Corrective Action Plans

Name of contact person - Mr. Joseph Gudac, Business Manager Corrective Action - We will follow our policy for federal purchases subject to quotation/bid/sole source requirements moving forward. The district will follow the policy for obtaining three quotation/bid requirements for federal purchases. In the event purchases are made through cooperative purchasing programs, three quotes will be documented when federal purchases are disbursed. We also implemented processes to improve documentation relating to the “reason” and “cost analysis” of sole source noncompetitive procurement. Anticipated Completion Date - The District will implement the above procedure immediately.

Food Worker Relief Program – Assistance Listing No. 10.181 Recommendation: We recommend that the Organization strengthen its controls and processes to identify all procurement transactions, ensure the appropriate procurement policies and levels are followed and clearly documented, and to verify vendors are not suspended or debarred. These procedures will help ensure compliance with Compliance Supplement and the Code of Federal Regulations related to procurement and suspension and debarment provisions. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management has taken the follwing steps to ensure procurement policies are followed : 1) Management has begun the hiring process for additional staffing in the Procurement Department to help support all operations. 2) Management will review and update current policy to be in line with Federal Procurement policies. 3) Procurement department will provide training to all personnel authorized for purchases. Name(s) of the contact person(s) responsible for corrective action: Jesse Satterlee, Interim CFO, 778-730-1155 Nancy Lipman, SVP Compliance, 602-257-0700 Planned completion date for corrective action plan: 6/30/2024 – Ongoing action and Implementation

Reviewing all areas of this finding, the District will follow the procurement policy, in fact the District has reached out to PINCO and is now part of their Co-op.

Management Response and Corrective Action Plan CRRUA has not previously required a single audit under Uniform Guidance, CRRUA will work with DAC Grant and Accounting team, who assist in oversight per contract agreement, to develop written procedures and policies per Uniform Guidance requirements. In addition, CRRUA will enlist external assistance for additional review and recommendations regarding the drafted policies and procedures. Finding resolved timeline: Implemented by June 30, 2024. In the next 3 months CRRUA will implement policies and procedures required to conform with Uniform Guidance. Designation of employee position responsible for meeting this deadline: Juan Carlos Crosby, (Interim) Executive Director and Mary DeAvila, Office Manager

Action taken in response to finding: • LMC staff will retain documentation for sam.gov verification

CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS, ASSISTANCE LISTING No. 21.027, DIRECT ALLOCATION, GRANT No.’s AC-22-0014, AM-22-0013 AND AM-22-0096 Name of contact person: Cherrie McAlexander Corrective Action: The city will review all ARPA Grant agreements and make sure that the Engineering Firm the city is working with on the projects is fully aware of the requirements in the ARPA Grant agreements. If the agreement calls for Suspension and Debarment verification the city will make sure that the Engineering firm makes this part of the bidding process. Proposed Completion Date: Before the next ARPA Grant project begins the city will make sure that all ARPA Grant requirements are met.

FINDING 2023-002 Finding Subject: Child Nutrition Cluster – Procurement and Suspension and Debarment Summary of Finding: We did not use the formal bid process for a vendor purchase over the simplified acquisition threshold. We did not ensure that all vendors over the $25,000 threshold were not suspended or debarred from conducting business with us. Contact Person Responsible for Corrective Action: Leeanne Koeneman Contact Phone Number and Email Address: Leeanne.Koeneman@nacs.k12.in.us; 260-637-8768 Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The Food Service Director will track cumulative expenditures for Vendor by Fiscal Year to ensure that compliance requirements related to procurement thresholds are met. Simultaneously, the Treasurer’s Office will provide reports to the Food Service Department on a monthly basis detailing the cumulative expenditures by vendor paid from the Food Service Fund. With thresholds being actively monitored, the Food Service Director will request quotes or bids, as applicable by individual and cumulative thresholds. Utilizing the procedures outlined above, individual and cumulative expenditures over $25,000 will be verified to ensure that the potential vendor(s) has not been suspended or debarred. Upon checking the status of vendor(s) at the Food Service Department, the results will be sent to the Treasurer’s office for review. Anticipated Completion Date: June 30, 2024

FINDING 2023-002 Finding Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Summary of Finding: Procurement The School Corporation failed to award contracts to four vendors totaling $314,783, which were considered small purchases. For small purchases of over $10,000 but less than $150,000, an informal process allows securing rate quotations from an adequate number of sources; however, the process still requires a written contract between the vendor and the school corporation. Suspension and Debarment The School Corporation failed, due to the lack of effective internal controls, to provide adequate oversight of the suspension/debarment process to ensure compliance to the process prior to paying vendors that were expected to be paid an amount equal to or exceeding $25,000. Contact Person Responsible for Corrective Action: Carla Gambill Contact Phone Number and Email Address: 812-847-6020 ext. 1004 cgambill@lssc.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Procurement When quotes for small purchases are received, the Director of School Finance will acknowledge a quote provided by a vendor that will be accepted by the corporation by written letter acknowledging the school corporation’s acceptance of the quote. The contract as well as the quote will be retained by the Director of School Finance and the Director of Food Services for comparison to invoices. INDIANA STATE BOARD OF ACCOUNTS 30 Suspension and Debarment On an annual basis, all vendors that are expected to be paid in excess of $25,000 will be searched by the Director of School Finance for suspension or debarment or the vendor will provide certification, either as a separate document, or as part of a written contract, that the vendor is not excluded or disqualified to receive federal funds. Those searches or other documentation will be reviewed by the Superintendent and acknowledged by signature. Anticipated Completion Date: This Corrective Action Plan will be put in effect March 2024.

FINDING 2023-007 Finding Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Summary of Finding: An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement The School Corporation did not complete or submit the fiscal year 2023 Procurement Plan as required to the Indiana Department of Education. Suspension and Debarment The School Corporation was a member of the East Central Educational Service Center (ECESC) during fiscal years 2021-2022 and 2022-2023. ECESC verified that vendors were not suspended or debarred when securing bids for food, dairy, and bread products on behalf of the member schools. However, for purchases of goods and services exceeding $25,000 handled by the School Corporation, 3 of the 5 vendors selected for testing were not verified for suspension and debarment to ensure vendors were not suspended or debarred from participation in federal programs. Contact Person Responsible for Corrective Action: Julie Cramer Contact Phone Number and Email Address: 765-932-4186 cramej@rushville.k12.in.us Views of Responsible Officials: We concur with the finding. Explanation and Reasons for Disagreement: N/A Description of Corrective Action Plan: Due to turnover in the Superintendent position and Food Service Director, position there was no access to SAM to verify vendor. This has been now been corrected and the Superintendent and Assistant Superintendent have access to SAM. They will verify for the Food Service Director any company will wish to deal with over $25,000. Future purchases will meet the school corporation’s procurement policy. All vendors in which expenditure exceed $25,000 will reviewed by the Food Service Director and either the Superintendent or Assistant Superintendent. Procurement – A 2023 procurement plan has been developed and will be sent to the Indiana Department of Education. Anticipated Completion Date: April 2024

FINDING 2023-002 Finding Subject: Child Nutrition Cluster -Procurement and Suspension and Debarment Summary of Finding: The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance with Procurement, Suspension and Debarment. The School Corporation entered into more than $50,000 of like/kind transactions with a single vendor during FY2022 and FY2023 without entering into a contract or properly verifying that the vendor was not suspended or debarred. Contact Person Responsible for Corrective Action: Tracy Troesch Contact Phone Number and Email Address: 812-817-0900; tracy.troesch@sedubois.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The Business Manager will review the vendors related to covered transactions and determine if like/kind transactions with any vendor are approaching or are expected to exceed $50,000. For vendors that meet the criteria of requiring a contract, the Business manager will obtain a contract, which will be reviewed and approved by the school board. The Business Manager will upload the purchase order and quote or other documentation of any purchase over $50,000 on Indiana Gateway for Government Units (Gateway) after board approval. Southeast Dubois County School Corporation followed the corrective action that was issued during the prior audit for Suspension and Debarment. During the current audit, the State Board of Accounts indicated that the corrective action and steps that were taken to verify compliance that the School Corporation was instructed to do were not adequate. Going forward, the Business Manager will run monthly vendor reports to determine if any vendors are close to the $25,000 to get a Certification Regarding Debarment, Suspension, Ineligibility, and Voluntary Exclusion form from the IN Department of Education needs to be issued to a vendor. If a vendor is close to the $25,000 mark, the Business Manager will send the Certification to be returned prior to future payment. Anticipated Completion Date: September 2024

Views of Responsible Officials: Management acknowledges the comment and subsequent to fiscal year end; has implemented internal procedures to ensure procurement is performed and documented for purchases in excess of our purchase threshold.

NONCOMPLIANCE WITH PROCUREMENT, SUSPENSION & DEBARMENT REQUIREMENTS, CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS; AL No. 21.027; GRANT No AM-23-0262, YEAR ENDED JUNE 30, 2023 Name of contact person: Fallon County Commission/Clerk and Recorder Corrective Action: Procedures will be developed that will provide reasonable assurance that procurement of goods and services are made in compliance with applicable federal regulations and other procurement requirements specific to a federal award or subaward, and that no subaward, contract or agreement for purchase of goods or services is made with any suspended or debarred party. Proposed Completion Date: Immediately

NONCOMPLIANCE WITH PROCUREMENT AND SUSPENSION AND DEBARMENT REQUIREMENTS, CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS, ASSISTANCE LISTING No. 21.027 AND DISASTER GRANTS-PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS), ASSISTANCE LISTING No. 97.036 Name of Contact Person: Loni Hanson Corrective Action: The City appreciates the clarification regarding the required compliance certifications for all contractors receiving federal funds. The City has worked with its engineering contractor to update processes to correct the identified deficiency. Proposed Completion Date: April 1, 2024

NONCOMPLIANCE WITH PROCUREMENT AND SUSPENSION AND DEBARMENT REQUIREMENTS, CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS, ASSISTANCE LISTING No. 21.027 AND DISASTER GRANTS-PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS), ASSISTANCE LISTING No. 97.036 Name of Contact Person: Loni Hanson Corrective Action: The City appreciates the clarification regarding the required compliance certifications for all contractors receiving federal funds. The City has worked with its engineering contractor to update processes to correct the identified deficiency. Proposed Completion Date: April 1, 2024

FINDING 2023-004 Finding Subject:􀀃Child􀀃Nutrition􀀃Cluster􀀃􀍲􀀃Procurement􀀃and􀀃Suspension􀀃and􀀃Debarment Summary of Finding: An􀀃effective􀀃internal􀀃control􀀃system􀀃was􀀃not􀀃in􀀃place􀀃at􀀃the􀀃School􀀃Corporation􀀃to􀀃ensure􀀃compliance􀀃with􀀃 requirements􀀃related􀀃to􀀃the􀀃grant􀀃agreement􀀃and􀀃the􀀃Procurement􀀃and􀀃Suspension􀀃and􀀃Debarment􀀃compliance􀀃 requirement.􀀃 Contact Person Responsible for Corrective Action: Lela Simmons Contact Phone Number and Email Address: (219) 391- 4100, lesimmons@ecps.org Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: All􀀃purchases􀀃will􀀃require􀀃three􀀃quotes􀀃to􀀃ensure􀀃the􀀃Vendor􀀃is􀀃compliance􀀃with􀀃purchase􀀃of􀀃$150,000􀀃or􀀃exceed􀀃 micro􀍲purchase􀀃threshold􀀃of􀀃$10,000􀀃all􀀃quotes􀀃will􀀃be􀀃attached􀀃to􀀃the􀀃APV.􀀃This􀀃will􀀃ensure􀀃all􀀃documents􀀃are􀀃 available􀀃upon􀀃request.􀀃The􀀃School􀀃Corporation􀀃will􀀃work􀀃with􀀃State􀀃to􀀃receive􀀃approval􀀃of􀀃Food􀀃Service􀀃 Management􀀃Company.􀀃􀀃 Anticipated Completion Date: We anticipate having the above corrective action plan in place by September 30, 2024.

FINDING 2023-003 Finding Subject: Special Education Cluster (IDEA) – Procurement, Suspension and Debarment Summary of Finding: Insufficient documentation provided for proof of Procurement and Suspension and Debarment verifications Contact Person Responsible for Corrective Action: Ghirmay Alazar (Procurement) Phyllis Ritenour (Suspension & Debarment) Contact Phone Number and Email Address: 317-845-9400 galazar@msdwt.k12.in.us pritenour@msdwt.k12.in.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: Procurement - At our educational institution, we prioritize the unique leaning needs of our students by actively seeking vendors who can effectively meet our expectations. To ensure transparency and fairness in the vendor selection process, we examine total costs estimates from each vendor and analyze their reputations, experience, customer feedback, and ability to provide innovative solutions. We use this information to make informed decisions and the rationale behind our vendor selection process. When searching for vendors we will keep documentation that displays the cost from each vendor and the rational for selecting a specific vendor. Suspension and Debarment – Beginning July 2024 the Assistant Accounting Manager will run reports annually in July from sam.gov and from FMS and compare the 2 files to make sure that we don’t have vendors in our system that are on the debarment list. The files will then be forwarded to the Accounting Manager via email for review and approval. The approval email and the 2 reports will be saved in our shared drive as proof of file review. All new vendors will be checked in sam.gov before allowing purchases to be placed. The review sheets will be emailed to the Accounting Manager for review and approval, these will also be saved in our shared drive. Anticipated Completion Date: Procurement – December 2024 Suspension & Debarment – July 2024

Type of Finding: Significant deficiency in internal control over compliance relating to inadequate records retained, CCS is at risk of noncompliance with the standards of Procurement. Management accepts the finding. Effective internal control over the documentation of procurement and suspension and debarment, which can be attributed to the documentation not being retained detailing the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, the basis for the contract price, and suspension and debarment. More thorough training of staff, along with careful supervisory review and documentation of procurement and suspension and debarment would likely have prevented these errors. Corrective action: A organization-wide federal compliance training is being developed and will include a refresher on procurement requirements. In addition, the review process of contracts has been strengthened regarding secondary review of proper procurement documentation.

We agree with the auditor’s comments, and the following actions will be taken to ensure all procurement procedures are within compliance: 1. Review current Board policies on small purchase and micro-purchase thresholds 2. Receive multiple quotes/bids for contracts that will qualify as small purchases. 3. Maintain documentation of the above for records purposes The above steps will be completed and implemented by December of 2024 to follow Child and Adult Care Food Program, Child Nutrition Cluster guidelines.

2023-004 - Written Policies Required by the Uniform Grant Guidance U.S. Environmental Protection Agency – Clean Water State Revolving Fund (ALN 66.458); Passed through the Michigan Department of Energy, Great Lakes, and Environment; All project numbers Auditor Description of Condition and Effect. Although the City has processes in place to cover these areas, there are no formal written policies covering payments, procurement, allowability of costs, compensation, and travel costs in accordance with the Uniform Guidance. As a result of this condition, the City was exposed to increased risk that grant requirements under 2 CFR 200 would not be followed. Auditor Recommendation. We recommend that the City develop and implement the required policies as soon as practical. Corrective Action. A written policy was developed and implemented in February 2024 that meets the requirements under Federal guidance. Responsible Person: Bobbi Schoon, Director of Finance and Administration

FINDING 2023-004 Information on the federal program: Subject: Special Education Cluster (IDEA) – Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 19611-022-PN01, 20611-022-PN01, 21611-022-PN01, 22611-022-PN01, 22611-022-ARP, 23611-022-PN01, 20619-022-PN01, 21619-022-PN01, 22619-022-PN01, 22619-022-ARP, 23619-022-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Qualified Opinion Condition: The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the procurement and suspension an debarment requirements. The Cooperative had not designed or implemented adequate policies or procedures to ensure that proper procurement procedures for micro or small purchases were followed. There was no oversight, review, or approval process in place and documented at the Cooperative to ensure proper procedures were followed and price or rate quotations were obtained, if required, or documentation to support limited procurement procedures. Context: The School Corporation is a member of the Greene-Sullivan Special Education Cooperative (Cooperative). During fiscal year 2021-2022 and 2022-2023, the Cooperative operated the special education programs and spent the federal money on behalf of all its members.  As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Procurement and Suspension and Debarment compliance requirement. 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 $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. For fiscal year 2022, three vendors, totaling $88,772, were identified as being less than the simplified acquisition threshold of $150,000, but exceeding the $10,000 micro-purchase threshold. One of the three vendors was a bankcard used to pay several different vendors; however, individual determinations of amount spent by vendor could not be determined, and thus it was considered under this threshold. All three vendors were tested. For all three, the Cooperative 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. For fiscal year 2023, six vendors, totaling $264,106, were identified as being less than the simplified acquisition threshold of $150,000, but exceeding the $10,000 micro-purchase threshold. One of the six vendors was a bankcard used to pay several different vendors; however, individual determinations of amount spent by vendor could not be determined, and thus it was considered under this threshold. All six vendors were tested. For five of the six, totaling $252,906, the Cooperative 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 were systemic issues throughout the audit period. 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. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the Cooperative disclosed they relied on a clause to be included in the vendor contracts to ensure compliance. Two covered transactions that equaled or exceeded $25,000 were identified. Both transactions, totaling $192,218, were selected for testing. One of the two transactions, totaling $44,883, included the appropriate clause. For the other vendor, the Cooperative did not verify the vendor’s suspension and debarment status prior to payment. The lack of internal controls and noncompliance regarding suspension and debarment were isolated to fiscal year 2023. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will take the following corrective action: 1 – Southwest School Corporation will ensure a system of internal control and procedures are in place and appropriate procurement procedures for goods and services are followed. 2 – The Cooperative will post any openings that exceed the small purchase threshold in the local newspapers, within the office, and on the cooperative website. Any and all proposals will be presented to the Cooperative Board of Directors for approval. Responsible party and timeline for completion: Chris Stitzle, Superintendent – April 1, 2024

The Organization will revise its procurement policy to include current language and the required elements of 2 CFR 200.318-.327.

Auditor’s Recommendations: We recommend the District establish a policy and implement procedures regarding large purchases related to Federal grants to insure that no vendors who are suspended, debarred, or otherwise excluded from participating in transactions funded through Federal grants are used. As identified above, there are several methods in which the District can verify vendors who are not suspended or debarred. The District may have the vendor provide an annual certification that is s not currently suspended, debarred, or otherwise prevented from receiving Federal dollars. In other occasions in which a single purchase is going to be made, the purchasing procedures should include looking up the vendor on the GSA website, printing a copy of the verification, and placing it in the file with the purchase order. The District has options, and it should establish what method is the least intrusive, but also effective, in complying with the requirements of the Uniform Grant Guidance. Responsible Official’s Plan: • Specific corrective action plan for funding: The procurement Officer of SJSWCD has updated the procurement process on 12/7/23 that all contractors who will be receiving Federal monies must provide an annual certification that they are not suspended, debarred, inactive, or otherwise excluded from participating in transaction funded through Federal grants. The policy change will be approved at the next board meeting. • Timeline for completion of corrective action plan: December 7, 2023 • Employee position(s) responsible for meeting the timeline: Oralia Bridge, District Manager

FINDING 2023-006 Information on the federal program: Subject: Special Education Cluster (IDEA) – Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers: 19611-022-PN01, 20611-022-PN01, 21611-022-PN01, 22611-022-PN01, 22611-022-ARP, 23611-022-PN01, 20619-022-PN01, 21619-022-PN01, 22619-022-PN01, 22619-022-ARP, 23619-022-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Qualified Opinion Condition: The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the procurement and suspension an debarment requirements. The Cooperative had not designed or implemented adequate policies or procedures to ensure that proper procurement procedures for micro or small purchases were followed. There was no oversight, review, or approval process in place and documented at the Cooperative to ensure proper procedures were followed and price or rate quotations were obtained, if required, or documentation to support limited procurement procedures. Context: The School Corporation is a member of the Greene-Sullivan Special Education Cooperative (Cooperative). During fiscal year 2021-2022 and 2022-2023, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Procurement and Suspension and Debarment compliance requirement. 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 $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. For fiscal year 2022, three vendors, totaling $88,772, were identified as being less than the simplified acquisition threshold of $150,000, but exceeding the $10,000 micro-purchase threshold. One of the three vendors was a bankcard used to pay several different vendors; however, individual determinations of amount spent by vendor could not be determined, and thus it was considered under this threshold. All three vendors were tested. For all three, the Cooperative 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. For fiscal year 2023, six vendors, totaling $264,106, were identified as being less than the simplified acquisition threshold of $150,000, but exceeding the $10,000 micro-purchase threshold. One of the six vendors was a bankcard used to pay several different vendors; however, individual determinations of amount spent by vendor could not be determined, and thus it was considered under this threshold. All six vendors were tested. For five of the six, totaling $252,906, the Cooperative 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 were systemic issues throughout the audit period. 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. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the Cooperative disclosed they relied on a clause to be included in the vendor contracts to ensure compliance. Two covered transactions that equaled or exceeded $25,000 were identified. Both transactions, totaling $192,218, were selected for testing. One of the two transactions, totaling $44,883, included the appropriate clause. For the other vendor, the Cooperative did not verify the vendor’s suspension and debarment status prior to payment. The lack of internal controls and noncompliance regarding suspension and debarment were isolated to fiscal year 2023. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will take the following corrective action: 1 – Northeast School Corporation will ensure a system of internal control and procedures are in place and appropriate procurement procedures for goods and services are followed. 2 – The Cooperative will post any openings that exceed the small purchase threshold in the local newspapers, within the office, and on the cooperative website. Any and all proposals will be presented to the Cooperative Board of Directors for approval. Responsible party and timeline for completion: Mark A Baker, Superintendent Effective April 2024

FINDING 2023-003 Finding Subject: Child Nutrition Cluster – Procurement and Suspension and Debarment Summary of Finding: Procurement: For one of the two vendors tested for small purchases an adequate number of price or rate quotes were not obtained. Suspension and Debarment: The School Corporation purchased bread, dairy produce and commodities through Region 8 Education Service Center (Region 8) However, Region 8 had not received the SFA – only Cooperative classification from IDOE for fiscal years 2021-2022 and 2022-2023. As such, the School Corporation could not rely on Region 8’s verification of suspension and debarment and was required to complete their own verification. One covered transaction was identified and tested that equaled or exceeded $25,000. For the noted transaction, the School Corporation did not verify that the vendor was not excluded or disqualified from participation in federal award programs. Contact Person Responsible for Corrective Action: Susan Loftain Contact Phone Number and Email Address: (260) 693-2007 loftains@sgcs.k12.in.us Views of Responsible Officials: Option 1: “We concur with the finding.” Description of Corrective Action Plan: Procurement: All vendors procured through Region 8 we will need to take action to secure bids and quotes and keeps copies and make we are within compliance Suspension and Debarment: We will be sure to complete our own verifications and not rely on Region 8 to check on suspension and debarment Anticipated Completion Date: Today 2/28/24

Finding: 2023-001 Federal Agency Name: U.S. Department of the Treasury Program Name: COVID-19 – Coronavirus State and Local Fiscal Recover Funds CFDA #: 21.027 Compliance Area: Procurement, Suspension and Debarment Initial Fiscal Year Finding Occurred: 2023 Finding Summary: During the course of the testing over the federal program, it was noted that while the City does have a purchasing policy, elements as required by Uniform Guidance are absent from the policy. In addition, elements that are required to be included in contracts with vendors who are paid using federal monies were missing from the contracts. This was due to the fact that the City had not had single audits performed until recently as a result of the increase in funding due to the COVID-19 pandemic. Because of this, they had not updated their purchasing policy to be compliance with Uniform Guidance. Responsible Individuals: Chief Financial Officer Procurement Manager Corrective Action Plan: City will update existing Purchasing Policy to include the necessary elements as noted in the Uniform Guidance. City will update future contracts associated to grant dollars to include the necessary elements as noted in the Uniform Guidance. Anticipated Completion Date: City will have the Purchasing Policy updated by June 1, 2024 to allow time for Legal Review public noticing timelines. City will have the Contract Language updated for the next applicable contract associated to grant dollars.