Corrective Action Plans

Finding 2025-003-Allowable Costs/Cost Principles and Activities Allowed and Unallowed - Significant Deficiency in Internal Controls over Compliance and Non-Compliance Federal Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Year(s): 2025 Federal Agency: Department of Treasury Pass-Through Agencies: State of Oregon and Multnomah County Responsible Party: Jeanne Stromberg, Major- Divisional Finance Secretary- Cascade Division 916-501-6374 RESPONSE: Management will implement a review and approval of the billing submissions to prevent duplicate submission of expenses and perform a review of billing submissions by the senior accountant monthly to prevent duplicate submission of costs. Effective Date: November 2026

The City has taken steps to strengthen internal controls over the CDBG program. The City will additionally implement formalized procedures requiring, centralized project files containing procurement documentation, cost support, and project eligibility records, document procurement procedures consistent with Uniform Guidance requirements, including cost/price analysis and justification for contractor selection, collection and review of Davis-Bacon documentation, including wage determinations and certified payrolls, when applicable, verification that required permits are obtained prior to construction and retention of inspection and completion documentation, and secondary review by City staff to ensure all required documentation is complete prior to project closeout. Additionally, the City will provide training to staff involved in CDBG program administration. Responsible Persons: Community Development Director Date of Implementation: Initiate FY 2025-26 with ongoing monitoring into FY 2026-27

As required by the OMB Uniform Guidance, we have provided our response and corrective action plan addressing the finding in the Schedule of Findings and Questioned Costs for the year ended August 31, 2025. Finding 2025-001: Allowable Costs – Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Management’s Views – Management agrees with the finding. LAJH acknowledges that payroll reimbursement calculations submitted under the federal program were prepared using subsequent employee pay rates rather than the contemporaneous pay rates applicable during the grant performance period and that certain duplicative expenditures were included in error. Management recognizes that these errors resulted in overstated costs totaling $79,825. Corrective Action Plan – LAJH will implement enhanced internal control procedures over the preparation and review of payroll costs charged to federal awards. Specifically, management will require all payroll reimbursement calculations to be supported by contemporaneous payroll registers and employee pay rate documentation applicable to the period during which services were performed. Person Responsible for Corrective Action: Robin Ray, Corporate Controller Anticipated Completion Date: May 31, 2026

Contact Persons Responsible: Primary – Anthonia Ibe, CFO In Absence (Alternative): – Jesus Infante, CAO Management acknowledges this finding and has developed a corrective action plan to strengthen the underlying control, assign clear ownership, and ensure timely implementation. The Agency is developing a time-tracking and documentation system to capture the actual time spent by allocable staff on federal programs, ensuring that charges to federal awards reflect the actual work performed in compliance with 2 CFR Part 200.403. Concurrently, HR is implementing a standardized pay rate approval and documentation process to ensure all approved salaries are formally recorded and retained by the human resources department. As an interim measure, manual time attestation will be in place by August 31, 2026, while the longer-term system is finalized. The CFO and CAO will work jointly to implement and monitor corrective actions in cross-functional areas, including timekeeping, payroll documentation, record retention, lease tracking, IT access controls, vendor onboarding, procurement documentation, and personnel training. This shared structure is intended to ensure that policy revisions are supported by clear workflows, staff training, documentation standards, and periodic compliance review. By October 31, 2026, the Agency will complete communication and training related to payroll approval controls.

The BGCNEO accounting staff will closely review expenditures to ensure costs were incurred within the applicable grant period, regardless of when the expenditure was paid.

Recommendation: The Department of Social Services should strengthen internal controls to ensure that only eligible recipients receive Money Follows the Person Rebalancing Demonstration services in accordance with federal laws, award terms and conditions, and the Money Follows the Person Operational Protocol. Corrective Action Plan as Reported by the Department of Social Services: The Department agrees in part with this finding. Condition #1: DSS agrees that participation end dates were not updated timely due to cross-system manual entry limitations. Reconciliation procedures and supervisory oversight will be strengthened. Condition #2: DSS agrees that participation suspensions were not consistently reflected across systems due to timing delays. Monitoring and real-time reconciliation controls will be enhanced. Condition #3: DSS agrees approved costs exceeded institutional thresholds in limited cases. Variances were clinically justified, reviewed, and authorized. DSS will strengthen documentation and internal protocols to ensure clearer policy alignment. Condition #4: DSS agrees that the documentation was incomplete in one instance. Internal review standards will be reinforced to ensure comparative cost analyses are consistently documented. Please note, the Department will not be returning the questioned costs associated with this finding. According to federal regulations, recoveries based on eligibility errors can only be pursued when identified by programs operating under Centers for Medicare and Medicaid Services’ (CMS) Payment Error Rate Measurement program, per section 1903(u) of the Social Security Act and regulations at Title 42 CFR Part 431, Subpart Q. Anticipated Completion Date: December 31, 2026 Department of Social Services Contact Person: Christine Weston, Program Division Director (860) 424-5012

Recommendation: The Department of Developmental Services should strengthen internal controls to ensure it obtains the required signatures for the individual plan for all Money Follows the Person Rebalancing Demonstration recipients. The Department of Social Services should conduct an audit of the medical provider in accordance with Section 17b-99 of the Connecticut General Statutes to ensure integrity of the Money Follows the Person Rebalancing Demonstration program. Corrective Action Plan as Reported by the Department of Developmental Services: DDS agrees with the finding. The errors were attributed to current manual processes and case management oversight regarding documenting signatures when individual plan (IP) meetings are held remotely rather than in-person. Most of the deficiencies (5 of 6) were isolated to one case manager. The MFP division is small with 3-4 case managers, causing a higher error rate when extrapolated against the sample size. The missing support service records have been forwarded to the Department of Administrative Services for research. There are plans to improve the individual plan process to enhance internal controls through automation. In the interim, case managers and case manager supervisors will be reminded of the IP signature requirements. Department of Developmental Services Anticipated Completion Date: June 30, 2026 Department of Developmental Services Contact Person: Krista Ostaszeski, Health Management Administrator (860) 418-6066 Wayne Siedel, Director of Service Development and Support (860) 418-6041 Corrective Action Plan as Reported by the Department of Social Services: The Department agrees with this finding and the response provided by the Department of Developmental Services. Additional research is needed to determine whether the missing documentation was the provider's responsibility or was due to a billing issue. The Department of Developmental Services is coordinating with the Department of Administrative Services to research this further. Department of Social Services Anticipated Completion Date: December 31, 2026 Department of Social Services Contact Person: Christine Weston, Program Division Director (860) 424-5012

Recommendation: The Department of Social Services should conduct an audit of the medical provider in accordance with Section 17b-99 of the Connecticut General Statutes to ensure integrity of the Money Follows the Person Rebalancing Demonstration program. The Department of Social Services should recoup any improper payments issued to medical providers and refund the corresponding federal reimbursements to the Centers for Medicare and Medicaid Services. Corrective Action Plan as Reported by the Department of Social Services: The Department agrees with the finding. The improper payment has been recouped and the DSS Audit Division will open an audit of the provider. Anticipated Completion Date: December 31, 2026 Department of Social Services Contact Person: Cathie Bussolotta, Director of Internal Audit (860) 424-5548

Recommendation: The Department of Transportation should strengthen internal controls over consultant payments for extra work. Corrective Action Plan as Reported by the Department of Transportation: The CTDOT Transit Design Unit has immediately put in-place a corrective action plan, which will be completed by January 30, 2026. As part of this action plan, when signing off on invoices in the future, the Project Manager will ensure the date of the invoice refers to the correct payment mechanism or extra work letter in accordance with our established policies. This will strengthen internal controls and reviews over payments for all fee letters to ensure it follows established policies and only pay for properly authorized extra work. In addition to internal actions, the consultant project team will be counseled for submitting an invoice that does not follow CTDOT policies. Anticipated Completion Date: January 30, 2026 Department of Transportation Contact Person: Jonathan Kang, Transportation Supervising Engineer Jonathan.Kang@ct.gov, (860) 594-2754

Finding 2025-003 Duplicate expenditures charged to same grant Recommendation: We recommend the District establish and maintain proper review procedures for expenditures charged to grants prior to submission for reimbursement. Management’s View: The District will strengthen internal controls over payroll expenditures charged to federal grants by implementing a standard operating procedure that will be conducted by the Payroll Specialist of verifying payroll distribution reports, funding codes, and supporting documentation prior to submission for payment. Before each payroll is finalized, the payroll specialist will run a payroll report that will be generated and sorted by employee to verify that no duplicate charges have been applied to the same grant within the same payroll period. This review will ensure that all costs charged to federal grants during the pay period are accurate, allowable, properly coded, and not duplicated. No payroll adjustments will be keyed until timesheets have been verified against previously submitted timesheets and that they are reviewed to confirm that prior entries have not already been charged to the same grant. Additionally, a secondary review by the accountant will be conducted prior to finalizing grant-related payrolls. Effective March 1, 2026, the Payroll Accountant and Chief Financial Officer will review grant-related payroll transactions to ensure accuracy, proper funding allocation, and compliance with applicable federal requirements. Effective Date: March 1, 2026 Contact Person: Sylvia Garza, Chief Financial Officer, Edcouch-Elsa Independent School District

Community Development Block Grants Cluster Entitlements/Special Purpose – Assistance Listing No. 14.218 Recommendation: It is recommended the County modify its procedure to include: • Improve reconciliation procedures to verify hours per pay period recorded in quarterly spreadsheet agrees to hours recorded in the KRONOS system. • Record grant wages using the pay rate at the beginning of the quarter if recorded on a quarterly basis or use pay rates for each pay period if recorded on a pay period basis. Explanation of disagreement with audit finding: Management concurs with the auditor’s recommendations. Action taken in response to finding: • Document the audit process in a formalized SOP and cross train all reviewers from SRGA Admin, Budget, and Fiscal. • Create a checklist to accompany each personnel draw to ensure that after rates are verified that SRGA Admin certify that no RPAs or pay adjustments were approved during the pay periods reported and if there were, a second pay rate is entered for that draw and hours are split according to accurate rates/dates. • Document the cure process in the SOP to ensure that any errors found after the fact will be corrected with HUD to remain compliant and to ensure that no funds drawn in error are retained. • Include a date verification process prior to submission of the draw to ensure that staff did not duplicate any dates. This verification will be an audit of the Time Tracking Review completed by Admin staff. Ongoing training and coaching will be administered should duplicate entries be found on final draw reports. • Audit of all personnel draws for both allocations of CDBG-DR grants will be completed using the new SOP and verification tools before the end of FY2026. Name of the contact person responsible for corrective action: Nicole Turner, Director Planned completion date for corrective action plan: The above action plan will be implemented immediately; an audit of all personnel draws will be conducted using new process and checklists by the end of FY2026.

Criteria: The Uniform Guidance requires the City to establish and maintain effective internal control over compliance for federal awards, including controls to reasonably ensure that costs charged to federal programs are allowable, properly supported, and comply with applicable federal requirements and the terms and conditions of the award. Under 2 CFR 200.403, costs charged to a federal award must be allowable, including that they be adequately documented and not be included as a cost or used to meet cost-sharing requirements of any other federally financed program in the current or a prior period. Condition: The City did not have adequately designed and implemented review controls over certain material project costs included in reimbursement requests submitted to the pass through agency. Our testing identified that the city submitted the same eligible project cost for reimbursement under two different federal grant awards, of which one was denied for reimbursement Cause: The City lacked sufficiently designed or effectively operating controls over the preparation, review, and approval of reimbursement requests for federal awards. In particular, the City's controls did not include an effective reconciliation of expenditure detail by invoice, pay application, or other unique transaction identifier across open grant awards before submission of reimbursement requests. Effect: The absence of effective review controls over material project costs increases the risk that ineligible, unsupported, or incorrectly costs could be included in reimbursement requests without timely detection and correction. The duplicate submission was not reimbursed from both federal awards and therefore does not require repayment or adjustment of reimbursement requests. This deficiency is considered a material weakness in internal control over compliance for the Department of Transportation program. Recommendation: We recommend that the City design and implement formal, documented review procedures over material project costs included in reimbursement requests. These procedures should include defined review responsibilities, documentation of the review performed, review of other federal funding reimbursement request, and supervisory oversight to ensure that all high-dollar or complex transactions are reviewed for eligibility, accuracy, and adequate supporting documentation before submission.Management Response: Management acknowledges the finding and will continue to review and controls to ensure all costs included in reimbursement requests are allowable.

2025-002. Allowable Costs/Cost Principles – (Excess Reimbursement Due to Inaccurate Final Expenditure Reporting) United States of Department of Education, Passed Through New York State, Department of Education: COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D Pass-through Entity Number: 5891-21-1490 COVID-19: American Rescue Plan - Elementary and Secondary School Emergency Relief ALN: 84.425U Pass-through Entity Number: 5880-21-1490 COVID-19: American Rescue Plan - Elementary and Secondary School Emergency Relief ALN: 84.425U Pass-through Entity Number: 5884-21-1490 Condition: The District submitted Form FS-10F final expenditure reports that included amounts for open encumbrances that were not fully expended after the final reports’ submission; the cumulative expenditures in the District’s accounting records for two of the Education Stabilization Fund (ESF) grants (CRRSA ESSER II, pass-through entity number 5891-21-1490, and ARP ESSER III, pass-through entity number 5880-21-1490) were less than the amounts claimed by the District on the FS-10Fs. The FS-10F for a third ESF grant (ARP SLR Learning Loss, pass-through entity number 5884-21-1490) included a duplicated amount for purchased services that was the result of a duplicated journal entry in the District’s accounting records. As a result, the expenditures reported on the FS-10F final expenditure reports exceeded the actual expenditures incurred and recorded by the District, and the District received reimbursements from the pass-through entity, New York State Education Department (NYSED) for expenditures it did not incur. Recommendation: The District should strengthen its internal controls over grant reporting and reimbursement processes to ensure that expenditures reported on the FS-10F final expenditure reports are accurate, allowable, and fully supported by the accounting records. Journal entries affecting federal grants expenditures The District should perform a comprehensive reconciliation of the FS-10F to the general ledger prior to submission, and again after the grant period ends to confirm all reported amounts were ultimately expended, and establish a formal process to review and clear outstanding encumbrances included in grant reports, ensuring any amounts not realized as expenditures are removed or adjusted. Additionally, the District should develop procedures to identify and track subsequent adjustments, including reclassifications of unallowable costs, and ensure that such changes are timely communicated and corrected with the New York State Education Department, and to require documented supervisory review and approval of all final expenditure reports and their subsequent reconciliations with supporting documentation and final accounting records. Planned Corrective Action: The District will strengthen internal controls over grant reporting to ensure that all expenditures reported on Form FS-10F are accurate, fully expended, and supported by the general ledger. Prior to submission, the District will perform a detailed reconciliation between the FS-10F and accounting records, verifying that only actual expenditures—not open encumbrances—are reported. A post-period reconciliation will also be conducted to confirm that all reported amounts were ultimately realized as expenditures. The District will establish a process to identify and track subsequent adjustments, including reclassifications or corrections, and will promptly communicate any necessary amendments to the New York State Education Department (NYSED). Starting from the next grant final cost submission, effective May 1, 2026, a structured review and approval process will be enforced: the Administrative Assistant responsible for grants will serve as the first-level reviewer during FS-10F preparation, and the Financial Officer will serve as the second-level reviewer prior to final submission. All final reports will require documented supervisory approval and supporting documentation, including actual invoices and purchase order amounts, to ensure accuracy and compliance. Responsible Contact Person: Mr. Idowu K. Ogundipe, CPA Assistant Superintendent for Business Freeport Union Free School District 235 North Ocean Avenue Freeport, New York 11520 Tel: (516) 867-5212 Email: iogundipe@freeportschools.org Anticipated Completion Date: May 1, 2026

Finding 2025-001: Significant Deficiency in Internal Control over Activities Allowed or Unallowed and Allowable Costs/Cost Principles Corrective Actions Taken and Planned: Washington Alliance for Better Schools is reimbursing the passthrough agency for the identified questioned costs, at their direction, and has adjusted the financial statements and schedule of expenditures of federal awards as of and for the year ended August 31, 2025, accordingly. In addition, to prevent future errors, as part of the grant invoicing process, management will implement a formal reconciliation of amounts billed to federal programs to supporting documents for reimbursable costs incurred. Anticipated Completion Date: August 31, 2026 Contact Person: Emily Yim President and CEO 206-393-4918 emilyy@wabsalliance.org

Creek County will work with all offices making sure that a proper invoice is attached on all purchase orders. Educating Offices that there is a difference in a quote verses an invoice. The County Clerk will make sure that there are multiple eyes on the purchase orders to ensure that this is caught before payment is issued.

The Town will implement written procedures requiring the development and maintenance of project‑specific budgets for all federal awards, including FEMA emergency response and recovery projects. Project budgets will be prepared in accordance with approved scopes of work and used to monitor expenditures throughout the life of the award. The Town will provide training to applicable staff on federal grant budgeting requirements and designate responsibility for budget preparation and monitoring.

Legal Services Corporation Grants – Assistance Listing No. 09.706060 Aging Cluster – Special Programs for the Aging, Title III, Part B – Assistance Listing No. 93.044 Recommendation: We recommend that the Organization consider updating its cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations that are calculated in a consistent manner that ensure costs are applied uniformly to respective benefited activities, and that are reflective on employees’ time and effort records. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations. Lastly, the Organization could consider removing LSC from the general fund into its own fund, and using fringe benefit rate and indirect cost rate allocation methods to simplify its cost allocation process. Explanation of Disagreement With Audit Finding: Management partially agrees with this finding. First, 45 CFR Part 1635 codifies the timekeeping requirement. CLS keeps track of every case and time dedicated by staff in strict compliance with this requirement. Manual adjustments primarily result from planned internal reconciliations and reviews designed to ensure the accuracy of CLS allocations. These reconciliations are conducted on a monthly basis and form an integral part of the Organization’s internal control framework. Action Taken in Response to Finding: Additionally, with respect to the Native American grant transactions, CLS implemented the necessary correction to the referenced percentage effective beginning in 2026. Name of the Contact Person Responsible for Corrective Action: Silvia Zelaya, Finance Director Planned Completion Date for Corrective Action Plan: January 2027

In response to the Auditor’s recommendations and as corrective action, the staff responsible or department will locate and document all required reports that were filed in accordance with the grant agreement requirements, including reconciliations with the Municipality’s official accounting subsidiary ledgers. Furthermore, the Municipality will design, document, establish, and provide the necessary training, along with written guidelines and procedures, to all personnel who work directly or indirectly with the management of these federal funds. In addition, the Municipality will implement periodic reviews and monitoring mechanisms to ensure ongoing compliance with reporting requirements and the accuracy of financial information related to federal funds.

We agree with the finding and we will be reviewing and implementing the recommendations accordingly. We are committed to ensuring no duplication of costs across reporting periods and compliance with allocability requirements under Uniform Guidance on a prospective basis. This corrective action plan will be implemented by June 30, 2026.

We agree with the finding and will review and implement the recommendations accordingly. We are committed to ensuring proper application of indirect costs, avoiding duplication of costs across reporting periods, and maintaining compliance with allocability requirements under Uniform Guidance on a prospective basis. This corrective action plan will be implemented by June 30, 2026.

2025-00I Condition: The center did not maintain adequate documentation to support compliance with Federal requirements related to allowable costs, period of performance, and procurement standards. Auditor's Recommendation: We recommend The Center review and revise its documentation policies and procedures to ensure that compliance is met with regards to federal awards. Management response: Management agrees with the finding and has collaborated with grant personnel to implement standardized personnel activity reporting and cost allocation documentation for all federal grants. The Center will strengthen controls to ensure that only allowable costs incurred within the approved grant period are charged to federal awards. In addition, procurement procedures have been revised to ensure compliance with 2 CFR §§ 200.317-200.327. Corrective actions have been implemented or are in progress and apply to all federal awards moving forward beginning in FY2026.

Signing of invoices have been added to our procedures when submitting invoices for payment. The required staff were notified of this addition to the procedures.

Federal Program: U.S. Department of Homeland Security - FEMA Assistance Listing Number: 97.036 - Disaster Grants - Public Assistance Passthrough Entity - Arkansas Department of Emergency Management Program Year: 2025 Management concurs with the finding. Corrective Action Planned: 1. Process Improvement: Management has updated its internal grant reimbursement request process. All future reimbursement requests now require a "Duplicate Payment Verification" step, where the preparer must reconcile the current request against the cumulative total of previous requests to ensure no individual transaction is billed twice. 2. Enhanced Oversight: A secondary review by Julie Haney will now explicitly include a cross-reference of payroll periods to the general ledger to confirm the uniqueness of each request. Anticipated Completion Date: The repayment will be initiated by 05/01/2026, and the updated reconciliation procedures have been implemented as of 03/31/2026. Responsible Official: Julie Haney CFO

Finding: 2025-030 - A review of 17 FY 25 Disaster Grants payments found that 15 payments - (88 percent) lacked adequate supporting documentation. Questioned Costs: Indeterminate Assistance Listing Number: 97.036 Assistance Listing Title: Disaster Grants COVID- 19 Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): DMVA concurs with the finding Corrective Action (corrective action planned to ensure compliance with federal regulations and effective management of federal awards, the Finance Office, in conjunction with the Homeland Security Director, will develop and implement written procedures that provide a clear framework for managing federal awards and ensure compliance with federal regulations. DMVA will: • Clearly outline federal requirements under 2 CFR 200.327, 2 CFR 200.403(g), and Homeland Security Acquisition Regulation Class Deviation 15-01. • Specify the documentation required to support reimbursement requests, including expectations related to discrepancies and follow-up actions. • Outline the procedures for Homeland Security for reviewing and certifying work completed by contractors, where applicable, prior to reimbursement to subrecipients. Completion Date (list anticipated completion date): October 31, 2026 Agency Contact (name of person responsible for corrective action): Bryan Fisher

Finding No. 2025-071 - Deficiencies were identified in the Office of Children’s Services FY25 foster care base rate setting methodology. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): DFCS disagrees with this finding. DFCS evaluated two foster care base rate proposals using the established Hornsby Zeller Methodology. The first option applied the traditional methodology and the second followed the same structure but incorporated Urban West regional expenditure data, which includes Alaska and eleven other western states as well as Hawaii. This change was implemented because Urban West data more accurately reflects Alaska’s high cost of living environment, whereas reliance on national averages has historically produced rates below Alaska’s true cost of care. Both options were reviewed with departmental legal counsel, who were involved in the original settlement, division leadership and the Commissioner’s Office. DFCS advanced the second option, resulting in an approximate 3000 increase to foster care base rate stipends effective July 1,2025. DFCS disagrees with the conclusion that the cost-of-living (inflation) factor should be adjusted to include inflation from 2016 forward. When the 2018 Foster Care Base Rates were established, inflation up to that point was already incorporated into the rate calculation. The current rate-setting process correctly used the 2018 rates as the baseline, which already accounted for prior inflation. Adding inflation from 2016 again would result in double-counting. DFCS disagrees with the conclusion that the rate-setting process did not follow the Hornsby Zeller methodology. The methodology was followed in full. As part of the rate analysis, DFCS applied the national average cost-of-living factor as outlined; however, the resulting amount did not adequately meet the needs of the children under the care and responsibility of the Department. DFCS is fiduciarily required to ensure that rates are sufficient to meet the actual needs of children in out-of-home care, and the national average input did not satisfy that obligation. To ensure the methodology produced accurate and appropriate results, DFCS utilized the Urban West index, an allowable and geographically relevant data source under the methodology. This adjustment did not change the methodology itself it refined the underlying input to better reflect Alaska’s actual cost of living and support the intended purpose of the rate-setting process. Corrective Action (corrective action planned): DFCS will continue to consult with legal counsel regarding any future methodology changes and will follow all guidance provided. Completion Date (list anticipated completion date): DFCS considers this matter resolved. Agency Contact (name of person responsible for corrective action): Nancy Miller, Finance Officer