Corrective Action Plans

Persons responsible for corrective action: Bob Harmon, Superintendent Corrective Action: The School implemented an electronic procurement system. This system provides clarity with the documentation and approval of procurements. The transition from paper to digital formats will provide enhanced internal controls to ensure that procurement transactions are documented and approved. Training will also be provided to staff involved with the procurement process to ensure that all are informed with the Federal and School requirements. Implementation date: June 30, 2025

Material weakness in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Management Response: We acknowledge the finding and provide the following corrective action plan. Corrective Action Plan: PDA worked with Clark Nuber team to revise and update the procurement policy to be in-line with the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards procurement standards. Anticipated completion date: Third quarter 2024 Name(s) of the contact person(s) responsible for corrective action: Co-Executive Directors, Directors, Finance team

Finding No.: 2021-037 AL Program: 97.030 - Community Disaster Loans Area: Procurement and Suspension and Debarment Questioned Costs: $18,353,963 Contact Person(s): Ryan Camacho, Sr. Financial Analyst / Pam Marigmen, Sr. Financial Analyst, SOF Office / Brien Nicholas, Procurement Services Corrective Action Plan: Condition 1: The Department of Finance – Procurement Services agrees with this finding. For 709918-000 OP - Gov's Executive Order #2022-04 was issued renewing the declaration of State of Public Health Emergency establishing response, quarantine, and preventive containment measures concerning Corona Virus Disease 2019 (COVID-19) and renewing the order directing the CNMI Homeland Security & Management Office, through the CNMI COVID-19 Task Force, and in partnership with CHCC. The Emergency Contract does not require the PS Director’s signature. The Emergency Contract was created by HSEM and is a template being used when an Emergency Declaration is in effect. The person who prepared the Emergency Contract made an error in selecting the procurement method as it should have been selected as Emergency Procurement instead of Competitive Sealed Proposal. This PO was issued to exercise the option to extend performance provided for in COVID19-0163 and provide the Commonwealth with 40,800 square feet of warehouse space for staging and distribution of supplies, equipment, and other necessary support items including electricity (power) as well as other amenities in the initial contract. For 719000-000 OP / 723730-000 OP - Gov's Executive Order #2022-04 was issued renewing the declaration of State of Public Health Emergency establishing response, quarantine, and preventive containment measures concerning Corona Virus Disease 2019 (COVID-19) and renewing the order directing the CNMI Homeland Security & Management Office, through the CNMI COVID-19 Task Force, and in partnership with CHCC. The Emergency Contract does not require the PS Director's signature. The Emergency Contract was created by HSEM and is a template being used when an Emergency arises. The person who prepared this contract should have selected the Emergency Procurement instead of Competitive Sealed Proposal. For 714181-000 OP - Payment for Blocked rooms needed for Medical Referral Patients in San Diego, California. No justification was provided as it was approved by former Governor Torres. For 707002-000 OP - Gov's Executive Order #2022-04 was issued renewing the declaration of State of Public Health Emergency establishing response, quarantine, and preventive containment measures concerning Corona Virus Disease 2019 (COVID-19) and renewing the order directing the CNMI Homeland Security & Management Office, through the CNMI COVID-19 Task Force, and in partnership with CHCC. The Emergency Contract does not require the PS Director's signature. The person who prepared this contract failed to select any procurement method on the emergency contract. For 698865-000 OP - Gov's Executive Order #2022-04 was issued renewing the declaration of State of Public Health Emergency establishing response, quarantine, and preventive containment measures concerning Corona Virus Disease 2019 (COVID-19) and renewing the order directing the CNMI Homeland Security & Management Office, through the CNMI COVID-19 Task Force, and in partnership with CHCC. The Emergency Contract does not require the PS Director's signature. For 698605-000 OP / 698865-000 OP - Gov's Executive Order #2022-04 was issued renewing the declaration of State of Public Health Emergency establishing response, quarantine, and preventive containment measures concerning Corona Virus Disease 2019 (COVID-19) and renewing the order directing the CNMI Homeland Security & Management Office, through the CNMI COVID-19 Task Force, and in partnership with CHCC. The Emergency Contract does not require the PS Director's signature. Condition 2: The Department of Finance – Procurement Services disagrees with this finding. For 715112-000 OP / 727492-000 OP / 730942-000 OP. These three purchase orders were provided in the list for ALN 97.030 and were available for testing during auditor fieldwork. Auditors failed to perform the required testing. Proposed Completion Date: Ongoing

Finding No.: 2021-032 AL Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Procurement and Suspension and Debarment Questioned Costs: $2,775,965 Contact Person(s): Ryan Camacho, Sr. Financial Analyst / Pam Marigmen, Sr. Financial Analyst, SOF Office / Brien Nicholas, Procurement Services Corrective Action Plan: Condition 1: The Department of Finance – Procurement Services disagrees with this finding. No procurement documents were provided because these thirty-four transactions were for payments made out for Travel, Medical Referral Patients, etc. Condition 2: The Department of Finance – Procurement Services agrees with this finding. The supporting documents were subsequently located. PO #725713-OP - FUJI Pacific - Office Space Rental. Copy of purchase order is available for inspection. Condition 3: The Department of Finance – Procurement Services disagrees with these findings. For 732176-000 OP $13,440 - No other quotes provided as it was the PS Acting Director's (FC Aguon) discretion, and the purchase requisition was approved by the former SOF (D. Atalig). For 724870-000 OP $8,789 - No other quotes provided as it was the PS Acting Director's (FC Aguon) discretion, and the purchase requisition was approved by the former SOF (D. Atalig). The Emergency Declaration suspended the procurement regulations and authorized the Expenditure Authority to procure any items/procure services exceeding the threshold without obtaining any price quotes. For PO #732176 & 728470, these are not part of the Gov’s Executive Order #2022-04. The Division of Procurement Services will accept the findings as noncompliance with the CNMI Procurement Regulations. Condition 4: The Department of Finance – Procurement Services agrees with these findings. For 726353-000 OP - No quotes were obtained. (FCA) former Acting Director of PS was off island. No DOA given for PS. The former SOF, David Atalig signed the requisition and M. Torres signed the P.O. We weren’t given ample time to seek legal advice from the Attorney General because we were instructed to process this request ASAP. However, moving forward we will advise the Agency to follow the Procurement Regulations regardless of Authority. We will send an LSR to the Attorney General and place the request on hold until we receive legal advice to proceed forward. For 727542-000 OP - No quotes were obtained. (FCA) former Acting Director of PS was off island. No DOA given for PS. M. Torres signed the requisition and the former SOF, David Atalig signed the P.O. For 727113-OC - FCA, the former Acting Director of PS was off-island, and no DOA was given to PS. Both D. Atalig and M. Torres signed the contract. Condition 5: The Department of Finance – Procurement Services agrees with these findings. This transaction doesn't relate to Procurement Services and is not a procurement matter. Donation/Gov's Office - September 2021 Heritage Month. Proposed Completion Date: Ongoing

Finding No.: 2021-020 AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Contact Person(s): Nerissa Benavente Karakaya, CIP COTR Corrective Action Plan: Condition 1: The Office of Grants Management (with the assistance of Procurement Services) agrees with the finding. The procurement processes are currently being revamped and with the implementation of the Tyler Munis system, procurement related documentation will be uploaded to the system and available for the Auditors to review. Condition 2: The CIP Office disagrees with this finding. The Capital Improvement Program provided information regarding these question costs. Please see the attached bid documents, bid submissions, and advertisement. For 703-OS/32200344 - RFQ20-GOV-084 was provided to the Auditor for their review. Three (3) proposers submitted - SP Dancoe & Associates; Marianas GeoTech Services; TRL Architecture & Pacific Engineering Group & Services. For 702-OS/32200912 - The procurement method for this was processed through a Sole Source. For CUC-WW-18-C032 - Lower Base Sewer Phase 1 - Lift Station and Focemain - This contract was executed by the Commonwealth Utilities Corporation on July 12, 2018. Procurement Services was able to obtain a copy of the contract from CUC to satisfy the audit testing. For 712727-OC (ITB20-DLNR/DOA-098) - Purchase of One (1) 13" Chipper Machine. Two bidders responded to this ITB; Boyer Trading Company & J. & J Company. Boyer Trading was selected as the lowest and responsive bidder. Condition 3: Document #1561570 ($2,500) and Document # 1573947 ($2,500): The Office of Grants Management disagrees with these findings because these are Open Accounts, and this would mean that no price quotations were required during the purchase requisition process in order to obtain the purchase orders. As confirmed by Financial Services and Procurement Services, quotations were not required on an open account. Open accounts were allowed during the JD Edwards period and were discontinued after September 30, 2021. MUNIS was implemented in October 2021. Condition 4: Document #333922 ($1,194,578): The Office of Grants Management (assisting DHSEM) disagrees with the finding because assigned personnel were not made aware of the documents needed; however, OGM is more than happy to provide the following documents to substantiate the purchase of a mobile Covid-19 Biological Safety Lab for the Commonwealth Healthcare Center and for the Alternate Care Site at Kanoa Resort. Per the documentation, the Public Assistance Office and DHSEM followed competitive procurement processing and invoked the Public Health Emergency Executive Order#2020-04 and to which the CNMI Attorney General’s Office approved the purchase. Purchase Order # 708019 was used by the Department of Homeland Security and Emergency Management and the Covid-19 Task Force. Contract number Covid19-0-0626 is attached for your reference. Expenses were later transferred to Department of the Interior CARES Act Funds under D20AP00049 per OGM Memo Number 2021-013. Proposed Completion Date: Ongoing

Finding No.: 2021-013 AL Program: 10.539 - CNMI Nutrition Assistance Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Contact Person(s): Margaret Aldan, NAP Administrator Corrective Action Plan: Condition 1: The CNMI-NAP disagrees with the finding. This transaction was supposed to be process in FY 2020 but because of the delay and completion date was done in FY 2021, a Change Order Contract No. 01 was processed, and the funds was carried over to FY 2021 (see attached copies of original contract and the change order. The Account number A1551L is a carryover account number from FY 2020 to FY 2021. Copy of the bid is also attached. The bid summary was not necessary because a change order was processed changing the account from A0551E to A1551L per NAP email dated 1/11/21 (Pending Change Order Contract) - CNC 01/13/21 Change Order #1 to charge $35,989.60 (Contract #707410-OC) to A1551L.64560 to extend the delivery period from thirty (30) days to ninety (90) days. (Researched in JDE and found the remarks made by Ms. Cozy N. Camacho - Financial Management) Condition 2: The CNMI-NAP disagrees with the finding. The Nutrition Assistance Program did follow the proper procurement method by processing Invitation to Bid and obtained the lowest bidder and processed the contract with a notice to proceed, please see attached copy of the Contract and the Summary of the bidders to prove that it went through the proper procurement process. Condition 3: The CNMI-NAP disagrees with the finding. The Nutrition Assistance Program tried to obtain quotations to purchase perforator machines on island and there was none. However, ARMATECH company submitted their price quotation stating that they are able to from off-island and NAP can purchase from them. Proposed Completion Date: Ongoing

The administration will review the procurement policy in the next management meeting. Division Directors will review the procurement policy with all Program Directors and Managers. Also, see actions for 2021-003

2021-005 Procurement Standards set out at 2 CFR sections 200.318 through 200.326 Management Response: The Tribe will update fiscal, payroll, HR, and procurement policies by the end of the year. Anticipated Completion Date: 12/31/2024 Responsible Party: Treasurer, Comptroller, Accounting Manager and Federal Programs Accounting Manager

The Treasurer, Town Manager and Select Board will take the following actions to address finding 2021-007 The current Town Manager was appointed by the Select Board on August 14, 2023, and had no knowledge of this material weakness. She is an experienced Manager and has drafted a new Procurement Policy that addresses this deficiency. The Select Board will review this draft at their meeting in January 2024, edits will be made and then it will be sent to legal for final review before adoption.

The Treasurer, Town Manager and Select Board will take the following actions to address finding 2021-004 The current Town Manager was appointed by the Select Board on August 14, 2023, and had no knowledge of this material weakness. She is an experienced Manager and has drafted a new Procurement Policy that addresses this deficiency. The Select Board will review this draft at their meeting in January 2024, edits will be made and then it will be sent to legal for final review before adoption.

Child and Adult Care Food Program - Assistance Listing No. 10.558 Recommendation Auditor recommends the Organization familiarize itself with the procurement regulations prior to entering into any future federal grants and review state and federal guidance. Explanation of disagreement with audit finding The Child and Adult Care Food Program was created as an emergency response during the COVID-19 pandemic. In such an emergent situation, management believes the federal government acted in good faith to meet the needs of the country by contracting with regional sponsoring organizations. New Vision Foundation was selected by the sponsoring organization to be a community-based food provider to culturally-specific populations. All activities related to the program were expressly approved by the sponsoring organization. The finding of material noncompliance is overstated. Management followed all guidelines and fulfilled all obligations outlined by Feeding Our Future. Procurement procedures and contracting processes used by management were approved by the sponsor organization. Action taken in response to finding The program noted was discontinued at the end of 2021. If the Organization enters into any other federal funding, we will consult with experts on compliance requirements from the start of the grant. Name of the contact person responsible for corrective action Hussein Farah, Executive Director Planned completion date for corrective action plan N/A

Finding Reference Number: MW2020-007 Statement of Concurrence or Nonconcurrence: CUAHSI agrees with the finding and recommendation. CUAHSI Corrective Action: Action by CUAHSI impacting audit year 2020: NA Corrective actions to processes and responsibilities impacting subsequent years: CUAHSI considers the finding to be closed as current practices are compliant and adhere to appropriate policies and procedures. When vendors are onboarded by CUAHSI, a check on disbarment is required and the CUAHSI Director of Finance performs this verification. New procurement requirements were added to CUAHSI policies in 2024 to clarify thresholds and processes for competitive procurement. Also in 2024, an approval certification step was added for all outgoing vendor payments, requiring a monthly certification by the Director of Finance or Executive Director to ensure those receiving payments from CUAHSI are not suspended or disbarred. Name of Contact Person: 􀁸 Maureen S. Ako, Director of Finance 􀁸 Telephone: (339)221-5400 􀁸 Email: msabino@cuahsi.org Projected Completion Date: NA; is complete

Statement of Concurrence or Nonconcurrence: CUAHSI agrees with the finding and recommendation. CUAHSI Corrective Action: Action by CUAHSI impacting audit year 2020: NA Corrective actions to processes and responsibilities impacting subsequent years: CUAHSI considers the finding to be closed as current practices are compliant and adhere to appropriate policies and procedures. When vendors are onboarded by CUAHSI, a check on disbarment is required and the CUAHSI Director of Finance performs this verification. New procurement requirements were added to CUAHSI policies in 2024 to clarify thresholds and processes for competitive procurement. Also in 2024, an approval certification step was added for all outgoing vendor payments, requiring a monthly certification by the Director of Finance or Executive Director to ensure those receiving payments from CUAHSI are not suspended or disbarred. Name of Contact Person: 􀁸 Maureen S. Ako, Director of Finance 􀁸 Telephone: (339)221-5400 􀁸 Email: msabino@cuahsi.org Projected Completion Date: NA; is complete

Finding No.: 2019-016 Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.870 Maternal, Infant and Early Childhood Home Visiting Grant Program Award Number: 1X10MC31162-01-00 Area: Procurement and Suspension and Debarment Questioned Costs: $60,104 Contact Persons: Perlie Santos, Chief Financial Officer; Yuline Cruz, MIECHV Program Manager; Vincent Camacho, Grants Administrator; Cora Ada, Procurement Director. Corrective Action: CHCC concurs with the findings but not the questioned costs. Although not timely scanned and sent electronically to the Auditors, the Procurement Documents are available for testing. In fiscal year 2020, CHCC implemented the document routing repository for the procurement process using Laserfiche Forms. This will enable CHCC to warehouse all supporting documentation related to procurement activities and document the approval process. With the implementation of the Munis Financial Information System in January 2023, CHCC is now able to electronically attach scanned supporting documents to the vouchers through the Tyler Content Manager (TCM). This will allow for audit testing to be done by providing auditors view only access to CHCC Financial Information System. Proposed Completion Date: On-Going

Finding No.: 2019-011 Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Award Number: 5U79SP020710-04 and 5H795M062879-02 Area: Procurement and Suspension and Debarment Questioned Costs: $183,926 Contact Persons: Perlie Santos, Chief Financial Officer; Reyna Saures, CGC Director; Vincent Camacho, Grants Administrator; Cora Ada, Procurement Director; Chellah Sablan, Comptroller. Corrective Action: CHCC concurs with the findings but not the questioned costs. Although not timely scanned and sent electronically to the Auditors, the Procurement Documents are available for testing. In Fiscal Year 2020, CHCC implemented the document routing repository for the procurement process using Laserfiche Forms. This will enable CHCC to warehouse all supporting documentation related to procurement activities and document the approval process. With the implementation of the Munis Financial Information System in January 2023, CHCC is now able to electronically attach scanned supporting documents to the vouchers through the Tyler Content Manager (TCM). This will allow for audit testing to be done by providing auditors view only access to CHCC Financial Information System. Proposed Completion Date: On-Going

Finding No.: 2019-007 Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED) Award Number: 5U79SM062447-04 Area: Procurement and Suspension and Debarment Questioned Costs: $23,500 Contact Persons: Perlie Santos, Chief Financial Officer; Reyna Saures, CGC Director; Vincent Camacho, Grants Administrator; Cora Ada, Procurement Director. Corrective Action: Condition 1 CHCC does not concur with the findings and the questioned costs. RFP19-CHCC/CHC-SOC-019 was published for Contract 686641, that supports Document 1475823 for $9,800. Document 1430779 was encumbered using 672067OM. This is a bridge obligation through an approved request for payment memorandum, while the contract was in progress. ITB 16-CHCC/CGC-002 was published for Contract 621100, that supports documents 1456419 for $850 and 1440996 for $850. Condition 2 and 3 CHCC does not concur with the findings and the questioned costs. The requested documentation was provided, however, CHCC acknowledges that the file sent referenced the Purchase Order numbers and the Document number (Payment Voucher Number). This may have resulted in auditors not properly associating the provided Purchase Orders to the selected payment vouchers. 2019-007 Finding No.: 2019-007, Continued With the implementation of the Munis Financial Information System in January 2023, CHCC is now able to electronically attach Purchase Orders to the Invoices and supporting documents are also electronically linked to the Purchase Order and invoices. This will allow for audit testing to be done by providing auditors view only access to CHCC Financial Information System. Condition 4 CHCC does not concur with the findings and the questioned costs. Although solicitations were not obtained for the car rental for the 4th year of the grant, CHCC believes that the vehicle rental agreement was competitively procured during the initial years of the rental. The agreement was rolled over annually to avoid disruption of service and program activity. To illustrate that, although no solicitation was obtained on the subsequent rental renewal, CHCC still ensures reasonableness of cost. For this agreement, the rental was even reduced from $950 per month to $900 per month on the 5th year of the agreement. Proposed Completion Date: Not applicable as CHCC does not concur with the findings.

Action Plan to Address Policy Updates and Implementation (Finding 2018-001): a. Review and Update Policies: Begin by conducting a comprehensive review of existing policies, particularly those related to procurement, suspension, and debarment. Ensure these policies align with the latest HRSA requirements and federal regulations. b. Engage a Policy Consultant: Seek the expertise of a policy consultant or legal counsel well-versed in healthcare compliance and HRSA regulations to assist in policy revision. c. Policy Training: Develop a training program to educate staff, especially key personnel like the CEO and CFO, on the updated policies. This training should emphasize the significance of compliance and the potential consequences of non-compliance. d. Implementation Oversight: Appoint a Compliance Officer responsible for overseeing the implementation of updated policies and procedures. This officer should regularly audit and monitor adherence to these policies. e. Documentation and Reporting: Implement a robust documentation system to track policy adherence and any deviations. Ensure that timely and accurate reports are generated for review by internal committees and the board. f. Board and Committee Involvement: Enhance board and committee involvement in the oversight of policy compliance. Provide regular updates and reports to these entities to keep them informed and engaged in the compliance process. g. Continuous Monitoring: Establish a continuous monitoring process to identify any policy-related deficiencies promptly. Regularly assess the effectiveness of policies and make necessary adjustments. h. External Audit: Schedule an external audit ahead of time by an independent auditor or agency to ensure objectivity and compliance with HRSA standards. i. Communication: Promote a culture of compliance through effective communication channels. Encourage employees at all levels to report potential violations or concerns without fear of retaliation. j. Periodic Review: Commit to a periodic review of policies, at least annually, to ensure they remain current and aligned with any evolving HRSA regulations or federal mandates.