Corrective Action Plans

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

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 paid with Temporary Assistance for Needy Families funds were allowable and property supported. Questioned Costs: Assistance Listing # 93.558 Amount $107,338,725 Status: Corrective action in progress Corrective Action: The Working Connections Child Care (WCCC) program was previously managed by the Department of Social and Health Services (DSHS) 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 grant requirements. The Department implemented grant-level management of all federal funds, including the Temporary Assistance for Needy Families grant. This consisted of making significant grant level adjustments between allowable grant sources to properly spend grant dollars within the allowable period of performance and ensure level of effort and matching requirements were met. The Department’s grant adjustments were processed based on eligible clients and allowable activities. The Department does not currently have the staff to develop and maintain the business process redesign, as well as the information technology initiatives necessary to meet the level of assurance recommended by the State Auditor’s Office. 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 2022-035 and 2021-028. 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 Social and Health Services did not have adequate internal controls over and did not comply with requirements for monitoring subrecipients to ensure payments were allowable, properly supported and met period of performance requirements for the Coronavirus State and Local Fiscal Recovery Funds. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $312,659,850 Status: Corrective action in progress Corrective Action: The Department partially concurs with the finding. The Department’s Office of Refugee and Immigrant Assistance (ORIA) administered this funding through the Washington COVID-19 Immigrant Relief Fund program and contracted with a subrecipient organization to conduct eligibility determinations to approve and disburse funds to undocumented immigrants. This program is now closed, with all subrecipient contracts ended and the final payments sent in early 2023. The Department is taking action to strengthen internal controls over subrecipient monitoring for ORIA’s contracts. By July 2024, the Department will: • Complete a review of all active contracts utilizing federal funding to ensure subrecipients are accurately identified. • Explore the feasibility of increasing ORIA and Economic Services Administration accounting staff resources to support the workload increase associated with monitoring subrecipients. By October 2024, the Department will convene a work group with contracts and accounting staff to create effective internal controls and written procedures for fiscal and program monitoring of ORIA’s subrecipient contracts. This will include the following: • Verify the subrecipient status for each contract is correctly determined and recorded in the Agency Contracts Database. • Include the required subrecipient language in the contract. • Obtain a copy of the indirect rate certification or cost allocation plan from the subrecipient. • Complete risk assessments. • Create appropriate monitoring plans for each subrecipient. • Conduct fiscal monitoring of each subrecipient to obtain assurance that the use of federal funds complies with federal laws and regulations. • Create corrective action plans when required. By January 2025, the Department will ensure all ORIA program staff responsible for monitoring receive training on the updated procedures. In addition, the Office of the Secretary will request the Department’s Internal Audit and Consultation office conduct an internal audit of ORIA to ensure the program implements strong internal controls, properly accounts for federal funds, and materially complies with federal requirements. The Department does not concur with the questioned costs. The funds were used to assist Washington workers/families who were affected by the COVID-19 pandemic but were unable to access federal stimulus programs and other social support due to their immigration status. Repayment of these funds would only hinder the state’s ability to provide critical services to our clients. If the grantor contacts the Department regarding the questioned costs, the Department will discuss this with the Department of Health & Human Services and will take additional action as appropriate. Completion Date: Estimated January 2025 Agency Contact: Richard Meyer External Audit Compliance Manager PO Box 45804 Olympia, WA 98504-5804 (360) 664-6027 Richard.Meyer@dshs.wa.gov

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements to ensure payments to subrecipients of the Emergency Rental Assistance program were allowable and properly supported. Questioned Costs: Assistance Listing # 21.023 COVID-19 Amount $4,123,486 Status: Corrective action complete Corrective Action: The funding for the Emergency Rental Assistance program ended on June 30, 2023. The Department is no longer funding this program. To address the control deficiencies reported in the prior year’s finding, the Department improved internal control processes, resulting in improved compliance. The Department strives to meet all federal requirements and any repayment of questioned costs will be determined through the normal audit resolution process with the U.S. Treasury. The conditions noted in this finding were previously reported in finding 2022-016. Completion Date: July 2023 Agency Contact: Gena Allen, CFE Internal Control Officer PO Box 42525 Olympia, WA 98504-2525 (360) 480-5149 Gena.Allen@Commerce.wa.gov

Finding 2023-037 – Corrective Action Plan Auditee Views: PRO met with the Department of Housing and the legal services vendors. The Department of Housing is collecting backup documentation for the vendors to support payment. This has been shared with PRO via SharePoint. The Department may also request additional backup documentation from the vendors to further support these costs. Corrective Action: Obtain additional documentation from the legal services vendors and maintain SharePoint to ensure PRO has access to supporting documentation. Anticipated Completion Date: Completed and Ongoing Contact Person: Tara Booker, Executive Director of Homelessness and Community Supports, Department of Housing tara.booker@housing.ri.gov

FINDING 2023-005 Compliance Requirement(s): Allowable Activities, Allowable Costs / Cost Principles Audit Findings: Material Weakness, Other Matters Summary of Finding: An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the following compliance requirements: Allowable Activities, Allowable Costs / Cost Principles The School Corporation paid trash removal services from the School Lunch fund without a methodology or supporting documentation for the amount charged. Without a reasonable methodology for the expenses paid, the amount was considered a questioned cost. The total amount charged to the School Lunch fund was $15,448. Internal controls over vendor disbursements were in place but were not operating effectively during the audit period. Additionally, there was no documentation indicating that payroll disbursements were reviewed or approved by a second individual not involved in the original payroll process. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Views of Responsible Officials: We Concur with this finding. Description of Corrective Action Plan: The School will start to divide trash removal services between cafeteria accounts and building accounts when being paid monthly. Verification of percentage coming from each account will be discussed. Internal controls will be put in place to document that payroll disbursements are being reviewed by a second individual. Payroll disbursement reports will be presented to the correct central office employee. Anticipated Completion Date: Immediately

UWGC has developed a procedure to ensure that prior to submission of invoices to federal awarding agencies, management prepares a monthly analysis based on 211 call logs to support the actual amounts allocated across all programs and invoiced to the awarding agencies that are reconciled to payroll reports, which then will allow UWGC to present evidence that all hours submitted for reimbursement are supported with the appropriate allocation. The process will include management staff from both 211 and finance departments thus maintaining internal controls. Additionally, this procedure will be reviewed at least annually by both departments as it relates to the allocation methodology to ensure that its appropriate given changes in the program and workforce.

UWGC has developed a procedure as outlined below in “Payroll Allocation Grants” to ensure that prior to submission of invoices to federal awarding agencies, management prepares a monthly analysis based on 211 call logs to support the actual amounts allocated across all programs and invoiced to the awarding agencies that are reconciled to payroll reports, which then will allow UWGC to present evidence that all hours submitted for reimbursement are supported with the appropriate allocation. The process will include management staff from both 211 and finance departments thus maintaining internal controls. Additionally, this procedure will be reviewed at least annually by both departments as it relates to the allocation methodology to ensure that its appropriate given changes in the program and workforce.

UWGC has developed a procedure as outlined below in “Payroll Allocation Grants” to ensure that prior tosubmission of invoices to federal awarding agencies, management prepares a monthly analysis based on 211 call logs to support the actual amounts allocated across all programs and invoiced to the awarding agencies that are reconciled to payroll reports, which then will allow UWGC to present evidence that all hours submitted for reimbursement are supported with the appropriate allocation. The process will include management staff from both 211 and finance departments thus maintaining internal controls. Additionally, this procedure will be reviewed at least annually by both departments as it relates to the allocation methodology to ensure that its appropriate given changes in the program and workforce.

Agency will implement as after-the-fact review for salaried employees. Timecards are actual time worked on project as instructed by Cal OES. Paycor allocations (which are budgeted allocations) are driving the salaried employees' allocations to the labor distribution report. Salaried employees, regardless of their time worked, are allocated 86.67 hours per pay period and by percentage of their labor allocation. Agency will review timecards to labor distribution and make the necessary adjustments after posting the Payroll Import by creating a journal entry to ensure that the project is charged accurately. Timecards are never altered as they are approved with 2 approvals.

2023-003 - Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Significant Deficiency) Condition: During our audit, we noted that three (3) out of forty (40) samples summed up to $39,055.50 had no proper source documents to support the transactions charged to the grant brought by lost official receipts, hence, identified as not adequately documented. Alternatively, the City created a memo to document the loss of receipts signed by the department head. Management concurs. Corrective Actions: The City has an existing purchasing policy and procedures requiring documentation of all purchases made. Finance department has already sent a reminder to all department heads regarding the policy and procedure and why they must comply. Implemented Name of Responsible Person: Manuel Carrillo Jr., Director of Recreation & Community Services

Condition - The Special Education District prepared, and the cognizant agency approved, a grant budget that included $637,216 of salaries for learning loss, summer enrichment and after school programs (run by member districts). The Special Education District claimed grant expenditures for payments to member districts as salaries. Plan - Management will ensure compliance with all aspects of the program in the future. Anticipated Date of Completion - July 1, 2024. Name of Contact Person - Greg Wetheim, Director. Management Response - Management does not agree with this finding. Management reached out to the cognizant agency which provided the following response - "The ESSER III Cooperative grant was state set-aside funds that were originally awarded to ISBE. ISBE determined that to meet the stipulations of Learning Loss-Summer Enrichment-After School Program reservations, the most efficient way to reach the maximum number of students would be through the cooperatives providing for their member districts. Henry-Stark County Special Education District met those requirements and fulfilled their financial obligations by providing evidence-based activities through their member districts"

Finding Number: 2023-003 Program: U.S. Department of Health and Human Services ALN Number: 93.243 ALN Name: Substance Abuse and Mental Health Service Projects of Regional and National Significance Grant Award Number: 1H79TI084507-01 Planned Corrective Action: Management has implemented a process wherein the Human Resources department sends the Termination Log weekly to the Payroll Department for comparison with the Payroll Department’s records and ensure that status changes for employees are properly recorded. Further, an adjustment was made subsequent to year-end to adjust the overpayment and remove the amount from the cumulative charges to the grant funds. Person(s) Responsible: Mordechai Schechter, Chief Financial Officer Expected Completion Date: June 30, 2024

Finding Number: 2023-002 Program: U.S. Department of Health and Human Services ALN Number: 93.243 ALN Name: Substance Abuse and Mental Health Service Projects of Regional and National Significance Grant Award Number: 1H79TI083607-01 Planned Corrective Action: Management will hire a HR Assistant to help review/ manage the review of timecards going forward. Person(s) Responsible: Mordechai Schechter, Chief Financial Officer Expected Completion Date: June 30, 2024

March 27, 2024 2023-005: Significant Deficiency in Internal Control / Immaterial Noncompliance – Reporting Condition: During our review it was noted that documentation supporting reports filed by the Consortium were not maintained by management. Corrective Action: We agree with the finding. As we work towards developing our procedures, we are currently developing a list of required documentation as mandatory sourcing for quarterly reports. We do not anticipate this issue in our 2024 Single Audit when several cycles of closeouts have been completed. Contact Person: Shamar Herron: Sherron@mwse.org Anticipated Completion Date: June 2024 Respectfully, Shamar Herron

Action taken in response to finding: The finance department has taken action in response to the circumstances which led up to this finding. We have added an accountant position to the team whose primary responsibility is to organize and invoice all grants for the organization. The additional staff person allows a more thorough and detailed review of allowable grant costs, specifically prorated payroll charges. Name(s) of the contact person(s) responsible for corrective action: Jeffrey Nelson, Accounting and Financial Analysis Director Planned completion date for corrective action plan: 9/30/2023

The County is continuing to draft and establish written procedures for county-wide and department specific use when determining the allowability of personnel costs related to federal awards. A primary function of this policy will be to provide guidance to county staff to ensure personnel costs are recognized in accordance with cost principles, statues, regulations, and terms and conditions of federal awards.

Identifying Number: 2023-001 – Activities Allowed or Unallowed; Allowable Costs/Costs Principles Finding: The Code of Federal Regulations (CFR) Section 200.403(g) states that for costs to be allowable under federal awards, they must be adequately documented and there must be sufficient documentation. Additionally, CFR Section 200.430 states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate and allowable. The Florida’s Division of Accounting and Auditing Reference Guide for State Expenditures states that supporting documentation shall be maintained in support of expenditure payment requests for cost reimbursement contracts including that approved timesheets support the hours worked on the project or activity must be kept. During our testing of payroll disbursements, we noted that seven of the 120 payroll expenditures selected for testing did not have a properly approved timecard for the pay period selected. Corrective Actions Taken or Planned: All of the timecards noted in the finding above have been reviewed for accuracy and retroactively approved by the Chief Talent Officer. The following corrective actions are in the process of being implemented: • CHS’s Payroll and Talent teams will conduct a review of timecards completed after July 1, 2023. The accuracy of any unapproved timecards identified will be verified and retroactively approved by the designated supervisor, or the Chief Talent Officer if the designated supervisor is no longer available. • After each payroll period, a list of unapproved timecards will be provided to the Talent Team so the respective Talent Business Partner may follow up with corrective action with those supervisors who have two or more repeat occurrences. Such corrective action will include: o A thorough review with the supervisor of the CHS policies and practices relative to supervisory duties regarding the management and approval of employee timecards. o Mandatory refresher education and training on the supervisory timecard review and approval process in the CHS HRIS, Paylocity. In addition, CHS is formally implementing a new HRIS, UKG PRO, in July 2024. This system has advanced notification and tracking features that will assist supervisors in proper management and approval of timecards. Person(s) Responsible for Corrective Actions: Barbara McDonald, Chief Financial Officer and Chief Administrative Officer and Heather Vogel, Chief Talent Officer Anticipated Completion Date for Corrective Actions: Implementation of the Corrective Actions outlined above will begin immediately to be completed by June 30, 2024.

Finding 2023-003 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions Identification of the federal program: Federal Grantor: United States Department of Homeland Security Pass-Through Grantors: State of Missouri, State Emergency Management Agency Arkansas Division of Emergency Management Assistance Listing No.: 97.036, COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) (“FEMA”) Pass-Through Award Numbers and Award Periods: Project# 185883 P/W# 529 01/20/2020–09/14/2020 Project# 699963 P/W# 624 01/01/2022–07/01/2022 Project# 699667 P/W# 233 01/01/2022–07/01/2022 Project# 699670 P/W# 211 01/01/2022–07/01/2022 Condition: Adequate documentation was not retained to support the average unit cost applied to COVID-19 personal protective equipment (PPE) inventory usage charged to the FEMA program as Force Account Material (FAM) costs. In addition, for 12 of 40 non-FAM costs (including purchased equipment, purchased supplies and rental equipment) charged to the program, we noted adequate documentation was not retained to evidence review and approval of the expenditure for allowability. Views of Responsible Officials and Planned Corrective Actions: Mercy Health has a system to calculate average cost of inventory items. We rely on this system, but it was not tested as part of compliance. In addition, Mercy Health has a robust capital approval process (for all equipment) and financial approval thresholds. All COVID purchases were logged in the capital system (VFA) and approvals were documented. During this time, we changed approval systems from VFA to Strata. We will implement testing of our inventory system (Lawson) to ensure calculations are accurate. All review and approvals of capital equipment will be maintained in Strata. Responsible Party: Jill McCart, VP Accounting and Reporting Date of Completion: By 6/30/24

FINDING 2023-003 Finding Subject: Special Education Cluster (IDEA) ‐ Earmarking Summary of Finding: Proportionate Share Reporting could not be verified Contact Person Responsible for Corrective Action: Kevin Frank Contact Phone Number and Email Address: 812-254-5536 kfrank@wcs.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Washington Community Schools will require the Director of the Daviess Martin Special Ed Cooperative to provide Proportionate Share expenditure data and emphasize the importance of having this information available for SBOA. Unfortunately, due to our configuration, WCS doesn’t have access to this data and it is up to the Coop to complete the requirements. Mr. Frank will offer training to DMSEC staff to ensure compliance. Anticipated Completion Date: 02/01/2024

2023-001 Block Grants for Prevention and Treatment of Substance Abuse – Assistance Listing No. 93.959 Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. Explanation of disagreement with audit finding: There is no disagreement with the finding. Action taken in response to finding: We have controls in place to ensure that costs charged to a grant are incurred within the grant period of performance. This finding exposed a vulnerability that circumvented our controls. We will use this finding to pinpoint the cause(s) and make the necessary corrective adjustments. Name(s) of the contact person(s) responsible for corrective action: Deborah Grupp-Patrutz and Steve Simmons Planned completion date for corrective action plan: Prior to June 30, 2024

FINDING 2023-009 Finding Subject: Special Education Cluster - Earmarking Summary of Finding: The School Corporation is a member of the Wabash Miami Area Programs for Exceptional Children (Cooperative). During fiscal year 2021-2022 and 2022-2023, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for the 20611-054-PN01, 20619-054-PN01, 21611- 054-PN01 and 21619-054-PN01 grant awards could not be verified for the individual member schools. The non-public school share funds for all member schools were comingled and the aggregate amount of expenditures was then allocated to the member schools on a percentage basis. These allocations were the amounts reported to IDOE. As such, we were unable to identify which expenditures were for each school in order to verify the minimum amount per the grant award was expended and properly reported to IDOE as required. The lack of internal controls and noncompliance were isolated to the 20611-054-PN01, 20619-054- PN01, 21611-054-PN01 and 21619-054-PN01 grant awards. Contact Person Responsible for Corrective Action: Amy K. Sivley Contact Phone Number and Email Address: 260-563-2151; sivleya@apaches.k12.in.us Views of Responsible Officials: We concur with the finding. Explanation and Reasons for Disagreement: n/a Description of Corrective Action Plan: The district will collaborate with the SPED co-op to implement controls to ensure compliance with earmarking requirements. Anticipated Completion Date: To be completed by July 2024

March 27, 2024 Federal Audit Clearinghouse Re: Corrective Action Plan for Community Action Partnership of Mercer County To whom it may concern: Views of Responsible Officials and Planned Corrective Actions: 2023-01 There is no disagreement with the audit finding regarding costs allowed or allowable reviewed. The Organization’s fiscal policy manual policies and procedures states Audit costs are direct charged to each program and are billed separately to each program at a cost of 2% of the total budget of the program or grant. This policy has been enforced for years with an agreement between auditors and the organization. Management will review and update the Organization’s fiscal policy manual and procedures for consistency and compliance with GAAP and Uniform Guidance. Employee Responsible for Corrective Action: Michelle Clarke Completion Date: May 31, 2024 Respectfully Submitted, Michelle Clarke VP/CFO

MANAGEMENT’S PLANNED CORRECTIVE ACTION: The School District’s will ensure that purchase order documentation is maintained as part of internal purchasing procedures. Regarding the timeframe for completion, the District has already implemented procedures regarding the documentation of costs and will continue to follow and improve them going forward. The District has contracted J. Martin & Associates, LLC (JMA) to provide business office accounting services.Representatives from JMA and the rest of the business office staff will monitor documentation procedures to ensure that they are followed appropriately.

Finding Number: 2023-002 Planned Corrective Action: Cleveland Play House had extensive turnover during the 2022 and 2023 fiscal years which resulted in several vacancies, including the Director of Finance position, for a significant portion of the year. As a result, many of the reports that are standard practice in our organization were not being completed. In addition, the filing of certain documentation to support expenditures was not being done consistently. The Director of Finance position was not filled until November 2022. As a result, documentation of allowable expenditures is being addressed for the fiscal 2023 audit. In addition to turnover, the organization transitioned to a new general ledger system with a new chart of accounts in fiscal year 2022. As a result of this transition and the vacancies mentioned above, certain data pertaining to the federal programs was not being captured. Management has informed all staff of the requirements to track federal programs within the general ledger accounts. Anticipated Completion Date: September 30, 2024 Responsible Contact Person: Erica Tkachyk, Director of Finance