Corrective Action Plans

2023-003 - Noncompliance and Significant Deficiency in Internal Controls over Compliance for Cash Management Corrective Action Plan: Wellbeing Initiative has reviewed Title 2 CFR §200.305 and updated the Internal Controls Policy and Procedure Manual to include the following policy. Other policies and procedures have been implemented and used since the incident to prevent the erroneous draw of funds prior to their expenditure. Item 10.3. Cash Management- : Criteria for cash management requirs non-Federal entities to utilize the reimbursement method and requires that expenditures were incurred prior to the date of the reimbursement request. Funds drawn from the Federal Payment Management System are deposited into a separate account and transferred to the appropriate account for reimbursement of previously accrued expenses. As allowable by grant guidelines the organization may drawdown funds in advance for expenditures to be made within the next 72 hours and meet the following requirements: i. Be limited to the minimum amounts needed to cover allowable project costs ii. Be timed in accordance with the actual immediate cash requirements of carrying out the approved project iii. Not be made to cover future expenditures Anticipated Completion Date: Completed 11/16/2023 Responsible: Chief Executive Team Danielle Smith and Sadie Thompson

This finding is a result of a) staff changes that occurred throughout the year without an adequate training and transition strategy, b) a lack of sufficiently detailed written procedures, and c) a lack of resources to adequately review staff work and provide feedback. Status/timeline: This is amongst the first areas that will be addressed by our fee accountant. Enhanced policies and procedures to be written within 30 days of fee accountant start date. The Directof Finance and Accounting along with the fee accountant will help ensure procedures are being followed with proper supporting documentation provided for each draw.

Recommendation: We recommend that Minnesota Land Trust adopt a written advance payment policy which includes all requirements of 2 CFR section 200.305. Actions to be Taken: The Minnesota Land Trust will adopt a written Advance payment policy that is consistent with the standards of 2 CFR section 200.305. Timeline for Completion: An Advance Payment Policy will be adopted by December 31, 2023. Contact person responsible for corrective action: Claire Colliander

Federal funds payback has been completed as required by Federal Transit Authority, as of October 2023.

Corrective Action Plan Finding Reference 2023-001 Personnel Responsible for Corrective Action: Matt Morgan, Assistant Director Sponsored Programs Administration Post-Award Anticipated Completion Date: November 1, 2023 Views of Responsible Officials and Planned Corrective Action: The RI concurs with the finding above and acknowledges that we drew down advance payments to cover encumbered costs rather than paid expenses, which resulted in retaining cash for more than 30 days. This approach was erroneous and did not account for the possibility of encumbrances remaining open for greater than 30 days. In response to the above issue, we have developed new processes to ensure our cash drawdowns align appropriately to reimburse expenses and prevent cash on hand: Rather than accept advance payments, we will use preferred method of reimbursement to draw down funds. Training for staff on cash management policy for Department of Commerce and Uniform Guidance Assistant Director for SPA Post-Award will review award setup and LOC draw terms to ensure no advance payments are being drawn down.

Finding 2023-003: Cash Management for the Institutional Portion of the COVID-19 Education Stabilization Fund Contact person responsible for correction action – Michelle Hall, CFO Anticipated completion date – Corrective action completed in January 2023 Corrective action Sterling College agrees with the finding of not meeting the posting deadline for drawing down the funds and spending the funds within the three calendar days of the drawdown. Sterling College recognizes this compliance requirement and will in the future for any other COVID-19 funds review the drawdown requests prior to execution and be cognizant of the timing and fund accordingly.

Our regular federal awards are being regularly submitted on a monthly basis by our bookkeeper. The finding is related to our newer grants that were awarded WYBILT specfically, and the ESSER III - ARP and were taken on by the business manager. We also had our GEER II award that had delays in cash requests. At different points in the year multiple changes in requirements in what to provide for documentation, caused a delay in doing cash requests. The business manager will work to shorten the amount of time this process takes in the upcoming year. We have fewer grants that will be tracked which will help in getting the time between expenditures and when cash is requested.

The District will implement additional internal control procedures to require the MSAP Director complete a request for reimbursement based off general ledger expenditures similar to other federal programs at the District. In addition, the District will implement additional monitoring procedures to ensure requests for reimbursement are received and reflect general ledger transactions prior to performing any drawdown of federal funds.

The District will implement additional monitoring on cash advances with federal funds to ensure compliance with cash management procedures as referenced in 2 CFR 200.305.

The Agency is updating its process to calculate the indirect costs in accordance with the revised notice of award (NOA) dated March 10, 2023. Additionally, the Agency will provide further training to all individuals involved in the financial management of federal awards. On a monthly basis, the calculation of indirect costs eligible for reimbursement under this award will be compared to the indirect costs allowed for in the NOA. This calculation will be secondarily reviewed by an individual having financial oversight on federal awards to ensure that any reimbursement request is computed in accordance with the NOA. The reimbursement request will then be submitted only after this verification has been completed. Contact person responsible for corrective action: Scott Moore, Chief Financial Officer Anticipated completion date: December 31, 2023

Identifying Number: 2023-002 Finding: For one out of two subrecipient payments tested, the College did not submit payment within 30 days after receipt of the billing from the subrecipient. Corrective Action Planned: The College will update its subrecipient invoice payment procedure to establish stronger internal controls related to tracking subrecipient invoice approval routing. The College will ask each subrecipient to include the Manager of Grants Accounting and Compliance on any requests for reimbursements. If a subrecipient’s invoice meets Moraine Valley’s criteria for performance and fiscal compliance, the Manager of Grants Accounting and Compliance will monitor the approval process to make sure it is properly approved by the grant’s Principal Investigator, the Director of Resource Development, and the Manager of Grants Accounting and Compliance. This additional monitoring will help ensure all subrecipient invoices are paid within 30 days of receipt. If the invoice does not meet the College’s criteria including all proper supporting documentation, the invoice will be returned to the subrecipient for corrections. Anticipated Completion Date: June 30, 2024 Responsible Person: Darren Howard, Manager of Grants Accounting and Compliance Howardd46@morainevalley.edu

Item 2022.006 - Cash Manaaement Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Repeat Finding Yes Action Taken Island Health Care will take the following actions to address this recommendation: • Prepare written procedures to document the process for Drawdown requests, including the initial review, documented approval process, submission to the funding agency, and the recording of the drawdown in the accounting system immediately after submission • Maintain detailed records of all drawdown requests, supporting documentation, approvals, and correspondence • Conduct regular internal reviews of drawdown activities to ensure compliance with procedures and maintain audit trail • Review drawdown procedures annually to ensure they remain current with funding agency guidelines and best practices

Condition and Context: As noted in finding 2022-002, ITCN had cash deficit in the amount of $35,398, while also reporting a total deferred revenue of $1,187,084 and a due to grantor agency of $269,375. At September 30, 2022, the WIC program is reporting deferred revenues of $289,963 while reflecting an amount loaned to other funds relating to these restricted sources totaling $60,455. Also, at September 30, 2022, the Child Care and Development Block Grant program is reporting deferred revenues of $198,541 while reflecting an amount loaned to other funds relating to these restricted sources totaling $828,529. As a result, ITCN is not in compliance with their contracts governing the use of these restricted funds. Recommendation: The auditors recommended that we implement the recommendations noted in finding 2022-002. Contact Name: Deserea Quintana, Executive Director Corrective Action Planned: ITCN has adopted the corrective actions under Finding 2022-002, with fiscal contractors monitoring compliance. The CFO provides monthly restricted fund reviews. MIP/Microix will add automated cash tracking and prohibit interfund borrowing. Staff training will reinforce cash management best practices. Anticipated Completion Date: The policy was adopted in March 2024. ITCN began to request for reconsideration, including supporting documentation, with grantor agencies with expected completion by December 31, 2025.

Recommendation: We recommend that the College review and update current procedures to ensure subrecipient payments are paid timely. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Collaborative workflows will be established between Grant PI's and the Accounts Payable department to ensure that subrecipient payments are submitted and paid timely. These workflows will be included in the Accounts Payable procedures. Name of the contact person responsible for corrective action: Clarissa Salhus, Finance Manager, Duane VanderGriend, CFO Planned completion date for corrective action plan: Completed as of January 14, 2026

Cash Management: The College agrees with the finding. To strengthen internal controls over cash management, the College will establish written guidelines that will clearly define timelines, responsibilities, and approval processes for drawdown and disbursements. The College will reconcile drawdowns to expenditures on a monthly/quarterly basis.

Cash Management College of the Marshall Islands acknowledges the finding and agrees that the absence of written cash management procedures and the lack of supporting expenditure listings for drawdowns created gaps in compliance with federal requirements. These issues stemmed from inadequate internal controls and the limitations of the previous manual filing system, which made it difficult to verify that drawdowns were fully supported by incurred expenditures during the audit fieldwork. To address this, the College has drafted new cash management policies and procedures in accordance with 2 CFR 200.305, which are now being circulated for review and approval. These policies will require maintaining detailed expenditure listings to support every reimbursement request and ensuring that funds are drawn only after related costs have been incurred. The College has also upgraded and institutionalized a cloud-based filing system to ensure complete documentation and easy retrieval of drawdown support records. With the upgraded systems and the support of newly hired skilled staff, the College is now better equipped to comply with cash management requirements. Staff have been trained and will continue to be trained twice a year on federal cash management and documentation standards to prevent recurrence of similar issues in future audits.

2022 – 007: Cash Collateralization Condition: During our review of the Organization’s cash, it was noted that as of September 30, 2022, they have not collateralized cash balances in excess of the amounts insured by the Federal Deposit Insurance Corporation. Cash balances of $11,685,898 were uninsured at September 30, 2022. Unearned revenue was reported at approximately $10,704,037 which includes advance payments of Federal funds. Corrective Action Plan: Management will review options with their bank to have a cash collateralization agreement put in place.

The funds from the project came from several different grant sources. Bills were due and our consultant DLZ advised us on how to pay these bills even if they were paid from grants other than from the correct grant sources.

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.