Corrective Action Plans

Management will implement written procedures for federal grant administration applicable to all federal awards. Reimbursement requests will be limited to costs incurred and supported by documentation at the time of the request. The reimbursement request, expenditure listing, supporting documentation, and documented allowability review will be maintained together in a referenced file and will include preparer and reviewer sign-off. For advance payments, management will document the program's immediate cash requirements supporting the amount and timing of each advance and monitor the period between receipt and disbursement of federal funds. The reimbursement log reconciliation and Schedule of Expenditures of Federal Awards will be subject to documented review by an individual who was not involved in their preparation. Management will also coordinate with the USDA Forest Service regarding the $64,969 in questioned costs and follow the awarding agency's direction.

FINDING 2025-020 Finding Subject: Education Stabilization Fund – Allowable Costs/Cost Principles Contact Person Responsible for Corrective Action: Darice Austin-Phillips, Ahnaf Tahmid & Marlaina Johns Contact Phone Number and Email Address: 574-393-6000, daustin@sbcsc.k12.in.us , atahmid@sbcsc.k12.in.us, mjohns2@sbcsc.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Vendor Service Contracts: Standardized contract guidelines for all non-employee services. Contracts must specify exact rates, hours, duration, maximum billing limits, and include standard legal terms. Approval Hierarchy: Contracts under $50,000 can be preliminarily approved by the Superintendent and later presented to the Board. Contracts over $50,000 require a dedicated Board presentation and approval. Contract Procurement Rules: Enforced tiered purchasing thresholds—Micro Purchases (no quote), Small Purchases (3 quotes required), and Large Purchases (bid process). Change Orders: Requires formal documentation and approval. Any change order increasing project costs by 10% or more requires pre-approval from the School Board.

FINDING 2025-017 Finding Subject: Teacher and School Leader Incentive Grants (Formerly the Teacher Incentive Fund) – Allowable Cost/Cost Principles Contact Person Responsible for Corrective Action: Ahnaf Tahmid & Marlaina Johns Contact Phone Number and Email Address: 574-393-6000, atahmid@sbcsc.k12.in.us, mjohns2@sbcsc.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: This grant was managed by a continued succession of people. The grant information was not centrally housed. Centralized Reporting: The Finance Department now mandates that all approved grant documentation (Grant Award Notifications, reimbursement forms, budget breakdowns) be submitted to Finance immediately. Succession Planning Policy: Added strict continuity protocols to the IC Manual, affirming that all data belongs to the corporation. Requirements include maintained system documentation, account deactivation within 24 hours of employee departure, and formal knowledge handoffs. Segregation of Duties: Updated policy to ensure no single individual manages any financial process (receivables, purchasing, or inventory) end-to-end. Anticipated Completion Date: September 30, 2024 (grant ended). January 1, 2025 is when grant award documentation sharing was required.

FINDING 2025-016 Finding Subject: Teacher and School Leader Incentive Grants (Formerly the Teacher Incentive Fund) – Activities Allowed or Unallowed Contact Person Responsible for Corrective Action: Ahnaf Tahmid & Marlaina Johns Contact Phone Number and Email Address: 574-393-6000, atahmid@sbcsc.k12.in.us, mjohns2@sbcsc.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Centralized Reporting: The Finance Department now mandates that all approved grant documentation (Grant Award Notifications, reimbursement forms, budget breakdowns) be submitted to Finance immediately. Succession Planning Policy: Added strict continuity protocols to the IC Manual, affirming that all data belongs to the corporation. Requirements include maintained system documentation, account deactivation within 24 hours of employee departure, and formal knowledge handoffs. Segregation of Duties: Updated policy to ensure no single individual manages any financial process (receivables, purchasing, or inventory) end-to-end. Anticipated Completion Date: September 30, 2024 (grant ended). January 1, 2025 is when grant award documentation sharing was required.

FINDING 2025-012 Finding Subject: Gaining Early Awareness and Readiness for Undergraduate Programs – Allowable Costs / Cost Principles Contact Person Responsible for Corrective Action: Chad Addie, Ahnaf Tahmid & Marlaina Johns Contact Phone Number and Email Address: 574-393-6000, caddie@sbcsc.k12.in.us, atahmid@sbcsc.k12.in.us, mjohns2@sbcsc.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Contract Retention: HR and Regional Data Services updated software archives to prevent loss of administrative records. Grant Personnel Verification: Grant fiscal officers must review and sign Payroll Certification Reports to confirm payroll accuracy for employees charged to the grant. Payroll & Overtime Controls: All employee compensation must receive prior School Board approval. Implemented a formal 10-step stipend approval workflow and mandated pre-approval for all overtime hours. Anticipated Completion Date: Completed by June 30, 2026

FINDING 2025-007 Finding Subject: Title I Grants to Local Educational Agencies - Allowable Costs/Cost Principles Contact Person Responsible for Corrective Action: Darice Austin-Phillips, Ahnaf Tahmid & Marlaina Johns Contact Phone Number and Email Address: 574-393-6000, daustin@sbcsc.k12.in.us, atahmid@sbcsc.k12.in.us, mjohns2@sbcsc.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Data & HR Retention: Updated software stores and archives via Regional Data Services to prevent administrative record loss. Payroll & Compensation: Enforced required School Board pre-approval for all compensation. Instituted a formal 10-step stipend approval workflow and mandated supervisor pre-approval for all overtime hours. Supporting Documents: Human Resources is responsible for saving and maintaining all personnel requisitions and contracts. Overtime Policy: Mandates supervisor pre-approval before overtime hours are worked Anticipated Completion Date: Corrected 06/30/2026

CORRECTIVE ACTION PLAN FINDING 2025-005 Finding Subject: Special Education Cluster (IDEA) - Condition of Records Contact Person Responsible for Corrective Action: Kwalfle Scott-Bradley, Ahnaf Tahmid & Marlaina Johns Contact Phone Number and Email Address: 574-393-6000, kscottbradley@sbcsc.k12.in.us, atahmid@sbcsc.k12.in.us, mjohns2@sbcsc.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Reimbursement & Approval Process: Standardized reimbursement requests to require full supporting documentation (transaction details and summary reports). The Director of Federal Grants filters expenditures since the prior request, reconciles totals against disbursements, and obtains CFO approval before submitting. Resolution of Over-Expenditures: Over-expenditures identified during the audit cycle were resolved in January 2026 via School Board approval by transferring unallowable and excess expenditures to the general fund. Category Monitoring: The Special Education Department will monitor budget limits continuously to ensure individual grant categories are not over-expended. Anticipated Completion Date: Completed January 2026

FINDING 2025-004 Finding Subject: Child Nutrition Cluster –Allowable Costs/Cost Principles Contact Person Responsible for Corrective Action: James Lutaaya, Ahnaf Tahmid & Marlaina Johns Contact Phone Number and Email Address: 574-393-6000, jlutaaya@sbcsc.k12.in.us, atahmid@sbcsc.k12.in.us, mjohns2@sbcsc.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Human Resources worked with Regional Data Services to identify the cause of the issue and made corrections to prevent the data being lost on the administrative side moving forward. This involved updates to software stores and archives. PAYROLL EXPENDITURES All compensation an employee receives must go before the School Board for approval prior to the pay. Approvals are retained in the form of Personnel Requisitions, Union Contracts, Board Personnel Approval. Pay Change Process: Stipend Approval Process: STEP ACTIVITY PRIMARY EMPLOYEE LEVEL REVIEWED BY NOTE 1 Create Employee Change Personnel Requisition (in Applicant Tracker or on paper) Employee's Supervisor School / Department Department Supervisor Be specific and fill in all fields. 2 Submit to the Department Supervisor for Review & Approval Employee's Supervisor School / Department Department Supervisor 3 Submit to Human Resources for Review & Approval Department Supervisor Central HR HR will review to ensure compliance with approved salary and job titles 4 Submit to Finance for Review & Approval HR Central Finance Finance will verify vacant positions exists and provide funding information. 5 Submit to Human Resources for Processing Finance Central HR HR will update the employee's information in financial / employee software 6 Verify Accuracy of Updates HR - 2nd employee Central n/a 7 Save a Copy of all Requisitions HR Central n/a 8 All pay changes are included in the Personnel Report that is submitted to the Board to obtain approval. HR Central School Board This includes position changes, job title changes, raises, transfers, etc. INDIANA STATE BOARD OF ACCOUNTS 88 OVERTIME APPROVAL POLICY All overtime hours must receive prior approval from a supervisor or manager before extra hours are worked. Employees are not permitted to work overtime without explicit approval, except in emergency situations where prior approval is not feasible. Failure to obtain approval may result in the overtime hours being unpaid or other disciplinary actions. To request overtime, employees must submit a request to their supervisor with a brief explanation of the need for additional hours. Approval will be granted based on workload requirements and budget considerations. Corrected Date: 06/30/2026 INTEGRITY • ACCOUNTABILITY • EMPOWERMENT ACADEMIC QUALITY | EQUITY, INCLUSION & JUSTICE | FINANCIAL SUSTAINABILITY | COMMUNITY PARTNERSHIPS 737 Beale Street • South Bend, Indiana 46616 • 574-393-6100 • sb.school

CORRECTIVE ACTION PLAN FINDING 2025-003 Finding Subject: Child Nutrition Cluster – Activities Allowed or Unallowed, Allowable Costs/Cost Principles Contact Person Responsible for Corrective Action: James Lutaaya, Ahnaf Tahmid & Marlaina Johns Contact Phone Number and Email Address: 574-393-6000, jlutaaya@sbcsc.k12.in.us, atahmid@sbcsc.k12.in.us, mjohns2@sbcsc.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: VENDOR CLAIMS Accounts payable is ensuring that all required documentation and approvals are completed prior to processing any and all payments. Including verifying that a board approved contract is in place, if applicable. This is in accordance with our IC Manual. The Director of Food & Nutrition (DFN) will review all invoices to ensure expense appropriateness and identify expenditures that cannot be included/paid. DFN will communicate with the vendor to ensure updates are made and a new invoice is created as applicable. DFN will sign the invoice to verify the charges are correct and can be paid. SBCSC terminated its contract with the Food Service Management Company effective June 30, 2026. Corrected Date: 06/30/2026

Finding 2025-005 Finding Subject: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – Allowable Costs/Cost Principles Summary of Finding: During the audit, it was identified that the County charged various drug court expenditures to the SLFRF award throughout the audit period. While certain drug court activities may align with eligible programs objectives, detailed testing determined that SLFRF funds were applied to costs that are not allowable under federal guidance governing the drug court program. These expenditures do not meet the federal eligibility or cost-allowability requirements established for SLFRF funds and therefore constitute unallowable charges to the grant. Contact Person Responsible for Corrective Action: Debbie Morton-Crum, County Auditor Contact Phone Number: 765-482-2940 Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: My office was not part of any discussions when Commissioners approved the Covid-19 project list. My team will work with the Federal Treasury to make sure what Drug Court costs are allowed under the Covid-19 grant. Anticipated Completion Date: August 2026

Name of the Contact Person Responsible for Corrective Action Jacqueline Guilfoyle, Corporate Controller Planned Corrective Action: In alignment with management's commitment to ensuring complete and accurate grant reporting, internal control procedures for grant expenditure reviews will be enhanced. To mitigate the risks associated with complex or commingled invoices, reviewers are now required to perform a detailed, line-item analysis of any invoice containing multiple service types or charges. For invoices that include both allowable and unallowable costs, the reviewer must document the specific segregation of these costs. This updated procedure will ensure that only the direct, incremental, and eligible costs are approved for reimbursement, thereby strengthening compliance with granting agency requirements. We will also repay FEMA for the amount claimed in error. Planned Completion Date: October 30, 2026

View of Responsible Officials and Planned Corrective Actions. Management agrees with and will implement corrective action. The following corrective actions will be implemented: strengthening budget monitoring by requiring monthly budget-to-actual reviews for all active grants; standardizing grant allocation procedures through the development and documentation of formal cost allocation methodologies; enhancing review and approval processes by conducting quarterly internal audits of grant expenditures; and improving reconciliation practices by performing monthly reconciliations of each grant account, requiring sign-off by both finance and program managers, and investigating and resolving variances within 10 business days.

A formal cost allocation plan is being finalized and will be presented to the Board for approval no later than the November 2026 meeting. The cost allocation plan is expected to be e􀀁ective retroactively as of January 1, 2026, and the organization has already implemented the plan’s allocation methodologies in the general ledger and grant reporting since that date.

Corrective Action Plan for the Calendar Year Ended December 31, 2025 In response to the finding from the Federal Single Audit for the fiscal year ended December 31, 2025. Major Program: COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters (Assistance Listing Number 97.036) (4488DR-NJ 734668; 4488DR-NJ 734675; 4488DR-NJ 736923) Finding: 2025-001 – Activities Allowed or Unallowed and Allowable Costs/Cost Principles (Material Weakness and Material Non-Compliance) Management Response: The System will strengthen its grant management and monitoring controls to ensure COVID 19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) (Disaster Grants) -funded expenditures are appropriately identified, tracked, and reconciled to insurance recoveries and other sources of disaster-related funding. Management will implement obligation-level tracking and periodic reconciliation procedures to identify applicable credits and potential duplication of benefits before submitting or retaining Federal reimbursement. The System will also formalize policies and procedures governing Disaster Grant administration, enhance communication among departments responsible for disaster-related funding, and provide training to personnel involved in grant management activities to support ongoing compliance with applicable Federal requirements. Christopher Caulfield, Assistant Vice President of Finance, will effectuate the corrective action plan, which is anticipated to be completed by December 31, 2026. caulfieldc@sjhmc.org 973-754-2016

Finding Number: 2025-02 Condition: During the audit, it was noted that the Association was unable to provide formal support for the internal review and approval of costs relating to stipends paid that were submitted to the pass-through grantor under the major program. Planned Corrective Action: The Godman Guild Association has an existing process for reviewing and approving stipend payments. The Association has shored up existing processes by implementing a consistent documentation format that identifies the applicable participant and payment period and includes supporting participation records, the stipend calculation, and reviewer approval. As an additional internal review procedure, program participant listings submitted to grantors will be periodically reconciled to supporting enrollment and eligibility documentation to provide an additional level of oversight of participant eligibility and grant reporting. The Association will retain all documentation with the applicable grant records to maintain a consistent record of the review and approval process. Contact Person Responsible for Corrective Action: Solonas Karoulla, Chief Advancement Officer, solo.karoulla@godmanguild.org Completion Date: September 30, 2026

Management agrees with the finding. Management will spend additional time reviewing CFR Part 200 for familiarization. Policy templates will also be reviewed, and assistance will again be requested to develop/finalize the necessary policies in accordance with Uniform Guidance. Policies will be reviewed and approved by the Board regularly.

Finding: The terms and conditions for recipients of Disaster Grants - Public Assistance (Presidentially Declared Disasters) require that federal funds be used only for eligible emergency protective measures and other eligible work. Emergency work is defined as work that must be performed immediately to save lives, protect public health and safety, or avert or lessen the threat of a major disaster. Status: Management agrees with the finding and the following corrective actions were taken to minimize future risks. Management will continue to monitor FEMA guidance and determinations related to COVID-19 Public Assistance funding. Management will evaluate the impact of subsequent FEMA reviews or determinations on amounts reported on the SEFA and adjust, as appropriate. Contact Person: Erin Fitzgerald, VP Chief Accounting Officer Anticipated Completion Date: Q1 2026

Management concurs with the finding. Due to an administrative error, JCMC included certain ineligible patient clinical laboratory testing costs, recorded as bad debt expense, in federal grant expenditures. Although management consulted with the Program administrator, the County of Hudson, prior to seeking reimbursement and received approval to include these costs, JCMC acknowledges its responsibility to ensure federal funds are not used to reimburse unallowable services. Going forward, JCMC will strengthen its review process to exclude unallowable bad debt costs from grant expenditures. Management has reviewed the applicable Uniform Guidance cost principles with Program grant personnel and supporting analysts to reinforce compliance. Responsible Official: Alexander Filipak, VP Finance, Jersey City Medical Center Email: Alexander. Filipiak@rwjbh.org. Anticipated Completion Date: December 31, 2026

FINDING 2025-003 Finding Subject: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – Period of Performance Contact Person Responsible for Corrective Action: Jessica Thome, Controller Contact Phone Number and Email Address: (812) 244-2360 and Jessica.Thome@terrehaute.in.gov Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The City will reclass the expense. Anticipated Completion Date: 10/31/2026

Northern Rocky Mountain Economic Development District (NRMEDD) agrees with the recommendation. The $2,871 misclassified expenditures has been reclassified to the correct account. The corrective action described in response to Finding 1 applies uniformly to expense classifications, with no separate or exception process.

FINDING 2025-004 Finding Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds – Allowable Costs/Cost Principles and Period of Performance Contact Person Responsible for Corrective Action: Catherine MM Lane Contact Phone Number and Email Address: 812-677-3959 clane@vincennes.in.gov Views of Responsible Officials: We concur with the findings. Description of Corrective Action Plan: The clerk’s office will work with the grant administrators and departments to assist in identifying non-compliant activities to ensure that funds are being used appropriately and according to the federal guidelines for the grant. We will consult with the relevant personnel to ensure understanding of allowable and disallowed costs as well as period of performance and help departments who may need additional training. Anticipated Completion Date: The corrective action plan will be implemented by December 31, 2026.

There is no disagreement with the audit finding. Action planned/taken in response to finding: Management concurs with the finding. The Organization acknowledges that evidence of review and approval was not consistently retained and that documentation supporting reimbursement requests was not maintained at a level sufficient to demonstrate compliance with federal requirements. To address this deficiency, management is implementing formal documentation standards requiring each reimbursement request to be supported by a reconciliation of amounts requested to actual allowable expenditures recorded in the general ledger, together with documented evidence of reviewer approval. Each reconciliation will be prepared by grant and budget category and will compare cumulative expenditures recorded in the general ledger to cumulative amounts previously drawn through the Payment Management System, with any differences investigated and resolved before the request is submitted. The Chief Financial Officer (CFO) or the Chief Executive Officer (CEO) will then review and approve each Request for Reimbursement form and related reconciliation before submission, consistent with the approval process described in the responses to Findings 2025-003 and 2025-006. Evidence of this review will include the approver’s handwritten or electronic signature and the approval date on both the Request for Reimbursement form and the supporting reconciliation. In addition, all expenditures will require documented preapproval by the respective department director or other designated personnel before costs are incurred. Original receipts, invoices, and other supporting documentation will be submitted to the Accounting Department, which will review each expenditure to verify that it is properly authorized, adequately supported, accurately coded, and incurred for a legitimate business purpose of the Organization. Prior to the submission of any reimbursement request, expenditures charged to federal awards will be reviewed for allowability, allocability, reasonableness, and adequate documentation in accordance with the cost principles of the Uniform Guidance (2 CFR Part 200, Subpart E). All reconciliations, approvals, and supporting documentation will be retained in accordance with federal record retention requirements and made readily available for review. Supporting documentation will be maintained in a centralized location, organized by grant and reimbursement period, and retained in accordance with the Uniform Guidance record retention requirements (2 CFR 200.334). The Organization will incorporate these review and approval procedures into its written financial policies and procedures, and finance staff involved in preparing reimbursement requests will receive training on them. In addition, management will periodically perform a secondary review of a sample of completed reimbursement requests to verify that reconciliations, approvals, and supporting documentation are complete, and any exceptions identified will be promptly corrected and documented. Name(s) of the contact person(s) responsible for corrective action: Edward Murphy, Asante Muyungga, Charity Gutierrez, Anthony Parker, Bennett Baber, Jannell Robinson. Planned completion date for corrective action plan: June 30th, 2027

Allowable Activities & Costs – Board approval U.S. Department of the Interior – BOR Providing Water to At-Risk Natural Desert Terminal Lakes – Assistance Listing No. 15.508 Recommendation: We recommend that management strengthen procedures to ensure that all disbursements exceeding the board‑approval threshold receive documented approval prior to payment, and that compliance with this requirement is monitored consistently. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Corrective Action Plan: The finance team has been increased to include a director of finance and an accounting manager position. The position assists in the expansion of separation of duties and increased internal controls. The Conservancy has revised its procurement forms and process to ensure documented approval prior to payment. Name(s) of the contact person(s) responsible for corrective action: Peter Stanton Planned completion date for corrective action plan: October 2025.

Finding 2025-006 Suspension and Debarment status verification (Vendors) U.S. Department of the Interior – BOR Providing Water to At-Risk Natural Desert Terminal Lakes – Assistance Listing No. 15.508 Recommendation: We recommend that WBC strengthen its current policies and procedures to ensure that Suspension and Debarment Status is verified for each vendor subject to verification of suspension and debarment verification according to WBC's Procurement policy. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Corrective Action Plan: The Conservancy performed a complete review of ALL vendors to ensure all required vendors were verified for suspension and debarment status. That audit supported the facts that the Conservancy has never made a payment to a vendor with a suspension or debarment status. The Conservancy has revised its procurement forms and process to proactively include suspension and debarment status verification on all required vendors according to financial policies. Name(s) of the contact person(s) responsible for corrective action: Peter Stanton Planned completion date for corrective action plan: October 2025.

Recommendation: We recommend management enhance its existing year-end review procedures to ensure that costs are incurred and reported in the appropriate fiscal year and that the SEFA includes only expenditures applicable to the current reporting period.