Corrective Action Plans

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.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND MATERIAL NONCOMPLIANCE – U.S. DEPARTMENT OF AGRICULTURE, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CHILD NUTRITION CLUSTER (INCLUDING COVID-19 FUNDING) – FEDERAL ALN 10.553, 10.555, AND 10.559 2023-004 Internal Control Over Compliance and Material Noncompliance With Federal Procurement, Suspension, and Debarment Requirements Finding Summary 2 CFR § 180 and 2 CFR § 200.318-327 requires the District to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including procurement, suspension, and debarment requirements applicable to the child nutrition cluster federal program. During our audit, we noted the District did not have sufficient controls in place resulting in material noncompliance within its child nutrition cluster federal program to ensure compliance with federal procurement requirements related to methods of procurement and to assure that it was not contracting for goods or services with parties that are suspended or debarred, or whose principals are suspended or debarred from participating in contracts involving the expenditures of federal program funds. Corrective Action Plan Actions Planned – The District is in the process of reviewing and updating its policies and procedures relating to procurement, suspension, and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The review of procedures will also include steps to assure that district personnel are following the requirements of the Uniform Guidance related to methods of procurement and maintaining appropriate documentation. Official Responsible – Sara Bratsch, Director of Finance. Planned Completion Date – June 30, 2024. Disagreement With or Explanation of Finding – The District is in agreement with this finding. Plan to Monitor – Sara Bratsch, Director of Finance, will assure appropriate internal controls and procedures are updated and in place to ensure compliance with procurement, suspension, and debarment requirements.

Suggested Actions: 2.1 Perform a review of Supplier Master Records for completeness. The validation of completeness will include but will not be limited to the initial suspension and debarment validation report on Supplier Master Record file, in accordance with CRS Supplier Master Record Management policies and procedures. Responsible Officials: Director of Global Procurement, DRD Operations, SCM RTAs, Head of Operations, Supply Chain Managers Completion Date: September 30th, 2024

Name of Contact Person - Mr. Michael Turek, Interim Superintendent 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.

Finding Summary: In connection with the audit procedures performed, it was noted that the Organization did not adequately maintain complete procurement file documentation (as required by 2 CFR 200.318) related to one vendor that was selected for testing. Responsible Individuals: Christa Beauchat, Chief Financial Officer Corrective Action Plan: Management is implementing processes to maintain adequate and required documentation (under the CFR) for the selection of existing vendors and all vendors selected in the future to evidence adherence to general procurement standards and to evidence that vendors have been verified as not suspended or debarred. Specifically, management will maintain a vendor file (with required documentation) for any vendors that meet the criteria under the CFR. Anticipated Completion Date: Ongoing

FIDING NO. 2023-003 PROCUREMENT SUSPENSION AND DEBARMENT CONDITION We examined one hundred percent (100%) of the disbursed made and charged to HEERF Institutional Aid for the fiscal year 2022-2023 and noted the following: 1) UPM did not have documentation related Schools are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. 2) UPM made five (5) payments for $100,406.71 in advance for goods or services not received at the disbursement date. RECOMMENDATION The Institution should reinforce the established procedures and adhere to them before any payment is made for goods or services. The amount of $100,406.71 should be reimbursed to the U.S. Department of Education. In addition, UPM should be included in its procedures steps to adopting regulations, to verify that the vendor entity is not suspended or debarred or otherwise excluded from participating in the transaction. Corrective Action Plan: The UPM requested the documents from potential vendors that authorized them to do business in Puerto Rico. The selected company, Vitaltek, provided documents showing that it was established and compliant with the law, precisely the evidence that they were not debarred or suspended. The UPM has a procurement process titled " Reglamento para la Adquisici6n de Equipos, Materiales y Servicios No Personales de la Universidad Pentecostal MIZPA" that states the process for verifying debarment and suspension. Prepayments The UPM has analyzed each prepayment, and we have evidence that the services, equipment. and materials have been received. In addition to having the purchase orders, contract, and invoices, we have the equipment in our facilities in good condition and inspected per our internal procedures, titled "Reglamento para la Administraci6n de Propiedad Mueble (Equipo) de la Universidad Pentecostal Mizpa." Vitaltek was the only company that provided a quote and was selected due to the COVID-19 emergency. Their purchase condition required a prepayment for ordering and obtaining products. Regarding the Service Contract for the photocopiers, we recognize that it was paid in advance; however, to date, all services related to this contract that we have required have been offered in compliance with each of the clauses and agreements signed. The acquisition of this type of equipment comes with a multiyear plan and maintenance services included in the package, which is the industry standard and necessary for the institution's administrative and academic operations. Understanding the seriousness of the correct administration of these funds, the Dean of Administration will periodically evaluate compliance with any contract. If it is not complied with, we will proceed through legal action to quickly recover these funds. The UPM understands that it should not reimburse this money to the United States Department of Education because there is sufficient evidence to demonstrate that the funds have been used within legal parameters, that they have strengthened the University in academic and administrative and that from now on we will observe the following to comply with such an essential and necessary reservation. Corrective action plan to follow: All employees. including those in the office of the presidency, have been finally and firmly alerted that advance payments should be avoided or only considered in emergency situations. All employees authorized to reach contractual agreements will be trained on this topic, and the internal procedures will be reviewed and edited to address prepayments and emergency processes. We will appoint an employee in charge of managing all compliance documentation so that, together with the Dean of Administration and Finance, they can locate and group all the relevant standards and regulatory procedures and have the power to guide so that each of its recommendations is willingly observed. This will be supported by the requirements that always accompany each award. In addition, these officers will have the power to make external consultations with professionals familiar with these matters.

Management states there was a procurement policy in place during this time but will now document that policy consistent with the federal laws and regulations.

Finding Number 2023-003 • Significant deficiency in internal controls over compliance related to procurement. Federal Agency: U.S. Department of Commerce Program Title: Pacific Fisheries Data Program Assistance Listing Number: 11.437 Award Numbers: NOAA-NMFS-AK-2023-2007663 Award Period: October 1, 2022 to September 30, 2027 Criteria • 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Procurement Standards require that awardees use documented procurement procedures for the acquisition of property or services required under a Federal award or subaward. Condition/Context for Evaluation • IPHC's internal controls over procurement do not include the controls and procedures required by 2 CFR 200. Questioned Costs • Not applicable. Cause • IPHC has not yet modified its procurement policies with the requirements of the 2 CFR Part 200 Procurement Standards. Effect or Potential Effect • As a result, IPHC cannot be certain that procurements were conducted in accordance with the 2 CFR Part 200 Procurement Standards. Repeat Finding • Not applicable. Recommendation • We recommend that IPHC update its procurement policy to include all procurement requirements of 2 CFR Part 200. - Procurement standards 2 CFR 200 Subpart D or 200.318-200.327 - Requirement for documented policies consistent with standards 200.318(a) Contact Person(s): • Executive Director: David Wilson (david.wilson@iphc.int); • Assistant Director: Andrea Keikkala (andrea.keikkala@iphc.int) Explanation and specific reasons for disagreement with the audit finding or that corrective action is not required (if applicable): Not applicable. Corrective action planned: As this was the IPHC’s first full GAAP Audit, Single Audit of federal grant funds, and also our first year transitioned from a Cash-basis of accounting to an Accrual-basis of accounting, there are a number of policies and procedures that are in the process of being amended. It will take the Secretariat several months to bring our written process guides into alignment with “2 U.S. Code of Federal Regulations (CFR) Part 200”, as well as our Financial Regulations (2021) that will be considered for amendment at the upcoming 100th Session of the IPHC Finance and Administration Committee (FAC100) and subsequent 100th Session of the IPHC Annual Meeting (AM100) in late January 2024. During the 2nd quarter of FY2024 (1 January – 31 March 2024) the IPHC will undertake a thorough review of “2 U.S. Code of Federal Regulations (CFR) PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS” and update our procurement policies and processes accordingly. Anticipated completion date: Deadline: 1 April 2024.

Finding 2023-004 Finding Subject: Child Nutrition Cluster-Procurement and Suspension and Debarment Summary of Finding: The School Corporation had not properly designed or implemented internal controls over procurement and suspension and debarment Contact Person Responsible for Corrective Action: Dr. Tracy Lorey, Monica Young, April Hopf Contact Phone Number and Email Address: tlorey@gjcs.k12.in.us myoung@gjcs.k12.in.us ahopf@gjcs.k12.in.us 812-482-1801 Views of Responsible Officials: We agree with the finding. Description of Corrective Action Plan: The school corporation will follow our Procurement policy in the future. Anticipation Completion Date: August 2024—Beginning of New School Year

Finding 2023-005 – Special Education Cluster – Procurement and Suspension and Debarment Contact Person Responsible for Corrective Action: Laura Hubinger, CFO-Greater Clark County Schools lhubinger@gccschools.com Jennifer Cato, Deputy Treasurer-Greater Clark County Schools jcato@gccschools.com Brooke Lannan, Director of Special Education blannan@gccschools.com Contact Phone Number: 812-288-4802 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: When service contractors are needed for these types of services, the district will solicit from additional vendors to see if types of services can be provided to meet the needs of our students in our district. Quotes will be obtained if vendors are capable of meeting requirements. If vendors are not available to meet the requirements for the services requested the attempt and contact information will be noted via memorandum to the CFO of the research of various providers and the results of the research and the reasons why a vendor is selected; additionally, notes will be provided as to why others did not qualify. There is a procedure already in place for checking for Suspension, Disbarment for selected vendor. Anticipated Completion Date: Immediately

Department of the Treasury, Passed through Utah Department of Workforce Services Federal Assistance Listing 21.027 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award, including procurement, suspension, and debarment requirements. Condition: The Organization’s written procurement policies did not include all of the elements required by the Code of Federal Regulations 2 CFR 200.318-200. Cause: The Organization did not have internal controls in place to review the procurement policy and ensure it complies with federal requirements. Effect: The risk is increased that a procurement noncompliance could occur. Questioned Costs: None reported. Context/Sampling: Nonstatistical sampling was used. Sample size was three of seven procurement transactions above the micro-purchase threshold and included contracts totaling $5,707,820 of federal awards. Repeat Finding from Prior Year(s): Yes, Finding 2022-002 Recommendation: We recommend the Organization implement internal controls to review the procurement policy periodically to ensure it is consistent with federal requirements. Views of Responsible Officials: Management agrees with this finding.

Department of the Treasury, Passed through Utah Department of Workforce Services Federal Assistance Listing 21.027 Coronavirus State and Local Fiscal Recovery Funds Reporting Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization’s internal controls over reporting did not include documentation of a review of quarterly reports submitted to the awarding agency. Cause: The Organization did not have internal controls in place to document review of the quarterly reports, including review of the amounts reported.Effect: The risk is increased that reported amounts could be misstated. Questioned Costs: None reported. Context/Sampling: Nonstatistical sampling was used. Sample size was three of the four quarterly reports and three of the nine monthly reports. Repeat Finding from Prior Year(s): Yes, Finding 2022-001. Recommendation: We recommend the Organization implement additional internal controls over review, approval, and monitoring of reporting requirements under federal awards. Views of Responsible Officials: Management agrees with this finding.