Corrective Action Plans

Recommendation: We recommend the Council updates in payment process to ensure that all providers are paid timely after receipt of grant funds. Action Taken: We have established a streamlined process to ensure timely disbursement of funds to providers upon receiving grant funds. Additionally, we have implemented a monitoring system to track payment timeliness and promptly address any delays. Responsible Party: Jeremy Ashbaugh, Director of Finance. Anticipated Completion Date: The issue has been corrected.

We were made aware of this issue by a desk review from the National Science Foundation and we have developed and implemented the following policies and internal controls to ensure grant funds are drawn down only after qualifying expenditures on a monthly basis.: If a grant is awarded on a cost-reimbursement basis, Future Earth draws down funds approximately once a month, unless the funder requires another way of accessing their funds. Funds are not drawn down until they have been spent. Before each drawdown, the third-party accounting firm will confirm the grant's cash balance. If there is a positive cash balance, the third-party accounting firm and COO will investigate the cause and correct it immediately. Grants with negative cash balance will be checked by third-party accounting firm to confirm that the grant was active when the expenses were incurred. The third-party account firm will provide a report of the associated transactions of the negative cash balance. The PI will confirm the report transactions and approve the drawdown request. Once approved, the third-party accounting firm will create an invoice and journal entry in the Quickbooks accounting system and the COO will request the drawdown from the funder.

Action taken in response to finding: LCHC management has implemented a robust task-management software to assist with internal controls, especially when related to grant management. Furthermore, a cloud-hosted warehouse for internal procedures was implemented to properly manage the assignment and transfer of accounting roles/responsibilities like the review and approval of grant drawdown request. Name(s) of the contact person(s) responsible for corrective action: Jeff Nelson, Accounting and Financial Analysis Director Planned completion date for corrective action plan: 9/30/2024

Corrective Action Plan: The District has developed and implemented a Federal Funds Manual. Anticipated Corrective Action Plan Completion Date: November 18, 2024 Contact Information: For additional information regarding this finding please contact Blaise Paul, Chief Business & Finance Officer, at 414-768-6140.

Recommendation We recommend a verification process be established to ensure accuracy in manual journal entries and to prevent the occurrence of duplicate recordings. Regular reconciliations should be enhanced and additional review steps should be incorporated during the financial close process to identify and correct errors promptly. Furthermore, future Federal Financial Report should take this error into account to accurately reflect cumulative expenditures. Management Response Corrective Action: Four Corners REC has added additional verification processes to ensure the accuracy of manual journal entries to prevent duplicate entries. Reconciliations will be done timely and accurately with added steps. Additional reviews will be done during financial closing and future federal expenditure reporting has been corrected. Due Date of Completion: Completed as of September 9, 2024 Responsible Party(ies): Finance Director

UNR – Agrees with the finding. • Detailed corrective action taken, including what will be done to avoid the identified issues in the future, and when these measures will be in place: Assigned staff will document all advance payments in the Notes section of the Award in Workday. Federal funds reimbursed in advance will be separated into an interest-bearing account. Additionally, staff will compare subrecipient expenses with advance payments on a monthly basis and follow up with the subrecipient as needed to ensure timely use of the funds. • How compliance and performance will be measured and documented for future audit, management and performance review: Staff will document advance payments in Workday's Notes section. The use of an interest-bearing account for advance funds will also be tracked. • Who will be responsible and may be held accountable in the future if repeat or similar observations are noted: The Associate Director of Post Award is responsible for remediation of this finding. Name of contact person responsible for corrective action plan: Rhett R. Vertrees, Assistant Chief Financial Officer 2601 Enterprise Road, Reno NV 89512-1666 Phone: (775)784-3409, Fax: (775)784-1127 Email: rvertrees@nshe.nevada.edu

Cash Management Subrecipient Federal Program Title: Research & Development Cluster Assistance Listing No. 93.859 & 47.074 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Recommendation: We recommend the University evaluate its procedures and implement an additional control to review and approve the Subrecipient reimbursements timely. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Grant accounting staff will follow payment requests through the system to make sure payments are made in a timely manner. Name(s) of the contact person(s) responsible for corrective action: Kirsten Broughton , Director of Grant Accounting. Planned completion date for corrective action plan: Implemented for FY25

2024-008 Cash Management Corrective action planned: Federal draws will be made with approval of the Director of Financial Operations or their designee for expenditures that have been incurred and recorded in the general ledger. Electronic documentation will be organized by draw to ensure proper documentation is maintained. Anticipated completion date: 11-30-2024 Contact person responsible for corrective action: Cathy Liles, Director of Fiscal Operations

We agree. The reimbursement has been processed in the Voucher for the month of August 2024. Procedures have been established improving the reviewing and monitoring process in order to detect and help to identify errors before vouchers processed.

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

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

2023-010-Cash Management Suggested Action: Ensure timely payment of subcontracts with minimal delay between time of grant disbursement and expense payment. Responsible Official: Global Finance Director Completion Date: 4/30/2026

VIEWS OF RESPONSIBLE OFFICIALS In response to the single audit finding we will take the following actions. We will establish internal controls that provide certainty, effective monitoring data validation and accountability for those employees who approved expenditures. We will prepare written process in accordance with both state and federal regulations. We will prepare written process in accordance with both state and federal regulations. We will require relevant staff (Staff interacting with procurement, expenditures approval) a comprehensive training program on the requirements of CFR 200. IMPLEMENTATION DATE September 30, 2026 RESPONSIBLE PERSON Ivan Rentas, President

2023-011 Timely Grant Draws Material Weakness Recommendation: The Housing Authority should adopt written grant draw policies into its financial policies and procedures manual. Financials should be reviewed monthly, and drawdowns made as needed. Action Taken: The Housing Authority agrees with this finding and will implement this recommendation within 120 days of this audit report.

Cash Management The College acknowledges the finding and will enhance its cash management practices by developing formal procedures outlining responsibilities, authorization requirements, and timelines related to federal drawdown and disbursements. In addition, the College will implement routine reconciliations of drawdown activity against recorded expenditures on a monthly or quarterly basis to improve monitoring and ensure compliance with federal requirements.

Finding No.: 2023-002 Area: Cash Management Views of responsible official and planned corrective actions: Management acknowledges the requirements of 2 CFR 200.305(b). Existing cash management procedures are currently under review, and updates will be made to further strengthen compliance with federal requirements. The Trust will ensure that procedures continue to minimize the time between receipt and disbursement of funds and that payments are made in accordance with contract terms. Written procedures will be updated as needed and followed by finance staff, with ongoing reviews to ensure compliance. Contact Person: Melanie Lawrence Aiseam, Chief Financial Officer Expected Completion Date: The Trust started training in Quarter 4 2024, and is ongoing

We recommend that management: ▪ Implement procedures to ensure timely payment of all obligations, particularly those related to federal programs ▪ Establish accounts payable aging monitoring and review processes, with escalation of overdue items ▪ Align disbursement practices with 2 CFR 200.305 to ensure funds are drawn and disbursed promptly ▪ Develop and enforce policies consistent with the Prompt Payment Act, including defined payment timelines ▪ Perform periodic reviews of cash flow and payment cycles to ensure compliance ▪ Assign oversight responsibility to ensure timely processing and documentation of payments Strengthening cash management practices will improve compliance with federal requirements and enhance overall financial control.

CORRECTIVE ACTION PLAN (Concerning Finding 2023-006) Contact Person Responsible for Corrective Action: Carrie Castonguay, Town Manager Corrective Action: The Town Manager and Select Board will take the following actions to address finding 2023-006 The current Town Manager was appointed by the Select Board on August 14, 2023, and had no knowledge of this material weakness. She is an experienced Manager and has drafted, had approved and has implemented the new Internal Controls Policy that addresses this deficiency. This policy will includes sections on risk assessment and management, annual audit, chart of account, general ledger, reconciliation and verification, reserve funds and reserve accounts, investments, financial reporting, fraud, accounting software, online transactions and banking, documentation daily cash-ups, grants and projects, AR process, AP process, and payroll. Anticipated Completion Date: This was completed February 20, 2024.

Corrective Action Plan Action Item Responsible Party Monitoring Maintain complete and accurate records of federal drawdowns, disbursements, and related trial balance activity in accordance with record-retention policies. CFO / Accounting Staff Monthly review Implement procedures to review unearned revenue balances and related cash activity to ensure federal funds are drawn and disbursed in compliance with cash management requirements. CFO Monthly reconciliation In FY 2026, management developed and implemented a formal Records Retention Policy to ensure that accounting records, supporting documentation, and organizational records are properly maintained and retained in accordance with applicable regulatory and audit requirements. CFO Management review Strengthen supervisory oversight of drawdowns and reimbursement requests to ensure compliance with Uniform Guidance and applicable federal regulations. CFO / Board Finance Committee Quarterly review ________________________________________ Management Response Management notes that no additional federal grants, other than the HRSA Section 330 program grant (Assistance Listing 93.224), were received in FY2025 or FY2026. Prior management did not provide a reconciled SEFA schedule for earlier reporting periods, which contributed to the documentation limitations identified during the audit. Beginning in FY2026, management has developed a detailed SEFA tracking schedule for the HRSA Section 330 grant that identifies the date federal funds were drawn down, the amount received, the related expenditures, and the corresponding disbursement dates. This schedule is maintained to improve reconciliation between drawdowns, expenditures, and the general ledger and to ensure documentation is readily available for audit and compliance purposes. ________________________________________ Responsible Official: Chief Financial Officer Expected Completion Date: FY 2026

Views of Responsible Officials and Planned Corrective Action The Organization notes the following existing internal control practices, as it relates to cash management subsequent policy and process development and implementation, and the additional controls to be implemented: A. System, Process & Review Controls In Practice. 1. System Controls. The Organization operates in an environment in which system, process & review controls of the United States Department of Health and Human Services (HHS) are practiced in processing cash (draw) transactions in both the Electronic Handbook (EHB) and Payment Management System (PMS) systems, operated by HHS. Only the director of administrative operations and the CEO have system access to the EHB and PMS systems. 2. Process & Review Controls – EHB & PMS. Cash management requests (aka federal draws) are computed by, and entered into the EHB, including the Organization’s justification of the expenditure, by the director of administrative operations, including the CEO on the approval request. The propriety of the cash draw is reviewed by the HHS assigned grants management specialist; and inquiry action, if needed, documented by e-mail from the grants management specialist; and approval documented in the EHB. Once the draw is approved, the director of administrative operations enters information into the PMS, noting that the CEO, is the authorized organization representative (AOR). The grants management specialist must then approve the draw request once more in the PMS system before a PMS representative approves the draw request. 3. Process & Review Controls – Finance Committee & Full Board. The Organization’s monthly Board process and review controls include review of the Organization’s: Statement of Financial Position, Statement of Revenues and Expenditures, Statement of Revenues and Expenditures – Net Income/(Loss) by Fund, Fund Details – Additional Information and Statistics, Active Subcontract Summary, Active Subcontract Listing Related to Funds – Additional Information and Statistics, Native Hawaiian Health Program (Fund 007V), and Native Hawaiian Health Scholarship Program (Fund 017V). B. Internal Control Environment Policy Establishment – July 2025. In July 2025, the Organization developed the following cash management related policies and related procedures: Internal Control Environment; Implementation of Significant Accounting Policies; Revenue Recognition Policy, Including Federal Draws; Implementation of HRSA Related Policies, including cash management processes and procedures. C. Additional Process & Review Controls – March 2026. Beginning March 2026, for federal draws, process and review internal controls will be implemented, via the chief of staff’s review of the director of administrative operations cash management analyses, federal grant receivable composition, reconciliation and related federal grant revenue computations, prior to any director of administrative operations and chief executive officer action in EHB and PMS, respectively.

Contact Person Responsible for Corrective Action Plan: G. Janina Trzmiel, Chief School Financial Officer Corrective Action Plan: We agree with the auditors’ comments and have taken the following actions: The Board will implement policies to ensure proper submission and approval over ESSER funds for reimbursement. Anticipated Completion Date: September 30, 2024

The Organization hired a new grant and partnership specialist. This specialist reviews all draws to ensure that the draw is for reimbursement for actual expenditure and not estimated expenditure. Reports and draws are also reviewed by the vice president of finance.

The department will adopt written policies with the Uniform Guidance for Federally Funded Grant Programs accepted by the department.

Condition 1 & 2: Effective FY2025, the Accounting Division is now required to prepare drawdown request forms using the detailed expenditure report (journal listing). Each request is submitted to the Finance Secretary only after approval by Accounting Management. Condition 3: The Budget Division will now be required to prepare drawdown request forms using the detailed expenditure report (journal listing). Each request is submitted onto the portal only after approval by Budget Management.

FINDING 2023-004 – Cash Management: Significant Deficiency over Internal Controls over Compliance Condition/context – The Organization draws down funds based on a profit and loss report to signify the excess expenses incurred over the grant revenue. The Organization identifies themselves as on the reimbursement method. The request for reimbursements are not reviewed to ensure amounts have been paid with the Organization’s funds prior to the reimbursement request because certain expense codes do not relate to expenses paid but rather expenses incurred. Additionally, the frequency of draws during mid-months creates potential for errors when the reporting period has not been reconciled and therefore coded expenses are subject to change. Corrective Action Plan: Policy & Procedure adjustments within Cash Management: • Reimbursement requests will be based solely on expenditures that have been paid using the Organization’s funds. • Financial reports used to prepare draw requests are reconciled to ensure expense coding accuracy. • Expense codes distinguish clearly between paid and accrued expenditures. • Mid-month draws are avoided or subject to additional reconciliation controls prior to submission. Name of Contact Person: Chris Flaherty, Chief Executive Officer 707.890.6491 Laura Williams, Chief Financial Officer 707.335.0010 Projected Completion Date: December 31, 2026