Corrective Action Plans

Corrective Action Taken: 1. Formalized record retention policies: A formal record retention policy specific to federal grant programs was implemented to ensure full compliance with 2 CFR 200.334. This policy applies regardless of whether documentation is stored internally or by third-party systems. Any documentation downloaded or transferred from third-party systems will be subject to a review process to verify completeness and accuracy before being finalized for County retention. The County shall also take steps to ensure that information downloads and exports from third-party systems represent complete and accurate records. 2. Auditing timing advocacy and preparedness: The County will continue to maintain timely documentation and preparedness for audits and will also advocate for timely initiation and completion of future audits. Significant delays in the audit process, though no fault of the County, as observed during the FY 2023 audit, substantially impacted the County's ability to access necessary documentation and demonstrate compliance. Although the County made every effort to retain records in accordance with federal requirements, the timing of the audit fieldwork occurred well after the program had concluded in May 2023. Had the audit been conducted in a timely manner, full access to the third-party platform used for program administration would have been available, along with supporting documentation. However, by the time the audit took place, the program had been closed for over 18 months, and access to the external software system had lapsed in accordance with the expiration of the service agreement. 3. Internal audit readiness reviews: Beginning with FY2025, the County conducts internal audit readiness reviews shortly after fiscal year-end to ensure all documentation for closed federal programs is centralized, archived, and accessible for future audit purposes, even if conducted years later. Implementation date of corrective action: October 24, 2025 Person Responsible for corrective action: Charles Nickerson, Senior Director of Finance

Condition: Controls were not sufficient to ensure that management has written policies and procedures surrounding procurement that align with Federal Procurement Standards outlined within the Uniform Guidance. Further, controls were not adequate to ensure that the history of procurement decisions was documented. Additionally, controls were not sufficient to ensure checks for suspension and debarment were performed and documented before entering into a covered transaction with third parties. Planned Corrective Action: The Organization will update and formally adopt written procurement, suspension, and debarment policies and procedures to conform to Uniform Guidance requirements and implement procedures to ensure those policies are consistently followed and documented for all federally funded procurements. Contact person responsible for corrective action: Louise Arzu, Vice President, Finance Anticipated Completion Date: 9/30/2024

Condition: Management lacked adequate controls at the transaction level to ensure compliance with activities allowed or unallowed, allowable cost principles, and period of performance, which resulted in the improper inclusion of duplicate costs and costs from a prior fiscal period. Further, a lack of effective controls over financial reporting and over preparation of the SEFA resulted in management reporting activity on a cash basis, inconsistent with the basis of reporting established in Note 1 and with requirements established by the passthrough funding agency. Planned Corrective Action: Management will implement a new review, reconciliation and oversight process to ensure that compliance with activities allowed or unallowed, allowable cost principles, and period of performance standards are followed for future grant submissions. Contact person responsible for corrective action: Louise Arzu, Vice President, Finance Anticipated Completion Date: 9/30/2024

Reporting Recommendation: We recommend that the auditee implement procedures to ensure that Form 19-lA reimbursement requests are reviewed prior to submission to confirm that expenditures are charged to the correct approved budget line items. This may include maintaining a reconciliation between the general ledger, the approved grant budget, and the Form 19-lA, as well as implementing supervisory review and approval of reimbursement submissions. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. 2026 Action taken in response to finding: Reoccurring bills such as utilities, loan payments, contract services and credit card payments do not require an expense request to be included for on going bills. We will review our procedures and update our financial policy. 2023 Our financial process includes at least two reviews prior to creating a bill in our accounting system, payments are reviewed by the director or the Deputy Director when signed. We do not use a auto signature all checks are reviewed. 2023 The Grantor billing is a P&L detailed report for that grant and provides reconciliation monthly This is sorted into grant line items designated billable and non-billable for compliance. Total program cost and billable to grant are tracked every month, by the grant finance manager for compliance prior to billing any grants. Timecards are reviewed, expense requests are reviewed and payments are reviewed. Prior to submission of the invoice to grantor. 2023 Grant finance manager pulls copy of timecards, bills and checks to ensure compliance with reimbursements are accurate. Name(s) of the contact person(s) responsible for corrective action: Cora Alyea Planned completion date for corrective action plan: July 2023

Allowable Costs/Payroll Disbursements Recommendation: We recommend that the auditee implement procedures to ensure that: all employee pay rates charged to Federal awards are appropriately approved and documented, and complete and accurate timesheets or equivalent time-and-effort records are maintained for all payroll costs charged to Federal awards. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Most Federal grants are renewed annually and have not requested any salary rate adjustments. Payroll line items are a lump sum. Serenity House since 2020 performs annually in May a market rate survey for all job positions to ensure wage rates are equitable to fair market for our County and Non-Profit job type. The sources are documented in the workbook that the annual raise percentages; wage adjustments are calculated for board approval. Our annual performance raises and adjustments is a pool of 1 to 5%, and 3 to 6 employees are below market rate each year. People with a market adjustment do not receive a merit increase. 2023 Merit increase is% that is allocated based on performance scores and management team comparison to everyone in that job category. People are scored by manager this score is reviewed by all managers that have employees in that grouped job class. The reviewing managers agreed highest performer with a 5% and lowest performer 1% Raise distribution is based on the performance review score. 2022 Employees are hired for a specific job when they are given their first time card grant line items for the grant they work on are on the time sheet. That time sheet is reviewed and corrected by the immediate supervisor then reviewed by the operations manager. Turned into the main office receptionist who checks submission against the employee list. Checks math and signatures, initials the times card takes up to payroll. 2023 Payroll double checks each time card when entering time into the payroll module. After all time is enter another employee checks the system addition to timecard. 2020 When Checks are manually signed the time is on the timecard and each check is reviewed. Each employee Name(s) of the contact person(s) responsible for corrective action: Kristin Cowan Planned completion date for corrective action plan: July 1 2023

Allowable Costs/General Disbursements Recommendation: We recommend that management reinforce the consistent execution and documentation of existing disbursement approval and documentation procedures. This should include ensuring that all expenditure charged to federal awards are appropriately approved and supported by sufficient documentation prior to payment, and that management periodically monitors compliance with these procedures to confirm they are operating as designed. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Reoccurring bills such as utilities, loan payments, contract services and credit card payments do not require an expense request to be included for on going bills. We will review our procedures and update our financial policy. Our financial process includes at least two reviews prior to creating a bill in our accounting system, payments are reviewed by the director or the Deputy Director when signed. We do not use a auto signature all checks are reviewed. The Grantor billing is a P&L detailed report for that grant. This is sorted into grant line items designated billable and non-billable for compliance. Total program cost and billable to grant are tracked every month, by the grant finance manager for compliance prior to billing any grants. Timecards are reviewed, expense requests are reviewed and payments are reviewed. Prior to submission of the invoice to grantor. Name(s) of the contact person(s) responsible for corrective action: Cora Alyea Planned completion date for corrective action plan: Completed in 2023

Cash Management Recommendation: We recommend that the auditee strengthen controls over grant billing and cash management to ensure that reimbursement requests and advance payments submitted to the pass-through entity are limited to immediate cash needs and supported by allowable costs incurred as of the billing date, in accordance with Uniform Guidance requirements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Advance payments for ERAP were temporary during COVID only. At that time the agency was paying out a vast amount of cash each month. This was not a normal time for cash flow or the community. The agency caught an overspend problem, reported to ERAP manager, and returned the funds to ERAP 2.0 by placing a line of credit to support 300K to stabilize cash flow and cover the ongoing problem of late contract renewals which can be 3 to 6 carried by the agency. This is still in place. Name(s) of the contact person(s) responsible for corrective action: Sharon Maggard Planned completion date for corrective action plan: September 2024

SEFA Preparation Recommendation: We recommend that management design and implement effective internal controls over compliance related to SEFA preparation, including assigning responsibility to personnel with appropriate training in federal award requirements. Management should also implement a documented review process, performed by a knowledgeable individual, to ensure the SEFA is complete, accurate, and compliant with Uniform Guidance prior to submission for audit. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Reached out to HUD Granter, Third Party Accounting Firm and in 2023. Followed up with a briefing from Auditor in 2025 for this audit. Name(s) of the contact person(s) responsible for corrective action: Sharon Maggard Planned completion date for corrective action plan: Completed

Finding No.: 2023-043 AL Program: 93.767 – Children’s Health Insurance Program (CHIP) Area: Reporting Questioned Costs: $-0- Contact Person(s): George J. Cruz, Medicaid Director Corrective Action Plan: The Commonwealth Medicaid Agency (CMA) respectfully disagrees with the auditor’s finding. While the Agency acknowledges that certain supporting documentation was not provided within the timeframe requested during the audit, CMA does not agree that the reported expenditures were unsupported. The Agency experienced resource and staffing constraints that affected its ability to compile and produce all requested documentation within the audit timeline. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. To strengthen reporting processes and ensure timely availability of supporting records, CMA has developed reporting procedures and is currently recruiting a Fiscal Analyst position that will be responsible for CMS-64 reporting, reconciliations, documentation retention, and related federal reporting requirements. The Agency continues to improve its reporting processes and internal controls to ensure supporting documentation is maintained and readily available for future audits and reviews. Proposed Completion Date: Ongoing

Finding No.: 2023-042 AL Program: 93.489/93.575/93.596 – CCDF Cluster COVID-19 93.489/93.575/93.596 CCDF Cluster Area: Special Tests and Provisions – Health and Safety Requirements Questioned Costs: $-0- Contact Person(s): Roselle Teregeyo, CCDF Co-Administrator/Accountant Corrective Action Plan: The CNMI CCDF Program agrees with this finding. Two types of providers were tested, Licensed center-based programs and license-exempt home-based programs. Finding No.: 2023-042, continued AL Program: 93.489/93.575/93.596 – CCDF Cluster COVID-19 93.489/93.575/93.596 CCDF Cluster Area: Special Tests and Provisions – Health and Safety Requirements Questioned Costs: $-0- Contact Person(s): Roselle Teregeyo, CCDF Co-Administrator/Accountant Corrective Action Plan: For the Licensed center-based program, the Unannounced visit was conducted on December 27, 2022, and the renewal (announced) visit was conducted on May 17, 2023. Prior to the May visit, the CCDF program was in a transition period in the full implementation of the Reach Higher CNMI Monitoring Check In visits. Before May 2023, visits were conducted but the reports were not reviewed nor signed off by the CCDF Director. Beginning May, as evidenced by the May 17, 2023 visit, all check in visits were submitted to the CCDF Office and these are reviewed and signed off by the CCDF Director. Similarly, for home-based programs, prior to October 2023, all check in visits were not submitted to the CCDF Director for reviewed and signature. However, beginning October 1, 2023, home based programs check in visits reports are now submitted to the CCDF Office for the Director’s review and sign off. The following corrective actions have been implemented by the CNMI CCDF Program to prevent recurrence: • The CCDF Director or designee will review and affix his/her signature on all CCDF provider check in visit reports to ensure oversight, accuracy, and compliance with CCDF monitoring requirements. • All check in visit reports have been submitted to the CCDF Office for review and signature by the CCDF Director beginning May 17, 2023 for licensed center-based programs and October 1, 2023 for license-exempt home-based programs. This process has been consistently followed since those dates. • Monthly meetings will include reminders to all consultants regarding the required submission and review procedure to ensure continued adherence. Procedure fully implemented since May 2023 and October 1, 2023, for licensed center-based programs and licensed-exempt home-based programs respectively. Proposed Completion Date: Completed

Finding No.: 2023-041 AL Program: 93.489/93.575/93.596 – CCDF Cluster COVID-19 93.489/93.575/93.596 CCDF Cluster Area: Period of Performance Questioned Costs: $95,367 Contact Person(s): Roselle Teregeyo, CCDF Co-Administrator/Accountant Corrective Action Plan: Condition 1 & 3a: The CNMI CCDF Program agrees with this finding. To strengthen oversight and ensure adequate accountability over Federal awards, the CNMI CCDF Program has implemented a filing system Finding No.: 2023-041, continued AL Program: 93.489/93.575/93.596 – CCDF Cluster COVID-19 93.489/93.575/93.596 CCDF Cluster Area: Period of Performance Questioned Costs: $95,367 Contact Person(s): Roselle Teregeyo, CCDF Co-Administrator/Accountant Corrective Action Plan: where all documents relating to a federal award are properly maintained and labeled for accessibility. This system became effective on October 1, 2025. Proposed Completion Date: Completed Condition 2 & 3b: The CNMI CCDF Program agrees with this finding and acknowledges the need to strengthen internal controls to ensure that all expenditures are cleared by the bank before the end of the liquidation period. The CCDF Program will coordinate with the Department of Finance (DOF) Financial Services Division regarding the establishment of a monitoring log that tracks all checks issued and cleared by vendor and office. Once this log is implemented, the CCDF Program will request regular copies to allow responsible staff to verify whether payments have cleared and to follow up with vendors as needed to ensure timely bank reconciliation. To streamline payment processing and enhance compliance with federal cash management requirements, the CCDF Program is exploring a transition to a fully ACH based payment system. Moving to electronic payments will reduce delays associated with paper checks, improve tracking and reconciliation, and strengthen internal controls over disbursements. This corrective action is currently in progress. The CCDF Program anticipates full implementation of the monitoring process and/or ACH transition by October 1, 2026. Proposed Completion Date: October 1, 2026

Finding No.: 2023-039 AL Program: 93.489/93.575/93.596 – CCDF Cluster COVID-19 93.489/93.575/93.596 CCDF Cluster Area: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Questioned Costs: $71,972 Contact Person(s): Roselle Teregeyo, CCDF Co-Administrator/Accountant Corrective Action Plan: The CNMI CCDF Program agrees with this finding. For seven (or 18%) out of the forty samples tested, CNMI did not provide the purchase order, contract, and/or invoice(s) supporting the allowability of the costs. To strengthen internal controls and ensure adequate accountability over Federal awards, the CNMI CCDF Program has implemented a filing system where all documents relating to a federal award are properly maintained and labeled for accessibility. This implementation became effective on October 1, 2025. Proposed Completion Date: Completed

Finding No.: 2023-036 AL Program: COVID-19 84.425H – Education Stabilization Fund – Governors (Outlying Areas) (ESF-Governor) Area: Matching, Level of Effort, Earmarking Questioned Costs: $-0- Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: The CNMI Department of Finance agrees with this finding. CNMI acknowledges the absence of documented standard operating procedures and internal controls governing the review and approval of financial data used to compute maintenance of effort (MOE) requirements. Upon completion of the MOE report, CNMI worked closely with the grantor and the state educational agency to compile the required information; because CNMI does not customarily receive this type of U.S. Department of Education award and received these funds only as part of the COVID 19 relief program, formal procedures were not previously in place. The grant covered by this finding is now closed; should CNMI receive future awards from this grantor, CNMI will adopt and implement a formal SOP for MOE calculations and related review and approval controls prior to preparing any MOE reports. Proposed Completion Date: Ongoing

Finding No.: 2023-035 AL Program: COVID-19 84.425H – Education Stabilization Fund – Governors (Outlying Areas) (ESF-Governor) Area: Allowable Costs/Cost Principles Questioned Costs: $-0- Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: The CNMI Department of Finance agrees with this finding. While approval controls are implemented within the Munis financial system and, since the FY2022 system migration, all federal expenditure approvals have been processed in Munis, the supporting evidence was provided to the auditors on April 9, 2026, after the agreed documentation deadline of February 19, 2026, resulting in evidence timing deficiency. CNMI established a Standard Operating Procedure for Internal Control for Federal Grants Management on May 1, 2025, to govern these processes, and management will ensure that going forward the expenditure workflow, not solely the journal entry workflow, is attached to documentation submitted with audit requests and will be included in the required documents checklist; documents of approval are available upon request. Proposed Completion Date: Completed

Finding No.: 2023-026 AL Program: 20.205 – Highway Planning and Construction (Federal-Aid Highway Program) Area: Special Tests and Provisions – Quality Assurance Program Questioned Costs: $-0- Contact Person(s): Stacy Atalig, Federal Programs Coordinator, DPW Corrective Action Plan: The Department of Public Works (DPW), Transportation Services Division (TSD) - Highway Branch agrees with the conclusions presented in this finding. Finding No.: 2023-026, continued AL Program: 20.205 – Highway Planning and Construction (Federal-Aid Highway Program) Area: Special Tests and Provisions – Quality Assurance Program Questioned Costs: $-0- Contact Person(s): Stacy Atalig, Federal Programs Coordinator, DPW Corrective Action Plan: The Highway Branch would adhere to 2 CFR 200.303(a), which mandates the establishment, documentation, and maintenance of effective internal controls over Federal awards. This system provides reasonable assurance that such awards comply with relevant Federal statutes, regulations, and the specific terms and conditions associated with the awards. Therefore, the Highway Branch will implement the following recommendations: Condition 1: • In accordance with 23 CFR 637.207, the DPW, TSD – Highway Branch will develop a QA program, policies and procedures that is approved by FHWA; and • Train employees and assign as designated agent to perform the functions of the QA Program. Condition 2: DPW, TSD – Highway Branch will develop a log sheet to document the results of the sampling and testing performed to include contractor and sub-contractor (if applicable), project numbers, project titles, date and time, location, and the name of the Highway Inspector/Engineer monitoring the project. Proposed Completion Date: September 2026

Finding No.: 2023-025 AL Program: 20.205 – Highway Planning and Construction (Federal-Aid Highway Program) Area: Procurement and Suspension and Debarment Questioned Costs: $-0- Contact Person(s): Stacy Atalig, Federal Programs Coordinator, DPW / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Condition 1: The Procurement Services Division respectfully disagrees with this finding. Procurement Services agrees that the Commonwealth should periodically review its procurement regulations to ensure continued consistency with applicable federal requirements. However, Procurement Services notes that the Procurement Regulations currently establish procurement thresholds and procedures for locally funded procurements and procurements funded through a combination of local and federal funds. Procurements exceeding applicable small purchase thresholds are required to proceed through other procurement methods authorized under the Procurement Regulations, including competitive sealed bidding or other approved procurement methods, as applicable. Finding No.: 2023-025, continued AL Program: 20.205 – Highway Planning and Construction (Federal-Aid Highway Program) Area: Procurement and Suspension and Debarment Questioned Costs: $-0- Contact Person(s): Stacy Atalig, Federal Programs Coordinator, DPW / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Procurement Services further notes that procurements exceeding the applicable small purchase thresholds are governed by other provisions of the Procurement Regulations and are therefore not without regulatory direction. Accordingly, Procurement Services does not fully concur that the regulations are inconsistent as described in the finding. Nevertheless, Procurement Services recognizes the importance of ensuring that procurement regulations clearly align with applicable federal requirements and are sufficiently clear to avoid differing interpretations. Procurement Services is currently reviewing the applicable regulations, policies, and procedures with legal counsel to determine whether revisions, clarifications, or additional guidance is warranted. Due to the resignation of the Assistant Attorney General previously assigned to Procurement Services, this review will continue with newly assigned legal counsel. Any amendments to the Procurement Regulations will require legal review, drafting, public notice, and formal adoption before they can take effect. Procurement Services will also continue monitoring updates to federal procurement requirements and will incorporate any necessary changes into its policies, procedures, and guidance. These efforts will help improve clarity, consistency, and compliance with applicable procurement requirements. Proposed Completion Date: Ongoing Finding No.: 2023-025, continued AL Program: 20.205 – Highway Planning and Construction (Federal-Aid Highway Program) Area: Procurement and Suspension and Debarment Questioned Costs: $-0- Contact Person(s): Stacy Atalig, Federal Programs Coordinator, DPW / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Condition 2: DPW, TSD-Highway Branch and the Procurement Services Division respectfully disagrees with this finding. A review of the procurement file confirmed that the Bid Opening Summary Sheet was maintained as part of the official bid package and procurement record for this solicitation. Procurement Services has located the Bid Opening Summary Sheet and confirmed that it accurately documents the bid opening results in accordance with applicable procurement requirements. The document remains in the procurement file and is available for review. A copy has been provided for reference. Based on the existence and availability of this document, Procurement Services respectfully requests reconsideration of this finding. The supporting documentation identified as missing was maintained within the procurement file and was available for audit review. While Procurement Services disagrees with this portion of the finding, it remains committed to maintaining complete procurement records and will continue reviewing internal recordkeeping practices to ensure procurement files are organized, complete, and readily accessible for audit and compliance purposes. Proposed Completion Date: Ongoing

Finding No.: 2023-024 AL Program: 20.205 – Highway Planning and Construction (Federal-Aid Highway Program) Area: Equipment and Real Property Management Questioned Costs: Undeterminable Contact Person(s): Stacy Atalig, Federal Programs Coordinator, DPW / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Condition 1: DPW, TSD – Highway Branch agrees with this finding. Highway Branch has consistently tried to work with Procurement Services to update its yearly inventory records to remove all transferred and disposed properties from its inventory record to no avail. Request for Survey-Out forms for damaged, past its useful life or obsolete properties and Request for Transfer of old or inactive but still usable equipment to Divisions within the Department of Public Works were transmitted along with the Fiscal Year inventory list to Procurement Services to update its list but still encounter discrepancies because of Procurement Services overall lump sum master list including inventories of both local and federal properties. Highway Branch conducts its yearly inventory count and submits its list to Procurement Services. However, Procurement Services has not conducted its own inventory for our office for several years. Additionally, the Procurement Services Division agrees with this finding. Improvements are needed in the way federally funded assets are tracked and reported. At present, the inventory management system is not configured to readily identify assets by specific federal award number, which makes it difficult to generate reports identifying assets purchased under individual grants. In addition, staffing limitations have affected the Commonwealth's ability to maintain and readily produce this information. To address this issue, the Property Management Branch has developed a revised Standard Operating Procedure (SOP), which is currently under review and pending finalization. The SOP strengthens procedures related to asset acquisition, tagging, inventory management, record retention, transfers, surveys, disposals, and supporting documentation. The Commonwealth is also evaluating available options to improve tracking and reporting of federally funded assets, including system enhancements, alternative tracking methods, technical assistance, and additional staffing resources where feasible. Finding No.: 2023-024, continued AL Program: 20.205 – Highway Planning and Construction (Federal-Aid Highway Program) Area: Equipment and Real Property Management Questioned Costs: Undeterminable Contact Person(s): Stacy Atalig, Federal Programs Coordinator, DPW / Geraldine Cruz, Procurement Services Director Corrective Action Plan: In the meantime, the Property Management Branch has begun asset reconciliation efforts, including physical inventories, record reviews, asset verification, and updates to inventory records. These efforts will continue while the revised SOP is finalized and implemented. These actions will help improve accountability, strengthen inventory records, and support compliance with federal property management requirements. Proposed Completion Date: Completed - Ongoing Condition 2: DPW, TSD – Highway Branch agrees with this finding. The Highway Branch has updated its Inventory Form to include the following required information: Date Acquired, Item No, Property/Tag No., Description of Property, Manufacturer, Model, Serial No., Purchase Order No./Contract No., Condition Code, Project No., FHWA Project Number, Percentage of Federal Participation, Location, Person Assigned, and the date the inventory was conducted. In September 2025, Federal Program Coordinator IV met with Director of Procurement Services to ensure these line items are incorporated into the inventory log sheet as part of the requirements. The Director agreed to instruct her staff to implement these updates beginning FY2025. Additionally, the Procurement Services Division agrees with this finding. The Division agrees that the annual physical inventory required for FY2023 was not completed. As a result, the existence, location, condition, and accountability of all assets could not be fully verified during the audit period. To address this issue, Section 3 of the CNMI Property Management Policies and Procedures Manual was updated on September 9, 2024, changing the physical inventory requirement from an annual inventory to a biennial (every two years) inventory cycle. Finding No.: 2023-024, continued AL Program: 20.205 – Highway Planning and Construction (Federal-Aid Highway Program) Area: Equipment and Real Property Management Questioned Costs: Undeterminable Contact Person(s): Stacy Atalig, Federal Programs Coordinator, DPW / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Property Management Branch is currently conducting physical inventories and random asset audits throughout the Commonwealth. These efforts include verifying asset locations, confirming accountability, reviewing asset condition and operational status, reconciling inventory records, and identifying assets that require transfer, survey, repair, replacement, or other corrective action. These inventory and reconciliation efforts are already underway and will continue while the SOP is finalized and implemented. Together, these measures will strengthen accountability, improve asset management practices, and help ensure compliance with federal and Commonwealth property management requirements. Proposed Completion Date: Ongoing

Finding No.: 2023-023 AL Program: 20.205 – Highway Planning and Construction (Federal-Aid Highway Program) Area: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Questioned Costs: $-0- Contact Person(s): Stacy Atalig, Federal Programs Coordinator, DPW Corrective Action Plan: The Department of Public Works, Technical Services - Highway Branch agrees with the finding. The Highway Branch agrees to be more vigilant in ensuring that all documents are properly reviewed and approved. The disbursement process of program funds, specifically, the process did not include documented review or approval demonstrating that checks and ACH disbursements were verified against supporting documents. DPW, TSD – Highway utilizes the Master PR20 log sheet for each fiscal year to track all Voucher for Work performed under Provisions of the Federal Aid and Federal Highway Acts as Amended (form PR20), Current Bills (drawdowns), and payments made on each. However, payments are either mailed or electronically transferred directly to the vendors by the CNMI Treasury Office. Effective immediately, the Highway Branch will download a copy of all payments made to its vendors directly to each PR20 file. Proposed Completion Date: June 2026

Finding No.: 2023-021 AL Program: COVID-19 17.225 – Unemployment Insurance (UI) Area: Activities Allowed or Unallowed / Allowable Costs/Cost Principles Questioned Costs: $224,846 Contact Person(s): Zachary Taitano, PUA Program Manager, DOL Corrective Action Plan: Condition 1: The CNMI Department of Labor agrees with this finding, as the supporting documents extracted from Munis were insufficient to support the referenced line items based on the documentation requested. The corresponding payment registers were uploaded on June 8, 2026, to support the entries. Finding No.: 2023-021, continued AL Program: COVID-19 17.225 – Unemployment Insurance (UI) Area: Activities Allowed or Unallowed / Allowable Costs/Cost Principles Questioned Costs: $224,846 Contact Person(s): Zachary Taitano, PUA Program Manager, DOL Corrective Action Plan: Additionally, in response to the need for stronger internal controls, the CNMI Department of Finance developed and implemented the "CNMI Journal Entry (FS-Ops) Procedures" Standard Operating Procedure, effective October 1, 2025. The procedure establishes requirements for the timely uploading of supporting documentation to ensure that adequate records are maintained and readily available for future audit and reviews. Proposed Completion Date: Completed Condition 2: The CNMI partially agrees with this finding. The payroll records for Employee Numbers 4381 and 5600 did not reflect the adjusted hourly rates during the weeks selected for testing because the Requests for Personnel Action (RFPAs) associated with the funding awards could not be finalized until the funding was officially awarded. The funding awards tied to the employee contracts during that time were provided through funding opportunities made available under UIPL 16-20, Change 7. The initial application was due to the Employment and Training Administration (ETA) on January 6, 2023. Following submission, communication between the CNMI and ETA regarding revisions and clarifications continued through March 26, 2023. The Notices of Award (NOAs) were subsequently issued on May 19 and May 22, 2023. The budget narrative submitted to ETA included position modifications and salary adjustments intended to be effective April 1, 2023. However, because the NOAs and associated funding were received after that effective date, retroactive RFPAs were initiated beginning June 13, 2023, and were not fully completed until mid-July 2023. As a result, the updated hourly rates were not reflected in the payroll registers for the periods selected for testing. With respect to employee no. 2293, the employee was a regular Department of Labor employee whose employment contract was scheduled to expire on September 30, 2022 and was subsequently renewed to include a salary adjustment. The RFPA for this employee was initiated in September 22, 2022 but did not complete the routing process until late October 2022. As a result, the adjusted hourly rate was not reflected in the payroll registers for the period selected for testing. Finding No.: 2023-021, continued AL Program: COVID-19 17.225 – Unemployment Insurance (UI) Area: Activities Allowed or Unallowed / Allowable Costs/Cost Principles Questioned Costs: $224,846 Contact Person(s): Zachary Taitano, PUA Program Manager, DOL Corrective Action Plan: All employees received the difference between their adjusted salary and initial salary at a later date in the form of a retroactive lump-sum payment. Proposed Completion Date: Completed

Finding No.: 2023-020 AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Subrecipient Monitoring Questioned Costs: $2,399,988 Contact Person(s): Angelina Phillips, Financial Analyst, Office of Management and Budget (OMB), Nerissa B. Karakaya, CIP COTR Corrective Action Plan: Condition 1a (A. Phillips): For Grant Award Nos. D23AF00036 and D22AF00299, the Office of Management and Budget (OMB) agrees with the finding and the need for a formally written policy and procedures for subrecipient monitoring. We have adopted the Department of Finance’s Subrecipient Monitoring Policy and Procedures effective 8/4/2025 establishing a formal monitoring suspension and debarment status of each subrecipient prior to granting any subaward. The guidance is reflective of the provisions set by 2 CFR 180.300. Proposed Completion Date: Ongoing Condition 1a and 1c (N. Karakaya): For Grant Award No. D23AP00068, the Capital Improvement Program (CIP) disagrees with this finding because the required verification was performed. Although documentation was not retained, CIP verifies that all subrecipients comply with OPA requirements before federal funds are awarded. Finding No.: 2023-020, continued AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Subrecipient Monitoring Questioned Costs: $2,399,988 Contact Person(s): Angelina Phillips, Financial Analyst, Office of Management and Budget (OMB), Nerissa B. Karakaya, CIP COTR Corrective Action Plan: To prevent recurrence, CIP will implement the following: 1. CIP will implement the revised Subrecipient Monitoring Standard Operating Procedures (SOP) issued by the CNMI Department of Finance, made effective October 28, 2025. Under these procedures, CIP will conduct a risk assessment to evaluate the subrecipient’s potential for noncompliance. The assessment will consider: a. Financial stability b. Audit history, including findings or questioned costs c. Internal controls, such as documented policies and procedures d. Programmatic capacity, including staffing and experience with similar awards The results of the risk assessment will help determine the level of monitoring required during the award period (e.g., low, moderate, or high risk). In addition, CIP will verify that subrecipients are not suspended or debarred from receiving federal funds by: a. Checking the System for Award Management (SAM.gov) and retaining a screenshot or record of the verification b. Alternatively, obtaining a signed certification from the subrecipient or including a suspension/debarment clause in the subaward agreement 2. No subaward agreement will be approved or executed until the required verification has been completed and reviewed by the CIP Administrator. 3. CIP staff will receive training on federal suspension and debarment requirements, including compliance with 2 CFR 180.300 and the CNMI Department of Finance Subrecipient Monitoring SOP. 4. CIP will conduct quarterly reviews of subaward files to ensure verification documentation is maintained and procedures are consistently followed. Proposed Completion Date: December 31, 2026 Finding No.: 2023-020, continued AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Subrecipient Monitoring Questioned Costs: $2,399,988 Contact Person(s): Angelina Phillips, Financial Analyst, Office of Management and Budget (OMB), Nerissa B. Karakaya, CIP COTR Corrective Action Plan: Condition 1b (A. Phillips): The Office of Management and Budget (OMB) agrees with the finding. OMB fully executed a Subrecipient Agreement with the subrecipient on 1/27/2023, prior to any grant administration taking place. The adoption of the Department of Finance’s Subrecipient Monitoring Policy and Procedures effective 8/4/2025 also further formalizes the process. Proposed Completion Date: Completed Condition 1c (A. Phillips): For Grant Award Nos. D23AF00036 and D22AF00299, the Office of Management and Budget (OMB) agrees with the finding and agree with the need for a formally written policy and procedures for subrecipient monitoring. We have adopted the Department of Finance’s Subrecipient Monitoring Policy and Procedures effective 8/4/2025 establishing a formal subrecipient risk assessment prior to entering into the subaward agreement and identifying the type of monitoring procedures to be performed for the subrecipient. Proposed Completion Date: Completed Condition 2 (A. Phillips): For Grant Award No. D23AF00036, the Office of Management and Budget (OMB) agrees with the finding and agree with the need for a formally written policy and procedures for subrecipient monitoring. We have adopted the Department of Finance’s Subrecipient Monitoring Policy and Procedures effective 8/4/2025 to perform proper monitoring to ensure that subrecipients are in compliance with single audits. Proposed Completion Date: Completed Condition 2 (N. Karakaya): For Grant Award No. D17AP00132, D21AP10043, D19AP00081, and D21AP10044, the Capital Improvement Program (CIP) agrees with the finding that a subrecipient with expenditures Finding No.: 2023-020, continued AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Subrecipient Monitoring Questioned Costs: $2,399,988 Contact Person(s): Angelina Phillips, Financial Analyst, Office of Management and Budget (OMB), Nerissa B. Karakaya, CIP COTR Corrective Action Plan: exceeding $750,000 during the year was not verified for compliance with single audit requirements, including whether corrective actions were taken to address prior audit findings. To address this issue, the Capital Improvement Program (CIP) will strengthen its subrecipient monitoring procedures to ensure compliance with single audit requirements by: 1. Developing and implementing a subrecipient monitoring checklist to identify subrecipients that expend $750,000 or more in federal awards during their fiscal year. 2. Obtaining and reviewing applicable Single Audit reports annually to verify compliance with federal requirements. 3. Documenting the review of audit reports and assessing whether any findings related to federal awards affect CIP-funded activities. 4. Requiring subrecipients with audit finding to submit corrective action plans and evidence of implementation. 5. Maintaining a tracking system to monitor the status and resolution of audit findings and corrective actions. 6. Providing training to CIP staff responsible for subrecipient monitoring on federal compliance and the CNMI Department of Finance Subrecipient Monitoring SOP. Proposed Completion Date: December 31, 2026

Finding No.: 2023-018 AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Period of Performance Questioned Costs: $-0- Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC / Nerissa B. Karakaya, CIP COTR Corrective Action Plan: Condition 1-2: The Capital Improvement Program (CIP) agrees with this finding that a subrecipient expending $750,000 or more in federal awards during its fiscal year was not adequately verified for compliance with Single Audit requirements, including whether corrective actions were implemented to address prior audit findings. To prevent recurrence, CIP will implement the following: • Update Policies and Procedures o Revise and strengthen written financial management policies to clearly define documentation requirements to substantiate expenditures and ensure costs are within the award’s period of performance for all projects. o Incorporate federal regulation references, including 2 CFR 200.303 (Internal Controls) and 2 CFR 200.344 (Closeout). • Internal Controls and Review Process o Implement a detailed tracking spreadsheet/ checklist for all CIP-funded transactions to ensure details are verified and that costs are incurred within the period of performance. o Require a secondary review and sign-off by the CIP Administrator for all documents pertaining to cost share projects. • Training and Capacity Building o Conduct an annual training for CIP staff on federal period of performance requirements and required supporting documentation standards. o Provide refresher sessions before each audit cycle. • Monitoring and Compliance o Establish a quarterly self-audit of grant files to verify that documentation is complete and properly supports expenditures. o Document results of each review and address deficiencies immediately. Proposed Completion Date: September 30, 2026 Finding No.: 2023-018, continued AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Period of Performance Questioned Costs: $-0- Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC / Nerissa B. Karakaya, CIP COTR Corrective Action Plan: For Grant Award No. D22AF00298 and D20AP10168, the Office of Grants Management (OGM) is unable to provide a response because the Grant Award # provided cannot be located in the current FMIS, nor does the Division of Financial Services, Federal Section, have records of their existence. Proper searches were conducted in the legacy system and in Tyler-MUNIS but were not successful. We recommend that the auditor provide additional details regarding the specific grant award so that the appropriate responsible office can be accurately identified. Furthermore, we do not know whether OGM is the responsible party to answer on behalf of these non-titled projects. Proposed Completion Date: Ongoing

Finding No.: 2023-017 AL Program: 15.875 - Economic, Social, and Political Development of the Territories COVID-19 15.875 Economic, Social, and Political Development of the Territories Area: Equipment and Real Property Management Questioned Costs: Undeterminable Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Condition 1: The Procurement Services Division agrees with this finding. Improvements are needed in the way federally funded assets are tracked and reported. At present, the inventory management system is not configured to readily identify assets by specific federal award number, which makes it difficult to generate reports identifying assets purchased under individual grants. In addition, staffing limitations have affected the Commonwealth's ability to maintain and readily produce this information. To address this issue, the Property Management Branch has developed a revised Standard Operating Procedure (SOP), which is currently under review and pending finalization. The SOP strengthens procedures related to asset acquisition, tagging, inventory management, record retention, transfers, surveys, disposals, and supporting documentation. The Commonwealth is also evaluating available options to improve tracking and reporting of federally funded assets, including system enhancements, alternative tracking methods, technical assistance, and additional staffing resources where feasible. In the meantime, the Property Management Branch has begun asset reconciliation efforts, including physical inventories, record reviews, asset verification, and updates to inventory records. These efforts will continue while the revised SOP is finalized and implemented. Finding No.: 2023-017, continued AL Program: 15.875 - Economic, Social, and Political Development of the Territories COVID-19 15.875 Economic, Social, and Political Development of the Territories Area: Equipment and Real Property Management Questioned Costs: Undeterminable Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC / Geraldine Cruz, Procurement Services Director Corrective Action Plan: These actions will help improve accountability, strengthen inventory records, and support compliance with federal property management requirements. Proposed Completion Date: Ongoing Condition 2: The Procurement Services Division agrees with this finding. The Division agrees that the annual physical inventory required for FY2023 was not completed. As a result, the existence, location, condition, and accountability of all assets could not be fully verified during the audit period. To address this issue, Section 3 of the CNMI Property Management Policies and Procedures Manual was updated on September 9, 2024, changing the physical inventory requirement from an annual inventory to a biennial (every two years) inventory cycle. Property Management Branch is currently conducting physical inventories and random asset audits throughout the Commonwealth. These efforts include verifying asset locations, confirming accountability, reviewing asset condition and operational status, reconciling inventory records, and identifying assets that require transfer, survey, repair, replacement, or other corrective action. These inventory and reconciliation efforts are already underway and will continue while the SOP is finalized and implemented. Together, these measures will strengthen accountability, improve asset management practices, and help ensure compliance with federal and Commonwealth property management requirements. Proposed Completion Date: Ongoing

AL Program: 15.875 – Economic, Social, and Political Development of the Territories Area: Cash Management Questioned Costs: $972,335 Contact Person(s): Angelina Phillips, Financial Analyst, Office of Management and Budget (OMB) Corrective Action Plan: Condition 1-2: The Office of Management and Budget (OMB) agrees with this finding. The underlying cause of this issue was the absence of succession planning and cross training, which resulted in a loss of institutional compliance knowledge during a staff transition. When the primary grant administrator unexpectedly left the organization, there was no transition plan, no cross trained backup staff, and no documented standard operating procedure in place. As a result, the departing administrator processed a drawdown request without leaving documentation of the drawdown or the corresponding vendor invoices. The untrained coverage staff, having only been informed that funds were received, subsequently processed the invoices for payment, which led to the timing discrepancy noted in the finding. To correct this issue, we have formally adopted the CNMI Department of Finance’s Internal Control for Federal Grants Management Manual effective May 1, 2025; the Department of Finance’s Federal Grant Drawdown Procedures effective June 20, 2025; and the Department of Finance’s Cash Management Policies and Procedures effective October 1, 2025. Collectively, these policies ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The step by step Standard Operating Procedures we have adopted for internal controls and the drawdown process clearly outline required documentation, approval workflows, and compliance timelines. In addition, we have initiated succession and continuity planning to ensure that at least Finding No.: 2023-016, continued AL Program: 15.875 – Economic, Social, and Political Development of the Territories Area: Cash Management Questioned Costs: $972,335 Contact Person(s): Angelina Phillips, Financial Analyst, Office of Management and Budget (OMB) Corrective Action Plan: one alternate staff member is trained and capable of performing grant administration responsibilities to prevent future disruptions. Proposed Completion Date: Completed

Finding No.: 2023-015 AL Program: 15.875 – Economic, Social, and Political Development of the Territories Area: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Questioned Costs: $4,203 Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC Corrective Action Plan: Condition 1: The Office of Grants Management (OGM) disagrees with this finding and questioned costs of $1,400.00. The ATP document is vested with the Division of Energy (DOE) and not OGM. The award is from OIA; however, not all awards are under the possession of OGM. In this matter, CNMI Department of Energy is the recipient. However, we were able to obtain a copy of the document after several phone calls to their office. Document is available for review upon request. Proposed Completion Date: Completed Finding No.: 2023-015, continued AL Program: 15.875 – Economic, Social, and Political Development of the Territories Area: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Questioned Costs: $4,203 Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC Corrective Action Plan: Condition 2: The Office of Grants Management (OGM) disagrees with this finding and questioned cost of $2,803.00. The documents were obtained for both employees and are available for review upon request. Proposed Completion Date: Completed

Finding No.: 2023-014 AL Programs: 11.307 – Economic Adjustment Assistance Area: Reporting Questioned Costs: $-0- Contact Person(s): Elizabeth S. Balajadia, Office of Planning and Development Acting Director / James Kintol, Project Manager, Department of Finance Corrective Action Plan: Condition 1: For project no. FG17010001 (related to the Economic Resiliency Center), the CNMI Department of Finance respectfully disagrees with this finding. The Department was not aware that a documentation request had been submitted through the EY portal. This occurred because the ERC project was grouped with other OPD-related projects within the same EY portal request, resulting in the Department not receiving clear notification that additional documents were required. The Department maintains all relevant supporting documentation for these transactions and such documentation is available for review upon request from the Grantor. The Office of Planning and Development partially disagrees with the finding related to Project No. FG26050001 and FG26050006. OPD has located the SF-425 Federal Financial Report for Project No. FG26050001 / Grant Award No. 07-79-07631 for the reporting period ending September 30, 2022, and the report is maintained by OPD and available for review. With respect to Project No. FG26050006 / Grant Award No. ED22SEA3070013, OPD has been unable to locate the referenced SF-425 reports for the reporting periods ending September 30, 2022, and March 31, 2023. However, although the grant was awarded in 2022, the project was not established until June 12, 2023, and grant activities had not commenced during the reporting periods cited in the finding. OPD will coordinate with the Department of Finance to determine whether reporting requirements applied during the referenced periods. Should additional guidance or clarification indicate that such reporting requirements were applicable, OPD will review the information provided and take appropriate action, as necessary. Correspondence from the Department of Finance confirming the project establishment date is available for review. OPD will continue coordinating with the Department of Finance and reviewing grant award documentation to determine whether reporting requirements applied during the referenced reporting periods and to identify any records relevant to the audit finding. No further corrective action is proposed at this time pending clarification of the applicable reporting requirements. Proposed Completion Date: Ongoing Condition 2a: For project no. FG17010001 (related to the Economic Resiliency Center), the Department of Finance respectfully disagrees with this finding. The Department was not aware that a documentation request had been submitted through the EY portal. This occurred because the ERC Finding No.: 2023-014, continued AL Programs: 11.307 – Economic Adjustment Assistance Area: Reporting Questioned Costs: $-0- Contact Person(s): Elizabeth S. Balajadia, Office of Planning and Development Acting Director / James Kintol, Project Manager, Department of Finance Corrective Action Plan: project was grouped with other OPD-related projects within the same EY portal request, resulting in the Department not receiving clear notification that additional documents were required. The Department maintains all relevant supporting documentation for these transactions and such documentation is available for review upon request from the Grantor. The Office of Planning and Development (OPD) respectfully disagrees with the finding related to Project No. 2605210018. OPD has located the SF-271 Outlay Reports and Requests for Reimbursement for Construction Program for Project No. 2605210018 / Grant Award No. 07-79-07562 covering the periods July 1, 2022, through October 31, 2022, and November 1, 2022, through January 9, 2023. These records are maintained by OPD and are available for review. No further corrective action is proposed. OPD has located the requested SF-271 reports and confirmed that they are maintained within its grant records and available for review. OPD will continue maintaining grant records in accordance with applicable record-retention requirements. Proposed Completion Date: Ongoing Condition 2b: The Office of Planning and Development (OPD) respectfully disagrees with the finding. OPD has located supporting accounting records associated with the SF-271 for Project No. 2605210018 / Grant Award No. 07-79-07562 covering the period August 29, 2022, through April 30, 2023, including invoices, purchase orders, and check copies. These records are maintained by OPD and are available for review. No further corrective action is proposed. The requested supporting records have been located and are maintained by OPD for review. OPD will continue maintaining supporting financial documentation in accordance with applicable record-retention requirements. Proposed Completion Date: Ongoing Condition 3a: For project no. FG17010001 (related to the Economic Resiliency Center), the Department of Finance respectfully disagrees with this finding. The Department was not aware that a documentation request had been submitted through the EY portal. This occurred because the ERC project was grouped with other OPD-related projects within the same EY portal request, resulting in the Department not receiving clear notification that additional documents were required. The Department maintains all relevant supporting documentation for these transactions and such documentation is available for review upon request from the Grantor. Finding No.: 2023-014, continued AL Programs: 11.307 – Economic Adjustment Assistance Area: Reporting Questioned Costs: $-0- Contact Person(s): Elizabeth S. Balajadia, Office of Planning and Development Acting Director / James Kintol, Project Manager, Department of Finance Corrective Action Plan: The Office of Planning and Development (OPD) respectfully disagrees with the finding. OPD has located the performance reports for Project No. FG26050001 / Grant Award No. 07-79-07631 and Project No. 2605210018 / Grant Award No. 07-79-07562 for the reporting period ending September 30, 2022. OPD believes the reports referenced in the finding as Periodic Performance Reports are maintained and submitted by OPD as Quarterly Progress Reports (QPRs). These records are maintained by OPD and are available for review. No further corrective action is proposed. The requested performance reports have been located and are maintained by OPD for review. OPD will continue maintaining programmatic records in accordance with applicable record-retention requirements. Proposed Completion Date: Ongoing Condition 3b: The Office of Planning and Development (OPD) agrees with the finding. The Periodic Performance Report for Project No. 2605210018 / Grant Award No. 07-79-07562 for the reporting period ending December 31, 2022, was submitted after the required due date. Although operational circumstances at the time contributed to the delay, OPD recognizes the importance of timely reporting and will strengthen internal monitoring procedures to improve tracking of reporting deadlines and support timely submission of all required reports. OPD will implement a reporting calendar and periodic internal reviews to monitor upcoming reporting deadlines and ensure timely submission of all required reports. Proposed Completion Date: Ongoing Condition 4: For project no. FG17010001 (related to the Economic Resiliency Center), the CNMI Department of Finance respectfully disagrees with this finding. Based on the project’s Special Award Conditions, the only reporting requirements identified for this award are the submission of Project Progress Reports and Financial Reports (SF-425). No additional reporting or documentation requirements – beyond those explicitly stated – were communicated to the Department. Accordingly, the Department requests further clarification from the auditor regarding the specific authority or requirement that forms this basis of this finding, including where such a requirement Finding No.: 2023-014, continued AL Programs: 11.307 – Economic Adjustment Assistance Area: Reporting Questioned Costs: $-0- Contact Person(s): Elizabeth S. Balajadia, Office of Planning and Development Acting Director / James Kintol, Project Manager, Department of Finance Corrective Action Plan: is documented. A copy of the Special Award Conditions is maintained by the Department and is available for review upon request. The Office of Planning and Development (OPD) respectfully disagrees with the finding. OPD reviewed the grant files, including the applicable Special Award Conditions, for Project No. 2605210018 / Grant Award No. 07-79-07562 and Project No. FG26050001 / Grant Award No. 07- 79-07631. OPD was unable to identify a requirement for submission of an Annual Performance Technical Report within the grant terms and conditions governing these awards. The applicable Special Award Conditions have been identified and are available for review. OPD respectfully requests clarification regarding the specific report referenced in the finding and will provide any applicable documentation should an applicable reporting requirement be identified. OPD will review any additional guidance or clarification provided regarding the reporting requirements applicable to these grants and will take appropriate action, if necessary. OPD will continue reviewing grant award requirements and maintaining documentation of applicable reporting obligations to support compliance and future audit reviews.