Corrective Action Plans

Federal Grantor: Department of Agriculture, Pass-Through: Nebraska Department of Education Program: Child Nutrition Cluster, Special Education Cluster Award No. and Year: 13898414/13897314/47600262900 and 2024, 24-6406-00-19-028-0001/24- 6408-00-19-028-0001/24-6411-00-19-028-0001/24-6412-00-19-028-0001/24-6418-132-28-0001P and 2024 Federal Assistance Listing Number: 10.553/10.555/10.559/10.582, 84.027/84.173 Compliance Requirement: Procurement, Suspension, and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance Corrective Action: Management will work with the School Board to update the current procurement policy to include all requirements in 2 CRF 200. Name of Contact Person: Cindy Miserez, Controller (531) 299-9891 cynthia.miserez@ops.org Project Completion Date: June 30, 2026

Develop and formally adopt a written procurement policy compliant with 2 CFR 200.317 - 200.327 Train all staff involved in procurement to ensure consistent understanding and proper implementation Perform periodic reviews and updates of the procurement policy to maintain compliance with evolving federal requirements.

Concur: · 8 instances where the Government was unable to obtain Quarterly Progress Reports. As a result of the audit finding and in accordance with grant requirement, a Governor's Authorized Representative (GAR) Memo is being implemented, requiring Subrecipients to submit Quarterly Progress Reports within 10 days of quarter end. All reports are reviewed and retained in a centralized location for documentation and audit compliance. · 8 instances where the Government was unable to obtain completion/inspection certificate. Project inspection/certification report(s) are now required for all payment request federal fund drawdowns. The reports must now be uploaded to the Enterprise Resource Planning System (ERP) and retained in centralized location for documentation and record keeping purposes. · 8 subrecipients with no supporting documentation that VITEMA verified that subrecipients expected to be audited as required by 2 CFR part 200, subpart F. The Program will annually notify subrecipients of their audit responsibilities, monitor compliance, obtain required audit reports, and maintain documentation in a centralized location for audit and recordkeeping purposes.

The Government concurs with the auditor’s findings and recommendations. Corrective action plan as follows: - Develop subrecipient monitoring policies (2 CFR 200.331–200.332) - Conduct risk assessments - Monitor financial and performance reports - Establish tracking system - Require follow-up on audit findings

To address this finding, OMB will strengthen its subrecipient monitoring controls and formalize procedures to ensure compliance with 2 CFR 200.303 and 2 CFR 200.332, including requirements related to identifying subawards, assessing subrecipient risk, documenting monitoring activities, following up on deficiencies, and maintaining evidence of supervisory review. OMB will also conduct periodic internal quality control reviews of subrecipient files to confirm that monitoring documentation is complete, timely, and consistent with federal requirements.

The Government will retain all necessary supporting documentation for purchase orders, contracts, and vendor profiles to ensure adherence to internal policies and regulatory requirements. Management will implement procedures to regularly review and verify that all procurement activities are properly documented and compliant with applicable regulations. Management will implement a formal process to ensure all executed contracts are timely included on GVIBUY. DPP will liaise more frequently with DOF IT team to rectify any potential system issues that can affect data accuracy. In collaboration with DPP and DOF, OMB will do the following: Formalize Policies and Procedures (SOP Updates): OMB will update its internal Standard Operating Procedures (SOPs) to clearly define: • Roles and responsibilities for procurement oversight • Required documentation standards - to ensure all procurement actions related to federal awards are captured, documented, and readily accessible for audit purposes. • Review and approval workflows Training and Capacity Building: OMB will conduct training sessions for all staff involved in procurement and grant management to reinforce compliance with: • Uniform Guidance (2 CFR 200.318–200.327) • Local procurement requirements (Title 31 VIC)

The Government concurs with the auditor’s findings and recommendations. DPNR’s subrecipient monitoring records and supporting documentation were maintained in multiple locations and were not consistently centralized in a manner that readily demonstrated compliance with Federal subrecipient monitoring requirements. In addition, DPNR did not maintain a comprehensive master listing of subrecipients that incorporated all information necessary to support risk assessments, monitoring activities, and audit requests. DPNR with the support of the federal agency’s consultant will implement a centralized electronic repository system to serve as the official recordkeeping location for all sub recipient supporting documentation. This repository will house all documents necessary to determine if a vendor is at high risk, if they are required to be audited and monitoring, including but not limited to: • A master listing of all subrecipients for each fiscal year; • Subaward agreements and any modifications; • Required subaward information pursuant to 2 CFR §200.331(a); • Subrecipient risk assessments and supporting documentation; • Financial and programmatic reports submitted by subrecipients; • Monitoring plans and monitoring reports; • Documentation of desk reviews and on-site monitoring, where applicable; • Audit reports, Single Audit reports, and management decisions; • Documentation of corrective actions and follow-up activities; and • Correspondence and any additional records necessary to demonstrate compliance with Federal requirements.

Develop procurement policy for federal grants noting that bids on federal grants will be advertised for at least three weeks.

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.

CORRECTIVE ACTION PLAN September 25, 2025 Cognizant or Oversight Agency for Audit The Center for Independent Documentary, Inc. (the Center) respectfully submits the following corrective action plan for the year ended December 31, 2024. Name and address of independent public accounting firm: AAFCPAs, Inc. 50 Washington Street Westborough, MA 01581 Audit period: January 1, 2024 – December 31, 2024 The finding from the December 31, 2024 Schedule of Findings and Questioned Costs is discussed below. FINDINGS-FEDERAL AWARD PROGRAMS AUDITS 2024-001 Procurement Policy Recommendation: We recommend that management establish a formal procurement consistent with the procurement standards set forth in the Uniform Guidance (2 CFR 200.317–327) issued by the U.S. Office of Management and Budget (OMB). Action Taken: We will work with the Board of Directors to establish a formal procurement policy that will include the following: • We will formalize procedures to confirm vendor eligibility, including consistent use of the SAM.gov exclusions list prior to entering contracts, and ensure documentation is retained for audit purposes. • The updated policy will outline specific steps for procurement activities at various thresholds, particularly mid-range purchases, with requirements for obtaining multiple quotes and documenting price comparisons. • In alignment with Federal guidelines, the revised policy will include a provision supporting preference for U.S.-made products and materials when feasible. • New sections will be added to address how the Center will manage vendor selection reviews, disputes, and issue resolution to promote fairness and consistency in the procurement process. • To ensure transparency and version control, the policy will include the date of each revision and a process for periodic review. The Center’s Management will implement the updated policy, coordinate training for programmatic staff, and monitor compliance with the updated procedures. We expect the revised procurement policy to be finalized and implemented by December 15, 2025. If the Cognizant or Oversight Agency for Audit has questions regarding this plan, please call Susan Walsh, at 339-364-1277. Sincerely yours, Susan Walsh Executive Director

2024-002 Procurement Policy Recommendation: We recommend that management amend and formally update the procurement policy to address the following critical areas: Vendor acceptance and debarment testing, definition and procedures for the Simplified Acquisition Threshold, domestic preference for procurements, procedures for handling procurement issues and policy governance and version control. Action Taken: To improve clarity, accountability, and regulatory compliance, the Finance Department will work with the Fiscal Sponsorship Department to develop The Praxis Project's procurement policy going forward. We will ensure the updated policy includes the following: · We will formalize procedures to confirm vendor eligibility, including consistent use of the SAM.gov exclusions list prior to entering contracts, and ensure documentation is retained for audit purposes. · The updated policy will outline specific steps for procurement activities at various thresholds, particularly mid-range purchases, with requirements for obtaining multiple quotes and documenting price comparisons. · In alignment with Federal guidelines, the revised policy will include a provision supporting preference for U.S .- made products and materials when feasible. · New sections will be added to address how the Organization will manage vendor selection reviews, disputes, and issue resolution to promote fairness and consistency in the procurement process. · To ensure transparency and version control, the policy will include the date of each revision and a process for periodic review. The Fiscal Sponsorship Department will implement the updated policy, coordinate training for programmatic staff, and monitor compliance with the updated procedures. We expect the revised procurement policy to be finalized and implemented by July 31, 2025. If the Cognizant or Oversight Agency for Audit has questions regarding this plan, please call Susan Pagel, CPA at 503-701-7173. Sincerely yours, Xavier Morales Executive Director

The contract provision will be enforced by the City of Creswell's Engineer of Record and Reviewed by the Finance Director prior to disbursement of payment to the vendor.

Finding No.: 2023-020 AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Subrecipient Monitoring Questioned Costs: $2,399,988 Contact Person(s): Angelina Phillips, Financial Analyst, Office of Management and Budget (OMB), Nerissa B. Karakaya, CIP COTR Corrective Action Plan: Condition 1a (A. Phillips): For Grant Award Nos. D23AF00036 and D22AF00299, the Office of Management and Budget (OMB) agrees with the finding and the need for a formally written policy and procedures for subrecipient monitoring. We have adopted the Department of Finance’s Subrecipient Monitoring Policy and Procedures effective 8/4/2025 establishing a formal monitoring suspension and debarment status of each subrecipient prior to granting any subaward. The guidance is reflective of the provisions set by 2 CFR 180.300. Proposed Completion Date: Ongoing Condition 1a and 1c (N. Karakaya): For Grant Award No. D23AP00068, the Capital Improvement Program (CIP) disagrees with this finding because the required verification was performed. Although documentation was not retained, CIP verifies that all subrecipients comply with OPA requirements before federal funds are awarded. Finding No.: 2023-020, continued AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Subrecipient Monitoring Questioned Costs: $2,399,988 Contact Person(s): Angelina Phillips, Financial Analyst, Office of Management and Budget (OMB), Nerissa B. Karakaya, CIP COTR Corrective Action Plan: To prevent recurrence, CIP will implement the following: 1. CIP will implement the revised Subrecipient Monitoring Standard Operating Procedures (SOP) issued by the CNMI Department of Finance, made effective October 28, 2025. Under these procedures, CIP will conduct a risk assessment to evaluate the subrecipient’s potential for noncompliance. The assessment will consider: a. Financial stability b. Audit history, including findings or questioned costs c. Internal controls, such as documented policies and procedures d. Programmatic capacity, including staffing and experience with similar awards The results of the risk assessment will help determine the level of monitoring required during the award period (e.g., low, moderate, or high risk). In addition, CIP will verify that subrecipients are not suspended or debarred from receiving federal funds by: a. Checking the System for Award Management (SAM.gov) and retaining a screenshot or record of the verification b. Alternatively, obtaining a signed certification from the subrecipient or including a suspension/debarment clause in the subaward agreement 2. No subaward agreement will be approved or executed until the required verification has been completed and reviewed by the CIP Administrator. 3. CIP staff will receive training on federal suspension and debarment requirements, including compliance with 2 CFR 180.300 and the CNMI Department of Finance Subrecipient Monitoring SOP. 4. CIP will conduct quarterly reviews of subaward files to ensure verification documentation is maintained and procedures are consistently followed. Proposed Completion Date: December 31, 2026 Finding No.: 2023-020, continued AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Subrecipient Monitoring Questioned Costs: $2,399,988 Contact Person(s): Angelina Phillips, Financial Analyst, Office of Management and Budget (OMB), Nerissa B. Karakaya, CIP COTR Corrective Action Plan: Condition 1b (A. Phillips): The Office of Management and Budget (OMB) agrees with the finding. OMB fully executed a Subrecipient Agreement with the subrecipient on 1/27/2023, prior to any grant administration taking place. The adoption of the Department of Finance’s Subrecipient Monitoring Policy and Procedures effective 8/4/2025 also further formalizes the process. Proposed Completion Date: Completed Condition 1c (A. Phillips): For Grant Award Nos. D23AF00036 and D22AF00299, the Office of Management and Budget (OMB) agrees with the finding and agree with the need for a formally written policy and procedures for subrecipient monitoring. We have adopted the Department of Finance’s Subrecipient Monitoring Policy and Procedures effective 8/4/2025 establishing a formal subrecipient risk assessment prior to entering into the subaward agreement and identifying the type of monitoring procedures to be performed for the subrecipient. Proposed Completion Date: Completed Condition 2 (A. Phillips): For Grant Award No. D23AF00036, the Office of Management and Budget (OMB) agrees with the finding and agree with the need for a formally written policy and procedures for subrecipient monitoring. We have adopted the Department of Finance’s Subrecipient Monitoring Policy and Procedures effective 8/4/2025 to perform proper monitoring to ensure that subrecipients are in compliance with single audits. Proposed Completion Date: Completed Condition 2 (N. Karakaya): For Grant Award No. D17AP00132, D21AP10043, D19AP00081, and D21AP10044, the Capital Improvement Program (CIP) agrees with the finding that a subrecipient with expenditures Finding No.: 2023-020, continued AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Subrecipient Monitoring Questioned Costs: $2,399,988 Contact Person(s): Angelina Phillips, Financial Analyst, Office of Management and Budget (OMB), Nerissa B. Karakaya, CIP COTR Corrective Action Plan: exceeding $750,000 during the year was not verified for compliance with single audit requirements, including whether corrective actions were taken to address prior audit findings. To address this issue, the Capital Improvement Program (CIP) will strengthen its subrecipient monitoring procedures to ensure compliance with single audit requirements by: 1. Developing and implementing a subrecipient monitoring checklist to identify subrecipients that expend $750,000 or more in federal awards during their fiscal year. 2. Obtaining and reviewing applicable Single Audit reports annually to verify compliance with federal requirements. 3. Documenting the review of audit reports and assessing whether any findings related to federal awards affect CIP-funded activities. 4. Requiring subrecipients with audit finding to submit corrective action plans and evidence of implementation. 5. Maintaining a tracking system to monitor the status and resolution of audit findings and corrective actions. 6. Providing training to CIP staff responsible for subrecipient monitoring on federal compliance and the CNMI Department of Finance Subrecipient Monitoring SOP. Proposed Completion Date: December 31, 2026

The Government concurs with the auditor’s findings and recommendations. The Government updated its procurement laws and issued revised procurement manuals, along with issuing position-specific Standard Operating Procedures. Processes for enforcing Internal controls and adherence to procurement laws have been established and are regularly reinforced. In early 2025, the Government-wide training reinforced expectations for full and open competition. User Agencies now access GVIBUY for informal solicitations in the eProcurement system, with ongoing training to prioritize competition and enhance oversight by the Department of Property and Procurement.

The Chancellor’s Office established and implemented SLFRF emergency financial assistance grants policies and procedures. The policies and procedures can be found on the following website: State Fiscal Recovery Funds - Emergency Financial Assistance for California Community College Students. These policies and procedures included a self-certification process to certify that students met SLFRF eligibility requirements, expenditure tracking and management information system data reporting, a monitoring plan, and state compliance procedures through the annual Contracted District Audit Manual for the 2021-22, 2022-23, and 2023-24 fiscal years. The Chancellor’s Office intends to include SLFRF compliance procedures in the upcoming 2024-25 fiscal year Contracted District Audit Manual. The intent of both the policies and procedures as well as the Audit requirements are intended to address the Chancellor’s Office need to: (1) maintain effective internal controls regarding its use of the applicable SLFRF Federal award funding, (2) assess each community college’s risk of potential noncompliance with SLFRF subaward federal statutes, regulations and terms and conditions, and (3) validate that community colleges expended the SLFRF resources in accordance with federal statutes, regulations and terms and conditions. The Chancellor’s Office will coordinate with the Department of Finance as needed to revise the funding source of expenditures that are determined to be ineligible to be supported by SLFRF resources. The Chancellor’s Office will also work with community college districts to ensure any SLFRF funds awarded to ineligible students are adjusted in districts’ accounting records to the proper state funding source. The Chancellor’s Office will continue to communicate the SLFRF emergency financial assistance grants policies and procedures to California Community districts as needed. Additionally, the Chancellor’s Office will continue to receive copies of each district’s annual audit and audit findings as determined through the Contracted District Audit Manual process. The Chancellor’s Office will also continue to review and revise the SLFRF policies and procedures, and memorandums as needed to ensure the required federal award identification information and retention process information is available to community college districts. In conclusion, the Chancellor’s Office appreciates the focus toward ensuring the successful implementation of the emergency financial assistance grant program and in support of our students’ success. The SLFRF grants provided low-income students who were disproportionately impacted by the COVID-19 pandemic emergency support to continue with their enrollment, improve their economic mobility, complete their educational goals, and contribute to California’s economy in a meaningful way. Estimated Implementation Date: December 15, 2025 Contact: Chris Ferguson Executive Vice Chancellor of Finance and Strategic Initiatives California Community Colleges Chancellor’s Office

California Department of Transportation (Caltrans) has determined that federal award information is not always disseminated to the project managers. Caltrans will review current policies and procedures of each division and revise, if necessary, so that best practices are followed. Caltrans Internal Audits Office will be working with Local Assistance’s single audit report monitoring process and take on the responsibility to monitor for all Caltrans divisions. Estimated Implementation Date: June 2025 Contact: Ben Shelton, Chief – Caltrans Internal Audits Office Division of Risk and Strategic Management

Assistance listing number and program name: 14.267 Continuum of Care Program Agency: Arizona Department of Housing (DOH) Name of contact person and title: Lori Moreno, DOH Human Resources and Procurement Administrator Anticipated completion date: March 31, 2025 Agency’s Response: Concur The Department will update written policies and procedures related to procurement to incorporate applicable aspects of Federal Regulations 2 CFR §§200.321, 200.322, 200.323, and 200.327. The updated policy will address competition through competitive bids, sole source selections, and retention of procurement documents. In addition, the policy will state the Federal requirements that are to be included in purchase orders and contracts.

Name of contact person: Michael Hardy, Chief Finance Officer. Corrective action: The Board is reviewing their procedures and policies to include a detailed review of all construction contracts that are funded by federal awards is completed by a designated member of senior management to ensure the contracts contain the provisions required by 2 CFR Appendix II, 2 CFR 200.216, and 2 CFR 200.322. Proposed completion date: The Board will implement the above procedures immediately.

Auditor’s Recommendations: We recommend the District establish a policy and implement procedures regarding large purchases related to Federal grants to insure that no vendors who are suspended, debarred, or otherwise excluded from participating in transactions funded through Federal grants are used. As identified above, there are several methods in which the District can verify vendors who are not suspended or debarred. The District may have the vendor provide an annual certification that is s not currently suspended, debarred, or otherwise prevented from receiving Federal dollars. In other occasions in which a single purchase is going to be made, the purchasing procedures should include looking up the vendor on the GSA website, printing a copy of the verification, and placing it in the file with the purchase order. The District has options, and it should establish what method is the least intrusive, but also effective, in complying with the requirements of the Uniform Grant Guidance. Responsible Official’s Plan: • Specific corrective action plan for funding: The procurement Officer of SJSWCD has updated the procurement process on 12/7/23 that all contractors who will be receiving Federal monies must provide an annual certification that they are not suspended, debarred, inactive, or otherwise excluded from participating in transaction funded through Federal grants. The policy change will be approved at the next board meeting. • Timeline for completion of corrective action plan: December 7, 2023 • Employee position(s) responsible for meeting the timeline: Oralia Bridge, District Manager

Responsible Contact Person(s): Diana Clark, Associate Director Senior Corrective Action Planned: SRM for the TANF Federal grant program will be included in the SFY2024 SRM Plan. Inclusion of Risk Assessment criteria have been made and are being incorporated into the Monitoring Plan. Estimated Completion Date: 8/1/2023

Specific corrective action plan for finding: Christi Walter, Coordinator Purchasing Department along with the Dom Atcitty, Grants Specialist, will review vendors that are issued requisitions at each approval level to assist in catching $25K or more for Suspension and Debarment. A printed document from SAM.GOV verifying eligibility to Requisitions over $25K should be attached. At the initial setup of new vendors, the Purchasing Department will review vendors in SAM.GOV. A printed document from SAM.GOV verifying eligibility of vendor will be attached to the vendor file. Timeline for completion of corrective action plan: July 1, 2023 Employee position(s) responsible for meeting the timeline: Dom Atcitty, Grants Specialists; Christi Walter, CPO; Lisa Smith, Purchasing Specialist; Bellamie DeHerrera-Presley, Federal Grants Coordinator and Erica Benally, Federal Grants Specialist

The Government concurs with the auditor's findings and recommendations. The Government has since updated its procurement laws and has issued revised procurement manuals, along with issuing position-specific Standard Operating Procedures. Processes for enforcing Internal controls and adherence to procurement laws have been established and are regularly reinforced. The Government, in late January and early February 2025, conducted the Government-wide training on the updated procurement laws and re-established expectations as it pertains to processes and maintaining full and open competition. The Government has begun providing User Agencies with access to GVIBUY to enable them to perform informal solicitations in the eProcurement system. Further targeted training on this process will continue over time, ensuring User Agencies prioritize full and open competition in their procurement activities and will give the Department of Property and Procurement more oversight and compliance powers.

Assistance Listing Number 21.027 Noncompliance Over Procurement and Suspension/Debarment - Major Federal Program - Coronavirus State and Local Fiscal Recovery Funds Muskogee County has hired an internal grant administrator to assist in keeping the county compliant with all local, state, and federal requirements. Efforts will be made going forward to ensure that all grant funds are properly expended. This includes that all expenditures are properly documented and that all vendors are ferderally eligible to perform services

Management Response #2022-013: Due to staff turnover in prior years and inadequate handover procedures, the Subrecipient Monitoring was not done as required. Corrective Action Plan: The Grants program management team has developed a Title X Program Manual to include a clearer Subrecipient Monitoring process that includes regular site visits and requiring supporting documentation of expenses. Furthermore, the Grants program management team will report out to the applicable internal parties on status of visits and findings on a quarterly basis. Responsible Party: Erin Flior, CDSO

FINDING 2022-001 Program: COVID-19: Coronavirus State and Local Fiscal Recovery Funds CFDA No.: 21.027 Federal Grantor: United States Department of the Treasury Passed-through: N/A Compliance Requirements: Procurement, Suspension and Debarment Auditor Recommendation: We recommend the City modify and strengthen its policies and procedures to ensure that the required Uniform Guidance standards are addressed. Views of Management/Responsible Officials and Corrective Action: The City concurs with the auditor?s recommendation and will modify and strengthen its policies and procedures to ensure that the required Uniform Guidance standards are addressed. The City has never had a finding in its Single Audit before and was not aware that the procurement standards identified in Title 2 of the Code of Federal Regulations (CFR), specifically 2 CFR sections 200.317 through 200.326, had to be included in the City?s procurement policy. Being that this was the first time the City received the ARPA funding and was subject to this requirement, this deficiency came up. The City will review and bring its current policy up to date. The City also made an effort to comply when a deficiency was known. In August 2022, the City established its Debarment and Suspension policy. With this policy in place, the City will review its current process to ensure that going forward, verifications for debarment and suspension are performed for contractors prior to entering into transactions with them. Name of Responsible Person: Kim Sao, Finance Director Implementation Date: 6/30/2023