Corrective Action Plans

Management thought the bidding for the Township engineer a number of years ago, met the bidding requirements. In the future, if the Township obtains any federal grant that requires engineering services, the Township will make sure that we bid engineering services. The anticpated completion date is prior to receiving another federal grant award requiring engineering services.

Views of Responsible Officials:This instance was largely due to staff turnover. ASCB will train all grant-related and all finance staff in proper processes and procedures based on contract price thresholds. This will create awareness throughout both departments which will result in everyone taking ownership of the process and not being reliant on any one staff member.

2CFR 320, Methods of Procurement Standards are to be followed by each department requesting federal award. The County Auditor has instructed our employees and admin people of the changes made to our system to be followed for methods of procurements. County Auditors have provided an easy sheet to be followed and dated to be turned into the auditor's office to be approved prior to purchases as to see all steps have been completed of the procurement policy prior of purchasing items on any federal award. All items by County Auditor will be processed and looked at again prior to a check written.

Item 2023‐002 Written policies, procedures, and standards of conduct Recommendation: Grantees should have written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. 2 CFR 200, Subparts D & E requires the non‐Federal entity to establish and maintain written policies, procedures, and standards of conduct including internal controls over the Federal awards that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award. Specific requirements relate to the following: § 200.302 Financial management  § 200.305 Payment  § 200.319 Competition  § 200.320 Methods of procurement to be followed  § 200.430 Compensation—personal services  § 200.431 Compensation—fringe benefits We recommend that the City implement the required written policies and procedures. Action Taken: Management, namely Jan Boutwell, City Clerk, agrees with the finding and will implement the necessary written policies to comply with the UG. Management anticipates completion by September 30, 2024.

Failure to Follow Procurement Policy Finding 2023-003 Auditor Description of Condition and Effect: The Authority did not comply with the current procurement policy as procedures were not fully followed and required forms were not completed. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, Responsibility Determination (sam.gov debarred verification), and Cost/Price Analysis. Also, as stated in the prior finding, the procurement policy needs to be updated. As a result, the Authority is noncompliant with 2 CFR 200 and its own procurement policy. Auditor Recommendation: We direct the Authority to implement procedures to ensure that the fiscal year 2022 is certified within the required nine-month deadline. Corrective Action Plan: The Authority will review and update its procurement policy to comply with federal requirements. The Authority’s management, consultant, and finance director will review the procedures in the policy to ensure they are being acted upon accordingly going forward. Responsible Official: Contact person is Rufus Adams, Executive Director,275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. Due Date: September 30, 2024

Federal Aid Policies Finding 2023-002 Auditor Description of Condition and Effect: The Authority’s management has completely turned over and been restructured. However, the Authority’s policies for federal aid approved in 2021 have not been revised to update for the current management structure. The policies have also not been updated for changes in the 2 CFR 200 that have occurred. As a result, the Authority is noncompliant with 2 CFR 200. Auditor Recommendation: We direct the Authority review and update all federal aid policies and implement procedures to ensure that they are being reviewed at least once a year for changes in the Authority’s management structure or changes that occur in the 2 CFR 200. Corrective Action Plan: The Authority will update their federal policies to comply with 2 CFR 200 and will review all policies on an annual basis going forward. Responsible Official: Contact person is Rufus Adams, Executive Director,275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. Due Date: September 30, 2024

Federal Program Information Federal Agencies: U.S. Department of Health and Human Services and U.S. Department of Defense Federal Cluster: Research and Development (R&D) Pass-Through Entity: The University of Texas Health (93.853, NS119834) Assistance Listing Nos.: 12.420, 93.310, 93.353, 93.393, and 93.853 Award Numbers: W81XWH-15-1-0292 (12.420), OD23121 (93.310), CA246568 (93.353), CA259201 (93.393), NS119834 (93.853), NS122096 (93.853) Award Periods: Various Corrective Action Planned Management conducted an education and training session for procurement teams in June 2024 to reinforce procurement requirements and documentation standards. Management will implement an independent sanction and debarment check for suppliers as part of existing quarterly audits over Supplier AP vendor master tables and related changes to those tables. Persons Responsible for Corrective Action Daniel Schmitz, Division Chair - Supply Chain Management Scott Hammer, Director - Supply Chain Management Target Completion Date June 30, 2024

Views of Responsible Officials: NFHA will review and update its current Procurement Policies to ensure that they meet all current Federal and Uniform Guidance requirements. This will include documentation of contractor selection and single source vendor criteria. NFHA will provide additional training to all staff on the revised policies and procedures.

The Organization is in the process of developing a procurement policy and suspension and debarment policies that aligns with Uniform Guidance.

Views of Responsible Officials: The Organization will complete and implement a formal, written procurement policy.

Finding 2023-001 Condition: Three vendors were awarded a contract without an appropriate procurement process. Corrective Action Planned: The School will implement federal procurement guidelines when contracting with vendors being paid for with federal awards in the future. Anticipated Completion Date: Immediately Contact: Michelle Austin, Director of Finance and Business Operations, Sandwich Public Schools

Finding 2023-003 Condition: Documentation of the solicitation of quotes for one purchase totaling $16,700 could not be found in Department files. Also, a written determination related to a sole source procurement totaling $15,460 was not in the Department files. Corrective Action Plan: The School District has implemented new policies and procedures surrounding the documentation of procurement to better ensure compliance with federal procurement requirements. Anticipated Completion Date: 5/31/2024 Contact Information: Keith Buday, Assistant Superintendent – Finance & Operations

Finding 2023-002 Condition: Procurement documentation could not be found in Department files related to purchases of pizza making supplies from a vendor. Corrective Action Plan: The School Lunch Department has implemented new policies and procedures surrounding documentation of procurement, including the adoption of new standardized procurement forms based on templates provided by the state, to ensure compliance with federal procurement requirements. Anticipated Completion Date: 5/31/2024 Contact Information: Keith Buday, Assistant Superintendent – Finance & Operations

While the city follows state law regarding the procurement of engineering services, going forward the city follow Uniform Guidance 2CFR Section 200.319 for any new projects that require any engineering services, or any other services exempt from state procurement laws.

1. The District will obtain more information from the Ohio Purchasing Council going forward on future projects. 2. On the purchase of a used van, the transportation supervisor searched for a van that would suit the needs for our school district. 3. Our maintenance supervisor received 2 quotes for the floor scrubbers that we purchased. The district split the order between the two vendors.

Finding Number: 2023-002 Condition: The Society did not have documentation to support that two covered transactions were checked for potential suspension or debarment before entering into the transaction. There was one covered transaction where the Society did not have documentation to support the procurement process followed or that more than one vendor was reviewed for pricing before selecting the vendor chosen. Planned Corrective Action: Staff turnover in early 2023 resulted in limited capacity for dedicated staff to check for potential suspension or debarment before adding vendors to the system. We have dedicated staff who will be managing this process going forward. The Society has written procurement policies and procedures. Key leadership stakeholders have been apprised of our policies and procedures. The Society will be implementing a training series for government funded procurement stakeholders within the Society to ensure compliance. Contact person responsible for corrective action: Dharshni Sabapathy, Senior Director of Accounting Anticipated Completion Date: April 25, 2024

The School District will follow proper procurement procedures related to food purchases.

2023-001 Procurement, Suspension and Debarment Contact: Joseph Wilson Title: SVP, Procurement Phone Number: 202-760-4193 Estimated completion date: September 2024 Corrective Action: Management agrees with the findings and recommendations set forth within. During the first quarter of fiscal year 2023, prior to the 2022-001 finding, noncompetitive procurements completed followed the prior procurement policy that did not align with Uniform Guidance as relates to noncompetitive procurement justifications. The Corporation has since completed its revised procurement policies and procedures to conform with Uniform Guidance procurement requirements. Training on the Uniform Guidance procurement requirements was developed and required for all staff with procurement responsibilities to ensure (1) adherence to Uniform Guidance and (2) that appropriate justifications for noncompetitive contracts are used and properly documented. Moreover, during the first quarter of the fiscal year 2023, NeighborWorks implemented a new contracts management system that will be used to manage all aspects of vendor contracts from planning to closeout, including the contract expiration date. During fiscal year 2024, management has continued its response to the recommendations by engaging with technical experts to enhance the contracts management system and strengthen internal controls. Additional training is being developed on the enhanced system and processes to ensure continued compliance with Uniform Guidance as relates to noncompetitive procurements.

2023-004 - Procurement, Suspension, and Debarment – Internal Control over Procurement and Verification Against the System for Award Management (“SAM”) (Significant Deficiency) Condition: Community Development Block Grants-Entitlement Grants Cluster Based on the City’s formal purchasing policy, purchase orders are required to initiate purchases from procured vendors for transactions above $5,000. During our audit, we noted that seven (7) out of forty (40) samples did have purchase order approval made subsequent to invoice approval. The aforementioned circumstance suggests that the method of procurement was not in line with the City’s adopted policy established in line with the uniform guidance. Coronavirus State and Local Fiscal Recovery Funds We determined that seven (7) out of forty (40) samples did have purchase order approval made subsequent to invoice approval. The aforementioned circumstance suggests that the method of procurement was not in line with the City’s adopted policy established in line with the uniform guidance. During our audit, we also noted that there was no supporting document to indicate that the City verified the vendor against the SAM to ensure the vendor was not suspended or debarred from federally-funded programs before the contract was entered into. Management concurs. Corrective Actions: The City has an existing purchasing policy and procedures that require documentation for all purchases. Finance department has sent to all department heads reminder and the importance of compliance with the policy and procedures. The reminder also emphasizes the necessity of preparing a purchase order before procuring products or services from a vendor. There may be certain circumstances preventing the preparation of a purchase order prior to procurement, such as the nature of the services or the urgency of acquiring materials and supplies, departments may proceed with the procurement as long as the services or purchases are within adopted budget. City Council approved the Federal Award Management Policy & Procedures on agenda item #4 on December 6, 2023. Finance staff has also updated the requisition form to include a verification of SAM.gov clearance, requiring any backup indicating the vendors status if it is federally funded. City staff has been diligently verifying the suspension or debarment for all federally funded expenditures. Implemented Name of Responsible Person: Robert A. López, Chief of Police Manuel Carrillo Jr., Director of Recreation & Community Services Ron Garcia, Director of Community Development Sam Gutierrez, Director of Public Works Rose Tam, Director of Finance Albert Trinh, Accounting Manager Projected Implementation Date: All actions needed have been Immediately implemented.

FINDING 2023-002 Finding Subject: Child Nutrition Cluster ‐ Procurement and Suspension and Debarment Summary of Finding: Procurement procedures not met – Suspension and Debarment not verified Contact Person Responsible for Corrective Action: Carrie Alford Contact Phone Number and Email Address: 812-254-5536 calford@wcs.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Washington Community Schools was under the impression that since Sodexo was the vendor for the purchases, the contract between Washington Community Schools and Sodexo was sufficient. Going forward, WCS will obtain contracts directly from the retailer even when Sodexo is the vendor in WCS files. If Sodexo makes purchases on behalf of WCS, they will obtain quotes from three retailers. WCS will request and maintain the quotes obtained by Sodexo. WCS will also check for any suspension and debarment for any vendor that Sodexo uses to purchase items for WCS. Anticipated Completion Date: 02/01/2024

FINDING 2023-008 Finding Subject: Special Education 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 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. The School Corporation had not designed or implemented a procurement policy for the purchases in the audit period. In addition, the school corporation did not award a contract for a purchase of $75,387. 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. The School Corporation had not designed or implemented internal controls, policies, or procedures to ensure that vendors were not suspended or debarred prior to entering into a covered transaction. One covered transaction that equaled or exceeded $25,000 was identified and selected for testing. Transactions to the vendor totaled $75,387; the School Corporation did not verify the vendor’s suspension and debarment status prior to payment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Contact Person Responsible for Corrective Action: Amy K. Sivley Contact Phone Number and Email Address: 260-563-2151; sivleya@apaches.k12.in.us INDIANA STATE BOARD OF ACCOUNTS 50 Views of Responsible Officials: We concur with the finding. Explanation and Reasons for Disagreement: n/a Description of Corrective Action Plan: Create internal controls (using either SAMS website, certification from vendor, or clause/condition in contract) to ensure that vendors have been vetted and have not been suspended or debarred. Also develop processes to ensure that contracts for purchases over $50,000 are approved by the School Board. Anticipated Completion Date: To begin immediately, March 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 a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance for Procurement and Suspension and Debarment. For covered transactions, the School Corporation is required to verify that the person with whom they wish to do business with is not excluded or disqualified. In Fiscal Year 2022, there was one vendor where the School Corporation had one covered transaction in the amount of $55,285, and in Fiscal Year 2023, there were two vendors where the School Corporation had four covered transactions in the amount of $130,257. During testing and inquiry of the School Corporation, it was determined that for all three vendors who had a total of five covered transactions in the amount of $185,542 during the audit period, the School Corporation did not verify if they were excluded or disqualified prior to entering into a covered transaction. In Fiscal Year 2022, the School Corporation purchased a box truck in the amount of $55,285; however, the School Corporation did not award a contract to the vendor per Indiana Code and the School Corporation was unable to provide supporting documentation to support that three quotes were obtained prior to purchasing the box truck. Contact Person Responsible for Corrective Action: Amy K. Sivley Contact Phone Number and Email Address: 260-563-2151; sivleya@apaches.k12.in.us Views of Responsible Officials: We concur with the finding. Explanation and Reasons for Disagreement: n/a Description of Corrective Action Plan: Create internal controls (using either SAMS website, certification from vendor, or clause/condition in contract) to ensure that vendors have been vetted and have not been suspended or debarred. Also develop processes to ensure that contracts for purchases over $50,000 are approved by the School Board. Anticipated Completion Date: To begin immediately, March 2024

OHA Procurement staff will verify all federal funded vendors are not suspended or debarred or otherwise excluded from participating in a transaction with OHA by checking the System for Award Management (SAM) Exclusions maintained by the General Servies Administration and available at SAM.gov. This procedure was implemented on a go forward basis on March 13, 2024.

FINDING 2023-005 Information on the federal program: Subject: Special Education Cluster (IDEA) – Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (Or Other Identifying Number): 19611-067-PN01, 20611-070-PN01, 21611-070-PN01, 22611-02-CEIS, 22611-070-PN01, 22611-070-ARP, 23611-067-PN01, 21619-070-PN01, 22619-070-ARP, 22619-070-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Qualified Opinion Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreements 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 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, the School Corporation had one vendor, with disbursements totaling $199,713 for the fiscal year, which exceeds the simplified acquisition threshold of $150,000. 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. For fiscal year 2022, three vendors, totaling $228,079, were identified as being less than the simplified acquisition threshold of $150,000, but exceeding the $50,000 micro-purchase threshold. One of the three vendors was selected for testing. 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. For fiscal year 2023, one vendor, totaling $65,861, was identified as being less than the simplified acquisition threshold of $150,000, but exceeding the $50,000 micro-purchase threshold and was selected for testing. 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 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. During the audit period, there were six vendors identified which exceeded $25,000 in disbursements on an annual basis. Two vendors were selected for testing. In both instances, 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 systemic issues throughout the audit period. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. Specifically, regarding Suspension and Debarment, for contracts over $25,000, MSD of Pike Township will obtain a Certification or include a Suspension and Debarment clause in the contract. Absent Certification, the Director of Grants will review for “Suspension and debarment” and maintain documentation. The Special Education Department will work with the Grant Manager and will review contracts over $50,000 to follow the appropriate procurement policy to obtain quotes. Where specialized services are being solicited, we will maintain a procurement file memo documenting the process and the reasons for vendor selection. Responsible Party and Timeline for Completion: Greg A. Foster, Chief Financial Officer, will oversee the corrective action plan. Plan will be implemented by June 30, 2024.

1. Person responsible: Director, Department of Public Health 2. Corrective action plan: DPH agrees with this finding and recommendation and will discuss, and document sensitive legal matters funded by federal funds with respective grantors to obtain guidance and direction on addressing audit requests. DPH will implement a protocol wherein the program executing any contract using federal funds will collect and maintain sufficient records which detail the history of the procurement. The program will also verify that compliance with procurement requirements is maintained for all federally funded contracts, including sufficient documentation to demonstrate compliance with suspension or debarment. To confirm this, the program will check the SAM exclusions prior to entering into a contract and will maintain documentation of that verification. These will ensure DPH’s ability to provide documentation when requested by auditors. 3. Anticipated implementation date: July 1, 2024