Corrective Action Plans

Item 2025.001 - Activities Allowed or Unallowed Recommendation We recommend that the Organization consistently enforce its internal controls over payroll to ensure that the allocations are reviewed and approved by the appropriate supervisor. Repeat Finding Not a repeat finding. Action Taken The Health Center converted the payroll system from Paycom to Paylocity which has capacity for grant hours tracking. We should have compliance in three months after implementation. The first pay date using Paylocity will be 7/2/2026 covering the pay period from 6/14/2026 to 6/27/2026. In addition, The Health Center's new GL system, Sage lntacct, also has grant accounting capability. With these two systems conversions, we should be able to track time and effort compliance.

Item 2022.003 - Activities Allowed or Unallowed Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently reinforces its internal controls over nonpayroll expenditures to ensure all expenditures were approved by the appropriate supervisor. Repeat Finding Yes Action Taken Island Health Care will take the following actions to address this recommendation: Timesheet and Payrate Review and Approval: • Standardize timesheet submission and approval process • Utilize an electronic timesheet system to document the verification of employee payrates and ensure there is a detailed audit trail that records all submissions, reviews, and approvals by supervisors • Conduct regular audits to verify timesheets and payrates are reviewed and approved by supervisors NonPayroll Expenditures: • Evaluate and improve upon existing processes to ensure internal controls over nonpayroll expenditures are working. This includes enforcement of approval policies with mandatory documentation and regular monitoring throughout the process for a clear audit trail • Conduct regular audits to verify nonpayroll expenditures have been reviewed and approved by supervisors

Item 2021.003 – Activities Allowed or Unallowed Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently reinforces its internal controls over nonpayroll expenditures to ensure all expenditures were approved by the appropriate supervisor. Repeat Finding Yes Action Taken Island Health Care will take the following actions to address this recommendation: Timesheet and payrate review and approval: • Standardize timesheet submission and approval process. • Utilize and electronic timesheet system to document the verification of employee payrates and ensure there is a detailed audit trail that records all submissions, review, and approval by supervisors. • Conduct regular audits to verify timesheets and payrates are reviewed and approved by supervisors. Nonpayroll Expenditures: • Evaluate and improve upon existing processes to ensure internal control over nonpayroll expenditures are working. This includes enforcement of approval policies with mandatory documentation and regular monitoring throughout the process for a clear audit trail. • Conduct regular audits to verify nonpayroll expenditures have been reviewed and approved by supervisors.

Item 2021.003 – Activities Allowed or Unallowed Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently reinforces its internal controls over nonpayroll expenditures to ensure all expenditures were approved by the appropriate supervisor. Repeat Finding Yes Action Taken Island Health Care will take the following actions to address this recommendation: Timesheet and payrate review and approval: • Standardize timesheet submission and approval process. • Utilize and electronic timesheet system to document the verification of employee payrates and ensure there is a detailed audit trail that records all submissions, review, and approval by supervisors. • Conduct regular audits to verify timesheets and payrates are reviewed and approved by supervisors. Nonpayroll Expenditures: • Evaluate and improve upon existing processes to ensure internal control over nonpayroll expenditures are working. This includes enforcement of approval policies with mandatory documentation and regular monitoring throughout the process for a clear audit trail. • Conduct regular audits to verify nonpayroll expenditures have been reviewed and approved by supervisors.