Corrective Action Plans

Finding 2024-004 Federal Agency Name: U.S. Department of Agriculture Program Name: Community Facilities Loans and Grants Cluster Applicable Federal Award Number- Direct Loan and Guaranteed Loan Assistance Listing Number #10.766 Finding Summary: The Medical Center was not in compliance with the terms of the loan agreements related to the reservefunds. Responsible Individuals: Ron Harrington, CFO Corrective Action Plan: The CFO worked with the local bank in Concordia to establish the required reserve account equal to the 10% of the annual debt service requirement on the direct loan and the guaranteed loan for the entire year. The Hospital is now in compliance with the terms of the loan agreements related to the reserve funds as of August 31, 2024. The Hospital has access to the accounts set up at the Bank to run monthly reports and record the interest amounts to the proper GL accounts quarterly as the interest on the accounts set up at the bank accrue interest quarterly. This entry is to ensure the Gl accounts agree with the Bank statements on the Reserve funds. Anticipated Completion Date: August 2024

Planned Corrective Action: The University has streamlined the process of R2T4 to prevent delays in processing. This enhanced process creates a countdown report to prioritize R2T4 calculation when staff resources as strained. Contact person responsible for corrective action: Roberta Smith Anticipated Completion Date: 06/30/26

Planned Corrective Action: The University will reassess internal documentation and procedures that were in place to ensure all required campus-level data and program-level data was being reported to NSLDS via NSC. Contact person responsible for corrective action: Roberta Smith/Sarah Lawson Anticipated Completion Date: 06/30/25

Management’s Response: The Finance team of Financial Controller and Senior Accountant are responsible for the reconciling grant revenue, grant receivables and unearned revenue accounts monthly. Proper monitoring and accurate documentation of COVID-19 related activities, including any and all expenditures will be tracked, properly documented and reconciled. Training and monitoring of grant activity will continue in fiscal year 2025. This will be completed by September 30, 2025. Estimated Completion Date: September 30, 2025 Responsible Position: Brochelle Shirley, Financial Controller, and Dawn Bowens, Senior Accountant

4.1 Haiti Country Program to ensure the physical counts of property are conducted, that evidence of a count is formally documented, and an authorized individual formally approves the result of the count, and the related reconciliation of property records, in order to adhere to Federal regulations related to equipment management and its related maintenance. Responsible Official: Head of Operations, Supply Chain Managers, DRD Operations, SCM RTA, Completion Date: September 30, 2025

3.1.Ensure that the inventory expenses charged to the federal program are allowable within the period of performance. Responsible Official: Head of Operations, Supply Chain Managers, DRD Operations, SCM RTAs, Completion Date: September 30, 2025

2.1 Ensure timely reconciliation of inventory distributions in order to record the transactions in the correct accounting period. Responsible Official: Head of Operations, Supply Chain Managers, DRD Operations, SCM RTAs, Completion Date: September 30, 2025

Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers: S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements. The School Corporation did not include Davis Bacon wage rate requirements in its contract with vendor which includes labor installation. The School Corporation did not obtain the weekly payroll reports certifications from vendor installing equipment. Context: The School Corporation had one project during the audit period which included construction or labor installation costs which were charged to the ESSER III (84.425U) grant award. For the vendor selected for testing, the School Corporation did not include federal wage rate requirement clauses in the contract with the vendor and did not have an internal control designed to collect the weekly payroll reports certifications from vendors and its subcontractors, as applicable, to comply with Davis Bacon wage rate requirements. The amount disbursed for the project totaled $192,036. Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: Management will ensure all federal funded renovation, remodeling, or construction projects anticipated to incur labor costs greater than $2,000 include a signed contract containing a Davis-Bacon wage rate provision and will monitor the vendor to ensure compliance with certified payroll reporting requirements. Responsible Party and Timeline for Completion: Jessica McFarland, Business Manager, procedures were implemented immediately.

FINDING 2024-009 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Audit Finding: Material Weakness, Modified Opinion Contact Person Responsible for Corrective Action: Linda Zaborowski, CFO Contact Phone Number and Email Address: (219) 881-5536 lzaborowski@garycsc.k12.in.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: Gary Community School Corporation (GCSC) is taking immediate action Gary and implementing an internal control system to ensure compliance with federal equipment and real property management requirements. The Business Office Coordinator is now responsible for tagging all equipment purchased for the district and entering all relevant information, including the source of funding and location, into the Follett Software system. When equipment is purchased, a copy of the purchase order will be provided to the Business Office Coordinator to ensure proper tracking and tagging of equipment purchased upon arrival. Inventory will be properly tracked based on GCSC policy # 7455 guidelines. In addition, all building personnel who receive equipment will be properly trained on procedures to ensure accurate tracking of assets. The Business Office Coordinator, with assistance from the Chief Financial Officer (CFO), will oversee all inventory of equipment and buildings. A physical inventory of all assets will be conducted at least once every two years to comply with federal regulations. These measures will ensure that all property is properly recorded, safeguarded, and maintained to prevent future findings. Anticipated Completion Date: Gary Community School Corporation will implement this procedure by July 2025.

FINDING 2024-008 Subject: Title I Grants to Local Educational Agencies – Matching, Level of Effort, Earmarking Audit Finding: Significant Deficiency Contact Person Responsible for Corrective Action: Linda Zaborowski, CFO Contact Phone Number and Email Address: (219) 881-5536 lzaborowski@garycsc.k12.in.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: To address the deficiency related to the Matching, Level of Effort, and Earmarking compliance requirement, the Gary Community School Corporation will implement a comprehensive internal control system to ensure accurate reporting of payroll expenditures in the Form 9 report. A formal oversight and review process will be established to verify that all payroll expenditures, including those outside of the Title I office, are properly recorded in the correct fund, account, and object code. The CFO will review all payroll expenditures before processing to ensure accuracy and proper classification prior to submission to the Indiana Department of Education through the Form 9 report. Additionally, a detailed reconciliation process will be conducted, cross-referencing payroll records with financial reports to confirm that expenditures are appropriately categorized. This added layer of review will help prevent errors and ensure compliance with grant requirements. Anticipated Completion Date: Gary Community School Corporation will implement this procedure by March 2025.

FINDING 2024-007 Subject: Title I Grants to Local Educational Agencies - Eligibility Audit Finding: Material Weakness, Other Matters Contact Person Responsible for Corrective Action: Linda Zaborowski, CFO Contact Phone Number and Email Address: (219) 881-5536 lzaborowski@garycsc.k12.in.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: The Gary Community School Corporation has implemented a corrective action plan to strengthen internal controls over Direct Certification data related to food service eligibility and to ensure the accuracy of enrollment and poverty data used in the Title I application process. The Business Services Coordinator will oversee a structured monthly verification process to confirm that student eligibility for free or reduced‐price meals is accurately reflected in Skyward, the district’s student management system. Every month, Direct Certification data will be retrieved from the Indiana Department of Education (IDOE) and cross‐checked against Skyward records. Additionally, Real Time reports, which are used to prepopulate enrollment numbers for reporting and compliance purposes, will be reviewed to ensure consistency with the verified Direct Certification data. Any discrepancies found between these data sources will be promptly investigated, corrected, and documented to maintain compliance with federal and state food service regulations. To enhance accountability, staff responsible for managing student eligibility data will receive training on the verification and reconciliation process. This training will ensure that they understand how to properly retrieve Direct Certification data, compare it to Skyward records and Real Time reports, and document necessary corrections. Anticipated Completion Date: Gary Community School Corporation will implement this procedure by July 2025.

FINDING 2024-006 Subject: Title I Grants to Local Educational Agencies – Special Tests and Provisions – Annual Report/High School Graduation Rate Audit Finding: Material Weakness, Modified Opinion Contact Person Responsible for Corrective Action: Linda Zaborowski, CFO Contact Phone Number and Email Address: (219) 881-5536 lzaborowski@garycsc.k12.in.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: To address the deficiencies related to the accuracy of the Annual Report Card and High School Graduation Rate, the Gary Community School Corporation will implement a structured withdrawal process to ensure proper documentation and verification of student withdrawals. A standardized withdrawal form will be introduced, requiring a parent or legal guardian to complete and sign the document before a student is officially withdrawn from the school. This form will be maintained in the student’s file along with any corresponding records request from the receiving school. As part of the revised withdrawal process, the principal will be required to review and sign off on all withdrawal requests to ensure accuracy and compliance with reporting requirements. This additional level of oversight will help prevent errors and ensure that student withdrawal data is properly documented and accounted for in graduation rate calculations. The School Corporation will also provide training for school administrators and registrars involved in the withdrawal and records management process to ensure proper adherence to the updated procedures. Periodic internal audits will be conducted to assess compliance and identify any areas for improvement. Anticipated Completion Date: Gary Community School Corporation will implement this procedure by July 2025.

FINDING 2024-005 Subject: Child Nutrition Cluster –Reporting Audit Finding: Material Weakness, Modified Opinion Contact Person Responsible for Corrective Action: Linda Zaborowski, CFO Contact Phone Number and Email Address: (219) 881-5536 lzaborowski@garycsc.k12.in.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: Gary Community School Corporation (GCSC) is taking immediate action to strengthen internal controls over meal count reporting. The district will fully utilize the Skyward Student Information System to track all meals, including those processed through the Point of Sale (POS) system and a la carte items, ensuring a standardized process across all schools. To improve accuracy and prevent over-claiming, GCSC is implementing a unique student ID system where each student will either scan their ID card or manually enter their assigned ID number when receiving a meal. The CFO/Food Service Director will conduct daily reconciliations of meal counts with the Food Service Management Company (FSMC) and verify all claims against source records to prevent errors. Monthly claims will be reviewed for accuracy, ensuring that second student meals and staff meals are excluded. Additionally, GCSC will establish clear policies and procedures requiring the FSMC to provide complete and accurate data for all claim submissions. Regular internal audits and staff training will be conducted to enforce compliance, and an oversight process will be implemented to detect and correct discrepancies before submission. Anticipated Completion Date: Gary Community School Corporation will implement this procedure by March 2025.

FINDING 2024-004 Finding Subject: Child Nutrition Cluster –Procurement and Suspension and Debarment Cost Principles Summary of Finding: Material Weakness, Modified Opinion Contact Person Responsible for Corrective Action: Linda Zaborowski, CFO Contact Phone Number and Email Address: (219) 881-5536 lzaborowski@garycsc.k12.in.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: To address the deficiencies in procurement and suspension and debarment compliance, the Gary Community School Corporation will implement a comprehensive internal control system. The School Corporation will establish and enforce policies and procedures to ensure that all invoices submitted by the Food Service Management Company (FSMC) accurately reflect the amounts paid by the FSMC. A structured process will be developed to verify that all invoices include the required documentation for discounts, rebates, and applicable credits. To ensure compliance, the School Corporation will require the FSMC to submit detailed documentation supporting all invoices, including proof of payment and a breakdown of any credits. The Business Office Coordinator will be responsible for reviewing and reconciling these invoices before they are approved for payment by the CFO/Food Service Director. The CFO/Food Service Director will oversee this process, and conduct regular reviews to confirm that all financial transactions adhere to procurement regulations. Additionally, the School Corporation will implement a formalized training program for procurement staff, focusing on federal and state procurement regulations, including invoice verification and compliance with suspension and debarment requirements. Anticipated Completion Date: Gary Community School Corporation will implement this procedure by July 2025.

FINDING 2024-003 Finding Subject: Child Nutrition Cluster – Activities Allowed or Unallowed, Allowable Costs/Cost Principles Summary of Finding: Material Weakness, Modified Opinion Contact Person Responsible for Corrective Action: Linda Zaborowski, CFO Contact Phone Number and Email Address: (219) 881-5536 lzaborowski@garycsc.k12.in.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: Gary Community School Corporation is committed to strengthening internal controls to ensure compliance with federal regulations governing the Child Nutrition Cluster programs. To address the deficiencies identified in the audit, we will implement a structured system for reviewing and approving all financial transactions related to the food service program. Moving forward, all invoices submitted by the Food Service Management Company (FSMC) will require detailed supporting documentation before payment is processed. The Food Service Director will conduct thorough reviews to verify the accuracy and allowability of costs, ensuring that only eligible expenses are charged to the program. Additionally, a standardized checklist will be developed to confirm compliance with federal cost principles. To address payroll-related deficiencies, all employees whose salaries are funded by the Child Nutrition Cluster will be required to maintain detailed time and effort records that document their work on federal and non-federal activities. The Payroll Department will not process payments from federal funds without proper documentation, and approval from the CFO/Food Service Director. To prevent future occurrences of questioned costs, the Business Office Coordinator will carefully review all FSMC invoices to verify that adequate documentation is provided, and any unallowable costs, including sales tax, are identified and excluded before payment is made. Moving forward, internal procedures will include a detailed verification process to ensure that only allowable costs are charged to the program. Anticipated Completion Date: Gary Community School Corporation will implement this procedure by July 2025.

Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: We identified one student disbursement at Fort Hays State University that was not reported to the COD within 15 days after originally being rejected by the COD system. Recommendation: We recommend that the University implement procedures to ensure that student disbursements are reported to the COD on a timely basis, particularly those that are originally rejected. Views of responsible officials: There is no disagreement with the audit finding. Action taken in response to finding: The University will evaluate and enhance current procedures to ensure the timely reporting of student disbursements to COD. Name(s) of the contact person(s) responsible for corrective action: Chantelle Arnold Planned completion date for corrective action plan: March 2025

Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: We noted that for two of the students tested, the enrollment statuses reported in NSLDS were still listed as withdrawn (W) despite graduating (G). This included one student from the University of Kansas who graduated in December 2023 and one student at Fort Hays State University who graduated May 2024. In addition, we noted that some of the institutions did not have an observable, auditable internal control over the submission process at the time of testing. Recommendation: We recommend that the institutions implement procedures to ensure that enrollment statuses, particularly those who were initially marked as withdrawn but need to be moved to graduated, are reported correctly and timely. Views of responsible officials: There is no disagreement with the audit finding. Action taken in response to finding: Fort Hays State University: The University will evaluate and enhance current procedures to ensure the accurate and timely reporting of student status changes to NSLDS. University of Kansas (KU): KU has implemented a process to review students who withdrew during the semester then subsequently graduated at the end of that semester. This ensures that their enrollment status, which is accurately updated in the National Student Clearinghouse (NSC), is subsequently reflected in the National Student Loan Data System (NSLDS) in a timely manner. Pittsburg State University: The University will evaluate internal controls around NSLDS status change submission process and work with the IT department to implement an observable control procedure. Kansas State University: The University has reviewed their process and identified a control and will maintain documentation of this control occurring. Emporia State University: The University will evaluate their procedures around NSLDS status change submissions and implement a formalized control procedure to document the review of this process. Name(s) of the contact person(s) responsible for corrective action: Fort Hays State University: Chantelle Arnold, Doug Storer University of Kansas: Casey Wallace, University of Kansas Registrar Pittsburg State University: Melinda Roelfs, Registrar Kansas State University: Kelley Brundage, University Registrar Emporia State University: Sheri Brooks, Registrar Planned completion date for corrective action plan: Fort Hays State University: April 2025 University of Kansas: March 4, 2025. Pittsburg State University: July 2025 Kansas State University: March 10, 2025 Emporia State University: April 2025

Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Condition: Kansas Department of Health and Environment (Department) was unable to provide supporting documentation that evidenced the auditors performing the Utilization Control review were qualified. Recommendation: We recommend the Department conduct training of all staff members to properly verify that supporting documents evidencing the qualification of individuals performing utilization control reviews are maintained. Views of responsible officials: There is no disagreement with the audit finding. The SSA Goals for FFY25: • KDHE team will collaborate with Policy to create materials for all contractors regarding maintaining and retaining records for all staff based off KanCare contracts timeframes. • Contractors will receive training focusing on retention of records and policy. • Contractors will receive education over documentation requirements throughout the year to strengthen their knowledge or record retention. • KDHE Audit Team will work with our Contracts and Compliance department to discuss any needed updates in the KanCare 3.0 contract section(s) relevant to the retention of records regarding subcontractors and their required documentation. Action taken in response to finding: KDHE is working with our subject matter experts to create a policy that will ensure all contractors through the state understand and follow procedures to properly verify that all supporting documentation and evidence involving any staff contracted or subcontracted through them is held for the appropriate timeframes as described in our contracts. Name(s) of the contact person(s) responsible for corrective action: Rebecca Gonzales, Medicaid Federal Audits Team Manager, KDHE Breanna Lester, Medicaid Federal Audits Program Manager, KDHE Planned completion date for corrective action plan: Ongoing

Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Condition: Kansas Division of Emergency Management (Management) did not track, determine or monitor the audit verification requirement for its subrecipients in a timely manner. Recommendation: We recommend that the agency review its procedures for monitoring of annual audits for subrecipients to ensure that subrecipients are audited in accordance with Subpart F timely. We recommend that a clear timeline and tracking for this monitoring be added to the policies and procedures. Views of responsible officials: Management does not agree with this finding. Action taken in response to finding: Explanation of disagreement with audit finding: • KDEM manages the grant expenditures during the entire lifespan of the project. Scope of work is matched with actual expenses and validated before sending to FEMA for close-out. • KDEM’s audit tracker identifies when audit letters were sent and can be verified through email verification sent to sub-recipients. • There is no regulation stipulating what is “timely”. KDEM verifies audits annually. Name(s) of the contact person(s) responsible for corrective action: Jennifer Deal, Fiscal & Grants Management Section Chief Planned completion date for corrective action plan: See above.

Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Condition: Kansas Division of Emergency Management (Management) did not issue subawards to subrecipients until after the fiscal year ended. Recommendation: We recommend that Management reviews and enhances its internal controls and procedures to ensure that subawards are issued timely to subrecipients, and that subawards include all required federal award information. Views of responsible officials: Management partially agrees with this finding. Although the 2023 2 CFR § 200.332 does state that the award letters should be sent at the time of the award, there needs to be some reasonableness to the interpretation of this regulation. KDEM currently has 13 open disasters with over 100 open projects and more being written. It is not reasonable to interpret that the award letters be sent on the date that the award is granted. Action taken in response to finding: Management will utilize the report run for FFATA to send award letters to sub-recipients. Name(s) of the contact person(s) responsible for corrective action: Jennifer Deal, Fiscal & Grants Management Section Chief Planned completion date for corrective action plan: Ongoing

Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Condition: The Kansas Division of Emergency Management (Management) did not report subawards to FSRS during SFY 2024 in compliance with FSRS reporting requirements. Recommendation: We recommend that Management continue to implement its corrective action plan from the prior year. Management should review and update its procedures and internal controls to ensure that subawards are accurate, reported timely and reviewed timely to FSRS. Views of responsible officials: There is no disagreement with the audit finding. Action taken in response to finding: Management will download awards every 2 weeks to ensure that the data is reviewed and entered timely. Name(s) of the contact person(s) responsible for corrective action: Jennifer Deal, Fiscal & Grants Management Section Chief Planned completion date for corrective action plan: Ongoing

Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Condition: Kansas Department of Health and Environment (Department) was unable to provide supporting documentation that it had performed recertification surveys within the required timeframe which is used to meet the provider health and safety standards. Recommendation: We recommend the State focus on ensuring the Department’s procedures and internal controls are being followed and have proper supporting documentation, and to continue to focus on training all staff members to properly verify providers are meeting the prescribed health and safety standards before making payments to those providers. Views of responsible officials: There is no disagreement with the audit finding. KDHE/Bureau of Facilities and Licensing (BFL) recognizes the recertification survey deadlines was not met for twenty of the sixty non-deemed acute and continuing care providers and supplier types included in this audit consisting of Hospitals, Critical Access Hospitals (CAH), Ambulatory Surgery Centers (ASC), End Stage Renal Disease Facilities (ESRD), Rural Health Clinics (RHC), Hospice and or Home Health Agencies (HHA). The KDHE/BFL would like to clarify that Section 1865(a)(1) of the Social Security Act (the Act) permits providers and suppliers "accredited" or "deemed" by an approved national accreditation organization (AO) to be exempt from routine surveys by State survey agencies to determine compliance with Medicare conditions. Accreditation by an AO is voluntary and is not required for Medicare certification or participation in the Medicare Program.) KDHE/BFL does not disagree with the findings above but does want to identify some of the challenges the State Survey Agency (SSA) faces hindering continued progress with corrective action plans. CMS’s annual appropriation to the SSA has continued to remain unchanged since FY 2015. This significantly limits the SSA’s capacity to conduct initial, complaint, recertification, and validation surveys. This limitation in funding, coupled with the continuing effects of the COVID-19 Public Health Emergency (PHE), accelerated the loss of SSA surveyor resources and resulted in an ongoing continued survey backlog. Even though this backlog has decreased from the previous year, it still exists. Also, as complaints about provider and supplier quality of care increases, non-statutory recertification surveys and less severe complaint allegations receive a lower priority. Complaint surveys, especially those alleging immediate jeopardy or actual harm to patient health and safety continue to be the primary oversight provided by the SSA, outside of statutory recertification surveys. These investigations of the most serious allegations also lead to more severe findings, higher numbers of revisits, and additional enforcement workload. Complaint surveys continue to be the primary oversight mechanism for most provider types. CMS has established the following priorities for the SSA’s: 1. Investigation of patient complaints, as these are active quality concerns that must be reviewed to protect the health and safety of the public. 2. Survey and recertification of statutory facilities such as home health agencies (HHAs), and hospices as required by current law; and 3. Survey and recertification of non-statutory facilities, as required by CMS policy with consideration of available funding once priorities one and two have been accomplished. Action taken in response to finding: At the beginning of each federal fiscal year including current FFY25, the BFL utilizes the CMS Mission and Priority Document (MPD) which directs and outlines the work of the SA based on regulatory changes, adjustments in budget allocations, and new initiatives, as well as new requirements based on statutes to prioritize and categorize survey plans. During this current FFY we continue our efforts at restructuring the program manager responsibilities, filling health facility surveyor positions, adding quality assurance responsibilities, and effectively managing contracted services. Our goal is always to be able to consistently meet our MPD Tier 1 and Tier 2 priorities. Recruitment, training, fiscal management & strategies are always a priority and part of action plans to meet these goals. During this current audit process, we did identify opportunities for record management, education and training opportunities. Therefore, this year we will be implementing education and training to our non-surveyor licensure and certification staff ensuring they understand the CMS provider certification requirements and the certification process utilizing specific chapters of the State Operations Manual (SOM) as well as the iQIES & ASPEN database systems. We additionally will be seeking collaboration will the CMS Regional Office. Name(s) of the contact person(s) responsible for corrective action: Rebecca Gonzales, Medicaid Federal Audits Team Manager, KDHE Breanna Lester, Medicaid Federal Audits Program Manager, KDHE Jerry Smith, Bureau Director, Bureau of Facilities and Licensing, KDHE Marilyn St Peter, RN, Deputy Director, Bureau of Facilities and Licensing, KDHE Planned completion date for corrective action plan: June 30, 2025

Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Condition: The Kansas State Department of Health and Environment (Department) reported awards issued to contractors to FSRS when contractor agreements are not considered subawards and should not be reported. Recommendation: We recommend that the Department develop procedures and internal controls to ensure that required subawards are reported accurately to FSRS and that contractor agreements are not reported to FSRS as subawards. Views of responsible officials: Management agrees with the finding. Action taken in response to finding: Process has been updated so that only POs coded as Aid To Local (550100, 550600) will be submitted on FFATA reports. Name(s) of the contact person(s) responsible for corrective action: Shelley Russell, Lead Fiscal Analyst, Division of Public Health Planned completion date for corrective action plan: Immediately. New process will be used for any reports moving forward. Reports that have already been submitted will be reviewed and updated so that only ATL obligations are reflected on the reports.

Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Condition: Kansas Department of Health and Environment (Department) was unable to provide supporting documentation that it had performed suspension and debarment verification procedures before the start of procurement contracts for twelve contracts of a total of twenty-eight selections (43%) tested. Recommendation: We recommend that the Department enhance its procedures and internal controls to ensure that it verifies and maintains documentation of its contractors’ suspension and debarment status prior to the execution of all contracts. Verification can be performed by either checking SAM exclusions and maintaining documentation when the verification occurred, collecting a signed certification from the contractor prior to contract execution, or adding a clause or condition to the contract. We further recommend that documentation is readily available for audit. Views of responsible officials: Management disagrees with this finding. KDHE disagrees with this finding. KDHE has an established process in place which is documented in the Procurement Policies and Procedures manual that was provided as part of the audit request which shows that verification of suspension and debarment in the System for Award Management takes place prior to contractual agreements being fully executed as part of the agency’s established process. There is no requirement that KDHE is aware of that requires that the date of verification be documented. Action taken in response to finding: KDHE will make sure the date the verification was done is on the documentation. Name(s) of the contact person(s) responsible for corrective action: Kelly Chilson, Director of Procurement Planned completion date for corrective action plan: Immediately when new contracts are being created.

Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Condition: Subawards issued by the Kansas Department of Health and Environment (Department) did not include all required subaward information. Recommendation: We recommend that the Department develop a subaward template that includes all required federal award information and update its procedures and internal controls to ensure that all required federal award information is included in subawards at the time of issuance. Views of responsible officials: Management disagrees with the finding. Multi-year subrecipient agreements executed prior to March 2024 did not include the Sub-Recipient Agreement Submission Form. The agreements were not re-executed after March 2024 to include the form. The audit findings should only pertain to agreements newly executed after March 2024; however, because the audit included agreements executed prior to March 2024, the audit found that information is missing. Action taken in response to finding: All subrecipient agreements executed after March 2024 include the Sub-Recipient Agreement Submission Form. Name(s) of the contact person(s) responsible for corrective action: Farah Ahmed and Sheri Tubach, Bureau of Epidemiology and Public Health Informatics Planned completion date for corrective action plan: Completed