Corrective Action Plans

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.

Finding No. 2025-004 – Improvement required over the equipment and real property management for which the physical inventory observation over property has not been performed Condition While obtaining our understanding of the policies and procedures in place at the Authority’s office in relation to the management of property and equipment, management represented to us that the required physical inventory has not been performed by the Authority’s Property Division personnel during the last seven years as required. Views of Responsible Officials and Corrective Actions This also has been a recurring finding in the last audits. The assigned staff responsible for coordinating the completion of this task are no longer with the Authority. However, during fiscal year 2025-2026, the Human Resources area, as explained last year, conducted an analysis and evaluation of all vacant positions to determine which ones can be hired, but due to current government policies regarding recruiting, the process has been slow. Management is aware of the importance of compliance and is moving forward with corrective action. We are currently in the process of obtaining the required approval to hire additional personnel needed to perform the physical inventory taking, among other tasks. Name(s) of the Contact Person(s) Responsible for Corrective Action Jennifer Medina – Human Resources Director Elena González – DEA Finance Miguel La Torre – Interim Finance Director Anticipated Completion Date During FY-2026-2027

VIEWS OF RESPONSIBLE OFFICIALS The Puerto Rico Department of Education (PRDE) acknowledges the audit finding presented by the auditors regarding equipment and real property management under 2 CFR §200.313. The PRDE conducted a physical inventory of its equipment in December 2025 and issued a new property management policy as a result of this process. The PRDE provides the following clarification for each of the specific deficiencies identified by the auditors: 1. Items with Unassigned Person (Custodian) Not Updated The property records for the items identified in the IDEA Cluster sample (8 items) and the Education Stabilization Fund Programs sample (7 items, plus 1 additional item also missing location information, and 1 item also missing location information with a condition update) were updated in the property system during March 2026 to reflect the correct assigned custodian. 2. Items with Location Not Updated and No Transfer Documentation The property records for the items identified with outdated location information (2 items in the IDEA Cluster sample and 1 item in the Education Stabilization Fund Programs sample) were updated in the property system during March 2026 to reflect the current location of the equipment. 3. Description Discrepancy with Property Observed For the two (2) IDEA Cluster items where the recorded description did not agree with the property observed, the PRDE clarifies that these items were acquired through direct purchases, and the description recorded in the property system was taken directly from the purchase contract (Purchase Order). The detailed equipment description is contained in the notes section of the PO rather than in the main description field, which resulted in the apparent discrepancy. The PRDE will coordinate with the Purchasing Office (Oficina de Compras) to correct the manner in which equipment descriptions from direct purchase contracts are recorded in the property system, to ensure the description field directly reflects the equipment characteristics going forward. 4. Transfer Documentation All transfers associated with the items identified by the auditors as lacking transfer documentation were corrected and properly documented in the property system during March 2026. 5. Assigned Person Reflecting the School Name (RESTART Program) For the twelve (12) RESTART Program items where the assigned person field reflects the name of the school rather than an individual, the PRDE clarifies that these items were assigned to private or non-public schools that are not under the administrative structure of the PRDE and whose personnel do not have a PRDE employee number. Consequently, the name of the school is recorded as the custodian in the absence of an assignable employee identification number. 6. Multiple Air Conditioning Units Under a Single Property Number Regarding the item representing the acquisition of eighty-two (82) air conditioning units recorded under a single property number, the PRDE clarifies that this acquisition corresponds to a central air conditioning system purchased as a single unit composed of multiple components necessary for the system to function as a whole, rather than as eighty-two individually independent units. Accordingly, the equipment was properly catalogued under one property number reflecting the system as a single piece of equipment. 7. Item Not Available for Physical Observation (Custodian on Sick Leave) With respect to the computer/laptop that could not be physically observed because the assigned custodian was on sick leave, the PRDE will validate this item with the responsible personnel once the employee returns from sick leave, and will update the property record accordingly to reflect the physical verification. 8. Equipment in Custody of the Puerto Rico Police Department For the items identified as servers and backup batteries in the custody of a Puerto Rico Police Department official, the PRDE clarifies that the change in custodian was made in the property records in accordance with the terms established under the memorandum of understanding between the PRDE and the Puerto Rico Police Department, which designates the Police Department as the custodial entity responsible for this equipment IMPLEMENTATION DATE Fiscal Year 2025-2026 RESPONSIBLE PERSON Nilda Z. Morales Vázquez Property Office

Finding 2025-006: Equipment and Real Property Management Airport Improvement Program View of responsible officials: The City agrees with the finding. Corrective action plan: The City will maintain property records for equipment acquired with federal funds that include, among other elements, the source of funding and the percentage of federal participation. The fixed asset ledger will be updated to distinguish assets acquired with federal award funds from assets acquired with other funding sources. Implementation dates: September 30, 2026 Responsible person: Lola Ogunremi, Chief Financial Officer

2025-002 Equipment Management Cluster: Research and Development Sponsoring Agency: All research and development cluster sponsoring agencies Award Names: All research and development cluster awards Award Numbers: All research and development cluster awards Assistance Listing Title: All research and development cluster assistance listing titles Assistance Listing Number: All research and development cluster assistance listing numbers Award Year: 2024-2025 Pass-through entity: All research and development cluster pass-through entities This is a repeat finding of 2024-004 and 2022-001 and in the prior year corrective action plan we had anticipated correcting this matter by June 30, 2025. Management agrees with the finding related to equipment management. Management conducted a biannual physical inventory count of specific federally purchased research equipment in Fiscal Year 2024, however the complete population of equipment funded with federal research and development dollars were not inspected. By September 30, 2025, the Dartmouth Health system created a federal equipment tracking procedure, and updated property records to include details required by 2 CFR section 200.313. Management will perform a full physical inventory of research equipment for the year ending September 30, 2026 and update the clinical inventory database to reflect the results of the inventory to be able to remediate the finding. Individual Responsible: John Muhlen, System Vice President of Corporate Finance Anticipated Completion Date: September 30, 2026

Views of Responsible Officials: Management respectfully acknowledges the auditors’ observation regarding the reconciliation of the fixed asset schedule to the BarCloud inventory management system. However, management disagrees with the classification of this matter as a Significant Deficiency and wishes to provide the following context for the record. Throughout the close of fiscal year 2025, management dedicated substantial time and resources to a comprehensive review and reconciliation of the Organization’s fixed asset records. This was a deliberate, proactive initiative undertaken by the finance and accounting team to identify and resolve historical discrepancies between the accounting system and BarCloud, enhance the quality and completeness of asset-level records, and establish a stronger foundation for ongoing compliance with 2 CFR 200.313(d). The discrepancies noted by the auditors were, in large part, the very items identified and addressed through this reconciliation effort—not indicators of a systemic or ongoing control failure.As part of this undertaking, management initiated a comprehensive effort to migrate all equipment records from legacy, manual binder-based files maintained at field offices to a centralized online BarCloud system. This effort is now substantially complete. Because a number of these binders were maintained at MBN’s overseas bureaus, obtaining timely access to the physical records presented logistical challenges that required additional coordination and time to resolve. To support this work, MBN engaged local vendors in each country where equipment records were maintained to perform additional inventory review and reconciliation, as well as independent professionals to assess the fair market value of equipment identified for disposition and to perform the required data sanitization of IT equipment in accordance with 2 CFR 200. As a result of this work, the Organization now maintains materially clean and reconciled fixed asset records. The condition observed during audit testing reflects the state of records prior to the completion of management’s remediation efforts, not the current state of the Organization’s controls. Management believes that the effort expended to bring the records into alignment, and the improved control environment that now exists as a result, should be considered in the assessment of severity. Accordingly, management does not believe that the remaining matters, in the context of the substantial remediation completed, rise to the level of a Significant Deficiency. Management agrees with the auditors’ recommendation to continue formalizing procedures for ongoing reconciliation between the accounting records and BarCloud. Management is committed to establishing a common asset identification methodology, implementing a periodic reconciliation schedule, and maintaining supporting documentation to evidence the process going forward. We appreciate the auditors’ recognition of the significant undertaking completed during fiscal year 2025 and remain committed to maintaining full compliance with Federal equipment management requirements under 2 CFR 200.313(d) and 2 CFR 200.303.

Finding 2025-057 Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and COVID-19 Airports Programs, ALN 20.106 Management Views MDOT agrees that policies and procedures should be implemented to ensure that equipment and real property purchased with federal funds is properly tracked, recorded, and safeguarded. Planned Corrective Action MDOT will work with the Federal Aviation Administration to address variances between the Uniform Guidance requirements and program guidance so that policies and procedures can be updated as necessary. Anticipated Completion Date September 30, 2026 Responsible Individual(s) Bryan Budds, MDOT

The Superintendent, Corporation Treasure, Director of Grants, and the Director of Facilities and or/ Director of Technology will monitor equipment purchases larger than $5,000. Once the purchase is made, the Director of Facilities and or/ Director of Technology will tag the equipment and notify the Director of Grants, Treasurer, and Superintendent when the fixed asset inventory is completed and updated.

Adeline Montessori School will establish a policy for recording, safeguarding, and maintaining property and equipment purchased with federal funding.