Corrective Action Plans

DHS: TANF – Child Care All applicable federal Notice of Awards (NOAs), which include the Federal Award Identification Number, will be emailed to the grantees both prior to the spending period and as they become available for the spending as indicated on the NOA. They will also be included in the annual Audit Guidelines. Anticipated Completion Date: Completed Contact Names: Nia Harris, Dir, Bur. of Early Learning Res. Center Ops.; Adrienne Smyth, Human Service Prgm. Executive; Paula Piasecky, Human Serv. Prgm. Rep. TANF – Other The DHS Office of Policy Development (OPD) will perform risk assessments for all grantees annually. Anticipated Completion Date: 06/30/2025 The DHS Office of Income Maintenance (OIM) reestablished the completion of risk assessments in the fall of 2024 and has provisionally completed them for all subrecipients, including TANF – Other, for FY23-24. The risk assessments seek to test various financial controls of subrecipients based on their risk assessment scores and will also assist in ranking subrecipients across the risk continuum. Anticipated Completion Date: Completed Contact Names: Louie Marven, OPD, Exec. Policy Splst.; Sheldon Marcus, OIM, Dir., Div. of Mgmt. & Bgt.; Ron Seliga, OIM, Mgr., Fin. Planning; Judy Alfaro, OIM, Mgr., Financial Accountability; Laura Schlagnhaufer, OIM, Dir., Div. of Contr. Progs. & Sys. Social Services Block Grant (SSBG) OPD will provide all grantees receiving federal funding with a letter identifying federal award information and applicable requirements. OPD will provide this letter annually. Anticipated Completion Date: Completed Contact Name: Louie Marven, OPD, Exec. Policy Specialist DOH: DOH planned to develop and implement a robust subrecipient monitoring program which included establishing a new section within the Budget Office. The PA Legislature did not approve a budget with funding that could accommodate a new section. Alternatively, a consulting firm was engaged to perform a review of policies and procedures across the agency, including providing a gap analysis to determine compliance. A recommendation report is to be provided to DOH by March 31, 2025. DOH will initiate a comprehensive training plan for department staff based on the recommendation report. DOH will then develop training materials with an anticipated completion of June 30, 2025, with a goal to conduct training across the department by September 30, 2025. Anticipated Completion Date: 09/30/2025 Contact Name: Andrea Race, CFO PDA: PDA’s Bureau of Food Assistance (BFA) will develop a process to evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. The evaluation will be based on Key Performance Indicators, such as leadership tenure; prior incidents of food spoilage; or qualitative feedback from clients served. If the evaluation determines that additional monitoring tools beyond the routine performance of on-site reviews of the subrecipient’s program operations are necessary, such conditions will be laid out in a separate letter communication to the sub-awardee. PDA will also develop and implement a system to document the evaluation of each subrecipients risk of noncompliance. Anticipated Completion Date: 09/30/2025 Contact Name: Caryn Long Earl, Director, Bureau of Food Assistance PDOA: Concerning the evaluation of each Subrecipient’s Risk of Noncompliance, PDOA has developed a new monitoring component, consisting of fifteen measurable elements, to actively monitor compliance of the 52 Area Agencies on Aging (AAA) subrecipients through a revised Phase IX monitoring tool. The revised tool, used by three Fiscal Field Representatives, includes a review of Program and Procurement, Contract Monitoring, Record Retention and Environmental Modifications. • Timelines have been established to evaluate each subrecipients risk of noncompliance with Federal statutes, regulations and the terms and conditions of their subaward. - The Bureau of Finance coordinated with the Bureau of Quality Assurance to ensure schedules do not conflict and become burdensome to the AAA network. - The Fiscal Representatives plan to follow-up on any Performance Issues identified within the succeeding 6-9 months as identified in the approved Cost Allocation Plan. - Prior to the start of a new State Fiscal Year, the Risk Assessment surveys are distributed to adequately evaluate each subrecipient’s risk of noncompliance timely. • PDOA has drafted a AAA Fiscal Monitoring process map to formally document the monitoring process which highlights the requirement to disseminate Risk Assessments. • PDOA has been working with the AAAs to correct reporting in preparation of the next round of monitoring to ensure accuracy of Financial Reporting requirements and Line-Item Budgets on record. • To avoid future deficiencies in compliance, revised risk assessments have been developed to evaluate each subrecipient’s risk of noncompliance to proactively address any weaknesses in internal controls over Federal programs. • Despite PDOA recognizing time and insufficient staffing as a barrier to achieving the goal of performing a risk assessment for every AAA, we have surpassed our expectation of reaching half at a minimum by conducting a full assessment of all 52 for fiscal year ending June 30, 2024. • PDOA confirmed the Comprehensive Aging Performance Evaluation (CAPE) approach to evaluations of aging services provided by AAAs a success and shifted it out of pilot status which features a fiscal component. • To best review internal controls for financial issues concerning the Aging Cluster, a fiscal component will be administered since multiple Federal funding streams are involved. • This finding has aided in our approach to the subrecipient section of contract language as the Cooperative Block Grants are actively being developed. The proposed policy addresses Subrecipient requirements in the Admin Chapter as opposed to the appendix as a result. Anticipated Completion Date: 06/30/2025 Contact Name: Jennifer Cave, Fiscal Management Specialist, PDOA Audit Liaison DDAP: DDAP understands the need to develop policies to ensure all required federal award information is disseminated to all subrecipients at the time of the subaward. DDAP currently includes the following federal award information in its grant agreements to subrecipients: • Subaward Period of Performance Start and End Date • Total amount of Federal funds obligated to the subrecipient • Total amount of the Federal award committed to the subrecipient • Name of Federal awarding agency, pass-through entity, and contact information for awarding official of pass-through entity • Assistance Listings Number (ALN) and title However, not all the required information is available at the time the grant agreements are executed, such as the Federal Award Identification Number (FAIN) and the Federal award date. To ensure subrecipients are compliant with the Uniform Guidance in 2 CFR Section 200 and other applicable federal regulations, DDAP will develop policies to ensure notification is sent to all subrecipients that includes all required federal award information once the information has been received through the Notice of Award from the Substance Abuse and Mental Health Services Administration (SAMHSA). • First draft of P&P and proposed letter to subrecipients: Person responsible - Ellie Stache and Tia Roebuck: Anticipated completion date - 03/28/2025 • Review of first draft and letter by Bureau Director: Person responsible - Marie Plumer, Director, Bureau of Administration: Anticipated completion date - 04/11/2025 • Revision to first drafts: Person responsible - Ellie Stache: Anticipated completion date - 04/25/2025 • Review of second drafts by Executive staff: Person responsible - Kelly Primus, Deputy Secretary: Anticipated completion date - 05/09/2025 • Revisions to second drafts: Person responsible - Ellie Stache: Anticipated completion date - 05/23/2025 • Final review by Bureau Director and Executive staff: Person responsible - Marie Plumer and Kelly Primus: Anticipated completion date - 06/06/2025 • Submission to auditor: Person responsible - Tia Roebuck: Anticipated completion date - 06/30/2025 Anticipated Completion Date: 06/30/2025 Contact Names: Tia Roebuck, Director, Division of Budget and Procurement; Ellie Stache, Section Chief, Fiscal Planning and Contractual Operations L&I: Once L&I’s Bureau of Workforce Development Administration (BWDA) identified that the incorrect funding source was listed on the Notice of Obligation (NOO) associated with the TANF Youth Development Program contract, BWDA updated the list of funding sources in the Commonwealth Workforce Development System to encompass ALN 93.558. This update was implemented on February 20, 2025, and the updated NOOs were disseminated through CWDS. This change ensures that all NOOs created under ALN 93.558 now and in the future will have the correct funding source listed for the subrecipient. Anticipated Completion Date: Completed Contact Names: Brenda Duppstadt, Director; Gordon Zook, Division Chief

Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Condition: Kansas Division of Emergency Management (Management) did not issue subawards to subrecipients until after the fiscal year ended. Recommendation: We recommend that Management reviews and enhances its internal controls and procedures to ensure that subawards are issued timely to subrecipients, and that subawards include all required federal award information. Views of responsible officials: Management partially agrees with this finding. Although the 2023 2 CFR § 200.332 does state that the award letters should be sent at the time of the award, there needs to be some reasonableness to the interpretation of this regulation. KDEM currently has 13 open disasters with over 100 open projects and more being written. It is not reasonable to interpret that the award letters be sent on the date that the award is granted. Action taken in response to finding: Management will utilize the report run for FFATA to send award letters to sub-recipients. Name(s) of the contact person(s) responsible for corrective action: Jennifer Deal, Fiscal & Grants Management Section Chief Planned completion date for corrective action plan: Ongoing

COUNTY OF MERCED CORRECTIVE ACTION PLAN FOR THE YEAR ENDED JUNE 30, 2024 Federal Award Findings and Questioned Costs Finding 2024-001 – Procurements and Suspension and Debarment (Significant Deficiency) Management’s Response or Department’s Response Management agrees with the finding and recommendation. Views of Responsible Officials and Corrective Action The County has confirmed that the internal procurement process incorporates the verification that contractors are in possession of valid, applicable licenses and are not barred, suspended or otherwise excluded from receiving federal funds prior to engaging in contracted work. Reference to this process has not been regularly documented; going forward, verifications will be documented on the contract review cover sheet to further support the completion of the process. Copies of supporting documentation will be attached, when applicable, to demonstrate eligibility. Anticipated Completion Date/Completion Date April 2025 Contact Information of Responsible Official Name: Vanessa Anderson Title: Deputy County Executive Officer Phone: 209-385-7456

FINDING 2024-001 Contact Person Responsible for Corrective Action: Rachel Dutoi Contact Phone Number: 574-254-4503 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: The amount transferred during the time period of July 1, 2024-December 31, 2024 will be transferred back to Fund 0800. This transfer will be done once the Form 9 for period 2 of 2024 is complete and the month of December is closed. An indirect cost rate for Fiscal Year 2026 has been applied for and this rate will be used to capture these costs from Fund 800 if approved beginning 7.1.2025. Anticipated Completion Date: The fund transfer back to Fund 0800 will occur by March 31, 2025. The claiming of the indirect cost rate will begin 7.31.2025 dependent upon the approval of the corporation’s indirect cost rate application.

Responsible Contact Person(s): Ousman Kah, Subrecipient Monitoring Coordinator Corrective Action Planned: A Grants Management solution is being pursued by DSS in anticipation that it can be deployed with Subrecipient Monitoring capabilities needed to comply with these requirements. A new budget request has been submitted for funding of a contingent Subrecipient Monitoring System solution. This will help bridge the deficiencies noted util an integrated permanent solution is implemented. Estimated Completion Date: 6/30/2025

Responsible Contact Person(s): Diana Clark, Associate Director Senior Corrective Action Planned: A spreadsheet to track monitoring activities by the BP SRM Coordinator was developed and implemented to ensure that Program Consultants adhere to the developed schedule. The BP SRM Coordinator reviews the completed audit documents to ensure that all required audit documents are uploaded to the enterprise management application timely and that reviews are conducted in accordance with the SRM Plan. A SRM monitoring desk tool will be created for Practice Consultants as a quick reference to the SRM Plan. Training for all Program Consultants conducting SRM will be provided on the new updated monitoring plan as well as ongoing training for newly hired Program Consultants. Estimated Completion Date: 3/31/2025

Responsible Contact Person(s): Diana Clark, Associate Director Senior Corrective Action Planned: A risk assessment tool was developed as part of the SFY2024 SRM Plan and will be implemented with the new plan. Risk Assessments were included in the FY2024 and FY2025 Business Plan Subrecipient Monitoring plans. Both the Regional Practice Consultants and Home Office staff completing SRM are required to complete Risk Assessments for the upcoming review year. DSS has found some issues with a few staff members not completely understanding the process; however, after additional trainings were completed, this should not occur with the FY2026 review cycle. Estimated Completion Date: 8/1/2025

Responsible Contact Person(s): Ousman Kah, Subrecipient Monitoring Coordinator Kevin Platea, Chief Information Officer Corrective Action Planned: A Grants Management solution is being pursued by DSS in anticipation that it can be deployed with Subrecipient Monitoring capabilities needed to comply with these requirements. A new budget request has been submitted for funding of a contingent Subrecipient Monitoring System solution. This will help bridge the deficiencies noted until an integrated permanent solution is implemented. Additionally, an interim solution is being considered where these subrecipients will be reviewed and tracked through a manual system. Estimated Completion Date: 6/30/2025

Responsible Contact Person(s): Michele Skaggs, Director of General Services Adrienne Childress, Strategic Sourcing Purchasing Manager Ousman Kah, Subrecipient Monitoring Coordinator Corrective Action Planned: DSS will dedicate the necessary resources to reviewing federal regulations to include all required information in subaward renewal agreements. Estimated Completion Date: 12/31/2025

Responsible Contact Person(s): Kimberly Boehme, OPGS Director Corrective Action Planned: Policies and procedures for grant management - to include subrecipient monitoring and FFATA reporting - will be revised. Oversight responsibilities will be determined for the Office of Grant Management, Office of Purchasing and General Services, and Office of Financial Management. Employees responsible for managing grants and subrecipients will receive training on the new process. Estimated Completion Date: 12/31/2025

FINDING 2024-002 Finding Subject: PPHF Geriatric Education Centers - Subrecipient Monitoring Summary of Finding: Audit Finding 2024-002 states that the University of Southern Indiana did not establish a system of internal controls to ensure that subrecipient audit reports are received and reviewed, when required, to ensure that subrecipients are properly monitored in accordance with Federal regulations. Contact Person Responsible for Corrective Action: Jina Platts, Assistant Vice President for Finance and Administration and Assistant Treasurer Contact Phone Number and Email Address: 812-465-7090; jlplatts@usi.edu Views of Responsible Officials: We concur with the finding that the University should have ensured that subrecipient audit reports were received and reviewed, when required, to ensure that subrecipients are properly monitored in accordance with Federal regulations. The University had other controls in place related to subrecipient monitoring including the review of financial reports and requests for reimbursement for subrecipient expenses. One purpose of collecting and reviewing subrecipient audit reports is to determine the level of monitoring required as high, medium, or low. Although the University treats all subrecipients as high risk, we are unable to issue a formal management decision to subrecipients within six months of acceptance of the audit report by the Federal Audit Clearinghouse without assurance that audit reports are received and reviewed in a timely manner. Description of Corrective Action Plan: The University will update subrecipient monitoring procedures as follows: 1. Upon issuance of a subaward, the Business Office will verify if a subrecipient is subject to single audit according to OMB Uniform Guidance. If so, the subrecipient must provide a complete copy of their most recent independent audit used to meet their OMB Uniform Guidance requirement or a link to their record on the Federal Audit Clearinghouse. 2. The Business Office will review the report to verify that there are no findings that may impact the proposed subaward. In the event there are such findings, the Business Office will notify the Office of Sponsored Projects & Research. Together the two offices will determine an appropriate plan of action and issue a Management Decision Letter as required by Uniform Guidance. 3. The Business Office will identify subrecipients receiving payments quarterly and verify that their most recent audit reports have been received and reviewed. Any audit reports completed after issuance of a subaward will be reviewed as described in #2 above. Anticipated Completion Date: Planned corrective actions to be implemented in January 2025.

MANAGEMENT’S CORRECTIVE ACTION PLAN 2 CFR § 200.511(c) June 30, 2024 Finding Number: 2024-001 – Internal Control over Compliance and Compliance with Period of Performance Planned Corrective Action: The errors identified took place during September 2023, during a period when the financial management of Council’s grants, including subrecipient monitoring and allowable cost review, were under the purview of the program teams. In May 2024, these responsibilities were deemed to be more appropriately aligned with the Finance and Business Operations Team’s skill sets and brought under that team’s management. Additionally, in December 2023, the accounts payable process was automated, enabling a more thorough review of each reimbursement package. Anticipated Completion Date: May 6, 2024 Responsible Contact Person: Stan Harrell, Chief Financial Officer

The Organization concurs with the finding and will implement the following: Develop additional policies and procedures that require documentation of subrecipient monitoring including a risk assessment for each subrecipient Revise all federal subrecipient contracts to include federal award identification number and the amount of federal funds awarded to each subrecipient Distribute policies and procedures and contract templates to all applicable finance and programmatic staff Train staff on the new policies and procedures

FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAMS AUDIT 2024-001 Internal Controls Systems and Compliance Over Subrecipient Monitoring – U.S. Department of Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Funds, Passed Through the State of Nevada Department of Education Criteria: In accordance with 2 CFR 200.332(a)(1), the auditee must maintain a system of internal control to ensure information related to federal awards is clearly identified to the subrecipient at the time of the subaward and if any data elements change, include the changes in a subsequent subaward modification. Condition: The Organization receives funding for the Nevada Ready! program through the State of Nevada and the amount of funding provided by federal and state sources changes annually. The Organization did not identify that certain information required to be communicated for federally sourced awards was missing from the information provided to subrecipients for subawards they received during the year. Context: Nineteen preschool centers did not receive notification that the funding they received included funds that were federally sourced and additional information required to be communicated related to the federal funding was not provided. Cause: The design and implementation of internal controls over subrecipient monitoring was not effective. Effect: Not communicating the inclusion of federal funding in a subaward and all related requirements in a subaward to subrecipients could result in the subrecipients not complying with federal regulations. Recommendation: We recommend management design and implement a system of internal controls whereby every subaward that includes federal funding be clearly identified to the subrecipient as a federal subaward and include all data elements required to be provided to the subrecipient at the time of the subaward and if any of the data elements change, include the changes in a subsequent subaward modification. Views of Responsible Officials and Planned Corrective Action: We appreciate the identification of this compliance issue and are committed to addressing the finding with a robust corrective action plan. The following steps outline the measures we will take to ensure compliance with federal requirements for subrecipient monitoring under 2 CFR 200.332, effective June 30, 2024, and related guidance: 1. Implementation of Updated Grant Award Communication Procedures Future Grants to Centers: - We will estimate the amount of federal funds included in each grant and include this amount in the agreement at the time of award issuance. - Agreements will be updated to clearly delineate the specific requirements for both federal and state funds. - Each Center will acknowledge their responsibilities and obligations for federal and state funds, with detailed requirements provided for both funding sources. Annual Notifications: - A statement will be provided to each Center annually, clearly notifying them of the amount of federal funding included in their subaward. 2. Prioritization of FY24 Subrecipients - Upon receipt of these findings, immediate focus was placed on Nonprofit Centers, and we confirmed that none received more than $749,999 in federal awards (either directly as a recipient or indirectly as a subrecipient) in aggregate for all its projects during the fiscal year. - A statement will be provided to each Center annually, clearly notifying them of the amount of federal funding included in their subaward. - The corrective actions will be implemented by January 31, 2025. 3. FY25 Proactive Measures - Notifications of federal requirements and the Q1 statement for FY25 will be distributed by January 31, 2025. - We conducted an initial high-level overview of these updated requirements at the Director Training on November 15, 2024. - A comprehensive training session will follow in January 2025 to ensure all subrecipients fully understand their obligations under Uniform Guidance, including subaward identification and compliance monitoring. 4. Alignment with 2 CFR 200.332 Requirements for Pass-Through Entities In compliance with the updated requirements for pass-through entities under 2 CFR 200.332: -Each subaward will be clearly identified as a federal subaward and include all required data elements at the time of issuance. Any subsequent changes will be communicated through a formal subaward modification process. - Indirect cost rate requirements under 2 CFR 200.332 (i) will be explicitly addressed. Specifically: If the subrecipient has an approved federally recognized indirect cost rate, it will be honored. If no approved rate exists, we will collaborate with the subrecipient to determine an appropriate rate. This may include using a previously negotiated rate between the subrecipient and another pass-through entity, without requiring additional justification from the subrecipient. By implementing these measures, we will establish a robust system of internal controls to ensure full compliance with the Uniform Guidance and related federal requirements. We are confident these steps will address the identified issue and strengthen our subrecipient monitoring practices. Responsible Official: Samuel Rudd, President & CEO

NONCOMPLIANCE 2024-001 – SUBRECIPIENT MONITORING Recommendation: The auditors recommended the Organization maintain documentation that evidences its compliance with required subrecipient monitoring activities in accordance with 2 CFR 200. Actions Taken or Planned: Management will ensure results of risk assessment and monitoring are documented in writing annually. Person Responsible: Wayne Shen, Chief Operating Officer Estimated Date of Completion: January 31, 2025

Finding: The Foundation is not in compliance with recordkeeping for program monitoring and evaluation, as the Foundation did not comprehensively assess all subrecipients using risk-based/subrecipient monitoring policies and procedures. Staff were not aware of the extent of the requirements to monitor program and fiscal compliance of project sponsors and document results and evidence of compliance or noncompliance. Therefore, a number of project sponsors/subrecipients were not monitored. Corrective Action Taken or Planned: The Foundation has updated its Quality Management Plan to include comprehensive subrecipient monitoring policies. The Foundation’s Quality Management team is working with all programming to implement a robust monitoring process, including risk assessments, adherent to grantor regulations, service delivery, and program outcomes. Date of Completion: January, 2024 Name of Contact Person: Laurie Wettstead, Chief Finance Officer

2024-003 Contact Person Tonya Hunskor Planned Corrective Action The Cooperative will ensure proper subrecipient monitoring is implemented. Planned Completion Date June 30, 2025.

Funding Agency: U.S. Department of the Interior National Park Service. Assistance Listing Number: 15.954. Finding: Reporting - The Trust did not provide timely Federal Funding Accountability and Transparency Act (FFATA) reporting for ALN #15.954 subawards subject to the FFATA reporting requirements. Corrective Action Plan: The Trust agrees with the finding. The Trust will review all subawards for subrecipients and ensure that FFATA reporting is completed in a timely manner for subawards subject to the requirements. The Trust will add a clause in subawards stating this requirement and will submit FFATA reports immediately upon subaward disbursement. Responsible Official: Mike Hoehn, Senior Director of Finance and Administration Anticipated Completion Date: November 22, 2024

Funding Agency: Department of Commerce Assistance Listing Number: 11.469, 11.472 Finding: Reporting - The Commission did not provide timely Federal Funding Accountability and Transparency Act (FFATA) reporting for ALN #11.469 and #11.472 subawards subject to the FFATA reporting requirements. Corrective Action Plan: The Commission agrees with the finding. The Commission will review all subawards for subrecipients and ensure that FFATA reporting is completed in a timely manner for subawards subject to the requirements. The Commission will add a clause in our Sub-awards stating this requirement. Responsible Official: Laura Leach, Director of Finance and Administration Anticipated Completion Date: December 31, 2024

2024-004 Subaward Agreements The Center is the recipient of GEAR UP awards based on prior grant applications submitted with its related program partners which include local educational agencies and other partners. While the audit revealed that no formal agreement was in place during the audit year, the Center did have documentation in place with each partner that included a detailed budget, program operating procedures manual, partner commitment form signed by each partner’s superintendent of schools, program monthly meetings, onsite visits, and other activities stipulated in the grant. A new program requirement was published on August 29, 2024, as amended in 34 CFR 75.127 through 75.129 for future Partnership Grants Application and includes language related to a binding agreement. The Center will ensure all future grant applications comply with this new requirement. Proposed Completion Date: February 1, 2025 Name of contact person: Rumalda Ruiz, Deputy Director - Business, Operations, & School Finance Support Contact: (956) 984-6290

We acknowledge that the timing of these actions did not fully align with the requirements of Uniform Guidance, which specifies that subaward information must be communicated with the subrecipients in writing at the time the subaward is made. However, the Organization worked diligently to address the issue once identified. To prevent recurrence of this issue, the Organization has taken corrective actions. As soon as we were made aware of the status of the recipients of the awards as subrecipients, we informed them of their status orally and outlined the general terms and compliance requirements associated with their subaward. We formalized this notification process by providing written agreements detailing the subaward terms, as required, in June 2024. These agreements were subsequently signed and returned by the subrecipients in July 2024. To avoid similar compliance challenges, the Organization worked with the Commonwealth of Massachusetts to revise its agreement. Effective September 30, 2024, the Organization no longer serves as a pass-through entity and does not pass federal funds through to subrecipients. For the remaining period during which the Organization acted as a pass-through entity, we implemented procedures to ensure timely and accurate communication of subaward information in writing, aligning with Uniform Guidance requirements. Management believes these actions fully address the cause of the finding and ensure compliance with federal regulations in the future.

Planned Corrective Action: In order to ensure that all subrecipients receive adequate notice of any changes to the grant funding source which may occur midyear, e.g. with an “offset” grant award from the Governor’s Office, Texas CASA will email an initial notification within one month to all subrecipients once we receive a midyear “offset” award with a different funding source. This initial notification will include the new FAIN, award date, total award, assistance listing number/title, name of the federal or state agency, pass-through entity, and contact information. After the “offset” grant funding source has been expended via reimbursements to subrecipients, Texas CASA will send a final notification to each subrecipient with the total amount of funding each entity received from the “offset” grant funding source, again including the FAIN, award date, total award, assistance listing number/title, name of the federal or state agency, pass-through entity, and contact information. Responsible Parties: Tamea Byrd, CFO Estimated Completion Date: December 31, 2024

Management agrees with this finding and will implement a more detailed review process for PTE and subrecipient monitoring requirements to ensure grant requirements are being appropriately followed.

The District now provides a subaward agreement to subrecipients to assist in procurement compliance and has put in place additional monitoring processes to ensure compliance of subrecipients.

Recommendation We recommend updating internal policy over subrecipient monitoring and recommend implementation of effective internal controls and procedures over subrecipient monitoring and tracking that allow for compliance with all applicable federal laws, regulations, and compliance requirements of various federal grants. It seems likely that additional monitoring activities are being performed that are not currently being documented in a central location and, therefore we also recommend standardizing the documentation of monitoring activities, using monitoring logs, monitoring checklists, and audit test sheets, etc. If the Department is experiencing periods where understaffing or staffing turnover is an issue causing risk of noncompliance, we recommend that the Department properly address those risks and consider contracting out certain monitoring controls to a third-party professional service firm. Management Response Corrective Action: Serve New Mexico acknowledges the lack of sufficient documentation for annual site visits and that fiscal monitoring activities for the 2023-2024 program year were not sufficient. To address this, we are revising our policies and procedures to comply with 2 CFR 200.303 (Internal Controls) and 2 CFR 200.332 (Requirements for Pass-Through Entities). Key actions we are implementing include: 1. Site Visits Documentation: We will conduct regular site visits as a component of our monitoring activities for 2024-2025 program year with clear, consistent and documented objectives for each visit and proper documentation of monitoring activities conducted during each visit. 2. Expansion of Fiscal Monitoring: Review of cost documentation will be expanded to include all subgrantees, regardless of risk, and for subrecipients subject to heightened fiscal monitoring, review of more than one month of documentation will be conducted. 3. Centralized Documentation: All supporting documentation will be scanned and stored in a centralized shared folder. This will ensure clarity and accessibility of records, particularly in the event of staff turnover. 4. Collaboration with a Consultant: Our Fiscal and Compliance Officer is working closely with a consultant to streamline fiscal policies and procedures in line with 2 CFR 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 5. Uniform Audit Test Sheet: We will develop a standardized audit test sheet to ensure that all programmatic and fiscal monitoring activities are consistently documented across all programs. These steps are designed to ensure compliance and enhance the effectiveness of our monitoring processes, addressing the findings of the audit comprehensively Due Date of Completion: June 30, 2025 Responsible Party(ies): Serve New Mexico Director