Corrective Action Plans

Procurement Recommendation: We recommend that management develop, adopt, and implement written procurement and conflict-of-interest policies that comply with Uniform Guidance requirements. These policies should address procurement standards, including methods of procurement and oversight, and establish standards of conduct governing conflicts of interest for employees, officers, and agents involved in the administration of federal awards. Management should also ensure that these policies are communicated to relevant personnel and applied consistently. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: In 2024 new maintenance staff was employed 3 bids are required for capital projects. If one contractor has personal relationship with employee conflict of interest form is filed. Name(s) of the contact person(s) responsible for corrective action: Kristin Cowan Planned completion date for corrective action plan: July 2024

Finding No.: 2023-032 AL Program: COVID-19 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Procurement and Suspension and Debarment Questioned Costs: $4,477,879 Contact Person(s): Tracy B. Norita, Secretary of Finance / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Condition 1: The Procurement Services Division respectfully disagrees with this finding. With respect to Contract No. 32300191, Procurement Services acknowledges that only one newspaper advertisement was located within the procurement file during the audit review. Procurement Services believes this was primarily the result of recordkeeping deficiencies that occurred during a period of significant staffing shortages, staff transitions, and limited knowledge transfer between outgoing and incoming personnel. At the time, Procurement Services experienced turnover among key staff responsible for maintaining procurement files, and sufficient training and transition of responsibilities did not occur. Procurement Services acknowledges that the supporting documentation maintained within the file was insufficient to fully demonstrate compliance with the newspaper advertisement requirements. With respect to Contract No. 32300062, Procurement Services respectfully disagrees with the finding. At the time of the procurement, it was the Commonwealth's practice to publicly post solicitations through the Munis Vendor Self-Service system and utilize newspaper advertisements as a supplemental means of notifying vendors and the public of procurement opportunities. For Contract No. 32300062, the solicitation was publicly posted and continuously available through the Munis Vendor Self-Service system for a period of 30 days prior to bid opening. Munis served as the Commonwealth's primary electronic procurement platform and provided vendors with access to the solicitation and related procurement documents throughout the advertisement period. The newspaper notices were intended as supplemental public notice to increase awareness of the solicitation and direct interested vendors to the Munis platform, where the complete solicitation package remained available throughout the solicitation period. Procurement Services' interpretation of the applicable regulation is that the requirement pertains to providing an advertisement period of at least 30 days during which the solicitation is publicly available to prospective vendors. In this instance, the solicitation remained publicly available through Munis for the required 30-day period, while the newspaper notices served as an additional method of notifying vendors of the procurement opportunity and directing them to the official solicitation documents. Finding No.: 2023-032, continued AL Program: COVID-19 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Procurement and Suspension and Debarment Questioned Costs: $4,477,879 Contact Person(s): Tracy B. Norita, Secretary of Finance / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Notwithstanding the foregoing, Procurement Services will continue to strengthen its recordkeeping practices and procurement file management procedures to ensure that all advertisement and public notice documentation is maintained within the procurement file and readily available for future audit review. Proposed Completion Date: Ongoing Condition 2: The Procurement Services Division agrees with this finding. Procurement Services acknowledges that, at the time of this procurement, there was a misunderstanding regarding the respective responsibilities of the procuring agency and Procurement Services for certain procurement functions, including responsibility determinations, award notifications, non-award notifications, issuance of Notices to Proceed, and other procurement administration activities. As a result, some actions that should have been handled through Procurement Services were instead performed by the procuring agency. Since that time, Procurement Services has reviewed and clarified the responsibilities established under the Procurement Regulations and has resumed direct oversight of procurement functions assigned to the Director of Procurement Services, including responsibility determinations, award and non-award notifications, issuance of Notices to Proceed, and related procurement administration activities. To further strengthen oversight and ensure consistency in the administration of contracts, Procurement Services has implemented a process requiring Notices to Proceed to be executed by both the expenditure authority and Procurement Services prior to issuance. This additional review helps ensure that all procurement requirements have been satisfied, contract documents have been properly executed, and the appropriate approvals are in place before contract performance begins. Procurement Services will continue to provide guidance and oversight to ensure procurement actions are processed in accordance with applicable regulations and that required notices and supporting documentation are properly maintained within the procurement file. These measures are intended to improve consistency, strengthen oversight, and reduce the likelihood of similar issues occurring in future procurements. Proposed Completion Date: Ongoing Finding No.: 2023-032, continued AL Program: COVID-19 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Procurement and Suspension and Debarment Questioned Costs: $4,477,879 Contact Person(s): Tracy B. Norita, Secretary of Finance / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Condition 3: The Procurement Services Division agrees with this finding to the extent that the documentation identified by the auditors could not be provided for review. Based on the information, Procurement Services was unable to locate the procurement file or supporting documentation associated with the procurement identified in the finding, including documentation necessary to verify the approvals, signatures, determinations, notices, and other records referenced by the auditors. The procurement identified in the finding involved legal services. Pursuant to § 70-30.3-215(a)(6) of the Procurement Regulations, legal services may be procured through the sole source procurement method. The documentation requirements identified in § 70-30.3-215(b) apply specifically to sole source procurements conducted under § 70-30.3-215(a)(1), where the determination is based upon the existence of only one source for the required supply, service, or construction. Similarly, the documentation requirements contained in § 70-30.3-215(c) apply only to procurements conducted pursuant to § 70-30.3-215(a)(2), (a)(3), or (a)(4). Because the procurement file could not be located and Procurement Services was not involved in the processing or approval of this procurement, Procurement Services is unable to independently verify the existence of the documentation or approvals associated with the procurement. To address this finding, Procurement Services will continue to reinforce procurement requirements applicable to sole source procurements, strengthen procurement oversight and record retention practices, and provide additional guidance to expenditure authorities regarding required approvals, documentation, and routing procedures. Procurement Services will also continue reviewing internal procedures to improve compliance monitoring and ensure procurement files are maintained in accordance with applicable procurement regulations. These corrective actions are intended to strengthen internal controls, improve procurement compliance and documentation practices, and address the concerns identified in this finding. Proposed Completion Date: Ongoing

Finding No.: 2023-032, continued AL Program: COVID-19 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Procurement and Suspension and Debarment Questioned Costs: $4,477,879 Contact Person(s): Tracy B. Norita, Secretary of Finance / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Condition 4: The Procurement Services Division partially agrees with this finding. Procurement Services notes that the transaction was subsequently reviewed for ratification and that a ratification package was prepared. Based on documentation available to Procurement Services, former Director of Procurement Service referenced a Legal Sufficiency Review (LSR) from the Office of the Attorney General in his recommendation. Procurement Services is currently attempting to locate a copy of the referenced LSR for inclusion in the procurement file. Procurement Services further understands that the Office of the Attorney General determined that the matter fell below its review threshold and advised that concurrence by the Secretary of Finance would be sufficient. As a result, the transaction proceeded through the Secretary of Finance for concurrence, and a purchase order was subsequently issued rather than execution of a formal contract agreement. Because Procurement Services has not yet located the referenced Legal Sufficiency Review and supporting correspondence, it is unable to verify the basis for the absence of the Attorney General's signature on the ratification documents. Procurement Services will continue efforts to locate and retain all supporting documentation associated with the transaction. To address this finding, Procurement Services will continue strengthening procurement file documentation, record retention practices, and ratification procedures to ensure that all required approvals, concurrences, determinations, and supporting documentation are maintained within the procurement file and readily available for future review. Proposed Completion Date: Ongoing Condition 5: The Procurement Services Division agrees with this finding. Procurement Services acknowledges that certain expenditures were incurred before the related purchase requisitions and/or purchase orders were approved. Procurement Services agrees that procurement approvals should be obtained before purchases are made or services are performed to ensure compliance with procurement requirements and established internal controls. Based on our review of the transactions identified in the finding, it appears that many of the transactions were processed and approved through Tinian (constitutionally separated government office). At that time, certain procurement activities on Tinian appear to have been administered Finding No.: 2023-032, continued AL Program: COVID-19 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Procurement and Suspension and Debarment Questioned Costs: $4,477,879 Contact Person(s): Tracy B. Norita, Secretary of Finance / Geraldine Cruz, Procurement Services Director Corrective Action Plan: locally and outside the direct review and oversight of Procurement Services. As Procurement Services was not directly involved in processing these transactions, we are unable to determine the specific circumstances that resulted in expenditures being incurred prior to the required procurement approvals. For transactions processed through the Division of Procurement Services on Saipan, Procurement Services has taken steps to reinforce compliance with procurement requirements. Personnel who have been delegated procurement review and approval authority have been issued formal designation letters outlining their responsibilities and approval thresholds. These designation letters specifically require compliance with the CNMI Procurement Regulations, established procurement procedures, and applicable internal controls when reviewing and approving procurement transactions on behalf of the Director of Procurement Services. The designation letters further advise that procurement actions must not proceed without the required approvals and supporting documentation and that failure to comply with procurement requirements may result in administrative action. Procurement Services will continue to provide guidance, training, and oversight to ensure that requisitions, purchase orders, and supporting documentation are properly reviewed and approved before purchases are made or services are performed. These actions are intended to strengthen internal controls, improve compliance with procurement requirements, and reduce the likelihood of similar findings in the future. Proposed Completion Date: Ongoing Condition 6: The Procurement Services Division agrees with this finding. Procurement Services acknowledges the auditors' observation that purchase requisitions could not be provided for certain transactions reviewed during the audit. Procurement Services recognizes the importance of maintaining Finding No.: 2023-032, continued AL Program: COVID-19 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Procurement and Suspension and Debarment Questioned Costs: $4,477,879 Contact Person(s): Tracy B. Norita, Secretary of Finance / Geraldine Cruz, Procurement Services Director Corrective Action Plan: complete procurement files and ensuring that all supporting documentation is properly retained and readily available for review. To address this finding, the Secretary of Finance has issued guidance reaffirming that a purchase requisition is a required component of every procurement transaction. Additionally, Procurement Services has issued guidance to all designated procurement staff approvers reinforcing the requirement that purchase requisitions and supporting documentation must be uploaded and maintained within the procurement file prior to the approval and processing of any procurement transaction. The guidance further requires that purchase requisitions contain sufficient information to support the procurement, including a description of the goods or services being requested, the purpose of the purchase, the intended use of the goods or services, and how the expenditure serves a legitimate public purpose. Designated staff who are approvers have been advised of these requirements and are expected to verify the presence of the requisition and supporting documentation before approving procurement actions. Procurement Services will continue to monitor compliance with documentation requirements and provide guidance and oversight to ensure procurement files are complete, properly maintained, and readily available for audit and compliance purposes. These measures are intended to strengthen recordkeeping practices, improve accountability, and reduce the likelihood of similar findings in future audits. Proposed Completion Date: Ongoing Condition 7: The Procurement Services Division agrees with this finding. Procurement Services acknowledges that approval of the purchase requisitions by the Officials with Expenditure Authority was not evident for certain transactions reviewed during the audit. Procurement Services agrees that purchase requisitions should be approved by the appropriate Official with Expenditure Authority prior to the processing of a procurement transaction to ensure proper authorization and compliance with established procurement requirements. Based on our review of the transactions identified in the finding, it appears that most of the transactions were processed through Tinian (constitutionally separated government office). At that Finding No.: 2023-032, continued AL Program: COVID-19 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Procurement and Suspension and Debarment Questioned Costs: $4,477,879 Contact Person(s): Tracy B. Norita, Secretary of Finance / Geraldine Cruz, Procurement Services Director Corrective Action Plan: time, certain procurement activities on Tinian appear to have been administered locally. As Procurement Services was not directly involved in the processing of these transactions, we are unable to determine the specific circumstances that resulted in the absence of documented approval by the applicable Official with Expenditure Authority. To address this finding, the Secretary of Finance has issued guidance reaffirming that a purchase requisition is a required component of every procurement transaction and must be approved by the applicable Official with Expenditure Authority before the procurement process may proceed. Additionally, Procurement Services has issued guidance to designated procurement staff and approvers reinforcing the requirement that approved purchase requisitions and supporting documentation must be uploaded and maintained within the procurement file prior to the review, approval, and processing of any procurement transaction. Procurement Services will continue to provide guidance, training, and oversight to ensure compliance with procurement requirements and proper documentation standards. These actions are intended to strengthen internal controls, improve accountability, and reduce the likelihood of similar findings in the future. Proposed Completion Date: Ongoing Condition 8: The Procurement Services Division partially agrees with this finding. Procurement Services acknowledges that documentation supporting the required quotation was not evident for one of the transactions identified by the auditors. Based on our review, purchase order number TMT-ARP-23-047 appears to have been processed through Tinian (constitutionally separated government office) during a period when certain procurement activities were administered locally. Because Procurement Services was not directly involved in processing this transaction, we are unable to determine the specific circumstances surrounding the absence of the quotation documentation. Procurement Services respectfully disagrees with the finding as it relates to Purchase Order No. 22301302. Based on the information available, the purchase was made under an existing fuel contract that was already in place. As such, obtaining an additional quotation was not necessary because the expenditure did not constitute a separate procurement requiring competition. Rather, the purchase order was used as an administrative mechanism to process payment under the existing fuel contract instead of processing the payment through an invoice entry. Finding No.: 2023-032, continued AL Program: COVID-19 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Procurement and Suspension and Debarment Questioned Costs: $4,477,879 Contact Person(s): Tracy B. Norita, Secretary of Finance / Geraldine Cruz, Procurement Services Director Corrective Action Plan: To address this finding, Procurement Services has reinforced procurement requirements with designated procurement staff and approvers. Staff have been reminded that when quotations are required under the Procurement Regulations, the required number of quotations must be obtained and maintained in the procurement file before a purchase order is approved and processed. Procurement Services has also emphasized the importance of ensuring that all supporting documentation is complete and available before procurement actions are approved. Additionally, Procurement Services will continue to provide guidance, oversight, and periodic reminders regarding quotation requirements, contract administration, and procurement documentation standards to ensure compliance with applicable procurement regulations. These actions are intended to strengthen internal controls, improve compliance with procurement requirements, and reduce the likelihood of similar findings in the future. Proposed Completion Date: Ongoing Condition 9: The Procurement Services Division partially agrees with this finding. Procurement Services acknowledges that only one quotation was maintained in the procurement file for the transaction identified by the auditors. However, Procurement Services respectfully disagrees that the procurement was necessarily subject to the requirement to obtain three quotations under the small purchase provisions of the Procurement Regulations. Based on the documentation available, the procurement involved the acquisition of commercial software licenses, including RM Demand and RM Mobile licenses, together with related software implementation services consisting of configuration, training, project management, support, and maintenance services. The procurement was conducted through RouteMatch Software, LLC (TripSpark), the provider of the software platform and related services. Documentation within the procurement file indicates that the purchase consisted of software licenses and software implementation services associated with the deployment and use of the RouteMatch software system. Procurement Services notes that § 70-30.3-320 of the Procurement Regulations provides specific procurement provisions applicable to commercial software, including Software-as-a-Service and related software acquisitions, under which competitive bidding or competitive procurement may not be required when the applicable regulatory conditions are satisfied. Finding No.: 2023-032, continued AL Program: COVID-19 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Procurement and Suspension and Debarment Questioned Costs: $4,477,879 Contact Person(s): Tracy B. Norita, Secretary of Finance / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Because the procurement file does not contain sufficient documentation for Procurement Services to determine whether all requirements of § 70-30.3-320 were fully documented at the time of procurement, Procurement Services is unable to conclusively determine whether the procurement qualified for the commercial software exception. Accordingly, while Procurement Services concurs that only one quotation was maintained within the procurement file, Procurement Services does not concur that the procurement was necessarily required to obtain three quotations under the small purchase provisions without first considering the applicability of the commercial software procurement provisions. To address this finding, Procurement Services will continue to provide guidance to procurement staff and expenditure authorities regarding the procurement of commercial software and related services. Procurement Services will also reinforce the requirement that procurement files contain sufficient documentation supporting the procurement method utilized, including any applicable exceptions to competitive procurement requirements. These actions are intended to strengthen procurement documentation, improve compliance with the Procurement Regulations, and reduce the likelihood of similar findings in the future. Proposed Completion Date: Ongoing Condition 10: The Procurement Services Division agrees with this finding. Procurement Services acknowledges the auditors' observation that the beneficiary and purpose of the donation were not documented for the procurement identified in the finding. Procurement Services recognizes the importance of maintaining sufficient documentation to demonstrate the public purpose and intended use of items purchased with public funds. To address this finding, the Secretary of Finance has issued guidance reaffirming that a completed purchase requisition is required for all procurement transactions. Procurement Services has also reinforced requirements with designated procurement staff who are designated approvers to ensure that requisitions contain sufficient information to support the procurement request. Moving forward, when items are being purchased for donation or distribution, the purchase requisition must clearly identify the recipient or intended beneficiaries, the purpose of the donation, the public benefit to be achieved, and the authority under which the donation is being Finding No.: 2023-032, continued AL Program: COVID-19 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Procurement and Suspension and Debarment Questioned Costs: $4,477,879 Contact Person(s): Tracy B. Norita, Secretary of Finance / Geraldine Cruz, Procurement Services Director Corrective Action Plan: made. This information must be documented and maintained within the procurement file prior to approval of the procurement action. Additionally, staff and approvers have been instructed to verify that all required supporting documentation is included before processing or approving procurement transactions. These measures are intended to strengthen internal controls, improve procurement documentation, and reduce the likelihood of similar findings in future audits. Proposed Completion Date: Ongoing Condition 11: The Procurement Services Division agrees with this finding. Procurement Services acknowledges that approval of the purchase requisitions by the Officials with Expenditure Authority was not evident for certain transactions reviewed during the audit. Procurement Services agrees that purchase requisitions should be approved by the appropriate Official with Expenditure Authority prior to the processing of a procurement transaction to ensure proper authorization and compliance with established procurement requirements. Based on our review of the transaction identified in the finding, it appears that this transaction was processed through the Judiciary branch (constitutionally separated government office). At that time, certain procurement activities for the Judiciary branch appear to have been administered locally. As Procurement Services was not directly involved in the processing of these transactions, we are unable to determine the specific circumstances that resulted in the absence of documented approval by the applicable Official with Expenditure Authority. To address this finding, the Secretary of Finance has issued guidance reaffirming that a purchase requisition is a required component of every procurement transaction and must be approved by the applicable Official with Expenditure Authority before the procurement process may proceed. Additionally, Procurement Services has issued guidance to designated procurement staff and approvers reinforcing the requirement that approved purchase requisitions and supporting documentation must be uploaded and maintained within the procurement file prior to the review, approval, and processing of any procurement transaction. Procurement Services will continue to provide guidance, training, and oversight to ensure compliance with procurement requirements and proper documentation standards. Finding No.: 2023-032, continued AL Program: COVID-19 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Procurement and Suspension and Debarment Questioned Costs: $4,477,879 Contact Person(s): Tracy B. Norita, Secretary of Finance / Geraldine Cruz, Procurement Services Director Corrective Action Plan: These actions are intended to strengthen internal controls, improve accountability, and reduce the likelihood of similar findings in the future. Proposed Completion Date: Ongoing Condition 12: The Procurement Services Division agrees with this finding. Procurement Services agrees that recurring services should be evaluated collectively to determine the appropriate procurement method and quotation requirements based on the total value of the services during the fiscal year. Procurement Services recognizes the importance of ensuring that recurring procurements are not processed in a manner that bypasses applicable quotation or competition requirements. To address this issue, Procurement Services has taken steps to reinforce compliance with procurement requirements for transactions processed through the Division of Procurement Services on Saipan. Personnel who have been delegated procurement review and approval authority have been issued formal designation letters outlining their responsibilities and approval thresholds. These designation letters specifically require compliance with the CNMI Procurement Regulations, established procurement procedures, and applicable internal controls when reviewing and approving procurement transactions on behalf of the Director of Procurement Services. The designation letters further advise that procurement actions must not proceed without the required approvals and supporting documentation and that failure to comply with procurement requirements may result in administrative action. Procurement Services will continue to provide guidance, training, and oversight to ensure that requisitions, purchase orders, quotations, and supporting documentation are properly reviewed and approved before purchases are made or services are performed. These actions are intended to strengthen internal controls, improve compliance with procurement requirements, and reduce the likelihood of similar findings in the future. Proposed Completion Date: Ongoing Condition 13: The Procurement Services Division agrees with this finding. Procurement Services acknowledges that a price quotation was not evident for the blanket purchase order identified in the finding. Based Finding No.: 2023-032, continued AL Program: COVID-19 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Procurement and Suspension and Debarment Questioned Costs: $4,477,879 Contact Person(s): Tracy B. Norita, Secretary of Finance / Geraldine Cruz, Procurement Services Director Corrective Action Plan: on our review, the transaction relates to a Tinian (constitutionally separated government office) procurement and appears to have been processed during a period when certain procurement activities on Tinian were administered locally. At that time, Tinian was handling and processing certain procurement transactions without routing them through the Division of Procurement Services for review and approval. As Procurement Services was not directly involved in the processing of this transaction, we are unable to determine the specific circumstances surrounding the absence of the required quotation documentation. To address this issue, Procurement Services has reinforced procurement requirements with designated procurement personnel and expenditure authorities. Procurement Services will continue to provide guidance, training, and oversight to ensure that procurement transactions are routed through the appropriate procurement channels and that all required quotations, approvals, and supporting documentation are obtained and maintained in the procurement file prior to processing. These actions are intended to strengthen internal controls, improve compliance with procurement requirements, and reduce the likelihood of similar findings in the future. Proposed Completion Date: Ongoing Condition 14: The Procurement Services Division agrees with this finding. Procurement Services agrees that vendor eligibility was not verified in accordance with 2 CFR Part 180 prior to the covered transactions identified by the auditors. As a result, the Commonwealth was not fully compliant with the federal suspension and debarment requirements applicable to these procurements. To address this issue, Procurement Services has incorporated suspension and debarment verification into its procurement review process. For federally funded covered transactions, expenditure authorities will be required to provide documentation from the System for Award Management (SAM.gov) confirming that the vendor is not suspended or debarred. This documentation must be submitted with the procurement package and retained in the procurement file prior to award. Finding No.: 2023-032, continued AL Program: COVID-19 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Procurement and Suspension and Debarment Questioned Costs: $4,477,879 Contact Person(s): Tracy B. Norita, Secretary of Finance / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Procurement Services will review the documentation as part of the procurement process and will provide additional guidance to procurement personnel and expenditure authorities regarding federal suspension and debarment requirements and documentation standards. These measures will help strengthen internal controls, improve compliance with federal requirements, and ensure that the necessary documentation is maintained in the procurement file going forward. Proposed Completion Date: Completed

Finding No.: 2023-025 AL Program: 20.205 – Highway Planning and Construction (Federal-Aid Highway Program) Area: Procurement and Suspension and Debarment Questioned Costs: $-0- Contact Person(s): Stacy Atalig, Federal Programs Coordinator, DPW / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Condition 1: The Procurement Services Division respectfully disagrees with this finding. Procurement Services agrees that the Commonwealth should periodically review its procurement regulations to ensure continued consistency with applicable federal requirements. However, Procurement Services notes that the Procurement Regulations currently establish procurement thresholds and procedures for locally funded procurements and procurements funded through a combination of local and federal funds. Procurements exceeding applicable small purchase thresholds are required to proceed through other procurement methods authorized under the Procurement Regulations, including competitive sealed bidding or other approved procurement methods, as applicable. Finding No.: 2023-025, continued AL Program: 20.205 – Highway Planning and Construction (Federal-Aid Highway Program) Area: Procurement and Suspension and Debarment Questioned Costs: $-0- Contact Person(s): Stacy Atalig, Federal Programs Coordinator, DPW / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Procurement Services further notes that procurements exceeding the applicable small purchase thresholds are governed by other provisions of the Procurement Regulations and are therefore not without regulatory direction. Accordingly, Procurement Services does not fully concur that the regulations are inconsistent as described in the finding. Nevertheless, Procurement Services recognizes the importance of ensuring that procurement regulations clearly align with applicable federal requirements and are sufficiently clear to avoid differing interpretations. Procurement Services is currently reviewing the applicable regulations, policies, and procedures with legal counsel to determine whether revisions, clarifications, or additional guidance is warranted. Due to the resignation of the Assistant Attorney General previously assigned to Procurement Services, this review will continue with newly assigned legal counsel. Any amendments to the Procurement Regulations will require legal review, drafting, public notice, and formal adoption before they can take effect. Procurement Services will also continue monitoring updates to federal procurement requirements and will incorporate any necessary changes into its policies, procedures, and guidance. These efforts will help improve clarity, consistency, and compliance with applicable procurement requirements. Proposed Completion Date: Ongoing Finding No.: 2023-025, continued AL Program: 20.205 – Highway Planning and Construction (Federal-Aid Highway Program) Area: Procurement and Suspension and Debarment Questioned Costs: $-0- Contact Person(s): Stacy Atalig, Federal Programs Coordinator, DPW / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Condition 2: DPW, TSD-Highway Branch and the Procurement Services Division respectfully disagrees with this finding. A review of the procurement file confirmed that the Bid Opening Summary Sheet was maintained as part of the official bid package and procurement record for this solicitation. Procurement Services has located the Bid Opening Summary Sheet and confirmed that it accurately documents the bid opening results in accordance with applicable procurement requirements. The document remains in the procurement file and is available for review. A copy has been provided for reference. Based on the existence and availability of this document, Procurement Services respectfully requests reconsideration of this finding. The supporting documentation identified as missing was maintained within the procurement file and was available for audit review. While Procurement Services disagrees with this portion of the finding, it remains committed to maintaining complete procurement records and will continue reviewing internal recordkeeping practices to ensure procurement files are organized, complete, and readily accessible for audit and compliance purposes. Proposed Completion Date: Ongoing

Finding No.: 2023-019 AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $270,553 Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC / Geraldine Cruz, Procurement Services Director / Nerissa B. Karakaya, CIP COTR Corrective Action Plan: Condition 1 (G. Cruz): The Procurement Services Division respectfully disagrees with this finding. Procurement Services agrees that the Commonwealth should periodically review its procurement regulations to ensure continued consistency with applicable federal requirements. However, Procurement Services notes that the Procurement Regulations currently establish procurement thresholds and procedures for locally funded procurements and procurements funded through a combination of local and federal funds. Procurements exceeding applicable small purchase thresholds are required to proceed through other procurement methods authorized under the Procurement Regulations, including competitive sealed bidding or other approved procurement methods, as applicable. Procurement Services further notes that procurements exceeding the applicable small purchase thresholds are governed by other provisions of the Procurement Regulations and are therefore not without regulatory direction. Accordingly, Procurement Services does not fully concur that the regulations are inconsistent as described in the finding. Finding No.: 2023-019, continued AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $270,553 Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC / Geraldine Cruz, Procurement Services Director / Nerissa B. Karakaya, CIP COTR Corrective Action Plan: Nevertheless, Procurement Services recognizes the importance of ensuring that procurement regulations clearly align with applicable federal requirements and are sufficiently clear to avoid differing interpretations. Procurement Services is currently reviewing the applicable regulations, policies, and procedures with legal counsel to determine whether revisions, clarifications, or additional guidance are warranted. Due to the resignation of the Assistant Attorney General previously assigned to Procurement Services, this review will continue with newly assigned legal counsel. Any amendments to the Procurement Regulations will require legal review, drafting, public notice, and formal adoption before they can take effect. Procurement Services will also continue monitoring updates to federal procurement requirements and will incorporate any necessary changes into its policies, procedures, and guidance. These efforts will help improve clarity, consistency, and compliance with applicable procurement requirements. Proposed Completion Date: Ongoing Condition 2 (E. Cabrera / N. Karakaya / G. Cruz): For TAP sample selections (FG26100012, FG26100002, 1901210068, 2001210031, and FG26100021), the Office of Grants Management (OGM) agrees with this finding and concurs that a formal procedure for verifying suspension and debarment status was not documented during FY2023, especially as this procurement aspect was not enforced by the Division of Procurement Services. However, management is not aware of any instances in which the listed contracts or subawards were issued to entities that were suspended, debarred, or otherwise excluded from participation in federally funded programs. All goods and services were received, and all expenditures were incurred for allowable program purposes. Accordingly, OGM believes the finding represents a control and compliance deficiency rather than an instance of unallowable costs. OGM has begun implementing procedures requiring SAM.gov verification and retention of supporting documentation prior to entering into covered transactions, especially due to a more recent procurement purchase. OGM kindly seeks the auditor’s discretion in changing the questioned costs to the amount of zero, due to it being more of an internal control issue rather than an allowability issue. Finding No.: 2023-019, continued AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $270,553 Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC / Geraldine Cruz, Procurement Services Director / Nerissa B. Karakaya, CIP COTR Corrective Action Plan: For the CIP sample selection (FC26050009), The Capital Improvement Program (CIP) agrees with the finding and that it did not verify if the firm in question was excluded or disqualified at the time of procurement. The Division of Procurement Services has recently begun requiring agencies to provide search results on SAM.gov Exclusions for the processing of contracts moving forward. CIP will follow this new protocol and include it in the standard documents for all construction and non-construction contracts. To prevent recurrence, CIP will implement the following actions: • CIP will include “Verification of suspension and debarment status” as a required item under Contract Documents on CIP’s contract templates • Staff Training and Awareness o CIP will train staff members to utilize the SAM.gov Exclusions page to search for vendors and print proof of verification. o CIP will ensure that all staff members are familiar with the new protocol with Procurement Services. • Monitoring and Verification o CIP will conduct reviews of new contracts and processing change orders to ensure that this new requirement is met. Additionally, the Procurement Services Division agrees that vendor eligibility was not verified in accordance with 2 CFR Part 180 prior to the covered transactions identified by the auditors. To address this issue, Procurement Services has incorporated suspension and debarment verification into its procurement review process. For federally funded covered transactions, expenditure authorities will be required to provide documentation from the System for Award Management (SAM.gov) verifying that the vendor is not suspended or debarred. This documentation must be submitted with the procurement package and retained in the procurement file prior to award. Procurement Services will review the documentation as part of its procurement review process and will provide additional guidance to procurement personnel and expenditure authorities regarding federal suspension and debarment requirements. Finding No.: 2023-019, continued AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $270,553 Contact Person(s): Epiphanio Cabrera, Jr., Grants Administrator, OGM-SC / Geraldine Cruz, Procurement Services Director / Nerissa B. Karakaya, CIP COTR Corrective Action Plan: These measures are intended to improve compliance with federal requirements and strengthen procurement documentation and oversight. Proposed Completion Date: Ongoing

Finding No.: 2023-010 AL Program: 10.539 – Nutrition Assistance Program Area: Procurement and Suspension and Debarment Questioned Costs: $684,138 Contact Person(s): Margaret Aldan, NAP Administrator / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Condition 1: The Procurement Services Division respectfully disagrees with this finding. Procurement Services agrees that the Commonwealth should periodically review its procurement regulations to ensure continued consistency with applicable federal requirements. However, Procurement Services notes that the Procurement Regulations currently establish procurement thresholds and procedures for locally funded procurements and procurements funded through a combination of local and federal funds. Procurements exceeding applicable small purchase thresholds are required to proceed through other procurement methods authorized under the Procurement Regulations, including competitive sealed bidding or other approved procurement methods, as applicable. Procurement Services further notes that procurements exceeding the applicable small purchase thresholds are governed by other provisions of the Procurement Regulations and are therefore not without regulatory direction. Accordingly, Procurement Services does not fully concur that the regulations are inconsistent as described in the finding. Finding No.: 2023-010, continued AL Program: 10.539 – Nutrition Assistance Program Area: Procurement and Suspension and Debarment Questioned Costs: $684,138 Contact Person(s): Margaret Aldan, NAP Administrator / Geraldine Cruz, Procurement Services Director Corrective Action Plan: Nevertheless, Procurement Services recognizes the importance of ensuring that procurement regulations clearly align with applicable federal requirements and are sufficiently clear to avoid differing interpretations. Procurement Services is currently reviewing the applicable regulations, policies, and procedures with legal counsel to determine whether revisions, clarifications, or additional guidance are warranted. Due to the resignation of the Assistant Attorney General previously assigned to Procurement Services, this review will continue with newly assigned legal counsel. Any amendments to the Procurement Regulations will require legal review, drafting, public notice, and formal adoption before they can take effect. Procurement Services will also continue monitoring updates to federal procurement requirements and will incorporate any necessary changes into its policies, procedures, and guidance. These efforts will help improve clarity, consistency, and compliance with applicable procurement requirements. Proposed Completion Date: Ongoing Condition 2: CNMI NAP agrees with this finding. The issue occurred because the previous policies and procedures did not fully document the three allowable verification methods under 2 CFR 180.300 for covered transactions ≥ $25,000. As a result of repeat findings, CNMI NAP developed and implemented the updated “SOP for Procurement of Goods and Servicesv.3”, which explicitly requires verification of vendors in the SAM.gov exclusions list prior to award (Section 4.1 and 4.3) and after contract execution, in full compliance with 2 CFR 200.214 and 2 CFR 180.300. This SOP was approved and effective 5/1/25 and is available for review upon request. Additional step taken by CNMI NAP is to continue adhering to the “CNMI NAP Suspension and Debarment SOP” that requires a screen-print documentation and annual reviews. This SOP was approved on 9/24/24 and is available for review upon request. Finding No.: 2023-010, continued AL Program: 10.539 – Nutrition Assistance Program Area: Procurement and Suspension and Debarment Questioned Costs: $684,138 Contact Person(s): Margaret Aldan, NAP Administrator / Geraldine Cruz, Procurement Services Director Corrective Action Plan: To prevent recurrence, CNMI NAP will deliver targeted training to all procurement, finance, and program staff on the updated SOPs, continue quarterly internal reviews of procurement files using new Google Sheet tracking system to verify ongoing SAM.gov compliance. Full staff training and first quarterly review will be completed by 9/30/26. Additionally, Procurement Services agrees that vendor eligibility was not verified in accordance with 2 CFR Part 180 prior to the covered transactions identified by the auditors. To address this issue, Procurement Services has incorporated suspension and debarment verification into its procurement review process. For federally funded covered transactions, expenditure authorities will be required to provide documentation from the System for Award Management (SAM.gov) verifying that the vendor is not suspended or debarred. This documentation must be submitted with the procurement package and retained in the procurement file prior to award. Procurement Services will review the documentation as part of its procurement review process and will provide additional guidance to procurement personnel and expenditure authorities regarding federal suspension and debarment requirements. These measures are intended to improve compliance with federal requirements and strengthen procurement documentation and oversight. Proposed Completion Date: Completed

Finding No.: 2023-019 AL Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Area: Procurement and Suspension and Debarment Questioned Costs: $307,881 Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the audit findings and recommendations. We recognize that our internal controls and existing policies regarding suspension and debarment must be modernized to align with 2 CFR §180.300. PSS is committed to implementing a standardized, mandatory verification process that ensures all vendors are vetted prior to the commitment of federal funds. Procurement processes were promulgated in a SOP on September 18, 2024. The SOP is under review by an external consultant and recommendations made to improve documentation of the vendor selection process, both competitive and sole source exception. (See also 2023-004, 2023-0009, 2023-0012) Corrective Action Plan: To address the lack of standardized procedures and ensure full compliance with procurement and debarment regulations, PSS will implement the following: I. Standardization of Procurement Files: PSS will implement a mandatory "Procurement Compliance Folder" structure for all competitive sealed bids. This folder must contain indexed sections for: (1) Evidence of four-week public notice, (2) Signed bid opening summary sheets, (3) Individual evaluation rubrics for all bidders, and (4) The final Basis of Award. No contract will be executed until the Procurement Office certifies the folder is complete. II. Revised Suspension and Debarment Protocol: PSS will update its internal policies to decouple the SAM.gov verification requirement from the Commissioner’s formal debarment actions. Per 2 CFR §180.300, a mandatory "Vendor Eligibility Verification" step will be added to the pre-award phase. Staff must perform a SAM.gov exclusion search and attach the dated results to the contract file before it is routed for the Commissioner's signature. III. Implementation of a Procurement Checklist: A comprehensive "Pre-Award Compliance Checklist" will be introduced. This checklist will serve as the primary enforcement mechanism, requiring staff to initial and date each procurement step as it is completed. IV. Updated Procurement Standard Operating Procedures: The Procurement SOP will be updated with more specific guidance and selection checklist for each method (e.g., sealed bid, sole source) including documentation requirements to support vendor eligibility as verified at a minimum by review of SAM.gov and certification by the proposer. All vendors with active contracts in 2023 and subsequent years will be reviewed in SAM.gov for eligibility. 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.: 2023-012 AL Program: 84.403 Consolidated Grants to the Outlying Areas Area: Procurement and Suspension and Debarment Questioned Costs: $1,019,874 Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the audit findings. We recognize that the procurement files for the identified contracts lacked the necessary documentation, specifically bid evaluation forms, public notices, and suspension and debarment verifications, required to substantiate compliance with PSS Procurement Rules and 2 CFR §200.317. Procurement processes were promulgated in a SOP on September 18, 2024. The SOP is under review by an external consultant and recommendations made to improve documentation of the vendor selection process, both competitive and sole source exception. (See also 2023-004, 2023-0009) Corrective Action Plan: To address the systematic filing issues and ensure robust monitoring of procurement requirements, PSS will implement the following: I. Mandatory Bid Opening and Evaluation Packet: PSS is implementing a standardized "Bid Evaluation Checklist" that must be completed for every Invitation for Bid (IFB). This checklist will require the Procurement Officer to verify that the file contains: (1) the Bid Opening Summary Sheet, (2) evaluation forms for all bidders (successful and unsuccessful), and (3) the original signed bids. II. Proof of Publication Certification: To ensure compliance with the four-week public notice requirement, PSS will now require a "Publication Certification Form" for every competitive procurement. This form will include dated evidence (such as website timestamps or newspaper affidavits) to provide a verifiable audit trail of the continuous advertisement period. III. Standardized SAM.gov Verification Protocol: For all covered transactions equal to or exceeding $25,000, PSS has made it a mandatory requirement to perform a SAM.gov exclusion search prior to contract execution. A dated PDF copy of the search result must be printed and physically or digitally attached to the contract file as evidence of compliance with 2 CFR §180.300. IV. Updated Procurement Standard Operating Procedures: Procurement SOPs will be updated with more specific guidance and selection checklist for each method (e.g., sealed bid, sole source) including documentation requirements to support vendor eligibility as verified at a minimum by review of SAM.gov and certification by the proposer. CNMI PSS legal counsel will be consulted regarding the addition of an appropriate contract clause to add to new contracts. All vendors with active contracts in 2023 and subsequent years will be reviewed in SAM.gov for eligibility. 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.: 2023-009 AL Program: COVID-19 84.027 Special Education Cluster - Grants to States (IDEA, Part B) Area: Procurement and Suspension and Debarment Questioned Costs: $102,862 Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the audit finding. While there are internal practices to monitor for compliance, we acknowledge that there are inconsistencies of completeness. Furthermore, we recognize the necessity of performing and documenting SAM.gov exclusion checks for all covered transactions over $25,000. Procurement processes were promulgated in a SOP on September 18, 2024. The SOP is under review by an external consultant and recommendations made to improve documentation of the vendor selection process, both competitive and sole source exception. (See also 2023-004) Corrective Action Plan: To address these deficiencies and ensure compliance with PSS Procurement Rules and 2 CFR §200.317, PSS will implement the following: I. Small Purchase Compliance Enforcement: The Procurement Office will strictly enforce the procurement policies through the implementation of a compliance checklist. This checklist is to be aligned with procurement regulations and completed by requesters with procurement personnel reviewing for compliance. II. Competitive Sealed Proposal (RFP) Workflow: PSS implemented a mandatory RFP Authorization document as a result of FY22 findings. FY22 findings where issued and completed at the beginning of FY24. This packet must include the written determination from the Commissioner of Education, citing legal counsel's advice, regarding the impracticality of sealed bidding. No RFP will be advertised until this signed determination and the corresponding evaluation rubric are uploaded to the permanent contract file. III. Strengthening SOP’s: Update Procurement SOP with more specific guidance and selection checklist for each method (e.g., sealed bid, sole source) including documentation requirements to support vendor eligibility as verified at a minimum by review of SAM.gov and certification by the proposer. CNMI PSS legal counsel will be consulted regarding the addition of an appropriate contract clause to add to new contracts. All vendors with active contracts in 2023 and subsequent years will be reviewed in SAM.gov for eligibility. 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.: 2023-004 AL Program: 10.555 National School Lunch Program (NSLP) Area: Procurement and Suspension and Debarment Questioned Costs: $725,425 Views of Auditee and Corrective Action Plan: Management’s Position: PSS Management concurs with the findings regarding procurement and suspension and debarment procedures. We recognize that maintaining the integrity of the competitive bidding process requires strict adherence to public notice timelines, documented justifications for vendor selection, and mandatory debarment verifications. Procurement processes were promulgated in a SOP on September 18, 2024. The SOP is under review by an external consultant and recommendations made to improve documentation of the vendor selection process, both competitive and sole source exception. Corrective Action Plan: To remediate these deficiencies and ensure compliance with 2 CFR §200.317 and PSS Procurement Rules, management will implement the following: I. Procurement Selection Justification Requirement: PSS will implement a formal "Basis for Award" memorandum template. In any instance where the lowest bidder is not selected, the Procurement Officer must provide a detailed written justification—reviewed and approved by legal counsel—explaining why the selected offeror is the most advantageous to PSS based on the criteria in the solicitation. This is covered by § 60-40-205 Competitive Sealed Bidding (i) Notice of Intent to Award. After bid evaluation, a notice of intent to award the contract to the lowest responsive bid by a responsible bidder whose bid fully meets the requirements of the invitation for bids and this chapter shall be issued to all bidders. The notice of intent to award is not a promise or guarantee of award, and the intended bidder should not incur any costs based on either the notice of intent to award or reliance of a contract. Bid rejections are issued as well detailing where the bids did not qualify under § 60-40-205(g). II. Mandatory SAM.gov Verification Protocol: PSS has updated its contracting checklist to include a mandatory "Suspension and Debarment Verification" step. For all contracts exceeding $25,000, a SAM.gov exclusion search must be performed, and a dated PDF of the search results must be physically or digitally attached to the contract file prior to execution. The Procurement SOP will be updated with more specific guidance and selection checklist for each method (e.g., sealed bid, sole source) including documentation requirements to support vendor eligibility as verified at a minimum by review of SAM.gov and certification by the proposer. CNMI PSS legal counsel will be consulted regarding the addition of an appropriate contract clause to add to new contracts. All vendors with active contracts in 2023 and subsequent years will be reviewed in SAM.gov for eligibility. III. Centralized Procurement Filing System: PSS is implementing a digitization protocol of all procurement documents. A review will be conducted prior to upload to ensure it contains the public notice evidence, all received bids, the evaluation rubric, and the debarment verification. 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

The Board of Supervisors will ensure staff are properly trained in procurement policy and future procurement activities comply with both Uniform Guidance and Mississippi Law. Anticipated Completion Date: 9/30/2025. Contact Person: Otis Griffin, County Administrator

It has been brought to our attention that we need an additional policy that covers conflict of interests and govern the performance of its employees engaged in the selection, award, and administration of contracts. We have taken this recommendation and are implementing the proper language, for all employees to acknowledge in our County Handbook. We will strengthen this control and add this be updated yearly, so that all conflict can be disclosed. Creek County prides itself in moving toward complete transparency and holding each employee accountable to disclose all information needed to make a proper selection of purchases. Creek County Clerk’s Office will work with the District Attorney’s Office for proper language.

The City of North Bend acknowledges that a contract utilizing SLFR funds, and awarded to a software vendor, did not include within the contract, a required self-attestation concerning Suspensions and Debarment. The self-attestation was used in lieu of a documented review of the SAM.gov portal for suspensions and debarment. This was an oversight of the contract review process. Other contracts issued during the same period included self-attestation language from 2 CFR 200.317 through 2 CFR 200.327. In 2024 and 2025, the Public Works Deputy Director, Contract Specialist, and Capital Staff Accountant ensure adherence to all applicable local, State, and federal procurement laws and regulations as provided in the Uniform Guidance at 2 CFR 200.214, 2 CFR Part 180, and Treasury’s implementing regulations at 31 CFR Part 19, prohibiting recipients from entering into contracts with suspended or debarred parties. The City of North Bend understands the significance of the finding and immediately took steps to review all subsequent contracts for compliance.

CORRECTIVE ACTION PLAN (Concerning Finding 2023-007) Contact Person Responsible for Corrective Action: Carrie Castonguay, Town Manager Corrective Action: The Treasurer, Town Manager and Select Board will take the following actions to address finding 2023-007 The current Town Manager was appointed by the Select Board on August 14, 2023, and had no knowledge of this material weakness. She is an experienced Manager and drafted, has had approved, and has implemented the new Procurement Policy that addresses this deficiency. Anticipated Completion Date: This was completed January 23, 2024

CORRECTIVE ACTION PLAN (Concerning Finding 2023-004) Contact Person Responsible for Corrective Action: Carrie Castonguay, Town Manager Corrective Action: The Treasurer, Town Manager and Select Board will take the following actions to address finding 2023-004 The current Town Manager was appointed by the Select Board on August 14, 2023, and had no knowledge of this material weakness. She is an experienced Manager and has drafted, had approved and is using the new Procurement Policy that addresses this deficiency. Anticipated Completion Date: This was completed January 23, 2024.

The following is Management’s Response to the Findings Required to be Reported by the Uniform Guidance. This document was prepared by management of the Catholic Charities of the Archdiocese of Oklahoma City (“CCAOKC”). 2023-002 Assistance Listing Number 93.576, Refugee and Entrant Assistance Discretionary Grants, U.S. Department of Health and Human Services, FAIN 90RP0121, Award Year 2023, Passed Through by the United States Conference of Catholic Bishops Criteria or Specific Requirement – Procurement, Suspension, and Debarment – 2 CFR § 200.317–.327; 2 CFR § 200.214 Finding Summary CCAOKC’s procurement documentation procedures were not adequate to meet the requirements of 2 CFR § 200.317–.327; 2 CFR § 200.214 - Procurement, Suspension, and Debarment. Explanation of Agreement/Disagreement: Management concurs with the findings and has updated CCAOKC’s procurement policy. Officials Responsible for Ensuring Corrective Action: David Ashton, Sr Director of Administration; E-mail – dashton@ccaokc.org Alan Lipps, Chief Financial Officer; E-mail – alipps@ccaokc.org Planned Completion for Corrective Action: Corrective action completed in FY 2026 Action in response to finding: Purchasing staff are trained in federal procurement requirements and were provided with a copy of the new policy.

CORRECTIVE ACTION PLAN FISCAL YEAR OF FINDING: June 30, 2023 AUDITOR FINDING: 2023-006 In accordance with 2 CFR Part 200.318 the recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in §§ 200.317 through 200.327. The Organization's purchasing policy did not contain elements of federal procurement requirements specified by Uniform Guidance. CLIENT PLANNED ACTION: The Organization will revise the Procurement Policy such that it is consistent with the appropriate regulations and standards and requires documentation of the vendor procurement policy. CLIENT RESPONSIBLE PARTY: Danielle Cordova, Controller COMPLETION DATE: July 1st, 2025

FINDING 2023-004 Contact Person Responsible for Corrective Action: Craig Zandstra Contact Phone Number: 219-945-0543 Ext 234 Contact Email: craigz@lakecountyparks.com Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan As this finding is shared between The Lake County Board of Commissioners and the Lake County Parks & Recreation Department, both departments will develop procedures to ensure the appropriate procurement methods are used for vendors that are within the Small Purchase Threshold. Both departments will also ensure that vendors are not suspended or debarred when expanding federal funds. Lastly, appropriate documentation will be maintained to ensure compliance with procurement, suspension and debarment in the future. Completion Date: June 2026

Corrective Action Plan Action Item Responsible Party Monitoring Require that procurement transactions be properly identified and tracked by federal program to ensure completeness and traceability. CFO / Procurement Staff Monthly review Maintain complete procurement documentation, including records of competition, procurement method, and verification of suspension and debarment in accordance with federal requirements. CFO / Procurement Department Periodic internal review Reconcile procurement-related expenditures to the SEFA and underlying accounting records to ensure a reliable population for compliance testing. CFO Documented reconciliation In FY 2026, management developed and implemented a formal Records Retention Policy to ensure that accounting records, supporting documentation, and organizational records are properly maintained and retained in accordance with applicable regulatory and audit requirements CFO Management oversight Implement supervisory review of procurement activity to ensure compliance with federal procurement requirements. CFO / Board Finance Committee Quarterly review ________________________________________ Management Response Management notes that no additional federal grants, other than the HRSA Section 330 program grant (Assistance Listing 93.224), were received in FY2025 or FY2026. Prior management did not provide a reconciled SEFA schedule for earlier reporting periods, which contributed to the documentation limitations identified during the audit. Beginning in FY2026, management has developed a detailed SEFA tracking schedule for the HRSA Section 330 grant that identifies the date federal funds were drawn down, the amount received, the related expenditures, and the corresponding disbursement dates. This schedule is maintained to improve reconciliation between drawdowns, expenditures, and the general ledger and to ensure documentation is readily available for audit and compliance purposes. In FY2026, management implemented an updated and comprehensive set of policies and procedures designed to strengthen internal controls and promote consistent, standardized accounting and administrative practices. These updates establish clearer documentation requirements, defined responsibilities, and improved oversight to ensure compliance with applicable regulations and the safeguarding of organizational records and financial information. ________________________________________ Responsible Official: Chief Financial Officer Expected Completion Date: FY 2026

Conditions 1-2: The MOF acknowledges this finding and will address the deficiencies by reinforcing documentation and compliance requirements. Annual refresher training will be provided to current staff, and onboarding will be conducted for new staff to ensure adherence to established procedures. Condition 3: The MOF acknowledges this finding and notes that screening for debarred, suspended, or excluded entities was incorporated into the Grants and Sub-Grants Monitoring Procedures Manual in November 2024. The Ministry further confirms that this requirement will be enforced immediately.

Conditions 1-3: The MOF acknowledges this finding and will address the deficiencies by reinforcing documentation and compliance requirements. Annual refresher training will be provided to current staff, and onboarding will be conducted for new staff to ensure adherence to established procedures. Condition 4: The MOF acknowledges this finding and notes that screening for debarred, suspended, or excluded entities was incorporated into the Grants and Sub-Grants Monitoring Procedures Manual in November 2024. The Ministry further confirms that this requirement will be enforced immediately.

Chairman of the Board of County Commissioners: These procurement issues originated during the prior County Clerk’s administration, but the current leadership is focused on corrective measures. Together, we are: • developing a SOP to ensure vendor checks for suspension and debarment are conducted on all purchases over $25,000, • establishing written standards of conduct to address conflicts of interest and set clear procurement guidelines, • and enhancing oversight and review to ensure all procurement processes are fully compliant with federal regulations. Our goal is to build a consistent, transparent procurement framework that safeguards both compliance and public trust. County Clerk: I was not the County Clerk in office at this time. To correct this issue, the County plans to develop a SOP to timely and accurately track and report on the SEFA. The SOP will be reviewed, adopted, and monitored by the Board of County Commissioners.

VIDE acknowledges the audit finding regarding the Consolidated Grant procurement documentation and concurs with the recommendation. VIDE recognizes that the unavailability of approved Short Form Contracts during the audit indicates a gap in record retention and file maintenance. To address this, the Business Office will not process any payment voucher for service-related procurements unless the approved Short Form Contract is attached to the ERP transaction as a mandatory supporting document. To ensure records are maintained and readily available for future reviews, the Procurement Division will digitize all executed Short Form Contracts and upload them to the department’s centralized SharePoint repository immediately upon execution. To reinforce these protocols, mandatory refresher training will be conducted for Procurement and Program staff on the new digital archiving requirement and the federal documentation standards for service-related procurements. Finally, the Office of Fiscal & Administrative Services will conduct monthly spot checks of the SharePoint repository to verify that all active service contracts are properly archived and accessible.

The Government concurs with the auditor’s findings and recommendations. The Government updated its procurement laws and issued revised manuals, along with position-specific Standard Operating Procedures. Processes to enforce internal controls and ensure adherence to procurement laws have been established and are regularly reinforced.

The Department of Health concurs with the Auditor’s findings and recommendations. To ensure that the WIC program is included in all processes and receive all documents and correspondence relating to WIC Special Funding as a secondary oversight of the transactions.