Corrective Action Plans

RIDOH agrees with the finding and recommendations. 2025-044a: RIDOH will examine and document internal processes for requesting federal drawdowns and will create and implement revised policies and procedures to align with both federal requirements and Workday requirements for documentation of expenditures. 2025-044b: RIDOH will review and reconcile ELC and Immunization grant awards reporting excess cash drawdowns as of 6/30/2025 and will make adjustments as appropriate to ensure accurate grant award tracking. Anticipated Completion Dates: 2025-044a: June 30, 2027 2025-044b: October 31, 2026 Contact Persons: Alisha Collella, Chief Financial Office, Department of Health alisha.colella@health.ri.gov Sarah Parker, Assistant Director of Health (Budget & Finance), Department of Health sarah.parker@health.ri.gov Carla Lundquist, Deputy CFO / Federal Grants Manager, Department of Health carla.lundquist@health.ri.gov Julie DeMelo, Assistant Director of Health (Budget & Finance), Department of Health julie.demelo@health.ri.gov

Finding Number: Finding 2025-001 Title: Improper Timing of MTW Capital Fund Program (CFP) Drawdowns (ALN 14.881) - Repeat of Finding 2024-002 Program Name: Moving to Work Demonstration Program - Capital Fund Program ALN: 14.881 Description: During testing of the Capital Fund Program (CFP) component of the Moving to Work (MTW) Demonstration Program, we determined that the Authority drew down CFP funds in advance of need. As of September 30, 2025, $1,891,326 of CFP funds drawn during the fiscal year remained unearned (undisbursed) and were carried as restricted/unearned amounts at year end. The drawdowns were not aligned with immediate, allowable obligations or expenditures at the time the funds were requested. This condition is a repeat of prior year finding 2024-002. Planned Corrective Action: The Authority concurs with the finding and acknowledges it is a repeat of finding 2024-002 involving cash management and drawdown procedures. Revise cash management procedures; require documented support and approval for drawdowns; perform monthly reconciliations; monitor interest earned on undisbursed federal cash; provide staff training; and report compliance status to the Board of Commissioners. Timeline for completion: 6 months

Title: Inadequate Tenant File Documentation in MTW Housing Choice Vouchers Program Name: Moving to Work Demonstration Program - Housing Choice Voucher Program ALN: 14.881 Description: During tenant file testing for the Housing Choice Voucher (HCV) component of the Moving to Work (MTW) Demonstration Program, variances were identified between the amounts reported on HUD Form 50058 and the actual Housing Assistance Payment (HAP)/Utility Allowance Payment (UAP) disbursements for six tenants. The Authority did not maintain sufficient documentation to reconcile the differences. Planned Corrective Action: The Authority will implement a process to reconcile all Housing Assistance Payment (HAP) and Utility Allowance Payment (UAP) disbursements to the amounts reported on HUD Form 50058. Identified variances for the affected tenants will be researched and corrected, supporting documentation will be retained in each tenant file, and staff will be trained on documentation and reconciliation requirements under the MTW HCV program. Periodic quality-control reviews of tenant files will be performed to ensure ongoing compliance.

Finding Number: 2025-002 Planned Corrective Action: Management has implemented enhanced cash management and grant monitoring procedures, including strengthened review of draw requests, improved documentation requirements, and closer reconciliation of grant expenditures to amounts drawn. In addition, the Organization is undertaking process improvements to streamline grant accounting and reporting activities, improve the timeliness of expense recognition, and enhance overall oversight of federal awards. Management expects these actions will strengthen compliance with federal cash management requirements and reduce the risk of future occurrences. Anticipated Completion Date: 12/31/2026 Responsible Contact Person: Alison Roca, Chief Financial Officer

KHDA will hire a CPA to oversee this process.

KHDA will hire a CPA to oversee this process.

Finding 2025-004 - Various Federal Programs: Cash Management- Excess Federal Cash, Untimely Reconciliations [Material Weakness}: Condition - At June 30, 2025, the College maintained excess federal cash balances across multiple federal programs, indicating that cash drawdowns and/or payable balances were not aligned with immediate cash needs for allowable program expenditures. These balances represented federal funds drawn or recorded as payable to federal agencies that were not supported by actual and immediate allowable program expenditures at year-end. The following table summarizes excess federal cash balances identified by program as of June 30, 2025: "Federal Program" "Excess Cash" "Minority Science and Engineering Improvement Program" 120,031 "Science Consortium of Minority Schools" 169,907 "NSF - Empowerment of Undergraduate STEM Majors" 94,801 "NSF - Tennessee Louis Stokes TLSAMP" 54,834 "Title III" 455,679 "FUTURE" 188,215 "Total Identified Excess Cash" 1,083,467 The College did not adequately reconcile federal cash activity to underlying grant expenditures on a timely basis and did not ensure that drawdowns were limited to amounts necessary to meet immediate cash needs. In addition, the College lacked effective monitoring controls to identify and resolve excess cash positions across federal programs in a timely manner. Federal bank reconciliations were untimely and error prone. Corrections occurred only after auditor inquiry. Federal accounts also earned excess interest. Corrective Action Plan The College requests drawdowns for Title Ill and FUTURE programs on a reimbursable basis, including review and approval procedures. Of the total amount identified for the Title Ill program, a $181,433 receivable related to FY2025. The balance related to prior year(s) activity. The College will review its Federal program cost allocation procedures to ensure all eligible costs are properly identified and supported going forward. The College has engaged two accounting firms to assist with staff training and bring all reconciliations current. In addition, standard month-end and year-end closing procedures will be implemented to address timely, accurate Federal program reconciliations and audit readiness going forward. The College experienced significant staff turnover within its business office. In addition, the College is undergoing conversion to a new Enterprise Resource Planning (ERP) system which affected its ability to complete some functions within a timely manner. Completion Date - September 30, 2026 Responsible Party - Chief Financial Officer

Finding 2025-003 - U.S. Department of Education [ED) - Federal Work Study - Noncompliance with Cash Management [Material Weakness): Condition -As of June 30, 2025, the College reported excess federal cash of $415,971 related to the Federal Work-Study Program. The excess cash represented cumulative federal funds drawn down through the federal payment system that were not disbursed or allowable Federal Work-Study payroll costs at year-end. The excess cash balance included amounts related to prior award years that had not been fully liquidated through reimbursement of allowable student wage expenditures or returned to the U.S. Department of Education as of June 30, 2025. Corrective Action Plan The College requests drawdowns for the Federal Work Study Program on a reimbursable basis, including review and approval procedures. Of the total amount identified, $26,466 related to FY2025, with the balance relating to prior year(s) activity. The College will review its Federal Work Study Program cost allocation procedures to ensure all eligible costs are properly identified and supported. The College has engaged two accounting firms to assist with staff training and bring all reconciliations current. In addition, standard month-end and year-end closing procedures will be implemented to address timely, accurate Federal Work Study Program reconciliations and audit readiness going forward. Completion Date - September 30, 2026 Responsible Party - Chief Financial Officer

Management acknowledge the improper treatment of the expenditure for the specific period. The expenditure in question was for a one-year marketing services agreement supporting activities under the FDA 503B award. The vendor required payment in advance as a condition of service delivery, and the cost was incurred for legitimate grant-related purposes within the approved scope of work and period of performance. The expenditure was fully documented, allocable to the award, reasonable in nature, and directly connected to approved programmatic objectives. Management acknowledges that the transaction involved payment for services extending across a future service period. Specifically, 2 CFR 200 does not prohibit recipients from entering into prepaid contractual arrangements for allowable services necessary to support award implementation, particularly where such arrangements reflect standard vendor business practices and operational necessity. Further, the organization’s actions must be evaluated in the context of significant federal payment administration changes that began in February 2025. Historically, the organization received advance funding under the award consistent with the cash management principles contemplated under 2 CFR 200.305. Beginning in 2025, however, the organization was required to operate under a reimbursement-based process requiring submission of supporting documentation prior to payment release. This materially altered the organization’s working capital position and limited its ability to independently finance operational expenditures for extended periods pending reimbursement. As a result, management was required to make operational decisions necessary to ensure continuity of approved grant activities while balancing vendor requirements, cash flow limitations, and evolving federal reimbursement practices. The organization did not receive excess federal cash, improperly retain federal funds, incur unallowable costs, or use award funds outside the approved project scope. The questioned transaction reflects a timing and payment structure issue rather than a violation of fundamental federal compliance requirements. Management also notes that 2 CFR 200.305 expressly contemplates advance payment methodologies and recognizes that reimbursement-only environments may create operational hardships for recipients lacking sufficient working capital. The organization’s actions were undertaken in good faith to maintain uninterrupted program operations under materially changed federal payment conditions. Importantly, the expenditure was allowable, the services supported approved award objectives, the costs were incurred during the award period, supporting documentation exists, no misuse or diversion of federal funds occurred, and no financial harm to the federal government resulted. Note also that going forward, PDA will record future services and subscriptions to prepaid and amortize based on the periods stipulated on the vendor invoices.

The Puerto Rico Ports Authority (PRPA) acknowledges the audit finding regarding the unused capital advances as of June 30, 2025. It is important to clarify that these funds were received under the Working Capital Advance (WCA) Program, an initiative led by COR3 to expedite the implementation of FEMA-funded recovery projects. The WCA Program provides subrecipients, such as PRPA, with a 25% upfront advance of the total project cost to address initial project expenses and mitigate delays due to cash flow constraints. The WCA advance is disbursed by PRPA upon completion of contracted deliverables by vendors or suppliers, particularly during the design and early implementation phases of projects. As of the audit date, most of PRPA’s FEMA projects under the WCA were still in the design phase, and the disbursements made thus far correspond to completed design services. The remaining balance of WCA funds will be disbursed as vendors fulfill the contractual milestones tied to architectural and engineering (A&E) and construction services. The apparent delay between fund receipt and disbursement reflects the timing of deliverable completion rather than a lack of project activity. PRPA continues to monitor the progress of A&E and construction services to ensure timely disbursement aligned with actual project progress. To strengthen the oversight of WCA funds and ensure timely utilization, PRPA management is implementing enhanced administrative controls. These include the development and formal adoption of internal procedures aimed at improving the handling, identification, and classification of FEMArelated funds. These measures will support be􀄴er alignment between fund disbursement and project execution timelines and demonstrate PRPA’s commitment to the prudent and compliant management of federal funds.

Finding No. 2025-006 – Internal control deficiencies over accounting for federal funds received from the United States Department of Homeland Security (DHS) Corrective Action Plan Single Audit 2025 Page 6 April 30, 2026 Condition During our procedures over the Authority’s funds received from FEMA we noticed the following: 1. Return of interest earned on FEMA-related funds totaling approximately $211,853 was not timely recorded in the general ledger and was subsequently recorded through a post-closing entry dated January 26, 2026. 2. Management initially misclassified approximately $6 million received under the Coronavirus State and Local Fiscal Recovery Funds as state funds rather than federal awards. As a result, the amount was originally excluded from the Schedule of Expenditures of Federal Awards (the Schedule). Views of Responsible Officials and Corrective Actions It should be noted that, although certain funds received were not properly identified as working capital advances, those funds were properly considered as received from FEMA through the COR-3 office of the Government of Puerto Rico. This situation basically arises because the federal funds coming from FEMA are being handled by outside consultants, without any coordination with the Federal Funds Management Office (FFMO). The Authority’s management will ensure that, in the future, the FFMO will coordinate with the assigned outside consultants all the efforts necessary for the proper handling, identification and classification of funds received from FEMA. Name(s) of the Contact Person(s) Responsible for Corrective Action Romel Pedraza Claudio. P.E. – Assistant Executive Director for Planning & Engineering Elena González – DEA Finance Miguel La Torre – Interim Finance Director Anticipated Completion Date During FY-2026-2027

Fergus has adopted and implemented policy: 252.0 Federal Funding Compliance to establish formal procedures and ensure ongoing compliance with applicable federal regulations, including 7 CFR 4280, Subpart A and 2 CFR 200. Anticipated completion date: August 31, 2026

Management will review its cash management procedures to ensure that federal drawdowns are supported by actual or immediate cash needs based on expenditures incurred. Management will also closely monitor subrecipient expenditure activity and reimbursement timing to ensure compliance with 2 CFR 200.305(b) and minimize the time between receipt and disbursement of federal funds.

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, 2024 – June 30, 2025 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: June 30, 2026

Condition: Controls in place were not sufficient to ensure subrecipients were paid consistently within 30 days of a request for reimbursement. Planned Corrective Action: GTI management will develop and implement a formal process to track and report subrecipient invoices that have been received but not yet paid. This includes: • Standardized Weekly Report: A report generated and reviewed weekly by Purchasing and Accounts Payable to identify, prioritize, and resolve outstanding actions for timely payment (Control Owners: AP Manager & Purchasing Manager; Implementation: September 30, 2026) • Weekly Invoice Review: The AP Specialist responsible for subrecipient invoices will review weekly to ensure invoices are prioritized and processed, with delays or exceptions escalated promptly to the AP Manager (Frequency: Weekly; Implementation: September 30, 2026) • Periodic Compliance Monitoring: Management will perform ongoing reviews of subrecipient invoice payment activity to monitor compliance with the 30-day payment requirement and adherence to internal policies (Control Owners: AP Manager & Program Revenue Operations; Frequency: Monthly with quarterly oversight; Implementation: Ongoing, formalized by September 30, 2026) Contact person responsible for corrective action: Naté Hoover, Program Revenue Operations Anticipated Completion Date: 9/30/2026

The College acknowledges the finding and agrees that formal cash management controls are required to ensure that Title IV funds are drawn only for immediate cash needs and are properly supported and documented. The condition resulted from the absence of documented procedures and inconsistent execution of draw preparation, review, approval, and reconciliation processes. The College is in the process of implementing enhanced controls over cash management. Formal written procedures are being established to govern draw calculations, timing, approvals, supporting documentation, reconciliation requirements, and identification and return of excess cash. A standardized draw file will be maintained for each draw, including supporting student-level disbursement detail, reconciliation to eligible expenditures, and documented supervisory approval. The College will also perform and document monthly reconciliations between student disbursement records and federal cash activity. Cash balances will be monitored to ensure funds are drawn only for immediate needs and that excess cash is identified and returned, as necessary. Implementation of these procedures began in April 2026 and was not in place for the full fiscal year. Fiscal year 2026 represents a transition period during which controls are being implemented and refined. Full implementation is expected for the 2026–2027 award year. These actions are intended to ensure that draw amounts are accurate, properly supported, and compliant with federal requirements, and to prevent recurrence.

View of Responsible Officials: Management is cognizant of federal regulations surrounding cash management and has procedures in place to minimize the time elapsing between the transfer of funds from the awarding agency and the disbursement of the funds. In this particular case, management received direction from relevant stakeholders recommending the advance drawdown of cash. • Management met with board members in September 2025 to discuss the impact of a potential government shutdown and received strategic guidance from the board to draw down the remaining funds to ensure that funding would be available for staff salaries. The Center’s staff union requires the Center to provide 120 days’ notice prior to layoff and the board wanted to ensure that funding would be available for the 120-day period, if necessary. • Management met with contracted financial advisors who encouraged management to draw down the remaining funds. The advisors are certified public accountants, well versed in regulations regarding federal funds. • Management received an email from the awarding agency representative recommending drawdown of the remaining funds; the agency provided the wording for the Center to use to justify the advance drawdown. A confirmation email was sent to the awarding agency after the draw was performed. 25 Corrective Action Plan: In the event of another government shutdown jeopardizing immediate funding, the Center will ensure that written guidance is received by the awarding agency, the Board of Governors, or the Center President, prior to initiating the drawdown. Contact Person: Chief Operating Officer Anticipated Completion Date: May 2026

The City will create a federal cash management policy. A review of cash will be done monthly.

Provide all management staff with annual training on federal grant requirements, perform periodic internal reviews and a final year-end reconciliation, maintainall grant-related records on a shared organizational drive accessible to all responsible staff, provide formal onboarding and off boarding procedures for federal grant management, and update the Finance Manual .

Finding Number: 2025-002 Finding Title: Cash Collateralization (Repeat Finding 2024-004) Planned Corrective Action: Management acknowledges the finding regarding cash collateralization. As of September 30, 2025, the Coalition's cash deposits were pledged and collateralized. After year-end, management became aware that two affiliated financial institutions participating in the deposit sweep program had inadvertently assigned the same certificate numbers during the nightly sweep process. Consequently, a portion of the Coalition's deposits may have been swept into the same financial institution, resulting in balances that may have temporarily exceeded applicable FDIC insurance limits. Although this condition resulted from the financial institutions' sweep process rather than the Coalition's cash management practices, management recognizes its responsibility to monitor deposit coverage and ensure compliance. To address this finding, the Coalition will implement the following corrective actions: 1. Meet with representatives from both participating banks to discuss the issue and formally notify them of the audit finding. 2. Request written confirmation that the nightly sweep process has been reviewed and modified to prevent deposits from being placed with the same institution through duplicate certificate assignments or other system errors. This may happen from time-to-time but IntraFi corrects those deposits and reallocates them, It will be reviewed weekly to make sure they did reallocate those funds. 3. Communication with certain representatives within the financial institution will be contacted by NUHIC and will need to request that dollars are required to be transferred to IntraFi to remain in compliance of your audit before 2:30pm everyday. 4. Obtain and review periodic reports from the financial institutions identifying the banks holding swept deposits and the amount of funds placed with each institution. 5. Establish a weekly review process to monitor cash balances, FDIC insurance coverage, and collateralization to identify any exceptions on a timely basis. 6. Maintain documentation of all reviews, bank communications, and corrective actions as part of the Coalition's internal control procedures. 7. If the financial institutions cannot provide adequate assurance that deposits will remain fully insured or properly collateralized, the Coalition will evaluate alternative cash management options, including other insured cash sweep providers or collateralized deposit arrangements. Management believes these corrective actions will strengthen oversight of the Coalition's cash management process and reduce the risk of future noncompliance with FDIC insurance requirements. Responsible Official: Carlett Gregory Anticipated Completion Date: December 31, 2026

Condition: The Corporation’s cash management policies were not in conformance with Uniform Guidance requirements. Although cash management transactions tested were performed in accordance with existing practices, the Corporation did not have a written cash management policy that met Uniform Guidance requirements. Planned Corrective Action: The Corporation will implement and formally adopt written cash management policies and procedures that conform to Uniform Guidance requirements and should ensure those procedures are consistently followed and documented. Contact person responsible for corrective action: Michelle Toups and Brian Balutanski Anticipated Completion Date: 1/1/2027

Views of responsible officials and planned corrective action: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Public Housing Capital Fund Program to ensure that established internal control policies are being followed on a timely basis. Ivy Melendez, Executive Director, will be responsible to implement this corrective action by September 30, 2026.

Finding Number: 2025-002 Planned Corrective Action: We concur with the finding. We will continue to monitor our federal grant cash requirements and seek additional cash flow when governmental environment changes. The Finance Administrator will continue to monitor cash flow requirements to mitigate cash advances to ensure timely federal grant cash remittance policies are being followed. Anticipated Completion Date: On-going Responsible Contact Person: Cynthia Diaz, Finance Administrator

DC Government Operations (DCGO) concurs with this finding and acknowledges the deficiencies identified during the audit period. The corrective action plan below assigns responsibility accordingly and includes a designated section for OCFO’s response. Condition 1 — DCGO will establish a formal monthly drawdown coordination meeting between the Grants Management Specialist and the OCFO to align on report readiness and submission timelines. DCGO will also update its grants reporting calendar to include monthly SF-270 submission deadlines with 30-day and 15-day advance triggers. The Grants Management Specialist will track submission status in real time and escalate to the CAO when deadlines are at risk. Condition 2 — DCGO will implement a monthly grant activity checklist requiring the Grants Management Specialist to confirm that all active awards, including the Facility Sustainment Restoration Modernization project, are represented in each drawdown cycle. Any award with no drawdown activity will require documented justification reviewed by the CAO before the cycle closes. Condition 3 — This condition is squarely within the DCGO lane, and we take full accountability. Effective immediately, the following controls will be implemented: The Grants Management Specialist will route every SF-270 through a documented approval workflow requiring CAO review and Director signature before submission. No SF-270 will be submitted to the GOR or USPFO without confirmed Director approval on record. Upon submission, the Grants Management Specialist will retain timestamped confirmation of submission, via DC Gov BOX, as permanent audit evidence in the grants compliance file. The DCGO SOP governing SF-270 preparation and routing will be updated to codify these steps no later than August 31, 2026. Condition 4 — DCGO will implement a pre-submission reconciliation checkpoint requiring the Grants Management Specialist to perform a line-by-line comparison between the billing authorization worksheet and the corresponding SF-270 before routing for Director approval. Any variance must be documented, explained, and resolved prior to submission. This reconciliation step will be captured as a required sign-off in the updated SOP. Condition 5 — DCGO will require that every SF-270 be traceable to an approved billing authorization worksheet before processing. The Grants Management Specialist will maintain a master award register cross-referencing all active grants against billing authorizations each cycle. Any SF-270 that cannot be matched to an authorized billing entry will be flagged and held pending resolution with Cooperative Agreement Program Manager (CAPM) and Director review. Condition 6 — DCGO will establish a cash receipt tracking log maintained by the Grants Management Specialist. Following each SF-270 submission, the GMS will monitor federal payment confirmation and document receipt in the log within 5 business days of funds being received. Unconfirmed receipts beyond 30 days of submission will be escalated to the CAO for follow-up with the GOR and USPFO.

Cash Management Moving to Work Demonstration Program AL No. 14.881 Other matter required to be reported in accordance with 2 CFR 200.516(a) Condition: Out of the 66 grant drawdowns during the year, 19 drawdowns were tested and it was noted that 1 of the drawdowns was made in advance of the supporting invoices being paid to the vendors and subsequently the invoices were not paid within three business days, as required. Auditor’s Recommendations: The Agency should continue to develop and implement internal controls over grant management to coordinate capital fund draws with the timing of invoice payments. Action Taken: Action Due Date Responsible Person This finding occurred prior to the staff receiving the results of the previous audit. There have been no additional invoice payments outside of the 3-day allowable time. Staff developed and implemented an internal tracking document to ensure payments are made within three days of the draw. Complete – May 2025 Accounting Technician, Kary Smith, Lauren Hodgens and Ryan Bates