Corrective Action Plans

Corrective Action Plan: Beginning with the 2026-2027 school year, the organization will follow our Federal Funds Procurement Policy and obtain a minimum of 3 bids for vendors whose purchases exceed $100,000 a year. Anticipated Corrective Action Plan Completion Date: June 30, 2027.

In 2020, Intelligent Transportation Systems (ITS) was the sole bidder for the District’s camera project. The selected camera vendor was Hanwha Vision. In 2023, ITS was sold. At the time of the sale, ITS had only completed a portion of the project. On February 22, 2023, the District extended the GIS contract of Environmental Science Services (ES2) through February 17, 2024, and transferred the remaining scope of the camera project from ITS to ES2. The camera technology was integrated into the GIS environment for the District. The remaining cameras to be installed were purchased under the ES2 2023 contract at a lower price than in the ITS 2020 awarded low bid. In retrospect, the District should have rebid the project because the cameras were funded under the Port Security Grant Program (PSGP). The oversight was mainly caused by the transition of District executive personnel starting in 2023. Though this was an oversight, the camera technology integrated in the GIS environment increases the Port’s safety and security posture. The District now adheres to its newly adopted Procurement Policy to prevent recurrence. Management will ensure the following processes are added to the financial management policies and procedures over federal and state funds to ensure full compliance with federal procurement standards, Louisiana Bid Law, Procurement Code, contract management protocols, and grant administration requirements: • The District is reviewing and updating its procurement policies to ensure alignment with federal procurement regulations, including those outlined in 2 CFR Part 200 (Uniform Guidance). All PSGP-funded procurements will be subject to competitive bidding procedures, proper documentation, and approval protocols to ensure transparency and compliance. • The District has reinforced its procurement procedures to ensure that all purchases exceeding $60,000 are formally advertised and awarded in accordance with Louisiana Revised Statute 38:2212. For purchases between $30,000 and $60,000, staff are required to obtain, document, and retain at least three competitive quotes in the procurement file. No significant purchases will be made without prior approval from the governing authority. • Formal procedures have been implemented to ensure that all PSGP-related contracts are properly executed, monitored, and supported by complete documentation. These procedures will includes verification of scope, deliverables, and performance timelines prior to payment authorization along with any solicitations, bids or quotes, evaluations, approvals, and any supporting documentation required by law and internal policy.• The District has designated a marine inspector to oversee PSGP grant activities, including expenditure review, documentation standards, and reporting requirements. All disbursements will be cross-checked against the approved Investment Justification (IJ) and verified for compliance with the grant’s period of performance. • Management is actively consulting with FEMA to assess the allowability of identified questioned costs. The District will follow FEMA’s guidance to resolve any discrepancies and ensure that all expenditures meet federal standards. • Mandatory training sessions are being scheduled for staff involved in procurement, contract management, and grant administration. These sessions will cover federal compliance requirements, internal control

Finding No.: 2024-002 For procurements using federal funds, GMHA is permitted to use a Simplified Acquisition Threshold up to the federal limit, which is currently set at $250,000 or $7.5 million for commercial goods. The Code of Federal Regulations (CFR) permits a non-federal entity to use a SAT up to the federal limits, without having to follow threshold limitations imposed by state or local law. The set of criteria employed by the Ernst & Young is incomplete, and fails to give proper deference to the legal opinions of licensed attorneys. In determining to follow the federal SAT, GMHA considered the guidance of a memorandum from the Office of the Attorney General indicating substantively the same legal analysis as follows. See Memorandum from Deputy Attorney General, Solicitor Division to Chief Deputy Attorney General, Federal Simplified Acquisition Threshold and Micro-purchase Threshold, Ref: AG 22-0410 (Sept. 14, 2022). When presented with this memorandum, the auditors refused to accept its instructions stating: “We were unable to follow why the Attorney General considered the definition of a non-Federal entity in applying the requirements of §§ 200.318 through 200.327. In reviewing the aforementioned sections, there was no reference to non-Federal entities.” This statement evidences the auditors’ fundamental misunderstanding of the law. The auditors based their analysis on an amended version of the CFR, which became effective only January 2025. According the definitions in the Code of Federal Regulations in effect during the relevant 2023-2024 audit period, Guam is both a “State” and a “Non-Federal entity.” Guam Memorial Hospital Authority also falls within the definition of “Hospital” and “subrecipient.” As relevant here, 2 CFR 200.1 states: State means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and any agency or instrumentality thereof exclusive of local governments. Non-Federal entity (NFE) means a State, local government, Indian Tribe, Institution of Higher Education (IHE), or nonprofit organization that carries out a Federal award as a recipient or subrecipient. Hospital means a facility licensed as a hospital under the law of any State or a facility operated as a hospital by the United States, a State, or a subdivision of a State. Subrecipient means an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a Federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency. As a Non-Federal entity, GMHA also is required to abide by the definition of “simplified acquisition threshold.” According to 2 CFR 200.1: Simplified acquisition threshold means the dollar amount below which a non-Federal entity may purchase property or services using small purchase methods (see § 200.320). Non-Federal entities adopt small purchase procedures in order to expedite the purchase of items at or below the simplified acquisition threshold. The simplified acquisition threshold for procurement activities administered under Federal awards is set by the FAR at 48 CFR part 2, subpart 2.1. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk, and its documented procurement procedures. However, in no circumstances can this threshold exceed the dollar value established in the FAR (48 CFR part 2, subpart 2.1) for the simplified acquisition threshold. Recipients should determine if local government laws on purchasing apply. (emphasis added). This definition applies to purchasing by all non-federal entities—including GMHA. Title 2 CFR 200.317 provides: When procuring property and services under a Federal award, a State must follow the same policies and procedures it uses for procurements from its non-Federal funds. The State will comply with §§ 200.321, 200.322, and 200.323 and ensure that every purchase order or other contract includes any clauses required by § 200.327. All other non-Federal entities, including subrecipients of a State, must follow the procurement standards in §§ 200.318 through 200.327. (emphasis added). As a subrecipient of Guam, GMHA would also be required to follow 2 CFR 200.320(a)(2)(ii), which reiterates that: “The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR.” The CFR treats the requirement that a state or local entity follow (1) its own “policies and procedures” and (2) its own small purchase “threshold” as separate requirements. The CFR applicable to most federal funds—including ARPA—only requires the hospital to follow the local “policies and procedures.” 2 CFR 200.317. The CFR requires GMHA—as a non-federal entity—to separately make a determination of an appropriate small purchase threshold based on a number of factors specific to GMHA, provided it does not exceed the federal SAT. 2 CFR 200.1; 2 CFR 200.320(a)(2)(ii). Procurement method selection is essentially a two-step process: (1) Make a substantive determination about the monetary cost of a proposed procurement and determine whether it is below or above an applicable threshold. Which side of a threshold a procurement falls on (and some other factors) will determine the method—sole source, RFQ, RFP, IFB—that will be used. (2) After the method is determined, an entity is then pointed to specific policies and procedures applicable to that type of procurement. The relevant factors for determining a recipient-specific SAT include an entity’s “internal controls, an evaluation of risk, and its documented procurement procedures.” 2 CFR 200.1; 2 CFR 200.320(a)(2)(ii). For a portion of the relevant procurement period, the CFR also stated: “When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations.” This section was amended effective approximately October 1, 2024. Now, it no longer requires the recipient or sub-recipient to ascertain whether this entity-specific threshold is “authorized or not prohibited under State, local, or tribal laws or regulations.” But even under the prior version, the entity only needed to consider the authorization or lack of prohibition under state or local law if it was adopting a “lower simplified acquisition threshold” than the federal SAT. 2 CFR 200.320(a)(2)(ii) (effective until Sept. 30, 2024) (emphasis added). GMHA determined that the federal SAT levels were appropriate, and—in any event—local law does not prohibit GMHA from adopting the federal SAT when using federal funds. GMHA’s use of the federal SAT for procurements using federal funds has been a decades long practice of our materials management, so a suggestion that it is unauthorized would be a finding quite inconsistent with GMHA’s internal controls. Highlighting the distinctness or difference between the “policies and procedures” and “threshold” requirements, is the fact that “simplified acquisition procedures” and “simplified acquisition threshold” are defined separately. See 48 CFR 2.101. And the two requirements are discussed separately in the section of the CFR discussing “informal procurement methods.” 2 CFR 200.320. Additionally, the small purchase “procedures” applicable to federal agencies, FAR Part 13, are contemplated in an entire section that is separate from the rules about the controlling SAT or other threshold. Finally, in other portions of the CFR—such as federal highway funds—the government has specifically instructed state entities to follow both the state or local “procedures” and the state or local “threshold. 23 CFR 172.7(a)(2). When the CFR wants the state government to follow state SATs, it will specifically do so. It has not put that instruction in 2 CFR 200.320. Guam law also specifically directs all persons within the Government of Guam to comply with the applicable federal law and regulations that are in conflict with or are not reflected in the Procurement Code. 5 GCA § 5501. In other words: Guam law requires GMHA to follow the federal rules. Specifically, here, the federal requirement that GMHA determine an appropriate SAT is not reflected in the local laws. GMHA, thus, must comply with the federal requirement that GMHA make a recipient-specific determination of an appropriate SAT. Even the Guam Legislature understands that the law operates in the same manner as the Attorney General’s memorandum. During a legislative hearing on June 25, 2024, Senator Sabina Perez recited the same analysis, recognizing that Guam agencies can use the federal simplified acquisition threshold when expending federal funds. See Guam Legislature, Public Hearing Bill No. 134-39 (COR) at *1:46:00-1:46:31 (June 25, 2025), available at https://www.youtube.com/live/ciXo1EEXJZI. In deciding the federal SAT applies, GMHA was also guided by precedent and guidance issued to other government entities. In 2015, when the Guam Department of Education was under a federal third-party fiduciary, it was still employing the lower local small purchase threshold. GDOE was instructed that this was inappropriate because federal law supersedes Guam law on the SAT. The federal fiduciary—consistent with USDOE instructions—required GDOE to follow the federal SAT. See Letter from John E. Hampford, Alvarez & Marsal, to Jon J.P. Fernandez, Superintendent of Guam Department of Education (Dec. 30, 2015); see also Letter from Jon J.P. Fernandez, Superintendent of Guam Department of Education to Attorney General Leevin T. Camacho and Public Auditor Benjamin J.F. Cruz (July 20, 2020). Thus, other Guam agencies have been instructed by the federal government to use the federal SAT. This is also bolstered by the case law. The Guam Supreme Court has ruled that the CARES Act funding was a federal appropriation for a specific purpose, “outside the control of the Guam Legislature.” See Story-Bernardo v. Gov’t of Guam, 2023 Guam 27 ¶ 46. ARPA funding is substantively similar to CARES Act funds, simply with additional permitted uses. Local law cannot dictate how these federal funds are spent. GMHA also considered case law from Texas federal court where a self-styled “whistleblower” sued the City of Burleson, Texas for allegedly spending in excess of their own SAT. Under Burleson’s own regulations, the local SAT was $10,000, see Rule 5.1, City Council Policy 36, City of Burleson Purchasing Policy (adopted July 2, 2018, revised Oct. 16, 2023). However, the lawsuit alleged that the city was spending in excess of this $10,000 SAT. The federal judge in that court stated: “In addition, the regulations show that “formal purchasing methods are not required” for purchases that are less than the “simplified acquisition threshold.” 2 C.F.R. § 200.1(2021). The simplified acquisition threshold is set at $250,000. 48 C.F.R. § 2.101(2021). However, Mr. Eder's complaint incorrectly alleges “upon information and belief” that the simplified acquisition threshold is $10,000. Doc. No. 37 at 12, ¶27(b). Mr. Eder's apparent misreading of the threshold for formal purchasing is central to his claim under the FCA, and it appears this concern may have arisen from simply misreading the rules, rather than any reasonable dispute under the law.” Eder v. City of Burleson, Civil No. 3:23-CV-00948-K, 2024 WL 4771408 at *5 (N.D. Tex., Nov. 13, 2024). Thus, the federal court recognized that the lower local SAT did not control. The only relevant SAT was the federal one. GMHA’s determination to use the maximum SAT allowed by the federal CFR is thus appropriate. The federal CFR rule requiring a recipient-specific SAT determination supersedes the local thresholds. If the procurement is under the federally-allowed $250,000 SAT, GMHA must still follow the local small purchase procedures. See in part 5 GCA § 5213. The auditors’ view of Guam law appears to be a clear outlier, inconsistent with a plain reading of both federal and Guam law, the opinions of both federal and local courts, the memorandum from the Attorney General’s Office, the understanding of the Guam Legislature, and the reasoned opinion of Hospital Legal Counsel. The auditors’ finding is also inconsistent with decades of GMHA procurement practice. The questioned costs based on this finding should be removed. The auditors’ (1) inability to even reference the relevant definitions from the CFR in effect at the time of the relevant audit period and (2) unwillingness to accept the legal opinions from licensed attorneys, should be a finding on the auditors’ peer review.

Finding 2024-02 Failure to Follow Procurement Policy Condition: The Organization maintains a procurement policy that establishes spending thresholds and outlines the requirements for obtaining rate quotations at each of these levels. During audit procedures, it was noted that the Organization did not follow the policy’s requirements for obtaining and documenting rate quotations for two of the transactions reviewed. The Organization explained that the vendor was considered a unique partner, and competition was intentionally limited based on the specialized nature of the services provided. However, no documentation was retained to justify this decision to limit competition, as required by federal procurement standards. The absence of such documentation resulted in questioned costs for these transactions. Corrective Actions Taken or Planned: Prior to the award of ARPA grant funding in 2023, The Organization did not have a formal procurement policy in place. Implementation of such a policy was required to receive the award. At the time of implementation, however, partnerships had already been established and were identified in the original grant proposal. With respect to legal services, the Organization engaged the two primary organizations in Indianapolis that provide expungement assistance. Indiana Legal Services (“ILS”) was the first entity contacted, but after multiple attempts, no response was received from the designated point of contact. Subsequently, the Organization engaged another nonprofit organization, which responded promptly and agreed to serve as a partner under the grant. For grant compliance services, the Organization engaged a third party. This decision was based on recommendations from community partners, as well as her demonstrated work quality, professional reliability, and commitment to serving the target population. The Organization plans to execute the following: 1. Immediate Remediation - For the two transactions in question, the Organization will prepare and retain retroactive documentation outlining the rationale for limiting competition, citing the vendor’s unique qualifications and specialized services. This documentation will be added to the procurement files to ensure transparency and compliance. 2. Procurement Policy Enforcement - The Organization will reinforce its procurement policy with staff responsible for purchasing, emphasizing the following requirements: - Obtain and document at least three rate quotations when required. - When limiting competition, prepare a written justification memo explaining the rationale (e.g., sole source, specialized expertise, emergency procurement). - Retain all procurement documentation in a centralized file accessible for future audits. 3. Documentation Standardization - A Procurement Justification Form will be developed for instances where competition is intentionally limited. This form will include: + Vendor name and description of services + Reason competition is limited (sole source, unique expertise, etc.) + Approval signatures from both the requesting program lead and the Co-Executive Director - This form will be required for all procurements exceeding the competitive threshold where quotations are not obtained. 4. Staff Training - The Organization will provide refresher training to all staff involved in procurement to ensure they fully understand documentation requirements under both organizational policy and federal standards. - Training will specifically address scenarios involving sole source or unique vendor selections. 5. Oversight & Monitoring - All procurements exceeding $5,000 will require review and approval by the Board. - Quarterly internal audits will be performed by the Finance Manager to ensure procurement files include proper quotations or justification forms. The Board will receive quarterly procurement compliance reports from the Finance Manager. Any deviations will be documented and addressed immediately. Progress will be tracked as part of the Organization’s annual internal control review.

FA 2024-001 Strengthen Controls over Expenditures Compliance Requirement: Procurement and Suspension and Debarment Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education Assistance Listing Number and Title: 10.553 - School Breakfast Program 10.555 - National School Lunch Program Federal Award Number: 225GA324N1099 (Year: 2024), 245GA324N1199 (Year: 2024) Questioned Costs: $46,878 Description: A review of expenditures charged to the Child Nutrition Cluster revealed that the School District's internal control procedures were not operating appropriately to ensure that the School District's procurement procedures were followed. Corrective Action Plans: Responsible Parties: Superintendent, School Nutrition Manager, To address this finding and prevent recurrence, the Superintendent and School Nutrition Manager will implement the following corrective measures in accordance with Terrell County Board of Education policy and applicable federal/state guidelines: 1. Staff Training-Provide training for School Nutrition staff on federal procurement requirements, the district's Procurement Plan, and Board policy related to financial management, procurement, and record retention. Training will be documented and updated annually or as requirements or Board policies are revised. 2. Process Monitoring-Establish written procedures aligned with board-approved procurement policies to ensure all required bids and quotes are obtained, documented, and retained. Maintain both electronic and hard-copy procurement files, with oversight responsibilities clearly assigned. 3. Internal Compliance Reviews-Conduct quarterly internal reviews between the Schol Nutrition Department and Finance to verify procurement documentation and adherence to Board policy and the Procurement Plan. Provide review summaries to the Superintendent and report systemic issues to the Board, if necessary. 4. Accountability Measures-Incorporate procurement documentation and retain responsibilities into departmental expectations, evaluations, and supervisory reviews, consistent with Board policies on accountability and internal controls. Noncompliance with documentation procedures will be addressed under established Board personnel and accountability policies. Estimated Completion Date: June 30, 2026 Contact Person: Shereca R. Harvey, Superintendent Telephone: (229) 995-4425 Email: srharvey@terrell.k12.ga.us

The Town of Jonesboro acknowledges the audit finding and appreciates the opportunity to provide clarification regarding the cited payment of $85,476 to a contractor for water and sewer system repairs. This particular contractor had a long-standing relationship with the previous administration and continued to submit invoices for services claimed to have been performed under prior authorizations. Upon assuming office, the current administration encountered a backlog of such invoices and, in many cases, limited to no documentation supporting the scope, schedule, or verification of the work that was allegedly completed. Due to the lack of transparency, inconsistent billing, and insufficient oversight, the current administration determined that it was not in the best financial or operational interest of the Town to continue any further engagement with this contractor. It became clear that the pattern of invoicing presented a risk of noncompliance and potentially unsupported expenditures. As a corrective measure, the Town took the following actions: 1. Final Settlement and Termination of Relationship: The Town made a one-time payment to settle the outstanding invoice history. This was done to clear any disputed or lingering financial obligations associated with the contractor’s services under the previous administration. 2. Legal Closure with Notarized Certification: The Town required and obtained a notarized letter from the contractor affirming that no additional payments are owed and that all contractual or informal claims have been resolved in full. This was done to ensure finality and mitigate any future risk or liability. 115 3. Policy Reaffirmation: The Town affirms its commitment to federal procurement regulations, specifically those set forth under 2 CFR § 200.320. Current procedures now mandate that all purchases exceeding the micro-purchase threshold undergo proper procurement documentation, including solicitation of price or rate quotations from multiple qualified vendors. Moving forward, the Town has ensured all vendors and contractors are engaged under transparent, documented, and compliant procurement procedures. This administration remains dedicated to restoring public trust and operating under full compliance with federal, state, and local purchasing regulations.

FINDING 2024-003 Finding Subject: Water and Waste Disposal Systems for Rural Communities - Procurement Contact Person Responsible for Corrective Action: David M. Kennard Contact Phone Number and Email Address: 812-677-3959 clerk@princetoncity.com Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Management will establish a proper system of internal controls to ensure expenditures made from federal awards use the appropriate procurement method and retain the documentation to support the procurement methods used in order to ensure compliance with the terms and conditions of the federal awards. Anticipated Completion Date: The corrective action plan will go into effect immediately.

SHN will draft a “Federal Grants Management Policy Manual” and implements related procedures which will be in compliance with Uniform Guidance (2 CFR 200.320) for micro-purchases. As of April 2025, there is a Procurement Policy in place and contracted vendors and staff are required to follow the policy. For food purchases that are in relation to federal funding, due to multiple smaller purchases, the requester must obtain 3 quotes and complete a spreadsheet indicating why the vendor was selected. It is then approved by the Director of Operations to move forward with the purchase.

Condition: The Organization did not have controls to retain documentation that the procurement process was followed to ensure more than one vendor was reviewed for pricing before selecting the vendor chosen (as required under 2 CFR 320(a)(2)(i)). Planned Corrective Action: Management will implement controls to ensure proper support of the procurement process is retained. Contact person responsible for corrective action: Manas Mehandru, COO Anticipated Completion Date: December 31, 2025

Auditor’s Recommendation: “We recommend management implement internal controls to ensure financial reports are submitted accurately, with supporting documentation retained.” Management response: The Family Place has reviewed its financial reporting procedures and concurs with the finding. During the audit period, staffing deficiencies in grants management and compliance oversight contributed to supporting documentation of financial reports submitted not having been retained. In 2025, The Family Place created a new internal compliance department and hired a Grants Manager to provide dedicated oversight of grant drawdowns and reporting. These changes, together with updated procedures and training, are designed to ensure all future financial reports comply with Uniform Guidance requirements and supporting documentation is retained. Corrective actions: The Executive Leadership Team has prioritized strengthening reporting controls and has already implemented several measures: The newly hired Grants Manager and internal compliance department are responsible for reviewing and approving all financial reports to confirm that expenditures have been incurred and liquidated prior to request. Finance sta􀀁 and program managers are being trained on reporting requirements under 2 CFR 200.320. All financial reports will be reconciled to the general ledger with supporting documentation and will be reviewed by the Grants Manager and The Chief Financial Officer or Chief Executive Officer before submission. These processes will receive additional oversight by the Chief Financial Officer, the Chief Executive Officer, and the Board of Trustees. Responsible parties for corrective actions: The Grants Manager, working within the internal compliance department, will have direct responsibility for ensuring financial reports are accurate and supporting documentation is retained. The Chief Financial Officer will review and approve reconciliations prior to drawdown. The Chief Executive Officer, Tiffany A. Tate, with assistance from the newly established Compliance Department, will confirm timely compliance and will receive regular status updates. Separately, the Chief Financial Officer will report progress to the Audit & Finance Committee of the Board of Trustees. Anticipated completion date: The new internal compliance department and Grants Manager began operating together in September 2025. Full compliance monitoring is currently in place.

Auditor’s Recommendation: “We recommend management review all contracts with vendors and review the procurement policy to ensure compliance with the procurement and suspension and debarment standards within their policy and the Uniform Guidance.” Management response: The Family Place has reviewed its procurement and suspension/debarment procedures and concurs with the finding. During the period covered by the audit, staffing turnover and performance issues within departments responsible for procurement and grant compliance contributed to inconsistent application of policies and incomplete documentation. Since that time, The Family Place has replaced staff where needed due to performance problems and initiated training to ensure compliance and consistency with existing procurement policy for all organizational expenses of $10,000 or more. Corrective actions: The Executive Leadership Team has reviewed procurement responsibilities and clarified the roles of staff who approve or execute purchases and contracts. Hiring, training, and coaching were prioritized in early 2025 to address the identified deficiencies, and staff replacements have already been completed where necessary. Going forward: All staff responsible for procurement or contract approval will complete training on the Uniform Guidance procurement and suspension/debarment standards, including requirements for organizational purchases of $10,000 or more. Finance staff will review procurement documentation, vendor suspension/debarment verification, and contract approvals prior to payment to ensure full compliance with policy and federal regulations. These processes will receive additional oversight by the Chief Executive Officer, with assistance from the newly established Compliance Department, and the Board of Trustees. Responsible parties for corrective actions: The Chief Financial Officer will have direct responsibility for finance review of procurement documentation and vendor status verification prior to payment. The Chief Operations Officer will ensure that all required procurement and suspension/debarment checks are performed and documented. The Chief Executive Officer, Tiffany A. Tate, with assistance from the newly established Compliance Department, will confirm that compliance occurs on a timely basis. Separately, the Chief Financial Officer will report on progress to the Audit & Finance Committee of the Board of Trustees. Anticipated completion date: Refresher training of relevant staff and implementation of the strengthened procurement and suspension/debarment procedures has already been completed. Going forward, quarterly training will take place for team members directly involved in the procurement process.

2024-001 – Internal Controls over Compliance and Compliance with Procurement Standards Individual Responsible for Corrective Action Plan: Meghan Davies, Chief Operating Officer Anticipated Completion Date: Effective immediately Corrective Action Plan: WWH’s Chief Operating Officer will be the single point person responsible for ensuring all federally funded procurements are managed properly and that all documentation is maintained. In addition, an extra step will be taken to duplicate the filing system for all federally funded procurements into the grants management files themselves.

Re: Management’s Response & Corrective Action Plan to Procurement Policy & Procurement Action Documentation (2024-004) The Wilmington Land Bank adopted a written Procurement Policy on September 11, 2024. At one property, however, the policy was not fully followed. The Land Bank initially considered the work a continuation of an existing project, but it was later determined that it should have been bid separately under the Procurement Policy. To strengthen compliance with the Procurement Policy going forward, the Land Bank will hold weekly internal staff meetings and weekly meetings with the City of Wilmington. These meetings will include a review of project updates and related procurement actions. Responsible Individual: Becky Vogel, Director of Finance & Grants Anticipated Completion Date: Already corrected

Condition: Controls in place were not adequate to ensure the policy included a well-defined Simplified Acquisition Threshold and related procurement method. Additionally, controls were not adequate to ensure price or rate quotations were obtained from an adequate number of qualified sources for contracts above the Simplified Acquisition Threshold. 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. Additionally, the procurement procedures will be amended to include additional review and sign-off from Grant and Purchasing leadership prior to purchases being made with federal funds to ensure price and rate quotations were obtained for contracts above the Simplified Acquisition Threshold. Contact person responsible for corrective action: Stephanie Cihon and Andy Vollmar Anticipated Completion Date: October 31, 2025

Adopting procurement policy that complies with UG procurement standards and distributed it to all staff with purchasing authority. The ED and Treasurer are currently developing a checklist that will be included as part of initiating contracts or purchases over the procurement threshold and that it is saved along with other grant documents. The bookkeeper will check the SAM data base for disbarment notices prior to queuing bills for amounts greater than $5,000 for payment

Corrective Action Plan for Finding 2024-01 Type of Finding: Internal Control and Compliance - Compliance and Material Weakness Deficiency over Procurement and Suspension and Debarment Federal Program: U.S. Department of Treasury, American Rescue Plan Act (ARPA) Federal Assistance Listing No.: 21.027 Condition: During the single audit, there was a finding of no documentation to support a competitive bidding or procurement process for certain vendor contracts, as required by federal procurement standards. Corrective Actions 1. Revise Internal Procurement Policy A. Action: The organization will revise its existing procurement policy to adhere with federal requirements for competitive bidding, including thresholds for different procurement methods (e.g., micro-purchases, small purchases, sealed bids, competitive proposals). The revised policy will clearly define the documentation required for each step of the procurement process. B. Responsible Party: Kimberly Royster (CFO) C. Anticipated Completion Date: October 15, 20252. Provide Mandatory Staff Training A. Action: The organization will train all employees, including those in finance, program management, and administration, on the new procurement policy and process. The training will emphasize the importance of compliance with federal regulations and the specific documentation requirements. B. Responsible Party: Wayne Lawson (HR) and Laura Connelly C. Anticipated Completion Date: November 12, 2025 3. Implement the Revised Procurement and Documentation System A. Action: The organization will implement the new procurement process for all procurement activities. This process will require documentation of all stages of the procurement process, from the initial request to the final contract award. This will ensure that a complete audit trail is maintained for every purchase. B. Responsible Party: Laura Connelly C. Anticipated Completion Date: November 12, 2025 4. Conduct Post-Implementation Monitoring A. Action: The organization will enlist the services of the external audit team to review the updated procedures. This will serve as a check to ensure the new policy meets federal requirements. B. Responsible Party: Current Auditor C. Anticipated Completion Date: December 31, 2025

2024-004 Coronavirus State and Local Fiscal Recovery Funds– Assistance Listing No. 21.027 Recommendation: We recommend the County follow procurement policy that is in accordance with Uniform Guidance requirements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The County will follow procurement policy that is in accordance with Uniform Guidance requirements. Name(s) of the contact person(s) responsible for corrective action: Kim Merrill, Finance Manager. Planned completion date for corrective action plan: December 31, 2025.

Recommendation: We recommend the Foundation strengthen its policies and procedures to ensure procurement is adequately documented for the goods and services purchased in accordance with Uniform Guidance and other federal guidelines, including simplified acquisition procedures for purchases above the micro-purchase threshold ($10,000). Grantee Response and Corrective Action Plan 2024-001: In response to the audit finding under 2 CFR Section 200.320 regarding the necessity to have and use documented procurement procedures for acquisition of goods and services under a federal award or a sub‐award, it is acknowledged that the Foundation did not previously have a formal policy specifically addressing procurement. Recognizing the importance of formalizing these practices into policy, we are committed to developing and implementing a comprehensive policy that explicitly addresses procurement. In line with our recent enhancements in internal controls, including the engagement of a Finance Manager in 2024, this policy will reinforce our ongoing efforts to uphold the highest standards of compliance and accountability in all our operations. Responsible Parties: Allie Kelly, Executive Director Anticipated Correction Date: December 31, 2025

The audit identified gaps in our procurement policies and procedures. In response, updated procurement policies have already been drafted. These policies align with federal requirements, strengthen internal controls, and establish clearer guidelines for competitive bidding, documentation and approval processes. The draft policies are currently under review by the Executive Director and will be finalized and implemented promptly.

Finding 2024-002 Drinking Water State Revolving Fund - Procurement Contact Person Responsible for Corrective Action: JoAnn Collins/Clerk Treasurer Contact Phone Number and Email Address: 574-653-2112 kewanna@fourway.net Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: We will update our procurement policy and implement a system of internal controls to ensure a purchasing policy is in place and quotes are obtained for small purchases. Anticipated Completion Date: A policy and internal controls will be in place by January 1, 2026

Reporting - Reportable Findings and Questioned Costs for Federal Awards Contact Person Marc Taylor, CFO E-Mail: Marc@chiefseattleclub.org Corrective Action Planned This finding occurred because of a lack of both procurement knowledge and staff oversight over a contractor handling the procurement for Eagle Village. Thanks to this finding, our real estate team has gained a better understanding of federal procurement requirements. Our auditor provided us with a procurement checklist, which we began using and will ensure that we comply with our procurement policy and better document future procurements. Anticipated Completion Date September 30, 2025

As stated in the Management Letter issued by SAX regarding the Organizations procurement policy, 2024 was the first year the Organization received federal funding and therefore was not aware of the specific language required by the Uniform Guidance (2 CFR §200.317-.327) needed in the procurement policy. The Organization has worked with SAX to add policies to procurement policies to ensure that any future procurements required by federal funding received will include procedures required under the Uniform Guidance (2 CFR §200.317-.327).

FINDING 2024-003 Finding Subject: Drinking Water State Revolving Fund - 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

Finding 2024-002 – Procurement and Suspension and Debarment Condition: Texas Biomed did not comply with procurement requirements per the Uniform Guidance. Specifically, Texas Biomed did not comply with informal procurement methods for small purchases and noncompetitive procurement requirements. Texas Biomed also did not comply with its own procurement policy in relation to procurements of small purchases and noncompetitive procurements. Additionally, Texas Biomed did not maintain records for certain procurements sufficient to detail the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, the basis for the contract price, and the performance of a cost or price analysis, when required. Three of the four procurements noted as findings were, in fact, sole source procurements but lacked timely documentation of sole source rationale. Corrective Action Plan: Texas Biomed made a change in management over the procurement function and hired an experienced and knowledgeable Assistant Director of Supply Chain Management on September 15, 2025 to oversee procurement and ensure compliance with the necessary requirements. To ensure compliance and adherence to purchasing policies and procedures, Texas Biomed will introduce a Purchasing Compliance Program. This program will include training and oversight procedures for the purchasing program. The training will include: new hire training, ongoing quarterly purchasing training for end users and purchasing staff. The purchasing team will maintain training documents and ensure new and existing employees have the most current policy, procedures, and requirements to guide them through the purchasing process. The oversight procedures will be performed by the Assistant Director of Supply Chain Management and shall include auditing purchase orders over the micro-purchase threshold to ensure proper documentation is present. The Assistant Director of Supply Chain Management will also lead efforts of continuous improvement to update and communicate the Purchasing Compliance Program to all Texas Biomed staff. Key dates shall include: • Enhanced new hire training October 2025 • Quarterly training session January 2026 • Oversight procedures developed November 2025 Responsible Parties: Eva Zepeda, Director, Finance; Eric McGowin, Assistant Director, Supply Chain Management Completion Date: October 31, 2025

Finding 2024-005 and Finding 2024-006: Procurement Procedures Issue: The audit noted gaps in documenting procurement. The organization did not adopt a formal procurement policy compliant with 2 CFR 200.320 until June 2024. As a result, several contracts executed earlier in the year were noncom pliant with federal procurement standards. Since the policy adoption, all new procurements have followed the updated procedures. The organization also did not keep records of debarment search results. • What's been done: All procurement following the adoption of the procurement policy has been done in alignment with the policy. We also introduced procurement "kickoff meetings" for new grants to review each budget line, determine the correct procurement method, and plan documentation for the procurement process. This has been piloted with our most recent grant. All vendors now have debarment searches in their QuickBooks vendor information tab. • Next steps: Apply this process to all new grants to ensure compliance from the outset. • Responsible party: Finance manager and Executive Director of Michigan Center for Adult College Success with oversight by President