Corrective Action Plans

MATERIAL WEAKNESS 2024-002 Child Nutrition Cluster – Assistance Listing Number 10.553 and 10.555 Procurement Recommendation: We recommend that the Organization establish and maintain effective internal controls over procurement requirements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: One City Schools adopted a procurement policy in November 2023 that, if followed, resolves this finding. A new primary food vendor was selected in summer of 2024, and the selection did adhere to the new procurement policy. This policy and all procedures were edited to be comprehensive of all uniform grant requirements through the development and adoption of the Federal Funds Procedural Manual. Name(s) of the contact person(s) responsible for corrective action: Janel Vertz, Finance Director Planned completion date for corrective action plan: January 2025

Corrective Action: Management will continue to stress the importance of following the detailed procedures for preparation and review of the SEFA. The SEFA checklist is updated to include a thorough review of expenditure details to ensure no prior-year expenses are reported. Responsibility for compiling the SEFA was assigned to a Senior Program Accounting Manager who is tasked with assuring the schedule and all the support reconciliation are complete and accurate. Both the Director of Program Accounting and the Executive Director of Finance/Controller will review the SEFA for completeness, accuracy, and compliance with CFR Section §200.510(b). Estimated completion date: June 30, 2025 Individual Responsible for Corrective Action Plan: Contact: Reginald Gregory Title: Executive Director/Controller Phone Number: 202-772-4300

December 18, 2024 Donovan CPAs 9292 N. Meridian Street, Suite 150 Indianapolis, IN 46260 Subject: Response to Uniform Guidance Audit Finding for FY23-24 Finding 2024-001 Procurement Significant Deficiency Federal Program: Charter Schools Program Assistance Listing Numbers: 84.282A Springville Community Academy (SCA) plans to develop a written procurement policy that incorporates the Federal regulations and procurement standards identified in §200.317 through 200.327. I, Corbin Dietrich, will work with the Board of Directors of SCA and our consultants with Indiana Charters to develop the appropriate procurement policies and procedures. We plan to draft and approve the required policies at the board meeting in January 2025. Sincerely, Corbin Dietrich, Treasurer

FINDING 2024-005 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): H027A210084, H027A220084, H027A230084 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Condition: An effective internal control system was not in place at the School District to ensure compliance with requirements related to the Special Education Cluster and Procurement and Suspension and Debarment compliance requirements. Context: During the audit period, the School District purchased Special Education contracted services from one specialist with aggregate payments for each fiscal year which were within the small purchases threshold ($10,000 - $150,000) under Federal and State procurement regulations. The School District did not solicit multiple quotes for services, document the method and rationale for procurement, and did not perform a check to confirm the service provider was not suspended or debarred before entering into the contract and disbursing federal funds. FINDING 2024-005 (Continued) Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: Management will implement a procurement checklist that is reviewed management to ensure compliance with the School's purchasing policy for federal awards. Sam.gov will be checked for each vendor being paid from Federal Funds. Responsible Party and Timeline for Completion: Moriah Crane - Treasurer and Andrew Grismore - Grant Coordinator starting immediately.

CORRECTIVE ACTION PLAN OF CURRENT AUDIT FINDINGS June 30, 2024 FINDING 2024-001 Information on the federal program: Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program, School Summer Food Service Program Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2023, FY 2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement and Suspension and Debarment compliance requirements. Context: Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $50,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. The School Corporation's policy states that the small purchase threshold is between $10,000 and $150,000. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. For fiscal year 2023, two vendors, totaling $109,657 and $53,441, were selected for testing at the small purchase threshold. The School Corporation did not obtain price or rate quotes nor was there documentation detailing the history of procurement, which must include the reason for the procurement method used. The lack of internal controls and noncompliance was isolated to fiscal year 2023. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include but are not limited to contracts for goods and services awarded under a non-procurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. During the audit period, there were ten vendors identified which exceeded $25,000 in disbursements on an annual basis. Six vendors were selected for testing. In one instance, the School Corporation's contract with the vendor did not include any suspension and debarment clause and the School Corporation did not verify the vendor's suspension and debarment status prior to payment. The lack of internal controls and noncompliance was isolated to fiscal year 2023. Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: Management will ensure that the School Corporation's procurement policy is being followed for all procurement thresholds. Management will perform a periodic check of federal fund disbursements to see if any vendors exceed procurement or suspension and debarment thresholds on an annual basis to ensure compliance with federal and state procurement guidelines. The School Corporation will ensure that all contracts exceeding $25,000 include a suspension and debarment clause and will verify that the vendor is not suspended or debarred prior to entering into the contract. Responsible Party and Timeline for Completion: The Food Service Department has already implemented these changes as the issue was not present in fiscal year 2024.

The Village of Lexington hired, through a bid process, Townley Engineering to design needed water and sewer expansion and upgrades for the purpose of submitting to USDA for Water and waste disposal systems for rural communities grants in 2017. The Village was awarded funding and hos worked closely with USDA representatives as we have moved through the program. A budget for all costs was approved as part of the grant award. All invoices, including all engineering fees, are approved directly by our assigned Area Specialist. The project costs are currently all within budget. The Village of Lexington will ensure that engineering services follow correct procurement procedures in any future grant program it is awarded.

Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Compliance) We recommend that management establish and enforce procedures to ensure all required federal financial and progress reports are submitted by the applicable due dates. Management's Response: The County concurs with the findings; Responsible Individual: Nicole Reinert, Public Health Director; Corrective Action Plan: Administrative staff will schedule out all required report dates in the Outlook calendar at least three weeks before the due date to keep responsible parties informed of deadlines. These set reminders will ensure timely submissions. The Department Head will review the submission process to eliminate congested workflow to ensure efficiency and identify any tasks that can be automated or improved. Regular check-ins will take place to discuss the status of ongoing reports.; Anticipated Completion Date: June 30, 2026.

Management concurs with this finding. The missed submission was caused by inadequate tracking mechanisms and insufficient procedural formalization under prior leadership. New personnel are now assigned responsibility for compliance and reporting, and management has completed a full review of all reporting obligations across federal awards. Management is in the process of developing standardized grant reporting procedures, enhanced tracking tools, and formal internal review controls to ensure timely and accurate submissions going forward. These procedures will be implemented by the first quarter of 2026.

AIRS management has started the process of creating new and updated policies and procedures related to financial reporting, activities, including written procurement standards, written standards of conflict of interest and others as required under Uniform Guidance.

Finding Reference Number: 2023-002 Description of Finding: Lack of documentation on sole source contracts and verification of vendors Statement of Concurrence or Nonconcurrence: The California Asian Pacific Chamber of Commerce (CalAsian) agrees with the finding. Corrective Action: CalAsian understands the serious nature of this finding and the compliance required with 2 CFR sections 200.318 through 200.327, as well as Part 1326 for vendor exclusions. The Controller and Director of Finance updated procedures to document requirements for all procurement activities, regardless of type. We also understand these findings are repetitive from the 2021 and 2022 audits; however, due to catch-up of the prior year audits, we were unable to address these issues prior to completion of the 2023 audit, as 2021 and 2022 audit reports were not received until 2024. This delay was caused by a change in auditors as our previous auditor did not have the capacity to retain us as clients due to staff shortages related to COVID. Resolution of this issue began in 2024 as the procurement policy was distributed to staff and reviewed during staff meetings. Further, the policy and procedures for procurement were reviewed directly with programmatic staff to ensure that they were familiar with the policies and what is required to be captured for documentation to ensure all procurement activities adhere to the company policies. Continuing education for staff will be provided in subsequent years to ensure continued compliance with these policies. Periodic reviews of the procurement activities will be performed to ensure compliance with these procedures to mitigate the risk of continued deficiencies. Name of Contact Person: Ryan Fong, Director of Finance, 916-446-7883, rfong@calasiancc.org Pat Fong Kushida, President & CEO, 916-446-7883, patfongkushida@calasiancc.org Projected Completion Date: December 2024

FINDING 2023-004 Finding Subject: Drinking Water State Revolving Fund (DWSRF) Cluster - Procurement and Suspension and Debarment Contact Person Responsible for Corrective Action: Tyler Pearson, Clerk Treasurer Contact Phone Number and Email Address: 574-739-1416 clerktreasurer@cityoflogansport.org Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: We will develop and implement a formal process for verifying that vendors are not suspended, debarred, or otherwise excluded from receiving federal funds before entering into contracts or transactions that meet or exceed the $25,000 threshold. The City will develop a purchasing policy that reflects the applicable state laws and regulations related to procurement. The City will also maintain proper documentation to support the appropriate procurement method. Anticipated Completion Date: December 31, 2025

Finding Number 2023-109 Subject Heading (Financial) or AL no. and program name (Federal) ALN: Multiple Federal Program name: Multiple Planned Corrective Action The finding states two ongoing concerns: “1) there are no policies and procedures in place for the people on [the pilot program] Statewide Contracts [as is required by 2 CFR § 200.317], and 2) these vendors are not being vetted to ensure state agencies are getting contracts that are reasonable per 2 CFR 200.404.” On the first issue, Section 200.317 of Title 2 of the Code of Federal Regulations requires states to “follow the same policies and procedures it uses for procurements with non– Federal funds” when “conducting procurement transactions under a Federal award.” 2 CFR § 200.317. Our publicly available CPO training explains the process for purchasing off Statewide Contracts (See Attachment 1 and 2). Also, we provided agencies with procedures related to the pilot program to give guidance on ordering off those specific Statewide Contracts (See Attachment 3). Additionally, OMES reiterates that Recipients of federal funds are ultimately charged with ensuring and documenting compliance with specific requirements under the federal award. However, in an attempt to assist agencies in understanding requirements of spending federal dollars, OMES issued a Procurement Information Memorandum and a new contract attachment to be utilized by agencies. (See Attachments 4 and 5). Therefore, OMES disagrees that we do not have the required policies and procedures in place to comply with Section 200.317. On the second issue, Section 200.404 of Title 2 of the Code of Federal Regulations explains, “A cost is reasonable if it does not exceed an amount that a prudent person would incur under the circumstances prevailing when the decision was made to incur the cost.” All our Statewide Contracts are evaluated on specific criteria, including pricing. If a bidder’s pricing appears to be unreasonable, they do not receive an award. Additionally, in Attachment 3 it is demonstrated that when an agency ordered from the pilot program Statewide Contracts, the Information Services Division (“ISD”) of OMES works with the agency and the supplier to develop a Scope of Work (“SOW”). The SOW is comprised of detailed deliverables and pricing for the relevant goods and/or services. ISD stakeholders are subject matter experts in the relevant work and ensure that all pricing on SOWs is fair, competitive and reasonable. Therefore, OMES also disagrees with the assertion that the vendors on contract are not vetted to ensure that state agencies are getting reasonable costs on their contract. OMES further reiterates that we believe the relevant solicitations were conducted pursuant to the requirements of the Statewide Contract pilot programs and meet competitive bidding requirements. The Statewide Contract pilot programs utilized the same initial procedures as all other Statewide Contracts prescribed in statute. Vendors are required to agree to standard state terms and submit competitive pricing for the goods and/or services within scope of the solicitation. OMES identifies evaluators for every solicitation to conduct an evaluation process relevant to the particular scope of services and to negotiate price when choosing responsive and responsible suppliers. In conclusion, OMES respectfully disagrees with the concerns of the State Auditor’s Office and invites any member of the State Auditor’s team to meet with OMES personnel to further clarify our processes and standards for ensuring fair and competitive procurement practices. Anticipated Completion Date Sine Die Responsible Contact Person

Corrective Action Plan Federal Procurement Audit Finding 2023-002 Town’s Response: The Town concurs with the audit finding and has begun implementing the corrective actions outlined below. 1. Policy Alignment o Revise the Town’s Procurement Policy to explicitly state that federal Uniform Guidance procurement standards supersede state exemptions when federal funds are used. 2. Procedural Controls o Require a funding source review step in the requisition process: if any portion of funding is federal, staff must apply federal standards. o Incorporate a mandatory compliance checklist for all federally funded procurements, including documentation of cost/price analysis, vendor selection, and conflict of interest certifications. 3. Training & Awareness o Conduct annual training for the Procurement Manager. o Provide written desk guides / “quick reference sheets” for federal vs. state thresholds and documentation requirements. 4. Oversight & Monitoring o Director of Finance/Assistant Finance Director to review and approve all federal-funded procurement files prior to award. o Establish quarterly compliance monitoring of federal procurements, with results reported to the Town Manager via Monthly reports submitted. 5. System Enhancements o Explore Munis configuration options to flag federally funded accounts during requisition entry, ensuring the correct rules are applied.

2023 - 003 - Reporting (Material weakness in Internal Controls over Compliance) - Repeated and Modified (Prior Year Finding 2022-002) Federal program information: Funding Agency: Program Title: Federal Assistance Listing Number: U.S. Department of Housing and Urban Development (Follow-up on PY finding) Indian Housing Block Grant 14.867 U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds 21.027 Condition: The Governmental Department did not submit their required Federal Financial Reports (SF-425) and Project and Expenditure Report within the required three and one month's respectively after the end of fiscal year. In addition, the reporting package and data collection form for the year ended December 31, 2023, was not filed by the deadline of September 30, 2024, to the Federal Audit Clearinghouse. Criteria: Title 2 CFR 200.327 requires programs to submit financial information to the funding agency using standard financial reporting forms. These reports are to be submitted by the required due date and be accurately completed and supported by the underlying accounting records. In accordance with 2 CFR Section 200.512(a), the audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report, or nine months after the end of the audit period, adjusted for any extensions permitted by the Office of management and Budget. Cause: The Governmental Department policies were not always followed or controls were not in place to ensure complete and accurate information could be provided timely. Effect: The Governmental Department was not in compliance with federal regulations and guidelines for (SF-425), Project and Expenditure Report and single audit submissions. Auditor's Recommendation: The Governmental Department should implement controls for filing the Federal Financial Reports, (SF- 425), Project and Expenditure Report, and the single audit report in a timely manner. Management’s Response: Due to delays caused by the pandemic, in conjunction with some major turnover in fiscal staff the Tribe fell behind in completing its annual audits, and other required grant reporting. In the first half 2023 the Tribe was able to hire a quarter-time CFO and fill one position in the department. Since the department had staff, they were able to complete the 2022 outstanding audit. The new staff was learning the process of grant reporting and other compliance matters, and at the time of this report have made improvements to implement internal controls to assist with the regulation of all compliance matters. Estimated Completion Date: March 03, 2025-Due to the newly elected Tribal Administration and restructuring of positions as well as training opportunities for fiscal and the executive committee. Responsible Party: The Tribal Administrator in collaboration with the Cahto Executive Committee is responsible to ensure the Fiscal department, the Department Directors and management are trained and adhere to existing policies and procedures.

Program 66.958 Water Infrastructure Finance and Innovation Award No: WIFIA-N18147WI Award Year: 2023 Finding 2023-001: Procurement policy and related contract Repeat finding of 2022-001Waukesha Water utility management has worked closely with WIFIA to craft contracts that include all necessary language prior to releasing RFPs for construction contracts. WIFIA was presented all service contracts to review prior to reimbursements received in fiscal year 2023. The finance department is working to update the procurement policy to ensure necessary federal language is included. The finance department will also work with service contractors to execute contract addendums

FINDING 2023-006 Finding Subject: Child Nutrition Cluster – Procurement, Suspension and Debarment Summary of Finding: A School Nutrition Cooperative (Co-ops, Education Service Center, Group Purchasing Organization, etc.) that would like to be classified as a School Food Authority (SFA) Cooperative must complete a questionnaire and submit it to the Indiana Department of Education (IDOE). Once a questionnaire is received IDOE will review the answers to determine a Cooperative’s classification. Only Cooperatives that submit the questionnaire and receive a SFA-only Cooperative classification from IDOE in writing will be considered a SFA only Cooperative for the purposes of the procurement process and procurement reviews. INDIANA STATE BOARD OF ACCOUNTS 41 􀀃 “Meeting􀀃students􀀃where􀀃they􀀃are􀀃and􀀃leading􀀃them􀀃forward…every􀀃student,􀀃every􀀃day”􀀃 When the value of goods or services exceeds the simplified acquisition threshold, the proper purchasing method would be the bidding process, unless the purchase meets certain other qualifications. Federal regulations allow for informal procurement methods when the value of the procurement for goods or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. If it is determined a single source provider can be used for a small purchase, documentation must be retained supporting the determination. The School Corporation could not provide supporting documentation that an adequate number of price or rate quotations was obtained to ensure full and open competition for two vendors procured under the small purchase threshold. Contact Person Responsible for Corrective Action: Drew Cooper, Business Manager Contact Phone Number and Email Address: 765-425-7889 dcooper@shenandoah.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The procurement method used to purchase equipment costing over $10,000 will be documented and archived with the purchase order. Anticipated Completion Date: July 31, 2024

COVID-19 Coronavirus State and Local Fiscal Recovery Funds —Assistance Listing No. 21.027 Recommendation: We recommend the District design controls to ensure an adequate review process is in place to review potential contractors to determine compliance with the Uniform Guidance procurement rules and procedures. Procedures for approval of the vendor contracts, and verification documents to ensure the vendor was not on the suspended or debarred vendor list maintained by the General Services Administration, should be reviewed and retained. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The District’s policies will be updated and approved if needed to confirm to federal guidance. Name(s) of the contact person(s) responsible for corrective action: Ron McEachern, General Manager, or Delia Stoor, Accounting Manager Planned completion date for corrective action plan: September 30, 2024

2023‐010 Procurement (Material Weakness/ Material Non‐Compliance): Since taking office in fiscal year 2024, the current Finance Director has implemented a Standard Operating Procedure (SOP) in alignment with the Procurement Policy adopted in 2022 to ensure compliance with the State Procurement Code, internal controls, and the proper segregation of duties in procurement. This SOP outlines the specific roles and responsibilities of the Certified Procurement Officer (CPO), Finance Director, City Manager, and City Council when applicable in the procurement process. In addition, a procurement workflow has been created to be utilized by the (CPO) to ensure compliance with the City of Espanola’s procurement policy, the State Procurement Code, and appropriate checks and balances at varying thresholds. The (CPO) is responsible for ensuring all policies and state procurement laws are followed throughout the process. Additionally, all documentation from initiation to the issuance of a Purchase Order (PO) is retained electronically in a complete packet for record-keeping and audit purposes. In order to address direct payment voucher controls, the City has restricted the use of direct payment vouchers for high-volume purchases. All procurements must follow the purchase order process, unless an exception is authorized in accordance with policy. The finance department has also implemented issuing procurement violations to any department head or staff who authorizes a purchase in the absence of an approved purchase order, which aligns with the 2022 Adopted Procurement Policy. By enforcing these measures, the City ensures procurement policy compliance, transparency, and financial accountability, thereby addressing the audit findings and preventing future violations.

Recommendation: CLA recommends ICEDC to update the procurement policy to be compliance in with Uniform Guidance and to include more rigorous documentation as required by 2 CFR sections 200.318-200.327. ICEDC needs to ensure that policy includes the need for suspension and debarment checks to be done prior to entering into a covered transaction. CLA also recommends emphasizing the importance of the procurement standards and established policy to all authorized purchasers within ICEDC. There is no disagreement with the audit finding. Action taken in response to finding: ICEDC acknowledges CLA’s recommendation regarding the need to update the procurement policy to ensure full compliance with the Uniform Guidance, specifically in accordance with 2 CFR Sections 200.318-200.327. ICEDC will further align policy with the requirements outlined in 2 CFR Sections 200.318-200.327, ensuring that all procurement processes are conducted in accordance with federal regulations. The updated policy will require that all suspension and debarment checks are conducted as per the applicable regulations and will ensure all authorized purchasers within ICEDC receive training in procurement policies when engaging in grant activities. Name(s) of the contact person(s) responsible for corrective action: Kristina Hines Planned completion date for corrective action plan: 8/31/2025

Management response/corrective action plan: The District will revise its Procurement and Purchasing policy (GAUD Policy #5, revised 7/17/2023) to ensure compliance with the Uniform Guidance Procurement Standards 2 CFR Sections 200.318 through 200.327.

NONCOMPLIANCE WITH PROCUREMENT, SUSPENSION & DEBARMENT REQUIREMENTS, CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS, AL No. 21.027 Name of Contact Person: Michael Opie Corrective Action: Big Horn County will pass an updated Management of Federal grant Awards policy. Proposed Completion Date: March 31, 2024

Program: Continuum of Care, Emergency Solutions Grant Program Federal Financial Assistance Listing No.:14.267, 14.231 Federal Agency: U.S. Department of Housing and Urban Development Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance Award Year: 2023 Compliance Requirement: Procurement, Suspension and Debarment Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24 Finding Summary: The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements. Repeat Finding from Prior Years: Yes, Finding 2022-003 Management’s Response: We concur. Views of Responsible Officials and Corrective Action: • Management will update policies and procedures to ensure they confirm to the Uniform Guidance regarding procurement, suspension and debarment (2 CFR 200.317 through 200.327, 2 CFR 180). • Train grant staff on new policies and procedures. Name of Responsible Person: Bryan Wagner, CFO Projected Implementation Date: December 31, 2024

Finding 2023-005 - Procurement Repeat Finding- See Finding 2022-007 Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows Uniform Guidance procurement standards. Action Taken: The City does follow Uniform Guidance procurement standards. In this instance, a vendor was selected under an emergency contract basis utilizing our waiver of bids policy. The entire country was awarded ARPA funds with water and sewer lining replacement being an allowable use of these funds. Due to the fact that there are a very limited number of vendors who provide this service, and the fact that there would be a significant number of municipalities seeking this service with the influx of ARPA dollars, as well as the fact that due to supply and demand, the cost for these services were escalating rapidly, the City wanted to be one of the first to engage with a contractor in order to secure a vendor in a timely manner before we would be unable to do so since the projects are long term projects and there was a time limit on when this money would need to be spent. Therefore, we knew it would not be possible to conduct our own bid. We chose a vendor off the COSTARS contract. I have attached a copy of the ordinance where we explained to Council our concern for our securing a vendor and our need to act quickly, which is why we originally initiated the purchase from City funds, before ARPA funds were distributed, and then replaced the City funds with ARPA funds once they were received.

Finding 2023-002: Procurement US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the Axon contract totaling $651,922 for the year ended December 31, 2023 followed formal procurement procedures. The Axon contract exceeds the Uniform Guidance formal procurement threshold but was done through cooperative purchasing. In addition, in accordance with the Uniform Guidance, a purchase price from a cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the value of the procurement transaction. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. The City relied upon vendors preapproved by the Commonwealth of Pennsylvania’s General Services Administration (GSA). These vendors were considered preapproved based on the Commonwealth’s own use of cooperative purchasing programs. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat finding: No Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows all Uniform Guidance procurement standards, especially regarding cooperating purchasing programs. View of Responsible Officials and Corrective Action Plan: Management agrees with this finding. Management has established procedures to ensure that our purchasing policy follows all Uniform Guidance procurement standards, especially regarding cooperating purchasing programs.

Finding 2022-07 Failure to Create and Implement a Suitable Procurement Policy Condition: The Organization created and implemented a procurement policy to govern its federal expenditures. The procurement policy implemented by the Organization failed to include several key elements, including clearly establishing and governing the various expenditure purchasing thresholds, documenting a sufficient bid process for competitive bid proposals, and standards of conduct covering conflict of interest for employees involved in the bid evaluation process. Further, while the policy was in place, the Organization failed to implement the elements of the policy into its procurement process. As part of audit procedures, 12 transactions were included in the testing population and all 12 were tested. Of the testing group, the auditor identified 4 transactions that required competitive bid procedures for which the Organization failed to conduct. The Organization also failed to document its rationale to limit competition for all items tested. Corrective Actions Taken or Planned: - VOICES will revise and implement a formal Procurement Policy that fully aligns with Uniform Guidance and federal regulations. The updated policy will include: + Clear Purchasing Thresholds: Establish thresholds for micro-purchases, small purchases, and formal procurements (e.g., competitive bidding for purchases exceeding $10,000 or other appropriate limits) - Implement a structured bid process that requires: + Multiple bids for purchases exceeding established thresholds. + Documentation of vendor selection rationale, including why competition was limited, if applicable. - Conduct mandatory training for all staff involved in procurement. - Require all vendors and contractors to be checked against the System for Award Management (SAM.gov) to confirm eligibility and compliance with federal procurement requirements.