Corrective Action Plans

Finding 2023 – 006 CONDITION During the current audit period, the Cook County Department of Public Health (DPH) did not perform adequate monitoring of its subrecipients as required by Federal regulations. CORRECTIVE ACTIONS DPH will implement procedures to ensure that the subrecipient monitoring process is adequately documented to ensure financial monitoring is performed, the subrecipient’s risk of noncompliance is evaluated, and the process includes the review of single audit reports. Management Approval of the Policy and Tools have been shared with the auditors. Implementation Phase includes but will not be limited to 1) identifying designated personnel team/consultant, 2) training staff, and 3) monitoring plan to ensure that the policy is followed. Anticipated completion of the corrective action is estimated to be December 31, 2024. The corrective action will be coordinated by the Director of Grants Accounting.

Finding 2023 – 005 CONDITION During the current audit period, the Cook County Department of Public Health (DPH) did not adequately comply with its subrecipient monitoring requirements in accordance with federal regulations. CORRECTIVE ACTIONS DPH will implement prior corrective action plan for future subrecipients awarded with federal funds. The corrective measure will include adequately documenting financial monitoring and review of single audit reports. Management Approval of the Policy and Tools have been shared with the auditors. Implementation Phase includes but will not be limited to 1) identifying designated personnel team/consultant, 2) training staff, and 3) monitoring plan to ensure that the policy is followed. Anticipated completion of the corrective action is estimated to be December 31, 2024. The corrective action will be coordinated by the Director of Grants Accounting.

Corrective Action Plan – Subrecipient Risk Assessment Fiscal Year Ended September 30, 2023 Program name: Research and Development Audit Contact: Jennifer Kennedy Title: Director, Sponsored Programs Finance Telephone: 617-638-2852 E-mail address: Jennifer.Kennedy@bmc.org Audit Report Reference: 2023-003 Anticipated Completion Date: September 30, 2024 Corrective Action Planned: The primary cause of the identified issue was due to personnel changes within Sponsored Programs Administration (SPA). This turnover led to a gap in recording and establishing the subrecipient risk assessment process before finalizing subaward agreements. However, SPA reviewed subrecipient single audit reports prior to issuing subaward agreements. 1) Review of Risk Assessments for current active subawards: SPA will conduct a review of all current subrecipients and document a risk assessment for each by the end of FY24. All new active subawards beginning October 1, 2024, will follow the updated SOPs and policies to ensure compliance and consistency. 2) Updating SOPs: SPA will update the Standard Operating Procedures (SOPs) pertaining to Subaward Issuance (Risk Assessments, Monitoring, Reporting, etc.) to ensure continuity and consistency, regardless of personnel changes. The updated SOPs will include specific steps for subaward issuance and will be reviewed and updated annually as necessary. In addition to the above actions, SPA is in the process of opening a new role for a Subaward Specialist who will be a dedicated FTE for subaward management. The new employee will pair with the SPA Associate Director as they onboard. This role will oversee subrecipient risk assessments, subaward issuance, and FFATA reporting. A centralized role will allow for consistency and expertise on all subrecipient management pre-award and non-financial post-award processes. This role will contribute to maintaining and updating current SOPs pertaining to subaward management and monitoring. By implementing these measures, we are confident in our ability to manage personnel changes effectively and ensure that critical functions, such as subrecipient risk assessments, are carried out with the highest level of accuracy and compliance.

COVID-19 Coronavirus State and Local Fiscal Recovery Funds– Assistance Listing No. 21.027 Recommendation: The County should review and enhance internal controls and procedures to ensure that evaluation of independent audits is performed. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Division of Grants Management requires annual reports from all SLFRF subrecipients. We will be requesting a copy of all annual audits from the subrecipients for the most recent completed year. The accountant team will review audit reports for any findings of note. We recognize that some subrecipients will not have their most recent audit completed and will allow those who need extra time to submit their audits by the fall. Name(s) of the contact person(s) responsible for corrective action: Ashley Meyer Planned completion date for corrective action plan: 6/30/2024

Action Plan: Upon learning of this finding during the FY2022 audit, we worked with our external consultant, our Council auditors and our external auditor to reperform and review the base year and subsequent year calculations of revenue, using financial information in our final audit reports. These corrected calculations of lost revenue have been clearly documented and will be reported going forward. We will continue to work to ensure that all controls for grants be documented with written procedures. The procedures will include the title of the positions responsible for each control (preparation, review, reconciliation, etc.) and will require that the performance of the controls be documented in a clear, reperformable manner including the name of each responsible individual, the specific control they performed over compliance for the grant and the date(s) the controls were performed. Contact Names responsible for the plan – Marcia Saulo Anticipated completion date of the plan – September 30, 2024

The contracts between the Board and its subrecipients did not include all the required elements as prescribed by 2 CFR Section 200.332. Management Response: The Board has taken immediate corrective action. We have implemented templates for fiscal reporting and introduced comprehensive checklists for the contracts and procurement and finance departments. These measures are designed to ensure full compliance with 2 CFR Section 200.332 requirements and enhance our subrecipient source reporting protocols.

Reference Number: 2023-001 - Material Weakness, Subrecipient Monitoring Recommendation: We recommend· that the Board improve policies and procedures to ensure communication identifies available funding for program services provided in a timely and efficient manner to the program providers. Concerning monitoring its sub-recipients, policies and procedures should be enhanced to ensure that oversight of its sub-recipients is more frequent, timely, and responsive to findings. Management Response: In response to the identified material weakness regarding subrecipient monitoring, the Board has been placed on a Corrective Action Plan by the Texas Workforce Commission to address and rectify the issues. The key actions and improvements are as follows: 1. Implementation of New Dashboards and Projection Tools: Action Taken: The Board has developed and integrated advanced dashboards that provide real-time insights into programmatic decisions and their financial impacts. These tools facilitate continuous monitoring and alignment of the budget with program activities. Expected Outcome: Enhanced ability to manage budget variances promptly, ensuring that future expenditures are consistently within approved funding limits. 2. Strengthening Subrecipient Monitoring: Action Taken: The Board has established more frequent and systematic oversight mechanisms, including bi-weekly meetings and comprehensive data analysis to track and manage enrollment and expenditures. Expected Outcome: Improved compliance with federal regulations, timely identification of potential over-enrollments, and prevention of budget overruns. 3. Active Oversight and Continuous Communication: Action Taken: The Board has instituted regular bi-weekly conference calls and progress reporting with Texas Workforce Commission (TWC) staff to review and support implementing the corrective action plan. Expected Outcome: Enhanced transparency and accountability, ensuring all stakeholders are informed and aligned with the implemented corrective measures. 4. Development of Standard Operating Procedures (SOPs): Action Taken: The Board is in the process of developing formal SOPs for enrollment and financial management to standardize and document all processes. Expected Outcome: Clear guidelines and consistent practices that ensure efficient and compliant program management. 5. Benchmark and Progress Monitoring: Action Taken: Specific benchmarks have been established to reduce the average number of children served per day and to monitor the active oversight of the Child Care Services (CCS) program. Expected Outcome: Achievement of performance targets and improved management of program resources. 6. Implementation of Strong Budgetary Oversight: Action Taken: Robust budgetary oversight measures have been implemented to monitor financial activities closely and ensure adherence to budget constraints. This includes integrating stronger projection tools and regular variance analysis. Expected Outcome: Improved fiscal discipline and proactive identification of financial risks, preventing budgetary shortfalls and ensuring sustainable program funding. Conclusion: The Board is committed to addressing the issues identified in the audit and ensuring that all subrecipient activities are monitored effectively to comply with federal requirements. The corrective action plan and the new tools and procedures will strengthen our financial oversight and program management capabilities. The Board will continue to work closely with TWC to ensure the successful implementation of these measures and to prevent future occurrences of such issues.

The County will require departments receiving federal funding to complete a subrecipient and contractor relationship checklist based on the Uniform Guidance prior to entering into a contract with any vendor. This checklist will ensure proper identification of subrecipients and serve as documentation of this procedure. This checklist will be part of our Grants Acknowledge form implemented by our Grants department that recipient departments are required to complete at a grant’s inception. Completed checklists will be retained and reviewed by the Finance department prior to SEFA compilation to ensure subrecipient expenditures are being properly recorded on the SEFA. For awards identified as being passthroughs to subrecipients, the County has developed additional procedures to document this relationship. This includes a subrecipient package requiring signatures from the County and subrecipient to acknowledge the subrecipient relationship. This package will include relevant award identifiers such as award date, period of performance and Federal awarding agency and Assistance Listing Number and title. Recipient departments will also be required to perform monitoring procedures on identified subrecipients including assessing the subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. The County has developed a questionnaire for biannual monitoring meetings with the subrecipient that is intended to further document the subrecipient is utilizing funds for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. This questionnaire also requests obtaining copies of the subrecipients financial statements and single audit to verify the subrecipient is audited as required by Subpart F - Audit Requirement under the Uniform Guidance

Views of Responsible Officials: HIAS management accepts this comment and has instituted a subrecipient risk assessment and ongoing monitoring policy and procedure which will be adhered to during FY 2024. HIAS will conduct sub award pre-risk assessments and determine appropriate level of ongoing monitoring for new sub awards, and will determine and document appropriate ongoing monitoring procedures for existing sub awards on an annual basis.

The Department of Housing and Community Development (DHCD) concurs with the conditions and recommendations of this finding. DHCD will create a subrecipient monitoring plan and submit final reports to all Homeowner Assistance Fund subrecipients promptly. Contact - Lesley Edmond, DHCD Housing Compliance Officer Estimated Completion Date - July 5, 2024 for submission of finalized reports to subrecipients; and July 28, 2024 to develop a revised monitoring plan for fiscal year 2024. See Corrective Action Plan for chart/table

Finding 2023-032 Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027 - Subaward Information Management Views MDHHS and MDE agree with the finding. Planned Corrective Action For part a., MDHHS updated the grantee profile in EGrAMS with the correct unique entity identifier (UEI). In addition, the MDHHS Federal Reporting Section will ensure all federal grant awards are recorded in SIGMA and included on the department’s Grants Received Report. The Grants Received Report will be maintained on the department’s SharePoint site for use by those within the department. All data elements required to comply with federal funding requirements, such as 2 CFR 200, will be included on the Grants Received Report. In the event data elements are missing from the report, the MDHHS Federal Reporting Section will follow up with the awarding agency, program area, or others to update the missing data elements within 30 days of receipt of the award. The Bureau of Grants and Purchasing will use the information from the Grants Received Report to communicate information to the subrecipients in accordance with 2 CFR 200. For part b., the grant award notification (GAN) recipient information is pulled directly from the Education Entity Master, including the UEI and the Federal Award Identification Number (FAIN). The GAN template is included as part of the grant requirement gathering process. Beginning with the 2024 fiscal year, MDE will require all grant awards using MDE Coronavirus State and Local Fiscal Recovery Funds to use this MDE GAN notification process. For those subrecipients whose grants continue past fiscal year 2023, MDE will evaluate any exceptions and determine whether subsequent communication can be made to the subrecipients to provide the correct subaward information. Anticipated Completion Date a. September 30, 2024 b. October 1, 2024 Responsible Individual(s) a. Jeanette Hensler and Steve Bendele, MDHHS b. Spencer Simmons, MDE Richard Lower, MiLEAP

The City will use a subrecipient audit certification form and a subrecipient risk assessment questionnaire to evaluate a subrecipient's risk/experience with federal funds as well as assess their federal funding threshold for having a single audit.

The City will incorporate a more formal review of financial audits of subrecipients in conjunction with new contracts moving forward. These audits, and City staff's verification of assessment will be included in each subrecipient file.

The two individuals determined to have incomes in excess of HOME Program limits were noted in our FY23 monitoring of properties assisted with HOME funds. The HOME Program allows for a unit to be occupied by a household who was initially eligible and whose income later increases, but requires that a comparable unit be designated as a HOME unit and leased to an eligible household when one is available. Owners of each property were made aware of the circumstance when City monitoring was completed. Each will designate comparable units to be HOME units when available and lease them to eligible households.

The City has established an Audit Review Certification form that is completed by employees to formally document review of subrecipient agencies' audit reports.

Activities Allowed and Unallowed / Allowable Costs and Cost Principles Please reference Finding 2023-002 for new procedures implemented during fiscal 2024 to ensure that payroll costs are allocated properly. In reference to the non-payroll costs, the finding arose because the Center’s participant database did not store an audit trail of the on-line approvals once the award was processed. In the current fiscal year, the Center’s software consultant worked with our software provider to update our participant database to include an audit feature which provides the full approval history for awards that are completed. Reporting The FFATA report was filed in fiscal 2024. Procedures were modified to ensure that necessary information is requested from Center subaward recipients to assist in preparing the FFATA reports. Furthermore, the subaward agreement template was revised to make reference to the need for filing FFATA reports. Subrecipient Monitoring Management has revised procedures to ensure that the subaward recipients are notified of the federal assistance listing number. In addition, Finance staff have been reminded of the necessity to communicate the assistance number to our subaward recipients.

All Final Expenditure Reports will include the appropriate expenditure amounts associated with the grant year.

MRGDC will implement fiscal monitoring policies and develop review procedures, as recommended, to ensure full compliance with the requirements outlined in 2 CFR 200.332 (d). Planned corrective action will consist of conducting financial monitoring visits/desk reviews on all eight (8) Area Agency on Agency sub-recipients before the fiscal year ends on September 30, 2024.

Additionally, MRGDC will request all sub-recipients submit their annual financial and compliance reports, as applicable, to our fiscal department. MRGDC fiscal staff will then timely review each report to further comply with the monitoring requirements as outlined in 2 CFR 200.332(d).

Special Conditions addendum, outlining guidance under 2 CFR 200.332. will be included with all subaward agreements going forward.

Corrective Action Plan Finding: 2023-001 – Communications with Subrecipients (repeat comment) Condition: Contracts with subrecipients did not include portions of required disclosures. Corrective Action Plan: CMHPSM added an additional staff position, Regional Project Assistant, to do additional work on contracts. This position was added after the April 2023 Board meeting to assist with contract reviews. The position reports up to CJ Witherow.

Action Taken: In March 2023, the Agency hired a new Executive Director and in August 2023, a new Fiscal Officer. The new management team has implemented policies and procedures to comply with subrecipient monitoring requirements.

Federal Program: ALN 93.959 Block Grants for Prevention and Treatment of Substance Abuse (Prevention, COVID-19 Prevention II, COVID-19 Treatment, and COVID-19 ARPA Prevention) Condition: During testing of contracts with subrecipients it was noted that these contracts did not include portions of required disclosures. Corrective Action Plan: The NMRE will include the information in contracts with subrecipients that are required in 2 CFR 200.332. Responsible Party: Provider Network Manager Date of anticipated implementation: FY24 going forward Thank you Regards, Deanna Yockey, CFO Northern Michigan Regional Entity 1999 Walden Drive Gaylord, MI 49770 231-383-6438

Views of Responsible Officials: While the Organization did evaluate sub-recipients prior to each sub-award, documentation of that evaluation was not retained as required. For any new subrecipients, the Organization will perform the required pre-award risk assessment and retain adequate documentation of the work performed and results.

Federal Award Findings and Questioned Costs: Lutheran Social Services of Wisconsin and Upper Michigan, Inc. did not monitor subrecipients of the federal award or maintain effective controls over the monitoring of the subrecipient. The amount of questioned costs could not be determined. Corrective Response: LSS received a grant from Illinois Housing Development Authority (IHDA) which was ‘passed through’ to a tax credit project entity (the subrecipient of the grant). The agreements governing the grant to Lutheran Social Services of Wisconsin and Upper Michigan, Inc. (LSS) and loan to the subrecipient specifically called for multiple layers of review and approval by the subrecipient, IHDA, other project lenders, a title company, and at IHDA’s request, LSS. The lead developer, a member of the tax credit project entity, is responsible for managing the construction project and for preparation of all draw requests. The agreements specifically called for the tax credit project entity (as subrecipient) to certify to LSS that the draw package met the grant agreement requirements and specifications, on which certification LSS would then rely to make a corresponding certification to IHDA that the draw package met the grant agreement requirements and specifications. In this instance, the lead developer properly prepared certain draw requests (as the subrecipient), made the required certifications, and submitted them directly to IHDA without informing LSS of such draw request. Rather than requiring strict compliance with the grant agreements and rejecting the subrecipient’s draw request for the lack of LSS’s certification, IHDA elected to accept a direct certification from the subrecipient and effectively waive the LSS certification requirement. We agree that LSS did not have a monitoring system in place to ensure that the subrecipient informed LSS of draw requests and ensure that LSS’s intervening certification to IHDA be made, however there are other factors impacting the program: 1. IHDA did not notify the subrecipient or LSS under the terms of the grant documents that the intervening LSS certification was missing, and instead elected to disburse proceeds directly to the subrecipient based on the subrecipient’s direct certification which served as a waiver of the requirement of the intervening LSS certification. 2. All draw requests were approved by the contractor, the architect, the construction lender, and the title company, which multiple additional layers of review put into place by LSS and IHDA as part of grant document negotiation ensured that grant funds were properly utilized for qualifying project expenses. 3. All parties have been made aware of this issue and it has not resulted in any financial, operational or reputation implications. We have put in place a process to ensure all draw requests come to LSS for review and documented sign-off approval before submission to IHDA. Anticipated Completion Date 6/30/2024 Responsible Contact Person - Randy Oleszak - CFO - 414-246-2353