Corrective Action Plans

FINDING 2025-002 Finding Subject: Title I - Annual Report Card Contact Person Responsible for Corrective Action: Phyllis Ritenour Contact Phone Number and Email Address: 317-205-3332 x 77218 pritenour@msdwt.k12.in.us Views of Responsible Officials: We disagree with the finding. Explanation and Reasons for Disagreement: In a sample of 15 students, only 3 did not have the requested supporting documentation for removal from the Cohort. As discussed with the auditors, registrars are required to remove students who are no longer in attendance at our schools within two weeks. Students without 50% attendance cannot be included in ME counts and therefore may not remain in the Cohort. Registrars make multiple attempts to obtain the reason documentation from parents when students are no longer in attendance. However, the district does not have the authority to compel parents to provide the requested documentation. INDIANA STATE

FINDING 2025-001 Finding Subject: Child Nutrition Cluster – Procurement Suspension & Debarment Contact Person Responsible for Corrective Action: Annette Guenther Contact Phone Number and Email Address: 317-205-3332 x 77209 aguenther@msdwt.k12.in.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: Child Nutrition will ensure that all procurement procedures are followed for both the simplified acquisition method and the small purchase method. Documentation will be retained to verify that required procedures were followed. Anticipated Completion Date: September 30, 2026

2025-018 PROCUREMENT HIGHER EDUCATION POLICY COMMISSION (HEPC), BLUEFIELD STATE UNIVERSITY (BSU) Assistance Listing Number: Various – Research & Development Cluster Higher Education Policy Commission (HEPC) response: HEPC maintains procurement policies consistent with state law, which is one of the three allowable criteria recognized in 2 CFR §200.320(a)(1)(iv) for establishing a micro purchase threshold of up to $50,000. A Self-Certification letter will be developed and maintained by April 30, 2026, while formally defining micro-purchase thresholds applied to federal awards. This selfcertification letter will be retained as part of our procurement documentation and will provide how the micro-purchase threshold was determined and applied in accordance with 2 CFR §200.320(a)(1)(iv). Bluefield State University (BSU) response: Beginning in FY 2026, the BSU Controller and Director of Purchasing will review the criteria recognized in 2 CFR §200.320(a)(1)(iv) for establishing a micro purchase threshold of up to $50,000. These requirements will be presented to the Board of Governors before June 30, 2026.

U.S. Department of Health and Human Services Program Name: Maternal and Child Health Services Block Grant Federal Assistance Listing Number: 93.994 Significant Deficiency, Nonmaterial Noncompliance – Reporting Finding 2025-010 – Repeat Finding Criteria or Specific Requirement: Per Section 200.303 of the Uniform Grant Guidance, a non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Per 2 CFR 200.334 the recipient must retain all federal award records for three years from the date of submission of their final financial report. Condition: During the audit we tested 9 reports and noted the following: a) There was one (1) instance out of (9) nine reports tested where the submitted reports were unable to be provided, including the date of submission for the reports. b) There were four (4) instances out of nine (9) reports tested where the County was unable to provide evidence the report was reviewed prior to submission. c) There were two (2) instances out of nine (9) reports tested where the County was unable to provide the date of submission for the reports. Questioned Costs: None of the nonmaterial noncompliance items resulted in questioned costs. Effect: By not having the required documentation and underlying support, the County is not able to demonstrate compliance with the applicable requirements. Cause: The County did not have a formal policy to ensure documentation was retained to evidence review and submission of all reports. Recommendation: While the County made updates to policies and procedures surrounding reporting during the current year to address the prior year finding, the County should ensure these policies are adhered to ensure all submitted reports and underlying data are retained in accordance with the Uniform Grant Guidance requirements. Views of Responsible Officials: Management agrees with the finding and is implementing procedures to correct this which is further discussed in the Corrective Action Plan. Corrective Action Plan: As of July 2025, The Health Department has created and adopted policy FIS-05 Retention of Reporting Requirement Submissions to ensure that federal award reports and data are retained in accordance with Uniform Guidance. The Health Department will document with screen shots as outlined in the FIS-05 Policy, to address circumstances when the required report consists of answering a NCDHHS survey or form that does not have “save” or “download” capability, to maintain record of documented submissions. In addition, the Health Department has developed a standard operating procedure whereby fiscal compliance Management Analysts, in collaboration with Program Managers, ensure they have reviewed federal award reports prior to submission and file documentation of review and approvals. While review of grant reports is common, the Health Department did not have adequate documentation to demonstrate completion of this step prior to July 2025. An additional training, to be recorded, will be held with program staff Friday December 19th, 2025. Anticipated Completion Date: December 19,, 2025 Responsible Person(s): Autumn Watson, Business Operations Director

Finding 2025-004 Title I Grants to Local Educational Agencies – Eligibility Contact Person Responsible for Corrective Action: Superintendent and Title I Program Director Mr. Todd Tanksley Contact Phone Number and Email Address: 812-849-4481 – tanksleyto@mitchell.k12.in.us Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan The School Corporation has established and implemented written internal control procedures to ensure that enrollment and poverty data reported in the October Real Time Reports are reviewed for accuracy and compared to the Title I application prior to submission. Beginning with the current grant cycle, the School Corporation will: 1. Obtain and retain copies of the October Real Time Report data used for each Title I application year. 2. Perform and document a detailed review of enrollment and poverty counts by school utilizing a worksheet that itemizes total enrollment at each school within the district, compares the low-income count according to the Real Time report, the utilized lunch software, and the counts indicated on the Title I application, and indicates a match (or variance in the event of data discrepancy) of the data among those three data sources. INDIANA STATE BOARD OF ACCOUNTS 32 3. Compare the poverty and enrollment data from the October Real Time Reports to the Eligible School Summary within the Title I application. 4. Verify poverty data using source documentation from the school lunch software system. 5. Investigate and resolve any discrepancies identified prior to submission. 6. Maintain documentation supporting the review, comparison, and verification process in accordance with federal record retention requirements under 2 CFR 200.334. Planned Evidence of Correction The School Corporation will maintain the following documentation as evidence of corrective action: ● October Real Time Reports ● Poverty and enrollment comparison worksheets ● School lunch software reports ● Signed and dated review checklists ● Copies of submitted Title I application Anticipated Completion Date Implemented and ongoing beginning with the 2026 Title I application.

FINDING 2025-003 Finding Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Contact Person Responsible for Corrective Action: Todd Nobbe, Corporation Treasurer Contact Phone Number and Email Address: 812-934-2194, tnobbe@batesville.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Management will request and review weekly wage reports for all Davis-Bacon Act projects. Documents will be reviewed and signed off by the Director of Operations and kept for audit. Anticipated Completion Date: Immediately 12/08/2025

November 18, 2025 Donovan CPAs 9292 N. Meridian Street, Suite 150 Indianapolis, IN 46260 The PATH School already has or will take the following actions to address the FY2025 supplemental audit report comments: Required Reports 1. We will implement additional procedures and internal controls to ensure that all required student documentation is consistently collected and maintained. As part of these enhanced controls with our front office staff including receptionist and office manager, our enrollment process now includes a mandatory step requiring all students to complete the Free/Reduced Lunch Application on an annual basis. This will be implemented immediately. This measure will help ensure accurate reporting and compliance with program requirements. Sincerely, Theodore Brannum Chief Operations Officer E: tbrannum@thepathschool.org

FINDING 2024-009 Finding Subject: ESSER Grant Contact Person Responsible for Corrective Action: Superintendent and Treasurer Contact Phone Number and Email Address: Kyle Neukam; 812-752-8921; kneukam@scsd2.k12.in.us Casey Cheatham; 812-752-8949; ccheatham@scsd2.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The ESSER program has concluded and corrections were made following leadership changes. Financial activity was reviewed and adjusted where possible. Reimbursement requests are now tied to general ledger activity with full documentation. The prior practice of correcting errors through transfers has been discontinued. Controls implemented apply to all future grants and monitoring is ongoing. Anticipated Completion Date: May 2026

FINDING 2024-008 Finding Subject: Special Education Cluster (IDEA) Contact Person Responsible for Corrective Action: Superintendent and Treasurer Contact Phone Number and Email Address: Kyle Neukam; 812-752-8921; kneukam@scsd2.k12.in.us Casey Cheatham; 812-752-8949; ccheatham@scsd2.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The School Corporation partnered with Mazi Education for oversight. Separate funds are maintained for each project year. Payroll mapping has been corrected and reimbursement requests are based on ledger activity with supporting documentation. Transfers are documented and restricted. Monitoring procedures ensure ongoing compliance. The School Corporation has implemented procedures designed to strengthen the control environment, improve risk assessment and information and communication processes, enhance control activities, and provide ongoing monitoring to ensure compliance with Special Education grant requirements and timely identification and correction of deficiencies. Anticipated Completion Date: August 2026

FINDING 2024-007 Finding Subject: Title I Eligibility Contact Person Responsible for Corrective Action: Superintendent and Treasurer Contact Phone Number and Email Address: Kyle Neukam; 812-752-8921; kneukam@scsd2.k12.in.us Casey Cheatham; 812-752-8949; ccheatham@scsd2.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Nonpublic schools are required to provide detailed documentation for enrollment and poverty data. Verbal data is no longer accepted. Documentation is reviewed, retained, and verified prior to use in calculations. Mazi Education provides oversight to ensure compliance and accuracy. The School Corporation has implemented procedures designed to strengthen the control environment, improve risk assessment and information and communication processes, enhance control activities, and provide ongoing monitoring to ensure compliance with Title I eligibility requirements and timely identification and correction of deficiencies. Anticipated Completion Date: August 2026

FINDING 2024-006 Finding Subject: Title I Grants Contact Person Responsible for Corrective Action: Superintendent and Treasurer Contact Phone Number and Email Address: Kyle Neukam; 812-752-8921; kneukam@scsd2.k12.in.us Casey Cheatham; 812-752-8949; ccheatham@scsd2.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The School Corporation partnered with Mazi Education to provide oversight of grant compliance. Separate funds are maintained for each grant and project year. Payroll mapping has been corrected to ensure proper allocation. Reimbursement requests are based on general ledger activity and supported by documentation. Transfers are restricted and documented. The School Corporation has implemented procedures designed to strengthen the control environment, improve risk assessment and information and communication processes, enhance control activities, and provide ongoing monitoring to ensure compliance with federal grant requirements and timely identification and correction of deficiencies. Anticipated Completion Date: August 2026

Finding 2024-008: Cash Management – Material Weakness Condition: As a result of the audit procedures, it was noted that the Organization did not retain copies of cost reimbursement reports submitted to the grantor for the Urban Health Clinic, Substance Abuse Prevention, and Title V programs. Corrective Action: Management is implementing a formal process to retain all cost reimbursement reports submitted to grantors in accordance with Federal record retention requirements. NACA is also hiring and training a Grant Director to strengthen oversight of grant reporting, reimbursement processes, and documentation requirements. This will include establishing a centralized and organized filing system, to ensure all submitted reimbursement reports are maintained and accessible. As part of the monthly reimbursement and grant reporting process, staff will ensure that copies of all submissions are saved and reconciled to the accounting records. A review step will also be added to confirm that all required documentation has been retained and properly organized prior to final submission. Management will continue to evaluate and adjust processes as needed to ensure compliance and completeness. Name of Person Responsible: Walter McCullough, CFO and finance staff Anticipated Date of Completion: May 31, 2026

VIEWS OF RESPONSIBLE OFFICIALS ADSEF is committed to establishing a rigorous documentation and oversight framework. We are prioritizing the development of standardized file-handling protocols, the implementation of a uniform record-keeping system, and the execution of comprehensive staff training to ensure that all sanction-related evidence is preserved, organized, and readily accessible for audit and verification purposes. Action Steps: 1. Implement a new "Uniform Record Retention & Archiving SOP" that mandates a specific organization, labeling, and storage legend for all participant files, ensuring uniform accessibility across all regions. 2. Adopt a formal "Sanction & Work Verification Checklist" that [LP4.1]must be completed for every participant file. This checklist will specifically require the inclusion of sanction periods, justification forms for "just cause," and evidence of non-compliance. 3. Develop an internal tracking log to manage sanction periods. This log will ensure that participants who have failed to comply with the work verification plan are monitored, and payments are suspended or reinstated only upon documented evidence of compliance. 4. Conduct a mandatory regional training curriculum for all regional staff on the importance of file maintenance, the specific requirements for documenting sanctions, and compliance. IMPLEMENTATION DATE During Fiscal Year 2026-2027 RESPONSIBLE PERSON Yessenia Peña Díaz Assistance Secretary of Administration

VIEWS OF RESPONSIBLE OFFICIALS We are resolving these deficiencies by leveraging the new Government ERP system, scheduled for launch in July 2026. This platform will provide the essential functionality to properly configure our Chart of Accounts, ensuring that all TANF and PTTA administrative expenditures are automatically segregated by federal award and Assistance Listing Number (ALN). This system will be the foundation for accurate, traceable, and reconcilable financial reporting, supported by robust internal controls and multi-level supervisory oversight. Action Steps: 1. ERP Chart of Accounts Configuration – Configure the ERP system with a granular Chart of Accounts that strictly segregates TANF and PTTA administrative expenditures, ensuring every transaction is coded to the correct federal grant and ALN. 2. Automated Reporting Workflow – Utilize the ERP's financial reporting modules to generate ACF-196TR reports directly from the General Ledger, ensuring reported expenditures are 100% traceable to source transactions. 3. Digital Reconciliation Workpaper – Require the ERP to generate an automated "Reconciliation Package" for every ACF-196TR submission, which links reported line items directly to General Ledger accounts, eliminating discrepancies. 4. Staff Training & ERP Stabilization – Execute comprehensive training for all finance staff on the new ERP accounting structure, reconciliation modules, and federal reporting requirements, ensuring the system is utilized for full audit compliance. IMPLEMENTATION DATE During Fiscal Year 2026-2027 RESPONSIBLE PERSON Eddie J. Burgos Auxiliary Administrator for Finance and Budget Carlos Martinez Colón Finance Director Vanessa Ayala Gerena Director of Budget

VIEWS OF RESPONSIBLE OFFICIALS ADFAN appreciates the observations presented in the audit and acknowledges the importance of strengthening its reporting processes. The agency recognizes that staffing limitations within the Finance Division have affected the ability to perform timely reviews and ensure adequate segregation of duties. Additionally, the Finance Procedures Manual referenced during the audit was approved in 2009 and is currently undergoing a comprehensive revision to reflect the agency’s present operational structure and accounting practices. ADFAN is committed to improving its internal controls, enhancing staff training, and implementing the necessary measures to ensure full compliance with federal reporting requirements moving forward. IMPLEMENTATION DATE December 31, 2026 RESPONSIBLE PERSON Yazmín Cruz Colón, Budget Director

VIEWS OF RESPONSIBLE OFFICIALS ADSEF is committed to establishing a comprehensive internal control framework. We are prioritizing the development of formal written policies, the standardization of regional data reporting, and the implementation of a rigorous oversight system to ensure all TANF programmatic reports are complete, accurate, and filed on time. Action Steps: 1. Revise the Protocol of “TANF – Reporting Procedures Manual" that defines the full data lifecycle: collection, regional validation, quality control, supervisory review, and submission. 2. Regional Standardization – Establish mandatory, standardized templates for all regional offices to report programmatic data, ensuring uniformity and minimizing data entry errors. 3. Reporting Calendar & Oversight – Implement a master’s "Federal Reporting Calendar" that tracks all due dates for ACF-199, ACF-209, and other reports, with automated alerts sent to management 30 days prior to submission. 4. Training & Certification – Launch a mandatory training curriculum for all staff involved in reporting, focusing on 45 CFR Part 265 standards, data accuracy, and the consequences of reporting failures. IMPLEMENTATION DATE During Fiscal Year 2026-2027 RESPONSIBLE PERSON Blanca M. Medina Díaz Administrator Gerhil Medina Baez Auxiliary Administrator Operational Services Johana Hernandez Andaluz TANF Program Director

VIEWS OF RESPONSIBLE OFFICIALS To resolve this, we are integrating these reporting requirements into the new Government ERP system, scheduled for launch in July 2026. This platform will provide the capability to generate accurate General Ledger data and automated financial reports, ensuring that all LIHEAP performance data is traceable to verified accounting sources and subject to multi-level supervisory approval workflows. Action Steps: 1. ERP-Driven Financial Reporting – Configure the ERP system to generate General Ledger reports that align precisely with LIHEAP financial data requirements. The ERP will serve as the "Single Source of Truth," eliminating discrepancies between accounting and reporting. 2. Automated Reconciliation Workflows – Utilize the ERP’s native reconciliation engine to automatically match expenditure records against reported LIHEAP budget obligations, ensuring figures are accurate and validated before submission. 3. Segregation of Duties (SOPs) – Formalize protocols where the ERP system enforces mandatory "Preparer-Approver-Certifier" roles. This ensures that performance data compiled by program staff is independently validated against ERP financial records by a supervisor. 4. Training on ERP Reporting – Train all staff on how to use ERP reporting modules for financial data extraction and the new protocols for reconciling this data with programmatic LIHEAP performance metrics. IMPLEMENTATION DATE During Fiscal Year 2026-2027 RESPONSIBLE PERSON Eddie J. Burgos Auxiliary Administrator for Finance and Budget Carlos Martinez Colón Finance Director Vanessa Ayala Gerena Director of Budget Nesvia Fontanez Marín Principal Accountant Federal Reports

VIEWS OF RESPONSIBLE OFFICIALS To resolve these systemic issues, the Government of Puerto Rico is transitioning to a new Enterprise Resource Planning (ERP) system, scheduled for live launch in July 2026. This modern platform will centralize our financial data and provide the necessary automation to ensure that all federal reports are accurate, traceable to source documentation, and subject to multi-level supervisory approval workflows. Action Steps: 1. ERP Implementation & Workflow – Deploy the new ERP system to centralize all financial accounting. The system will be configured to require distinct user roles for the preparation, review, and certification of federal reports. 2. Automated Traceability – Utilize ERP reporting tools to ensure all administrative expenditures are linked to valid source documentation (e.g., invoices, payroll registers), providing a clear audit trail from report to General Ledger. 3. Implement report validation tool – No federal report may be submitted until an independent, designated official has digitally validated the report against source accounting records. 4. Reconciliation SOPs – Formalize a written SOP requiring monthly reconciliations of reported federal expenditures against the ERP database. These reconciliations will be retained as evidence of review for audit purposes. 5. Training & Accountability – Conduct mandatory training for all staff on new reporting workflows and the importance of segregation of duties, ensuring all personnel understand their responsibility in maintaining accurate financial data. IMPLEMENTATION DATE During Fiscal Year 2026-2027 RESPONSIBLE PERSON Eddie J. Burgos Auxiliary Administrator for Finance and Budget Carlos Martinez Colón Finance Director Vanessa Ayala Gerena Director of Budget

VIEWS OF RESPONSIBLE OFFICIALS ADSEF is committed to establishing a rigorous compliance framework to ensure all participant files are complete, accurate, and readily available for audit as required by federal regulations. Action Step: 1. Standardized Documentation Checklist- Implement a mandatory, uniform "Eligibility Documentation Checklist" that must be completed for 100% of non-PAN/TANF applicants, ensuring ID, residency, and utility evidence are present before approval. 2. Supervisory Sign-off - Require a supervisor to perform a "Document Completeness Review" for every non-PAN/TANF file before the benefit is authorized. Files lacking mandatory documentation will be rejected by the system/workflow automatically. 3. Analysis of the Existing File Uniformity Procedure for Compliance Verification – Assessment of the physical and digital filing layout across all regions. A uniform legend and organization protocol will be mandated to facilitate monitoring and eliminate systemic filing errors. 4. Compliance Training - Execute mandatory, recurring training sessions for all regional staff on document requirements and the legal necessity of preserving records for the full three-year federal mandate. IMPLEMENTATION DATE During Fiscal Year 2026-2027 RESPONSIBLE PERSON Blanca M. Medina Díaz Administrator Gerhil Medina Baez Auxiliary Administrator Operational Services Marta Soto Ayala NAP Program Director Johana Hernandez Andaluz TANF Program Director

VIEWS OF RESPONSIBLE OFFICIALS ADFAN concurs with the finding. The agency acknowledges the requirement to maintain written procedures in accordance with 2 CFR §200.302, including procedures related to cash management and the determination of allowable costs under federal awards. The condition identified was impacted by limited staffing resources within the Finance Area, which affected the timely completion and formalization of the required written procedures. In addition, the Finance Procedures Manual is currently under review and revision to ensure compliance with Uniform Guidance requirements and to strengthen internal controls over federal programs. As corrective action, ADFAN is completing the update and formalization of the Finance Procedures Manual, which will incorporate the written procedures required by Uniform Guidance. Upon completion, the revised manual will be formally approved, communicated to relevant personnel, and implemented across the agency. Management will also continue assessing staffing needs and resource allocation within the Finance Area to support the ongoing maintenance and monitoring of financial policies and procedures. IMPLEMENTATION DATE December 31, 2026 RESPONSIBLE PERSON Rafael López Arocho Assistant Administrator on Administration

VIEWS OF RESPONSIBLE OFFICIALS ADSEF is committed to transitioning from manual, offline tracking to a fully integrated, system-based approach within our Enterprise Resource Planning (ERP) system. Action Step: 1. ERP System Configuration: Configure the ERP system to automatically flag and categorize transactions eligible for indirect cost calculation by class object, replacing manual Excel-based methods. 2. Indirect Cost SOP-Develop and implement written formal procedures detailing the extraction of data from the ERP, ensuring traceability back to the source transaction IMPLEMENTATION DATE During Fiscal Year 2026-2027 RESPONSIBLE PERSON Eddie J. Burgos Auxiliary Administrator for Finance and Budget Carlos Martinez Colón Finance Director Vanessa Ayala Gerena Director of Budget

VIEWS OF RESPONSIBLE OFFICIALS ADSEF acknowledges the findings regarding weaknesses in the Random Moment Sampling (RMS) methodology used for allocating administrative costs. We conclude that the absence of formal written procedures, combined with insufficient communication between the Human Resources Appointments Office and the Finance Division, has contributed to inaccuracies in the distribution of administrative expenses across federal programs. ADSEF reaffirms its commitment to strengthening its cost allocation plan to ensure that only allowable costs, directly associated with the administration of federal awards, are charged to the TANF program, in strict compliance with 2 CFR §200.302. Action Steps: 1. Policy Formalization Develop, approve, and implement a comprehensive Standard Operating Procedure (SOP) that formalizes the RMS methodology, including clear and standardized definitions for all survey response categories. 2. HR–Finance Liaison Establish a structured monthly reporting protocol between the Human Resources Appointments Office and the Finance Division to ensure the RMS participant list remains accurate, complete, and current. 3. RMS Questionnaire Update Revise the RMS questionnaire to remove non-federal program selections and ensure that all response options align directly with federally allowable functions. 4. Quarterly Oversight Institute a mandatory quarterly review of RMS results by senior management to validate alignment between RMS survey data and accounting system allocations IMPLEMENTATION DATE March 31, 2027 RESPONSIBLE PERSON Eddie J. Burgos Auxiliary Administrator for Finance and Budget Coral M. Caceres Alvarez Auxiliary Administrator Human Resources Carlos Martinez Colón Finance Director Vanessa Ayala Gerena Director of Budget Gerhil Medina Baez Auxiliary Administrator Operational Services Rafael Acosta Sepulveda Program Director

VIEWS OF RESPONSIBLE OFFICIALS The data will be evaluated by the IT department to verify the controls in place at the time the files identified as duplicates were issued. Regarding the issuance, the IT department acknowledges an error in the file transmission, which resulted in the information not being matched against the issuance. The data will be available as reference for evaluation. For reconciliation purposes, work will be performed efficiently and within the established timeframes to ensure that all transactions are recorded promptly in the system. This will enable the accurate completion of the reconciliation process, as well as the recording of issuances and any other related transactions, in accordance with established procedures. IMPLEMENTATION DATE During Fiscal Year 2026-2027 RESPONSIBLE PERSON Blanca M. Medina Díaz Administrator Eddie J. Burgos Auxiliary Administrator for Finance and Budget Carlos Martinez Colón Finance Director Vanessa Ayala Gerena Director of Budget Carmen Ramírez IT Director

The District concurs with the finding and acknowledges the importance of maintaining complete and accessible documentation to support federal expenditures, compliance activities, reimbursement requests, and financial reporting in accordance with Uniform Guidance requirements. The condition identified in the audit resulted from grant management, documentation retention, and accounting practices that existed prior to the current administration. During fiscal year 2025-2026, the District implemented significant corrective measures to strengthen federal grants management, financial oversight, documentation retention, and compliance monitoring. The District established enhanced grant administration procedures designed to improve the organization, retention, and accessibility of grant records. Grant expenditures, reimbursement requests, budget monitoring documents, approval records, and supporting documentation are now maintained in centralized electronic files to improve audit readiness and support compliance monitoring activities. In addition, the District strengthened coordination among program administrators, the Business Office, and District administration to improve oversight of federal grant activity. Grant budgets, expenditures, reimbursements, and compliance requirements are reviewed on an ongoing basis to ensure expenditures are properly supported, allowable, and consistent with grant requirements. The District has also implemented procedures to improve grant-level tracking and monitoring of revenues and expenditures and has worked to ensure that grant activity is supported by documentation sufficient to demonstrate compliance with applicable federal requirements. Efforts have been made to strengthen record retention practices, improve financial reporting by grant award, and maintain documentation necessary to support future audit and monitoring activities. The District will continue to formalize written procedures governing federal grant administration, accounting, reconciliation, reimbursement processing, documentation retention, and compliance monitoring. Staff responsible for grant administration will continue to receive guidance and training regarding documentation and record retention requirements. The District believes that the corrective actions implemented during FY26 have substantially strengthened internal controls over federal grants management, documentation retention, and financial reporting and have significantly improved the District's ability to demonstrate compliance with federal program requirements.

Finding No.2024-002: Maintain Supporting Documentation for Required Federal Reports Finding: During our testing of 24 reporting samples, we identified two (2) instances wherein Quarterly Expenditure Reports related to the grant of Council on American Islamic Relations, San Francisco Bay Area Office (CAIR-SFBA), including the evidence of submission (e.g. confirmation emails or system-generated receipts), were not available for review. Views of Responsible Officials and Corrective Action Plan: Management concurs with the finding and has already implemented reporting procedures to include the retention of submission confirmations as part of its grant documentation. Because the organization’s first single audit in FY2023 was conducted concurrently with the FY2024 single audit, there was limited opportunity for these procedural improvements to be reflected in the FY2024 single audit testing cycle. As a result, the impact of these changes will be more fully reflected in the FY2025 single audit, which is scheduled to commence this year. Responsible person: Jackie Ramirez, Operations & Finance Associate Director Implementation date: October 31, 2025.