Corrective Action Plans

Response to Finding 2024-001 Federal Award Agency: Department of the Treasury Name of Contact Person: Geoff Wall, Chief Financial Officer Views of Responsible Officials: The housing authority did follow its standard procurement policy and obtained 3 qualified bids from General Contractors before executing the contract. As a subrecipient of the ARPA funding staff believed our procurement processes were sufficient. After the contract was executed, staff discovered that the requirement for sealed bids under 2 CFR 200.320 of the Uniform Guidance was passed through in the subrecipient agreement. Corrective Action: 1. The Director of Development and the Chief Financial Officer for the Authority will review grant agreements and subrecipient agreements for all sources of funding for construction/development projects prior to hiring a general contractor in order to confirm the most restrictive requirements for procurement are being followed. Date of Planned Corrective Action: Immediately following being notified of this finding.

2024-005 Suspension & Debarment Recommendation: CLA recommends the City continue the process in assessing its financial management systems and related internal controls over federal awards during the 2025 fiscal year. This assessment should include evaluating existing policies and procedures to determine where additional enhancements should be made or new policies created, a plan to communicate these policies to City employees, and procedures to periodically review and update, as considered necessary. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned/taken in response to finding: The City has implemented procedures to ensure vendors are being checked for suspension and debarment prior to entering into contracts. Name of the contact person responsible for corrective action: Michael Stelmaszek, City Manager Planned completion date for corrective action plan: June 30, 2025

Management agrees with the finding that two out of five procurement selections totaling $158,000 did not include the appropriate evidence (signed competitive bid or sole source justification) and that this information was not retained in the procurement file. While the departments that selected the vendors did perform sole source and vendor evaluation within their departments, formal documentation and appropriate sourcing details was not obtained by CHOP Procurement. As CHOP is committed to full compliance with reporting requirements for all external agencies, our organization has determined that putting additional controls and education into place with our staff members is the appropriate action to take. Therefore, we will be conducting formal training in November 2024 to our Purchasing and Contracting teams to ensure all established procurement processes and policies are adhered to. Additional auditing of CHOP purchases meeting the bid threshold will be conducted on a monthly basis by the CHOP Procurement Manager and AVP, Sourcing, Contracting, and Procurement. Any discrepancies will be identified and addressed following the audit. CHOP commits to an improved management and oversight of these requirements going forward. Jeffrey Raup, AVP – Sourcing, Contracting, and Procurement at CHOP, will have responsibility for this corrective action plan.

Finding: 2024-002 - Procurement, Suspension and Debarment Auditor Description of Condition and Effect: In cases where the vendor did not sign a suspension or debarment certification, either within the vendor contract or as a separate certification, the City did not have a process in place to manually search the Excluded Parties List System to verify the vendor was not suspended or debarred. As a result of this condition, while none of the vendors tested appeared to be suspended or debarred, documentation does not exist to support that the City verified its vendors paid with federal dollars were not suspended or debarred prior to contracting with them. Auditor Recommendation: We recommend that the City create procedures and a related checklist to ensure all federal requirements are being addressed. Corrective Action: Due to the influx of new employees managing federal funds under the Coronavirus State and Local Fiscal Recovery Funds program, many were unaware of the requirement to document their searches for suspended or debarred vendors. As a result, search results showing no matches were not retained in the files. Moving forward, all relevant employees will receive additional training to ensure proper documentation of these searches. This training will help to ensure this requirement is consistently met in the future. Responsible Person: Heather Ehnis, Finance Director Anticipated Completion Date: June 30, 2025

Procurement, Suspension, Debarment Description of Finding: The Board of Education failed to document sole source justification prior to awarding contracts to vendors. Statement of Concurrence or Nonconcurrence: Management agrees with this finding. Corrective Action: Management will review existing processes and contracts to ensure procurements are taking place in compliance with local policies and federal guidance. Name of Contact Person: Joshua Pothier, Comptroller Projected Completion Date: June 30, 2025

There is no disagreement with this finding. The District does have an appropriate Procurement policy in place. The District has already begun reviewing policies and procedures to ensure that documentation related to procurement is consistently documented in accordance with District policy.

SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE AND REPORETABLE INSTANCES OF NONCOMPLIANCE– U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, SPECIAL EDUCATION CLUSTER – FEDERAL ALN 84.027 AND 84.173 2024-001 Internal Control Over Compliance and Reportable Noncompliance With Federal Procurement Requirements Finding Summary - 2CFR § 200.320 requires the District to establish and maintain effective internal control over compliance with procurement requirements applicable to its federal program expenditures. Our testing indicated that the District did not have sufficient controls in place within its special education cluster federal programs to ensure compliance with federal procurement requirements related to methods of procurement, which resulted in reportable instances of noncompliance where contracts exceeding the District’s micro purchase threshold were awarded without obtaining multiple quotations for two of six vendors tested. Corrective Action Plan Actions Planned – The District will review policies and procedures relating to relating to procurement for its special education cluster federal programs to ensure that multiple quotations are obtained when required and that adequate documentation is retained. Official Responsible – The District’s Director of Finance, Joseph Primus. Planned Completion Date – June 30, 2025. Disagreement With or Explanation of Finding – The District agrees with this finding. Plan to Monitor – The District’s Director of Finance will monitor the implementation of these corrective actions, and will verify that appropriate controls over federal procurement requirements are in place and being consistently applied to ensure multiple quotations are obtained for contracts awarded for goods or services in excess of the District’s micro-purchase threshold, as required by the Uniform Guidance.

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.

CONTACT PERSON: Jessica D. Carraher, Associate of Financial Services, Charleston County School District, jessica_carraher@charleston.k12.sc.us CORRECTIVE ACTION: The District discovered this issue prior to the end of the Fiscal Year and made adjustments to the Procurement process between the Office of Federal Programs and Financial Services which now follows the SCDE's accepted practice for federal funds. PROPOSED COMPLETION DATE: June 30, 2025

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.

2024-005 Higher Educational Institutional Aid – Assistance Listing No. 84.031X Recommendation: We recommend the College evaluate its procedures to ensure documentation is properly supported within their procurement files. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: All grants at NEO have been instructed about the importance of submitting sole source support for purchases where needed. The VP of Fiscal Affairs will ensure proper documents are submitted to justify purchases before approvals are done in OK Corral. Name(s) of the contact person(s) responsible for corrective action: Brando Glick, VP Fiscal Affairs Planned completion date for corrective action plan: 11/30/24

CONTACT PERSON: Terri Smith, Assistant Superintendent of Business Services, trsmith@rhmail.org CORRECTIVE ACTION: The District will ensure that procurements related to federal programs do not use local exemptions and that these procurements provide for full and open competition. PROPOSED COMPLETION DATE: Prior to June 30, 2025

CONTACT PERSON: Matt Owens, Chief Financial Officer, mattowens@pickens.k12.sc.us CORRECTIVE ACTION: The District will ensure that procurements related to federal programs do not use local exemptions and that these procurements provide for full and open competition. PROPOSED COMPLETION DATE: Prior to June 30, 2025

Finding 2024-003 – Child Nutrition Cluster – Procurement Contact Person Responsible for Corrective Action: Marsha Bohannon, Controller Contact Phone Number: (317) 867-8000 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: We will contact our educational service center and see if they are able to either do an RFI or RFP for food service equipment maintenance or we will otherwise request three quotes for small purchases. We are currently under a contract with SmartCare for food service equipment maintenance until the end of this current school year. Anticipated Completion Date: July 1, 2025

Views of Responsible Officials: MCCC and Affiliate used the vendor historically and previously got an approval. They are currently in contact with their GOTR to get the approval in writing for the current grant period.

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

Board policy will be followed to ensure purchases are in compliance with all federal and state regulations.

Finding: 2024-001 – Procurement, Suspension and Debarment U.S. Department of Education – Child Nutrition Cluster (ALN 10.553, 10.555, and 10.559); Passed through the Michigan Department of Education (MDE); All project numbers. Auditor Description of Condition and Effect: Of the six vendors tested for compliance with procurement requirements, the District was unable to provide documentation for compliance with procurement standards for one vendor tested. The vendor had total expenditures of $81,757 during the current fiscal year. Included in these expenditures was the purchase of equipment in the amount of $30,321 which is in excess of the MDE competitive bid threshold. The District was unable to provide documentation to support that competitive bidding was performed in accordance with the District's policies and procedures and MDE guidelines. Additionally, multiple quotes were not obtained for the remaining purchases not in excess of the MDE competitive bid threshold. The District could not properly document compliance with federal requirements as required under Uniform Guidance. Auditor Recommendation: We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs. Corrective Action: District officials will review the District's internal procedures to ensure future compliance with and appropriate documentation of procurement requirements vendor relationships. Responsible Person: Lauren Bailey, LEA Business Manager Anticipated Completion Date: June 30, 2025

Recommendation: The City should review their policies and procedures to ensure that all contracts that have federal expenditures are properly bid in accordance with 2 CFR 200.320. Corrective Action Plan: The City of Scott will review their policies and procedures to ensure that all contracts that have federal expenditures are properly bid in accordance with 2 CFR 200.320.

Recommendation: The City should review their policies and procedures to ensure that all contracts that have federal expenditures are properly bid in accordance with 2 CFR 200.320. Corrective Action Plan: The City of Scott will review their policies and procedures to ensure that all contracts that have federal expenditures are properly bid in accordance with 2 CFR 200.320.

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.)

Auditor Description of Condition and Effect: Of the five vendors tested for compliance with procurement requirements, the District could not provide documentation of compliance with procurement standards for one of the vendors tested. While the District appears to have made an informal effort to ensure that costs were reasonable by contacting its group purchasing vendor, the District did not issue or document price and/or rate quotations as required. The District could not properly document compliance with federal requirements for informal procurement methods as required under Uniform Guidance. Auditor Recommendation: We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs. Corrective Action: The District identified the omitted prior year capital asset additions and has reconciled their UAAL expenditures and benefits accruals to agree with the required audit adjustments. The District will work to ensure the proper year end reconciliations are put into place to avoid future reporting errors. Responsible Person: Chad Baas, Business Manager. Anticipated Completion Date: June 30, 2025.

Management’s Response and Planned Corrective Actions: 1. The name of the contact person(s) responsible for the corrective action a. Kathleen Broadhurst, Sr. Director of Finance/ShelterCare 2. The corrective action planned: a. Internal control document and procedure that is consistent with the compliance requirement for: i. CFR §200.318, General procurement standards identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals i. §200.319, Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements ii. §200.320 Methods of procurement to be followed. 3. The anticipated completion date: a. New processes will be implemented by 11/1/2024.

2024-006 Procurement Corrective action planned: OMC’s Purchasing Policy will be updated to ensure compliance with federal regulations. Documentation will be reviewed by accounting staff. Anticipated completion date: 11-30-2024 Contact person responsible for corrective action: Cathy Liles, Director of Fiscal Operations