide detailed instructions on how to allocate applicable cost share expenditures to the respective funds. Name(s) of the contact person(s) responsible for corrective action: Julie Schwindt, Director, Post-Award Accounting Planned completion date for corrective action plan: March 31, 2024 If the Department of Health and Human Services has questions regarding this plan, please call Julie Schwindt at 601-984-1058.

Department of Health and Human Services 2023-005 Value-Based Medical Student Education Training Program – Assistance Listing No. 93.680 Condition: Indirect cost expense was improperly calculated. Auditors’ Recommendation: We recommend the institution strengthen its internal controls to ensure that calculations are reviewed and adjusted for, if necessary, in a timely manner. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: UMMC’s transition to Workday resulted in the need for multiple F&A bases to be created in Workday to accommodate our DHHS negotiated agreement. However, since our go-live we have only been using one modified total direct cost base to calculate F&A. UMMC is in the process of engaging a Workday Certified consulting firm to review the operational efficiency of Workday for Post-Award Accounting. The scope of this engagement will be to align our usage of Workday to industry best practices, including best practices for F&A calculation. During the scope of this project, we will review these established bases to ensure they meet the needs of our negotiated rate agreement provisions. In the meantime, we are reviewing the F&A calculations on existing projects when an invoice or financial report is prepared to ensure accuracy. F&A will be recalculated with each invoice and/or financial report and any necessary adjustments will be made before the invoice or financial report is submitted to the sponsor. Name(s) of the contact person(s) responsible for corrective action: Julie Schwindt, Director, Post-Award Accounting Planned completion date for corrective action plan: June 30, 2024 If the Department of Health and Human Services has questions regarding this plan, please call Julie Schwindt at 601-984-1058.

Department of Education, United States Department of Agriculture, Federal Aviation Administration 2023-004 R&D Cluster – Assistance Listing No. 84.334, 10.001, 20.109 Condition: MSU established a micro-purchase threshold of $75,000 for contracted services and was not able to provide documentation to support this threshold. Recommendation: We recommend the institution review and revise their current procurement policy and review requirements to ensure that their policy is meeting Federal requirements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Mississippi State University will make corrections to the Procurement and Contracts Manual to ensure compliance with 2 CFR 200.320. Name(s) of the contact person(s) responsible for corrective action: Jennifer Mayfield, Director of Procurement and Contracts and Jonathan Tucker, Director Sponsored Programs Planned completion date for corrective action plan: June 30, 2024 If the Department of Education, United States Department of Agriculture, or Federal Aviation Administration has questions regarding this plan, please call Jonathan Tucker at 662-325-1930.

Department of Health and Human Services 2023-003 SEFA Reporting – Recording Expenses in the Correct Period – Assistance Listing No. 93.211 Condition: Schedule of Expenditures of Federal Awards (SEFA) contained expenses that were not allowable. Auditors’ Recommendation: We recommend the institutions review and revise its current reporting procedures and review requirements to ensure that federal expenditures are properly identified, recorded, and classified in the accurate year. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: During a reconciliation of the project, Post-Award Accounting identified $1,175 in salary that should not have been recorded to the grant. These expenses were not reported to the sponsor, nor were they invoiced. However, expenditures were not removed from the grant fund promptly. To address this finding, campus grant administrators will be provided with a deadline to remove unallowable expenditures. If the expenditures are not removed according to this deadline, the responsible departmental chair or dean will be notified of the non-compliance until the expenditure is removed. Name(s) of the contact person(s) responsible for corrective action: Julie Schwindt, Director, Post-Award Accounting Planned completion date for corrective action plan: June 30, 2024. If the Department of Health and Human Services has questions regarding this plan, please call Julie Schwindt at 601-984-1058.

Department of Education 2023-002 Title I, Special Education Grants to States, Career and Technical Education – Assistance Listing No. 84.010, 84.027, 84.048 Condition: The Schedule of Expenditures of Federal Awards (SEFA) contained errors and incorrect information which affected the major program determination. Auditors' Recommendation: We recommend the institution review and revise its current reporting procedures and review requirements to ensure that federal expenditures are properly identified and classified. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Mississippi State University will review and revise its current reporting procedures related to awards reflecting multiple ALNs and sources of funding. The Office of Sponsored Projects and Sponsored Programs Accounting will collaborate, on a case-by-case basis, to ensure federal expenditures are properly identified and classified for reporting on the Schedule of Federal Expenditures. Name(s) of the contact person(s) responsible for corrective action: Kacey Strickland, Executive Director for Research Administration and Jonathan Tucker, Director of Sponsored Programs Accounting Planned completion date for corrective action plan: June 30, 2024 If the Department of Education has questions regarding this plan, please call Jonathan Tucker at 662-325-1930

Department of Health and Human Services 2023-001 R&D Cluster – Assistance Listing No. 93.680, 93.084, 93.059 Condition: The Schedule of Expenditures of Federal Awards (SEFA) contained errors and incorrect information which affected the major program determination. Auditors’ Recommendation: We recommend the institution review and revise its current reporting procedures and review requirements to ensure that federal expenditures are properly identified and classified. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Director of Post-Award Accounting, hired in November 2022, continues to review sponsored award procedures, including procedures and reports integral to our ERP system, Workday. These ongoing reviews will not only include the expenditure amounts reported for sponsored award on the SEFA but will also include the accuracy of other agreement terms and conditions that contribute to the SEFA preparation. A management review process has been implemented to further review agreement terms captured within the Workday ERP system. This additional management review takes place at the time of new award set-up when the manager reviews the new award attributes in Workday for accuracy and alignment to the notice of award document. Additionally, all existing awards, previously established within Workday, are being reviewed to ensure agreement terms are accurately recorded within Workday. UMMC is engaging a Workday Certified consulting firm to review the operational efficiency of Workday for Post-Award Accounting. The scope of this engagement will be to align our usage of Workday to industry best practices, including best practices for award set-up, management, and reporting. The scope of work is expected to be completed by December 31, 2024; however, our own internal reviews of data integrity will be completed by June 30, 2024, with any necessary corrections reflected in Workday. Name(s) of the contact person(s) responsible for corrective action: Julie Schwindt, Director, Post-Award Accounting Planned completion date for corrective action plan: June 30, 2024 If the Department of Health and Human Services has questions regarding this plan, please call Julie Schwindt at 601-984-1058.

Finding 2023-003 – Material Weakness AL No: 20.507 Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Formula Grants - Direct Award Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles. Condition: The District’s internal controls over compliance requirements did not identify ineligible costs applied to four separate Federal Transit Administration (FTA) grants as follows. • Section 5307 Grant Award CA-2020-173-01: The District overclaimed Route 42 and Woodland fixed route operating expenses that should have been reimbursed by a local match as required by other FTA grants applied to the same routes, resulting in ineligible costs of $1,073,260 being charged to the program. Questioned Costs: $1,073,260. • Section 5307 Grant Award CA-2022-140-01: The District overclaimed Route 42 expansion fixed route operating expenses that should have been reimbursed by a local match as the wrong federal percentage was applied in the claims, resulting in ineligible costs of $33,129 being charged to the program. Questioned Costs: $33,129. Section 5307 Grant Award CA-2022-147-04: The District overclaimed communication expenses for Woodland paratransit operating routes, resulting in ineligible costs of $12,513 being charged to the program. Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part 200, Subpart F (Uniform Guidance), Section 200.516. • Section 5307 Grant Awards CA-2022-204-01 and CA-2021-162-03: The District claimed engine overhaul expenses that did not qualify as preventative maintenance costs allowed by the terms and conditions of the grant, resulting in ineligible costs of $17,902 being charged to the program. Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part 200, Subpart F (Uniform Guidance), Section 200.516. Criteria: 2 CFR Part 200, Subpart E (Uniform Guidance) Section 200.303 states that “The nonfederal entity must: (a) 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.” Cause: Several federal grants applied to these routes had local match requirements that were not captured by the District’s review procedures due to recent staff turnover and lack of documented procedures to track expenses charged to all funding sources combined. Not all paratransit operating expenses were reported and tracked separately in the allocation spreadsheet leading to expenses being double claimed under different grants for different purposes. This is due to the allocation spreadsheet not having a summary page totaling all expenses charged to programs to make sure the total expenses allocated agree to the total population of expenses allocated. Effect: Expenses were charged to more than one grant when filing claims and ineligible costs were applied, resulting in the overclaimed amounts cited above. Context: The ineligible costs were discovered through reconciliation of the operating expenses and capital costs from the claims to the general ledger. It was noted that the District did not have any FTA awards for capital maintenance during the year. The overclaimed amounts of $1,073,260, $33,129, and $12,513 have been removed from revenue as the FTA has currently approved the District claiming the expenses under different grants. There were potentially additional operating expenses under Paratransit services that could have offset some of these overclaimed amounts. The ineligible costs of $17,902 have been submitted to the FTA through a budget revision to allow for capital funding under the two related awards and is currently pending FTA approval. Recommendation: We recommend the District develop written procedures for allocating expenses to routes and purposes used to claim expenses under federal grants and to track the different funding sources applied. A summary tab should be added to the allocation spreadsheet to sum amounts for each route computed on separate tabs on the spreadsheet to make it easier to reconcile total operating expenses, preventive maintenance, insurance, communications and other expenses allocated to the population of expenses in the general ledger. View of Responsible Officials and Planned Corrective Action: Management acknowledges the audit finding and agrees with the recommendation. The District is taking immediate corrective action by training staff and seeking temporary assistance to support operations during ongoing training and improvement. While the new financial system aimed to enhance our processes and efficiencies, we recognize the need to modify the general ledger processes to better detect required transactions. The District will focus promptly on resolving these issues to prevent future errors and oversights. Further, we will prioritize reviewing all grant award agreements and collaborating closely with our grant program coordinators to ensure compliance and accuracy in grant-related activities.

Finding 2023-007 – Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Contact Person Responsible for Corrective Action: Matthew Parkinson, CFO Contact Phone Number: 317-869-4364 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: MSD Warren has construction projects at two sites payable out of ARP. MSD Warren’s contracts for those projects contain Davis-Bacon provisions. MSD Warren will collect payroll data to verify compliance with Davis-Bacon. Anticipated Completion Date: 12/15/24

Finding 2023-006 – Education Stabilization Fund – Reporting Contact Person Responsible for Corrective Action: Matthew Parkinson, CFO Contact Phone Number: 317-869-4364 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: MSD Warren will submit a revised ESSER data report to DOE. Anticipated Completion Date: Completed as of the date of this report.

Finding 2023-005 – Special Education Cluster - Procurement and Suspension and Debarment Contact Person Responsible for Corrective Action: Matthew Parkinson, CFO Contact Phone Number: 317-869-4364 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: MSD Warren will seek competitive quotes for these services prior to the 24-25 school year. Anticipated Completion Date: 6/30/24

Finding 2023-003 – Child Nutrition Cluster – Procurement and Suspension and Debarment Contact Person Responsible for Corrective Action: Matthew Parkinson, CFO Contact Phone Number: 317-869-4364 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: The CFO will send a memo to all administrators identifying quote and bid thresholds. The school district will obtain at least 3 quotes or use an alternative acceptable procurement method for large purchases. Anticipated Completion Date: 6/30/24

Finding 2023-002 – Child Nutrition Cluster – Activities Allowed or Unallowed, Allowable Costs/Cost Principles Contact Person Responsible for Corrective Action: Matthew Parkinson, CFO Contact Phone Number: 317-869-4364 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: Business Office and Payroll staff will review a Labor Distribution Report to verify that the staff is only paying appropriate personnel from the Food Service Fund. Anticipated Completion Date: 6/30/24