Corrective Action Plans

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.

Identifying Number: SA 2024-002 Description of Finding: During the audit, MARTA was unable to provide purchase order documentation or contract for eight samples that are above $500. Per current procurement policy, "Purchases of supplies, services, and equipment costing more than five hundred ($500) shall be made by purchase order, unless authorized by a signed contract or Mountain Transit Board Approval". During the audit, MARTA was unable to provide supporting documentation to demonstrate that the required price or rate quotations for those purchases or contracts with contract amounts above $10,000 were obtained from an adequate number of qualified sources and maintained the documentation to support its conclusion. These were noted for two samples tested. The expenditure paid ranged from $10,000 to $36,000 in 2024. During the audit, MARTA was unable to provide supporting documentation to demonstrate that the process of verifying if vendors are not suspended or debarred were performed on two vendors tested. The expenditure paid to these vendors ranged from $109,000 to $647,000 in 2024. Corrective Actions Taken or Planned: We are in the process of updating our Procurement Policy. We will ensure that we follow these updated policies and procedures to address compliance and documentation requirements for small and micro-purchases, sole-source, and informal processes. The updated Procurement Policy will be brought to our October 2025 Board of Directors meeting for Board review or approval. Personnel responsible for implementation: Sean Gillingham, Finance Manager Anticipated completion date: October 2025

2024-001 (Procurement and Suspension & Debarment) Management Comments and Corrective Action: Due to the growing need to adequately care for the minors at SWK’s shelters coupled with the limitations of access to vendors caused by COVID-19, SWK utilized existing vendor to minimize significant disruptions to operations. The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Reprocuring all of these contracts at once would potentially cause disruptions in operations due to the products/services related to those vendors playing an important role in the Organization’s dayto- day operations. In April 2021, the Organization hired new procurement leadership and invested in Full Time Employees (FTEs) to develop a robust procurement department. Due to this procurement revamp, Procurement adopted a hybrid model, and Desktop Protocols were established to provide universal procedures to fulfill policy. Protocols instruct staff on obtaining three quotes and provide tools for selecting the vendor. In addition, quality protocols and tools are currently in development to verify a random sample of procurement transactions and files. The Organization still has several active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Proposed Implementation Date of Corrective Action: In process and to be completed by December 31, 2025. Person Responsible for Corrective Action: Steven Beckman, CFO 45

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.

Management Comments and Corrective Action: Due to the growing need to adequately care for the minors at SWK’s shelters coupled with the limitations of access to vendors caused by COVID-19, SWK utilized existing vendor to minimize significant disruptions to operations. The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Reprocuring all of these contracts at once would potentially cause disruptions in operations due to the products/services related to those vendors playing an important role in the Organization’s day-to-day operations. In April 2021, the Organization hired new procurement leadership and invested in Full Time Employees (FTEs) to develop a robust procurement department. Due to this procurement revamp, Procurement adopted a hybrid model, and Desktop Protocols were established to provide universal procedures to fulfill policy. Protocols instruct staff on obtaining three quotes and provide tools for selecting the vendor. In addition, quality protocols and tools are currently in development to verify a random sample of procurement transactions and files. The Organization still has several active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Proposed Implementation Date of Corrective Action: In process and to be completed by December 31, 2025. Person Responsible for Corrective Action: Steven Beckman, CFO

We value your guidance and are committed to enhancing our compliance with the Uniform Guidance. In response, we will: 1. Documentation Procedures: We will implement procedures to properly document procurement activities. This will help us maintain consistency and ensure compliance with the Uniform Guidance. 2. Monitoring and Accountability: Additionally, we will establish a system to regularly monitor our compliance with these policies and procedures. This will enable us to quickly address any issues that may arise. The Finance Department will be responsible for implementing these changes and will have everything ready before the end of 2024. We are dedicated to making these improvements and truly value your support as we work through this process. Personnel responsible: Eduardo Cedeno, Director of Finance Anticipated completion date: December 31, 2024

Finding Number: 2023-003 Finding Title: Procurement, Suspension, and Debarment Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Name of Contact Person Responsible for Corrective Action: Ra Chhoth, Deputy Chief Finance Officer, Finance and Property Services OR Matt Bower, Manager Resource Coordination, Finance and Property Services Corrective Action Planned: Controllers Division staff will work with Procurement Division on further development of enhanced communication and training tools on federal procurement for city contract manager staff. Suspension and debarment subject has been shared with Grants Users Group and will be made a standing annual topic to be covered moving forward. Anticipated Completion Date: 12/31/2024

The City of Tracy, California respectfully submits the following corrective action plan for the reported findings for the fiscal year ended June 30, 2023. The findings are numbered consistently with numbers assigned in the June 30, 2023 Single Audit Report. Finding 2023-001 Procurement Policy Criteria: Non-Federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) and (b). Under the micro-purchase method, the aggregate dollar amount does not exceed $3,500 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(c); the competitive proposals method under the conditions specified in 2 CFR section 200.320(d); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(f). Finding 2023-001 Procurement Policy (Continued) Criteria (Continued): 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(d)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR part 200, “Contract Provisions for Non- Federal Entity Contracts Under Federal Awards.” Non-federal entities had a grace period of two full fiscal years after the effective date of the Uniform Guidance before they had to comply with the procurement requirements of 2 CFR section 200. For a non-federal entity with a fiscal year-end of June 30, its effective date for the procurement requirements was July 1, 2017. However, during this grace period, non-federal entities were required to clearly document whether they decided to comply with the previous version of the applicable procurement standards or the new standards contained in the Uniform Guidance. Condition: The City has not updated its purchasing policies and procedures to bring it into compliance with the requirements of Uniform Guidance. The City has also not formally documented whether it has decided to extend its applicable date of compliance with 2 CFR part 200 to be effective beginning July 1, 2018. Context: See condition above for context of the finding. Cause: The City has not evaluated its existing procurement policies for compliance with the requirements of the Uniform Guidance. Effect: The City is not in compliance with the procurement policy provisions of 2 CFR part 200 and the Uniform Guidance. Not updating the City’s procurement policy could lead to future findings and questioned costs related to federal awards. The current audit did not identify noncompliance with direct and material compliance requirements of the major federal award program. Identification as a Repeat Finding: Yes. 2022-001. Recommendation: The City should evaluate and update existing purchasing policies and procedures in order to bring the City into compliance with the procurement policy requirements of 2 CFR part 200 and the Uniform Guidance. The updated policy should include, among other things: Finding 2023-001 Procurement Policy (Continued) Recommendation (Continued): 1. Thresholds and appropriate approval procedures for allowable federal procurement methods. 2. Written standards for how conflicts of interest involving employees engaged to select, award, and administer contracts will be governed. 3. How to ensure that contracts and awards are made only to responsible and eligible contractors and how oversight of contractor performance will be monitored. 4. How records will be maintained in order to document the history of federal procurements. Corrective Action Plan: The City is still in the process of working with an outside firm on a review of procurement and purchasing policies. The consultation includes compliance review of this standard. Anticipated Completion date: July 1, 2023 Name of Contact Person: Sara Cowell, Finance Director

Procurement and Suspension and Debarment: The College agrees with the finding and takes note of the previous corrective actions that did not fully resolve the issue. The College will update its Purchasing and Accounts Payable Policy to require SAM.gov verification prior to awarding contracts. The College will conduct mandatory procurement training to strengthen compliance with federal requirements.

Procurement and Suspension and Debarment College of the Marshall Islands acknowledges the finding and confirms that the gaps noted resulted mainly from the previous manual filing system and limited internal procurement controls. 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, verification of suspension and debarment status, and equitable distribution of micro- purchases. In addition, newly hired staff dedicated to Procurement and Accounts Payable have been onboarded to improve oversight and compliance. With these new systems, strengthened controls, and added staffing capacity, the College is now better positioned to maintain full compliance. Staff have been trained—and will continue to be trained twice a year—on procurement requirements and federal regulations to prevent recurrence of similar issues in future audits.

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.

I believe this has to do with the sewer project. I was thrown into the middle of this. I don’t believe proper records were started or kept by the former Fiscal Officer. I only have what happened since I was here.

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

Program: COVID-19 ? Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) CFDA No.: 93.323 Federal Agency: U.S. Department of Health and Human Services Passed-through: California Department of Public Health Award Year: 2021-2022 Compliance Requirement: Procurement and Suspension and Debarment Grant Award Number: COVID-19 ELC39 and COVID-19 ELC97 Type of Finding: Material Noncompliance and Material Weakness in Internal Control over Compliance Repeat Finding from Prior Year: Yes, prior year finding 2021-09. Management?s or Department?s Response: We Concur. Views of Responsible Officials and Corrective Action: Procedures have been developed and implemented to comply with the County?s policies over procurement and suspension and debarment. Name of Responsible Person: Bruce Cosby Name of Department Contact: Bruce Cosby Projected Implementation Date: July 1, 2023

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

We will implement procedures to ensure all future contracts are properly procured under this grant. July 31, 2023 County Administrator 740-474-6093

Views of Responsible Officials and Planned and Corrective Actions: Management has acknowledged the insufficient maintenance of documentation that is required to be retained for all bids and quotes. Even though most bids and quotes were received, the documentation of those bids and quotes were not maintained in a centralized location. To comply with our procurement policies, we will adjust our daily operating procedures to ensure that all bids and quotes that are obtained are retained in a centralized location that is easily accessible to the Chief Financial Officer and the assistant Chief Financial Officer.

2022-004: Procurement (Significant Deficiency) Views of Responsible Officials and Planned Corrective Actions: Management concurs with the finding. The Authority implemented a procurement policy effective January 2022. Completion Date ? January 2022 Contact Person ? Jami Blosmo, Accounting Manager

The City of Tracy, California respectfully submits the following corrective action plan for the reported findings for the fiscal year ended June 30, 2022. The findings are numbered consistently with numbers assigned in the June 30, 2022 Single Audit Report. Finding 2022-001 Procurement Policy Criteria: Non-Federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors? performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) and (b). Under the micro-purchase method, the aggregate dollar amount does not exceed $3,500 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(c); the competitive proposals method under the conditions specified in 2 CFR section 200.320(d); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(f). Finding 2022-001 Procurement Policy (Continued) Criteria (Continued): 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(d)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR part 200, ?Contract Provisions for Non- Federal Entity Contracts Under Federal Awards.? Non-federal entities had a grace period of two full fiscal years after the effective date of the Uniform Guidance before they had to comply with the procurement requirements of 2 CFR section 200. For a non-federal entity with a fiscal year-end of June 30, its effective date for the procurement requirements was July 1, 2017. However, during this grace period, non-federal entities were required to clearly document whether they decided to comply with the previous version of the applicable procurement standards or the new standards contained in the Uniform Guidance. Condition: The City has not updated its purchasing policies and procedures to bring it into compliance with the requirements of Uniform Guidance. The City has also not formally documented whether it has decided to extend its applicable date of compliance with 2 CFR part 200 to be effective beginning July 1, 2018. Context: See condition above for context of the finding. Cause: The City has not evaluated its existing procurement policies for compliance with the requirements of the Uniform Guidance. Effect: The City is not in compliance with the procurement policy provisions of 2 CFR part 200 and the Uniform Guidance. Not updating the City?s procurement policy could lead to future findings and questioned costs related to federal awards. The current audit did not identify noncompliance with direct and material compliance requirements of the major federal award program. Identification as a Repeat Finding: Yes. 2021-001. Recommendation: The City should evaluate and update existing purchasing policies and procedures in order to bring the City into compliance with the procurement policy requirements of 2 CFR part 200 and the Uniform Guidance. The updated policy should include, among other things: Finding 2022-001 Procurement Policy (Continued) Recommendation (Continued): 1. Thresholds and appropriate approval procedures for allowable federal procurement methods. 2. Written standards for how conflicts of interest involving employees engaged to select, award, and administer contracts will be governed. 3. How to ensure that contracts and awards are made only to responsible and eligible contractors and how oversight of contractor performance will be monitored. 4. How records will be maintained in order to document the history of federal procurements. Corrective Action Plan: The City is still in the process of working with an outside firm on a review of procurement and purchasing policies. The consultation includes compliance review of this standard. Anticipated Completion date: June 1, 2023 Name of Contact Person: Sara Cowell, Interim Finance Director

Procurement and Suspension and Debarment - Public and Indian Housing ? Assistance Listing No. 14.850 Recommendation: We recommend that the Authority reviews it?s procurement policy and active contracts and future contracts to ensure that all policies and procedures regarding procurement of contracts are properly followed and documented. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Name(s) of the contact person(s) responsible for corrective action: Ivra Amacker, VP Affordable Housing Planned completion date for corrective action plan: September 30, 2023

The City of Dos Palos was on a state of emergency Resolution, and when these funds came available, understood that we could go forward with the rehabilitation of our 750,000 gallon tank, for storage for the City. In the future, if an emergency situation should arise, the City will review all regulations and documents for procurement of the funds. The City's procurement policy is outdated and we will be implementing a new written procurement policy.

Management Comments and Corrective Action: During the course of the single audit for the year ending August 31, 2022, it was noted that SWK "legacy" contracts did not follow the established procurement policy and procedures which requires SWK to obtain quotes from at least three sources and/or did not document the quotations in the procurement file for one expenditure between $25,000 to $100,000. This instance of noncompliance noted was for a consumer goods (i.e., clothing, and personal healthcare). Due to the growing need to adequately care for the minors at SWK’s shelters coupled with the limitations of access to vendors caused by COVID-19, SWK utilized an existing vendor to minimize significant disruptions to operations. The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Reprocuring all of these contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. In April 2021, the Organization, hired new procurement leadership and invested Full Time Employees (FTEs) to develop a robust procurement department. As a result of this procurement revamp, Procurement adopted a hybrid model, and Desktop Protocols were established to provide universal procedures to fulfill policy. Protocols instruct staff on obtaining three quotes and provided tools for the selection of the vendor. In addition, quality protocols and tools are currently in development to verify a random sample of procurement transactions and files. The Organization still has several active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Proposed Implementation Date of Corrective Action: In process and to be completed by December 31, 2023. Person Responsible for Corrective Action: Fred Muniz, CFO 2023