Corrective Action Plans

Corrective Action Plan: Upon assuming the role of Executive Director in July 2024, it became clear that rent reasonableness studies were not being conducted under the previous administration, as required. Recognizing the importance of compliance with HUD regulations, I initiated the implementation of a rent reasonableness policy and process. To support this effort, we entered into a contract with MRI to provide us with the rent reasonableness software. Last year we supplied MRI with the necessary property addresses and zip codes to begin the analysis. Due to the complexity of the implementation and the volume of data required, the setup process took time. We are now actively incorporating rent reasonableness determinations into all tenant files during annual recertifications and interims. With nearly 700 families in our program, this is an ongoing process, but significant progress has been made. Our team is fully committed to ensuring full compliance with HUD regulations, and we continue to work diligently toward that goal. In addition, to ensure continued compliance and to maintain the integrity of our files, the HCV Supervisor will be conducting weekly audits. This internal quality control measure helps us identify and address any inconsistencies or issues in a timely manner.

Condition: The Village did not have written policies for cash management or procurement that adhered to the requirements of the Code of Federal Regulations. Planned Corrective Action: The Village is currently reviewing existing policies to determine the best course of action and updating them for compliance. Some updates may require voter approval as certain provisions are in the Village Charter. Contact person responsible for corrective action: Penny Ray Anticipated Completion Date: 12/31/2026

Finding Number: 2025-001 Completion Date: 03/31/2025 Responsible Contact Person: Kami Greene, Director of Accounting and Controller Kristen Cope, Assistant Controller Corrective Action: The University enhanced its written procedures for requesting cash draws and further trained new staff on policies and procedures to ensure compliance. In addition, a review process has been established before each cash draw takes place to ensure that all cash draws are for expenses that were incurred to prevent funds from being overdrawn.

Criteria or Specific Requirement: Subparts D and E of 2 CFR Part 200 require a nonfederal entity to establish written policies, procedures, and standards of conduct, including procedures to implement the cash management requirements of 2 CFR section 200.305, procedures that comply with the procurement standards of 2 CFR sections 200.318 through 200.326, and procedures for determining the allowability of costs in accordance with Subpart E of 2 CFR Part 200. Specifically, 2 CFR sections 200.430, 200.431, and 200.475 require written policies concerning compensation for personal services, fringe benefits, and travel costs, respectively. Views from Responsible Officials: Management agrees with the finding. Management has established written policies and procedures after yearend that were the policies and procedures followed during the year under audit and meets the requirements of Subparts D and E of 2 CFR Part 200. Contact Person: John Jacques Date of Completion: November 14, 2025

Recommendation The Organization should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Repeat Finding No Action Taken A new federal cash draw down form has been created that will ensure all cash draw downs are reviewed and approved by the CEO. If there are any question regarding this plan, please e-mail Diane Manning at dvdlmanning@usmhs.org.

DEPARTMENT OF THE TREASURY CDFI Equitable Recovery Program (CDFI ERP) – Assistance Listing No. 21.033 Recommendation: The Credit Union did not maintain supporting records to demonstrate that interest earned on unused funds held in interest-bearing accounts was remitted to the federal government, as required by 2 C.F.R. § 200.305(b)(7). This deficiency appears to stem from a lack of formal procedures and oversight related to the handling of advance payments and interest earned on federal funds. To address this issue, we recommend that the Credit Union implement internal controls designed to ensure compliance with grant requirements, including procedures for tracking interest earned, verifying remittance to the federal government, and maintaining appropriate documentation to support these activities. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management will implement grant compliance controls and maintain proper documentation. Name(s) of the contact person(s) responsible for corrective action: Cindy Lindsey, CEO Planned completion date for corrective action plan: December 2025

Finding Number: 2025-005 Federal Program, Assistance Listing Number and Name: ALN 93.914, Department of Health and Human Services (HHS), HIV Relief Project Grants Condition: Original Finding Description: A lack of effective controls resulted in noncompliance with federal payment requirements, specifically for payments made to subrecipients. Contact Person Responsible for Corrective Action / Anticipated Completion Date: Denise Fair Razo Regina Greear Terri Daniels Anticipated completion date: March 2026 Planned Corrective Action: The three payments made were paid one to two days after the 30 day reimbursement requirement. The City will review its subrecipient payment terms and implement additional processes to help ensure compliance with federal payment requirements.

The Town recognized its lack of understanding of Uniform Guidance as it relates to federal grant programs and hired an outside consultant on August 1 6, 2022, to administer the federal grants to ensure that the Town would comply with all federal program requirements. The Town was led to believe that they were in compliance with all federal program requirements. The Town will develop, formally adopt, and implement written policies and procedures to comply with Uniform Guidance (2 CFR 200).

Pursuant to federal regulations, Uniform Administrative Requirements Section 200.511, the following is the finding as noted in the Northern Michigan University Single Audit Act Compliance report for the year ended June 30, 2025, and corrective action to be completed. 2025-001 – Lack of Drawdown Review Procedures Auditor Description of Condition and Effect. The University did not have documented review procedures in place for federal grant drawdowns under the Research and Development cluster. Drawdowns were processed without a formal review or approval process to verify that amounts requested were based on allowable expenditures. This deficiency increases the risk of drawing federal funds in excess of actual expenditures or for unallowable costs, potentially resulting in noncompliance with federal regulations. Auditor Recommendation. The University should implement formal review procedures for all federal grant drawdowns, including enhancing policies around reviewing drawdowns, designated reviewers, and system controls to ensure drawdowns are accurate, allowable, and properly supported. Corrective Action. The University is developing formal grant drawdown review procedures that outlines required documentation and review steps around federal grant drawdowns. Responsible Person. Jamie Beauchamp, Controller Anticipated Completion Date. January 31, 2026.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 2025-003 Continuum of Care – Assistance Listing No. 14.267 Recommendation: We recommend that management ensure drawdowns are strictly aligned with incurred and allowable expense. 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 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 drawdowns going forward. Name of the contact person responsible for corrective action: Christine Simiriglia, President & CEO Planned completion date for corrective action plan: June 30, 2026

2025-004 Inadequate Cash Management Procedures and Noncompliance with Period of Performance Requirements Criteria: Per 2 CFR §200.305(b), non-Federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement of those funds for program purposes under the period of performance. Furthermore, entities must have written procedures that clearly outline the timing and methods for drawing down federal funds in accordance with cash management requirements. These procedures should be documented, reviewed, approved, and periodically revised to ensure ongoing compliance. Client’s Response: The organization will revise its current draw-down procedures to reflect timing and methods for drawing down federal funds that are in compliance with cash management requirements. Proposed Implementation Date – 12/31/2025 Name of Contact Person – John Edwards, Sr. Email: jledwards@umadaop.org Phone: 419-255-4444

Finance department will set up the coding process and begin including Departments that match project codes for all federal programs. Corrective Action Owner: Lisa Peacock, Comptroller with assistance from the Senior Accountant, and report to Francesca Rattray, CEO

Condition: Controls in place did not minimize the time elapsing between the transfer receipt of billing from the subrecipient and disbursement of federal dollars to the subrecipient in accordance with the guidance above. Planned Corrective Action: Federation typically receives vouchers from 15 subrecipient organizations approximately ten to fifteen days after the end of each month. The number of vouchers per agency depends on the number of programs they provide. Staff reviews the vouchers for allowability and accuracy and submits them to the Illinois Department of Human Services (IDHS) within 24 days of month end. During fiscal year 2025, the IDHS remitted payment to Federation anywhere from 20 to 82 days after the month end. Upon receipt of the cash, Federation typically pays subrecipient organizations within two to three business days. In the instances identified by the auditors, the IDHS remitted payment over 30 days after Federation submitted the vouchers for reimbursement. Federation’s longstanding policy has always been to reimburse each subrecipient agency after it has received payment from the IDHS. Prior to fiscal year 2024, the IDHS usually provided payment within 15 days of receipt of our voucher and therefore Federation was able to comply with the 30-day requirement. However, reimbursement delays from IDHS began to occur in fiscal year 2024 and continued throughout fiscal year 2025, resulting in the findings describe herein. IDHS made two advance payments to Federation during fiscal 2025, but the amounts provided were not adequate to fund all payments within the 30 day time period. To ensure compliance with the 30-day reimbursement requirement, Federation will again request advances from the IDHS. Kyu Kim, Director of Finance and Contract Compliance, Refugee Services will be responsible for the oversight of the reimbursement payments. Contact person responsible for corrective action: Kyu Kim Anticipated Completion Date: July 2026

Corrective Action: The organization has enhanced its payment workflow to guarantee prompt disbursement of funds to providers. Improvements include automated alerts and internal checkpoints designed to prioritize payments immediately after grant funds are received. Anticipated Completion Date: Corrected.

Corrective Action: The Finance Director will establish clear timelines for submitting and processing payment requests to prevent any discrepancies in cash requests or disbursements. Well-defined internal procedures, including submission deadlines and approval workflows, will ensure that funds are requested, approved, and drawn down efficiently. Ongoing monitoring of pending requests, coupled with proactive communication among team members, will further support timely financial management and minimize any risks. Responsible Person: Director of Finance

College officials acknowledge the error and attribute it to the misclassification of the grant under an incorrect organization code. They note that the funds were ultimately expended for allowable project costs within the same fiscal year. The College agrees to enhance training and implement additional review procedures to ensure compliance with cash management requirements going forward.

In Finding 2025-002, the Organization made several draws of federal funds for which expenditures had not been incurred at the time of the draw. The Organization is required to minimize the time between draws and expenditures. Management recognizes the importance of the requirements to disburse federal funds in a timely manner. In response to Finding 2025-002, procedures. will be established to document these expenditures prior to transferring the from the U.S. Treasury to ensure that advance draws of federal funds do not occur.

In Finding 2025-002, it was reported that the Organization’s did not reconcile federal grant expenditures in a timely manner, resulting in a lack of draws of federal funds for which qualifying expenditures had been made prior to the end of the Organization’s financial statement year end. Management recognizes the importance of complying with federal grant guidelines. In response to Finding 2025-002, the Organization understands the importance of timely reconciliations of federal grant expenditures and timely draws of federal grant funds. The Organization will review its processes and procedures to ensure that federal grants are reconciled in a timely manner.

Condition: While testing of internal controls over cash management it was noted that the Center did not follow procedures in place for the draw down of federal funds. Action Taken: Update grant intake process to identify draw down procedures outlined in grant agreement or agency terms and conditions. Document and follow identified procedures for all grant draw downs.

2025-004 Cash Management (repeat of finding 2024-008) Corrective action planned: Beginning April 1, 2025, when the organization was made aware of this finding in last year’s audit, OMC took immediate corrective action. The CFO/Designee monitors expenses and prepares a detailed report of expenditures claimed for reimbursement and retains this documentation along with supporting invoices. A qualified, knowledgeable CFO will continue to ensure compliance with these requirements. Anticipated completion date: Corrective Action taken on April 1, 2025. Contact person responsible for corrective action: Allen Boyd, Director of Fiscal Operations

MANAGEMENT WILL ENSURE THAT ALL FUTURE GRANT DRAWDOWNS ARE RETAINED IN THE BANK UNTIL SPENT ON ALLOWABLE GRANT EXPENSES.

Finding Number: 2024-006 Finding Title: Financial Policies and Procedures Federal Program Information: • Federal Agency: Department of Housing and Urban Development; Department of the Treasury • Assistance Listing Numbers (ALN): 14.251 and 21.027 • Federal Program Names: Economic Development Initiatives—Special Project, Neighborhood Initiative and Neighborhood Stabilization Program; Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Financial Management and Standards of Financial Management Systems (2 CFR §200.302(b)); Allowable Costs (2 CFR §200.403-405); Procurement (2 CFR §200.317-327); Cash Management (2 CFR §200.305); Travel Costs (2 CFR §200.475) Note: Organization has existing Conflict of Interest policy in compliance with 2 CFR §200.318(c)(1). Questioned Costs: $0 Repeat Finding: No Management's Response: The Board of Directors of Restoration Christian Ministries agrees with the finding. The Organization will establish formalized accounting policies and procedures that adhere to the requirements of the Uniform Guidance. Corrective Action Plan: Corrective Action #1: Comprehensive Policy Manual Development • Action: Engage consultant or work with Contract Accountant to develop comprehensive written financial policies and procedures manual addressing all Uniform Guidance requirements, including: (a) Allowable costs (2 CFR §200.403-405); (b) Procurement (2 CFR §200.317-327); (c) Cash management (2 CFR §200.305); (d) Travel costs (2 CFR §200.475); (e) Time and effort documentation; (f) Equipment management; (g) Subrecipient monitoring; (h) Financial reporting; and (i) Record retention. Ensure policies address financial management system requirements under 2 CFR §200.302. Tailor policies to Organization's all-volunteer structure. [Note: Organization already has Conflict of Interest policy complying with 2 CFR §200.318(c)(1).] • Responsible Person/Title: Board Treasurer with Contract Accountant • Anticipated Completion Date: April 30, 2026 Corrective Action #2: Board Approval and Adoption • Action: Present draft policies to full Board of Directors for review and input. Board will formally adopt policies by resolution. Document approval in Board meeting minutes. • Responsible Person/Title: Board President • Anticipated Completion Date: May 31, 2026 Corrective Action #3: Dissemination and Training • Action: Distribute approved policies to all Board members and Contract Accountant. Conduct training session for Board members and Contract Accountant on new policies and procedures. Board members and Contract Accountant will sign acknowledgment of receipt and understanding. Make policies readily accessible (e.g., shared drive, Board portal). • Responsible Person/Title: Board President • Anticipated Completion Date: June 30, 2026 Corrective Action #4: Implementation Tools and Support • Action: Develop templates, forms, and tools to support policy implementation. Create workflow diagrams and checklists for common transactions. Establish Board Treasurer as primary resource for policy implementation questions. • Responsible Person/Title: Board Treasurer and Contract Accountant • Anticipated Completion Date: July 31, 2026 Corrective Action #5: Annual Policy Review Process • Action: Schedule annual review of policies to ensure continued Uniform Guidance compliance. Update policies as needed for regulatory or organizational changes. Submit material policy changes to full Board for approval. • Responsible Person/Title: Board Treasurer • Anticipated Completion Date: Annually, beginning June 2027 Corrective Action #6: Governance Structure Assessment • Action: Board will evaluate establishing Audit Committee or combined Finance/Audit Committee to provide enhanced oversight of financial management, internal controls, and federal compliance. If Board size prohibits separate committee, designate at least two Board members with specific oversight responsibilities. • Responsible Person/Title: Board President • Anticipated Completion Date: June 30, 2026

Management will implement standardized cash drawdown procedures to ensure federal funds are requested only for immediate cash needs in accordance with Uniform Guidance. A consistent drawdown calculation template will be used, supported by incurred and allowable expenditures. Monthly reconciliations of drawdowns to actual expenses will be performed, and staff involved in federal fund management will receive training on federal cash management requirements.

Recommendation We recommend the College establish the required written procedures for federal monies and have them available to all personnel who work with federal programs Management Response Corrective Action Unfortunately, due to the untimely completion and release of the June 30, 2023 audit report (released on August 8, 2025 - over two years after the end of the June 30, 2023 fiscal year audit), the College did not have the opportunity to review and begin a timely process of addressing a majority of the audit findings until well after the end of the audit period. While the College is committed to corrective action, the delayed delivery of the June 30, 2023 audit limited the ability to implement corrective measures earlier. The College is working proactively to ensure that these issues are resolved going forward. It is important to note that Southeast New Mexico College was a newly established independent community college, having formally separated from New Mexico State University (NMSU) as of April 2022. During this transition period, many administrative processes, including federal grant compliance procedures, were in the process of being developed, transitioned, and implemented independently from NMSU systems. As a result, certain policies, procedures, and documentation processes were not yet fully established or operational at the time of the audit. Corrective Action Taken / Planned: Policy Development • The institution will develop comprehensive written policies and procedures to address compliance requirements related to 2 CFR 200, Subparts D and E of the Uniform Guidance and approved by institutional leadership by July 31, 2025. Policy Review and Approval • Draft policies will be reviewed by VP of Business and Finance and approved by institutional leadership by August 31, 2025. Training • Relevant personnel will be trained on the new policies and procedures to ensure consistent understanding and compliance. Implementation • The institution will fully implement the new procedures by August 31, 2025, and will ensure all departments involved with federal awards are following them. Ongoing Review: • Policies and procedures will be reviewed annually, and updates will be made as necessary to ensure continued compliance with federal regulations. Date of Completion: August 31, 2025 Responsible Parties Vice President for Business and Finance (or appropriate official), Dean of Business and Finance, Director of Finance, Restricted Funds Manager

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.