Corrective Action Plans

Corrective Action: The Finance Director will establish clear timelines for submitting and processing payment requests to prevent any discrepancies in cash requests or disbursements. Well-defined internal procedures, including submission deadlines and approval workflows, will ensure that funds are requested, approved, and drawn down efficiently. Ongoing monitoring of pending requests, coupled with proactive communication among team members, will further support timely financial management and minimize any risks. Responsible Person: Director of Finance

College officials acknowledge the error and attribute it to the misclassification of the grant under an incorrect organization code. They note that the funds were ultimately expended for allowable project costs within the same fiscal year. The College agrees to enhance training and implement additional review procedures to ensure compliance with cash management requirements going forward.

In Finding 2025-002, the Organization made several draws of federal funds for which expenditures had not been incurred at the time of the draw. The Organization is required to minimize the time between draws and expenditures. Management recognizes the importance of the requirements to disburse federal funds in a timely manner. In response to Finding 2025-002, procedures. will be established to document these expenditures prior to transferring the from the U.S. Treasury to ensure that advance draws of federal funds do not occur.

In Finding 2025-002, it was reported that the Organization’s did not reconcile federal grant expenditures in a timely manner, resulting in a lack of draws of federal funds for which qualifying expenditures had been made prior to the end of the Organization’s financial statement year end. Management recognizes the importance of complying with federal grant guidelines. In response to Finding 2025-002, the Organization understands the importance of timely reconciliations of federal grant expenditures and timely draws of federal grant funds. The Organization will review its processes and procedures to ensure that federal grants are reconciled in a timely manner.

Condition: While testing of internal controls over cash management it was noted that the Center did not follow procedures in place for the draw down of federal funds. Action Taken: Update grant intake process to identify draw down procedures outlined in grant agreement or agency terms and conditions. Document and follow identified procedures for all grant draw downs.

2025-004 Cash Management (repeat of finding 2024-008) Corrective action planned: Beginning April 1, 2025, when the organization was made aware of this finding in last year’s audit, OMC took immediate corrective action. The CFO/Designee monitors expenses and prepares a detailed report of expenditures claimed for reimbursement and retains this documentation along with supporting invoices. A qualified, knowledgeable CFO will continue to ensure compliance with these requirements. Anticipated completion date: Corrective Action taken on April 1, 2025. Contact person responsible for corrective action: Allen Boyd, Director of Fiscal Operations

Processes and controls have been implemented so that the accounting staff prepares the justification and expense support of the grant reimbursement requests which are reviewed and approved by the CEO for submission.

The Department of Health and Human Services/Centers for Disease Control and Prevention – Assistance Listing No. 93.495 Recommendation: We recommend that the Organization implement policies and procedures to ensure subrecipients are paid within 30 days of when the billing is received. If the request is believed to be improper, support for the delay in payment should be maintained. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: We have established a process to review and track accounts payable, including monthly reviews of outstanding bills, partner invoices, and partner compliance. Furthermore, we have added additional accounting staff focused on disbursements for subrecipients involved in federal grant programs. Finally, we have a process in place to document the receipt of partner invoices submitted to GHN for payment as well as a record of payment approval and/or revisions necessary. Names of the contact persons responsible for corrective action: Jan Warren, Director of Finance & Amber Henderson, Chief Organization Excellence & Strategy Officer Planned completion date for corrective action plan: December 31, 2025

Material Weakness in Internal Control over Compliance and Compliance - Cash Management Federal Program: Major Program- 93.939- HIV Prevention Activities: Non-Governmental Organization Based. Other Program- 16.889- Grants for Outreach and Services to Underserved Populations Federal Agency: Major Program- U.S. Department of Health and Human Services. Other Program- U.S. Department of Justice Award Number: Major Program- NU65PS923746. Other Program- 15JOVW-22-GG-00404-UNDE Fiscal Year: July 1, 2023 – June 30, 2024 Recommendation: We recommend that management ensure drawdowns are strictly aligned with incurred and allowable expenses. This should include: • Pre-drawdown verification of expense documentation. • Monthly reconciliations of drawdown activity to actual expenditures. • Training for staff involved in federal fund management on Uniform Guidance requirements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned/taken in response to finding: Procedures related to federal drawdowns were not followed in this case. The finance department will review all procedures and ensure that staff are trained on proper drawdown procedures going forward. Name of the contact person responsible for corrective action: Simon Trowell, Chief Executive Officer. Planned completion date for corrective action plan: December 31, 2025

Condition and Context: The County does not have a complete set of written cash management policies and procedures required by the Uniform Guidance. The lack of written procedures did not result in any material noncompliance, fraud or abuse with respect to the major program. Recommendation: Management should determine the scope of written policies needed for compliance with all federal programs and develop policies and procedures to comply with the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and recommendation. The County’s existing policies are currently under review by management and staff to determine what updates/changes are necessary in order to meet the Uniform Guidance requirements. Once any updates/changes are drafted, the policy will be presented to the Governing Body for review and approval.

Condition: During our audit of the financial management system and cash management practices for the Ryan White Federal Program, we identified the following deficiencies: Transposed Drawdown Amount: A drawdown request submitted to the PMS system for the Ryan White Program had the requested amount transposed with the amount of another federal program. This resulted in an over-request of a material amount on the Ryan White Program. Duplicate Invoice Reimbursement: An invoice was requested and received for reimbursement on a prior drawdown and was subsequently included again in a draw after year-end, resulting in a duplicate reimbursement. Incomplete Expenditure Tracking: The entity did not have a complete system for tracking all expenditures eligible for reimbursement. The drawdown process was limited to cash disbursement and payroll transactions and excluded expenditures incurred and recorded by journal entries. This resulted in the entity having unreimbursed expenditures that could have offset the over-requests noted above. Corrective Action Plan: To correct the deficiency, we are implementing a plan focused on establishing a review and approval process for all drawdown requests and revising our policies to ensure that all eligible incurred expenditures are properly captured and reconciled, thereby assuring strict compliance with federal cash management regulations and preventing federal funds from exceeding our immediate needs. Responsible Party: Austin Maddox, CFO Anticipated Completion Date: December 31, 2025

Management believes that in order to ensure that the amount being drawn down are timely and more accurate to the amounts being drawn upon, management is in the process of developing a more formal policy whereby the general ledger will be formally closed on a monthly basis and all amount will be reconciled to the ledger. Once all amounts are proven, then the drawdown amounts will be initiated with the proper documentation attached.

The County does not have a complete set of written cash management policies and procedures as required by the Uniform Guidance. The lack of written procedures did not result in any material noncompliance, fraud or abuse with respect to the major program. Recommendation: Management should determine the scope of written policies needed for compliance with all federal programs and develop policies and procedures to comply with the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and recommendation. The County’s existing policies are currently under review by management and staff to determine what updates/changes are necessary in order to meet the Uniform Guidance requirements. Once any updates/changes are drafted, the policy will be presented to the Governing Body for review and approval.

Finding 2024-004 - Material Weakness in Internal Control over Compliance and Material Noncompliance (Qualified Opinion) - Inadequate Tracking of Expenditures and Retention of Documentation: Activities Allowed or Unallowed: Allowable Costs/Cost Principles and Reporting (A/B/L) for Assistance Listing Number 19.510 and 93.567 Criteria: The Code of Federal Regulations (CFR) Section 200.510(b) states in part, “The auditee must also prepare a schedule of federal expenditures for the period covered by the auditee’s consolidated financial statements which must include the total Federal awards expended as determined in accordance with 200.502.” Also, in accordance with CFR Section 200.302(b) - Financial Management, the auditees financial management system must provide 1) identification of all federal awards received and expended; 2) accurate, current, and complete disclosure of the financial results of each federal award or program; 3) records that identify adequately the source and application of funds for federally‐funded activities; 4) effective control over, and accountability for, all funds, property, and other assets; 5) comparison of expenditures with budget amounts for each Federal award; 6) written procedures to implement the requirements of section 200.305 and; 7) written procedures for determining the allowability of costs in accordance with Subpart E and the terms and conditions of the Federal award. Recipients of federal awards must submit accurate, complete and timely financial and performance reports. The Organization should have internal controls designed to ensure compliance with those provisions. The Organization should retain sufficient documentation such as invoice and allocation support for expenditures to retain documentation for audit purposes. Condition: During detail testing of expenditures, it was noted that the Organization did not maintain adequate documentation to support how certain costs were allocated to the federal program. Several transactions lacked sufficient detail, such as invoice or expense reimbursement form. Several expenditures selected for testing did not obtain sufficient approval by an individual at the Organization. There was one instance of employee compensation being processed at an approved pay rate and the Center could not provide any supporting documentation such as an offer letter, to substantiate the rate paid. It was noted that quarterly reports provided to the federal program were not reviewed by an individual at the Organization prior to submission to ensure accurate report of expenditures. 2 of the 8 monthly reports sampled were not submitted timely to the grantor. Cause: The Organization does not have an adequate system in place to ensure quarterly reports have sufficient supporting documentation, proper approval/review, and accurate reporting prior to submission. Responsibilities for expenditure tracking were not clearly assigned, and there was no formal review process in place. The Organization is not following their Document Retention Policy. Effect: The effect of this condition increases the possibility that quarterly financial reports are misstated or inaccurate and increase the risk of noncompliance with federal requirements. The effect of this condition also increases the risk that expenditures are unallowable per the grant, federal regulations, or cost principles due to the insufficient support of proper approval retained. Questioned costs: None Repeat Finding: Yes - 2023-003 Recommendation: Policies and procedures should be in place to ensure quarterly financial reports are properly supported, accurately reported, and adequately approved and reviewed. A formal review process should be established to ensure compliance. The Organization should follow the Document Retention Policy that was put in place and required by law and submit the required reporting documentation timely to the grantor to ensure compliance. Management Response: There is no disagreement with the audit finding. Management has taken steps to address these deficiencies in fiscal year 2025 including but not limited to: the implementation of a new accounting system that includes document retention and review/sign off logs, the engagement of a third-party CPA firm to provide client advisory and accounting services and the review and updating of accounting policies and procedures for best practices. Responsible Person for Corrective Action Plan: Marc Hall, Director of Operations Implementation Date for Corrective Action Plan: Fiscal year 2025

Management concurs with the audit recommendation and is taking the following corrective actions to improve cash management efficiency and ensure accurate and timely financial reporting: The District will implement a policy requiring that reimbursement requests are submitted at least quarterly to the grant administrator and reconciled to the SF-425 reporting. • This policy will ensure that federal drawdowns are performed timely and aligned with actual expenditures, improving cash flow management and reducing the risk of reporting discrepancies. • Procedures will reconcile all reimbursement requests with SF-425 financial reports to confirm that expenditures are accurately and consistently reflected in the corresponding SF-425 report, in compliance with 2 CFR 200.305 and 2 CFR 200.328. • Management will ensure staff is adequately trained in grant administration and financial reporting. These sessions will cover federal cash management standards, SF-425 reporting procedures, and internal controls to ensure consistency and compliance. These actions reflect the District’s commitment to improving financial management practices, enhancing grant compliance, and ensuring the timely and accurate reporting of federally funded expenditures.

Recommendation: We recommend that management timely submit annual audit report to the Federal Audit Clearinghouse. To do this, management should develop and implement a clear timeline with internal milestones for completing audit preparation and review. Management should also establish internal control procedures that assign specific responsibilities to staff to ensure that all federal reporting deadlines are met. Views of Responsible Official: Management of the Organization concurs with the audit finding and will immediately implement the auditors’ recommendations. Internal control procedures will be put into place to establish milestones and overseen by the Executive director

For all grant reimbursement requests we will now have an addtional person to review and sign off on the reimbursement request.

U.S. Department of Justice 2024-005 Congressionally Mandated Awards – Assistance Listing No. 16.753 Recommendation: We recommend that the County develop internal controls and procedures to ensure drawdowns are performed in a manner to minimize the time between drawing and disbursing federal funds Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Fiscal Clerk has been trained on proper drawdown of grant funds and accurate recording of expenditures. Name of the contact person(s) responsible for corrective action: District Attorney Fiscal Clerk Planned completion date for corrective action plan: 12/31/25

Finding 2024-004 Lack of Internal Control over Cash Management Type of Finding: Material weakness in internal control over compliance and material noncompliance. Name of Contact: Adela Lane, Executive Director. Corrective Action Plan: 1. Strengthen the payment review process: • Action: Enforce and document a stricter segregation of duties in the payment process. This will ensure the individual requesting a payment is not the same person who authorizes the payment. • Details: All payment requests must be cross-referenced with a corresponding invoice or receipt and reviewed and approved by an authorized department head. This Department Head must not be the one who submitted the initial request. 2. Implement a two-tiered review for cash receipts: • Action: Establish a formal two-tiered cash receipts process to enhance accountability and accuracy. • Details: o Tier 1: The individual receiving and logging cash receipts will immediately perform a preliminary count and documentation. o Tier 2: A separate, authorized staff member will perform a second, independent review of the cash receipt records and verify the funds against the deposit slip before the funds are deposited. 3. Standardize training and onboarding for all staff: • Action: Develop a standardized training curriculum on financial management policies and procedures, including a dedicated section on cash management best practices. • Details: o All new permanent and staff members will undergo mandatory training on the updated policies. o Training will cover the importance of internal controls, specifically emphasizing segregation of duties in cash handling. o The Executive Director will meet with all new finance and administrative staff within their first two weeks to review proper protocols and emphasize the organization's commitment to financial controls. 4. Introduce periodic, surprise cash audits: • Action: Conduct unannounced cash counts and reconciliations to ensure compliance with procedures. • Details: An authorized, independent party will perform these surprise audits quarterly to check cash on hand and compare records against financial systems. 5. Enhance oversight and reporting: • Action: The Executive Director will provide regular updates on the implementation of these corrective actions to the Native Village of Point Hope Tribal Council. • Details: A formal report will be presented quarterly, outlining the progress of the corrective actions and any findings from the new oversight procedures. This provides a clear accountability mechanism. Proposed Completion Date: Ongoing, Starting Early 2026.

2024-005 Community Economic Adjustment of Establishment, Expansion, Realignment, or Closure of a Military Installation/ Finance Delayed Requests for Reimbursement of Federal Funds Starting in Fiscal Year 2025-2026, LRA’s Finance Department has included within its monthly checklist accounting closing procedures the requirement of processing and requesting reimbursement of federal funds under the cost reimbursement method. Internal deadlines have been established to complete this process and be able to submit all reimbursement within 30 days after each monthly closing. This change in procedure will ensure reimbursement requests are submitted within 30 days once the department has finished its monthly accounting closing procedure. Jamille E Muriente Díaz, Financial Affair Director Telephone: 787-705-7188 Email: Jamille.muriente@lra.pr.gov Target Completion Date - 6/30/2026

2024-003 Disaster Grants - Public Assistance Finance (Not A Major Program) FEMA Working Capital Advances LRA acknowledges the finding related to the Working Capital Advances (WCA) received through COR3 and their retention in the Authority’s bank account for more than 365 days without being disbursed. LRA has established and currently maintains written procedures for the management of federal funds, which are designed to comply with applicable federal cash management requirements. LRA is committed to safeguarding federal resources and ensuring their use strictly in accordance with Uniform Guidance. The delays experienced in the disbursement of the WCA funds are primarily attributable to external regulatory factors beyond the direct control of the Authority, including: • The ongoing review by the Federal Emergency Management Agency (FEMA)’s Environmental and Historic Preservation (EHP) division, which is a prerequisite for project execution. • FEMA’s Environmental consultations are required under federal and local regulations, which have extended project timelines. • The project versioning process arising from requests for improved projects that include additional mitigation measures under the Hazard Mitigation Plan (HMP). These regulatory and compliance-driven requirements have temporarily limited the Authority’s ability to execute disbursements, resulting in the retention of funds until the necessary approvals are finalized. It is important to note that the Authority has continued to actively manage these projects, engaging with FEMA and other relevant agencies to ensure that all environmental, historic preservation, and mitigation requirements are fully addressed before project implementation begins. Furthermore, the Authority recognizes the recent programmatic changes to the WCA program implemented by COR3. In response, the Authority is strengthening its financial management practices to align with these revisions and will ensure that future advance requests are supported by a comprehensive spending plan, considering each project’s status to minimize delays associated with FEMA approvals. In cases where project reviews extend beyond anticipated timelines, the LRA may return the corresponding WCA funds to avoid prolonged retention. Once FEMA approval is obtained, the LRA will then reapply to COR3 for the necessary advances. Ramón Lizardi, Facilities Director Telephone: 787-705-7188 Email: Ramón.lizardi@lra.pr.gov Target Completion Date - 6/30/2025

Federal agency: U.S. Department of Health and Human Services Federal Award Project Title: Better Family Life’s Relationship, Education, Advancement, and Development for Youth for Life Project Assistance Listing Number: 93.086 Assistance Listing Program Title: Healthy Marriage Promotion and Responsible Fatherhood Grants Award Period: September 30, 2023 – September 29, 2024 Award Period: September 30, 2024 – September 29, 2025 Federal agency: U.S. Department of Health and Human Services Federal Award Project Title: Better Family Life’s Teen Pregnancy Prevention Education Assistance Listing Number: 93.297 Assistance Listing Program Title: Adolescent Health Programs Award Period: July 1, 2023 – June 30, 2024 Award Period: July 1, 2024 – June 30, 2025 Management response to 2024-001: In response to the auditors’ recommendation, management has addressed this deficiency by assigning appropriate personnel to properly track and monitor drawdown requests to ensure the costs requested for reimbursement have been incurred, are complete and accurate, and in line with Federal award requirements. Additionally, management has implemented specific procedures for review and approval of all drawdown requests.

Finding # 2025-003 Type: Immaterial noncompliance U.S. Department of Commerce, National Oceanic and Atmospheric Administration Assistance Listing #11.441 Finding: In accordance with 2 CFR 200.305, organizations that receive more than $250,000 of federal funding per year should maintain those funds in an interest-bearing account. Interest earned in excess of $500 should be remitted back to the federal government. Presently, funds are not maintained in an interest-bearing account. Corrective Action: Funds on hand will be moved to an interest-bearing account. Anticipated Completion Date December 2025

U.S. Department of Justice 2024-005 Congressionally Mandated Awards – Assistance Listing No. 16.753 Recommendation: We recommend that the County develop internal controls and procedures to ensure drawdowns are performed in a manner to minimize the time between drawing and disbursing federal funds Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Fiscal Clerk has been trained on proper drawdown of grant funds and accurate recording of expenditures. Name of the contact person(s) responsible for corrective action: District Attorney Fiscal Clerk Planned completion date for corrective action plan: 12/31/25

Finding Number: 2024-001 Finding Title: Cash Management - WIC Reimbursement to Member Counties Program: Special Supplemental Nutrition Program for Women, Infants, and Children Name of Contact Person Responsible for Corrective Action : Brandon Nelson Corrective Action Planned: Set up an internal policy where any payment remittance advices' must be responded to and completed within two weeks of receipt to ensure that payments are deposited, and member counties of the CHB are reimbursed for the expenses that were submitted for in a prompt manner. Anticipated Completion Date: August 15, 2025