Corrective Action Plans

Finding: While testing the procurement requirement, we noted that internal controls were not properly designed over the procurement requirement. Prior to receiving federal funding beginning in August 2022, the program conducted a request for proposal (RFP) process and began contracting with a vendor. When federal funding was obtained, the vendor was not reevaluated in accordance with the Uniform Guidance to ensure the procurement requirements were being met. In addition, we noted UW Health – Madison’s procurement policy documents do not include all of the information that is required by the Uniform Guidance. Correction actions taken or planned: Management became aware of the need to perform additional procedures to comply with Uniform Guidance part way through the year ended June 30, 2024 and completed the evaluation once it became known. However, by that time, the vendor was already charged to the grant prior to the completion of the vendor evaluation. UW Health has developed processes and procedures to ensure compliance with the Uniform Guidance and that evaluations are taking place prior to any vendors being charged to the grant. UW Health is also in the process of updating policy to comply with Uniform Guidance. Anticipated completion Date: June 2025 UW Health employees responsible for Corrective Action Plan: James Hood, Director of Procurement Services and Jamie Soyk, Program Director – Financial Reporting

2024-001 (Procurement and Suspension & Debarment) Management Comments and Corrective Action: Due to the growing need to adequately care for the minors at SWK’s shelters coupled with the limitations of access to vendors caused by COVID-19, SWK utilized existing vendor to minimize significant disruptions to operations. The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Reprocuring all of these contracts at once would potentially cause disruptions in operations due to the products/services related to those vendors playing an important role in the Organization’s dayto- day operations. In April 2021, the Organization hired new procurement leadership and invested in Full Time Employees (FTEs) to develop a robust procurement department. Due to this procurement revamp, Procurement adopted a hybrid model, and Desktop Protocols were established to provide universal procedures to fulfill policy. Protocols instruct staff on obtaining three quotes and provide tools for selecting the vendor. In addition, quality protocols and tools are currently in development to verify a random sample of procurement transactions and files. The Organization still has several active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Proposed Implementation Date of Corrective Action: In process and to be completed by December 31, 2025. Person Responsible for Corrective Action: Steven Beckman, CFO 45

The district will establish a system of internal controls with the Cooperative (NISEC) to ensure formal procurement methods are properly followed.

U.S. Department of the Treasury, Passed through Lancaster County, Nebraska COVID-19 Coronavirus State and Local Fiscal Recovery Funds, AL #21.027 Procurement, Suspension, and Debarment: Noncompliance and Material Weakness in Internal Control over Compliance Finding Summary: The Organization does not have a formalized procurement policy that conforms to applicable standards under Uniform Guidance. Additionally, the Organization did not follow procurement policies when obtaining bids for contracts. Responsible Individuals: Natalya Young, Executive Director Corrective Action Plan: Procedures will be developed to ensure proper procurement transactions in accordance with the Uniform Guidance. Additionally, the Organization will follow procurement policies when obtaining bids for contracts. Anticipated Completion Date: June 2025

The City of Bardstown places a high priority on fiar and equitable purchasing practices. The General Bidding Statue (KRS 424.260) governs purchases made during the normal course of business. The City acknowledges the need to adopt a written purchasing policy to set qualifications and procedures when federal funds are being utilized. A purchasing policy is currently being drafted to adopt procurement standards found in 2 CFR 200.317 through 200.326. This policy will be presented to council and adopted prior to February 28, 2025.

Management's Response: The College will strengthen its policies and procedures over procurement to ensure all procurement threshold requirements are identified and all vendors are properly procured. Anticipated Completion Date: February 28, 2025

FINDING 2024-002 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24 FINDING 2024-002 (Continued) Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Cluster and Procurement and Suspension and Debarment compliance requirements. Context: Procurement The School Corporation participates in the Food2School Child Nutrition Cooperative which procures vendors for food purchases and other supplies on behalf of its members. During the audit period, the School Corporation purchased supplies and equipment from vendors not procured by the Cooperative. One vendor with aggregate annual purchases of $118,390 and $68,859 for fiscal year 2023 and fiscal year 2024, respectively, exceeded the small purchase threshold ($50,000 - $150,000) and was not subject to the School Corporation’s procurement policy to solicit multiple quotes and to document the method and rationale for procurement. Suspension and Debarment For three vendors tested which were not procured by the Cooperative and had aggregate annual disbursements exceeding the federal suspension and debarment threshold of $25,000, the School Corporation did not perform suspension and debarment checks to confirm the vendors were not suspended or debarred before entering into the contract or disbursing federal funds. Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: Management will implement a procurement checklist that is reviewed after the purchasing process has been completed to ensure compliance with purchasing requirements for federal awards. Sam.gov will be checked for each vendor with aggregate purchases above $25,000. Responsible Party and Timeline for Completion: Shane Hacker, Assistant Superintendent of Operations; Corey Ebert, Director of Finance; Jordan Ryan, Director of Nutrition Services Anticipated Completion Date: February 1, 2025.

Management's Response: Management concurs with the above finding and will ensure that the restricted accountant and purchasing agent receive further training on federal grant purchasing requirements to ensure all purchasing rules are met. Additional approval levels will also be put in place to safeguard required federal purchasing limits. Implementation will be completed by June 2025.

Federal Agency Name: Department of Housing and Urban Development Continuum of Care, Federal Financial Assistance Listing 14.267, Affects all grant awards included under Federal Financial Assistance Listing 14.267 on the Schedule Finding Summary: Catholic Charities has documented procurement procedures that conform to applicable federal standards regarding testing vendors for suspension and debarment; however, the procedures were not followed for four vendors selected for testing. Corrective Action Plan: Procurement, suspension and debarment procedures were largely decentralized across the agency. In response, the organization has an internal, cross-functional compliance team that has reviewed and is developing process changes to ensure appropriate systems are developed and documentation is maintained for purchasing related to federal programs. Responsible Individuals: Chief Legal Officer, Controller Anticipated Completion Date: June 30, 2025

Procurement, Suspension and Debarment Significant Deficiency in Internal Control over Compliance Finding Summary: In our testing of procurement, suspension and debarment it was identified that the District did not go out for quotes on one contract over the mircro purchase threshold. Responsible Individuals: Beth Slette, Superintendent Corrective Action Plan: The District will ensure all contracts comply with their procurement policy and the procurement standards as identified in 2 CFR sections 200.317 through 200.327. Anticipated Completion Date: June 30, 2025

In the future, we intend to advertise for a longer period of time and if needed re-advertise for a second job walk. We will note each company that attends and if they did or did not chose to bid the job. The documentation of each bid and the board approval for the awarded bid will now be maintained at both the Construction, Maintenance, and Operations Department and the District Office to lessen the loss of documentation due to employee turnover.

January 5, 2024 To: Nigro & Nigro PC Regarding Audit Finding 2024-001 Procurement (5000) Assistance Listing #10.533, 10.55- U.S Department of Agriculture, California Department of Education, Child Nutrition Cluster We agree with the auditor's comments and the following actions will be taken to ensure the district is compliant with Code of Federal Regulations, CFR 200.320. 1) Implement a district system to track all formal bids, informal bids and RFQ's by contract year 2) Documents will include key information such as bid solicitation dates, contract dates and renewal dates for all Nutrition Services bids, RFPs, RFQs and micro-purchases. 3) The Director of NUtrition Services will review all contracts at the beginning of each school year. These steps along with training key personnel will make sure we are in compliance with Code of Federal Regulations, CFR 200.320 Michelle Cagle Director, Fiscal Services

MATERIAL WEAKNESS 2024-002 Child Nutrition Cluster – Assistance Listing Number 10.553 and 10.555 Procurement Recommendation: We recommend that the Organization establish and maintain effective internal controls over procurement requirements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: One City Schools adopted a procurement policy in November 2023 that, if followed, resolves this finding. A new primary food vendor was selected in summer of 2024, and the selection did adhere to the new procurement policy. This policy and all procedures were edited to be comprehensive of all uniform grant requirements through the development and adoption of the Federal Funds Procedural Manual. Name(s) of the contact person(s) responsible for corrective action: Janel Vertz, Finance Director Planned completion date for corrective action plan: January 2025

December 18, 2024 Donovan CPAs 9292 N. Meridian Street, Suite 150 Indianapolis, IN 46260 Subject: Response to Uniform Guidance Audit Finding for FY23-24 Finding 2024-001 Procurement Significant Deficiency Federal Program: Charter Schools Program Assistance Listing Numbers: 84.282A Springville Community Academy (SCA) plans to develop a written procurement policy that incorporates the Federal regulations and procurement standards identified in §200.317 through 200.327. I, Corbin Dietrich, will work with the Board of Directors of SCA and our consultants with Indiana Charters to develop the appropriate procurement policies and procedures. We plan to draft and approve the required policies at the board meeting in January 2025. Sincerely, Corbin Dietrich, Treasurer

2024‐001 Procurement and Suspension and Debarment Person Responsible for Corrective Action: Lark Reynolds, Business Administrator Correction Action Planned: (1) The District management will review procurement policies with staff. (2) Timely action will be taken to solicit bids for contracts that exceeds District thresholds. (3) To ensure full and open competition takes place, management will routinely review spending reports. Anticipate Completion Date: November 30, 2024

FINDING 2024-005 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): H027A210084, H027A220084, H027A230084 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Condition: An effective internal control system was not in place at the School District to ensure compliance with requirements related to the Special Education Cluster and Procurement and Suspension and Debarment compliance requirements. Context: During the audit period, the School District purchased Special Education contracted services from one specialist with aggregate payments for each fiscal year which were within the small purchases threshold ($10,000 - $150,000) under Federal and State procurement regulations. The School District did not solicit multiple quotes for services, document the method and rationale for procurement, and did not perform a check to confirm the service provider was not suspended or debarred before entering into the contract and disbursing federal funds. FINDING 2024-005 (Continued) Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: Management will implement a procurement checklist that is reviewed management to ensure compliance with the School's purchasing policy for federal awards. Sam.gov will be checked for each vendor being paid from Federal Funds. Responsible Party and Timeline for Completion: Moriah Crane - Treasurer and Andrew Grismore - Grant Coordinator starting immediately.

CORRECTIVE ACTION PLAN OF CURRENT AUDIT FINDINGS June 30, 2024 FINDING 2024-001 Information on the federal program: Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program, School Summer Food Service Program Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2023, FY 2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement and Suspension and Debarment compliance requirements. Context: Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $50,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. The School Corporation's policy states that the small purchase threshold is between $10,000 and $150,000. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. For fiscal year 2023, two vendors, totaling $109,657 and $53,441, were selected for testing at the small purchase threshold. The School Corporation did not obtain price or rate quotes nor was there documentation detailing the history of procurement, which must include the reason for the procurement method used. The lack of internal controls and noncompliance was isolated to fiscal year 2023. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include but are not limited to contracts for goods and services awarded under a non-procurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. During the audit period, there were ten vendors identified which exceeded $25,000 in disbursements on an annual basis. Six vendors were selected for testing. In one instance, the School Corporation's contract with the vendor did not include any suspension and debarment clause and the School Corporation did not verify the vendor's suspension and debarment status prior to payment. The lack of internal controls and noncompliance was isolated to fiscal year 2023. Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: Management will ensure that the School Corporation's procurement policy is being followed for all procurement thresholds. Management will perform a periodic check of federal fund disbursements to see if any vendors exceed procurement or suspension and debarment thresholds on an annual basis to ensure compliance with federal and state procurement guidelines. The School Corporation will ensure that all contracts exceeding $25,000 include a suspension and debarment clause and will verify that the vendor is not suspended or debarred prior to entering into the contract. Responsible Party and Timeline for Completion: The Food Service Department has already implemented these changes as the issue was not present in fiscal year 2024.

The Village of Lexington hired, through a bid process, Townley Engineering to design needed water and sewer expansion and upgrades for the purpose of submitting to USDA for Water and waste disposal systems for rural communities grants in 2017. The Village was awarded funding and hos worked closely with USDA representatives as we have moved through the program. A budget for all costs was approved as part of the grant award. All invoices, including all engineering fees, are approved directly by our assigned Area Specialist. The project costs are currently all within budget. The Village of Lexington will ensure that engineering services follow correct procurement procedures in any future grant program it is awarded.

Re: Finding 2024-001: Procurement (50000) Nutrition Services currently uses US Foods for the purchase of various commercial food items throughout the year (candy, chips, soda, bread, hotdogs, popcorn, coffee, hot cocoa, churros, cookies, etc). A vast majority of the purchases are for non-program foods for catering or Snack Bar Sales at Fred Kelly Football Stadium. Occasionally, US Foods is used to purchase specialty items for students with food allergies (i.e. gluten free) and baby food for students that require a pureed diet. Nutrition Services compares prices between US Foods and Smart and Final periodically throughout the year. Smart and Final purchases are made in store and Nutrition Services would have to provide pictures of price tags on the shelf at Smart and Final to show compliance with this request. Nutrition Services requested a price quote for products purchased through US Foods. Unfortunately, the company representative told us their prices are variable based on the market and could change weekly. Nutrition Services would only be able to provide auditors of screenshots ofUS Foods online ordering portal, which would consist of hundreds of pages given the expansive foods available. To correct the finding, Nutrition Services will do the following: 1. Request piggybackable formal bid options from US Foods. To that end, the Nutrition Services and Purchasing directors will seek board approval no later than March 1, 2025. 2. Take necessary steps to increase micropurchase threshold to $50,000. 3. Consider opening a Purchase Order with Sysco Foods to spread the micropurchases to another online retailer, thus mitigating the issue of in-person shopping and price comparisons. 4. Work with Purchasing Department to ensure open Purchase Orders do not exceed $50,000 for any vendor that does not have formal procurement in place. To that end, the Nutrition Services Accounting Technician and the Purchasing Supervisor will review quarterly expenditures for all open purchase orders effective December 1, 2024.

The Purchasing department will develop and maintain written procurement procedures requiring that “small purchases” of equipment or services made under a Federal award or sub-award above the micro purchase threshold require multiple quotes and that these quotes are properly documented as evidence. “Small purchases” are those where the total dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. Purchasing department staff will be trained on this procedure and the District will adopt a board policy to address this procedure. The contact person is Philippa Townsend and the anticipated completion date is 11-1-2025.

Action Taken in Response to Finding: Procurement practices were maintained and subsequently standardized and incorporated into Financial Policies and Procedures. A Procurement Policy aligned with 2 CFR §§200.317–200.327 was implemented and includes requirements for: • Documenting procurement methods • Ensuring full and open competition, where applicable • Performing cost or price analysis when required • Maintaining procurement records sufficient to support decisions These requirements have been integrated into financial operations to ensure consistency and compliance across all Federal awards. Control Enhancement: A standardized procurement framework has been implemented requiring: • Documentation of procurement method (micro, small purchase, competitive, or sole source) • Documentation of vendor selection and rationale • Cost or price analysis for applicable procurements • Justification and approval for noncompetitive procurements All procurement actions are supported by documentation demonstrating compliance with federal requirements. Monitoring & Review: • Procurement transactions are reviewed prior to execution of vendor agreements funded with Federal awards • Documentation is submitted to the Director of Finance & Operations for review • Review and approval are performed in accordance with established approval thresholds Testing & Validation: • Beginning in June 2026, periodic internal reviews will be conducted to assess procurement files for compliance with Federal requirements • Testing will confirm: o Proper procurement method selection o Adequate documentation of vendor selection o Completion of cost/price analysis where required Documentation & Evidence: • Procurement files maintained in Teams / SharePoint • Documentation includes procurement method, vendor selection, and pricing support • Approvals documented via workflow / contract approval process Control Owner(s): • Director of Finance & Operations • Finance Team • Program Leadership (as applicable) Responsible Party: Helen Young Hayes, Founder / Chief Executive Officer, in coordination with the Director of Finance & Operations Anticipated Completion Date: All corrective actions will be implemented by June 30, 2026. Ongoing monitoring and periodic validation will continue. Status: • Formalized Procurement Policy: Implemented in May 2023, • Monitoring documentation (memorandum and checklist): Implemented in 2024; Strengthened with additional structure and controls, with support from an outside professional services firm - CliftonLarsonAllen(CLA)’s grant management team, leveraging their experience in federal grant compliance Grant Management framework Integrated into Financial Policies and Procedures: Completed May 2026 • Periodic internal reviews will be conducted to assess procurement files for compliance with Federal requirements: June 2026.

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