Corrective Action Plans

Finding Number: 2023-001 Program Name/Assistance Listing Title: COVID-19 Education Stabilization Fund Assistance Listing Number: 84.425U Contact Person: Mercedes Villafana, Procurement Director and Kim Polyhronakis, Purchasing & Warehouse Coordinator Anticipated Completion Date: December 31, 2024 Planned Corrective Action: The District does not believe that an internal control issue exists but does acknowledge that an error occurred while reviewing the capital project documentation. The purchasing and accounts payable departments will collaborate and review all of the capital expenditures to ensure that documentation is included in the review of the applicable capital asset reporting totals.

HJF will implement the following increased measures in FY 2024: 1. Property control staff will continue the increased use of inventories by exception. This will include reviewing maintenance records for laboratory equipment from both vendors and military installations performing these tasks on HJF’s behalf. Maintenance performances are considered physical touches and may be used for inventory counting purposes. 2. Property control staff will continue to prioritize inventories by dollar amount with a secondary emphasis on units. 3. HJF will continue to include program managers and or supervisors in the distribution of the monthly inventory deficiency reports currently received by property custodians and they remain responsible for reviewing any deficiencies.

Management will develop internal control procedures for tracking fixed assets purchased with federal funds to ensure the District is complying with the Equipment and Real Property compliance requirement.

Management will develop internal control procedures for tracking fixed assets purchased with federal funds to ensure the District is complying with the Equipment and Real Property compliance requirement.

Finding 2023-006 – Education Stabilization Fund – Equipment Contact Person Responsible for Corrective Action: Felicia Wolfington Contact Phone Number: (812) 936-4474 x232 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: The school corporation will perform a documented, physical inventory of property at least once every two years and reconcile that with property records. Anticipated Completion Date: 06/30/2024

CORRECTIVE ACTION PLAN December 18, 2023 The Kutztown Area School District respectfully submits the following corrective action plan for the fiscal year ended June 30, 2023. Name and address of Independent Public Auditing Firm: Herbein & Company 2763 Century Blvd. Reading, PA 19610 Audit Period: July 1, 2022 - June 30, 2023 The findings from the June 30, 2023 schedule of findings are discussed below. Section III - Federal Awards Findings and Questioned Costs 2023-001 EQUIPMENT AND REAL PROPERTY MANAGEMENT - SIGNIFICANT DEFICIENCY Federal Program Education Stabilization Fund ALN 84.425D - COVID-19 - Elementary Secondary School Emergency Relief Fund (ESSER II), contract #200-210215 ALN 84.425U - COVID-19 - Elementary Secondary School Emergency Relief Fund (ESSER III), contract #223-210215 Criteria In accordance with Uniform Guidance Title 2 CFR 200.313, a non-Federal entity may not encumber equipment without prior approval of the Federal awarding agency. Condition The District charged costs for server and firewall purchases which met the definitions and thresholds requiring prior written approval, however, the District’s grant applications did not include these purchases as part of the budget submitted and they did not obtain prior approval through other means. Cause The District revised their original plan for spending of the ESSER funds and there was oversight in completing a revised budget to reflect the changes which included purchases that required pre-approval. Information regarding the pre-approval requirement for equipment purchases was not properly communicated between federal program leadership and the business office. Controls in place over equipment and real property management did not detect the pre-approval requirement prior to encumbering the cost using federal funds. Effect Costs encumbered without required prior approval are unallowable. The District subsequently communicated with the Pennsylvania Department of Education (PDE), the passthrough agency, and submitted budget revisions including these costs which were approved by PDE and deemed allowable. Questioned Costs None. Context We examined all equipment purchases charged to the Education Stabilization Fund during the year. Two of the three invoices examined had purchases totaling $110,986 which required pre-approval. Pre-approval was not obtained for either purchase; however, they were subsequently approved via interim budget revisions. Repeat Finding No. Recommendation We recommend the District revisit procedures for reviewing program guidelines and requirements prior to approving and incurring costs for equipment and real property from federal funding sources. Action Plan The District had made revisions to the original ESSER budgets to utilize ESSER funds to include upgrades technology infrastructure. The magnitude of these expenditures created an unrecognized need for preapproval of capitalized equipment from the Federal award agency. While all other purchasing requirements were properly documented, the District recognized the need for the additional level of approval subsequent to the purchase of the equipment. The necessary ESSER prior approval for the capital expenditures was applied for and awarded by the Federal awarding agency. Additionally, internal processes have been added to purchasing with grant funds. Any future changes to grant budgets will be requested prior to purchasing. Anticipated Completion Date Action plan fully implemented as of report date. If the Department of Education has questions regarding this plan, please contact Elizabeth A. Siteman at 610-683-7361, extension 5526 or via email at esiteman@kasd.org. Sincerely, Elizabeth A. Siteman Business Administrator

Response and Corrective Action Plan: The District will review current processes for purchasing equipment within Iowa Department of Education approval amounts or seek amendments when approval cost limits cannot be met.

2023-002 EQUIPMENT/REAL PROPERTY MANAGEMENT Program: Education Stabilization Fund Federal Assistance Listing Number: 84.425D Federal Agency: U.S. Department of Education Pass-Through Agency: Arizona Department of Education Grantor Number: 21FESSII-111389-01A Questioned Costs: $-0- Type of Finding: Noncompliance (Other Matter), significant deficiency in internal control Compliance Requirement: F. Equipment/Real Property Management Condition/Context: During our review of property and equipment purchased with federal funding, one asset out of five tested, was unable to be found. Criteria: The District must follow 2 CFR sections 200.313 which requires that: 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. Cause: Management oversight. Effect: Noncompliance and internal control weakness. Recommendation: We recommend the District to review its internal control procedures over property and equipment reporting to ensure assets are properly tagged, in the location identified on the corresponding listing, and a physical inventory is maintained to ensure all assets can be found. Corrective Action Plan: The District has implemented property and equipment procedures to ensure all assets are tagged and an inventory is done to ensure assets are in the location identified on the applicable listing. Planned completion date for corrective action plan: For the period ending June 30, 2024. Name of the contact person responsible for corrective action: Ginger Stevens, Director of Finance and Business Services.

Finding 2023-002 Recommendations: The District should have an employee compare the third party’s equipment inventory records with the financial records for completeness. An employee should also be present during the physical equipment inventory each year and maintain records of proof for its occurrence. Lastly, the current inventory records should also be altered in order to be maintained with information required by 2 CFR section 200.313(d)(2) 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 of disposal and sales price of the property. Action Taken: We agree with the recommendation. Our targeted implementation date is June 2024.

2023-008 – Equipment and Real Property Management – Material Weakness in Internal Controls over Compliance 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: In order to track assets acquired with federal funds, the university will update its equipment tracking system and will conduct a physical inventory of its fixed assets at least every two years. Name of Responsible Party: 1. Aaron Krantz, IT Director 2. Jeffrey Beehler, Physical Plant Director 3. Alysia Stevens, Controller 4. VP of Administration/CFO 5. Dr. Andrew Sund, President Anticipated completion date: 6/30/2024

The District will append the notes field in our inventory records to include the grant funding year and source, for example, "22-23 ESSER, 989".

On December 12, 2023, we met with the IT, Maintenance, and Grant departments to discuss tracing technology and other equipment inventory records to the funding source. The existing District inventory list will be updated to include the funding source, acquisition date, and acquisition cost. Board Policy 626 - Federal Fiscal Compliance and related procedures have been updated to reflect the missing categories. Full cycle inventory will be conducted on a bi-annual basis to ensure the accuracy of inventory records. We will explore using the Assets Inventory module available in our CSIU software. This module allows us to record the Funding Source; run reports so we have a detailed inventory list; and update the records accordingly.

Finding 2023-005 Personnel Responsible for Corrective Action: Senior Accountant – Trish Dinovelli Anticipated Completion Date: June 2024 Corrective Action Plan:The University has implemented guidelines for categorizing equipment and supplies. Additionally, HSSU is presently exploring an Asset Management software solution to facilitate inventory tracking and intends to carry out biannual inventory audits.

The District will contract with Questar III BOCES no later than 11/30/23 for engagement in a complete fix asset inventory which will include the record management of the fixed assets.

CORRECTIVE ACTION PLAN Finding 2023-001 General Ledger Accuracy The due date of the original draft trial balance to begin the audit has limited the staff ability to ensure all entries and adjustments are made prior to submitting. In addition, the finance department underwent significant changes at the end of the fiscal year with transitioning to new leadership and 100% staff turnover throughout the closing period. Going forward, management will ensure an accurate timely year end closing as follows: Monthly Closing Process - Finance will be implementing a formal monthly closing process, managed directly by the Controller, and using deadlines and checklists to make sure all expenses are settled properly and timely. All regular monthly reconciliation processes will be assigned to specific positions and actively managed by the controller and overseen by the finance director. A report on the monthly closeout process will be provided to the CEO by the 20th of each month. Annual Closing Process - CSA management will meet with auditors to develop a closing timeline that will allow more adequate time to complete the final draft trial balance. The finance director and controller will set deadlines and assignments for specific closing tasks and a hard deadline for final closing and time for the finance director to perform a closing review of financials. Renee Olson, CSA Finance Director, will be the individual primarily responsible for implementing this corrective action. Estimated date of completion is January 31, 2024. Finding 2023-002 Equipment and Real Property Management Management intends to add additional measures to identifying capital assets so that there is not an overreliance on the general ledger review. An accounting manager position has been created and filled within the past 3 months with the responsibility of inventory management and updating property records to include all required information. The finance director will maintain a separate folder of all invoices over $5,000 to be considered for capitalization. The general ledger will be further examined each month to ensure all items have been properly identified going forward. The list of assets to be capitalized will be reviewed by the Finance Director and Program Managers quarterly to ensure all assets are properly identified for annual capitalization and depreciation and that all required information is recorded. Renee Olson, CSA Finance Director, will be the individual primarily responsible for implementing this corrective action. Estimated date of completion is February 28, 2024.

2023-001 – Equipment management Management agrees with the recommendations and will improve documentation and tracking of equipment by ensuring tags and other identifying numbers are accurately entered into the system. While all equipment selected for testing was located, maintained and safeguarded there is room for improvement in documentation and data entry into the system. As of May 2023, the University has hired a full-time employee responsible for the oversight and maintenance of the federal equipment process and changes were already implemented prior to this discovery to improve recording and tracking of equipment. Additional procedures are under consideration including community education on asset documentation and processes as well as a review of accounts for funding source. These changes will ensure that equipment will be entered accurately in the system and that only equipment purchased with federal dollars will be classified as such. Implementation of additional controls will be completed by May 2024, prior to the next physical inventory cycle.

2023-002 – Equipment Management Cluster: Research and Development Cluster (“R&D Cluster”) Grantor: Various - All R&D Cluster awards with equipment Award Name: Various - All R&D Cluster awards with equipment Award Year: FY2023 Assistance Listing Number: Various – All R&D Cluster awards with equipment. Pass-through entities and ID Number: Various - All R&D Cluster awards with equipment Management acknowledges that, while a physical inventory of equipment is performed at least every two years, reconciliation procedures and documentation of such reconciliation can be improved. Specifically, by June 30, 2024, an aggregated listing of federally funded equipment will be maintained and reconciled to the results of the third-party equipment inventory and will ensure that all federally funded equipment has been counted within the last two years. Further, follow-up inquiries related to assets included in the University’s aggregated listing, but not identified during the third-party inventory observation will be documented and aggregated as well. Lastly, new equipment identified during the third-party inventory observation which is not included on the University’s aggregated listing of federally funded equipment, potentially because it is below the capitalization threshold or is not federally funded, will be investigated to ensure proper exclusion with results documented. These updated processes will be implemented jointly by the Capital Asset Administrator and Associate Director of Research Administration Compliance.

Finding 2023-003 Recommendation: We recommend that management resume the inventory counting every two years View of Responsible Officials and Planned Corrective Actions: The University will immediately resume biannual physical inventory review and count on a regular schedule. Individual Responsible for Corrective Action: Thomas Kaeo, Director, Office of Research Services, 610-660-1206, tkaeo@sju.edu Anticipated Completion Date for Corrective Action: The Planned Corrective Actions will be immediately implemented

CORRECTIVE ACTION PLAN AUDITOR FINDING: 2023-001 AREA: Equipment Compliance It was noted that (1) equipment records were not maintained in accordance to 2 CFR 200.313, in which equipment is not identifiable with serial numbers or tags; (2) internal controls were not in place to safeguard equipment at various locations. It is recommended for the Organization to tag all equipment and perform a physical inventory count in order to create a complete equipment listing within its asset management system. In addition, it is advised for the client to create an agreement between Organization and location/holder of property that clarifies ownership as well as compliance requirements for equipment purchased with federal funds with respect to safeguarding and maintaining such equipment. Lastly, for the Organization to establish an equipment policy and train grant managers in the requirements associated with equipment management and federal compliance requirements. CLIENT PLANNED ACTION: The Organization agrees with the finding. All equipment will be tagged in order to specifically identify it and alert that it was purchased with federal funds, and to aid in inventory control. A subaward document has been created that clarifies ownership, compliance requirements, and the need to safeguard and maintain equipment received. This will be presented to and signed by each organization who receives equipment purchased with federal funds through Billings Clinic. Grant managers that are in charge of purchasing equipment for other sites under the conditions of a federal grant, will be trained in the requirements associated with equipment management and federal compliance requirements. The grant manager will maintain an equipment list of all items with required information, including identifying number, location placed, etc. CLIENT RESPONSIBLE PARTY: Stephanie Fitch, Grant Manager COMPLETION DATE: October 1, 2023

Finding No.: 2022-015 AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Equipment and Real Property Management Questioned Costs: Unknown Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC / Geraldine Cruz, Procurement Services Director Corrective Action Plan: The Procurement Services Division agrees with this finding. The CNMI has recently implemented the MUNIS Financial Management System to improve recordkeeping and compliance processes. All equipment and real property records acquired with federal funds will now be entered, tracked, and maintained within MUNIS. Supporting documentation will also be filed in accordance with standardized retention procedures to ensure that accurate and sufficient audit evidence is readily available. Current staff are undergoing formal training on the use of the MUNIS system, with particular emphasis on modules related to asset and property management. This training will ensure staff are fully capable of inputting, maintaining, and retrieving compliance-related records to support audit readiness. The CNMI is actively working on completing the FAIR (Federal Asset Inventory & Reconciliation) project, which aims to reconcile all existing federal property records. Upon completion of this project, a random physical inventory of federal property assets will be conducted to verify accuracy and completeness of records within the system. Results will be documented and used to address any discrepancies. Corrective Action Plan: To support sustained compliance, CNMI will develop internal procedures that align with federal property management regulations. These procedures will define roles and responsibilities, documentation requirements, and timelines for conducting regular physical inventories and system updates. Proposed Completion Date: June 30, 2026

Equipment and Real Property Management College of the Marshall Islands acknowledges the finding and confirms that a new system has been put in place to transition from manual to automated processes for improved recordkeeping and monitoring. The College has implemented the MIP Fixed Asset Module to maintain complete and accurate capital asset records, conduct timely reconciliations, and strengthen asset safeguarding controls. Internal procedures have been enhanced to ensure periodic physical inventory, prompt updates, and independent reviews of capital asset records. The full reconciliation and migration of all capital asset data into the new system is actively ongoing and scheduled to be completed by December 2025. These measures will ensure compliance with federal property management requirements and prevent recurrence of similar issues in the future.

The Government concurs with the auditor's findings and recommendations. The Epidemiology Division has established robust procedures to manage and monitor property and equipment effectively, adhering to Property and Procurement guidelines. All equipment is meticulously inventoried, and employees sign acknowledgment forms listing the items assigned to them, such as laptops or cell phones, with serial numbers clearly documented and safeguarded. However, DOH recognize the need for improved coordination between the Epidemiology Division and Property and Procurement. To enhance asset management, the Department of Health will update our Fixed Asset SOP to require that each division shares its asset inventory with Property and Procurement on a quarterly basis, ensuring more accurate and up-to-date records.

The Government concurs with the auditor's findings and recommendations. VIDE acknowledges the finding regarding the management and documentation of federally funded equipment. VIDE will ensure the reliability of its asset tracking system and ensure the maintenance of a centralized record of all assets acquired with federal funds, to include property description, serial number or other identification number, source of property, titleholder, acquisition date, cost of the property, percentage of Federal participation, location, use and condition of the property, and disposition information. The Procurement Division will schedule quarterly inventory audits and reconciliation processes to ensure all federal program assets are accounted for and that records align with actual inventory. Any discrepancies identified during these audits will be resolved promptly. The Fixed Asset Director will create a protocol to facilitate regular communication and updates among Programs/Divisions responsible for asset acquisition, maintenance, and recordkeeping. Monthly status reports on federal asset records will be required from each Program/Division to ensure data accuracy and timely updates.

The Government concurs with the auditor's findings and recommendations. VIDE acknowledges the finding regarding the management and documentation of federally funded equipment. VIDE will ensure the reliability of its asset tracking system and ensure the maintenance of a centralized record of all assets acquired with federal funds, to include property description, serial number or other identification number, source of property, titleholder, acquisition date, cost of the property, percentage of Federal participation, location, use and condition of the property, and disposition information. The Procurement Division will schedule quarterly inventory audits and reconciliation processes to ensure all federal program assets are accounted for and that records align with actual inventory. Any discrepancies identified during these audits will be resolved promptly. The Fixed Asset Director will create a protocol to facilitate regular communication and updates among Programs/Divisions responsible for asset acquisition, maintenance, and recordkeeping. Monthly status reports on federal asset records will be required from each Program/Division to ensure data accuracy and timely updates.

The Government concurs with the auditor's findings and recommendations. The Asset Management Division (AMD) has consistently followed Federal equipment and maintenance guidelines. Assets are tagged, and records are created using the Tyler Munis Resource Planning system (ERP). The serial numbers, model numbers, acquisition dates, cost of equipment, and agency that received the items are included. In 2022, AMD conducted inventory for four agencies, ensuring that all assets were accounted for and managed according to Federal regulations. Additionally, AMD have completed the Standard Operation Policies and Procedures (SOPP), which is currently in the approval process. Implementing SOPP is essential to enhancing internal controls and ensuring compliance with Federal regulations. Training sessions will be conducted for fixed assets employees across all Government agencies to provide detailed insights and updates on the processes. It has been identified that additional staff will be required to support this initiative effectively.