Corrective Action Plans

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

Corrective Action Plan Finding No.: 2024 - 001 Condition: The District procured $147,612 in goods from a food service vendor (Martin Bros. Distributing Company Inc.) and did not have documented support that price or rate quotations were obtained from multiple sources in accordance with the small purchase guidelines. Plan: The District will follow the procedures for the procurement of goods that meet the small purchase procedures as defined by the Uniform Guidance rules. The District will maintain documentation to show that they complied with these requirements. By June 1st of each school year, the Food Service Director will obtain multiple quotes of the food needed to supply breakfast and lunch to all students to ensure that he is obtaining the lowest prices possible for the school district. Anticipated Date of Completion: 6/30/2025 Name of Contact Person: Scott Fisher, Superintendent

Management agrees with the recommendation to maintain support for all bids obtained and the conclusions reached as part of the procurement process. The procurement audit sample contained expenses incurred by a Provider Staffing Agency. We were unable to provide support that we obtained multiple bids from staffing agencies. Going forward we will confirm rates via email and maintain the documentation supporting the fact that we are obtaining quotations from an adequate number of qualified sources. In addition, the following actions are being taken: • The Procurement Policy is being sent out to all relevant personnel to remind them of the procedures that must be followed before making purchases greater than $25,000. • Personnel will be required to send in the quotes from the qualified sources at the time the purchase order is submitted. Anticipated date of completion: December 31, 2026

Views of Responsible Officials and Planned Corrective Actions: LHCA acknowledges that in two instances procurement documentation was administratively incomplete. In both cases the underlying competitive process was sound, vendors were evaluated, the appropriate vendor was selected, and the executed contracts reflect those outcomes. No questioned costs were identified. In the first instance, a completed evaluation matrix existed with vendor scoring but did not include a formal notation confirming the award conclusion. LHCA operates in a fully electronic environment where wet signatures are not standard practice. Going forward, documentation systems are in place so that explicit award conclusion notation will be included in the vendor file to make the selection decision self-evident to any reviewer without requiring supplemental explanation.In the second instance, complete procurement documentation existed at the time of the audit but was not delivered to auditors in a timely manner due to staff turnover. This was a document retrieval issue, not a documentation gap. LHCA has addressed this by centralizing all procurement documentation in a shared Google Drive repository that is immediately accessible regardless of staff changes, and by designating a dedicated audit liaison responsible for maintaining and producing all procurement files on request. Going forward, LHCA will incorporate a conflict-of-interest representation clause into all contractor agreements, including the Meat Institute management agreement, effective with the next contract cycle. Annual execution of each contract will serve as the annual conflict of interest certification required under 2 CFR §200.318(c) and LHCA's contracting guidelines, eliminating the need for a separate certification process outside of Executive Board officers involved in procurement. Regarding the market representative relationships. LHCA's market representative relationships were competitively awarded at inception, and are maintained through annual performance evaluation consistent with MAP §1485.29(d)(5), which explicitly replaces periodic re-competition with annual performance evaluation for the life of the relationship. Where a market representative engaged under MAP takes on additional related work funded under other programs such as FMD, the regulatory framework supports an approach other than a new competitive RFP. MAP §1485.29(d)(5) establishes that market representative relationships are not subject to periodic re-competition by virtue of their specialized and relational nature. FMD §1484.35 requires documented price reasonableness but does not prescribe the specific mechanism. 2 CFR §200.320, which applies to both programs by incorporation, recognizes that noncompetitive procurement is appropriate where only one source is reasonably available. Taken together, these provisions support the conclusion that where an existing market representative is the only practicable source for incremental related work — by virtue of their established relationships, market knowledge, commodity expertise, and program continuity — a formal proposal-based review process satisfies the regulatory intent without requiring a competitive process that would produce no meaningful competition. LHCA therefore requires the market representative to submit a formal written proposal for any expanded scope, with deliverables, timelines, and line-item costs sufficient to support a documented price reasonableness analysis. A contract amendment is executed only upon a determination that the proposed scope and cost represent reasonable value. This satisfies the regulatory intent of MAP §1485.29(d)(5), FMD §1484.35, and 2 CFR §200.320 without requiring a competitive process contrary to program interests. LHCA will incorporate this procedure explicitly into its contracting guidelines to ensure consistent application and clear documentation of the policy basis going forward.

Procurement and Suspension and Debarment The College acknowledges the finding and recognizes the need for additional improvements to ensure full compliance with federal procurement regulations. Moving forward, procurement procedures will be strengthened by incorporating vendor eligibility verification requirements, including review of SAM.gov prior to contract execution or purchase approval. The college will also implement recurring training and oversight measures for employees involved in procurement activities to improve adherence to federal standards and internal procedures.

Procurement and Suspension and Debarment College of the Marshall Islands acknowledges that this finding was reported in 2022 and was repeated in FY2023. The College agrees that certain procurement transactions were not adequately supported with sufficient documentation to demonstrate compliance with procurement requirements, including vendor quotations, sole source justification, and procurement history documentation. The College has since upgraded and institutionalized a cloud-based filing system to ensure complete documentation, proper retention, and easy retrieval of procurement records. Internal control policies and procedures have been strengthened to ensure compliance with the RMI Procurement Code, including vendor selection documentation, sole source justification, quotations, and bid evaluations. In addition, newly hired Procurement and Accounts Payable staff have been assigned responsibilities for monitoring compliance, a staff training on federal procurement requirements and documentation standards will continue periodically to strengthen oversight and prevent recurrence.

Planned Corrective Action: We concur with the finding. Management has issued guidance to obtain at least two quotes when practicable. Procurement procedures are being reviewed to strengthen competition, and staff will retain date-stamped SAM.gov screenshots to document suspension and debarment checks before awards. Proposed Completion Date: On-going Name and Contact of Responsible Person: Sherilynn Madraisau Director Bureau of Public Health & Human Services Contact: 680-488-2552 Email: Sherilynn.madraisau@palauhealth.org Gail Rengiil Director Bureau of National Treasury Ministry of Finance Contact:680-767-2561 Email: gailr@palaugov.org

Planned Corrective Action: We concur with the finding. Management has issued guidance to obtain at least two quotes when racticable. Procurement procedures are being reviewed to strengthen competition, and staff will retain date-stamped SAM.gov screenshots to document suspension and debarment checks before awards. Proposed Completion Date: On-going Name and Contact of Responsible Person: Sherilynn Madraisau Director Bureau of Public Health & Human Services Contact: 680-488-2552 Email: Sherilynn.madraisau@palauhealth.org Gail Rengiil Director Bureau of National Treasury Ministry of Finance Contact:680-767-2561 Email: gailr@palaugov.org

Planned Corrective Action: We concur with the finding. Management has issued guidance to obtain at least two quotes when practicable. Procurement procedures are being reviewed to strengthen competition, and staff will retain date-stamped SAM.gov screenshots to document suspension and debarment checks before awards. Proposed Completion Date: On-going Name and Contact of Responsible Person: Ida R. Kilcullen Director Bureau of Curriculum & Instruction Ministry of Education Contact: 680-488-2547 Email: ikilcullen@palauschools.org Gail Rengiil Director Bureau of National Treasury Ministry of Finance Contact:680-767-2561 Email: gailr@palaugov.org

Planned Corrective Action: We concur with the finding. Management has issued guidance to obtain at least two quotes when practicable. Procurement procedures are being reviewed to strengthen competition, and staff will retain date-stamped SAM.gov screenshots to document suspension and debarment checks before awards. Proposed Completion Date: On-going Name and Contact of Responsible Person: Gail Rengiil Director Bureau of National Treasury Ministry of Finance Contact:680-767-2561 Email: gailr@palaugov.org