Corrective Action Plans

Finding Number 2023-005 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.027 Federal Program name: Coronavirus State And Local Fiscal Recovery Funds (CSLFRF) Planned Corrective Action Management Response: OMES-GMO concurs with the finding that CSLFRF program funds were applied to GEER and ERA expenses. OMES-GMO specifically notes that while the applied expenditures are indeed allowable under federal programs, the application of CSLFRF to these programs was in error ostensibly due to administrative challenges experienced throughout this tumultuous period. During the COVID-19 pandemic, states across the country faced numerous operational and compliance challenges, including frequently changing federal guidance and firsttime handling of federal funds. In response to the growing complexity of managing multiple federal funding programs, OMES established the Grants Management Office (OMESGMO). However, in its initial phase, the OMES-GMO experienced consistent instability with a high frequency of employee turnover, understaffing, limited resources, restricted internal controls, and practiced leadership. These factors contributed to classification errors and delays with internal review. Since then, OMES-GMO has taken steps to stabilize operations by maintaining consistent leadership, hiring additional staff, and the uniform application of organizational processes. These improvements have strengthened internal controls and allowed for the identification of previously misapplied expenditures. Prior to the finding, OMES-GMO reviewed and flagged these expenditures and is actively working to correct the issue. To resolve the misclassification, OMES has requested state appropriations to properly adjust and reallocate these expenses to their appropriate funding sources. Anticipated Completion Date Controls have been put into place and will continue through the end of the Federal Period of Performance and closeout. Responsible Contact Person Parker Wise

Finding Number 2023-091 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Emergency Rental Assistance Program (ERA) Planned Corrective Action 1. Condition and Context: While documenting controls over Period of Performance for the ERA 1 grant, we noted payments made to subrecipients in the Statewide Accounting System were all put under one fund and were not distinguishable between ERA 1 and ERA 2. Therefore, OMES was unable to determine at a glance whether the funds distributed to subrecipients were attributable to ERA 1 or ERA 2. Further, we determined one of the subrecipients, Communities Foundation of Oklahoma (CFO), did not have sufficient internal controls over ERA 1 program spending to ensure all funds were expended by the end of the period of performance. • We disagree with SAI on the Statewide Accounting System separation of funds. The Statewide Accounting System did distinguish between ERA1 and ERA2. The Statewide Accounting System has funds 49400 and 49200 shows establishment of both federal funds in 2021. • We disagree with SAI on CFO’s internal controls. CFO did have internal controls in place to ensure funds were expended during the period of performance. Per ERA 1 Closeout Resource “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI the general ledger shows a date before December 29, 2022. (Attachment 494,492, ERA Closeout Resource) 2. For eight of 30, or 26.67% of adjustments tested, the adjustment was to move expenses from ERA 2 to ERA 1 to meet ERA 1 spending requirements prior to closeout of the program. CFO comingled ERA 1 and ERA 2 funds and could not directly support each recharacterization with documentation for the specific transactions involved, but stated it was recharacterized to meet ERA 1 spending limits prior to the end of the period. In addition, CFO did not go back to revise any prior monthly or quarterly reports as required by Treasury. • We partially agree. We agree that funds cannot be moved from ERA 2 to ERA 1. • We disagree with SAI on comingling of funds. CFO did not comingle funds. CFO has 31 separate accounts within C-Suite their financial software. All accounts are listed and examples provided in the ERA Fund Open Report. • We disagree with SAI’s evaluation of the Treasury reporting requirement. CFO was not required to go back and revise prior monthly and quarterly reports per federal guidance. “As of December 2022, ERA1 grantees will only be able to edit their Final Report or as applicable, their Q4 2022 report. However, grantees may submit revisions to certain financial data submitted with their past quarterly reports, specifically, subrecipient/contractor/direct payee records; subaward/contract/direct payment records; and expenditure records when completing their Final Report or as applicable, their Q4 2022 Report. “While ERA1 grantees are no longer able to submit or revise any prior ERA1 quarterly reports, grantees may receive additional communications from Treasury’s compliance team to make corrections to past quarterly reports and as appropriate, the Final Report…” (Attachment ERA Closeout Resource pg 5) 3. For 11 of 30, or 36.67%, the adjustment was to move expenses between jurisdictions (City, State, County), which is unallowable per FAQ #42 and ERA reporting guidance. • We disagree with SAI’s unallowable cost. Due to a misunderstanding, CFO staff misstated that funds were moved between jurisdictions. Funds were not moved between jurisdictions. If a computer error occurred due to the large volume of checks that were being sent every week (approximately 1,600), not all errors were caught immediately. However, when further reviews were conducted and it was discovered a payment was issued incorrectly, the proper accounting procedures for correcting the errors were completed. (Attachment OneDrive_2025- 4-23(1)) • We disagree. FAQ 42 says nothing about jurisdictions. FAQ #42 states, “May a grantee provide ERA funds to another entity for the purpose of making payments more rapidly? To speed the delivery of assistance, grantees may enter into a written agreement with a nonprofit organization to establish a payment fund for the sole purpose of delivering assistance using ERA funds while a household’s application remains in process. A grantee may use such a process if: The process is reserved for situations in which an expedited payment could reasonably be viewed as necessary to prevent an eviction or loss of utility services that precludes employing the grantee’s standard application and payment procedures on a timely basis. The nonprofit organization has the requisite financial capacity to manage the ERA funds, such as being a certified community development financial institution. The nonprofit organization deposits and maintains the ERA funds in a separate account that is not commingled with other funds. The grantee receives all required application and eligibility documentation within six months. The nonprofit organization agrees in writing to return to the grantee any assistance that the household was ineligible for or for which the required documentation is not received within six months. Any funds not used by the nonprofit organization are ultimately returned to the grantee. If a payment made by the nonprofit organization is subsequently found to have been used for an ineligible household or an ineligible expense, or if the required application and eligibility documentation are not timely submitted, the payment will be considered an ineligible use of ERA funds by the grantee. Any administrative expenses attributable to a payment fund should be considered in accordance with FAQ 29.” (Attachment ERA FAQs) 4. When performing our testwork to determine whether ERA 1 expenditures met period of performance requirements (incurred on or before September 30, 2022), we noted 207 transactions occurred after September 30, 2022. Of the 207 transactions, we noted 40 that resulted in $10,711,668 (of this amount $2,313,435 is already questioned above) in questioned costs. • We disagree with SAI’s questioning of expenditures incurred after September 30, 2022. Per the ERA 1 Closeout Resource, “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI, the general ledger shows a date before December 29, 2022. (Attachment ERA Closeout Resource pgs 1, 4) 5. For 13 of 207, or 6.28% of transactions tested, the adjustment was to move funds between funding jurisdictions (City, State, County), which is unallowable per FAQ #42 and ERA reporting guidance. (This resulted in $1,594,881 in questioned costs, of which $24,450 is questioned above) • We disagree with SAI’s questioned cost. Due to a misunderstanding CFO staff misstated that funds were moved between jurisdictions. Funds were not moved between jurisdictions. If a computer error occurred due to the large volume of checks that were being sent every week (approximately 1,600), not all errors were caught immediately. However, when further reviews were conducted and it was discovered a payment was issued incorrectly, the proper accounting procedures for correcting the errors were completed. (Attachment OneDrive_2025- 4-23(1)) • We disagree. FAQ #42 says nothing about jurisdictions. FAQ #42 states “May a grantee provide ERA funds to another entity for the purpose of making payments more rapidly? To speed the delivery of assistance, grantees may enter into a written agreement with a nonprofit organization to establish a payment fund for the sole purpose of delivering assistance using ERA funds while a household’s application remains in process. A grantee may use such a process if: The process is reserved for situations in which an expedited payment could reasonably be viewed as necessary to prevent an eviction or loss of utility services that precludes employing the grantee’s standard application and payment procedures on a timely basis. The nonprofit organization has the requisite financial capacity to manage the ERA funds, such as being a certified community development financial institution. The nonprofit organization deposits and maintains the ERA funds in a separate account that is not commingled with other funds. The grantee receives all required application and eligibility documentation within six months. The nonprofit organization agrees in writing to return to the grantee any assistance that the household was ineligible for or for which the required documentation is not received within six months. Any funds not used by the nonprofit organization are ultimately returned to the grantee. If a payment made by the nonprofit organization is subsequently found to have been used for an ineligible household or an ineligible expense, or if the required application and eligibility documentation are not timely submitted, the payment will be considered an ineligible use of ERA funds by the grantee. Any administrative expenses attributable to a payment fund should be considered in accordance with FAQ 29.” (Attachment ERA FAQs) 6. For 11 of 207, or 5.31%, the adjustment was to move funds between ERA 2 and ERA 1 and the adjustment was not directly supported with documentation for the specific transactions involved. It was noted as recharacterized to meet ERA 1 spending limits prior to the end of the period, and CFO did not go back to revise any prior monthly or quarterly reports as required by Treasury. (This resulted in $7,003,715 in questioned costs, of which $2,200,000 is questioned above) • Partially agree. • We agree that funds cannot be moved from ERA2 to ERA1 • We disagree with SAI’s evaluation of the Treasury reporting requirement. CFO was not required to go back and revise prior monthly and quarterly reports per federal guidance. “As of December 2022, ERA1 grantees will only be able to edit their Final Report or as applicable, their Q4 2022 report. However, grantees may submit revisions to certain financial data submitted with their past quarterly reports, specifically, subrecipient/contractor/direct payee records; subaward/contract/direct payment records; and expenditure records when completing their Final Report or as applicable, their Q4 2022 Report. “While ERA1 grantees are no longer able to submit or revise any prior ERA1 quarterly reports, grantees may receive additional communications from Treasury’s compliance team to make corrections to past quarterly reports and as appropriate, the Final Report…” (Attachment ERA Closeout Resource pg 5) 7. For 7 of 207, or 3.38% of transactions tested, the adjustment was to ‘correct accounts’ or ‘tie out accounts’; we determined these were not attributable to specific transactions but were ‘plug’ numbers to zero out the ERA 1 balance prior to the end of the period of performance to meet spend down requirements and were not supported by actual expenditures that can be determined to have been incurred on or before September 30, 2022. (This resulted in $1,837,072 in questioned costs, of which $88,985 is questioned above) • We partially agree. • We agree that funds cannot be moved from ERA 1 to ERA 2 • We disagree with SAI’s questioning of expenditures incurred after September 30, 2022. Per the ERA 1 Closeout Resource, “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI, the general ledger shows a date before December 29, 2022. (Attachment ERA Closeout Resource pgs 1, 4) 8. For 7 of 207, or 3.38% of transactions tested, the adjustment was to CFO management fees. Management fees were retained on a percentage basis; therefore, the fee is not supported by actual expenditures that can be determined to have been incurred on or before September 30, 2022. (This resulted in $1,430,228 in questioned costs which were all questioned on finding 2023-028). We disagree with SAI’s questioning of expenditures incurred after September 30, 2022. Per the ERA 1 Closeout Resource, “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI, the general ledger shows a date before December 29, 2022. (Attachment ERA Closeout Resource pgs 1, 9. We noted a total of $8,271,796 in management fees that were not expended for ERA 1 and therefore were not spent within the period of performance. Of this amount, $6,841,568 were management fees questioned in the SFY2021 and SFY2022 State of Oklahoma Single Audit reports and the remaining $1,430,228 is questioned on finding 2023-028. We disagree with SAI’s questioning of expenditures incurred after September 30, 2022. Per the ERA 1 Closeout Resource, “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI, the general ledger shows a date before December 29, 2022. (Attachment ERA Closeout Resource pgs 1, 4) 10. For 2 of 207, or 0.97% of transactions tested, the payment was not supported by an itemized invoice to enable a determination that all the costs were incurred prior to September 30, 2022. (This resulted in $276,000 in questioned costs) • We disagree with SAI questioning cost and have provided supporting documentation in OneDrive - 2025-04-23(2) to show questioned expenditures. • We disagree with SAI’s questioning of expenditures incurred after September 30, 2022. Per the ERA 1 Closeout Resource, “The end date of the award period of performance is the last day for a grantee to obligate funds for ERA1 activities (September 30, 2022, for award funds received pursuant to the grantee’s initial allocation and December 29, 2022, for reallocated funds). Per documentation provided by SAI, the general ledger shows a date before December 29, 2022. (Attachment OneDrive -2025-04-23(2), ERA Closeout Resource pgs 1, 4 ) Oklahoma Office of Management and Enterprise Services (OMES) acknowledges the Oklahoma State Auditor and Inspector Office’s (SAI) findings that OMES did not implement the proper internal controls and oversight of the ERA Program during FY2023. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI. Beginning with FY2025, OMES has taken the following measures: • Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience. To ensure that the subrecipient agreement includes all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) have recently executed a Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies. See Attached – Grant Agreement Amendment. • OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed. • OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMES-GMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES-GMO staff, the Director of the OMES-GMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multilayer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMES-GMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements. • Depending on the level of risk, OMES-GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMES-GMO conducts bi-weekly monitoring meetings with CFO and is currently reviewing documentation provided by CFO to ensure all current ERA projects are eligible under the ERA guidelines and that CFO is exercising the proper oversight over their subrecipients. • OMES-GMO will continue with their current ERA monitoring steps and internal controls and will work with CFO to ensure ERA program funds are spent in accordance with ERA program guidelines and state and federal regulations. Anticipated Completion Date Ongoing throughout the life of the grant Responsible Contact Person Brandy Manek

Finding Number 2023-088 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Emergency Rental Assistance Program (ERA) Planned Corrective Action Condition and Context: When reviewing SFY23 payroll administrative expenditures, we noted that Communities Foundation of Oklahoma paid $2,372,400 in bonuses to 146 employees. Of these bonuses, 47 people received between $10,000 - $19,999, and 44 people received more than $20,000. We found the expenditures to be unallowable; we found no guidance that stated ERA administrative funds could be expended on bonuses. • Community Cares Partners (CCP) was established as a temporary, emergencyresponse initiative tasked with administering Emergency Rental Assistance Program (ERAP) funds on behalf of the State of Oklahoma and multiple jurisdictions. Although initially conceived as a short-term project, CCP ultimately administered nearly $150 million in federal funds over multiple years in response to a historic public health and housing crisis. To meet U.S. Treasury mandates to rapidly disburse funds—or risk recapture—CCP had to scale quickly, adapt continuously, and deliver results under unprecedented pressure. The complexity of federal guidance, evolving compliance expectations, and intense audit scrutiny required a workforce that was agile, highly skilled, and capable of operating in a fast- paced, high-stakes environment. To achieve this, Communities Foundation of Oklahoma (CFO), as CCP’s fiscal sponsor, implemented an innovative staffing model in which all CCP team members—including leadership—were engaged as independent contractors. This model allowed for rapid onboarding and deployment of services without placing undue strain on CFO’s internal team or disrupting the core functions of other nonprofit and government agencies during the pandemic. However, because these contractors were not employees, they did not receive traditional benefits such as health insurance, paid time off, or retirement contributions. To support retention, motivation, and high performance in the absence of such benefits, CCP established a performance bonus structure, as outlined in its “Fee-for-Services Rendered” policy. Bonuses were based on merit and tied directly to both individual and team accomplishments. Performance Bonuses Were Structured, Purposeful, and Aligned with Program Goals Bonuses were awarded in recognition of critical achievements, such as the complete spend-down of ERA-1 funds before the federal deadline—a milestone that required sustained, coordinated effort well beyond routine contract deliverables. These incentives were calculated using a combination of objective factors, including: · Tenure with the organization (recognizing longterm commitment); Recommendation of the team director (based on direct performance observations); · Average weekly hours worked (accounting for parttime vs. full-time contributions); · Pay rate and level of responsibility (reflecting role complexity and expectations); · Performance indicators such as quality of work, accuracy, initiative, leadership, teamwork, positive attitude, and contributions to process improvements. Bonuses were not automatic or uniformly distributed. Rather, they were awarded based on documented performance and in alignment with the responsibilities and accomplishments of each contractor. The process involved director-level recommendations and required approvals from CCP’s Chief Operating Officer and the Executive Director of CFO, ensuring appropriate oversight and accountability. Allowability Under Federal Guidelines While the ERA guidance does not specifically address performance bonuses, U.S. Treasury FAQs instruct grantees to establish their own internal policies and procedures—consistent with the statutes—and to follow them consistently when specific guidance is not provided. CCP’s bonus practices followed this directive. Moreover, the incentive structure aligns with the principles in 2 CFR § 200.430(f), which permits incentive compensation when it is reasonable, tied to performance, and paid pursuant to a good-faith agreement established before services are rendered. These bonus payments were not arbitrary. They were essential tools for incentivizing high-quality performance, encouraging efficiency and innovation, and sustaining a capable team during a national emergency. Each bonus was grounded in documented policy, approved through established protocols, and tied to clearly defined. For 4 of 116, or 3.45% of claims tested, the contract was for an unreasonable rate and the invoices provided were not itemized and specific enough to determine if the time spent was for an allowable activity related to ERA 1 or ERA 2. • The contract rates for CCP’s executive leadership—specifically, Executive Director and Chief Operating Officer were reasonable and justified given the scope of responsibility, experience, and industry standards. Both leaders operated as full-time independent contractors (a structure applied to all team members at CCP), and neither received employee benefits such as health insurance or paid time off, which materially impacts total compensation calculations. CCP was a high-capacity public-private partnership program of CFO. CCP/CFO was responsible for administering over $440 million in Emergency Rental Assistance Program (ERAP) funds from the U.S. Department of the Treasury on behalf of the State of Oklahoma and multiple local jurisdictions. CCP executive leadership managed a team of more than 150 individuals and carried out complex, time- sensitive operations to deliver critical housing stability services during the COVID- 19 public health emergency. Industry benchmarks (e.g., Guidestar / Candid data, 990 analyses) show that for nonprofits with comparable annual budgets ($150M+), full-time executive compensation for experienced leaders often ranges from $175,000 to over $300,000 annually— excluding benefits. Both contractors brought more than 15 years of relevant leadership experience and operated within that reasonable range. Their rates reflected both the magnitude of the public responsibility and the demands of launching and managing a large-scale, federally funded program under emergency conditions. Regarding invoice specificity, the submitted invoices reflected agreed- upon deliverables and outcomes consistent with contract terms and allowable activities under federal guidance. While not time-stamped or broken down by hour, they were reviewed and approved based on performance milestones. Additional documentation is uploaded to further demonstrate the alignment of time spent with allowable ERAP administrative activities. Invoices submitted followed the contract terms, including hours rendered. A sample calendar page was provided and redacted for PII. § 200.338 Restrictions on public access to records. For 9 of 116, or 7.76% of claims tested, the payment was for more than the contracted rate. • PARTIALLY AGREE: overpayment of $37 • DISAGREE: see Bonus justification below. • 4.2.22 addendum with $29.60/hr rate • 4.2.22 addendum with $29.60/hr • 4.2.22 addendum with $36/hr rate • 4.2.22 addendum with $31.25/hr rate • 4.2.22 addendum with $29.60/hr rate • 4.2.22 addendum with $38/hr rate • 4.2.22 addendum with $28/hr rate Also see CCP Contractor Increases April, 2022 spreadsheet Attachments OneDrive_1_4-22-2025 OneDrive_3_4-22-2025- Contracts For 23 of 116, or 9.83% of claims tested, the subrecipient was unable to provide a contract for the period paid. • The Independent contractors each signed contracts in 2021 which laid out specific terms and conditions under which the independent contractors would provide their services and be compensated. Although some of these contracts expired, second contracts and/or addendums were signed by those same independent contractors in 2023. The independent contractors continued to work under the same terms and conditions and continued to be paid the same remuneration in the time period between the expiration of the original contracts and when the new contracts and/or addendums were created and signed. According to 15 O.S. Section 133, an implied contract is on where the existence and terms are not explicitly stated but are inferred from the conduct of the parties. Because the original contracts contained the specific terms regarding services and payment and because these independent contractors continued to operate under those same terms and receive payment even in the interim between signed contracts, this shows that an implied contract existed under Oklahoma law. The original contracts expired in 2021 which was at the height of the Covid- 19 crisis. The entities involved were addressing more urgent matters to assist the people of Oklahoma with the objectives of the program and did not have the bandwidth to draft and sign new agreements when responding to more urgent matters. Therefore, given the surrounding circumstances and the overall intent of the parties, it can be logically deduced that an implied contract existed in the interim periods between any expiration of an original contract and the second contract and/or addendum being signed. For 9 of 116, or 7.76% of claims tested, the contract was not signed by the Executive Director and was not valid. • We partially agree the contracts for three are not currently available with the Executive Director’s signature. • We disagree, fully executed contracts for two are available for review in the attachment OneDrive_3_4-22- 2025. For 22 of 115, or 19.13% of claims tested, the payroll cost was allowable; however, the expense was attributable to multiple jurisdictions and only 90.33% of the cost should have been charged to the State of Oklahoma, but the subrecipient was unable to support the allocation was completed and that 100% of the cost was not charged to the State. • See response to audit finding 2023-028 regarding the second Condition and Context. Oklahoma Office of Management and Enterprise Services (OMES) acknowledges the Oklahoma State Auditor and Inspector Office’s (SAI) findings that OMES did not implement the proper internal controls and oversight of the ERA Program during FY2023. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI. Beginning with FY2025, OMES has taken the following measures: • Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience. • To ensure that the subrecipient agreement includes all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) have recently executed a Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies. See Attached – Grant Agreement Amendment. • OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed. • OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMES-GMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES-GMO staff, the Director of the OMES-GMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multilayer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMES-GMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements. • Depending on the level of risk, OMES-GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMES-GMO conducts bi-weekly monitoring meetings with CFO and is currently reviewing documentation provided by CFO to ensure all current ERA projects are eligible under the ERA guidelines and that CFO is exercising the proper oversight over their subrecipients. OMES-GMO will continue with their current ERA monitoring steps and internal controls and will work with CFO to ensure ERA program funds are spent in accordance with ERA program guidelines and state and federal regulations. Anticipated Completion Date Ongoing throughout the life of the grant Responsible Contact Person Brandy Manek

Finding Number 2023-018 Subject Heading (Financial) or AL no. and program name (Federal) 20.509 - Formula Grants for Rural Areas Planned Corrective Action We concur with the auditor’s recommendations. As of SFY 2025, OMPT has revised its procedures to strengthen internal controls and ensure payroll expenditures are charged to the appropriate grant. A project was established for each FTA grant program to receive payroll charges based on actual charges. Training was provided to OMPT staff on June 28, 2024. Anticipated Completion Date 7/1/2025 Responsible Contact Person Eric Rose/Bobby Parkinson

CONDITION: During the calendar year 2023, the City did not utilize a formal general ledger system of accounting to track the financial activity (financial position and results of operations) for several ‘Funds’ held at the City. The activity of these funds is either 1) maintained in spreadsheet fashion similar to a checkbook used in personal finances, 2) recorded partially (expenses only with no revenue), or 3) not tracked at all. As these funds are not maintained using the City’s accounting software package, management does not have the ability to efficiently generate financial reports necessary to provide management with the proper fiscal oversight. This condition included the American Rescue Plan Act (ARPA) funding known as the Coronavirus State and Local Fiscal Recovery Fund. However, it should be noted that City personnel were able to prepare spreadsheets to document which expenditures were utilized to prepare the necessary quarterly reporting requirements to the Department of Treasury. This is a repeat finding (2022-002) from the prior year. CRITERIA: Prudent internal control procedures in the areas of general ledger management and financial reporting include maintaining a formal general ledger system of accounting to track the activity of all ‘Funds’ maintained by the City. In specific as it relates to federal programs, Section 2 CFR 200.403(g) of the Uniform Guidance requires that federal costs must be adequately documented which would include the maintaining of a formal general ledger system of accounting for all ‘Funds’ of the City. MANAGEMENT’S CORRECTIVE ACTION PLAN: Management of the City will assess the current workload and expertise of the City’s business office personnel in an effort to determine a feasible timeframe to continue the process of creating a formal general ledger system of accounting for all City ‘Funds’ that are not already entered into the software accounting system. The timeframe for completion of this review will occur during the first nine months of calendar year 2025 with the intention of having the City be in full compliance with Section 2 CFR 200.403(g) of the Uniform Guidance which requires federal costs to be adequately documented which would include the maintaining of a formal general ledger system of accounting for all ‘Funds’ of the City.

CONDITION: During the calendar year 2023, the City did not record the necessary adjustments to the various ‘Fund’ general ledgers of the City to properly reconcile the balance sheet accounts, such as cash, receivables, payables, and payroll-related liabilities to the underlying supporting documentation available at the City (which includes reconciliations of cash prepared independently by City personnel but do not agree to amounts reported in the various general ledgers). This included ‘Funds” containing significant federal funding such as the City’s Community Development Block Grant (CDBG) Program and American Rescue Plan Act (ARPA) funding known as the Coronavirus State and Local Fiscal Recovery Fund. As a result, the financial position and results of operations as shown throughout the calendar year were inaccurately stated. However, it should be noted that the Community Development Department of the City and other City personnel maintain separate financial reporting for these federal funds, independent of the aforementioned ‘Fund’ general ledgers sufficient to ascertain the revenues and expenditures of the federal programs. This is a repeat finding (2022-001) for the prior year. CRITERIA: Prudent internal control procedures in the areas of general ledger management and financial reporting include the reconciliation of all general ledger account balances to underlying supporting documentation monthly with independent oversight and approval as part of the process. In specific as it relates to federal programs, Section 2 CFR 200.403(g) of the Uniform Guidance requires that federal costs must be adequately documented which would include the applicable general ledgers of the City. MANAGEMENT’S CORRECTIVE ACTION PLAN: Management of the City will review the recommended options as presented by the Audit Firm’s recommendation for feasibility considering current manpower, expertise, and budgetary constraints. In addition, the City plans to ensure that written procedures for all accounting functions are implemented, reviewed and updated as necessary with the objective of ensuring that all balance sheet account balances are supported by the underlying documentation available at the City. The timeframe for completion of this review will occur during the first nine months of calendar year 2025 with the intention of having the City be in full compliance with Section 2 CFR 200.403(g) of the Uniform Guidance which requires federal costs to be adequately documented which would include the applicable general ledgers of the City.

Finding Number: 2023-016 Finding Name: Improper TANF Beneficiary Payments Finding Condition(s): The Illinois Department of Human Services (IDHS) made improper payments to beneficiaries of the Temporary Assistance for Needy Families (TANF) program. In addition, the IDHS identified a system error in June 2025 impacting beneficiaries whose benefit payments were calculated using diverted income. Name of Contact Person(s): Elizabth Lusk, Social Service Program Planner – Illinois Department of Human Services, Division of Family and Community Services Corrective Action(s): As of June 30, 2025, the IDHS’ Office of Policy and Program Integrity and the IDHS’ Office of Family Community Resource Centers discussed and formulated a plan to ensure payments are properly calculated and paid. Additionally, a training will be provided for caseworkers that pertains to reviewing the case summary for income errors or sanction errors, etc. Proposed Completion Date: June 30, 2026

Finding Number: 2023-014 Finding Name: Unallowable Costs Charged to the TANF and CCDF Cluster Programs Finding Condition(s): The Illinois Department of Human Services (IDHS) could not provide documentation to support payments made on behalf of beneficiaries of the Temporary Assistance for Needy Families (TANF) and CCDF Cluster (CCDF) programs. Additionally, the IDHS had not performed a monitoring review in 2023 or either of the previous two fiscal years to ensure billing information provided by the child care providers is accurate for any of the providers sampled. As a result, IDHS does not have adequate controls in place to ensure information provided by providers is accurate and the related child care payments made were appropriate. Name of Contact Person(s): • Felicia Gray, Associate Director of Operations – Illinois Department of Human Services, Division of Early Childhood • Elizabeth Lusk, Social Service Program Planner – Illinois Department of Human Services, Division of Family and Community Services Corrective Action(s): The IDHS will develop a procedure for periodic reviews of billing certificates for payments entered through the Interactive Voice Response (IVR) system. Additionally, the IDHS will develop forms, notices, and tools needed to implement the review process. Furthermore, the IDHS will develop and implement a communication plan to announce upcoming reviews that includes the Service Employees International Union (SEIU), the Division of Early Childhood (DEC), Child Care Resource and Referrals (CCR&Rs), and all providers using the Interactive Voice Response (IVR). Once these items are developed, the IDHS will determine needed changes to the IDHS’ administrative rules, its Child Care Assistance Program (CCAP) Policy, and its CCDF State Plan response. After obtaining the necessary leadership approvals, the IDHS will begin conducting IVR reviews. Proposed Completion Date: January 1, 2026

Finding 2023-055 U.S. Department of Health and Human Services Medicaid Cluster: State Medicaid Fraud Control Units, 93.775 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare, 93.777 Medical Assistance Program (Medicaid; Title XIX), 93.778 Summary of Finding: Underlying supporting documentation for certain administrative costs was not maintained by the Division of Health Care Financing and Policy (DHCFP). DHCFP did not have adequate internal controls to ensure supporting documentation for administrative expenditures was maintained. Administrative costs were charged to the federal program without appropriate supporting documentation. No documentation was available to support seven transactions, totaling $5,459, that were charged to the federal program. These charges included general ledger descriptions of: • Per diem in-state • Annual leave • Building and grounds lease assessment • IT virtual server hosting • IT security assessment Of the seven transactions, five were journal vouchers that did not contain the underlying support for the journal voucher. One transaction was coded as a direct payment voucher and one transaction was coded as an expenditure to a cash receipt (rather than payment voucher). We recommend DHCFP enhance internal controls to ensure supporting documentation for administrative expenditures is maintained. NVHA Response: Nevada Health Alliance agrees with this finding. Corrected Action Planned: The Division has strengthened its internal controls to ensure that supporting documentation for all administrative expenditures is properly maintained and readily accessible. The following procedures have been implemented: 1. Documentation in CORE.NV: Accounting personnel are now required to attach all supporting documentation directly in CORE.NV at the time of transaction preparation, while acting as the Pend1 approver. 2. Pend2 Approval Verification: The Pend2 approver must verify that the appropriate supporting documentation is attached in CORE.NV before applying their approval to the transaction. 3. “Snatch and Grab” Transactions: For transactions initiated outside the standard workflow (“snatch and grab”), accounting personnel will proactively obtain the necessary supporting documentation from the applicable division to ensure completeness. 4. SharePoint Repository: In addition to CORE.NV, all supporting documentation will be saved in a centralized SharePoint repository to enhance accessibility, transparency, and audit readiness. These measures are intended to improve accountability, ensure compliance with documentation requirements, and support the integrity of financial reporting. Anticipated Completion Date of Corrective Action Plan: September 2025

Corrective Actions Taken or Planned Management concurs with the finding and has already initiated enhancements to its review process to ensure that expense reports are consistently reviewed and approved by both supervisors and finance personnel prior to being charged to federal awards. These steps are designed to further strengthen internal controls and support compliance with federal requirements. In addition, Finance staff are formalizing procedures to reconcile payroll charges on a regular basis to ensure compliance with federal requirements and to confirm that all charges to federal programs are supported by actual time and effort records. Responsible person: Jackie Ramirez, Operations & Finance Associate Director Expected Implementation date: October 31, 2025

2023-002 Internal Controls over Period of Performance and Procurement, Suspension and Debarment (Material Weakness) Recommendation: Director of Housing and Supportive Services and any other approvers should be retrained to identify allowable and reasonable costs under the grant before approving such requests. Corrective Action: All leadership and designated line staff were retrained on reviewing and approving supporting documentation for expenditures in accordance with the federal guidelines. Responsible Parties: Ritchie T. Martin, Jr., Chief Human Services Officer Date Corrected: Immediately

The Municipality Administration is committed to identify the control of deficiency that allowed for the deficiency to happen. Additionally, the administration is committed to implementing the correct control sturcture to prevent the situation from happening in the future. The Municipality Management will continue the search of supporting documentation of the highlighted transactions. New proposed contrl strucure to be evaluated by Municipality for adequacy. The Municipality ensures the compliance with the Disaster Grants disbursement policies.

The Municipality Administration is committed to identify the control of deficiency that allowed for the deficiency to happen. Additionally, the administration is committed to implementing the correct control structure to prevent the situation from happening in the future. The Municipality Management will continue the search of supporting documentation of the highlighted transactions. New proposed control structure to be evaluated by Municipality for adequacy. The Municipality ensures the compliance with the Coronavirus State and Local Fiscal Recovery Funds Assistance disbursement policies.

Finding Number: 2023-005 Planned Corrective Action: The Authority has updated our allocation plan and added actual percentages to the plan. A/P was unaware that all employee benefits were at a different percentage; has since then been remedied. Anticipated Completion Date: April 15, 2025 Responsible Contact Person: Sherrie Boudinot

2023-001 Supporting Documentation and Approval of Disbursements Contact Person – Erin Metcalf, Finance Director Description of Corrective Action – Since that time, the organization has developed an invoice and payment process. This ensures proper disbursement and approval processes and supporting documentation are obtained for expenses incurred. We will ensure that the expenses for the grants are reviewed monthly and will make the correct adjustments on a timely basis to ensure that the funds are approved and paid in accordance with the grant documents. Completion Date – June 30, 2025 Root Cause – New program procedures were not in place

VIEWS OF RESPONSIBLE OFFICIALS Develop a subrecipient contract template that guarantees compliance. Establish a fiscal and administrative subrecipient manual and procedure that describe fund management and compliance criteria. This manual will include monitoring procedures and standards forms. Establish an indirect cost policy to standardize the evaluation and approval for subrecipient. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Socioeconomic Development of the Family (ADSEF, by its Spanish Acronym)

Issue: Summary Condition: The Auditee submitted reimbursement requests to the Mississippi Department of Education (MOE) that were not fully supported: Standard monthly amounts requested for Digital Learning Instructor (DU) labor exceeded actual contract costs, resulting in overstatements. 1 of 60 items sampled lacked support for $11,700 in charges. Cause: The Consortium requested funds before receiving invoices or verifying actual expenses. There was no reconciliation process in place to verify that reimbursement requests matched actual expenditures. Effect: Federal funds were received in excess of allowable costs and not returned to the grantor. These excess reimbursements represent questioned costs which the grantor could request funds to be refunded. Criteria: In accordance with 2 CFR 200.403 and 200.430, costs must be necessary, reasonable, and allocable, and adequately documented to be allowable under federal awards. Questioned Costs: Total known questioned costs are $49,082, which includes: $37,382 related to Digital Learning Instructor (DLI) contract labor, including $34,445 in excess labor charges and $2,937 in related indirect costs. These charges were identified through a 100% review of all DU contract labor activity for fiscal year 2023. $11,700 from a single reimbursement request that partially lacked supporting documentation. This item was identified during testing of a sample of 60 items totaling $6,545,759.87. Response: The Consortium acknowledges the finding and agrees with the audit's assessment. The practice of requesting reimbursement based on estimated monthly amounts without timely reconciliation to actual expenses was not in alignment with federal cost principles under 2CFR 200.403 and 200.430. We recognize that this oversight led to the disbursement of excess federal funds, and we are committed to promptly resolving this issue and implementing strong internal controls to prevent recurrence. Corrective Action Plan: Reconciliation Process Implementation: We have implemented a formal reconciliation process to ensure reimbursement requests are in line with actual cost. This includes reviewing all invoices and matching them to amounts requested. Return of Excess Funds: We are identifying and preparing to return any excess federal funds that were distributed as a result of these overstatements, as part of our reconciliation review. Corrective Action Timeline: The reconciliation process was initiated in June 2025. The return of fund to Mississippi Department of Education will begin with sending the audit report to MDE and getting directions on how to return overstated funds. Responsible Individuals: Mark Brown, business manager, is leading the implementation of the corrective action measures, in collaboration with Projects Coordinator, Susan Scott.

2023 – 005 - Significant Deficiency in Internal Control Over Compliance: Allowable Costs and Activities Recommendation: 1. Implement a Formal Expenditure Review and Approval Policy – Establish a policy requiring that all expenditures charged to grants be reviewed and approved by an appropriate individual before being recorded in the system. 2. Require Documentation of Review and Approval – Ensure that invoices, payroll allocations, and other cost support documents include a signature, initials, or system-generated approval to confirm review. 3. Utilize System-Based Controls – If possible, configure the financial system to require electronic approval for all grant-related expenditures before costs are recorded. Management View: Management partially agrees with the finding. While we acknowledge that documentation of expenditure approval was not always retrievable, we believe the expenditures reviewed were all appropriate. Finding 2023-006 refers to the auditors’ assessment of expenditure review and approval processes that occurred in Calendar Year 2023. During Calendar Year 2023, Prism relied on email routing of expenditures for review and approval. As of this writing, Prism Health North Texas’ expenditure review and approval processes already meet or exceed the recommendations above. Action Taken: 1. Expenditure Review – All expenditures charged to grants are reviewed and approved by two qualified individuals. 2. Documentation of Review and Approval – a. Such review and approval for non-payroll expenditures occur in and are documented in the SAP Concur software before the costs are recorded in the accounting system (Abila). b. Such review and approval for payroll-related expenditures occur via and are documented via a combination of methods, also before they are recorded in Abila. i. Employees report their time, including how much time was devoted to grant activities, in the ExponentHR payroll system, and their supervisors approve both the time and the allocation in that system. ii. Programmatic measures that also support grant billing (“units”) are calculated from activity documented in the athenaOne electronic health record (EHR). iii. Payroll allocation is calculated by one person, based on the ExponentHR documentation and the units, then reviewed and imported into Abila by a second person. The unposted transactions are reviewed again before posting. 3. Utilize System-Based Controls – In place as above. Anticipated Completion Date: The recommendations are already in place. Responsible Contact Person(s): • Name: General Laffitte • Title: Vice President of Finance and Accounting • Phone: 214-623-6896 • Address: 3900 Junius St. Ste. 300, Dallas, Texas 75246 • Name: Jana Voege • Title: Chief Financial Officer Address: 3900 Junius St. Ste. 300, Dallas, Texas 75246 Corrective Action Plan Date: 4/28/2025 Cognizant or Oversight Agency for Audit Prism Health North Texas respectfully submits the following corrective action plan for the year ended FY2023. Name and address of independent public accounting firm: Armanino LLP 15950 Dallas Pkwy #600, Dallas, TX 75248 (972) 661 - 1843 Audit Period: The consolidated financial statements of AIDS Arms, Inc. were audited for the period of calendar year 2022 and 2023. The findings from the year ended December 31, 2023, schedule of findings and questioned costs are discussed below. The Findings are numbered consistently with the numbers assigned in the schedule.

STDC acknowledges the auditor's finding regarding the inclusion of $12,153 in administrative costs in a supplemental reimbursement request submitted via Form B-13 to the Texas Department of State Health Services (DSHS) under the Ryan White HIV/AIDS Program – Part B. The costs in question lacked contemporaneous supporting documentation at the time of audit review. While STDC maintains that all costs submitted were incurred in good faith to support the Ryan White program, the lack of appropriate documentation constitutes a lapse in internal controls by the former Finance Director, Julia Gonzalez, over post-award claims processing. STDC has initiated an internal review and will consult with DSHS to determine the appropriate repayment action. Additional controls and protocols are being implemented to ensure that all future reimbursement requests—especially post-period—are fully documented, verified, and approved. Corrective Action Plan Finding Number: 2023-02 Planned Completion Date: July 31, 2025 Responsible Official: Director of Finance Corrective Actions to Be Implemented: 1. Policy and Procedure Development STDC shall develop a written policy governing post-award and supplemental reimbursement requests, with clear requirements for documentation and approval. The policy will define acceptable forms of documentation, including invoices, time records, internal allocation spreadsheets, and procurement records. 2. Document Verification Protocol Require pre-submission validation of all reimbursement entries by the Finance Director. 3. Supervisory Review and Sign-Off Supplemental claims must receive sign-off from both the Finance Director and the Executive Director prior to submission. Claims will include documentation verification and reconciliation to program records. 4. Training Ensure all finance department staff involved in grant accounting and reporting are trained on documentation requirements under 2 CFR Part 200, and internal review protocols for final and supplemental financial reports. 5. Communication with DSHS STDC will communicate with DSHS regarding the questioned costs and will take appropriate action based on agency guidance, including cost disallowance and repayment as required. 6. Quarterly Internal Reconciliation Establish recurring quarterly reviews of actual costs incurred versus amounts reimbursed to identify discrepancies and prevent accumulation of unsupported claims.   Policy Title: Post-Award Reimbursement and Documentation Policy Effective Date: July 10, 2025, or upon adoption by the STDC Board of Directors Applies to: Finance Department, Grants Compliance, Department Heads Purpose To ensure that all reimbursement requests, including post-award and supplemental claims, are adequately documented, supported, and reviewed in compliance with 2 CFR §200 Subpart E. Policy Overview STDC shall not submit for reimbursement any cost for which contemporaneous and auditable documentation is not available. All supplemental reimbursement submissions must undergo a formal review and approval process to ensure the allowability, allocability, and documentation of all requested costs. Procedures 1. Required Documentation: Every cost line item included in a supplemental reimbursement must be supported by original documentation including: o General ledger detail o Paid invoice or payroll record o Allocation spreadsheet (if applicable) o Program approval or correspondence 2. Review Process: The Department Heads, or their designee, will verify that all documents meet federal allowability and documentation standards prior to submission to the Finance Department. A Supplemental Reimbursement Review Checklist must be completed and signed before submission of any supplemental requests. 3. Approval Authority: Final approval must be obtained from the Finance Director and Executive Director. 4. Retention Requirements: All reimbursement submissions and supporting documentation must be retained according to the STDC Local Record Retention Schedule. 5. Reporting Discrepancies: Any discrepancy, missing documentation, or unsupported cost identified must be reported to the Finance Director immediately for resolution before claim submission.

STDC acknowledges the audit finding regarding the inclusion of sales tax on a utility invoice that was initially charged to multiple federal programs through the administrative cost pool. While the vendor issued credit for the sales tax in question, the original charge had already been distributed across multiple grants, and appropriate reallocations were not documented at the time of audit review. Documentation of the credit was made in the subsequent month’s billing cycle and applied to the listed programs. STDC takes seriously its obligation to ensure compliance with Uniform Guidance cost principles and recognizes the need to improve internal controls regarding invoice review and post-payment credit reconciliation. The Finance Department is taking immediate steps to make necessary reallocations to correct the grant charges and to implement control procedures that prevent future errors of this nature. Corrective Action Plan Finding Number: 2023-05 Planned Completion Date: July 31, 2025 Responsible Official: Director of Finance Corrective Actions to Be Implemented: 1. Immediate Reallocation of Sales Tax Credit The Finance Department will correct accounting entries to reallocate the $51.47 vendor credit back to the same federal grants charged. Journal entries will be completed and documented by July 31, 2025. 2. Invoice Review Protocol All vendor invoices will now be reviewed prior to payment for unallowable costs such as sales tax. Reviewers must initial a compliance checklist confirming allowability. 3. Credit Tracking and Reallocation Procedure Establish a formal mechanism for tracking vendor credits and documenting the reallocation of any prior charges to federal programs. Credits will be logged in STDC’s finance system (AccuFund) to the corresponding grants. 4. Staff Training Finance and grant staff will be trained on Uniform Guidance cost principles with specific attention to tax-exempt status and handling of credits. Training will be held annually and as part of onboarding. 5. Quarterly Reconciliation Review The Finance Department will implement quarterly reconciliation reviews to ensure that any sales tax mistakenly paid is credited back and accurately reallocated.   Policy Insert: Sales Tax Review and Vendor Credit Reallocation Procedure Purpose: To ensure that all costs charged to federal awards are allowable and that any vendor credits (e.g., for sales tax) are correctly applied and documented in accordance with 2 CFR §200.403 and §200.405. Procedure: 1. Invoice Review Prior to Payment Accounting Technicians must review all invoices for unallowable items, including sales tax. Any invoice that includes sales tax must be returned to the program department for correction or payment adjusted accordingly by their vendors. 2. Vendor Credit and Grant Reallocation Upon receipt of a credit from a vendor, the credit must be reviewed for its original allocation(s) to federal grants. The credit amount must be allocated proportionally back to each grant that was charged. A reallocation journal entry must be documented and approved by the Finance Director. 3. Documentation and Recordkeeping Copies of invoices, credits, allocation entries, and internal review checklists must be retained with supporting documentation as required by STDC’s Local Record Retention Schedule. 4. Oversight The Finance Director will review the implementation of this policy on a quarterly for completeness and compliance.

Description of Finding: A disbursement made to a vendor was not supported with adequate documentation to support the payment that was made. Planned Corrective Action: To address the lack of adequate documentation for vendor disbursements, YWCA New Hampshire will implement the following measures: 1. Policy Update: Revise the Financial Management Policy to mandate that all disbursements require supporting documentation, including invoices, purchase orders, and approval signatures, before processing. 2. Training: Conduct mandatory training for all staff involved in procurement and payment processes on proper documentation requirements by June 30, 2025. 3. Internal Review Process: Establish a pre-payment review checklist to be completed by the Finance Manager to ensure all required documentation is present. 4. Document Retention: Implement a digital filing system, through Bill.com, to store and organize all disbursement-related documents, ensuring easy retrieval for audits. 5. Monitoring: The CFO will conduct monthly reviews of a sample of disbursements to verify compliance, with findings reported to the Executive Director. Responsible Party: Finance Manager, overseen by Caroline Catlender, Executive Director Anticipated Completion Date: July 31, 2025

The Organization acknowledges this repeat finding and will take steps to address the deficiencies noted. Since the prior year's audit, management will implement updated procedures to strengthen internal controls around documentation of allowable costs charged to federal awards. These measures include the development of a formal time and effort reporting system, which requires all grant-funded employees to submit periodic certifications that reflect actual hours worked and funding source allocation. Supervisors are now required to review and approve these certifications to ensure alignment with actual program activities. Additionally, the Organization will reinforce its invoice documentation and review process. All expenditures charged to the Block Grant and Opioid STR programs must now be supported by detailed invoices and documentation that clearly demonstrate allocability, allowability, and consistency with the approved grant budget and period of performance. These requirements are monitored through monthly reviews by the finance department. The Organization has also adopted a document retention policy aligned with 2 CFR §200.334, and relevant staff have received training on documentation and compliance requirements for federal awards. These corrective actions are being actively monitored by the Director of Finance to ensure full implementation and ongoing compliance. Organization Contact Person Responsible for Corrective Action: Joseph Koehler, Director of Finance Anticipated Completion Date: June 30, 2025

Supporting Documentation Federal Agency: Department of Agriculture Federal Program Name: Supplemental Nutritional Assistance Program (SNAP) Assistance Listing Number: 10.561 Recommendation: We recommend the University develop a procedure for ensuring all expenditures made via corporate credit card receive appropriate approval. We also recommend management maintain proper recordkeeping and retention of documentation. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The University is improving its processes surrounding obtaining supporting receipts from employees who check out a Kroger GoCard. Procedures are in place to reconcile the Expense Log to receipts on a weekly basis to discover any missing documents much sooner to allow Purchasing to retrieve a copy from the store or the Kroger web site. Name(s) of the contact person(s) responsible for corrective action: Fran Pinkston, Director of Purchasing & Procurement Planned completion date for corrective action plan: December 31, 2025

Supporting Documentation Federal Agency: Various Federal Program Name: Research and Development Cluster Assistance Listing Number: Various Recommendation: We recommend the University develop a procedure for ensuring all expenditures made via corporate credit card receive appropriate approval. We also recommend management maintain proper recordkeeping and retention of documentation. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The University is improving its processes surrounding obtaining supporting receipts from employees who check out a Kroger GoCard. Procedures are in place to reconcile the Expense Log to receipts on a weekly basis to discover any missing documents much sooner to allow Purchasing to retrieve a copy from the store or the Kroger web site. Name(s) of the contact person(s) responsible for corrective action: Fran Pinkston, Director of Purchasing & Procurement Planned completion date for corrective action plan: December 31, 2025

Management agrees with the auditors' finding and will take action to implement controlling procedures over federal programs.