Corrective Action Plans

4. 2025-004 – Equipment and Real Property Management – Material Weakness in Internal Controls over Compliance and Instance of Noncompliance Recommendation The auditors recommend the University update their equipment tracking system to allow the University to identify assets purchased with federal money. In addition, the auditors recommend the University perform a physical inventory of its fixed asset at least once every two years. Planned corrective actions: Heritage University agrees with the recommendation and recognizes the need to strengthen its processes surrounding the identification, tracking, and monitoring of federally funded equipment. The University is assessing its current practices, records, and systems to better understand existing gaps and determine an appropriate and sustainable process moving forward. This work will include reviewing how federally funded equipment is identified and tracked, clarifying responsibilities across departments, and evaluating opportunities to improve coordination and documentation throughout the lifecycle of an asset. The Office of Sponsored Programs, in collaboration with the Business Office and other affected departments, will assist in developing and documenting appropriate procedures as this assessment progresses. The University will prioritize improvements based on identified risk, available resources, system capabilities, and applicable federal and award requirements. Management recognizes that strengthening this process will require a phased approach and will continue to evaluate and implement improvements as the University's equipment records, processes, and internal controls are reviewed. Name of Responsible Party: Yesenia Rodriguez, Rachel Castilleja, Sagrario Armenta Jimenez, Joanne Fernandez, Aaron Krantz Anticipated completion date: In Progress

Finding No.: 2025-014 Federal Agency: U.S. Department of Education AL Program: 84.425 Education Stabilization Fund 84.425X American Rescue Plan – Outlying Areas State Educational Agency (ARP-OA-SEA) Federal Award No.: S425X210003 Area: Equipment and Real Property Management Questioned Costs: $5,268 Views of Auditee and Corrective Actions GDOE agrees with the finding. The finding identified that the acquisition cost for Asset No. 103192, a PIONEER 48,000 BTU A/C split unit, was recorded in the property record as $5,268.00 instead of the supported invoice cost of $4,684.05. The asset record was corrected on August 25, 2026, to reflect the verified acquisition cost. Receiving and Property Management acknowledge the importance of ensuring that property records are complete, accurate, and supported by appropriate source documentation in accordance with 2 CFR 200.313(d). The incorrect acquisition cost resulted from the inconsistent submission of supporting documents to the Receiving Warehouse Supervisor, which created unclear guidance regarding the correct acquisition cost to be recorded. Plan of action and completion date: Asset No. 103192 was corrected in the property record from $5,268.00 to the verified invoice cost of $4,684.05. The correction was completed on August 25, 2026. Plan to monitor and responsible officials: The Receiving Warehouse Supervisor II will ensure that all required supporting documentation is received and reviewed before approving the Receiving Report for submission to the Property Management Office. The review will include verification of the quantity received, unit acquisition cost, asset description, and other information necessary to properly identify and record the asset. The Receiving Warehouse Supervisor II, Inventory Management Officer, Property Control Officers, and Supply Management Administrator will be responsible for implementing and monitoring corrective actions.

Finding No.: 2025-012 Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grants Federal Award No.: S403A230002 Area: Equipment and Real Property Management Questioned Costs: 3,095 Views of Auditee and Corrective Actions GDOE agrees with the finding. The finding identified that the acquisition cost for asset no. 103166, a Motorola APX 4000 radio, was recorded in the property record as $3,095.00 instead of the supported invoice cost of $1,319.14. The asset record was corrected on August 26, 2026, to reflect the verified acquisition cost. GDOE acknowledges the importance of ensuring that property records are complete, accurate, and supported by appropriate source documentation in accordance with 2 CFR 200.313(d). The following corrective action plan addresses the finding and strengthens the review of asset costs from receipt through final entry into the property records. Plan of action and completion date: Asset No. 103166 was corrected in the property record from $3,095.00 to the verified invoice cost of $1,319.14. The correction was completed on August 26, 2026. Plan to monitor and responsible officials: The Receiving Warehouse Supervisor II will review the purchase order, vendor invoice, and related receiving documentation before approving the Receiving Report for submission to the Property Management Office. The review will include verification of the quantity received, unit acquisition cost, description, and other information necessary to properly identify the asset. The Receiving Warehouse Supervisor II, Inventory Management Officer, Property Control Officers, and Supply Management Administrator will be responsible for implementing and monitoring corrective actions.

Finding 2025-09 Equipment and Real Property Management: Lack of Documentation Supporting Physical Inventory Counts – Significant Deficiency in Internal Control Over Compliance; Planned Corrective Action Plan: APU will establish a documented process for physical inventory of federally funded equipment at least once every two years. Results of the physical inventory will be reconciled to the University's property records, discrepancies will be investigated and resolved, and documentation of the inventory and reconciliation will be retained.; Anticipated Completion Date: July 1, 2027

Finding 2025-001 (ALN 93.889) The Organization did not have sufficiently designed internal controls to ensure that property records are retained in accordance with Section 200.313(d)(1) and (2). This is a repeat finding (2024-005) Management Response: Management agrees with the finding and will ensure that the enhanced procedures and monitoring controls already in place are consistently followed to ensure that equipment acquired with Federal grant funds is accurately recorded, properly tracked, and supported by property records that are maintained and retained in accordance with 2 CFR § 200.313(d)(1) and (2). The Program team is responsible for ensuring that physical inventories are conducted at least every two years, reconciled to the applicable property records, and that any discrepancies identified are investigated and resolved in a timely manner. These corrective actions will strengthen internal controls over federally funded equipment and support continued compliance with applicable Federal requirements. Contact Person(s) Responsible for Corrective Action: Steve Baron, Program Manager Anticipated Completion Date: December 31, 2026

FINDING 2025-021 Finding Subject: Education Stabilization Fund – Equipment and Real Property Management Contact Person Responsible for Corrective Action: Darice Austin-Phillips, Ahnaf Tahmid & Marlaina Johns Contact Phone Number and Email Address: 574-393-6000, daustin@sbcsc.k12.in.us , atahmid@sbcsc.k12.in.us, mjohns2@sbcsc.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Physical Asset Inventory: Enforced a capital asset inventory program starting June 2025. An independent vendor tags and inventories all capital assets costing $5,000 or more. CFR Compliance: Updated IC procedures to meet 34 CFR § 80.32 rules, requiring complete property records, a mandatory physical inventory at least once every two years, safeguard systems against theft/loss, and proper disposition procedures Anticipated Completion Date: Grant Ended: December 2025 IC Updates: January 1, 2025

FINDING 2025-003 Finding Subject: Water and Waste disposal Systems for Rural Communities – Equipment and Real Property Management Contact Person Responsible for Corrective Action: Timothy Detrick Contact Phone Number and Email Address: 765-754-7285 treasurer@townoffrankton.in.gov Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The Town began maintaining a capital asset listing during the audit period. SBOA provided clarification on the required components of the listing and helped ensure we understood which items should be included. As I am still relatively new to the position, I have been learning the proper requirements and classifications. I am now familiar with all required fields and have updated the capital asset listing accordingly. Anticipated Completion Date: September 2026 INDIANA

FINDING 2025-003 Finding Subject: Water and Waste Disposal System for Rural Communities - Equipment Contact Person Responsible for Corrective Action: Amy Crull Contact Phone number and Email Address: 765-866-0111 and newmarket.in8@gmail.com Views of Responsible Officials: We concur with the finding Description of the Corrective Action Plan: We will work at getting the right information into the right records and make sure everything is reported in the places it needs to be. The Town will ensure a detailed breakdown of assets related to its Sewer Construction project is included in its asset records and all required information is contained therein. This will be done with the help of the Town CPA/Consultant. Anticipated Completion Date: December 31,2026 INDIANA STATE

Inadequate Subrecipient Equipment Use and Disposal Procedures - Transit - MDT - The Montana Department of Transportation concurs with the finding. A. The department will continue enhancing its disposal procedures. The Transit Section is now fully staffed and is working through the backlog of disposition requests, which is expected to be resolved by the end of calendar year 2026. A system issue that prevented the disposition vehicle report from capturing all submitted vehicles was corrected with the June 2025 BlackCat update. The Transit Section was aware of vehicle records requiring a full audit and continues to work on this project. B. Disposal instructions have been prepared and are available in BlackCat for subrecipients to reference. C. The Transit Section will continue working through the inventory cleanup and expects to complete this work by the end of state fiscal year 2027. This cleanup is being conducted in conjunction with the migration from BlackCat to the B2G platform. Responsible Party - Kimberly Doherty, Accounting Systems Supervisor, Montana Department of Transportation Target Implementation Date - 6/30/2027

Noncompliant Equipment and Construction Controls – ESSER – OPI - The Montana Office of Public Instruction notes that the grant is closed and the temporary grant-funded staff are no longer with the agency. Moving forward, new grant managers will have better direction on the agency’s internal controls. Responsible Party - April Grady, Chief Financial Officer, Montana Office of Public Instruction Target Implementation Date - 9/30/2026

Equipment Inventory Controls - R&D - MSU - The Montana State University - Bozeman concurs and has already engaged in several improvements to its inventory processes. It is increasing proactive communication with department heads and other leaders across campus when physical inventory is taking place. It is adding more information into the procurement system to identify the location of items at the time of purchase to ensure accurate documentation and future inventory. It is including the property management team in employee termination paperwork to ensure a new responsible party is identified for any assigned asset prior to departure. It is coordinating with a newly hired research asset coordinator to complete cross-training. The University has made significant progress from the last finding to the current finding. Responsible Party - Kristy Colling, Controller, Montana State University - Bozeman Target Implementation Date - 8/31/2026

Equipment Inventory Controls - R&D - UM - The University of Montana - Missoula will establish a system-level inventory monitoring process by generating an annual listing from the Banner system to identify all departments required to perform inventories. This listing will serve as the official inventory checklist and will be used to track and verify inventory completion. The University will continue to use the dedicated staff member responsible for capital asset management and will perform physical inventories every two years to verify asset existence and ensure all capital assets are properly tagged. Responsible Party - Rachel Buswell, Controller, University of Montana - Missoula Target Implementation Date - 3/31/2027

Finding 2025-003 Federal Agency name: Department of Housing and Urban Development Pass-Through Entity: Governor’s Office of Economic Development and Moody County Assistance Listing Number: 14.228 Program Name: Community Development Block Grant Finding Summary: The property records listing had no formal review or approval in place. Additionally, there was no formally documented physical inventory of property that was purchased with federal award monies within the last two years. Corrective Action Plan: When the auditors asked for a physical inventory of property bought with federal funds, we gave them a complete list in June 2026, within five business days. That showed our property records were accurate and on hand. We are now adding a formal review and approval step for the property list, and we will keep it current with the information 2 CFR 200.313(d)(1) requires: a description, the identification number, the funding source and Federal Award Identification Number (FAIN), the title holder, the date and cost of purchase, the federal share, and the location, use, condition, and disposition of each item. We will take a physical inventory of federally funded property at least every two years and match it against the records. We have assigned a staff member to keep the property records current and to document the reviews and inventory counts. Responsible Individuals: Jody Hernandez, Chief Executive Officer; Tim Dietz, Chief Financial Officer Anticipated Completion Date: Inventory provided in June 2026. The review and approval process and the two-year inventory schedule will be in place by July 2026

FINDING 2025-004 EQUIPMENT AND REAL PROPERTY MANAGEMENT - SIGNIFICANT DEFICIENCY Management agrees with the finding that the fixed asset listing maintained by the City for assets acquired with federal and state funds did not contain all required elements and further recognizes the importance of maintaining complete and accurate property records for assets acquired with federal and state financial assistance. The City will update its existing fixed assets and grant administration policies to establish specific requirements for identifying and tracking property acquired with federal and state funds in accordance with applicable federal and state regulations. The updated procedures will require the fixed asset records to include, as applicable, the property description, serial number or other identification number, funding source and applicable award identification number, title holder, acquisition date, acquisition cost, percentage of federal or state participation, location, use and condition, and disposition information. As part of the corrective action, the Finance Department will review the existing fixed asset records for federally and state-funded assets and update the records to include the required information. Procedures will also be established to ensure that applicable information is captured when assets are acquired and maintained throughout the asset's useful life, including when assets are transferred, disposed of, or otherwise removed from service. The new Finance Director and Comptroller will oversee implementation of the updated procedures and provide appropriate guidance to personnel responsible for purchasing, grant administration, and fixed asset management. These measures will strengthen the City's internal controls and ensure that property acquired with federal and state financial assistance is consistently identified, tracked, and reported in accordance with applicable requirements.

BGCPR recognizes that it must keep and improve the asset capitalization processes and policies, particularly within the accounting system of record. It acknowledges the need to strengthen these processes to ensure accurate and compliant management of equipment acquisitions. To address this, during fiscal year 2025-26, BGCPR implemented a system capable of recording, classifying, and monitoring all capital assets in alignment with the criteria established under federal regulation 2 CFR §200. This improvement is essential to ensure that all asset capitalization activities meet regulatory standards and support greater financial transparency and accountability. As a corrective measure, BGCPR will take the following actions: a. A property and inventory coordinator was hired and is responsible for overseeing all aspects of property control and asset management. b. Full Implementation Property software to accurately all property of by BGCPR. The system includes information such as asset identification number, acquisition date, funding source, cost, useful life, depreciation, location, and other relevant details, serving as a support tool for the property records maintained in the accounting system. c. Prepare an updated Property Control Manual, which is pending final approval by senior management. Implement procedures for timely recording of acquisitions, transfers, disposals, and impairments to ensure that asset records remain current and accurate. d. Perfom and complete physical inventory for all Units and Central Office. e. All inventory counts have been entered into the system. f. All property acquired have been recorded in the property software. g. Currently we are in the process of valuation of the physical inventory to reconcile with the accounting records by December 31, 2026. h. Training was provided to personnel involved in asset management and inventory activities to ensure consistent application of established procedures. i. Perform periodic monitoring reviews by finance, compliance, or internal audits to validate adherence to property control policies and inventory requirements. Contact Person: Paul Barrera Carlos Rivera Enrique Vélez Cortes Lexa M. González Brown Team: Finance Team Anticipated Completion Date: December 31, 2026

The Treasurer will work with the Inventory Clerk to update property records to include a description of the property, serial/identification number, source of funding for the property including the federal award identification number, title holder, acquisition date, cost of property, percentage of federal participation in the project costs for the federal award, location, use and condition of the property, and all disposal information. Additionally, the Inventory Clerk will perform a physical inventory of that property and reconcile with the property records at least once every two years for property purchased with federal awards dollars.

The organization will develop a policy on inventory acquisition, maintenance and disposal. Inventory will be conducted a prescribed by the funding source for Head Start it will be every two years in June of odd years, or when classrooms are relocated. Inventory will be reconciled with the last inventory taken. In addition, if prescribed by other funding sources the organization may do an annual inventory and reconcile it with the previous year as well. Disposal policies will include methods of disposition as required by the various funding sources. Responsible Individual: Chief Financial Officer - Scott Korba Estimated Completion Date: Fourth Quarter - ending Dec. 2026

The organization will develop a policy on inventory acquisition, maintenance and disposal. Inventory will be conducted a prescribed by the funding source for Head Start it will be every two years in June of odd years, or when classrooms are relocated. Inventory will be reconciled with the last inventory taken. In addition, if prescribed by other funding sources the organization may do an annual inventory and reconcile it with the previous year as well. A form will be created to ensure that all requirements of inventory are met: date of purchase, description of item, purchase price, vendor, location, grant award number. Responsible Individual: Program Directors Estimated Completion Date: December 2026, thereafter June of odd years

This finding is due to the district inadequately maintaining property records for assets acquired under the Education Stabilization Fund – Elementary and Secondary Education that identify all of the property records elements not per federal guidance. Additionally, there was no indication that a physical inventory of the property acquired under the Education Stabilization Fund – Elementary and Secondary Education had been performed within the preceding two years.

2025-009 Airport Improvement Program, Infrastructure Investments and Jobs Act Programs, and COVID-19 Airports Programs - Assistance Listing Number 20.106 Recommendation: We recommend the City strengthen procedures and internal controls to ensure that all equipment acquired under the Federal program is accurately recorded and included in the annual inventory list, and that the annual physical inventory is reconciled to the equipment records. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding:  Airport created a new SOP for AIP Property Name(s) of the contact person(s) responsible for corrective action:  Kim Waldecker Planned completion date for corrective action plan:  7/30/2026

CORRECTIVE ACTION PLAN FINDING 2025-003 Finding Subject: Contact Person Responsible for Corrective Action: Katie Ritchie, Clerk Treasurer Contact Phone Number and Email Address: 260-347-7025, kritchie@kendallvillein.gov Views of Responsible Officials: Option 1: “We concur with the finding.” Description of Corrective Action Plan: The Clerk Treasurer will add the 16 airpacks to the asset list and will add any capital threshold assets purchased with federal funding to the asset list at the time of attainment going forward Anticipated Completion Date: August 1, 2026

The School has implemented an improved inventory control system that conducts inventory and records all information into APSCN as required.

Corrective Action: The City has begun implementing formal equipment management procedures for federally funded assets, including the green tagging of grant-funded assets utilizing the RCI asset management system. The City will conduct and document a physical inventory of federally funded equipment at least once every two years; reconcile inventory results to property records; investigate discrepancies timely; and retain supporting documentation to demonstrate compliance with federal equipment management requirements. Responsible Individual(s): Michael Elizalde, Grants & Strategic Initiatives Director; Vidal Roman, Finance Director. Timeline: In Progress. Estimated September 2026.

Finding Number: 2025-001 Finding Title: Equipment and Real Property Management Program: 14.218 Community Development Block Grants/Entitlement Grants Name of Contact Person Responsible for Corrective Action: Jenn Moses, Manager of Planning and Community Development Corrective Action Planned: • Conduct a training for community development staff on federal regulations related to equipment and real property management • Assign specific employees oversight of equipment inventory • Coordinate with the finance department to ensure all CDBG assets are appropriately categorized within inventory • Implement monitoring protocol for yearly audit of the inventory Anticipated Completion Date: November 30, 2026

Federal Agency: Various Federal Program: Research and Development Cluster Assistance Listing Number: Various Federal Award Numbers: Various Finding No.: 2025-003 Corrective Action Plan: The College will continue to strengthen and monitor internal controls over the management of federally funded equipment to sufficiently address this finding. The College completed a comprehensive physical inventory of federally-funded equipment as of June 30, 2026. The inventory results were successfully reconciled to the College's fixed asset register. Going forward the accounting group, in collaboration with the Office of Sponsored Programs and departmental equipment custodians, will perform and document the required physical inventory, update the asset register to reflect current locations and statuses, and maintain complete documentation supporting all inventory activities. Developed in accordance with federal requirements, the College also implemented a new equipment disposal policy for all federally-funded equipment, effective July 1, 2026. Timeline for Implementation of Corrective Action Plan: The College completed the corrective action plan by June 30, 2026. Management will periodically monitor compliance to ensure federally-funded equipment is properly inventoried, documented, and disposed of in accordance with federal requirements.