Corrective Action Plans

The award subject to this finding was a novel award for Texas Biomed and, therefore, controls relative to the wage rate requirements were not in place. Texas Biomed relied on the general contractor awarded the construction project to facilitate compliance with the special tests and provisions; however, failed to validate that certified payrolls were provided as required. Texas Biomed has since implemented enhanced procedures and controls. Purchasing will ensure contracts subject to Davis Bacon Act requirements will clearly outline the responsibilities of the general contractor, as well as requiring flow down to subcontractors. For the Animal Care Complex project partially funded by the EDA award, Purchasing will request certified payrolls dating back to the start of the project from the contractor and subcontractors. Certified Payrolls will only be accepted via DOL form WH347. Texas Biomed has engaged an external project management firm to support extensive new construction underway or soon to commence on Texas Biomed’s campus. The consultant, as part of the scope of their engagement, will serve as the first reviewer of invoices and pay apps, and payment requests will not progress without their approval. The review will include verification of inclusion of necessary certified payrolls. Documentation will be saved in a shared Dropbox folder, where Texas Biomed Facilities personnel will review and sign off on the cover letter from the consultant, verifying Texas Biomed’s review of the necessary certified payrolls at that time. When the pay app is entered by Texas Biomed Accounts Payable in the automated system for invoice payment, the payment request will automatically route to a designated Texas Biomed Facilities staff member. This second staff member will provide a final review of the certified payrolls as a condition for approving the invoice for payment. Both Facilities staff members will have access to the certified payrolls and approval at each step will signify the necessary documentation has been received. If there is a lack of proper documentation, Facilities personnel will alert Accounts Payable of the reason for delay. Facilities personnel will follow up with the project management consultant and contractor to request additional backup when necessary. Responsible Parties: Amber Garcia, Facilities Operations Coordinator; Mike Merz, Principal Engineer; Patricia Thompson, Assistant Director, Materials Management Completion Date: December 31, 2024

Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance Federal Agency Name: Department of Treasury Pass‐Through Entity: North Dakota Office of Management and Budget Assistance Listing Number: 21.027 Program Name: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Finding Summary: In the testing of procurement, suspension, and debarment it was identified that the City did not have a written policy on procurement that satisfied the requirements of 2 CFR sections 200.318 through 200.326. Corrective Action Plan: The City has adopted a procurement policy satisfying the requirements of 2 CFR sections 200.318 through 200.326 as of January 8, 2024. Responsible Individuals: Dustin Scott, City Administrator Anticipated Completion Date: January 8, 2024

Corrective Action: CBNHC will implement the following corrective actions: • CBNHC will update its procurement policies and procedures to conform with 2 CFR Part 200. • CBNHC will implement training for all staff who perform program purchases to ensure compliance with its Finance Policies and Procedures. • The Accounting Supervisor, Accounting Technician, and Interim Finance Director/Chief Operations Officer will ensure that all new purchases comply with the CBNHC Finance Policies and Procedures. Person Responsible: The following individuals will be responsible for the above corrective action plan: • Accounting Supervisor (Candyce Guerro) – Is responsible for conducting procurement policy training for all staff who perform program purchases. • Interim Finance Director/Chief Operations Officer (Volelle Zamora) – Is responsible for updating the procurement policies and procedures. • Interim Finance Director/Chief Operations Officer (Volelle Zamora), Accounting Supervisor (Candyce Guerro), and the Accounting Technician (Charlotte Sandoval) – Jointly responsible for ensuring incoming purchase requisitions are in compliance with the purchasing policies and procedures. Completion Date: CBNHC will update its procurement policies and procedures by December 31, 2024. Training over the current procurement protocol will be implemented immediately and will be conducted annually for all program managers. The Finance Department will immediately review all incoming purchase requisitions to assure requests comply with policy standards.

Finding 2023-005 Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance and Immaterial Instance of Noncompliance Finding Summary: The City does not have a written policy on procurement that satisfied the requirements of 2 CFR sections 200.318 through 200.326. Responsible Individuals: Steve McFarland, City Administrator Corrective Action Plan: The City will establish controls to follow all applicable procurement requirements under Uniform Guidance and applicable CFR sections. Anticipated Completion Date: December 31, 2024

Procurement Process Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Assistance Listing #93.323; Passed through the Oklahoma State Department of Education (Fund 723) Compliance Requirement: Procurement Material Weakness in Internal Control over Compliance; Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award the provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations and conditions of the federal award. 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. Effective May 14, 2022, the non-Federal entity must ensure that all applicable programs comply with section 70914 of the Build America, Buy America (BABA) Act, including through incorporation of a Buy America preference in the terms and conditions of each award with an infrastructure project. Condition: A vendor that was funded by the ELC program had not gone through the procurement process as required by applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Cause: The District has previously funded the vendor using state and local funds rather than federal funds for the past several years. The vendor’s service was identified that the use of the funds was an allowable activity and cost but the vendor had not gone through the required procurement process for federally funded programs. Effect: The District is out of compliance with federal requirements regarding procurement and could be contracting with vendors that are not the most practical for the District. Context/Sampling: Both of the two vendors that met this scope in this program was tested so no sampling was necessary. Repeat Finding From Prior Year: No Questioned costs: Funds spent with this vendor in this program were $486,260. Recommendation: Control procedures should be implemented to ensure that all vendors that are paid with federal funds following the required procurement regulations and ensure federal updates are regularly made to ensure continued compliance with procurement requirements.Views of Responsible Officials: The district understands the importance of complying with federal procurement requirements and will ensure all staff involved with federal funds are informed of the procurement rules with the addition of the federal compliance procedures to our Fiscal Management Policy. Responsible Individuals: Cameron Cox, Director of Purchasing Anticipated Completion Date: June 30, 2024

Auditor’s Recommendation: We recommend that the Foundation adopt a formal written procurement policy in the format and with the elements required by 2 CFR Sections 200.318 to 200.326. Action Taken: • As a First Year Single Auditee, the management team will ensure that senior leadership team, finance and accounting team, as well as program manager/directors for federal awards receive some form of training and certify receipt of this training within six-months of these findings. • As a First Year Single Auditee, the management team will ensure that specific policies are created to ensure a procurement process for goods and services expensed from federal funds is established and in alignment with UG (Uniform Guidance) standards for federal awards. • As a First Year Single Auditee, the management team will have an independent audit firm review this policy to ensure they are in alignment and conformance with UG (Uniform Guidance) standards.

The Chief Procurement Officer will follow all federal and state procurement standards. CPO will review and make necessary changes to documentation procedures for procurement to ensure that all federal and state requirements are met. Chief Procurement Officer has reviewed federal and state procurement compliance. He will update changes to documentation of procurement by December 31, 2024

The District will communicate with the team at DESE to determine what is needed to bring all files current.

The District understands fully that all state and federal spending must follow guidelines set forth in the grant or amount allocated.

Accounts payable will not release funds until all guidelines and documents are secured and attached to the Purchase Card of Purchase Order form. The district has appointed a different Federal Program Coordinator and this action has been practiced since January 2, 2024.

The District will conduct a training to inform supervisors what forms and guidelines are required prior to the release of any monies by the end of July 2024.

2023-003: Procurement Type of Finding: Noncompliance, Material Weakness Condition: The School did not always follow procurement standards as put forth in 2 CFR §200.318 through §200.326. Context: For ten of 25 vendors within the Simplified Acquisition Threshold reviewed, the School did not maintain documentation that appropriate procurement procedures were performed. Repeat Finding: Similar to prior year finding 2022-003. Action planned in response to finding: Management will implement procedures to ensure that competitive purchasing procedures are performed for all transactions above the micro purchase threshold and documentation is maintained to support the procurement procedures performed. Planned completion date for corrective action plan: June 30, 2024 Name of the contact person responsible for corrective action: Dolores Silva, Chief Financial Officer

●      The superintendent was provided with a statement of liability coverage from the company's insurer, which was assumed to suffice as a performance bond, but going forward, only proper performance bonds will be accepted. The District has properly recorded the assets obtained through these funds. The Arkansas Division of Elementary and Secondary Education (DESE) has been consulted regarding the documentation of Davis-Bacon wages, and the District will require weekly wage reports from future contractors when federal funds are used for construction projects. The District will also ensure that all future capital improvement projects adhere to federal and state requirements, including obtaining appropriate performance bonds and incorporating prevailing wage rate provisions in contracts. Additionally, the Capital Assets Clerk will receive specific training on the proper documentation and recording of capital improvements and equipment. Anticipated Completion Date: July 1, 2024.

FINDING 2023-002: Procurement Please provide an explanation of how your organization plans to resolve procurement error moving forward The Simple Foundation has implemented a newly developed procurement policy that aligns with the Uniform Guidance procurement standards. Moving forward, this policy will be strictly followed for all agreements and transactions under the Federal procurement requirements within Uniform Guidance. Attached below in the procurement policy and the Purchase Justification Form. Reasonable completion date: 08/04/2024 Responsible Party: D&K Financial, Compliance

Management has already been working with legal counsel and the board to develop a formal policy to put in place, with a planned implementation date of July 25, 2024.

Finding 2023-003 - Procurement, Suspension and Debarment (COVID-19 American Rescue Plan Act Local Fiscal Recovery) Significant Deficiency – Internal Control over Compliance Other Matters (Noncompliance) Description of Finding - The City’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Statement of Concurrence or NonConcurrence - Management agrees with this finding. Corrective Action - The City has implemented a revised procurement policy which addresses the essential elements of uniform guidance, including suspension and debarment. However, the policy was not in place for all of the current year. Name of Contact Person - John Monks, Comptroller Projected Completion Date - June 30, 2024

1) Management will review procurement policies with staff 2) Timely action will be taken to solicit bids for contracts that exceed District thresholds. 3) To ensure full and open competition takes place, management will routinely review current contracts and spending reports to identify expenditures that exceed the dollar amount threshold to individual vendors. Anticipated completion date: June 30, 2024 Responsible contact person: Emily Johnson

Corrective Action Plan: Testing of procurement, suspension, and debarment was accomplished timely in most cases and leadership will continue to engage and teach agency staff to follow existing procurement policies to assure compliance. No further policy is necessary. Staff training will be strengthened. Responsible Individuals: Dr. Kenneth D. Varble – Vice President of Accounting Anticipated Completion Date: December 2024

FINDING 2023-009: Wage Rage Compliance Response: The District will implement internal controls to ensure compliance requirements of all federal funds received. Contractors will be required to certify that they are complying with prevailing wages if the project is paid with federal funds.

COVID-19 State and Local Fiscal Recovery Funds – Assistance Listing No. 21.027 Recommendation: We recommend the City reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The City will work with their departments utilizing federal dollars to ensure the proper procurement method is utilized for all procurements and that documentation of that process is retained so it’s clear what considerations were made in the procurement decision. Name of the contact person responsible for corrective action: Pa Thao Planned completion date for corrective action plan: December 31, 2024.

Item 2023-001 Special Tests and Provisions – Wage Rate Requirements Recommendation: We recommend the strengthening of controls to ensure the prevailing wage rate clauses are included in the contracts and that certified payrolls are received for each week in which construction work is performed. Action Taken: The Board will strengthen the controls in place to provide assurance that proper prevailing wage rate clauses are added to construction contracts and certified payrolls are received from each week in which construction work is performed. Tricia Norman, CSFO, will be responsible for the corrective action plan and anticipates completion of corrective action will be taken before September 30, 2024.

Item 2023-001- Special Tests and Provisions - Wage Rate Requirements Recommendation: 2 CFR 200.303 requires the non-Federal entity to "(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award." 2 CFR 200.326 and 29 CFR Part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction (DOL Regulations) require the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). We recommend the strengthening of controls to ensure the prevailing wage rate clauses are included in the contracts and that certified payrolls are received for each week in which construction work is performed. The Chief School Financial Officer, Jessica Pettway, should review documentation for inclusion of the prevailing wage rate clauses in construction contracts as part of the bid process prior to expenditures being made. She should also review all invoices received from contractors and subcontractors to ensure that the certified payroll information is received for all weeks for which construction work is performed. Action Taken: Management has reviewed the requirements of 2 CFR Section 200.303 and 2 CFR 200.326 relating to wage rate requirements and agrees with the recommendation. Management has already communicated with all contractors and subcontractors regarding the wage rate requirements and has implemented additional procedures, effective July 1, 2023, stating that the Chief School Financial Officer, Jessica Pettway, will review documentation for inclusion of the prevailing wage rate clauses in construction contracts as part of the bid process prior to expenditures being made. She will also review all invoices received from contractors and subcontractors to ensure that the certified payroll information is received for all weeks for which construction work is performed.

Item 2023‐001 – Special Tests and Provisions – Wage Rate Requirements Recommendation: 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” 2 CFR 200.326 and 29 CFR Part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction (DOL Regulations) require the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). We recommend the strengthening of controls to ensure the prevailing wage rate clauses are included in the contracts and that certified payrolls are received for each week in which construction work is performed. The Chief School Financial Officer, Kerry Bedsole, should review documentation for inclusion of the prevailing wage rate clauses in construction contracts as part of the bid process prior to expenditures being made. She should also review all invoices received from contractors and subcontractors to ensure that the certified payroll information is received for all weeks for which construction work is performed. Action Taken: Management has reviewed the requirements of 2 CFR Section 200.303 and 2 CFR 200.326 relating to wage rate requirements and agrees with the recommendation. Management has already communicated with all contractors and subcontractors regarding the wage rate requirements and has implemented additional procedures, effective October 1, 2023, stating that the Chief School Financial Officer, Kerry Bedsole, will review documentation for inclusion of the prevailing wage rate clauses in construction contracts as part of the bid process prior to expenditures being made. She will also review all invoices received from contractors and subcontractors to ensure that the certified payroll information is received for all weeks for which construction work is performed.

FINDING NO 2023-001 Significant deficiency in Internal Control Over Compliance – Improve Control and Documentation over Procurement Detail of Finding and Planned Corrective Action Plan During the single audit it was discovered that a summary of bid quotes for one of the items selected for procurement testing was not available. The project selected had initially begun in FY2017 before the Town implemented its procurement tracking system. The individual in charge of the project had resigned and although the Technology Department tried to do a search of the employee’s email, the documentation was not found. The Town maintains an online procurement folder (by fiscal year) available to all departments to store all procurement information by project. The Town views this particular finding as an unfortunate exception to the procedures and policies that it has put into place to procure everything properly during FY2020. The Town will continue to follow all procurement guidelines and store all procurement documentation in a centralized location so that this finding does not happen again. Contact Dan O’Donnell – Finance Director Jesse Beyer – Town Accountant Completion Date (expected) These procedures and policies mentioned above related to procurement are expected to be implemented before the completion of June 30, 2024.

Introduction United Health Centers of the San Joaquin Valley (the "Organization") vigorously protests this finding. The Organization rigorously complies with not only federal and state procurement regulations, but also WIC regulations and the requirements found in the contract between the Organization and WIC. Additionally, numerous audits have been conducted by various entities (including audits by both WIC and the Health Resources and Services Administration (HRSA)) without any findings related to the Organization’s procurement. Finally, the Organization trains all individuals participating in the procurement process and provides guidance on procurement rules. Compliance with Regulations and WIC Program Contract The Organization’s compliance efforts are top tier. It uses many checks and balances to ensure compliance across the board with not only federal and state procurement regulations, but also WIC regulations and the requirements found in the contract between the Organization and WIC. It maintains written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts, intentionally avoids acquisition of unnecessary or duplicative items and uses surplus items instead of purchasing items when feasible. It uses full and open competition and obtains prior written authorization from the appropriate CDPH Program Contract Manager as required. The Organization maintains a narrative description of the procurement system, guidelines, rules, or regulations that is used to make purchases, which is audited by WIC for compliance. The Organization’s contract with WIC even goes above and beyond the requirements of 2 CFR § 180.220 and §§ 200.318 through 200.327. For example, the contract requires the reporting, tagging and annual inventorying of all equipment and/or property that is furnished by CDPH or purchased/reimbursed with funds provided through the contract. Upon receipt of equipment and/or property, the Organization reports the receipt to the CDPH Program Contract Manager and receives property tags for the items, then tags and logs them. For all purchases, the Organization maintains copies of all paid vendor invoices, documents, bids and other information used in vendor selection, for inspection or audit. Justifications supporting the absence of bidding (i.e., sole source purchases) are also maintained on file by the Organization for inspection or audit. Finally, although training is not required under 2 CFR § 180.220 or §§ 200.318 through 200.327, the Organization trains all pertinent staff related to procurement, the Organization’s procurement policies and procedures, the WIC contract requirements, WIC’s regulations and Uniform Guidance. This is done to ensure compliance with the principles and requirements of each of these requirements. No Prior Audit Findings Most recently, in January 2024 the Organization’s procurement policies and procedures were comprehensively audited by the federal HRSA through an Operational Site Visit to verify the status of UHC’s compliance with the relevant statutory and regulatory requirements. The HRSA audit specifically reviewed the Organization’s procurement policies and procedures, as well as reviewed documentation related to procurements during the prior three years by evaluating ten elements. This assessment evaluated written procurement procedures to ensure compliance with federal procurement standards, including a process for ensuring that all procurement costs are allowable, consistent with federal cost principles found in 45 CFR 75 Subpart E: Cost Principles. Additionally, the audit reviewed records for procurement actions paid for in whole or in part under the federal award that include the rationale for method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. This review involved documentation related to noncompetitive procurements. The audit also included evaluating the Organization’s retention of final contracts and related procurement records, consistent with federal document maintenance requirements, for procurement actions paid for in whole or in part under the federal award. Another element of the audit was to ensure that all activities and reporting requirements are being carried out in accordance with the provisions and timelines of the related contract and UHC’s own policies and procedures. Following completion of the expansive audit, HRSA’s evaluation resulted in no findings related to procurement. UHC successfully met all six elements of the Operational Site Visit audit conducted by HRSA. Conclusion In conclusion, the Organization vehemently disputes the findings presented, underscoring its unwavering commitment to stringent compliance with federal and state procurement regulations, as well as the stipulations outlined in its contract with WIC. The Organization's robust compliance mechanisms, encompassing meticulous checks and balances, written standards of conduct, and adherence to full and open competition, exemplify its dedication to procurement integrity. Furthermore, the Organization's proactive measures, such as reporting, tagging, and inventorying equipment, surpass the mandated requirements, ensuring transparency and accountability. Notably, recent audits by both WIC and the Health Resources and Services Administration (HRSA) have yielded no findings pertaining to procurement, validating the efficacy of the Organization's practices. The Organization's unwavering commitment to compliance, coupled with its comprehensive procurement protocols and ongoing training efforts, unequivocally refute any assertions of impropriety. UHC will reevaluate the audit findings and may or may not adopt a Corrective Action Plan.