Corrective Action Plans

Corrective action plan: The current application lacks a notification feature for discrepancies between the requested and approved payment amounts. A software enhancement is expected to be implemented by April 30th, 2025, that will display a warning message if the requested and approved amounts do not match, prompting an additional review. During the developer review, the Grant Manager Lead will maintain a spreadsheet highlighting mismatched data, stored in the AVN Grant drive for reference. TxDOT AVN Grant Managers will be trained on this process, with updated instructions. Once the software is updated, further training and procedure updates will follow. Implementation dates: June 1, 2025 Responsible persons: Michelle Burcham, Grants & Admin Section Director, Allison Martin, Grant Manager Lead, Cassandra Moore, Grant Managers

Corrective action plan: Social Services Block Grant (SSBG) Actions Taken: HHSC Fund Management worked with Chief Financial Officer (CFO) Operations Support to develop a query to identify journal transactions that post in the CAPPS Financials General Ledger module prior to the start date of the project. This query has been run monthly since May 2024, and it was fully implemented as of August 31, 2024. Planned: Additional training on the review process for Accounting and Budget staff, and revisions to the process to emphasize meeting deadlines while new federal grants and old federal grant close out transactions occur. An expenditure transfer voucher (ETV) to correct reconciliation issue will be completed by CFO Budget staff. Block Grants for Community Mental Health Services (MHBG) Actions Taken: HHSC Fund Management will run the monthly query and take corrective action on any resulting journals prior to the close of the fiscal year. In addition, HHSC Fund Management/Cash Management does not draw federal funds past the liquidation date. These dates are denoted in their draw ledgers. Cash Management also sends a semi_x0002_monthly email during the fiscal year and a weekly email from mid-June through the end of July to HHSC Budget identifying transactions by fund source that should be cleared from the draw down report prior to the close of the fiscal year. HHSC Cash Management will continue to send the draw down clean up report and start the weekly emails the first week of June. HHSC Budget will complete any ETVs resulting from the draw down clean up report to HHSC Fund Management General Ledger for processing by July 15 to ensure the draw down accurately reflects federal expenditures for the SEFA population. Planned: Budget Management will revise the coordination process with Behavioral Health Services program financial staff administering MHBG to prioritize addressing encumbered balances on expiring block grant years at the beginning of the liquidation period and set deadlines for Program input on required financial adjustments to ensure sufficient time for processing. ETV to correct reconciliation issue will be completed. Implementation dates: February 28, 2025 Responsible persons: SSBG: Heather Nevill, Fund Management Director, Fund Accounting Raymond Jasik, Budget Director, CFO Budget Heather Anderson, Budget Manager, CFO Budget MHBG: Marcie Ochoa-Gamez, Budget Manager, Budget Management

FINDING 2024-003 Finding Subject: Special Education Cluster (IDEA) - Earmarking Contact Person Responsible for Corrective Action: Robert Glover Jr. Contact Phone Number: (219) 945-0250 Contact Email Address: rglover@hobart.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: As a member of the Northwest Indiana Special Education Cooperative (NISEC), School City of Hobart reported their proportionate share based on a percentage of expenditures and have had successful audits in doing so. When Hobart was notified that this process was no longer acceptable, we immediately implemented an internal control process with NISEC which included detailed reporting of staff work hours for nonpublic schools related to only our school corporation. The report is then reviewed and signed by the NISEC staff working for the nonpublic school and their supervisor. The employee detailed time and effort report is then provided to the NISEC finance department for a second review and signature before being provided to payroll. NISEC payroll then charges the proportionate share to the IDEA Part B grant in the payroll system bi-weekly based on the time and effort report pertinent to just School City of Hobart Non-public schools. The time and effort reports are then used to submit the reimbursement request to the Department of Education for Hobart’s proportionate share. Anticipated Completion Date: 4/30/2025

Views of Responsible Officials and Planned Corrective Action: Moving forward the Department will require recipients to provide a list of invoices with the invoice date, period of performance, invoice amount and amount requested/disbursed from ARPA and/or other funding sources to be included with each disbursement request. Staff training will be modified to ensure staff understand allowable expenditures and period of performance restrictions. Anticipated Completion Date: June 30, 2025 Contact Person: Debby Dickson Water Development Division Manager Arkansas Department of Agriculture-Natural Resources Division 1 Natural Resources Drive Little Rock, AR 72205 (501) 225-1598 Debra.Dickson@agriculture.arkansas.gov

Views of Responsible Officials and Planned Corrective Action: ASBO will work with our 3rd party program administrator to re-emphasize the importance of verifying the expenses for adequate supporting documentation and allowability. We will discuss the possibility of a repeat training with all federal grant subrecipients. Anticipated Completion Date: August 1, 2025 Contact Person: Glen Howie, Jr. Director, Ark State Broadband Office Department of Commerce 1 Commerce Way Little Rock, AR 72202 (501) 682-1123 Glen.Howie@Arkansas.gov

Program: AL 21.027 – COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – Allowability   Corrective Action Plan: DHHS has implemented a process to obtain signed legal affidavits from all recipients attesting to using the employee retention and recruitment funds in accordance with state and federal law. Additionally, the department subsequently requested and received supporting documentation of expenditures from all samples selected by the APA, supporting allowable use of the funds distributed. The Department will request documentation of expenditures for SFY25 payments made under this program for a sample of recipients for final payments received as part of LB1014 in SFY25. The State Fair Board contract with NDEE is ongoing and the change in the calculated tourism loss amount will result in tourism loss section and Clean Water (all other) section contractual revisions (offsetting adjustments). No additional impact or follow up action noted. Contact: Philip Olsen Anticipated Completion Date: January 31, 2025

Program: AL 20.509 – Formula Grants for Rural Areas – Allowability & Subrecipient Monitoring Corrective Action Plan: • NDOT will continue to enhance its financial review procedures to ensure that all subrecipients provide adequate supporting documentation for expenditures, including personnel charges and cost allocations. • Training sessions will continue to be conducted for subrecipients to reinforce compliance requirements related to allowable costs, proper documentation, and cost allocation methods. • Revised internal procedures will clarify expectations for travel costs, fuel charges, personnel reimbursements, and revenue reporting to prevent improper charges to the grant. • Assigning audit staff to conduct periodic sampling throughout the year enhances our ability to ensure costs are properly supported, adapt to necessary changes, and effectively communicate updates to our subrecipients. Contact: Jodi Gibson Anticipated Completion Date: NDOT appreciates the audit’s recommendations and remains committed to ensuring compliance with Federal requirements through strengthened internal controls and enhanced subrecipient oversight. This will be an ongoing and continual effort to address anticipated compliance requirements and evolving state and federal regulations.

Program: AL 15.611 – Wildlife Restoration and Basic Hunter Education and Safety – Allowability & Subrecipient Monitoring Corrective Action Plan: NGPC will continue to work closely with our subrecipients. We will review subrecipient monitoring procedures and determine documentation that can be provided to meet the intent of federal regulations. Contact: Eli Kass Anticipated Completion Date: July 1, 2025

Program: Various, including AL 93.778 – Medical Assistance Program (Medicaid) – Allowable Costs/Cost Principles Corrective Action Plan: OCIO - To resolve the identified overcharge and reduce the Internal Service Fund Balance, OCIO conducted an 8 month no-bill period from December 2023 through June 2024. During this time OCIO customer agencies would have seen a significant reduction in charges and OCIO’s fund balance significantly decreased. In addition, a full and thorough review of all OCIO rates was conducted. This review resulted in the decrease in any mainframe related rates by 30% from the previous years (State FY2021 and FY2022). DAS Materiel – The Print Shop will have the new rates developed and effective July 1, 2025, the beginning of the new biennium. Contact: OCIO - Noah Finlan; Materiel, Print Shop, Internal Service – Ann Martinez. Anticipated Completion Date: OCIO - Corrective action has already been taken and the fund balance is currently below the allowable threshold permitted. As of September 30, 2024, the fund balance was approximately $10 million dollars. Rates have been adjusted to be more in line with actual expenditures for FY2025. Print Shop – July 1, 2025.

Program: AL 84.126 – Rehabilitation Services Vocational Rehabilitation Grants to States – Period of Performance Corrective Action Plan: A validation will be added into the case management system (QE2) that prevents an obligation from being created in a federal fiscal year with a service start date in a previous federal fiscal year. Contact: Cathy Callaway Anticipated Completion Date: April 1, 2025

Program: AL 84.048 – Career and Technical Education – Basic Grants to States – Allowability Corrective Action Plan: The Nebraska Department of Education’s Office of Career, Technical, and Adult Education will carry out the following actions to improve procedures to ensure that all payments are supported by adequate documentation: Provide ongoing technical assistance to subrecipients and NDE staff to ensure they are familiar with and fully informed on the documentation necessary to process reimbursement for all types of expenditures. Ensure all subrecipients have a stipend policy in writing. Conduct regular desk audits to ensure subrecipients are adhering to all applicable state and federal laws and regulations. Contact: Katie Graham, Sydney Kobza, Teri Sloup Anticipated Completion Date: June 2025

Program: AL 93.778 - Medical Assistance Program; AL 93.959 - Block Grants for Prevention and Treatment of Substance Abuse; AL 93.767 - Children’s Health Insurance Program; AL 93.575 – Child Care and Development Block Grant; AL 10.561 – State Administrative Matching Grants for the Supplemental Nutrition Assistance Program – Allowable Costs/Cost Principles Corrective Action Plan: The entire payroll process is being reviewed and changes will be made. Contact: Heather Arnold Anticipated Completion Date: 12/30/2025

Program: AL 93.558 – Temporary Assistance for Needy Families; AL 93.563 – Child Support Services; AL 93.566 – Refugee and Entrant Assistance; AL 93.568 – Low Income Home Energy Assistance (LIHEAP); AL 93.575 – Child Care and Development Block Grant; AL 93.658 – Foster Care Title IV-E; AL 93.659 – Adoption Assistance; AL 93.667 – Social Services Block Grant; AL 93.767 – Children’s Health Insurance Program; AL 93.778 – Medical Assistance Program; AL 10.561 – State Administrative Matching Grants for the Supplemental Nutrition Assistance Program – Allowable Costs/Cost Principles Corrective Action Plan: Time and Effort: Agency has submitted retroactive PACAP amendment (complete). For the IST Fiscal Projects Admin cost center, a time study will no longer be utilized, and the hours will be treated as General IST Administration without direct grant allocations. RMTS Allocations: Agency has clarified with staff what the “Non-DHHS Activities” selection pertains to (complete). Labor Hours Statistics: This was the first audit cycle of the new Cost Allocation system. DHHS will create a checklist of items for the new system that will be reviewed prior to completion of the quarterly cost allocation compilation. This checklist will address specific issues presented during this audit cycle. Recipient Counts: This was the first audit cycle of the new Cost Allocation system. DHHS will create a checklist of items for the new system that will be reviewed prior to completion of the quarterly cost allocation compilation. This checklist will address specific issues presented during this audit cycle. Contact: Patrick Werner Anticipated Completion Date: 6/30/2025

Program: AL 93.558 – Temporary Assistance for Needy Families; AL 93.566 – Refugee and Entrant Assistance; AL 93.568 – Low Income Home Energy Assistance (LIHEAP); AL 93.575 – Child Care and Development Block Grant; AL 93.658 – Foster Care Title IV-E; AL 93.659 – Adoption Assistance; AL 93.667 – Social Services Block Grant; AL 93.778 – Medical Assistance Program; AL 10.561 – State Administrative Matching Grants for the Supplemental Nutrition Assistance Program – Allowable Costs/Cost Principles Corrective Action Plan: This was the first audit cycle of the new Cost Allocation system. DHHS will create a checklist of items for the new system that will be reviewed prior to completion of the quarterly cost allocation compilation. This checklist will address specific issues presented during this audit cycle. Contact: Patrick Werner Anticipated Completion Date: 6/30/2025

On or before June 30, 2025, PEBC will implement controls that properly support the distribution of student educator teststipends in accordance with the Uniform Guidance. Controls shall include: • Standardized Documentation: Finance & Accounting Department will work with the Residency Department to develop and maintain a clear inventory of required documents for each stipend award. • Resident File Management: Residency Department will establish a consistent and complete portfolio of documents for each student educator, including applications, agreements, award letters, diligence documents, and relevant correspondence. • Manager Review & Approval: Residency managers will review and attest to the completeness of each Resident File with documented approvals. • Disbursement Authorization: Finance & Accounting Department will work with the Residency Department to implement a formalized process to formalize and document requests to the Finance and Accounting Department for fund disbursement, including documentation of Residency Department manager approval. • Monthly Reconciliation: Finance & Accounting Department and Residency Department will conduct monthly reconciliations of all stipend disbursements to ensure accuracy and completeness. • Independent Oversight: Require approval of monthly reconciliations by an authorized manager who is not responsible for either approving, processing, or reconciling disbursements, or any combination thereof.

FINDING 2024-007 Finding Subject: Covid-19-Education Stabilization Fund-Allowable Costs/Cost Principles Summary of Finding: This finding claims federal awards were not in compliance with the terms and conditions as well as the allowable cost compliance requirements. Additionally, the School corporation did not properly implement a process to identify and assess internal and external risks, or monitor internal control activities to ensure they were operating effectively. Contact Person Responsible for Corrective Action: Melissa Embry Contact Phone Number and Email Address: 812-547-2637 melissa.embry@cannelton.k12.in.us Views of Responsible Officials: We concur with the finding. The reason we spent the money the way we did is because the IDOE approved our budget. We spent exactly as it was approved not knowing that we could not spend it on items or services that were being paid for prior to the grant’s application. If it was not supposed to be spent this way, then IDOE should have never approved it. To prevent noncompliance going forward, the school’s grant administrator will review disbursements of the program to ensure they were not spent on items or services that were in place prior to the grant’s application. Description of Corrective Action Plan: To prevent noncompliance going forward, the school’s grant administrator will review disbursements of the program to ensure they were not spent on items or services that were in place prior to the grant’s application. Cannelton management will establish a proper system of internal controls including policies and procedures related to risk assessment and monitoring activities within the federal program. Anticipated Completion Date: The noncompliance will be addressed immediately. The additional controls will be implemented by August 2025.

FINDING 2024-004 Finding Subject: Child Nutrition Cluster-Activities Allowed or Unallowed, Allowable Costs/Cost Principles Summary of Finding: Payments made based on statements or no supporting documentation. The School corporation did not properly implement a process to identify and assess internal and external risks, or monitor internal control activities to ensure they were operating effectively. Contact Person Responsible for Corrective Action: Melissa Embry Contact Phone Number and Email Address: 812-547-2637 melissa.embry@cannelton.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Invoices are already being given to the Corporation Treasurer monthly and are being attached to each Accounts Payable Voucher to show exactly what is being paid for. Cannelton management will establish a proper system of internal controls including policies and procedures related to risk assessment and monitoring activities within the federal program. Anticipated Completion Date: The noncompliance was corrected as of January 2025. The additional controls will be implemented by August 2025.

FINDING 2024-001 Finding Subject: Special Education Cluster (IDEA) - Earmarking Contact Person Responsible for Corrective Action: Lynn A. Kwilasz Contact Phone Number and Email Address: 219.983.3604; lkwilasz@duneland.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: School corporation personnel will work with PCES Cooperative personnel to appropriately review the PCES processes and procedures that have been established by PCES to ensure that the required level of expenditures for non-public school students with disabilities is tracked and met for the school corporation. Anticipated Completion Date: June 30, 2025

FINDING 2024-003 Finding Subject: Special Education Cluster (IDEA) - Earmarking Contact Person Responsible for Corrective Action: Andrea Phillips, Director of Finance Contact Phone Number and Email Address: (812) 663-4774 aphillips@greensburg.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: At the end of each nine week grading period employees will turn in actual hours worked with non-pub students to the Director of Special Education. The Director of Special Education will verify the actual hours worked with non-pub students, sign off, and then submit the information to the Director of Finance. The Director of Finance will then reconcile actual hours worked to budgeted hours estimated and make any adjustments necessary in the accounting software. Anticipated Completion Date: By April 30, 2025, the Director of Finance should be able to reconcile the 2024-2025 IDEA grants for the 2024-2025 school year thus far.

Department of Health and Human Services Response/Corrective Action Plan The Department of Health and Human services agrees with the recommendation. WIC special formula distribution costs from August 2022 were invoiced in January 2023, exceeding the 120-day closeout period for the FFY22 grant. HHS has addressed the issue with the vendor and will follow up to ensure future invoices are received promptly and aligned with the correct fiscal year. Contact Person: Karol Riedman, Assistant CFO Anticipated Completion Date: August 28, 2024

3.1.Ensure that the inventory expenses charged to the federal program are allowable within the period of performance. Responsible Official: Head of Operations, Supply Chain Managers, DRD Operations, SCM RTAs, Completion Date: September 30, 2025

2.1 Ensure timely reconciliation of inventory distributions in order to record the transactions in the correct accounting period. Responsible Official: Head of Operations, Supply Chain Managers, DRD Operations, SCM RTAs, Completion Date: September 30, 2025

FINDING 2024-003 Finding Subject: Child Nutrition Cluster – Activities Allowed or Unallowed, Allowable Costs/Cost Principles Summary of Finding: Material Weakness, Modified Opinion Contact Person Responsible for Corrective Action: Linda Zaborowski, CFO Contact Phone Number and Email Address: (219) 881-5536 lzaborowski@garycsc.k12.in.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: Gary Community School Corporation is committed to strengthening internal controls to ensure compliance with federal regulations governing the Child Nutrition Cluster programs. To address the deficiencies identified in the audit, we will implement a structured system for reviewing and approving all financial transactions related to the food service program. Moving forward, all invoices submitted by the Food Service Management Company (FSMC) will require detailed supporting documentation before payment is processed. The Food Service Director will conduct thorough reviews to verify the accuracy and allowability of costs, ensuring that only eligible expenses are charged to the program. Additionally, a standardized checklist will be developed to confirm compliance with federal cost principles. To address payroll-related deficiencies, all employees whose salaries are funded by the Child Nutrition Cluster will be required to maintain detailed time and effort records that document their work on federal and non-federal activities. The Payroll Department will not process payments from federal funds without proper documentation, and approval from the CFO/Food Service Director. To prevent future occurrences of questioned costs, the Business Office Coordinator will carefully review all FSMC invoices to verify that adequate documentation is provided, and any unallowable costs, including sales tax, are identified and excluded before payment is made. Moving forward, internal procedures will include a detailed verification process to ensure that only allowable costs are charged to the program. Anticipated Completion Date: Gary Community School Corporation will implement this procedure by July 2025.

Action Taken: We have taken several steps to prevent this sort of error in the future:We immediately reviewed this error with the office in question and made sure they understood the correct process of capitalizing prepaid expenses and expensing each month  This is a transaction that was made in error, guidance for handling prepaid expenses already exists. We reviewed this existing guidance around the correct way to handle prepaid expenses with relevant finance staff.  At the end of each fiscal year offices will be required to complete a full check with finance signoff for prepaid expenses and agree that everything that is prepaid has been communicated to finance.  There is an existing process for grant closeout that provides additional review of expenses that would detect this sort of expense and ensure it is recorded correctly, however, in this instance it was a multi-year grant and so the grant was not closed out and fiscal year end.  As this is a multi-year grant, we corrected this error in FY25 and returned the funds to the grantor for the expense that had not yet been incurred.

Auditor’s Recommendation: The Auditor recommends that the procurement policy be updated to comply with all relevant federal procurement requirements and reviewed for necessary revisions regularly and retain backup documentation to support amounts charged to grant. Views of Responsible Officials and Planned Corrective Action: Purchasing has updated policy to reflect Federal Guidelines. In addition, the determination has been made to self-certify allowing the University to more closely align requirements from the State of New Mexico with Federal purchasing. Furthermore, additional training within the Purchasing Department has and will continue to be provided for staff to have the tools to identify all circumstances that require additional compliance. The update of Policy was completed in June 2024. Self-Certification was documented in October 2024. Training is ongoing but initial will be completed January 2025. Timeline and Estimated Completion Date: January 2025 Responsible Party: Director of Purchasing