Corrective Action Plans

Context: For the I sample item tested, we noted the School Corporation expended $500,000 on septic tank upgrades in the prior audit period which was charged to the ESSER III (84.425U) grant award. It was noted only $311,614 of these capital asset acquisitions were reported on the capital asset listing for the School Corporation as of June 30, 2024. Contact Per on Responsible for Corrective Action: Michele Harrison/ Corporation treasurer Brian Byrum / Superintendent Contact Phone Number: M. Harrison:765-492-5101 B. Byrum: 765-492-5102 Vie" s of Responsible Official: We concur with the finding. Description of Correcti e Action Plan: Our capital asset inventory is contracted out through Brett Lewis from Adtech. The management team contacted Mr. Lewis with the finding. The correct amount will be added to the next capitol asset inventory. Anticipated Completion Date: 3/7/2025

Context: For testing of Equipment and Real Property Management, 1 of 2 sample items tested, we noted the School Corporation expended $348,030 on roof renovations which was charged to the ESSER II (84.425D) 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. Additionally, we noted the School Corporation’s capital asset listing did not contain all the required information, including the source of federal funding for the property, outlined in the criteria above. Contact Person Responsible for Corrective Action: Brittany Treesh Contact Phone Number: 260-357-3185 Views of Responsible Official: The school corporation concurs with the finding. Description of Corrective Action Plan: The school corporation will implement additional internal controls. Business Manager and Deputy Treasurer will expand object codes on the monthly expenditure report to keep track of project progress. Once project is completed both Business Manager and Deputy Treasurer will ensure the project has been updated and entered in the capital asset software. Anticipated Completion Date: The Business Manager will implement this procedure March 2025.

Context: The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal years 2022-2023 and 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. Contact Person Responsible for Corrective Action: Brittany Treesh Contact Phone Number: 260-357-3185 Views of Responsible Official: The school corporation concurs with the finding. Description of Corrective Action Plan: Garrett-Keyser-Butler’s Business Manager will work closely with the Special Education Cooperative Treasurer and DeKalb Eastern Business Manager during the grant process and make sure all required documents are collected. Anticipated Completion Date: The Business Manager will implement this procedure March 2025.

Finding 2023-002: Inventory Report: This is a repeat finding from the previous audit report, identified as finding number 2023-002. The school does not have internal controls and procedures to ensure a physical inventory is conducted at least every two years. • Response: Response: we will work with Jim Miller and Chris Ashmore to complete a physical inventory of all capital assets by September 30, 2025. Responsible Person/Position: Rod Iberg/ COO

This finding was brought to Management January 16, 2025. It involves significant cross-functional work including, but not limited to, Grants, Procure-to-Pay, Information Technology, Warehouse Operations, and Fine Arts. A group will come together in February 2025 representing these areas to develop a comprehensive action plan. That plan will be shared with the Internal Audit Committee and Board. It will include timelines and responsible parties, which Internal Audit staff will monitor.

Context: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Contact Person Responsible for Corrective Action: Lisa Baker, Business Manager/Treasurer Contact Phone Number: 765-664-0624 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: The School Corporation is in the process of manually extracting and transferring fixed assets data from a database to a spreadsheet to allow the deputy treasurer access to the fixed assets data. This will allow the deputy treasurer to enter all assets as described in our board-approved policy into the updated fixed assets system. At least every six months, the business manager will generate a report from the financial software that will include object codes for purchases over $10,000 and for construction and verity that all assets have been added to the fixed assets spreadsheet. Currently, the business manager maintains the fixed assets database because it is not accessible to the deputy treasurer. It is the intent of the School Corporation to segregate these duties. The current fixed assets databased has been updated to include all flooring purchases that were previously missed. Anticipated Completion Date: We anticipate that the new fixed assets spreadsheet will be created and the data will be entered by December 31, 2025.

Condition: The University did not complete a physical inventory of the property within the last two years. Planned Corrective Action: During the 3rd calendar quarter each year, create a report of externally funded equipment purchases. Sometime within the nine months ending June 30th and using the report created, perform a physical inventory of all equipment purchased with federal awards. Save physical inventory records with images and locations with company records. Contact person responsible for corrective action: Amy Smitchols, Senior Director of Finance and Accounting Anticipated Completion Date: 02/07/2025

Name of Contact Person: Renee Orange, Assistant Controller Corrective Action: Owensboro Health, Inc. will implement an updated policy for the recipient of the CFDA #93.965 grant (i.e., the Coal Miners’ Clinic) which will ensure that (1) the clinic performs a physical inventory of property purchased with federal funds on an annual basis, (2) the results of the inventory are reconciled with the property records, and (3) this asset reconciliation is monitored and directed by the Authorized Official. Proposed Completion Date: February 28, 2024

Auditor recommendation: The auditor recommends the City enhance the design of its control activities and create a tool to assist in tracking and maintaining equipment purchased with federal funds. Additionally, the employees responsible for the inventory should be trained to ensure understanding of the Uniform Guidance requirements relevant to equipment and real property management. Periodic review should also be designed to evaluate compliance with relevant requirements. Views of Responsible Officials and Planned Correc􀀁ve Ac􀀁on: The City agrees with this finding. During FY24 the Airport Manager hired a Heavy Equipment Mechanic. This posi􀀁on is responsible for tracking, maintaining, and repairing Airport equipment. Logbooks are now being kept for all equipment. In CY25 the Finance Director, the Accoun􀀁ng Officer, and the Grants team will work with the Airport team to improve internal controls over equipment purchased with federal funds. Policies and procedures will be developed to ensure that an accurate physical inventory that contains the informa􀀁on required by the Uniform Guidance is conducted at year-end. The City is in the process of contrac􀀁ng with a vendor to assist the Airport with federal compliance and provide training for Airport staff on relevant Uniform Guidance requirements. The vendor’s scope of work will include helping with developing and documen􀀁ng policies and standard opera􀀁ng procedures related to equipment management. Tools will be developed to facilitate tracking and maintaining equipment purchased with federal funds. Addi􀀁onally, the Airport Department plans to create a Grant Accountant posi􀀁on which will be responsible for reconciling grant expenditures monthly. The Grant Accountant will also work with the Airport Heavy Equipment Mechanic to ensure that the inventory lis􀀁ng includes the funding source used for the purchase (i.e. federal or non-federal). In CY25 the City plans to provide Uniform Guidance to staff which will include capital assets and equipment informa􀀁on, and the specific requirements for the year-end inventory. Responsible Official: Emily Oster, Finance Director, James Harris, Airport Manager, Airport Heavy Equipment Mechanic, Matthew Bonifer, Accounting Officer, Erika Lujan, Grants Manager Timeline and Es􀀁mated Comple􀀁on Date: June 30, 2025

FINDING 2024-002 Finding Subject: Education Stabilization Fund – Equipment and Real Property Management Summary of Finding: The School Corporation failed to add improvements paid for out of ESSER monies to the capital asset listing and complete physical inventories were not completed. Contact Person Responsible for Corrective Action: Jessica Espinoza Contact Phone Number and Email Address: (219)836-9111 jbespinoza@munster.us Views of Responsible Officials: We concur with the finding. The School Corporation plans to complete a physical inventory of assets this year and every two years, thereafter. Description of Corrective Action Plan: The Director of Operations will share inventory listings with each building. An STM employee will conduct the inventory and it will be reviewed by a supervisor and signed off on. The sources of funding will also be added to the School Corporation’s inventory listing to easily identify equipment paid for out of Federal dollars. Anticipated Completion Date: Fall 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: 84.425D, 84.425U Federal Award Numbers: S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Context: The School Corporation expended $1,367,798 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. Contact Person Responsible for Corrective Action: Andrew J Nicodemus, Business Manager Contact Phone Number: 765-362-2342 x6 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: Crawfordsville Community School Corporation plans to review all internal control procedures, including the controls over Equipment and Real Property Management for the Education Stabilization Fund. After this review, we will implement a system to ensure that the proper procedures are completed and fully integrated into our internal control structure. We will implement additional training for all staff involved and will have a designated place where this support is kept. Anticipated Completion Date: We expect this Corrective Action to be implemented as of the current date due to this grant being completed and the School Corporation is not expected to have these grant funds in the future.

During our current year audit, we noted that capital outlay expenditure codes were not reviewed with an appropriate level of precision to ensure all fixed asset purchases worthy of capitalization were added to the District’s fixed asset register. We recommend a reconciliation be prepared between the capital outlay expenditure codes and the fixed asset register to ensure that all items requiring capitalization as per District policy are captured, as well as a review of capital projects expenditures to date to determine if they are complete. We acknowledge that the District has made the necessary edits to the fixed asset register for the purposes of appropriate financial statement presentation. The District has reviewed the process for tracking fixed assets with the necessary staff members to ensure that paperwork is received timely from the various departments. Written protocols will be established and maintained in the Business Office Reference Guide. This will ensure that all assets are recorded in the fixed asset software in a timely manner. Status: In process Implementation Date: December 2024

Context: For 1 of 3 sample items tested, we noted the School Corporation expended $1,114,159 on building 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: David Rowe, Business Manager Contact Phone Number: 765-298-6505 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: Qualifying building renovations will be added to the capital asset listing going forward. Anticipated Completion Date: Begin immediately, ongoing

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND MATERIAL NONCOMPLIANCE – U.S. DEPARTMENT OF EDUCATION – PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, COVID-19 – EDUCATION STABILIZATION FUND – FEDERAL ALN 84.425 2024-003 Material Weakness in Internal Control Over Compliance and Material Noncompliance With Equipment and Real Property Management Requirements Finding Summary 2 CFR § 200.313 requires the District to designate fixed assets purchased under federal programs and to maintain related property records, including a description of the property, a serial number or other unique identification number, the source of funding for the property (including the federal ALN), 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 sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least every two years. During our audit, we noted that the District did not have sufficient controls in place within the COVID-19 – Education Stabilization Fund federal program to specifically identify federally funded fixed assets and maintain the required records as noted above to assure compliance with federal equipment and real property management requirements. The District does not have a process or procedure in place for a physical inventory of property acquired with federal funds. Two fixed assets purchased with federal awards were not maintained in accordance with federal equipment and real property management requirements. Corrective Action Plan Actions Planned – The District plans to review its internal control procedures to ensure future compliance with the federal compliance requirements specific to equipment and real property management requirements for the COVID-19 – Education Stabilization Fund federal program. Official Responsible – Kathleen Heider, Finance Director. Planned Completion Date – June 30, 2025. Disagreement With or Explanation of Finding – The District is in agreement with this finding. Plan to Monitor – Kathleen Heider, Finance Director, will ensure that federally funded fixed assets are distinguishable within the District’s finance system. The District also intends to review its control procedures relating to equipment and real property management requirements to ensure compliance for future federal awards expenditures.

Recommendation: We recommend the University ensure that a physical inventory over equipment is completed at least every two years. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Questioned Costs: N/A Action taken in response to finding: This is a repeat finding that was first presented to the University in conjunction with the release of the 2023 audit report in May 2024. The 2023 audit was completed after substantially all of Fiscal Year 2024 had elapsed, so there was not adequate time for the University to fully implement corrective action. While Langston has a plan for biennial equipment verification, the University commits to strengthening its physical inventory processes for tracking fixed assets. Name(s) of the contact person(s) responsible for the corrective action: Mr. Chris Kuwitzky, Vice President for Fiscal and Administrative Affairs. Planned completion date for corrective action plan: March 2025

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.