Corrective Action Plans

2023-005 – HEERF lack of compliance at one campus - (Significant deficiency) Cluster: Not applicable Sponsoring Agency: Department of Education (ED) Award Names: COVID-19 Education Stabilization Fund Award Numbers: P425E200430 and P425F201596 Assistance Listing Titles: COVID-19 Higher Education Emergency Relief Fund (HEERF) Student Aid Portion and Institutional Aid Portion Assistance Listing Numbers: 84.425E and 84.425F Award Year: 2022-2023 Pass-through entity: Not applicable Cash Management Interest in the amount of $172,641.83 was remitted to DHHS on December 8, 2023. Effective June 2022, a new standard operating procedure (SOP) was implemented requiring a full reconciliation of costs prior to drawdowns to ensure only actual costs are drawn. The reconciliation must also be reviewed and approved by the Project Portfolio Financial Management Supervisor prior to the draw. The SOP applies to all Federal draws and therefore would apply to any “ad hoc” emergency programs moving forward. Eligibility In the event of any future “ad hoc" emergency federal programs with eligibility requirements, our policy has been updated as of 2/13/2024 to require two approvals and to document the approvals. • The reports used to determine student eligibility will be written and implemented by the Assistant Director of Financial Aid Systems. • The Deputy Director will then direct the awarding of direct grant payments which is executed by the Financial Aid Systems team. • Payments awarded to cover balances will be awarded by various members of the Financial Aid team during the processing of special circumstance appeals. Period of Performance As a result of the unallowable cost, the University took the following action in February 2024: • The Vice Chancellor for Student Affairs (VCSA) conducted a comprehensive review of current financial management policies and processes with specific attention to grant expenditure guidelines and timelines and provided training and educational resources to VCSA office staff since they do not ordinarily have responsibility for federal funding. Specifically, VCSA office staff have been trained on federal cost principles and now have responsibility for reviewing expense requests for allowability and allocability. Policies, training documents, and all resources developed as a result of this effort have been saved to a shared location for future reference. • Additionally, the unallowable charge identified in the audit was reversed and HEERF balance instead used for lost revenue previously accrued but not claimed. Reporting The Office of Financial Aid and Scholarships (OFAS) conducted a comprehensive review of the reporting process for HEERF and in October of 2023, established and documented a more systematic approach to reconcile the reports to the underlying data. At this time, updates to the 2022-2023 quarterly HEERF reports were also made. For inquiries regarding this finding, please contact Amanda Preston-Nelson at anelson10@ucmerced.edu who is responsible for the corrective action.

Federal Program Title: Research and Development Cluster ALN: Various 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 planned/taken in response to finding: Boise State University continues to review and enhance its internal subrecipient payment processes to find ways to identify and prevent untimely subrecipient payments, and to reduce the potential for human error. The University will implement additional internal measures to address inefficiencies related to the current multi-department review, approval, and payment process. Name(s) of the contact person(s) responsible for corrective action: Jen Lutke, Assistant Director, Post Award: jenniferlutke@boisestate.edu Planned completion date for corrective action plan: February 2024

Finding Number: 2023-001 Condition: Out of 28 payments to subrecipients that were tested, 12 were made after the 30 calendar day requirement. Planned Corrective Action: Accounts Payable personnel will review all vendor invoices to determine whether an invoice is related to a federal award expenditure. For federal award expenditures, Accounts Payable will manually change the payment terms to 30 calendar days or less, to ensure compliance. Periodically, Accounts Payable will review open federal award payables to verify payment terms have been properly set for the 30-day compliance requirement. The Controller’s and Accounts Payable Offices will also explore creating a more efficient long-term solution, whereby the 30-day terms could be automatically set during the purchase order creation process. This would eliminate any manual updates to the payment terms by Accounts Payable personnel. The Sponsored Research Services Accounting Office will send reminders to all college business officers and Principal Investigators (PIs) to highlight the need for prompt review and approval of Federal award invoices. This language will be incorporated into the SRS Best Grant Practices training classes, as well as the university’s Fundamentals of Sponsored Administration training courses. Contact person responsible for corrective action: Accounts Payable: Erik Sager; Purchasing: Tom Guerin; Sponsored Research Services Accounting: John Ungruhe Anticipated Completion Date: Initial corrective action, including review of invoices, reminders and modifications to training, will be completed by 10/31/2023. Additional solutions to eliminate manual updates, if possible, will be completed within 12 months.

SUBRECIPIENT CASH MANAGEMENT Department of Health and Human Resources (DHHR) Assistance Listing Number 93.788 The West Virginia Department of Health and Human Resources, Bureau for Behavioral Health (BBH), analyzed this finding and hereby offers more details into the condition and cause of the finding. For the first noted exception, the grant was finalized on March 20, 2023. The BBH received the subrecipient’s first request for payment on April 12, 2023, at which point the reconciliation indicated that the subrecipient had incurred expenses of $118,186.21 to date. Although the reconciliation was not reviewed and approved by the BBH timely, it indicated that the subrecipient had not been reimbursed at all; therefore, the subrecipient had no cash on hand at the time of the request for payment. For the second noted exception, the BBH received the reconciliation on June 2, 2023. Although the reconciliation was not reviewed and signed by the BBH timely, it indicated $41,296.14 of cash on hand, which was under the 10% threshold established by the BBH when monitoring cash management for subrecipients of the Opioid program. For the third noted exception, the BBH received the reconciliation on March 14, 2023. Although the reconciliation was not reviewed and signed by the BBH timely, it indicated expenditures of $63,839.08 and cash on hand of only $18,070.92, which was less than the 10% threshold established by the BBH when monitoring cash management for subrecipients of the Opioid program. For the fourth noted exception, a processing error within the BBH caused the subrecipient to receive a payment that should have been held due to the subrecipient having sufficient cash on hand at the time of the payment. Nonetheless, after the period of performance, the subrecipient did not have excess cash on hand, or any cash on hand for that matter. The subrecipient returned $218,290.74 to the BPH on November 14, 2023 and $2,317.10 on November 29, 2023 in accordance with the closeout procedures referenced in 2 CFR 200.344(d). The total amount of $220,607.84 constituted the balance of unobligated cash that the BPH paid the subrecipient in advance and was not authorized to be retained by the subrecipient for use in other projects. In an effort to enhance internal controls, the BBH’s central level managers continue to work with internal and external parties to improve everyone’s understanding of the federal rules and regulations and the BBH’s existing policies, procedures, and overall expectations concerning subrecipient cash management.

SUBRECIPIENT CASH MANAGEMENT Department of Health and Human Resources (DHHR) Assistance Listing Number 93.323, COVID-19 93.323 The West Virginia Department of Health and Human Resources, Bureau for Public Health (BPH), will analyze the condition that led to this finding in an effort to determine if the subrecipient has any excess cash on hand to date. In an effort to enhance internal controls, the BPH has initiated mandatory retraining for all staff members who are responsible for reviewing subrecipient expenditure reports and processing invoices. The retraining effort has already begun and will be conducted on a monthly basis for existing employees and at the start of employment for new staff members. The BPH has also developed and implemented a Subrecipient Grant Expenditure Checklist and Subrecipient Grant Invoice Checklist. The checklists outline the steps to take when reviewing subrecipient expenditures and invoices; provide a means to verify whether the grantee is under the 10% threshold established by the BPH when monitoring cash management for subrecipients of the Epidemiology program, including a means to compare expenditures between reporting periods; and require the staff member to certify that the reviews were completed.

Due to a turnover in the office of Controller, the Interim Controller drew down SIP grant funds for qualified purchases prior to the funds being disbursed, which is not the normal University procedure. The Interim Controller is no longer with the University, and the current administration has returned to the established University practice of not drawing down grant funds until payments have been made to vendors for grant purchases.

The Home contacted the Office of Refugee Resettlement (ORR) and was instructed to keep the funds and submit a carry-over request for these funds.

Condition: The College drew down an estimated amount of cash prior to the funds being disbursed to students or used for allowable expenditures. Planned Corrective Action: There is not anymore HEERF or federal stimulus funding to be drawn down moving forward. However, if there is in the future, the College will follow the three-day drawdown rules for cash disbursements. Contact person responsible for corrective action: Tom Reynolds College Treasurer Anticipated Completion Date: 12/14/2023 as soon as possible moving forward

Finding 2023-002 Cash Management Internal Controls (Significant Deficiency) Responsible Persons: Debbie Rapier, Chief Financial Officer Corrective Action Plan: All monthly billing information for the FPP and MST programs is sent by the Director of Revenue Cycle to the FPP/MST supervisor for review and comparison. The Outpatient Services Manager then prepares the monthly invoice. The invoice is forwarded to finance and reviewed by the Chief Financial Officer or Accounting Manager, in the absence of the CFO. Once approved, it is submitted to the Department of Community Based Services for payment. Once payment is received, it is compared against the receivable for accuracy. Anticipated Completion Date: Throughout fiscal year ending and beyond June 30, 2024

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

2022-011 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.

CORRECTIVE ACTION PLAN (Concerning Finding 2022-007) Contact Person Responsible for Corrective Action: Carrie Castonguay, Town Manager Corrective Action: The Treasurer, Town Manager and Select Board has taken the following actions to address finding 2022-007 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 a new Procurement Policy that addresses this deficiency. This policy was approved and implemented by the Select Board on January 23, 2024. Anticipated Completion Date: Completed January 23, 2024.

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.

REFERENCE # 2022-004 CASH MANAGEMENT – MATERIAL WEAKNESS- NONCOMPLIANCE Program Name/ALN Emergency Food and Shelter National Board Program (ALN # 97.024) Criteria: Non-Federal Entities Other Than States- Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). What constitutes minimized elapsed time for funds transfer will depend on what payment system/method a non-federal entity uses. Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR section 200.3). A non-federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the US Treasury and disbursement by the non-federal entity, as well as a financial management system that meets the specified standards for fund control and accountability (2 CFR section 200.305(b)(1)). Condition/Context: Division receive Emergency Food and Shelter National Board Program funds from the U.S. Department Homeland security/FEMA and various pass-through entities. Division receives advance funds from the pass-through agency and incurred program expenditures. Of the Sixty (60) files selected for testing We noted that the Division: (1) Does not have written procedures that minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Questioned Costs: Cannot be determined Recommendation: We recommend Division minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Corrective Action Plan: The Division will strive to minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division. Step 1 Action Date: Ongoing Final Implementation Date: 12/31/2023 Name and Phone # Of Person Responsible for Implementation: Jeanne Stromberg, Major, Divisional Finance Secretary (916) 563-3710

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