Corrective Action Plans

View of Responsible Officials and Corrective Action Plan The excess drawdown may have occurred due to the carry fund balance being included as a debit balance on the trial balance during review of drawdown expenses and not adjusted to reduce the amount of the drawdown(s). The error was discovered when the Accounting Manager was in the process of preparing the SEFA schedule. The Accounting Manager disclosed this error to the auditor during the course of the audit. Corrective Action Plan Timeline AAIHB will consult with the Program Manager and awarding agency to determine the appropriate resolution of the excess drawdown within 30 days. AAIHB finance office has a process in place of reviewing drawdowns and monitoring expenses as grants approach the end of the project funding period. Designation of Employee Position Responsible for Meeting Deadline Accounting Manager and Finance Director

Finding Reference Number: SA 2022-005 Cash Management – Drawdown of Grant Funds In Advance of Disbursement AL Number: 14.218 Assistance Listing Title: CDBG - Entitlement Grants Cluster – Community Development Block Grants/Entitlement Grants COVID-19 - Community Development Block Grants/Entitlement Grants-CV Federal Agency: Department of Housing and Urban Development Federal Award Identification Number: B-14-MC-06-0037, B-15-MC-06-0037, B-16-MC-06-0037, B-17-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037, B-21-MC-06-0037 • Fiscal Year of Initial Finding: 2022 • Name(s) of the contact person: Jennifer Block, Management Analyst • Corrective Action Plan: At the end of FY 2023, the City brought the program back in-house to the newly-created Department of Social Services and Housing (SSH). In FY 2024, staff developed a process to ensure timely and consistent draws, with reconciliation to the general ledger at the point of each draw. SSH staff have developed and implemented a timeline of required actions for the program to ensure compliance with deadlines. Staff performs drawdowns of CDBG funding through HUD's IDIS online system monthly. Staff will now report the quarterly drawdowns and reconciliation in the Funds Projected/ Funds Drawn spreadsheet to improve monitoring and identification of problems early. This will increase the speed by which Davis spends down its credit line, and reduce gaps in expenditure recording between IDIS and the City's financial management system. In addition, an updated draw-down process, paired with quarterly reconciliation and reporting through the quarterly cash transaction report, will help staff correctly draw entitlement funds. • Anticipated Completion Date: June 30, 2024.

Corrective Actions Taken:

1.       SCMRC revised its federal drawdown procedures in 2024 to require documented review and approval of all expenditures before submitting any drawdown request.

2.       A Draw Down Request Workbook is now prepared by the Controller and reviewed against supporting documentation, including invoices, timecards, and purchase records.

3.       The CEO reviews and signs off on each Draw Down Request prior to submission.

4.       Completed Draw Down Request Workbooks are submitted to HRSA for prior approval and retained for audit purposes.

5.       Internal drawdown audits are conducted monthly to confirm alignment with federal cash management standards.

Corrective Action Plan:

1.       Updated drawdown procedures have been incorporated into SCMRC’s financial policies and will be re-reviewed annually.

2.       Refresher training on 2 CFR § 200.305 and internal drawdown requirements will be conducted by Q4 2025.

3.       Results of monthly drawdown audits will be included in the Finance Committee compliance dashboard starting in September 2025.

4.       SCMRC will continue to require documented CEO approval on all federal drawdown submissions to ensure sustained internal control.

Finding Reference Number: MW2022-07 Statement of Concurrence or Nonconcurrence: CUAHSI agrees with the finding and recommendation. CUAHSI Corrective Action: Action by CUAHSI impacting audit year 2022: Certain 2022 draws were processed as advances outside grant guidelines, although these draws were properly recorded as advances payable in the accounting records. Corrective actions to processes and responsibilities impacting subsequent years: CUAHSI considers this finding resolved. A written drawdown procedure is now in place, requiring twotier preparation and review and, for working-capital advances, written approval from the prime funder. When the non-compliance was identified, CUAHSI suspended all NSF draws (late March 2023) until new controls were implemented. On 15 June 2023 CUAHSI completed its first draw under the revised policy; the certified SF-270 and supporting documentation were reviewed and approved by NSF. Name of Contact Person: • Jordan S Read, Executive Director • Telephone: (339)933-4660 • Email: jread@cuahsi.org Projected Completion Date: NA; is complete

NMC has formal internal controls and policies and procedures for cash drawn downs. Our drawn downs are not on a reimbursement base, but advance basis. Funds were drawn down to pay the invoice in question. The mobile unit was being repaired, and when we notified it was ready to be picked up the funds were drawn down. Once we were at the vendor to pick up the unit, it was discovered that it had not been properly repaired. The funds were not given to the vendor until the unit was properly repaired. We held the funds until such time.

Views of Responsible Officials and Planned Corrective Action Plans: Management agrees with this finding and has implemented process to prevent excessive draws. In addition, RoboNation has subsequently settled all amounts owed to the Office of Naval Research.

Finding 2022-002 Name of Responsible Individual: Carolina Liriano, Grant Manager; Holly Forester, Controller; Sheri Brady, VP and Chief Program Officer   Corrective Action: CDF hired an Outsourced Grant Manager starting January 2025 who will assume comprehensive oversight of all facets of grant administration and compliance. The grant manager's duties will include ensuring that all reimbursement requests are substantiated by adequate documentation, such as actual invoices, payroll registers, and payment records. Key actions include:  Establishing a systematic process for the collection, organization, and retention of all requisite documents.  Implementing internal review and approval procedures to guarantee that every reimbursement request undergoes thorough vetting and receives approval prior to submission, with explicit documentation of the review process.  Instructing both existing and new personnel on these newly instituted procedures to prevent future inconsistencies. Anticipated Completion Date: December 31, 2025.

The City has identified federal grants subject to the Uniform Guidance and will develop written procedures to implement the requirements of 2 CFR § 200.305 Payment.

FA 2022-003 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education Assistance Listing Number and Title: 84.010 - Title I Grants to Local Educational Agencies Federal Award Number: SO10A200010 (Year: 2021) SO10A210010-21A (Year: 2022) Questioned Costs: None Identified Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education Assistance Listing Number and Title: COVID-19 - 84.425D - Elementary and Secondary School Emergency Relief Fund, COVID-19 - 84.425W - American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Homeless Children and Youth Federal Award Number: S425D210012 (Year: 2021) S425W210011 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Finding: FA 2021-001, FA 2020-001, FA 2019-001, FA 2018-001, FA 2017-002, FA 2016-001, FA 2015-002, FA 2014-003 Description: The School District made cash drawdowns in excess of immediate cash needs for the Title I Grants to Local Educational Agencies and Elementary and School Emergency Relief Fund programs. Corrective Action Plans: District office has put procedures in action to make sure that all drawdowns are in line with expenditures. All draw down packets will be viewed and singed off by federal programs director. This packet will include detail expenditure sheet for the month, year to date expenditure report and a cover sheet. Estimated Completion Date: December 31, 2024 Contact Person: Terrance H. Freeman, III CFO Telephone: 706-665-8577 Email: tfreeman@talbot.k12.ga.us

No federal funds are drawn until the suppliers’ banking information is provided and an additional employee is now available to handle disbursements.

Views of Responsible Officials The Organization agrees with this finding. Corrective Action Plan The Organization has strengthened its internal controls over non-payroll transactions such that all expenditures can be properly explained with supporting documentation, and all expenditures are reviewed and approved prior to payment. Additionally, the Organization only submits expenditures for reimbursement that have been paid. While the Office of Management and Budget allows the reimbursement of expenditures that have been incurred, the pass-through entity will only reimburse expenditures that have been paid. Name(s) of Responsible Individuals Lacy Kimes, Board President Anticipated Completion Date Already implemented.

Management Response #2022-009: Due to the staff shortages and turnover in FY2020-2022 the company did not have adequate personnel in place to monitor or document grant activity. Formal documentation of policies and procedures were also deficient. Additionally, documents were not stored centrally, which made it extremely difficult to find supporting documentation. Corrective Action Plan: The following action plans have since been implemented: • During the fourth quarter in 2022, finance team delineated and expanded positions whose primary responsibility is to monitor and manage all grant activities. • During the fourth quarter in 2022 a new process was implemented to track grant related activities. Prior to any drawdown, the expenses are pulled from the G/L and reviewed. The expenses are entered into a spreadsheet and totaled based on the applicable federal award which has been assigned a client ID in the accounting system. The finance team is notified of the amount due to be drawn for each federal award. That amount is entered into the accounting system as an accounts receivable entry. This process has been formally documented. • Project Budget Reports have been created for each federal award. These reports include the budget, expenses for each month and the revenue (drawdown) incurred for each month. The reports will be reviewed and reconciled by the grants administration staff and finance monthly to ensure all agree with the allocated costs and costs and are in compliance with grant regulations. Once approved by both teams the reports will be routed for signatures. This process was launched in July 2022. • Supporting documentation for all draws will be maintained on a shared network drive so that an adequate audit trail will be established. This drive will be backed up on a regular basis by the Information Technology team. Responsible Party: Tamara Barnes, CFO

In the response for Finding# 2022-001, the College described the events that led to the excess funds on hand. The institution did not any earn interest on these funds. The College now recognizes that the approach used in Finding# 2022-01 is unallowable and will confine its future drawdowns of federal funds to actual, not speculative, expenditures. The Board will implement the above procedure immediately.

Management Response / Corrective Action: Rowan-Salisbury School hired a new payroll director in May of 2022 who identified the cause for the above noted discrepancy, noting the team was overbudgeting taxes on staff personnel payments due to employees who opt in for the ?pre-tax contributions.? When an employee enrolls in the ?pre-tax contributions,? the budgeted amount for Social Security/Medicaid is adjusted so that the rate no longer meets the 7.65% calculated amounts for all employees. As a result, the team has gone through each month?s drawdown and determined that $7,793.78 was over budgeted and we are correcting that in our February 2023 drawdown by reducing the drawdown by $7,793.78. We have also adjusted our budget calculation so that we are properly accounting for those employees who opted for ?pre-tax contributions? going forward.

The Auditor's office with work with the Community Transportation Connection and provide training on the importance of grant reporting and tracking.We will also explain and show how using the ERP system can aid in the tracking of expenses and help to ensure better accounting for grants.The Auditor's office will implement an additional level of control for this department's grant award, reporting, and reimbursements to be reviewed by our office for accuracy.Use online state and federal agency websites to verify grant awards amounts and disbursements.