Corrective Action Plans

Finding 2024-001 Subject: Education Stabilization Fund – Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers: S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Context: The School Corporation expended $944,437 on building renovations during the period under audit which was charged to the ESSER II (84.425D) and ESSER III (84.425U) grant awards. It was noted these capital asset acquisitions were not reported on the capital asset listing for the School Corporation as of June 30, 2024. The School Corporation had also not performed a complete physical inventory of capital assets during the audit period. Views of Responsible Official: Management agrees with the finding and will take the following corrective action. Description of Corrective Action Plan: Stephanie Pittman, Treasurer will add the value of the building renovations to the capital asset listing as of June 30, 2024 and amend the annual financial report for the 2023- 2024 school year. Stephanie Pittman, Treasurer will also perform a complete physical inventory at the end of the 2024-2025 school year and develop a schedule for regular inventories at least every other year. Anticipated Completion Date: The amendment to the capital asset listing and annual financial report will be completed by February 15, 2025. The physical inventory will be completed by August 31, 2025.

Information on the federal program: Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers: S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Context: For 1 of 2 sample items tested, we noted the School Corporation expended $1,079,166 on roof renovations which was charged to the ESSER III (84.425U) grant award. It was noted these capital asset acquisitions were not reported on the capital asset listing for the School Corporation as of June 30, 2024. Contact Person Responsible for Corrective Action: Dawn Ray Contact Phone Number: 812.988.6601 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: We will have someone other than the preparer of the capital asset invoices perform a documented review prior to submission to the Capital Asset company to validate the accuracy and completeness of the items to be submitted. Anticipated Completion Date: Immediately upon the completion of the audit.

Views of Responsible Officials The Organization agrees with this finding. Corrective Action Plan The Organization will update its property records to include all required information. Additionally, the Organization plans to document its performance of a physical inventory count and related reconciliation on an annual basis. Name(s) of Responsible Individuals Lacy Kimes, Board President Anticipated Completion Date June 30, 2025

CORRECTIVE ACTION PLAN FINDING 2024-002 Contact Person Responsible for Corrective Action: Tamara Swartzentruber, Treasurer Contact Phone Number: 812-486-3220 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: The Treasurer will schedule the inventory of the property and equipment owned by the school corporation to be completed during the audit period. Anticipated Completion Date: July 2024

Subject: Education Stabilization Fund – Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers: S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Context: The School Corporation expended $419,545 on equipment acquisitions during the period under audit which was charged to the ESSER II (84.425D) and ESSER III (84.425U) grant awards. The School Corporation did not maintain a capital asset listing for the audit period to properly track federal equipment acquisitions. The School Corporation had also not performed a complete physical inventory of capital assets during the audit period as required by federal and state regulations. Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: Management will consult Board approved polices for capital asset management and prepare a detailed asset listing and ensure a physical inventory is completed at least once every two years. Responsible Party and Timeline for Completion: David Wolford, Director of Operations and Technology, will create a draft capital asset listing by July 1, 2025.

Information on the federal program: Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers: S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Context: The School Corporation expended $82,286 on building renovations during the period under audit which was charged to the ESSER III (84.425U) grant award. It was noted these capital asset acquisitions were not reported on the capital asset listing for the School Corporation as of June 30, 2024. Contact Person Responsible for Corrective Action: Vicki Jones Contact Phone Number: 765-793-4877 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: All capital assets will be included in the AFR each year and verified with a sign-off by the Superintendent. Anticipated Completion Date: July 2025

Management's Response: Management concurs with the above finding and notes that an annual physical inventory is done. Moving forward all federal equipment housed in a separate inventory system will be included in the annual physical inventory process. In addition, the tracking and monitoring of these assets will be brought to the asset manager within the fiscal services office. Action will be taken immediately and completed by June 2025.

FINDING #2024-002: EDUCATION STABILIZATION FUNDS – EQUIPMENT AND OTHER CAPITAL EXPENDITURES (5000) Corrective Action Plan: Compton USD will act with diligence and care. Under the new Director of Fiscal Services, a pre-approval checklist for all grant expenditures, including mandatory CDE approval for equipment and capital expenditures, has been implemented.

Equipment Management Management agrees with the finding and the auditor's recommendation. Mass General Brigham (MGB) will develop supplemental training materials focusing on the policies and procedures around federal equipment management. The training materials will emphasize the importance of accuracy in the disposal request forms including identification of assets purchased with federal funding. In addition, updates to equipment disposals that are already complete will no longer be held for processing once all other disposals associated with a transfer or sale are complete_ Management believes these are isolated incidents that will be avoided going forward through enhanced training and escalation when delays occur. Training materials will be developed by Research Space Management Directors for implementation April 2025 to coincide with annual Asset Certification.

The District will re-implement bi-annual physical inventory of inventoriable items by an independent third-party vendor, as required under the provisions of 2 CFR 200.313. This process will be under the direction of the Purchasing Services Department and will begin in Fiscal Year 2024-2025.

Elementary and Secondary School Emergency Relief – Assistance Listing No. 84.425D, 84.425U Recommendation: Auditor recommends that the District establish and implement procedures to ensure that a physical inventory of equipment is conducted at least once every two years. This should include assigning responsibility for the inventory process, setting a schedule for inventory counts, and ensuring that the results are reconciled with the equipment records. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: We will work with the Building and Grounds Director to create a schedule for the inventory process. Name(s) of the contact person(s) responsible for corrective action: Frank Neve Planned completion date for corrective action plan: 06/30/2025. U.S. Department of Agriculture

Management agrees with the recommendation and has already contracted with an asset appraiser to physically inventory the research funded assets. We are also planning to do a full physical inventory of all property in the Spring of 2026 as part of our Facilities and Administrative Rate proposal base year activities.This is expected to be completed prior to the close of FY2025.

Town management concurs with the finding, and while audit staff were still onsite for field work, Town staff implemented and added tracking and documentation information for all federally funded capital assets, to include unique descriptors, Catalog of Federal Domestic Assistance grant number, funding source and amount. In addition, inventory counts for federally funded assets will be conducted and recorded at least once every two years.

Corrective Action Plan: The District has developed and implemented a Federal Funds Manual. Anticipated Corrective Action Plan Completion Date: November 18, 2024 Contact Information: For additional information regarding this finding please contact Blaise Paul, Chief Business & Finance Officer, at 414-768-6140.

Identifying Number: 2024-004 Equipment Management—Material Weakness U.S. Department of Education Passed through Missouri Department of Elementary and Secondary Education Education Stabilization Fund, Assistance Listing No. 84.425C (COVID-19—Governor’s Emergency Education Relief Fund), 84.425D (COVID-19—Elementary and Secondary School Emergency Relief Fund), 84.425U (COVID-19—American Rescue Plan-Elementary and Secondary School Emergency Relief), 84.425W (COVID-19—American Rescue Plan-Elementary and Secondary School Emergency Relief-Homeless Children and Youth) Federal award year 2023-2024 Summary of Finding: Criteria: The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance retirements. Also, in accordance with 2 CFR section 200.313(d)(1), property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. In accordance with 2 CFR section 200.313(d)(2), a physical inventory of equipment and property must be taken, and the results reconciled with the property records at least once every two years. Condition: The District’s controls were not operating effectively to reasonably ensure the District had maintained property records with the above required information, and performed the required physical inventory of equipment within the two previous years. As a result, the District did not comply with the compliance requirements for equipment and property. Cause: The District does not have processes and procedures in place related to equipment management, tracking and required physical inventories. Effect or potential effect: The District is not in compliance with federal grant requirements over the tracking and physical inventory of equipment. Improper equipment procedures could result in actions taken by oversight agencies which could impact future funding. Questioned costs: None Context: For all sample selections tested in the major program, there was no process of tagging and tracking equipment purchased with federal funding, nor evidence that any physical inventories had been performed. Identification as a repeat finding, if applicable: Not applicable.   Corrective Action: District personnel do not normally make capital purchases from federal grants. ESSER III was unusual in this regard. Management has prepared a spreadsheet that will be used to track the capital purchases made from ESSER dollars. We will send this spreadsheet to Operations and Academic Services personnel so that they can populate the data. Once this is complete, we will schedule an inventory of these items. Anticipated Completion Date: June 2025 (for the year ending June 30, 2025). Contact Person: Steve Marriott, Controller 816-321-5000 Steve.marriott@nkcschools.org

CORRECTIVE ACTION PLAN Nov 6, 2024 Higher Institute for Arts and Technology (the School) provides its Corrective Action Plan for the fiscal year ended June 30, 2024. FINDING 2024-001 – RECONCILIATION OF PHYSICAL INVENOTRY – Significant Deficiency Planned corrective action: The School through the educational service provider agreement with Entrepreneurial Ventures in Education (EVE) will implement procedures and provide additional training to school staff that are responsible for taking physical inventory to ensure results are reconciled with fixed asset property records maintained by EVE. Responsible officers: Jeffrey Larkins, Director of Finance and Accounting; Javier Dimas, Vice-President of Operations Estimated completion date: May 15, 2025 22

As of October 8, 2024, the Executive Director of Business & Human Resources, Kevin J. Polunci has reached out to Questar III BOCES to ensure the equipment purchased with federal funds is clearly denoted in the report ending June 30, 2025.

Implementation plan of action: The Business Manager will review these requirements with the Account Clerk responsible for tracking fixed assets to ensure that purchases made with federal dollars are recorded in the database with all the necessary information to meet the compliance requirements. In addition, we will establish a process to perform a physical inventory as required every two years. Person Responsible for Implementation: Jodi Birch, Business Manager and Kristie Smith, Account Clerk Anticipated Completion Date: June 30, 2025

Finding No.: 2023-024 AL Program: 20.205 – Highway Planning and Construction (Federal-Aid Highway Program) Area: Equipment and Real Property Management Questioned Costs: Undeterminable Contact Person(s): Stacy Atalig, Federal Programs Coordinator, DPW / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Condition 1: DPW, TSD – Highway Branch agrees with this finding. Highway Branch has consistently tried to work with Procurement Services to update its yearly inventory records to remove all transferred and disposed properties from its inventory record to no avail. Request for Survey-Out forms for damaged, past its useful life or obsolete properties and Request for Transfer of old or inactive but still usable equipment to Divisions within the Department of Public Works were transmitted along with the Fiscal Year inventory list to Procurement Services to update its list but still encounter discrepancies because of Procurement Services overall lump sum master list including inventories of both local and federal properties. Highway Branch conducts its yearly inventory count and submits its list to Procurement Services. However, Procurement Services has not conducted its own inventory for our office for several years. Additionally, the Procurement Services Division agrees with this finding. Improvements are needed in the way federally funded assets are tracked and reported. At present, the inventory management system is not configured to readily identify assets by specific federal award number, which makes it difficult to generate reports identifying assets purchased under individual grants. In addition, staffing limitations have affected the Commonwealth's ability to maintain and readily produce this information. To address this issue, the Property Management Branch has developed a revised Standard Operating Procedure (SOP), which is currently under review and pending finalization. The SOP strengthens procedures related to asset acquisition, tagging, inventory management, record retention, transfers, surveys, disposals, and supporting documentation. The Commonwealth is also evaluating available options to improve tracking and reporting of federally funded assets, including system enhancements, alternative tracking methods, technical assistance, and additional staffing resources where feasible. Finding No.: 2023-024, continued AL Program: 20.205 – Highway Planning and Construction (Federal-Aid Highway Program) Area: Equipment and Real Property Management Questioned Costs: Undeterminable Contact Person(s): Stacy Atalig, Federal Programs Coordinator, DPW / Geraldine Cruz, Procurement Services Director Corrective Action Plan: In the meantime, the Property Management Branch has begun asset reconciliation efforts, including physical inventories, record reviews, asset verification, and updates to inventory records. These efforts will continue while the revised SOP is finalized and implemented. These actions will help improve accountability, strengthen inventory records, and support compliance with federal property management requirements. Proposed Completion Date: Completed - Ongoing Condition 2: DPW, TSD – Highway Branch agrees with this finding. The Highway Branch has updated its Inventory Form to include the following required information: Date Acquired, Item No, Property/Tag No., Description of Property, Manufacturer, Model, Serial No., Purchase Order No./Contract No., Condition Code, Project No., FHWA Project Number, Percentage of Federal Participation, Location, Person Assigned, and the date the inventory was conducted. In September 2025, Federal Program Coordinator IV met with Director of Procurement Services to ensure these line items are incorporated into the inventory log sheet as part of the requirements. The Director agreed to instruct her staff to implement these updates beginning FY2025. Additionally, the Procurement Services Division agrees with this finding. The Division agrees that the annual physical inventory required for FY2023 was not completed. As a result, the existence, location, condition, and accountability of all assets could not be fully verified during the audit period. To address this issue, Section 3 of the CNMI Property Management Policies and Procedures Manual was updated on September 9, 2024, changing the physical inventory requirement from an annual inventory to a biennial (every two years) inventory cycle. Finding No.: 2023-024, continued AL Program: 20.205 – Highway Planning and Construction (Federal-Aid Highway Program) Area: Equipment and Real Property Management Questioned Costs: Undeterminable Contact Person(s): Stacy Atalig, Federal Programs Coordinator, DPW / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Property Management Branch is currently conducting physical inventories and random asset audits throughout the Commonwealth. These efforts include verifying asset locations, confirming accountability, reviewing asset condition and operational status, reconciling inventory records, and identifying assets that require transfer, survey, repair, replacement, or other corrective action. These inventory and reconciliation efforts are already underway and will continue while the SOP is finalized and implemented. Together, these measures will strengthen accountability, improve asset management practices, and help ensure compliance with federal and Commonwealth property management requirements. Proposed Completion Date: Ongoing

Finding No.: 2023-017 AL Program: 15.875 - Economic, Social, and Political Development of the Territories COVID-19 15.875 Economic, Social, and Political Development of the Territories Area: Equipment and Real Property Management Questioned Costs: Undeterminable Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Condition 1: The Procurement Services Division agrees with this finding. Improvements are needed in the way federally funded assets are tracked and reported. At present, the inventory management system is not configured to readily identify assets by specific federal award number, which makes it difficult to generate reports identifying assets purchased under individual grants. In addition, staffing limitations have affected the Commonwealth's ability to maintain and readily produce this information. To address this issue, the Property Management Branch has developed a revised Standard Operating Procedure (SOP), which is currently under review and pending finalization. The SOP strengthens procedures related to asset acquisition, tagging, inventory management, record retention, transfers, surveys, disposals, and supporting documentation. The Commonwealth is also evaluating available options to improve tracking and reporting of federally funded assets, including system enhancements, alternative tracking methods, technical assistance, and additional staffing resources where feasible. In the meantime, the Property Management Branch has begun asset reconciliation efforts, including physical inventories, record reviews, asset verification, and updates to inventory records. These efforts will continue while the revised SOP is finalized and implemented. Finding No.: 2023-017, continued AL Program: 15.875 - Economic, Social, and Political Development of the Territories COVID-19 15.875 Economic, Social, and Political Development of the Territories Area: Equipment and Real Property Management Questioned Costs: Undeterminable Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC / Geraldine Cruz, Procurement Services Director Corrective Action Plan: These actions will help improve accountability, strengthen inventory records, and support compliance with federal property management requirements. Proposed Completion Date: Ongoing Condition 2: The Procurement Services Division agrees with this finding. The Division agrees that the annual physical inventory required for FY2023 was not completed. As a result, the existence, location, condition, and accountability of all assets could not be fully verified during the audit period. To address this issue, Section 3 of the CNMI Property Management Policies and Procedures Manual was updated on September 9, 2024, changing the physical inventory requirement from an annual inventory to a biennial (every two years) inventory cycle. Property Management Branch is currently conducting physical inventories and random asset audits throughout the Commonwealth. These efforts include verifying asset locations, confirming accountability, reviewing asset condition and operational status, reconciling inventory records, and identifying assets that require transfer, survey, repair, replacement, or other corrective action. These inventory and reconciliation efforts are already underway and will continue while the SOP is finalized and implemented. Together, these measures will strengthen accountability, improve asset management practices, and help ensure compliance with federal and Commonwealth property management requirements. Proposed Completion Date: Ongoing

Management agrees with this finding and acknowledges the seriousness of the reported material weakness and material noncompliance related to equipment management for federally funded assets. To remediate this finding, the Fund will establish a comprehensive, centralized fixed asset and equipment register that specifically identifies federally funded equipment and links each applicable asset to the related federal award information. The register will include, where applicable, asset description, serial number or other identifying number, acquisition date, acquisition cost, percentage of federal participation, award identification, location, use, condition, inventory date, and disposition data. Management will also conduct a full physical inventory to establish a verified baseline and implement recurring inventory procedures at least every two years. Corrective action plan: • Create a centralized equipment register for all federally funded equipment and cross-reference each asset to the related federal program, award year, and other available grant or assistance documentation. • Perform a complete physical inventory of federally funded equipment to establish a baseline inventory and validate existence, location, condition, and identifying information. • Reconcile the physical inventory results to accounting records and the centralized register, and research all variances. • Implement procedures for timely recording of acquisitions, transfers, impairments, disposals, and retirements, including retention of supporting documentation. • Adopt written equipment management procedures addressing safeguarding, tagging where practical, periodic review, disposition approvals, and compliance monitoring. • Schedule recurring physical inventories at least every two years, with interim updates for additions, disposals, and transfers performed throughout the year. Responsible party/role: Business Office Manager and in coordination with Operations/Network Management and oversight by the General Manager. Implementation timeline: The centralized federally funded equipment register will be established within 90 days of issuance of the audit report. The initial full physical inventory and reconciliation will be completed by June 30, 2026. The recurring inventory cycle will be formally scheduled upon completion of the baseline inventory and performed at least every two years thereafter. Management further intends to monitor compliance with federal equipment management requirements as part of its ongoing grant and award administration process. Where historical federal award information is incomplete, management will work from available accounting records, grant files, procurement records, and other supporting documentation to reconstruct asset history to the extent practicable.

Finding No.: 2023-014 AL Program: COVID-19 84.425A/84.425X Education Stabilization Fund Area: Equipment and Real Property Management Questioned Costs: Undeterminable Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the audit findings and recognizes the systemic nature of the deficiencies in equipment management. We acknowledge that the current decentralized approach to safeguarding and maintenance is insufficient to meet the standards of 2 CFR §200.313. PSS is committed to implementing a district-wide, standardized asset management framework to protect federally funded property. Financial and Grants Management policies procedures were promulgated in a SOPs on September 18, 2024. The financial management system was subsequently changed to Tyler Munis to conform with CNMI central government requirements which will enhance capabilities. The SOPs and the Tyler Munis implementation are under review by an external consultant and recommendations made to improve documentation of cost allowability have been received. Payment procedures are being addressed in a separate SOP. Corrective Action Plan: To remediate these findings and ensure consistent compliance across all 27+ locations, PSS will implement the following: I. Capital Asset Listing Enhancement: PSS will immediately update the master inventory database to include all data fields required by 2 CFR 200.313(d)(1). A system-wide data validation will be conducted semi-annually or greater to ensure these fields are populated for all existing federal assets. II. Uniform Safeguarding and Maintenance Guidance: PSS will develop and issue a mandatory guidance on Uniform Safeguarding and Maintenance. This will provide standardized maintenance schedules and safeguarding protocols (e.g., specific tagging requirements and secure storage standards) that must be adopted by every school and office. This eliminates the "lack of standardized controls" across different locations. III. Standardized Maintenance Logs: PSS will require all locations to utilize a standard "Equipment Maintenance Log." This log will serve as the primary documented evidence that maintenance procedures are being performed. IV. Standard Operating Procedures and Policies: PSS will finalize SOPs and policies internal controls and specifically allowability determinations and vendor payments that are currently in draft including an analysis rubric and checklist for review. Where necessary, program specific supplemental guidance for allowability determinations will be provided. PSS central office staff participated in live training in October 2025 regarding allowability of costs. Refresher training on cost principles will be required annually for staff making allowability determinations. Payment processes will be added to this training. Proposed Completion Date: September 2026 Name of Contact Person and Title: Contact: Michael Jason A. Babauta, Chief Procurement & Supply Officer Email Address: michael.jason.babauta@cnmipss.org

Finding No.: 2023-011 AL Program: 84.403 Consolidated Grants to the Outlying Areas Area: Equipment and Real Property Management Questioned Costs: Undeterminable Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the finding and recommendations regarding Equipment and Real Property Management. We acknowledge that current decentralized practices have led to inconsistencies in asset record-keeping and maintenance. PSS is committed to fully aligning its internal policies with 2 CFR §200.313 to ensure the integrity and protection of all federally funded assets. Property management and inventory control processes were promulgated in the Procurement and Supplies SOP on September 18, 2024. The SOP is under review by an external consultant and recommendations made to expand property management and inventory control into a separate SOP. PSS central office has contacted the State Infrastructure Technology Department for additional information about an existing inventory tracking system and its potential for implementation and integration with the new financial management system, Tyler Munis. (See 2023-0007) Corrective Action Plan: To remediate these deficiencies and ensure consistent compliance across all locations, PSS will execute the following: I. Comprehensive Asset Data Update: PSS will redesign the Master Capital Asset Listing to include all federally mandated fields and the specific physical condition of each asset. A one-time district-wide data validation check will be conducted to populate these missing fields. II. Standardized Maintenance and Safeguarding Framework: PSS will develop a Unified Asset Protection Guidance that establishes mandatory safeguarding protocols and maintenance schedules for all equipment types. This framework will serve as the minimum standard for all schools and offices, requiring them to maintain localized logs that prove equipment is being serviced and secured. III. Standard Operating Procedures and Policies finalized: PSS will include more detail on property management and inventory control. Identify and evaluate the use of a digital inventory management system with the intent, if feasible, to implement within the next year. PSS staff at each school and in the central office will be identified as property custodians held accountable for annual inventory and property management of assigned assets. Training to be required annually for these personnel. Proposed Completion Date: September 2026 Name of Contact Person and Title: Contact: Michael Jason A. Babauta, Chief Procurement & Supply Officer Email Address: michael.jason.babauta@cnmipss.org

Finding No.: 2023-007 AL Program: 84.027 Special Education Cluster - Grants to States (IDEA, Part B) Area: Equipment and Real Property Management Questioned Costs: Undeterminable Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the findings. We recognize that our current capital asset records and decentralized maintenance practices do not fully meet the rigorous data and oversight standards of 2 CFR §200.313. Property management and inventory control processes were promulgated in the Procurement and Supplies SOP on September 18, 2024. The SOP is under review by an external consultant and recommendations made to expand property management and inventory control into a separate SOP. PSS central office has contacted the State Infrastructure Technology Department for additional information about an existing inventory tracking system and its potential for implementation and integration with the new financial management system, Tyler Munis. PSS is committed to a comprehensive overhaul of our inventory management system to ensure full compliance and better protection of federal property. Corrective Action Plan: To address the deficiencies in recordkeeping, safeguarding, and physical verification, PSS will implement the following: I. Asset Listing Remediation: PSS will update the Master Capital Asset Listing to include information such as asset condition. II. Standardized Safeguarding & Maintenance Guidance: PSS will finalize SOPs and policies to include more detail on property management and inventory control. PSS will develop and distribute a district-wide equipment maintenance & safeguarding guidance. This will establish the minimum required procedures for all schools and offices, including standardized logs for routine maintenance and specific security protocols (e.g., tagging, restricted access, and secure storage) to prevent loss or theft. III. Formal Inventory Certification: To resolve the issue of missing count sheets, PSS will implement a standardized annual inventory process. This will require each location custodian to submit a signed and dated "Physical Inventory Certification" along with the count sheets to be verified by Procurement personnel. No inventory will be considered complete until the Central Office verifies that the custodian list matches the asset records. PSS staff at each school and in the central office will be identified as property custodians held accountable for annual inventory and property management of assigned assets. Training to be required annually for these personnel. Proposed Completion Date: September 2026 Name of Contact Person and Title: Contact: Michael Jason A. Babauta, Chief Procurement & Supply Officer Email Address: michael.jason.babauta@cnmipss.org

We will give the instructions to the Property Division of the Municipality to update the inventory related to equipment, furniture and vehicles. However, we recognize that the construction in progress and several real properties and infrastructure assets are not recorded in our capital assets records. To correct this situation, we will give instructions to the Property Division of the Municipality to start identifying all the real property and infrastructure owned by the Municipality and start a process of gathering the necessary information related to the cost, completeness, and ownership of its real property and infrastructure assets, to comply with the requirements. Implementation Date: During fiscal year 2025-2026 and during the next fiscal years.