Corrective Action Plans

Finding Number 2023-210: Low-Income Home Energy Assistance Program (LIHEAP) performance and special reports did not include a review for accuracy and compliance prior to submission. Federal Programs: 93.568 – Low-Income Home Energy Assistance Related to Prior Finding: N/A Agency’s view: The Department agrees with this finding. Corrective Action: The Program will develop a process to work with the Information Management and Analysis Team (IMAT) within the division to compile the data for the Low-Income Home Energy Assistance Program (LIHEAP) reports. Program will review the completed reports for accuracy. All reports will then be submitted to the Bureau Chief, as a second review of accuracy, prior to submission to Federal Partners. Documentation will be maintained to support the preparation, review, and approval steps. The process outlines a timeline to have reports prepared and reviewed ahead of the established deadline. Program will communicate with our Federal Partner if circumstances arise that would prevent a report from being submitted by an established deadline to receive an extension. Anticipated Corrective Action Date: The Program has already implemented the involvement of IMAT and secondary review and approval processes. Program will write a process document to support the corrective action. The documented process will be in place by April 15th, 2024. Responsible for Corrective Action: Shane Leach, Division Administrator Shane.Leach@dhw.idaho.gov 208-859-1033 Kelly Combs, Bureau Chief, Compliance Kelly.Combs@dhw.idaho.gov 208-334-5814

Finding Number 2023-209: Monthly cost allocation statistics, used to allocate indirect costs to federal grants, were not reviewed and approved by the Department. Federal Programs: 10.551 - Supplemental Nutrition Assistance Program (SNAP) 10.561 - State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (SNAP) 21.027 - Coronavirus State and Local Fiscal Recovery Funds 93.391 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises 93.558 - Temporary Assistance for Needy Families (TANF) 93.568 - Low-Income Home Energy Assistance 93.569 – Adoption Assistance 93.575 - Child Care and Development Block Grant (CCDF 93.658 - Foster Care Title IV-E 93.777 - State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare 93.778 - Medical Assistance Program Related to Prior Finding: N/A Agency’s view: The Department agrees with this finding. Corrective Action: With the implementation of Luma and the interfaced cost allocation module, finance has spent a significant amount of time assessing the best practices for cost allocation processing steps. Since going live on 7/1/23, each month, finance has reviewed, revised, and refined process steps. The department’s budget analysts who hold oversight of some cost allocation processes, use a spreadsheet to track processing. Finance has added a step in the process to ensure that finance reviews the cost allocation SharePoint site for review and signature of each supervisor responsible for each statistic. Anticipated Corrective Action Date: March 1, 2024 Responsible for Corrective Action: Staci Phelan, Division Administrator Staci.Phelan@dhw.idaho.gov 208-334-0632 Kelly Combs, Bureau Chief, Compliance Kelly.Combs@dhw.idaho.gov 208-334-5814

Finding Number 2023-208: The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller (Office) included multiple errors. Federal Programs: 10.551 - Supplemental Nutrition Assistance Program (SNAP) 10.561 - State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (SNAP) 21.027 - Coronavirus State and Local Fiscal Recovery Funds 93.391 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises 93.558 - Temporary Assistance for Needy Families (TANF) 93.568 - Low-Income Home Energy Assistance 93.569 – Adoption Assistance 93.575 - Child Care and Development Block Grant (CCDF 93.658 - Foster Care Title IV-E 93.777 - State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare 93.778 - Medical Assistance Program Related to Prior Finding: 2022-211; 2021-206 Agency’s view: The Department agrees with this finding. Corrective Action: Since the implementation of LUMA, the department has been cognizant of the systematic challenges and risks and is acutely attentive to monitoring and review efforts. For example, due to LUMA, finance now has a new chart of accounts structure, meaning previously used reports for compilation of the SEFA are no longer a concern. The department held a required training on March 12-13, 2024, for all employees involved with grant administration where the determination of contractor vs. subrecipient, as well as proper account coding, were reiterated. Finance has efforts underway to strengthen compliance through report building and monthly monitoring of proper coding. The department will be moving forward with the implementation of Grant Management Software in SFY25, which finance believes will provide further assurances of data accuracy. Finance will confirm all expenditures and adjustments are completed before running reports when preparing the SFY24 and future SEFA’s. This confirmation will be documented via an email to the Financial Manager of the Budget section. The email response will be retained with the SEFA preparation file for audit purposes. Anticipated Corrective Action Date: Partial efforts already completed; full completion by June 30, 2025. Responsible for Corrective Action: Staci Phelan, Division Administrator Staci.Phelan@dhw.idaho.gov 208-334-0632 Kelly Combs, Bureau Chief, Compliance Kelly.Combs@dhw.idaho.gov 208-334-5814

Finding Number 2023-206: The Department did not fully disclose required information to subrecipients, document subrecipient risk assessments, or ensure subrecipient audits were received for the Coronavirus State and Local Fiscal Recovery Fund. Federal Programs: 21.027 – Coronavirus State and Local Fiscal Recovery Fund Related to Prior Finding: N/A Agency’s view: The Department agrees with this finding. Corrective Action: The department agrees with the lack of certain required subrecipient information datapoints for the CSLFRF projects. • The department had an imperfect implementation of the initial subawards for CSLFRF documentation for subrecipients. Our general practice includes providing the identified federal award identification datapoints; however, this was not the case with the initial CSLFRF subrecipients. As an example, the period of performance was truncated to ensure that we were able to meet the aggressive timeline outlined in the American Rescue Plan Act; we will include both the true period of performance as set forth in the grant and the budgetary period in which the subrecipient will need to complete their work. Carrie Champlin, Contracts Manager, and Rob Sepich, Chief Financial Officer will implement these changes by April 15, 2024. • The department had processes for evaluating the risk of subrecipients, however it could be improved and made clearer for auditors and we will implement a process used by other agencies to memorialize the risk factors outside of email in a clear and concise manner. Additionally, the department is currently implementing a new software system, Amplifund, to aid in registering subrecipients, monitoring them, and closing out subawards. This system will include all of the relevant information necessary for both the subrecipient and the department in one location and will provide consistency across the department. Amplifund implementation is currently underway and will be used department- wide by August 2024. Doug McRoberts, Grants Manager, Jeri Ann Fogg, Accounting Manager, Carrie Champlin, Contracts Manager are working on the integration of Amplifund. Anticipated Corrective Action Date: April 15, 2024 Responsible for Corrective Action: Rob Sepich, Chief Financial Officer Rob.Sepich@deq.idaho.gov 208-373-0292

Finding Number 2023-205: The Department understated total federal expenditures on the Schedule of Expenditures of Federal Awards (SEFA) closing package by $24,824,862 and understated amounts passed through to subrecipients by $39,901,202. Federal Programs: 21.027 - Coronavirus State and Local Fiscal Recovery Funds; 66.458 - Clean Water State Revolving Fund; 66.468 - Drinking Water State Revolving Fund; 66.419 - Water Pollution Control State, Interstate, and Tribal Program Support; 66.432 - State Public Water System Supervision; 66.460 - Nonpoint Source Implementation Grants; 66.708 - Pollution Prevention Grants; 66.040 - Diesel Emissions Reduction Act State Grants; 81.214 - Environmental Monitoring/Cleanup, Cultural and Resource Management, Emergency Response Research, Outreach, Technical Analysis Related to Prior Finding: N/A Agency’s view: The Department agrees with this finding. Corrective Action: 1. Identify Root Causes: With the aid of LSO, we identified errors and are acting on a thorough analysis to pinpoint the root causes of the reporting errors on the Schedule of Expenditures of Federal Awards (SEFA) identified during the recent audit. As noted by the auditors, the errors were due to significant turnover-related knowledge gaps, staff being tasked with unfamiliar processes, lack of written desk manuals and other documentation, and issues with maintaining the internal reporting tool. This identification was completed by Rob Sepich, Chief Financial Officer, and Jeri Ann Fogg, Accounting Supervisor, in tandem with the audit. 2. Implement Training and Guidance: DEQ will provide comprehensive training sessions for staff involved in preparing and reviewing SEFA reports, considering the high turnover rate experienced in the department. We are in the process of developing detailed guidelines and documentation outlining SEFA reporting requirements, including specific instructions on categorizing federal awards, allowable expenditures, and reporting formats, to address any knowledge gaps resulting from turnover. As part of the statewide ERP move to LUMA from STARS, staff will utilize new reporting platforms and tools in LUMA to streamline SEFA reporting processes and mitigate potential errors associated with manual data entry or outdated systems. One significant improvement over our legacy reporting will be the use of front-end splits (FES) in LUMA that will automatically split out the state match from the federal component of our expenditures at the time in which they are spent, which was not as clearly defined under STARS. The new accounting system will be clearer to auditors and staff. Rob Sepich, Chief Financial Officer will create reconciliation reports for the SEFA by June 2024, with SEFA reporting compiled and completed in July 2024. 3. Enhance Internal Controls: Moving forward we will significantly strengthen internal controls and review processes to detect and prevent reporting errors in the future, particularly considering the turnover challenges. We anticipate requiring multiple additional review checkpoints and validation procedures within the new reporting platforms to verify the accuracy and completeness of SEFA data that will be reconciled before submission. We will also assign clear responsibilities and designate individuals responsible for overseeing SEFA reporting activities, ensuring continuity and consistency despite turnover and reduce the amount of unfamiliar work given to staff. This will include a review by Doug McRoberts, Grants Manager, Heather Hodges, Principal Budget Analyst, Rob Sepich, Chief Financial Officer, and Jeri Ann Fogg, Accounting Manager. Lastly, we are in the process of developing improved documentation on the new LUMA processes for our day-to-day operations so that we have up to date and accurate desk manuals should we experience additional turnover. These desk manuals are expected to be completed in June 2024. 4. Conduct Comprehensive Review: As part of the audit, we conducted a comprehensive review of the FY 2023 SEFA reports to identify any additional errors or discrepancies that may have been overlooked, considering the turnover-related knowledge gaps. The department was able to resubmit our SEFA closing package, including the list of sub recipients to the State Controller’s Office and LSO Auditors on March 9th, 2024 due to the efforts of Jeri Ann Fogg, Accounting Manager and Rob Sepich, Chief Financial Officer. 5. Continuous Monitoring and Improvement: We will establish a process for ongoing monitoring and periodic review of SEFA reporting activities, leveraging the capabilities of the new reporting platforms in LUMA to streamline processes and enhance accuracy. This will bring us closer to the work processes that other agencies do through the statewide reporting systems and reduce our dependency on reporting tools developed in-house that are unfamiliar to other state agencies. This should reduce the risk of losing key institutional knowledge during turnover and will make it easier for an employee with experience from another agency to be able to quickly pick up our reporting needs. To foster a culture of continuous improvement and knowledge sharing within the department, we will have additional meetings to encourage collaboration and communication to address SEFA reporting and ensure that we are not missing key input from staff. Anticipated Corrective Action Date: See corrective action above for timeline. Responsible for Corrective Action: Rob Sepich, Chief Financial Officer Rob.Sepich@deq.idaho.gov 208-373-0292

Finding Number 2023-203: The Schedule of Expenditures of Federal Awards (SEFA) closing package originally submitted to the Office of the State Controller did not properly report expenditures for the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) program. Federal Programs: 21.027 – Coronavirus State and Local Fiscal Recovery Fund Related to Prior Finding: N/A Agency’s view: The Department agrees with this finding. Corrective Action: After management review the department will improve training and process review of preparation of the SEFA closing package to ensure all amounts are correctly reported. This lack of understanding of the SEFA was due to staff turnover and lack of subject matter experts regarding the SEFA for Fiscal Year 2023. The agency will implement the following to fix this issue: a) Financial Manager (or delegate) expenditure detail report shall include grant fund 344 (ARPA grants), 348 fund (grants), and any additional funds designated by the legislature or agency, for the specific purpose of tracking federal grant funding. b) Once prepared by the Financial Manager (or delegate), review of the SEFA by the Financial Officer for completeness, verifying all required grant federal funds appropriated to the agency are included on the SEFA closing package. c) Financial Manager and Financial Officer meet to review the SEFA for agreement of grant expenditure amounts reported on the SEFA. Anticipated Corrective Action Date: Corrective actions will be implemented for fiscal year 2024 reporting. Responsible for Corrective Action: Cindy, McMackin, Financial Manager CMcmacki@idoc.idaho.gov 208-658-2000

Finding Number 2023-201: The Coronavirus State and Local Fiscal Recover Fund (CSLFRF) was understated by $18 million on the Schedule of Expenditures of Federal Awards (SEFA) closing Package. Federal Programs: 21.027 – Coronavirus State and Local Fiscal Recovery Fund Related to Prior Finding: N/A Agency’s view: The Department of Administrations agrees that the SEFA was prepared using procedures similar to prior years, which failed to capture the expenditures related to the CSLFRF as those funds were deposited into a non-federal fund as directed by the legislature in HB752. Corrective Action: Prior to the issuance of this memo, the Department transferred the remaining $6,969,325.15 of CSLFRF funds into a separate reporting program. The Department will process quarterly reconciliations utilizing the quarterly reports from the insurance carrier. These transactions will then be queried each year, similar to other federal funding sources, and reported on the SEFA. Future federal awards will be deposited into a federal funding source or clearly delineated from non-federal funding sources to ensure proper reporting on the SEFA. Anticipated Corrective Action Date: Corrective actions will be implemented for fiscal year 2024 reporting. Responsible for Corrective Action: Bailey Peterson, Chief Financial Officer Bailey.Peterson@adm.idaho.gov 208-332-1815

The department concurs with this finding and plans the following: The NH DDS will have written policies and procedures in place that ensure the validity (non-expired) of medical licenses for providers, as well as the suspension & debarment status of providers. Policies will be in place for pre-hire interested parties, as well as more than annual re-reviews. Aside from written policies and procedures, we will develop a spreadsheet to be completed for each individual review done and we will maintain a documents folder to retain electronic proofs in. Proofs will be retained for 6 years. At this time, the Administrator meets with the Professional Relations Officer every two weeks. Discussions and oversight of these policies, procedures, spreadsheet completion and proofs documentation can be done on, before and after these reviews.

(SSA 4513) The department concurs with this finding and plans to work on the following areas to make reviewing and understanding of the reports an easier process: NHDDS will make sure that line 7 on the 4513 report is checked appropriately on all future reporting. NH DDS will update all process directions for all fiscal reporting. For these directions, NH DDS will update all spreadsheets used for reporting purposes, add labels to column headers and link to cells when able for better understanding of our business processes and where amounts are pulled from. NH DDS will keep all backup documentation needed for these directions, to review all current open grant years. NHDDS will create “Mock” documents of each reporting process to help in any further reviews. (SSA 4514) Administrator runs a leave report for a 1-month time frame. Put in alpha order and date order. In an excel spreadsheet, staff are in alpha order. Leave time is added to each individual staff member for a time frame of 3 months (quarterly report). The total for each individual staff member is then populated to a second spread sheet which is broken out by position categories and each position total is then populated to the 4514 report. • On Duty Hours (column A) are the number of days worked in a quarter, times 7.50 hours per day. • Holiday/Leave Hours (column B) are the number of Holidays (7.50 hours per day) during that quarter plus the amount of leave (hours and minutes) per individual staff member during that quarter. • Total Hours (column C) is the amount of column A, plus column B, equals column C. • Total Part-Time Personnel-Is the number of hours the physician worked during that quarter. A report is run in Virtual Time Clock for the quarterly time frame and hours are entered into Part-Time, Medical Consultants (h.) Prior to completing the quarterly report, the excel spread sheet, sheet 2, will be reviewed to ensure cell equations are correct to eliminate formula errors used to calculate quarterly hours. When emailing the Administrator, the quarterly report for signature, the following statement will be in the body of the email to certify cell equations were reviewed prior, to eliminate formula errors: “I certify that I reviewed the SSA-4514 prior to completion, to ensure that cell equations were correct to eliminate formula errors.” Sent to the Administrator for signature then sent off to Region. Sent emails will be saved in an outlook folder for future reference and proofs that reports were sent.

Corrective Action Planned: The identified payments relate to postage expenditures recorded in the Child Support Enforcement Grant. Postage expenditures are controlled in the State's mailing system through mail codes. Agencies send approved postage budgets to the Department of Administrative Services (DAS), who then creates a new mail code or adds additional funding to existing codes in the system. All mail processed through the mailing system is charged to these individual mail codes. A monthly expenditure report from the mailing system is interfaced with NH First, and the DAS uploads a journal entry to the general ledger to record these expenditures. The review and approvals for these postage transactions occur upfront at the agency level, not through a NH First approval workflow. DHHS and DAS will work together to document adequate evidence of this upfront review and approval.

Corrective Action Planned: The Bureau of Employment Supports has undergone significant programmatic changes over the past 3 years. As part of those changes, our Work Verification Plan was updated and submitted for approval on July 8, 2022. It was approved by the Administration of Children and Families on February 9, 2024, making the updates to the NH work verification plan in effect back to July 9, 2022. The audit period in question is from July 1, 2022 to June 30, 2023. Trainings, supports and guidance have taken place throughout that time to correct hour errors such as those identified through this audit. Uploading documents into the e-folder was found to be error prone, therefore, on March 1, 2023, NHEP leadership provided guidance and training on a specific process of indexing and scanning documents to ensure that moving forward the Career Counselors are checking their e-folder’s to ensure that documents are properly uploaded and visible. In addition, a statewide training took place on May 5, 2023, to look in depth at past audit findings, during which, strategies were identified to help alleviate these errors from re-occurring. An additional statewide training also took place on December 15, 2023, which involved discussion around the audit, which was about to begin, including what the general focus of the audit has historically been. As of April 2023, an additional Quality Assurance Specialist was hired to help monitor and support newly hired career counselors in their first year of employment. This additional Specialist has allowed for guidance to be available not only to newly hired staff, but also to seasoned staff throughout the state. The need for an extra layer of training throughout the year for newly hired Career Counselors was identified in the summer of 2023 and the NHEP Leadership Team developed a weekly Quality Assurance meeting. These weekly meetings started August 30, 2023. These meetings provide real time training to review best practices and further career counselors understanding of federal and state policies. The meetings have been successful and are now bi-weekly. As of February 28, 2024, the meetings have been opened to all career counselors throughout the state, not just those under 9 months of employment. The meetings ensure that there is consistent messaging across the state and also provide an opportunity for statewide collaboration between career counselors. Through cursory investigations, we believe that these new supports and processes, have already shown to be effective in improving the accuracy of supporting and recording hours. The last audit yielded 15% discrepancies in hour errors. This audit period had a decrease of 12%, indicating 3% discrepancies in hour errors. NHEP leadership has also been working with the NEW HEIGHTS system to streamline the process of uploading documents to further decrease the potential for errors. A change request form was submitted approximately two years ago. In order to address the audit findings, within the next 90 days, NHEP leadership is holding a statewide mandatory staff training to review the audit process and findings that were identified. During the meeting, in regards to the over reporting hours error, the Leadership Team will reiterate and discuss the importance of uploading documents prior to inputting hours. In regards to the under reporting hours error, the meeting will also include further training about the importance of justification for any differences in hours than what is reported on the activity tracker. Further, that any differences need to be documented in either a sticky note or a RID note. In addition, the Quality Assurance meetings will continue to be held bi-weekly to address issues or trends in the moment. Our continuous transparency will further ensure buy-in from the staff to put systems in place for themselves as well as to increase self-monitoring practices and in turn, decrease errors in the future.

This function (FFATA reporting) has now been designated to our Federal Reporting Group, which will allow for redundancy in personnel. A new policy and procedure, which will include internal controls, will be developed and implemented.

NHED concurs with the finding identified with the expenditures of $3605. The NHED will have the LEA’s submitting for indirect costs after September 30th upload an invoice and back up documentation into GMS. The NHED concurs with the findings identified with expenditures of $5,172. There were in fact some items that were charged outside the period of performance. This happened prior to us receiving the FY22 audit finding and putting in place new controls to prevent. We have since put into place DOE-OBM-33 to ensure payments are being reviewed closely to the period of performance at multiple times. We have also corrected any items charged to the wrong CAN. The NHED concurs with the findings identified with expenditures of $816. We will look into the district returning these funds or other enforcement actions. In addition to the DOE-OBM-033 process, the Division of Learner Support has created and implemented a transfer of funds procedure.

The Office of ESEA Title programs and Covid-19 education programs have established an internal process to sample and test reports compiled to ensure operations are executed as intended. These internal controls include a monthly reporting sign off Excel sheet, certification on each FFATA submission and a secondary certification for accuracy verification, and a division wide process for FFATA filing and verification. Division wide training occurred on October 26, 2023. Due to grant award notification (GAN) changes and development within our grants management system (GMS), the FFATA process has also been developing and shifting; therefore the FFATA process will be revisited annually and updated as needed. A revised procedure for FFATA reporting will be completed prior to additional training being offered. To ensure that processes are being followed, newly hired staff is trained appropriately, and updates to the GAN process are considered within the FFATA process we will hold another training this spring, March 14th, 2024, prior to new subawards being issued.

Corrective Action Planned: The Office of ESEA Title Programs’ accountant identified when the miscalculation first took place in 2021-2022 and made changes to the workbook formula to correctly calculate the LEA allocations. The office administrator and the bureau administrator both thoroughly reviewed the Title I, Part A allocation workbooks and relayed questions, comments and concerns to the accountant, to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. This three-step review ensures that formulas are executed as required under Title I, Part A legislation. As a part of the corrective action plan, the Office intends to establish internal controls that ensure the three-step review will take place annually prior to awarding allocations to LEAs. Each level of review will be passed forward via email documenting that the allocation review has taken place and allocations are approved, in order of; 1. Accountant, 2. Office Administrator, 3. Bureau Administrator. Once all three reviews are completed and approved via the same email chain, the email will be saved on the department’s common drive for auditing purposes.

BEA will evaluate existing internal controls in place to ensure that the precision level of the control is such that it would detect an error in the expenditures reported in comparison to the expenditures incurred within the general ledger, account for precision level control when changing guidance exists, and that all documentation used to support the amounts reported on the federal report are properly maintained. Condition A has been completed. In January 2024, BEA evaluated internal controls related to the review and approval of expenditures. The following additional reconciliation step was added to the processes of preparation of expenditure draws and reporting preparation: • Broadband program Accountant II performs a data extract from NHFirst and reconciles the drawdown calculation totals as well as “dashboard” reporting totals to the NHFirst data extract to confirm accuracy of all data points. This second data validation step has been added to ensure all expenditures recorded in NHFirst are evaluated against program guidelines, submitted for reimbursement and included on required reports. Condition B & C to be completed no later than 12/31/2024.

Corrective Action Planned (Condition A): The DAS analyzed the six items erroneously reported as subawards and noted the errors were isolated to two specific agencies, the Department of Health and Human Services and the Department of Environmental Services. In response to the prior year finding 2022-002, the DAS had strengthened internal controls related to the review and validation of amounts reported by individual state agencies as pass through expenditures. This included an additional control specifically verifying SLFRF pass through expenditures reported by each agency. The DAS will offer additional training relative to identification and reporting of subaward expenditures in its annual statewide Single Audit training and re-evaluate the precision of execution of controls over the validation of pass through reporting in assembling the SEFA for fiscal year 2024. Corrective Action Planned (Conditions B through E): The State largely concurs with the findings and recommendations and has implemented procedures to address the identified conditions already or will do so. With regards to condition B, The State will work with the individual agencies to ensure that individual agencies entering into such agreements clearly indicate the terms required by Uniform Guidance, including permitted indirect cost rates and whether the award is for R&D. The State has already begun this corrective action plan with the agencies. With regards to condition C, for a. and b. for payments by agencies, there are standard procedures for review and authorization of invoices and payments and those payments are documented. For c. The State has already implemented an agency wide framework for subrecipient monitoring. The State will provide re-training for those agencies that had not properly documented monitoring as outlined by the subrecipient risk assessments and ensure monitoring reports are documented. With regards to condition D, The State has already implemented an agency wide framework to help ensure policies and procedures are in place concerning Uniform Guidance Reports. We will work those agencies that had not documented the date received and the review of the Uniform Guidance Reports to ensure written documentation occurs. Where findings have been reported in the Uniform Guidance Report, ensure timely Management Letters are documented and provided with the summary review of Uniform Guidance Report.

Corrective Action Planned (Condition A): The DAS would note the definition of a subaward per 2 CFR 200.1 specifies a subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract. State procurement policies require contracts, including contracts deemed subawards, greater than $10,000 are subject to legislative and executive branch approval prior to final execution. The resulting contracts are managed within the State’s financial system using purchase orders which in turn encumber funds. To support the testing of procurements, the State provided a detailed listing of purchase orders initiated during the audit period and in doing so clearly expressed the resulting population would include contracts considered subawards. Accordingly, the State deems the portion of selections identified as subawards to be reasonable and appropriate given the population sampled. However, the DAS will re-evaluate the precision of execution of controls over the validation of the subrecipient population in fiscal year 2024. Corrective Action Planned (Condition B): The State concurs with the findings and recommendations and has implemented procedures to address the identified conditions already or will do so. With regards to condition B, The State will work with the individual agencies to ensure that individual agencies maintain and document the search of SAM.gov for suspension and debarment.

In order to meet the segregation of duties, the Department will explore the need to create a position to ensure requisite segregation of duties requirements. With regard to the segregation of duties, the SF-270 is required form that DMAVS submits to the National Guard Appendix Program Manager for reimbursement with all back up documentation. The National Guard Appendix Program Manager, National Guard Grants Officer Representative, and National Guard United States Property Fiscal Officer (USPFO)/controller located in Concord, NH review, sign and submit the form to the Department of Defense on behalf of DMAVS to request the cash draw. Prior to the submission of reimbursement of any funds, each billing and invoice is reviewed, entered into a ledger and reconciled by three members of the accounting team. Once reconciled, the SF-270 is prepared and signed by the Financial Administrator. The SF-270 is then submitted to the appendix program manager for concurrence and then to the federal fiscal agent (USPFO) for approval. No funds are drawn down until approved by the USPFO. If this is not a satisfactory level of review, the department will request a new position to ensure that there the business function has the proper level of staffing to meet the requirements for segregation of duties.

For clarity the Department will create a redundant manual ledger that duplicates the functions of the current ledger and Detailed Transaction Register (DTR). DMAVS has existing policies and procedures in place to track all federal funds, state funds and mixed funds, and uses spreadsheets for all transactions that reconciles every month to NH First Detail Transaction Register (DTR), Federal Fund tracking sheet, and Federal reimbursement tracking sheet with backup documents. The tracking sheet for the federal register is not intended to account for the state share of billing. The state share is accurately accounted for in the DTR, the cumulative accounting in the SF-270 and associated back up documentation. Supporting documentation to substantiate the accuracy of lines a, c, e, and f is in the DTR, the cumulative accounting of each SF-270, the supporting documentation sent with the billing to the Federal Government, and Year-end Agency Report for Federal Awards. This includes reconciliation and analysis of SADB expenditures and revenues to the Statement of Appropriations by each Program Accounting Unit. The SF-270 form is continuous cumulative data that starts Oct 1st and runs through the end of that Federal Fiscal Year. The SF-270 is the required federal form DMAVS submits to the Federal National Guard Appendix Program Manager for reimbursement. Back up documentation is submitted with the SF-270. The National Guard Appendix Program Manager, National Guard Grants Officer Representative, and National Guard United States Property Fiscal Officer (USPFO)/controller located in Concord, NH review, sign and submit the form to the Department of Defense to affect the cash draw. DMAVS does not unilaterally make cash draws to the federal government. The USPFO, who is substantially involved provides an independent review and reconciles any discrepancies prior to approving any requests for reimbursement. One possible explanation for the finding is that the selected test works were not continuous.

Department of Health and Human Services: Federal Financial Assistance Listing #93.498 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year - Period 4 TIN #426037759 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: Guthrie County Hospital (the Hospital) reported expenses in the Department of Health and Human Services (HHS) special report for Period 4 that were not reduced by reimbursement from other sources or that other sources were obligated to reimburse. Additionally, the Hospital did not report its excess expenses as unreimbursed expenses attributable to Coronavirus in the HHS special report, did not report total interest earned on the ARP Rural Payments and Period 4 General Distribution Payments, and reported gross revenues/net charges from patient care by quarter for 2021 when net revenues should have been reported. In addition, there was no evidence retained that the HHS special report was reviewed by an individual separate from the preparer prior to submission. Planned Corrective Action: Management will implement an internal control policy for federal awards compliance to more diligently review the reporting of expenses and revenues to ensure all reporting requirements are met. However, had the errors in reporting of expenses and lost revenues been identified and corrected prior to reporting, the Hospital would have demonstrated that they had incurred eligible expenses and lost revenue in excess of the Period 4 funds received, including interest on such funds. Contact Person, Title and Phone Number: Christopher Stipe, Chief Executive Officer, (641)332-2201 Anticipated Date of Completion: June 30, 2024

2023‐003 Material Weakness in Internal Control over Compliance with Actvities Allowed Unallowed and Allowable Costs/Cost Principles Condition: The Organiza􀆟on did not retain the required documentation to support the review of expenditures. Cause: The Organization had turnover and limited staffing available. Management’s Response and Corrective Action Plan: The CEO will add a regular discussion point to the weekly finance meetings in which the finance department reports on both the status of federal funds and the expenditures using those funds. Responsible Individuals: -Maintain separate tracking account – Marcia Meyer, CEO, in conjunction with Board Finance Committee - Authorization for use of funds – Marcia Meyer - Maintenance of records for use – Jennie Myers - Confirmation with use of funds per allowable uses per national guidelines – Jennie Myers - Reporting on monthly finance report – Jennie Myers Anticipated Completion Date: This process is underway and will be visible at the fiscal year‐end audit in June 2024

Student Financial Assistance Cluster – Assistance Listing No. 84.038 Recommendation: We recommend that they assign the loans back to the Department of Education or have the students resign the loans via Electronic MPN or Paper MPN and retain those in the proper manner. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management respectfully agrees on all findings and recommendations. Management will engage in additional staff training and is committed to consistent application of current policies and procedures to ensure all student loan documentation is maintained per the U.S. Department of Education policies. Management will assign the respective loans back to the Department of Education as to be in compliance with U.S. Department of Education requirements. Name(s) of the contact person(s) responsible for corrective action: Karissa Sultan Planned completion date for corrective action plan: June 30, 2024

Student Financial Assistance Cluster – Assistance Listing No. 84.268, 84.063, 84.007 Recommendation: We recommend that the University enhance its policies and procedures to ensure required contracts and contract components are provided to the U.S. Department of Education. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management respectfully agrees on all findings and recommendations. Management will engage in additional staff training and is committed to consistent application of current policies and procedures to ensure all required information is provided to the U.S. Department of Education. Additionally, Management will work to ensure that the required contract URL is provided the U.S. Department of Education, following the agency’s requirements. Name(s) of the contact person(s) responsible for corrective action: Karissa Sultan Planned completion date for corrective action plan: June 30, 2024

Student Financial Assistance Cluster – Assistance Listing No. 84.268 Recommendation: CLA recommends that the University enhance its policies and procedures regarding stale-dated check escheatment to ensure that the funds are returned to the appropriate program within 240 days from the date of issue. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management respectfully agrees on all findings and recommendations. Management will engage in additional staff training and is committed to consistent application of current policies and procedures regarding stale-dated federal student financial aid outstanding checks. Management will implement additional procedures, returning checks issued directly by the University that stale-dated, similar to policies and procedures followed by the University’s third-party credit balance refund vendor. As part of this procedure, management will engage in student communication and outreach, similar to the University’s regular escheatment procedures. Management believes that a consistent practice between University-issued checks and third-party credit balance refund vendor-issued checks is in the best interest of students while also adhering to U.S. Department of Education timing requirements. Name(s) of the contact person(s) responsible for corrective action: Karissa Sultan Planned completion date for corrective action plan: June 30, 2024