Corrective Action Plans

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

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

Finding 2024-001 Condition: Three vendors were awarded a contract without a proper competitive procurement process. A fourth vendor was awarded a contract that the School believes is a sole source procurement, but written documentation of the circumstances and rationale for the non-competitive procurement, as well as a history of the process, was not maintained by the client. Corrective Action Planned: The School intends to implement additional internal controls including employee training and enhancements to its federal awards policies and procedures to better ensure compliance. Anticipated Completion Date: March 31, 2025. Contact: Cathleen Ellis, Business Manager

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

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

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

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

Procurement Federal Program Title: Research & Development Cluster Assistance Listing No. 47.083 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Recommendation: We recommend the University evaluate its procedures and implement an additional control to document reasons for obtaining competitive bids. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Grant Accounting and Purchasing will both review requisitions within Jaggaer to make sure appropriate bids, and or exemptions are documented or attached. Name(s) of the contact person(s) responsible for corrective action: Lisa Leyshon, AVP Finance/Controller and Kirsten Broughton, Director of Grant Accounting Planned completion date for corrective action plan: July 1, 2024

Management Response: The management staff of Hubbs-SeaWorld Research Institute take very seriously the federal compliance related to the procurement of goods and services. Hubbs-SeaWorld Research Institute acknowledges the finding and has subsequently updated their procurement policy and procedures to be in compliance with 2 CFR 200.303. Management has adopted a plan of action to prevent future instances of non-compliance. Action Taken: Hubbs-SeaWorld Research Institute plans to modify its procurement procedures for federal grants to comply with 2CFR section 200.319 by continuing to require at least three bids (or a sole source statement, if applicable) for any purchases over the micro-purchase threshold, currently $10,000. In addition, we will monitor cumulative vendor purchases on a monthly basis to ensure that price or rate quotations are obtained from an adequate number of qualified sources, that is, at least three bids (or a sole source statement, if applicable.)

Finding 2023-003: Test no 15 is for Department of Education and the rest are for Department of Health. • For test no. 15, obligation 361854 – Of 3 quotations obtained for a small purchase transaction, the highest quotation was selected, there was no documented justification to support the procurement selection. • For test no. 16, obligation 372216 – The procurement was sourced from one vendor and lacks additional quotations. There was no documented justification to support the sole-source procurement. • For test no. 17, obligation 372215 – The procurement was sourced from one vendor and lacks additional quotations. There was no documented justification to support the sole-source procurement. • For test no. 22, obligation 334914 – The procurement file included 2 quotations and a justification form that did not relate to the transaction as it cites an explanation for purchasing goods from other vendors unrelated to the actual transaction. Of the 2 vendors included, there did not appear to be a notable difference in goods/services offered, however the higher of the 2 was selected. Consequently, we could not determine the ultimate basis for vendor selection. • For test no. 30, obligation 358537 – The procurement as sourced from one vendor and lacks additional quotations. There was no documented justification for the sole-source procurement. Root Cause Analysis Ineffective documentation filing and retention controls, further impacted by the relocation of the State Treasury office. Corrective Actions • Strengthen procurement documentation controls and ensure rationales and justifications for vendor selection are retained in procurement files. Responsible Parties Director of Education and its administrative officers Director of Health and administrative officers Director of DOTA, certification and payable section Timeline Verification of Effectiveness Periodically verify the department's purchases to ensure that no instances of noncompliance are still taking place.

We will continue to follow state purchase laws.

FINDING 2023-004 Finding Subject: Drinking Water State Revolving Fund (DWSRF) Cluster - Procurement and Suspension and Debarment Contact Person Responsible for Corrective Action: Tyler Pearson, Clerk Treasurer Contact Phone Number and Email Address: 574-739-1416 clerktreasurer@cityoflogansport.org Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: We will develop and implement a formal process for verifying that vendors are not suspended, debarred, or otherwise excluded from receiving federal funds before entering into contracts or transactions that meet or exceed the $25,000 threshold. The City will develop a purchasing policy that reflects the applicable state laws and regulations related to procurement. The City will also maintain proper documentation to support the appropriate procurement method. Anticipated Completion Date: December 31, 2025

Condition: Controls in place were not adequate to ensure the policy included appropriate procurement thresholds and methods. Planned Corrective Action: Management understands the importance of adhering to procurement thresholds and methods. Procurement policies and grant policies will be updated to include federal thresholds and methods to reflect federal Uniform Guidance. Contact person responsible for corrective action: Stephanie Cihon and Andy Vollmar Anticipated Completion Date: October 31,2025

The Auditor’s Office will work with the Commissioner’s Office and Prosecutor’s Office to implement the required policies.

In regard to the village not having a written policy in place for the requirements outlined in the Code of Federal Regulations regarding the villages received Coronavirus funding, as previously stated the village does not routinely receive federal funds and was not aware at the time of having such a policy. The village is currently working with the village solicitor to rectify this issue. A new policy will be implemented to resolve this issue. – Mayor M. Shane Patrone

Views of Responsible Officials and Planned Corrective Actions: Agree with recommendation. A draft procurement policy has been prepared. It will be modified to ensure compliance with procurement of property or services required under a Federal award. Employees with procurement responsibilities will be required to follow the policy.

Finding 2023-007: Significant Deficiency, Procurement and Noncompliance Finding – Procurement – Internal Control over Procurement Finding: SPED/Grant Administration did not adhere to the Danbury Public Schools “Bids and Purchases-Competitive” procurement policies, that were compliant with Federal Part 3 compliance guidelines. The DPS had a procurement policy in place that was consistent with the standards of the aforementioned compliance sections; however, the City did not follow their own procurement policy requiring two quotes for a micro-purchase expenditure, three quotes for a small purchase expenditure and advertising for bids publicly for the large >$5,000 purchase expenditures. They only obtained one quote for each expenditure for micro and small purchases, and they did not use a public bid process for expenditures over $5,000. Corrective Action Taken or Planned: Danbury Public Schools (DPS) will begin reviewing the procurement policies that are in place in order to ensure they are in accordance with all compliance requirements set forth by any grants that DPS participates in. A memorandum will be issued summarizing procurement policy features. Lastly, training will be conducted with both the department and the finance team to review the policies and ensure understanding.

FINDING 2023-006 Finding Subject: Child Nutrition Cluster – Procurement, Suspension and Debarment Summary of Finding: A School Nutrition Cooperative (Co-ops, Education Service Center, Group Purchasing Organization, etc.) that would like to be classified as a School Food Authority (SFA) Cooperative must complete a questionnaire and submit it to the Indiana Department of Education (IDOE). Once a questionnaire is received IDOE will review the answers to determine a Cooperative’s classification. Only Cooperatives that submit the questionnaire and receive a SFA-only Cooperative classification from IDOE in writing will be considered a SFA only Cooperative for the purposes of the procurement process and procurement reviews. INDIANA STATE BOARD OF ACCOUNTS 41 􀀃 “Meeting􀀃students􀀃where􀀃they􀀃are􀀃and􀀃leading􀀃them􀀃forward…every􀀃student,􀀃every􀀃day”􀀃 When the value of goods or services exceeds the simplified acquisition threshold, the proper purchasing method would be the bidding process, unless the purchase meets certain other qualifications. Federal regulations allow for informal procurement methods when the value of the procurement for goods or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. 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. If it is determined a single source provider can be used for a small purchase, documentation must be retained supporting the determination. The School Corporation could not provide supporting documentation that an adequate number of price or rate quotations was obtained to ensure full and open competition for two vendors procured under the small purchase threshold. Contact Person Responsible for Corrective Action: Drew Cooper, Business Manager Contact Phone Number and Email Address: 765-425-7889 dcooper@shenandoah.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The procurement method used to purchase equipment costing over $10,000 will be documented and archived with the purchase order. Anticipated Completion Date: July 31, 2024

Finding 2023-003 – Significant Deficiency in Internal Control over Compliance, Other Matters Description of Finding The Town of Coventry and Coventry Public School’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.303, and 200.318 through 200.326 within Uniform Guidance. Statement of Concurrence or Nonconcurrence Management concurs with the finding. Corrective Action Management of the Town of Coventry and the Coventry Public Schools will review the current purchasing policies and update them to make sure that the Town and School Department is following the criteria as set out in the 2 CFR sections 200.303 and 200.318 through 200.326. The policy will then be updated and communicated to all personnel involved in the procurement process. Name of Contact Person Robert J. Civetti, CPA, Town Finance Director; Christopher Deverna, CPA, Director of Finance, Coventry Public Schools Projected Completion Date June 30, 2025

Views of Responsible Officials: The procurement policy will be expanded for all re-procuring of longterm contracts procedures. All contracts with service providers or contractors will be reviewed and a renewal or re-procurement process will be taken care accordingly.

A detailed Procurement process currently exists; however, due to staff turnover we were unable locate all the procurement documentation requested. We will continue to reinforce our Procurement policy (detailed below as it relates to documentation) and now require all documentation be stored in a Central location for all applicable Finance staff. (1) Mary's Center will establish and maintain procurement records and files. The physical records will be kept in the office of the Chief Executive Officer and/or Finance office and virtual copies will be stored on the Finance shared folder. (2) Mary's Center will document in the procurement files some form of cost or price analysis made in connection with every procurement action. (3) For any contracted service (other than equipment-specific technical support), Mary's Center procurement file will include: Basis for selection of the contractor, Justification for lack of competition when competitive bids or prices are not obtained, and Basis for award cost or price. (4) These records and files will be kept in accordance with Mary's Center's Record Retention and Document Destruction Policy. Anticipated Completion Date: 3/31/2025 Responsible Contact Person: Tony Ricciardella, Interim Chief Financial Officer and Alison Roca, Controller

Condition: Five vendors were awarded a contract without a competitive procurement process. Corrective Action Planned: Complete competitive procurement will be done via the federal guidelines for Purchase Orders below and over the $50,000.00 threshold. This means upholding the laws laid out in 200.319 by allowing competitive bidding for each contract given out to a vendor by soliciting quotes and having a written internal procedure with the help of the audit team. We will create a Google folder to upload all supporting documents on a yearly basis. Anticipated Completion Date: 2/17/2025 Contact: Noel Velez, Director of Finance

Finding Number: 2023-004 Finding Title: Procurement, Suspension and Debarment Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Name of Contact Person Responsible for Corrective Action: Kris Vipond, Assistant Finance Director Corrective Action Planned: Directors in departments receiving federal funding will document the history of procurement transactions, including contract selection and rationale, in accordance with federal regulations. They will also verify vendors are not debarred or suspended, or that other exclusions apply prior to entering into contracts and will maintain the appropriate documentation. In addition, they will work with other internal County departments that may purchase on their behalf to document and verify in a similar manner. Anticipated Completion Date: 12/31/2025

The Auditor’s Office will work with the Commissioner’s Office and Prosecutor’s Office to implement the required policies.

Management agrees with the findings and recommendation. The District will update its policies and procedures to ensure they meet the Uniform Guidance Requirements. .