Corrective Action Plans

Research and Development – Assistance Listing No. Various Recommendation: We recommend the University review its current procedures to ensure non-federal costs are not being allocated to federal fund codes. Also, the University should process retro-active cost transfers or payroll adjustments to ensure that no teaching salaries are coded to USDA grant funds. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Langston is strengthening budgeting and payroll assignments to properly use appropriate cost codes to categorize types of payroll classification. Redistribution of expenditures between the payroll cost code categories within the appropriate project fund are in process. Name(s) of the contact person(s) responsible for corrective action: Mr. Robert Dixon, Director, Grants and Contracts Fiscal Administration, Oklahoma State University. Planned completion date for corrective action plan: June 2024

Criteria: CFR 200.403 states “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented.” Condition: In testing, the Agency was not able to provide support for 2 of 80 expenditure transactions reviewed. Corrective Action Plan: Agency personnel will implement internal controls to ensure all supporting documentation is filed properly and accessible when needed. Responsible Individual: Jessica Backs, Executive Director Implementation Date: Immediately

We agree that the allocation being performed once annually does not create the most equitable allocation of costs between our individual programs. We will perform our indirect cost allocations more periodically during the course of the fiscal year to ensure that more appropriate times studies and applicable participant hours are being utilized to limit the potential of allocating unrelated indirect costs from the year to individual programs, including the federally funded programs.

2023-003 – Allowable Costs/Cost Principles Corrective action plan: Management implemented a process to evaluate time spent each month. That allocation is used to classify actual salary paid to particular federal awards on a pay period basis. Personnel responsible for corrective action: Timothy Jodway, Interim Chief Financial Officer; Peg Clark, Grant Accountant; Reyann James, Senior Accountant. Estimated corrective action completion date: May 2024

Finding number: 2023-012 Federal agency: U.S. Department of Treasury Programs: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance listing #: 21.027 Award year: 2023 Compliance requirement: Allowable Costs Corrective Action Plan: College Unbound has increased its administrative capacity and has implemented internal controls to properly track, account for and report on grant expenditures. CU hired the Vice President for Student and Institutional Sustainability in 2023 and subsequently a Controller and Bursar were hired in October 2023 to support the growing needs of the college. The Chief Development Officer, Program Staff and the Financial Team including the VP, Bursar, Financial Aid, and Controller have developed routines and procedures to ensure we are using grant funds as intended and have proper documentation. We are in the process of developing procurement protocols to align with federal grant expectations. Timeline for Implementation of Corrective Action Plan: Currently updating procedures to ensure compliance for FY25. Contact Person: Diana Perdomo, Vice President for Institutional and Student Sustainability/CFO

Finding 2023-002: Overdrawn Federal Funding Condition The auditors identified duplicated federal award expenditures amounting to $380,644, resulting in overdrawn federal funds by $380,644. The excess cash on hand was not returned to the funding source in a timely manner. Correction action: NACDD has experienced drastic change in size over the past 3-4 years. Current policies and procedures have not been adequate for the size and volume of the transactions experienced in FY 23. In addition, there has been significant finance/accounting staff turnover including leadership of the Finance team. +The impact of this deficiency was isolated to one cooperative agreement which closed out as of 9.30.23. NACDD performed efficient and effective subsequent disbursement procedures after year end to ensure that expenses for this grant and others were recorded in the appropriate fiscal year. In the process of preparing the FFR and researching further additional expenditures related to this grant, expenses included in the initial subsequent disbursement adjustments, related to this grant were duplicated. +The Correction action plan includes previously implemented augmentation of the Finance staff. Since the end of the FY 23 fiscal year, the finance department has been fully staffed with knowledgeable accounting professionals, many who have financial federal grant experience. There is now a financial analyst on staff whose main responsibility is to reconcile and record federal grant expenditures and receivables. This process is done monthly. We believe that this additional procedure will eliminate the recurrence of this and any other like issues. Procedures related to the weekly PMS drawdown have been expanded to include reconciling the accounts receivable by grant with the PMS accounts to allow only amounts listed in PMS which are supported with appropriate expenditures to be drawn. +Implementation of corrective measures: The above expanded procedures and oversight have been in effect for most of the FY 24 fiscal year. PMS drawdowns are now done weekly with worksheets that tie in detail to the weekly expenditures. In addition, a control checklist will be created and utilized by the Finance staff leadership to monitor and document the successful implementation of corrective measures. + Additional over-arching controls – The Finance team will execute an interim audit process inhouse as of 6.30.24 and every year going forward to further identify errors and irregularities that may exist. If necessary, additional policies and procedures will be implemented to provide greater scope and assurance in preventing financial reporting errors. Responsible Person Trish H. Strong, CFO Anticipated completion date June 30, 2024

METRO's Grant Programs Administration Division will review and implement changes, as necessary, to established policies and procedures regarding expense transactions to be charged to a grant and reimbursed by the granting agency. Emphasis will be placed on reimbursements for prior year costs not typically subject to detailed allowability assessments in accordance with federal requirements. Any change to processes and controls will be in accordance with cost principles criteria (i.e., allowable, allocable, reasonable, and necessary) as per Title 2 CFR 200.403 (a) and (b). This effort will be completed by Philip Brenner, Deputy CFO, before September 30, 2024.

The Department of Behavioral Health (DBH) concurs with the finding. The Accounting Supervisor will require additional documentation upon the presentation of requests for reimbursement for all federal grants prior to submitting the request in the federal system. The accountant will be required to submit supporting documentation reflecting the summary and detailed personal and non-personal service expenditures. Contact - Adran Reid, DBH Agency Fiscal Officer Estimated Completion Date - July 1, 2024 See Corrective Action Plan for chart/table

American Diabetes Association (ADA) is committed to ensuring the appropriate documentation is in place to adhere to federal regulations regarding activities allowed or unallowed and allowable costs. In response to the audit finding, ADA is taking the following corrective actions to address the audit recommendations: 1) Financial Services will communicate annual reminders of the existing policy relating toweekly completion and manager review of time records to all ADA team members. 2) Federal grant program management will perform weekly monitoring of all time recordsapplicable to federal awards to ensure that time is reviewed and approved by a manager with knowledge of staff activities so that ADA conforms to federal regulations regardingactivities allowed or unallowed and allowable costs. 3) Financial Services will execute a reimbursement request only once all time is reviewed and approved by a manager with knowledge of staff activities.

Findings Related to the Financial Statements Reported in Accordance with Government Auditing Standards None Findings Related to Federal Awards 2023-001 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Homeland Security: Passed through the State of New Jersey, Department of Law and Public Safety Program Titles and Assistance Listing Numbers (ALN): Disaster Grants – Public Assistance (Presidentially Declared Disasters) – ALN 97.036 Federal Grant Numbers: State of New Jersey pass-through number: UH1WX, Project Worksheet #1822 – Award Year 2023 (Application 553330) Contact Person: Donna Wilser, Deputy Executive Director, 732-750-5300 Corrective Action: Management agrees with the finding. We are committed to strengthening our processes to ensure that all physical timesheets related to FEMA-declared disaster events are properly maintained and readily accessible. To achieve this, we will implement enhanced procedures and controls to ensure full compliance with the Uniform Guidance requirements. Anticipated Completion Date: December 1st, 2024

Activities Allowed and Unallowed / Allowable Costs and Cost Principles Please reference Finding 2023-002 for new procedures implemented during fiscal 2024 to ensure that payroll costs are allocated properly. In reference to the non-payroll costs, the finding arose because the Center’s participant database did not store an audit trail of the on-line approvals once the award was processed. In the current fiscal year, the Center’s software consultant worked with our software provider to update our participant database to include an audit feature which provides the full approval history for awards that are completed. Reporting The FFATA report was filed in fiscal 2024. Procedures were modified to ensure that necessary information is requested from Center subaward recipients to assist in preparing the FFATA reports. Furthermore, the subaward agreement template was revised to make reference to the need for filing FFATA reports. Subrecipient Monitoring Management has revised procedures to ensure that the subaward recipients are notified of the federal assistance listing number. In addition, Finance staff have been reminded of the necessity to communicate the assistance number to our subaward recipients.

Activities Allowed and Unallowed / Allowable Costs and Cost Principles New payroll allocation procedures were implemented during fiscal 2023 in an effort to streamline the allocation process. Starting in fiscal 2024, management has reverted to the fiscal 2022 payroll allocation procedures to ensure that the proper percentages are used in calculating charges to our contracts and grants. The procedures used in fiscal 2022 and prior resulted in clean audit opinions and can be trusted to allocate payroll properly. The allocation errors noted during the audit were corrected in the subsequent fiscal year.

2023-003 – Period of Performance Recommendation: We recommend that PPS enhance its procedures and internal controls to ensure that expenditures are not charged to federal awards during the period of performance. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Office of Special Education and Related services and the Portsmouth Finance department will monitor expenditures on an ongoing basis to ensure the funds are spent in accordance with the period of performance of the grant. The Finance department will review all purchases and notify the Office of Special Education if purchases are unallowable and do not follow the period of performance and have alternate suggestions on how the purchase can be made. Name(s) of the contact person(s) responsible for corrective action: Pamela Battle-Hardy, Director of Special Education and Related Services Planned completion date for corrective action plan: January 1, 2025

Reference Finding Number: 2023-001 Eligibility and Allowable Costs To Whom It May Concern, This letter is in reference to the 2023 audit conducted by Capin Crouse on Harmony Community Development Corporation (Harmony CDC). Please find below the corrective action plan devised by Harmony CDC management to address the findings in the audit: The (SOP) standard operating procedure will be revised to ensure client documentation is being stored in more than one place. There will be a process to backup all files on an external drive. This will serve as a secondary storage place. Currently client documentation is stored in the housing portal and on the shared drive in the organization. In addition, a required documentation checklist will be maintained and verified for each client. A policy will be developed to complete quarterly internal audit reviews and evaluate 10-15% of the client case files. Staff will conduct ongoing peer reviews of the client files. When a staff member is on a Leave of Absence, the employee’s network access will be revoked during the time off. If a staff member is on a disciplinary action plan, the employee’s network access will be monitored. Mandatory compliance & ethical training will be completed by all employees. All employees will review and sign employee handbooks, conflict of interest and code ethics. Person Responsible for Corrective Action Plan: Mark Porter, Executive Director Anticipated Date of Completion: May 1, 2024 and ongoing internal audits quarterly

Planned Corrective Action: To ensure grant funds are not utilized prior to final approval, grant application documents will be submitted to DESE by August 15th to ensure approval is given prior to costs being incurred. Additionally, we will identify alternative funding sources in the event grant approval is delayed and costs must be incurred.

The Agency will no longer hold assets in an advisory investment account but transfer assets to a qualified bank for low-risk savings, money market, or certificate of deposit account where no advisory fees are charged. The Agency will no longer sponsor employee meals but utilize federal awards according to HHSS expenditure guidelines.

Finding 2023-001 Corrective Action Plan: The Organization will implement accounting policies and procedures to ensure expenditure approvals are formally documented. Subsequent to year-end, the Organization has already implemented a new credit card system to help automate and track the approval process. Name of Responsible Person: Laura Minzenberg Anticipated Completion Date: May 2024 04/02/2024 Date

Education Stabilization Fund – Assistance Listing No. 84.425 Recommendation: CLA recommends the School ensures it documents the underlying support for how allowable payroll expenditures were charged to the program along with approval of that determination. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned in response to finding: The School will ensure as they allocate wages to federal programs going forward they will specifically identify the underlying disbursements and document their approval of that allocation. Name of the contact person responsible for corrective action: Abdi Shekh Planned completion date for corrective action plan: June 30, 2024.

Finding 2023-003: 2023-003 - Significant Deficiency in Internal Control over Compliance and Noncompliance – Allowable Costs/Cost Principles Contact: Michael Bailey, Chief Financial Officer Corrective Action Plan: The Accounting department at Alaska Behavioral Health has stabilized staffing in accounting personnel, including the replacement of the Chief Financial Officer. Prior to submission of financial reports, the CFO will review and verify that personnel related expenditures are supported by payroll allocation records, and other direct expenditures have adequate documentation associated with the allowable expenditure. Proposed Completion Date: 06/30/2024

2023-002 Significant Deficiency in Internal Control over Compliance, Other Matters Recommendation: We recommend the County establish internal control procedures to ensure that all amounts charged to grant programs for employee payroll costs be reconciled to the specific employee payroll records and that supporting documentation be maintained throughout the grant award period and beyond. Views of responsible officials: Management concurs with the finding. There were minimal variances in the number of employees tested and the County believes the wage report discrepancies are isolated due to the complexity of the EMS salary structure. The County claimed $26,038,852 of the $37,618,256 total eligible expenses available. Action planned/taken in response to finding: Effective fiscal year 2024, Management will implement the following corrective action: The County will create a process to ensure the payroll wage reports generated by Human Resources agrees to support documentation. Name of the contact person responsible for corrective action plan: Pete Winton Planned completion date for corrective action plan: The above action plan will be implemented in fiscal year 2024.

Recommendation: Transactions should be recorded in accordance with GAAP with a review and approval for financial reporting as well as for compliance with allowability requirements. Training on cost principles per the Uniform Guidance should be provided to the finance department and program managers. Ac􀆟on Taken: This transaction happened early on when the WIG grant was first awarded. Soon after, it was apparent this had been done incorrectly. The current Finance staff has attended a two-day Uniform Guidance training course and continues to read and review 2 CFR 200 regularly. If a transaction is in question, we reach out to auditors/consulting team. The corrective action planned is continual training on Uniform Guidance and the addition of a Compliance Director to our team. The contact person responsible for the corrective action is Wendi Speed, CFO. The anticipated completion date is June 30, 2025.

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with financial reporting requirements for the Child Care and Development Fund Cluster. Questioned Costs: Assistance Listing # 93.575 93.575 COVID-19 93.596 Status: Corrective action in progress Corrective Action: The Child Care and Development Fund (CCDF) program was previously managed by the Department of Social and Health Services and the Department of Early Learning. Since the program transitioned in 2019, the Department has been making efforts to strengthen internal controls over payments to child care providers and other CCDF grant requirements. The Department implemented grant-level management of all federal funds, including the CCDF grant. The Department allocated the CCDF grant to eligible clients and allowable activities in compliance with 45 CFR 98.67. As part of the audit resolution process, the Department of Health and Human Services (HHS), Administration for Children & Families (ACF), which oversees the CCDF program at the federal level, reviews all State Auditor’s Office (SAO) findings and issues management decision letters. The Department received a management decision letter dated October 3, 2023, from HHS for finding 2021-033 (2020-038) which states: “The ACF noted that the auditor raised concern about the Department’s accounting procedures and efforts made to trace expenditures at the transaction-level. As the basis for the finding, the auditor used CFRs (200.53, 200.303, 200.403, 200.410) that do not apply to CCDF. Federal regulations allow Lead Agencies to expend and account for CCDF funds in accordance with their own procedures.” In addition, ACF did not sustain the disallowance of questioned costs and stated: “Although the Department’s internal controls were lacking, the ACF has not identified any funds that were expended on ineligible activities.” The ACF recommended: “…that the Department work with the auditors to determine an appropriate methodology that can be tested to ensure child care payments comply with Federal regulations.” The Department met with ACF and SAO on November 8, 2023, to discuss the ACF decision at which time ACF upheld the above statements that the activities allowed finding was not substantiated. The Department is committed to collaborating with SAO to determine an appropriate methodology that identifies a sampling unit that can be used to accurately test compliance. The SAO maintained that the program is not auditable without child-level data. The Department does not currently have the staff and resources to develop and maintain the business process redesign, as well as the information technology initiatives necessary to meet the level of assurance recommended by SAO. In response to the auditor’s recommendations, the Department submitted a budget request for the 2024 supplemental budget. Funding was provided to develop and maintain the business process that would allow adjustments to include child-level data beginning July 2024. The conditions noted in this finding were previously reported in findings 2022-044 and 2021-038. Completion Date: Estimated December 2025 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with period of performance requirements for the Child Care and Development Fund Cluster. Questioned Costs: Assistance Listing # 93.575 93.575 COVID-19 93.596 Status: Corrective action in progress Corrective Action: The Child Care and Development Fund (CCDF) program was previously managed by the Department of Social and Health Services and the Department of Early Learning. Since the program transitioned in 2019, the Department has been making efforts to strengthen internal controls over payments to child care providers and other CCDF grant requirements. The Department implemented grant-level management of all federal funds, including the CCDF grant. The Department allocated the CCDF grant to eligible clients and allowable activities in compliance with 45 CFR 98.67. As part of the audit resolution process, the Department of Health and Human Services (HHS), Administration for Children & Families (ACF), which oversees the CCDF program at the federal level, reviews all State Auditor’s Office (SAO) findings and issues management decision letters. The Department received a management decision letter dated October 3, 2023, from HHS for finding 2021-033 (2020-038) which states: “The ACF noted that the auditor raised concern about the Department’s accounting procedures and efforts made to trace expenditures at the transaction-level. As the basis for the finding, the auditor used CFRs (200.53, 200.303, 200.403, 200.410) that do not apply to CCDF. Federal regulations allow Lead Agencies to expend and account for CCDF funds in accordance with their own procedures.” In addition, ACF did not sustain the disallowance of questioned costs and stated: “Although the Department’s internal controls were lacking, the ACF has not identified any funds that were expended on ineligible activities.” The ACF recommended: “…that the Department work with the auditors to determine an appropriate methodology that can be tested to ensure child care payments comply with Federal regulations.” The Department met with ACF and SAO on November 8, 2023, to discuss the ACF decision at which time ACF upheld the above statements that the activities allowed finding was not substantiated. The Department is committed to collaborating with SAO to determine an appropriate methodology that identifies a sampling unit that can be used to accurately test compliance. The SAO maintained that the program is not auditable without child-level data. The Department does not currently have the staff and resources to develop and maintain the business process redesign, as well as the information technology initiatives necessary to meet the level of assurance recommended by SAO. In response to the auditor’s recommendations, the Department: • Implemented written procedures for period of performance requirements effective December 6, 2023. • Submitted a budget request for the 2024 supplemental budget. Funding was provided to develop and maintain the business process that would allow adjustments to include child-level data beginning July 2024. The conditions noted in this finding were previously reported in findings 2022-043, 2021-037 and 2020-041. Completion Date: Estimated December 2025 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with matching, level of effort, and earmarking requirements for the Child Care and Development Fund Cluster. Questioned Costs: Assistance Listing # 93.575 93.575 COVID-19 93.596 Amount $0 Status: Corrective action in progress Corrective Action: The Child Care and Development Fund (CCDF) program was previously managed by the Department of Social and Health Services and the Department of Early Learning. Since the program transitioned in 2019, the Department has been making efforts to strengthen internal controls over payments to child care providers and other CCDF grant requirements. The Department implemented grant-level management of all federal funds, including the CCDF grant. The Department allocated the CCDF grant to eligible clients and allowable activities in compliance with 45 CFR 98.67. As part of the audit resolution process, the Department of Health and Human Services (HHS), Administration for Children & Families (ACF), which oversees the CCDF program at the federal level, reviews all State Auditor’s Office (SAO) findings and issues management decision letters. The Department received a management decision letter dated October 3, 2023, from HHS for finding 2021-033 (2020-038) which states: “The ACF noted that the auditor raised concern about the Department’s accounting procedures and efforts made to trace expenditures at the transaction-level. As the basis for the finding, the auditor used CFRs (200.53, 200.303, 200.403, 200.410) that do not apply to CCDF. Federal regulations allow Lead Agencies to expend and account for CCDF funds in accordance with their own procedures.” In addition, ACF did not sustain the disallowance of questioned costs and stated: “Although the Department’s internal controls were lacking, the ACF has not identified any funds that were expended on ineligible activities.” The ACF recommended: “…that the Department work with the auditors to determine an appropriate methodology that can be tested to ensure child care payments comply with Federal regulations.” The Department met with ACF and SAO on November 8, 2023, to discuss the ACF decision at which time ACF upheld the above statements that the activities allowed finding was not substantiated. The Department is committed to collaborating with SAO to determine an appropriate methodology that identifies a sampling unit that can be used to accurately test compliance. The SAO maintained that the program is not auditable without child-level data. The Department does not currently have the staff and resources to develop and maintain the business process redesign, as well as the information technology initiatives necessary to meet the level of assurance recommended by SAO. In response to the auditor’s recommendations, the Department submitted a budget request for the 2024 supplemental budget. Funding was provided to develop and maintain the business process that would allow adjustments to include child-level data beginning July 2024. The conditions noted in this finding were previously reported in findings 2022-042, 2021-036 and 2020-040. Completion Date: Estimated December 2025 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with requirements to ensure payments to child care providers for the Child Care and Development Fund Cluster programs were allowable and properly supported. Questioned Costs: Assistance Listing # 93.575 93.575 COVID-19 93.596 Amount 356,042,172 Status: Corrective action in progress Corrective Action: The Child Care and Development Fund (CCDF) program was previously managed by the Department of Social and Health Services and the Department of Early Learning. Since the program transitioned in 2019, the Department has been making efforts to strengthen internal controls over payments to child care providers and other CCDF grant requirements. The Department implemented grant-level management of all federal funds, including the CCDF grant. The Department allocated the CCDF grant to eligible clients and allowable activities in compliance with 45 CFR 98.67. As part of the audit resolution process, the Department of Health and Human Services (HHS), Administration for Children & Families (ACF), which oversees the CCDF program at the federal level, reviews all State Auditor’s Office (SAO) findings and issues management decision letters. The Department received a management decision letter dated October 3, 2023, from HHS for finding 2021-033 (2020-038) which states: “The ACF noted that the auditor raised concern about the Department’s accounting procedures and efforts made to trace expenditures at the transaction-level. As the basis for the finding, the auditor used CFRs (200.53, 200.303, 200.403, 200.410) that do not apply to CCDF. Federal regulations allow Lead Agencies to expend and account for CCDF funds in accordance with their own procedures.” In addition, ACF did not sustain the disallowance of questioned costs and stated: “Although the Department’s internal controls were lacking, the ACF has not identified any funds that were expended on ineligible activities.” The ACF recommended: “…that the Department work with the auditors to determine an appropriate methodology that can be tested to ensure child care payments comply with Federal regulations.” The Department met with ACF and SAO on November 8, 2023, to discuss the ACF decision at which time ACF upheld the above statements that the activities allowed finding was not substantiated. The Department is committed to collaborating with SAO to determine an appropriate methodology that identifies a sampling unit that can be used to accurately test compliance. The SAO maintained that the program is not auditable without child-level data. The Department does not currently have the staff and resources to develop and maintain the business process redesign, as well as the information technology initiatives necessary to meet the level of assurance recommended by SAO. In response to the auditor’s recommendations, the Department submitted a budget request for the 2024 supplemental budget. Funding was provided to develop and maintain the business process that would allow adjustments to include child-level data beginning July 2024. The conditions noted in this finding were previously reported in findings 2022-041, 2021-033, 2020-038, 2019-035, 2018-034, 2017-024, 2016-021, 2015-023, 2014-023, 2013-016, 12-28, 11-23, 10-31, 9-12 and 8-13. Completion Date: Estimated December 2025 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov