Corrective Action Plans

Finding No.: 2023-050 AL Program: 97.036 – Disaster Grants – Public Assistance (Presidentially Declared Disasters) COVID-19 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Area: Subrecipient Monitoring Questioned Costs: $7,350,898 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1-2: The CNMI Public Assistance Office (PAO) acknowledges and agrees with the compliance deficiencies identified regarding subrecipient monitoring and documentation requirements under 2 CFR §200.332 and has developed corrective actions to address these weaknesses. However, PAO respectfully disagrees with the questioned cost determination. The finding relates to deficiencies in monitoring procedures and documentation rather than the allowability, eligibility, or support for the underlying expenditures. The expenditures identified were associated Finding No.: 2023-050, continued AL Program: 97.036 – Disaster Grants – Public Assistance (Presidentially Declared Disasters) COVID-19 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Area: Subrecipient Monitoring Questioned Costs: $7,350,898 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: with FEMA-approved projects and no specific costs were identified as unallowable, unsupported, outside the approved scope of work, or otherwise ineligible for federal participation. While PAO recognizes that monitoring documentation was insufficient to demonstrate compliance with subrecipient monitoring requirements, PAO believes the appropriate classification is a compliance finding without questioned costs. Accordingly, PAO respectfully requests consideration that questioned costs associated with this finding be reduced to $0. Subrecipient monitoring activities were historically performed alongside project management responsibilities and were not supported by a centralized tracking system. As the number and complexity of Public Assistance projects increased, monitoring activities, documentation, and audit follow-up procedures were not consistently performed or documented. In addition, delays in the completion of CNMI-wide Single Audits and limited responsiveness from certain subrecipients affected PAO's ability to obtain timely financial reports, audit reports, and supporting documentation. PAO is implementing corrective actions in phases to establish a sustainable and documented subrecipient monitoring framework. Phase I – Immediate Actions (Completed/In Progress) • Responsibility for subrecipient monitoring activities has been assigned to the Compliance Manager and Risk Officer to provide dedicated oversight independent of project management functions. • PAO has begun conducting biannual subrecipient risk assessments and documenting risk ratings for active subrecipients. • For nonresponsive subrecipients, PAO will maintain documentation of all attempts to obtain required information and will perform additional follow-up as appropriate. These records will be maintained as evidence of monitoring activities and due diligence. • Standardized monitoring checklists, risk assessment forms, audit review checklists, and follow-up procedures are being developed to improve consistency and documentation. Finding No.: 2023-050, continued AL Program: 97.036 – Disaster Grants – Public Assistance (Presidentially Declared Disasters) COVID-19 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Area: Subrecipient Monitoring Questioned Costs: $7,350,898 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: • PAO will initiate a centralized tracking process using existing tools, including Excel spreadsheets and shared electronic files, to monitor: o Subrecipient risk assessments. o Financial and performance report submissions. o Single Audit report status. o Monitoring activities performed. o Corrective actions and follow-up requirements. o PAO will continue to document requests for financial reports, audit reports, risk assessment information, and other monitoring documentation. Supporting records, including request emails, follow-up correspondence, meeting invitations, telephone call logs, and responses received from subrecipients, will be retained to demonstrate monitoring efforts and follow-up actions. Phase II – Process Formalization • PAO will finalize written updates to the Subrecipient Monitoring Procedures establishing requirements for: o Risk assessments. o Monitoring frequency. o Financial and performance report reviews. o Single Audit follow-up. o Documentation retention. o Escalation procedures for nonresponsive subrecipients; and o Management review. • PAO will establish a formal Subrecipient Monitoring Register that consolidates monitoring activities, risk ratings, audit status, corrective actions, compliance deadlines, and follow-up actions. • Quarterly management reviews will be implemented to monitor completion of required monitoring activities, assess high-risk subrecipients, and address outstanding compliance issues. • PAO will establish formal procedures to review subrecipient Single Audit reports, verify reporting of FEMA-funded expenditures on the SEFA, document audit reviews, and track corrective actions resulting from audit findings. Finding No.: 2023-050, continued AL Program: 97.036 – Disaster Grants – Public Assistance (Presidentially Declared Disasters) COVID-19 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Area: Subrecipient Monitoring Questioned Costs: $7,350,898 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Phase III – Compliance & Monitoring Portal (Future Implementation) • Upon acquisition and implementation of Microsoft 365 resources, PAO will develop a centralized Compliance & Monitoring Portal to serve as the official repository for subrecipient monitoring records. • The portal will include electronic tracking of risk assessments, monitoring activities, audit findings, corrective actions, reporting deadlines, communication logs, and supporting documentation. • Automated reminders, management dashboards, workflow tracking, and document retention controls will be incorporated to strengthen oversight and improve monitoring documentation. These corrective actions will establish a documented, risk-based monitoring framework that improves oversight of subrecipients, strengthens documentation and audit trails, formalizes monitoring procedures, enhances accountability through dedicated compliance personnel, and improves compliance with the requirements of 2 CFR §200.332. Phase I – Ongoing Phase II – June 30, 2027 Phase III – Upon acquisition and implementation of Microsoft 365 resources and completion of staff training. Proposed Completion Date: June 30, 2027 (For Phase II). Phase I & II is Ongoing.

Finding No.: 2023-038 AL Program: COVID-19 84.425H – Education Stabilization Fund – Governors (Outlying Areas) (ESF-Governor) Area: Subrecipient Monitoring Questioned Costs: $6,641,757 Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: Condition 1-2: The CNMI Department of Finance agrees with this finding. CNMI submitted risk assessment and monitoring compliance documentation to the auditor on February 26, 2026, after the agreed February 19, 2026, deadline, resulting in evidence timing deficiency. CNMI established Standard Operating Procedures for subrecipient monitoring effective October 28, 2026. Management will implement standardized file labeling and retention procedures in accordance with the SOP so that each subrecipient file contains the subrecipient determination, required subaward clauses, the unique entity identifier, documented SAM.gov exclusion checks, and verification of audit requirements. In alignment with 2 CFR §200.332, CNMI will review financial and performance reports quarterly, conduct an annual performance assessment using a standardized checklist (updated annually or upon project completion), maintain documentation of all monitoring activities, and verify audit status for entities subject to the Single Audit Act. The risk assessment and monitoring compliance documentation for this grant is available to the auditor upon request. Proposed Completion Date: Completed

Finding No.: 2023-034 AL Program: COVID-19 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Subrecipient Monitoring Questioned Costs: $15,640,541 Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: Condition 1-3: The CNMI Department of Finance agrees with this finding. During FY 2023, the Department of Finance became aware that existing practices for subrecipient monitoring did not fully meet federal requirements under 2 CFR 200.331–200.332. DOF began implementing corrective actions in the latter part of FY 2023 and continued strengthening procedures throughout FY 2024, including improvements in documentation, SAM.gov verification, and basic risk assessment elements. In response to these identified gaps, the CNMI formally adopted comprehensive Subrecipient Monitoring Policies and Procedures effective October 28, 2025, which fully incorporate federal pass through entity requirements and include standardized processes, templates, monitoring tools, and clear definitions. These procedures were not applied retroactively; however, they are fully in place for FY 2025 and ongoing operations. Finding No.: 2023-034, continued AL Program: COVID-19 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Subrecipient Monitoring Questioned Costs: $15,640,541 Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: As a result, while we anticipate partial improvement and reduced findings for FY 2024 due to incremental implementation of best practices, we do not expect subrecipient monitoring findings beginning in FY 2025, as the adopted SOP directly addresses all elements identified in the FY 2023 audit finding. Proposed Completion Date: Ongoing

Finding No.: 2023-020 AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Subrecipient Monitoring Questioned Costs: $2,399,988 Contact Person(s): Angelina Phillips, Financial Analyst, Office of Management and Budget (OMB), Nerissa B. Karakaya, CIP COTR Corrective Action Plan: Condition 1a (A. Phillips): For Grant Award Nos. D23AF00036 and D22AF00299, the Office of Management and Budget (OMB) agrees with the finding and the need for a formally written policy and procedures for subrecipient monitoring. We have adopted the Department of Finance’s Subrecipient Monitoring Policy and Procedures effective 8/4/2025 establishing a formal monitoring suspension and debarment status of each subrecipient prior to granting any subaward. The guidance is reflective of the provisions set by 2 CFR 180.300. Proposed Completion Date: Ongoing Condition 1a and 1c (N. Karakaya): For Grant Award No. D23AP00068, the Capital Improvement Program (CIP) disagrees with this finding because the required verification was performed. Although documentation was not retained, CIP verifies that all subrecipients comply with OPA requirements before federal funds are awarded. Finding No.: 2023-020, continued AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Subrecipient Monitoring Questioned Costs: $2,399,988 Contact Person(s): Angelina Phillips, Financial Analyst, Office of Management and Budget (OMB), Nerissa B. Karakaya, CIP COTR Corrective Action Plan: To prevent recurrence, CIP will implement the following: 1. CIP will implement the revised Subrecipient Monitoring Standard Operating Procedures (SOP) issued by the CNMI Department of Finance, made effective October 28, 2025. Under these procedures, CIP will conduct a risk assessment to evaluate the subrecipient’s potential for noncompliance. The assessment will consider: a. Financial stability b. Audit history, including findings or questioned costs c. Internal controls, such as documented policies and procedures d. Programmatic capacity, including staffing and experience with similar awards The results of the risk assessment will help determine the level of monitoring required during the award period (e.g., low, moderate, or high risk). In addition, CIP will verify that subrecipients are not suspended or debarred from receiving federal funds by: a. Checking the System for Award Management (SAM.gov) and retaining a screenshot or record of the verification b. Alternatively, obtaining a signed certification from the subrecipient or including a suspension/debarment clause in the subaward agreement 2. No subaward agreement will be approved or executed until the required verification has been completed and reviewed by the CIP Administrator. 3. CIP staff will receive training on federal suspension and debarment requirements, including compliance with 2 CFR 180.300 and the CNMI Department of Finance Subrecipient Monitoring SOP. 4. CIP will conduct quarterly reviews of subaward files to ensure verification documentation is maintained and procedures are consistently followed. Proposed Completion Date: December 31, 2026 Finding No.: 2023-020, continued AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Subrecipient Monitoring Questioned Costs: $2,399,988 Contact Person(s): Angelina Phillips, Financial Analyst, Office of Management and Budget (OMB), Nerissa B. Karakaya, CIP COTR Corrective Action Plan: Condition 1b (A. Phillips): The Office of Management and Budget (OMB) agrees with the finding. OMB fully executed a Subrecipient Agreement with the subrecipient on 1/27/2023, prior to any grant administration taking place. The adoption of the Department of Finance’s Subrecipient Monitoring Policy and Procedures effective 8/4/2025 also further formalizes the process. Proposed Completion Date: Completed Condition 1c (A. Phillips): For Grant Award Nos. D23AF00036 and D22AF00299, the Office of Management and Budget (OMB) agrees with the finding and agree with the need for a formally written policy and procedures for subrecipient monitoring. We have adopted the Department of Finance’s Subrecipient Monitoring Policy and Procedures effective 8/4/2025 establishing a formal subrecipient risk assessment prior to entering into the subaward agreement and identifying the type of monitoring procedures to be performed for the subrecipient. Proposed Completion Date: Completed Condition 2 (A. Phillips): For Grant Award No. D23AF00036, the Office of Management and Budget (OMB) agrees with the finding and agree with the need for a formally written policy and procedures for subrecipient monitoring. We have adopted the Department of Finance’s Subrecipient Monitoring Policy and Procedures effective 8/4/2025 to perform proper monitoring to ensure that subrecipients are in compliance with single audits. Proposed Completion Date: Completed Condition 2 (N. Karakaya): For Grant Award No. D17AP00132, D21AP10043, D19AP00081, and D21AP10044, the Capital Improvement Program (CIP) agrees with the finding that a subrecipient with expenditures Finding No.: 2023-020, continued AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Subrecipient Monitoring Questioned Costs: $2,399,988 Contact Person(s): Angelina Phillips, Financial Analyst, Office of Management and Budget (OMB), Nerissa B. Karakaya, CIP COTR Corrective Action Plan: exceeding $750,000 during the year was not verified for compliance with single audit requirements, including whether corrective actions were taken to address prior audit findings. To address this issue, the Capital Improvement Program (CIP) will strengthen its subrecipient monitoring procedures to ensure compliance with single audit requirements by: 1. Developing and implementing a subrecipient monitoring checklist to identify subrecipients that expend $750,000 or more in federal awards during their fiscal year. 2. Obtaining and reviewing applicable Single Audit reports annually to verify compliance with federal requirements. 3. Documenting the review of audit reports and assessing whether any findings related to federal awards affect CIP-funded activities. 4. Requiring subrecipients with audit finding to submit corrective action plans and evidence of implementation. 5. Maintaining a tracking system to monitor the status and resolution of audit findings and corrective actions. 6. Providing training to CIP staff responsible for subrecipient monitoring on federal compliance and the CNMI Department of Finance Subrecipient Monitoring SOP. Proposed Completion Date: December 31, 2026

2023-012-Subrecipient Monitoring Suggested Action: Enhanced contractual requirements that ensure greater subrecipient monitoring around greater support for any requests or assertions from our subrecipients. Responsible Official: Chief Operations Officer Completion Date: 6/30/2026

Management’s Response or Department’s Response The County agrees with the finding and recommendation. Views of Responsible Officials and Corrective Action Plan The County will implement a formalized monitoring program and agreement template to identify subrecipients based on criteria in § 200.332. The County will provide a comprehensive training to program managers to implement the monitoring program and subrecipient agreement template. In addition, the County will include direction to project managers to review current awards to identify existing subrecipients that were not provided a subrecipient agreement with all of the required elements from CFR § 200.332. Anticipated Completion Date/Completion Date June 30, 2026 Contact Information of Responsible Official Name: Donald McNair Title: County Clerk & Auditor-Controller Phone: 209-533-6593

The County Board is continuously monitoring award recipients and bas a process established that prevents disbursement of fonds until proof of use is provided to the County Board.

We agree with this finding and will include the relevant information in our subawards in the future.

Contact Person: Iftin Hagimohamed; Chief Financial Officer Stephanie Sosa: Finance Manager Corrective Action Plan For the Year Ended 2023 Explanation and specific reasons for disagreement with the audit finding or that corrective action is not required (if applicable): Management concurs with the finding. Subaward agreements did not consistently include all required elements under 2 CFR §200.332. Status: Corrective Action Taken Corrective action planned: Management has revised its internal policies and procedures regarding subrecipient monitoring to follow 2 CFR 200.332. Ensure that subward are clearly identified and included in subrecipient agreement. • Develop and adopt a standardized subaward agreement template including Assistance Listing Number, federal award name, award ID, performance period, and required compliance provisions. • Implement a documented subrecipient risk assessment process. • Establish a subrecipient monitoring checklist for invoice review and compliance tracking. • Amend active subaward agreements where required. Anticipated completion date: April 30,2026

We will implement the required procedures surrounding the subrecipient monitoring process and follow them consistently.

Views of Responsible Officials and Planned Corrective Action While the Organization concurred with the prior year (2022-002) and current year renumbered recommendation (2023-002), the Organization notes the corrective actions that have been implemented, specifically, related to the subrecipient monitoring and management provision of 2 CFR§ 200.331 and 2 CFR §200.332 of the Uniform Guidance, that emphasizes accountability and compliance in managing federal funds and subrecipients, and that have been in practice, from the effective date(s) noted below, to the present period of the report dated March 2, 2026: A. Subrecipient Monitoring and Management. Implemented internal process changes, effective November 1, 2024, specifically, prospectively, and consistently the: 1. Use of a checklist, to comprehensively assess risk of determining subrecipient or contractor classification, before entering into any subrecipient agreement; 2. Provision of identification details such as CFDA number, amount of federal funds obligated, and the award period for determined subrecipient awards; 3. Submission of programmatic and financial reports as specified in the subrecipient agreement; 4. Review of a single audit in accordance with 2 CFR Part 200, Subpart F for subrecipients that expend $750,000 or more in federal funds during a fiscal year, if applicable; and 5. Review of their audit report(s) and addressing any finding(s) related to their federal award(s), including the related appropriate corrective actions, when applicable. B. Retroactive Subrecipient Portfolio Risk Assessment and Correction(s). The Organization performed a risk assessment of the existing subrecipient portfolio to identify risks, for the audit periods July 1, 2022 – June 30, 2023, and July 1, 2023 – June 30, 2024. The objective of this risk assessment was to identify, evaluate, and prioritize risks that could adversely impact the Organization’s ability to achieve its strategic, operational, compliance and quality assurance goals. The completion of the Organization’s portfolio risk assessment resulted in correction of identified non-compliant subrecipient agreement(s). C. Subrecipient Policies and Procedures. By December 31, 2024, the Organization updated and implemented financial policies and procedures aligned to the subrecipient monitoring and management provision of 2 CFR §200.331 and 2 CFR §200.332 of the Uniform Guidance, including checklists, flowcharts, samples, data sheets, data sharing agreements, etc.; and the current practices of the Organization to the present period of the report dated March 2, 2026, is consistent with such developed subrecipient policies and procedures.

The MOF requires that all necessary documents, including expenditure and financial reports, be submitted prior to the release of subsequent funding. These reports are reviewed and processed by the Compliance Unit once complete. Additionally, the Sub-Grants Monitoring Procedures Manual has been updated to require management, through the Chief of Internal Audit, to prepare a management decision letter. Furthermore, a proposed adjusting entry will be made to recognize a receivable for the overpayment, which will be discussed with the grantor.

Chairman of the Board of County Commissioners: This issue originated under the prior County Clerk’s administration where key reporting processes were not followed. The Board of County Commissioners and the other elected officials have made correcting this a top priority. Together, we are: • developing a comprehensive SOP to ensure accurate and timely tracking and reporting of Federal funds, • improving communication and oversight between all county offices to ensure consistent reporting standards, • and ensuring annual compliance with federal reporting requirements. Our collective goal is to implement the policies and structures that will keep Osage County operating with the highest standard of accountability and excellence County Clerk: I was not the County Clerk in office at this time. To correct this issue, the County plans to develop a SOP to timely and accurately track and report on Grants and Awards. The SOP will be reviewed, adopted, and monitored by the Board of County Commissioners.

The formal process for completing and retaining Subrecipient Agreements is now operational to ensure compliance with programmatic obligations. As the recipient, it is the territory's responsibility to notify the Subrecipient when the federal funds are obligated and provide them with a subrecipient agreement which outlines the terms and conditions of the program. The Disaster Program Financial Specialist is responsible for obtaining the subrecipient agreement and ensure it has been signed by the Applicant/Subrecipient and Governor's Authorized Rep and later provided to the Territorial Public Assistance Officer (TPAO). As such, no funds will be disbursed until the Subrecipient signs and returns the agreement. These agreements are saved in a centralized location for documentation and audit purposes. In accordance with the 2CFR #200 Subpart F, all Subrecipients must comply with applicable audit requirements because the applicant is in the receipt of federal funding. Under 2CFR #200.500 Subpart F applies to any non-federal entity that expends $750,000 or more in federal awards during a fiscal year. Subrecipients meeting this threshold are required to undergo a single audit or a program specific audit for that fiscal year. The TPAO will review audit requirements during the applicant's briefing and will incorporate these requirements into the Subrecipient Agreement.

VIDE, through the Office of Federal Grants (OFG), acknowledges the finding and concurs with the need to strengthen internal controls related to subrecipient identification, monitoring, and compliance with federal audit requirements, as outlined in 2 CFR Part 200, Subpart F. During the period under review, gaps in documentation and monitoring were impacted by staff turnover, leadership transitions, and programmatic shifts, which limited the consistency and precision of subrecipient oversight across programs. In response, OFG has taken steps to reinforce its role as the pass-through entity and to formalize monitoring expectations and processes. OFG is committed to ensuring that all subrecipient agreements clearly identify the federal award and applicable requirements, including reporting, audit, and compliance obligations under 2 CFR Part 200, Subpart F, in accordance with 2 CFR §§ 200.331 and 200.332. Subrecipient agreements will explicitly outline financial, programmatic, and reporting expectations necessary for VIDE to meet its own federal responsibilities. In addition, OFG is strengthening risk-based subrecipient monitoring practices, including evaluating prior audit results, changes in personnel or systems, and the complexity of subawards to determine the appropriate level of oversight. Monitoring activities will include documented reviews of financial and programmatic reports and follow-up on identified deficiencies, as required. Through these actions, OFG is working to ensure that subrecipients are properly identified, monitored, and supported, and that federal funds are expended in accordance with all applicable statutes, regulations, and award terms.

The Government concurs with the auditor’s findings and recommendations. Starting FY25, OMB will identify and monitor federal awarding agencies, requesting single audit results for applicable recipients and including them in monitoring reviews. For revenue replacement projects, Treasury's Final Rule FAQ (13.14) states that these funds do not create subrecipient relationships, thus exempting them from the Single Audit Act due to the absence of a federal program or purpose.

The Government concurs with the auditor’s findings and recommendations. The GVI is currently in the process of developing a comprehensive Grants Management Overarching Standard Operating Policies and Procedures (SOPP) to establish uniform guidance for all grant-related processes, including drawdowns, documentation retention, subrecipient and compliance monitoring. Training will be provided to all staff on the SOPPs.

Recommendation: We recommended the City enhance its subrecipient monitoring activities and establish a formal record-keeping policy to ensure complete and timely documentation of expenses. Views of Responsible Officials: Management concurs with the finding. The City of Adelanto experienced higher than expected staff turnover in the finance department during the timeframe noted in this audit, which caused a backlog in audit preparation and submission, along with certain financial controls implementation interruption. At the time of this audit publishing, Management believes that implementation of such procedures is in compliance with the noted recommendation. Persons Responsible for Corrective Action: City Finance Staff (various) City Department Heads applying for grant funding (various) Anticipated Completion Date for Corrective Action: Corrective action has been immediately implemented in response to the auditors’ recommendation. As financial reporting is still in the process of becoming current, the City anticipates finding to be removed in future fiscal years.

The County Child and Youth Services department started requiring a corrective action plan for all subrecipients with findings as a result of their on-site monitoring in 2023 that include the entity’s plan to correct the errors noted, individual responsible and timeline for corrections to be implemented. Finding noted are for monitoring completed in January and March 2023, prior to the requirement of written corrective action plans being implemented.

Response to finding 2023-004 – Subrecipient Monitoring Views of Responsible Officials: CSforALL management agrees with the conditions identified by SAX Advisory Group, including the noted causes and resulting effects under 2023-004. Due to the organizational pause at the end of 2024 and the transition period throughout 2025, the Organization had limited capacity to maintain formalized subrecipient monitoring procedures aligned with 2 CFR 200.332. As CSforALL prepares for the 2026 rebuilding phase, management is establishing structured policies and procedures to ensure full compliance with federal subrecipient monitoring requirements. Corrective Action taken in 2025: During 2025, the Operations Manager ensured that all subrecipients associated with the current Alliance grant have signed or will sign formal Statements of Work with explicit deliverables and expectations required for payment. External parties without a Statement of Work are now required to submit proper documentation, invoicing, and proof of deliverables before any funds are released. No payments have been made to participants under the FY 2025 Alliance grant to date, as CSforALL is ensuring that all required policies and procedures are in place prior to both drawing down and paying out funds. Weekly and quarterly meetings have been established with external partners responsible for deliverables to confirm timelines, verify progress, and ensure alignment with payment expectations. Corrective Action Planned for 2026: Beginning in 2026, CSforALL will formalize subrecipient monitoring policies aligned with 2 CFR 200.332, including risk assessments for all subrecipients, review and documentation of Single Audit reports where applicable, issuance of management decisions, and structured ongoing monitoring activities. All monitoring documentation will be maintained in a centralized, accessible system to ensure consistent compliance throughout the 2026 operating year and beyond.

The County will implement a new policy to ensure all subrecipients that are given federal funds of $25,000 or more are properly monitored.

Views of Responsible Officials and Planned Corrective Action We will give instructions to the accounting staff in charge of the preparation of the quarterly progress reports of the Program, in order to comply with the FEMA reporting requirements. Responsible Official: Mrs. Irma M. Vargas Aguirre, Finance and Budget Director Implementation Date: December 31, 2025

Trailhead is establishing a new Contract and Compliance Coordinator role to oversee contract compliance processes and to ensure that Trailhead’s policy on subrecipient monitoring is followed. This role will be responsible for ensuring that compliance requirements are integrated at the outset of each grant. This role will be responsible for internal monitoring and auditing. This role will ensure that all grant kick-off meetings follow a standard procedure and include: 1) A clear understanding of federal requirements for all involved fiscal, program, and compliance staff 2) Delegated assignments to program staff for implementing and documenting: a) Suspension and debarment prior to contracting with subrecipients b) Subrecipient vs contractor determinations c) Evaluation of each subrecipient’s risk of noncompliance i) Establish the appropriate subrecipient monitoring level based on risk. This compliance role will have the authority to ensure the procedures are completed by the assigned staff. Evidence of the completed procedure must be documented and saved in a newly created contracts database. This database will be a centralized storage that will be reviewed during internal compliance checks to ensure all required steps have been completed and documented. These documents and associated grant and contract documents will be part of an official repository.

Finding Number 2023-006 Subject Heading (Financial) or AL no. and program name (Federal) 93.658 – Foster Care Planned Corrective Action The risk assessment cannot be completed until we have actual data and performance needed to make that assessment. Subrecipient risk assessments are completed at the beginning of the fiscal year based on prior year data and performance. The changes to all of the subrecipient agreements identified have been in process and were completed during State fiscal years 2024 and 2025. Additional findings are expected for the 2024 audit since the audit timing is currently almost two years in arrears. Anticipated Completion Date February 2025 Responsible Contact Person Kevin Haddock

Finding Number 2023-212 Subject Heading (Financial) or AL no. and program name (Federal) 93.323: Epidemiology and Laboratory Capacity for Infectious Diseases Planned Corrective Action The Oklahoma State Department of Education (OSDE) is committed to strengthening its subgrant management processes in response to the audit findings. To address the identified issues, OSDE will implement a more robust and clearly defined application procedure for Local Education Agencies (LEAs) applying for subgrants. This will include standardized guidance and documentation requirements to ensure consistency and transparency. In addition, OSDE will establish comprehensive procedures to conduct risk assessments of individual LEAs prior to awarding subgrants. These procedures will detail specific steps for identifying and addressing noncompliance, ensuring that higher-risk LEAs receive the appropriate level of oversight and support. To further improve the integrity of the reimbursement process, OSDE will provide regular training sessions and technical assistance to LEAs. These sessions will emphasize the importance of submitting complete and accurate documentation to support reimbursement claims. OSDE will also collaborate with our vendor, MTW, to ensure that LEAs can efficiently upload required documentation through the Grants Management System (GMS). Finally, OSDE will conduct targeted training for internal reviewers to ensure they are well-versed in identifying allowable versus unallowable expenditures and understand the documentation requirements associated with each type of expense. This will help promote consistency and compliance in the review and approval of claims. Anticipated Completion Date 6/30/2025 Responsible Contact Person Shawn Richmond, Comptroller