Corrective Action Plans

FINDING 2023-005 Finding Subject: Special Education Cluster (IDEA) – Allowable Costs/Cost Principles Summary of Finding: Material Weakness, Other Matters The Individuals with Disabilities Act (IDEA) Special Education – Grants to States program provides grant to states, and through them to Local Educational Agencies (i.e. the School Corporation), to assist them in providing special education and related services to eligible children with disabilities ages 3-21. IDEA’s Special Education – Preschool Grants program provides grants to states, and through them to LEAs to assist them in providing special education and related services to children with disabilities ages three to five and, at the state’s discretion, to twoyear- old children with disabilities who will turn three during the school year. The School Corporation did not have internal controls in place over payroll disbursements made from the special education funds. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Contact Person Responsible for Corrective Action: Bengamin Mann Contact Phone Number and Email Address: 765-661-8807 bmann@mgusc.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Quarterly grant meetings will be held between the CFO, Deputy Treasurer, and Grant writer. This will ensure compliance requirements continue to be met. The CFO now reviews the Org Charge report and signs off before the payroll batch being released to the bank. This report is generated by Payroll and Benefits. Also, this entire report is now included with board claims for board approval rather than a final summary sheet. Anticipated Completion Date: February 2024

FINDING 2023-002 Finding Subject: Child Nutrition Cluster – Allowable Costs/Cost Principles Summary of Finding: Material Weakness, Other Matters A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. The School Corporation did not have internal controls in place over payroll disbursements charged to the food service program. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Contact Person Responsible for Corrective Action: Bengamin Mann Contact Phone Number and Email Address: 765-536-0008 bmann@mgusc.k12.in.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: The CFO now reviews the Org Charge report and signs off before the payroll batch being released to the bank. This report is generated by Payroll and Benefits. Also, this entire report is now included with board claims for board approval rather than a final summary sheet. Anticipated Completion Date: February 2024.

FINDING 2023-002 Subject: COVID-19 Education Stabilization Fund – Allowable Costs Federal Agency: Department of Education Federal Program: COVID-19 Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Number: S425U210013 Compliance Requirement: Allowable Costs Audit Findings: Significant Deficiency Condition: The School Corporation did not have internal controls in place to ensure that the School Corporation complied with the allowable cost requirements. The School Corporation did not have adequate procedures in place to ensure that the expenditures charged to the grant were accurate and pertained to the Education Stabilization Fund. Context: The School Corporation requested a transfer of $54,886 from the School Lunch Fund to the Education Stabilization Fund to cover costs incurred for Grab & Go meals as a result of the COVID-19 Pandemic. Upon review of the supporting detail, the actual amount of expenditures for the Grab & Go meals was $30,293, resulting in over reporting of receipts in the amount of $24,593. This was due to a clerical error made by management that was not caught in the review process. Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: We will transfer the over expenditure of $24,593 from the School Lunch Fund to the Education Stabilization Fund to correct the error. To make sure this type of error does not occur in the future; the district will change our internal control procedures to have a second person review and sign the transfer prior to entering the transfer into the financial software to ensure accuracy. Responsible Party and Timeline for Completion: The CFO will enter the corrective transfer and have it reviewed and signed off on by the Deputy Treasurer prior to February 29, 2024.

CORRECTIVE ACTION PLAN OF CURRENT AUDIT FINDINGS June 30, 2023 FINDING 2023-001 Subject: Special Education Cluster (IDEA) – Earmarking Federal Agency: Department of Education Federal Program: Special Education Preschool Grants Assistance Listing Number: 84.173 Federal Award Number: 22619-043-PN01 Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Significant Deficiency Condition: The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. Context: The School Corporation is a member of the Northwest Indiana Special Education Cooperative (Cooperative). During fiscal year 2022-2023, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The Non-Public Proportionate Share expenditures for the 22619-043-PN01 grant award could not be verified for the individual member schools. Total grant expenditures were posted as expended. The non-public proportionate share expenditures were determined by applying a percentage to the non-public school budgeted expenditures. As such, we were unable to identify if the minimum amount per the grant award was expended and properly reported to IDOE as required. The lack of internal controls was isolated to the 22619-043-PN01 grant award. Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: As a member of the Northwest Indiana Special Education Cooperative (NISEC), Highland reported their proportionate share based on a percentage of expenditures and had successful audits in doing so. When Highland was notified that this process was no longer acceptable, we immediately implemented an internal control process with NISEC which included a detailed reporting of staff work hours for nonpublic schools related to only our school corporation. The report is then reviewed and signed by the NISEC staff working for the nonpublic school and their supervisor. The employee detailed time and effort report is then provided to the NISEC finance department for a second review and signature before being reported to payroll. NISEC payroll then charges the proportionate share to the IDEA Part B and the Special Education Pre-School grants in the payroll system bi-weekly based on the time and effort report pertinent to just Highland. The time and effort reports are then used to submit the reimbursements request to the Department of Education for Highland’s proportionate share. Additionally, any IDEA Part B nonpublic material expense is broken out in detail with Highland’s proportionate share for approval by the NISEC finance office prior to vendor payment and the reimbursement request is submitted to the Department of Education. Responsible Party and Timeline for Completion: Federal regulation requires name and title of person overseeing corrective action plan and anticipated completion date. Peyton Gilmore, NISEC CFO, indicated that NISEC stopped reporting nonpublic proportionate share expenditures by percentages as of the 2022/2023 school year. An internal control procedure to report nonpublic proportionate share expenditures by detailed time and effort work of expenditures was implemented as of September 2022.

Program: AL 20.509 – Formula Grants for Rural Areas and Tribal Transit Program – Allowability Corrective Action Planned: The transit will work with NDOT and FTA to ensure cost allocations have proper documentation. Any items that may not seem clear cut will be reviewed by NDOT or mobility management for feedback on the appropriateness of the expense reimbursement. Anticipated Completion Date: June 30, 2024 Responsible Party: Christy Warner, Transit Administrator

Planned Corrective Action: With the transition to a new CFO, allowable costs are now reviewed on a weekly basis, in addition to a year-to-date review being done weekly, by award.

MANAGEMENT’S CORRECTIVE ACTION PLAN: Management will ensure that all future purchases will comply with Board policy 626 for procurement – federal programs, by processing a purchase order for all purchases regardless of the type of award or purchase. The timeframe for implementation will commence during the remaining months of the 2023-2024 fiscal year and extend to all future fiscal years.

FINDING 2023-001 Finding Subject: Special Education Cluster (IDEA) - Earmarking Summary of Finding: The School Corporation did not have internal controls in place to ensure that the Greater Lafayette Area Special Services Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for nonpublic school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. Contact Person Responsible for Corrective Action: Lissa Stranahan, GLASS Director and Michelle Cronk, CFO of West Lafayette Schools Contact Phone Number and Email Address: Lissa Stranahan Michelle Cronk 765-771-6013 765-746-1602 lstranahan@lsc.k12.in.us cronkm@wl.k12.in.us Views of Responsible Officials: We concur with the finding for earmarking. GLASS did not have adequate procedures in place to ensure that the required level of expenditures for non-public school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure nonpublic school expenditures were appropriately identified and reported. The methodology used by the Cooperative to monitor non-public proportionate share expenditures was based upon a percentage for each school corporation that comprises the Cooperative rather than basing the expenditures off of the grant award for each non-public school within the geographical boundaries of the school corporations. While all proportionate share funds were expended, it was problematic in determining if the minimum amount per the grant awards was expended and properly reported prior to July 1, 2023. Description of Corrective Action Plan: The former Director of GLASS retired June 30, 2023. Upon hire on July 1, 2023, the new director immediately implemented measures to correct the previous methodology used at GLASS. Non-public proportionate share funds are identified and reported based upon the grant award for each school corporation. The expenditures are based upon the geographical location of the non-public school and the corresponding public school corporation, not based upon the “home” school corporation of the student. The school corporation will review the methodology used to calculate non-public proportionate share on the grant applications to ensure that the correct methodology is used. Anticipated Completion Date: The corrective action was already put into place on July 1, 2023. The audit finding reflects the previous grant cycle prior to the action taken.

FINDING 2023-004 Finding Subject: Special Education Cluster (IDEA) – Earmarking Summary of Finding: The Non-Public Proportionate Share expenditures for the 21611-048-PN01 grant award could not be verified for the individual member schools. The non-public school share funds for the participating member schools were allocated based on the yearly budget for certified staff instead of time charged to the non-public schools. These allocations were the amounts reported to IDOE. As such, we were unable to identify which expenditures were for each school in order to verify the minimum amount per the grant award was expended and properly reported to IDOE as required. Contact Person Responsible for Corrective Action: Lana M. Miller Contact Phone Number and Email Address: Phone Number-812-689-6282 Email- lmiller@sripley.k12.in.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: INDIANA STATE BOARD OF ACCOUNTS 31 Expenses for non-public schools are tracked and charged to the appropriate corporation. Staff record time spent at each non-public school, sign and date the form and turn it into the treasurer. The expenses are then moved to the correct expense line on the grant after receiving this information. Materials that are purchased are charged to the correct expense account when paid. ROD’s treasurer will prepare a report showing compliance with the earmarking requirement on a monthly basis. These reports will be provided to the ROD board for review, and our Superintendent is a member of that board. Anticipated Completion Date: July 1, 2023

FINDING 2023-002 Finding Subject: COVID-19 - Education Stabilization Fund – Allowable Cost/Cost Principles Summary of Finding: Time and Effort logs were not maintained for grant Contact Person Responsible for Corrective Action: Todd Nobbe Contact Phone Number: 812-934-2194 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: The School Corporation will have the individuals paid by this grant complete time and effort documentation for the grant. Documentation will be kept for the audit. Completion Date: Immediately 2/26/2024

FINDING 2023-002 Finding Subject: Child Nutrition Cluster- Allowable Activities, Allowable Costs/Cost Principals Summary of Finding: A portion of the wages for the CFO/Treasurer, the Director of Operations, the Director of Finance, and two School Secretaries were paid from the School Lunch Fund. The wages charged to the School Lunch fund were based on fixed percentages and did not provide adequate information to determine if the percentage charged was appropriate. Total wages charged to the program for the above noted employees was $31,617. Contact Person Responsible for Corrective Action: Camden Parkhurst Contact Person Phone Number and Email Address: 765-457-8101 camden.parkhurst@nwsc.k12.in.us View of Responsible Official: We concur with the finding. There was a substantial amount of turnover within the finance department. It was understood that the mentioned salaries were removed from the 0800 fund following the last audit. During review it was discovered only the Director of Operations and Assistant Treasurer salaries were removed from the child nutrition cluster. Upon discovery the Operations Assistant and Director of Finance were still having a portion of the salary paid from the 0800 fund, they were immediately removed. Description of Corrective Action Plan: The Director of Finance and the Operations Assistant’s salaries have been removed from the 0800 fund and returned to the 0300 fund. Anticipated Completion Date: Immediate and has been completed.

FINDING 2023-004 Finding Subject: COVID-19 - Education Stabilization Fund – Allowable Costs/Cost Principles Summary of Finding: Condition and Context The Elementary and Secondary School Emergency Relief (ESSER) Fund provided funding to States and school districts to combat the effects of the coronavirus pandemic, help safely reopen and sustain the safe operation of schools, and to address the impact of the coronavirus pandemic on the nation’s students. States were required to subgrant a portion of their ESSER allocation to local educational agencies (LEA). Prior to LEAs receiving their respective subgrants, LEAs were required to complete an application for ESSER funding, which was submitted to the Indiana Department of Education (IDOE), the pass-through entity for approval. The application included a district level budget identifying how the LEA intended to spend program funds. Per the School Corporation’s approved application, program funding was budgeted for salaries and respective benefits, counseling services, and supplies. A sample of 40 payroll claims charged to the ESSER program for which reimbursement was received during the audit period was selected for testing to verify the expenditures were in conformance with the applicable cost principles. Of the 40 payroll claims tested, 21 payroll claims were determined to be for payroll adjustments into the ESSER II fund. For all 21 payroll adjustments, totaling $1,509,248, there was not adequate supporting documentation to determine to where the payroll was originally paid, to whom the original payment was made and at what amount the original payment was made. The total amount of the 21 payroll claims/adjustments, $1,509,248, was determined to be questioned costs. Due to the lack of documentation for the payroll adjustments into the ESSER II fund, all adjustments were reviewed. A review of the additional adjustments resulted in an additional $114,353 of payroll charges in which there was not adequate supporting documentation to determine to where the payroll was originally paid, to whom the original payment was made and at what amount the original payment was made. In addition, the School Corporation requested a total reimbursement of $3,342,940 in payroll costs from their ESSER allocation during the audit period. However, expenditures per the ledger for payroll and benefits totaled $2,995,014. As a result, the School Corporation over requested and received $347,926 for payroll expenditures that cannot be substantiated. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the payroll adjustments and additional payroll noted above. Contact Person Responsible for Corrective Action: Dr. Thomas A. Keeley, Executive Director of Business Services Contact Phone Number and Email Address: (574) 258-9591 Tkeeley@phm.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The school corporation will revise job descriptions to clearly identify segregation of duties for Federal Fund Coordinators, employees responsible for calculating accurate disbursement reports, reimbursement requests and payroll processing. Detailed expenditure reports will be generated for end of year reporting with the Accounting Specialist, Accounts Payable Coordinator and the Executive Director of Business Services completing a final review process providing signatures indicating review and accuracy before filing. Anticipated Completion Date: March 1, 2024.

Condition: The billing submitted to the awarding agency for May and June 2023 cash management drawdown included expenses that weren’t incurred as of May and June 2023. Planned Corrective Action: The corrective action has been implemented to modify the order of our preventative internal controls. SFTRA has changed the order of review so the electronic drawdown is not completed by the Budget Office until the Accounting Office has reviewed and approved the draw. This step was previously completed after the drawdown was initiated. Additionally, during review by the Accounting Office, the general ledger line detail will be reviewed to ensure accuracy Contact person responsible for corrective action: Jeremy Baker, Director of Finance Anticipated Completion Date: 1/15/2024

FINDING 2023-006 Finding Subject: Special Education Cluster (IDEA) – Earmarking Summary of Finding: The Non-Public Proportionate Share expenditures for the 21611-048-PN01 grant award could not be verified for the individual member schools. The non-public school share funds for the participating member schools were allocated based on the yearly budget for certified staff instead of time charged to the non-public schools. These allocations were the amounts reported to IDOE. As such, we were unable to identify which expenditures were for each school in order to verify the minimum amount per the grant award was expended and properly reported to IDOE as required. Contact Person Responsible for Corrective Action: Julie Dudley Contact Phone Number and Email Address: 812.537.7205 jdudley@lburg.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Expenses for non-public schools are tracked and charged to the appropriate corporation. Staff record time spent at each non-public school, sign and date the form and turn it into the treasurer. The expenses are then moved to the correct expense line on the grant after receiving this information. Materials that are purchased are charged to the correct expense account when paid. ROD’s treasurer will prepare a report showing compliance with the earmarking requirement on a monthly basis. These reports will be provided to the ROD board for review, and our Superintendent is a member of that board. Anticipated Completion Date: July 1, 2023

FINDING 2023-002 Finding Subject: Special Education Cluster - Earmarking Summary of Finding: Material Weakness, Modified Opinion Contact Person Responsible for Corrective Action: Meghan Damron Contact Phone Number and Email Address: 219-650-5300 x5361 Views of Responsible Officials: We concur with the finding. We have taken the audit finding, conclusions and recommendations and created a corrective action plan to correct our earmarking for the future. Description of Corrective Action Plan: As a member of the Northwest Indiana Special Education Cooperative (NISEC), Merrillville Community School Corporation reported their proportionate share based on a percentage of expenditures, and had successful audits in doing so. When Merrillville Community School Corporation was notified that this process was no longer acceptable, we immediately implemented an internal control process with NISEC which included a detailed reporting of staff work hours for nonpublic schools related to only our school corporation. The report is then reviewed and signed by the NISEC staff working for the nonpublic school and their supervisor. The employee detailed time and effort report are then provided to the NISEC finance department for a second review and signature before being provided to payroll. NISEC payroll then charges the proportionate share to the IDEA Part B grant in the payroll system bi-weekly based on the time and effort report pertinent to just Merrillville Community School Corporation. The time and effort reports are then used to submit the reimbursement request to the Department of Education for Merrillville Community School Corporation’s proportionate share. Additionally, any IDEA Part B nonpublic material expense is broken out in detail with Merrillville Community School Corporation proportionate share for approval by the NISEC finance office prior to vendor payment and the reimbursement request is submitted to the Department of Education. 􀀃􀀃 Anticipated Completion Date: The Northwest Indiana Special Education Cooperatives Chief Financial Officer stopped reporting nonpublic proportionate share expenditures by percentage as of the 2022-2023 school year. An internal control procedure to report nonpublic proportionate share expenditures by detailed time and effort work and expenditures were implemented as of the 2023-2024 school year.

FINDING 2023-004 Finding Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Summary of Finding: Management had not developed an effective system of internal control that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could have resulted in the loss of funds to the School Corporation. We recommended that the School Corporation's management establish an effective system of internal control to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Contact Person Responsible for Corrective Action: Andrea Miller Contact Phone Number and Email Address: 765-564-2100, millera@delphi.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: A price list will be requested from vendors (GFS/Piazza) twice a month to reflect current pricing, and reports will be filed by school year by the Food Service Director for reference. The Food Service Director or Assistant will sample items that have been purchased and compare them to the pricing listing to verify accuracy. Anticipated Completion Date: August 2024

Finding Number: 2023-001 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing: 21.027 Pass-Through Entity: Maryland State Department of Education Pass-Through Entity Award Information: 211874 (3/3/2021 – 12/31/2024) Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Compliance: 2 CFR section 200.403 states, in part, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented. Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: For one of sixty transactions selected for testing, Anne Arundel County Board of Education (the Board) was unable to provide documentation supporting that the payment was allowable under the program. The invoice supporting an employee purchase for summer baking/cooking camp could not be provided. Questioned Costs: $31.93, the amount of the unsupported employee purchase. Cause: The Board’s procedures were not sufficient to ensure that it maintained documentation supporting employee purchases. Internal controls did not prevent or detect the error. Effect: Unallowable costs could be charged to the program. Recommendation: We recommend that the Board review its policies and procedures to ensure that it maintains documentation supporting employee purchases and that this documentation is readily available for audit. Views of responsible officials: Explanation of disagreement with audit finding: There is no disagreement with the audit finding. AACPS acknowledges that a receipt supporting the $31.93 purchase could not be located. AACPS made several attempts during the single audit's development phase to procure the receipt from the employee, but without success. Throughout the audit, the teacher furnished a detailed account of the purchased items and the purpose behind it. Nevertheless, the supervisor had sanctioned the purchase, the teacher provided a valid reason for the missing receipt, and the amount was negligible. The principal had initially approved the purchase, and supervisor authorization is standard procedure for all purchases, either before or after the transaction. Therefore, AACPS believes this finding should be considered immaterial and requests its exclusion from the single audit report. Action taken in response to finding: A meeting has been scheduled with the Supervisor of Purchasing to begin the process to review the Purchasing Card (PCard) Manual and included processes and procedures. AACPS will review and update as necessary to ensure that all staff members who have PCard responsibility (purchase and approval authority) are aware of the crucial need to maintain accurate and complete records, including copies of all receipts. AACPS believes its current policies and procedures are sufficient and provide sound internal controls. Name(s) of the contact person(s) responsible for corrective action: Matthew Stanski, Chief Financial Officer; Krishna Bappanad, Supervisor of Finance; Mary Jo Childs, Supervisor of Purchasing. Planned completion date for corrective action plan: February 28, 2024.

Finding 2023‐001 Finding Subject: COVID‐19 ‐ Education Stabilization Fund ‐ Allowable Costs/Cost Principles Summary of Finding: The School Corporation paid security contractors without an invoice. Costs charged to grant funds must be adequately documented. The School Corporation had an accounts payable voucher signed by the contractor, but there was no invoice supporting the accounts payable voucher. Costs charged to grant funds must be adequately supported with documentation. Contact Person Responsible for Corrective Action: Tiffany Grant, Grant Coordinator Contact Phone Number and Email Address: 765‐342‐6641 ‐ Tiffany.Grant@msdmartinsville.org Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: A contract is on file with the Martinsville City Police Department for the contracted police officers that work for the MSD of Martinsville. Going forward, contracted police officers will submit their timesheets directly to the MSD of Martinsville Assistant Police Chief. The Assistant Police Chief will verify hours worked and submitted to the schedule. The Assistant Police Chief will review and initial/sign the vouchers before submitting those to the Grant Coordinator for review and signature. Anticipated Completion Date: February 2024

CORONAVIRUS STATE AND LOCAL RECOVERY FUNDS, ASSISTANCE LISTING 21.027 : INELIGIBLE COSTS / UNIFORM GUIDANCE 2 CFR PART 200 UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS, SUBPART E: COST PRINCIPLES SECTION 200.403(F) STATE "EXCEPT WHERE OTHERWISE AUTHORIZED BY STATUTE, COSTS MUST MEET THE FOLLOWING CRITERIA IN ORDER TO BE ALLOWABLE UNDER FEDERAL AWARDS: (F) NOT BE INCLUDED AS A COST OR USED TO MEET COST SHARING OR MATCHING REQUIREMENTS OF ANY OTHER FEDERALLY-FINANCED PROGRAM IN EITHER THE CURRENT OR PRIOR PERIOD. / THE CITY OF EAST PRAIRIE RECEIVED ARPA FUNDS THROUGH MISSISSIPPI COUNTY, MISSOURI FOR THE REMOVAL OF ASBESTOS AND DEMOLITION OF A HAZARDOUS SCHOOL STRUCTURE IN ORDER TO FACILITATE THE CONSTRUCTION OF A PUBLIC HEALTH FACILITY IN AUGUST AND SEPTEMBER, 2022. IN DECEMBER OF THE SAME YEAR, THE CITY RECEIVED WAS AWARDED AND ARPA GRANT AND FUNDS THROUGH THE MISSOURI DEPARTMENT OF ELEMENTARY AND SECONDARY EDUCATION FOR THE SAME PROJECT. THIS WAS A DUPLICATION OF ARPA FUNDS DUE TO THE CITY NOT BEING FULLY AWARE OF THE COST STANDARDS OF UNIFORM GUIDANCE AND A MISCOMMUNICATION REGARDING ELIGIBILITY OF COSTS. / THE CITY OF EAST PRAIRIE HAS CONTACTED MISSISSIPPI COUNTY AND WILL BE RECEIVING AUTHORIZATION FROM THE MISSISSIPPI COUNTY COMMISSION TO RE-ALLOCATE THOSE FUNDS FOR THE SAME PUBLIC HEALTH FACILITY PROJECT. WE ARE ALSO DEVELOPING A WRITTEN POLICY AND PROCEDURE MANUAL CONFORMING TO UNIFORM GUIDANCE.

ALLOWABLE COSTS AND COST PRINCIPLES Department of Health and Human Resources (DHHR) Assistance Listing Number 97.036, COVID-19 97.036 The DHHR analyzed this finding and hereby offers more details into the condition and cause of the finding. Although the DHHR concurs with the condition statement in the finding, in that certain invoices were paid to one vendor without verifying their accuracy, the DHHR does not concur with the cause statement, which proclaims a lack of proper controls within the DHHR. While no set of internal controls can prevent unseemly or otherwise improper payment activities with absolute assurance, the DHHR does indeed have proper internal controls in place to provide reasonable assurance that invoices are verified for accuracy prior to payment. The DHHR is a large state agency with many spending units, divisions, and levels of oversight and approval. Accordingly, when paying invoices, the process includes a separation of duties. Authorization to approve cash payments begins with the DHHR spending unit, which was a programmatic unit in this case since the vendor in question was required to provide nasal swab diagnostic testing for COVID-19 and upload the test results immediately, as the tests were for specific DHHR programs and initiatives that were an absolute priority at the time. For these and other types of billings, the spending unit receives the invoice from the vendor, conducts an initial review for completeness and accuracy, and approves [or denies] the invoice for payment pursuant to the internal specifications at the spending unit level. If approved for payment, the invoice must be certified by the spending unit. Per the Code of State Rules, Title 155, Series 1, Standards for Requisition for Payment Issued by State Officers on the Auditor, the term “certify” means, “To verify that pertinent information is true and accurate by affixation of a manual signature by an authorized person.” To comply with the verification requirement, 155CSR1-3.1.3 requires the invoice to be stamped with the following certification: “I hereby certify that the items or services contained in the foregoing have been received and approved for payment.” Within the DHHR, the certification must be dated and signed by an authorized representative at the spending unit level with authority to approve such payments. The spending unit then enters the information into wvOASIS, which is the statewide accounting system, and forwards the related documentation to the DHHR central finance office. The central finance office performs a secondary review for completeness and accuracy pursuant to the specifications at the DHHR central level and, if acceptable, approves the documents within the wvOASIS workflow to the WV State Auditor’s Office for final review, approval, and processing of the payment pursuant to the specifications at the statewide level. For the invoices in question, the person authorized to certify the invoices and approve the payments was an upper-level supervisor, and his duties in that position had included reviewing and verifying the accuracy of certain invoices submitted to the DHHR by vendors supplying the aforementioned COVID-19 testing and mitigation services prior to certifying the invoices for payment. The supervisor originally proclaimed that he certified the invoices only after two individuals working with the program verified the invoices. The supervisor subsequently admitted that he certified the invoices without actually making any effort to verify their accuracy. The supervisor is no longer employed by the DHHR. It is important to note that although the supervisor certified the invoices without making any effort to verify their accuracy, it has yet to be determined if the vendor’s invoices were correct or erroneous. Currently, there are several internal and external organizations investigating the vendor and the overall condition that led to this finding. Those investigations began prior to the period of the audit. Once complete, the investigations will disclose additional details surrounding the validity of the invoices and the costs in question.

ALLOWABILITY Department of Education (DOE) Assistance Listing Number COVID-19 84.425D, 84.425U The DOE plans to strengthen its internal controls by putting in place a review of procurement procedures prior to the Local Educational Agency (LEA) finalizing a purchase. This control will entail DOE working with LEAs to monitor their internal control procedures for procurement and testing these procedures randomly throughout the year. The questioned costs were first identified as stringing in the FY21 monitoring. Subsequently, there was a repeat finding with the same vendor in FY22 which raised additional questions. The LEA was required to do an additional training put on by the DOE to improve knowledge/procedures of WV Policy 8200. The DOE plans to address these issues by working with the LEA to move the expenses off federal monies. Along with working with the LEA, the DOE is working with the FBI, West Virginia State Police, and the Office of the Inspector General to investigate the spending and the vendor themselves.

FINDING 2023-003 Subject: COVID-19 – Education Stabilization Fund –Allowable Costs/Cost Principles Summary of Finding: Condition and Context The American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) Fund provided funding to States and school districts to help safely reopen and sustain the safe operation of schools and to address the impact of the coronavirus pandemic on the nation’s students. States were required to subgrant a portion of their ARP ESSER allocation to local educational agencies (LEA). Prior to LEAs receiving their respective subgrants, LEAs were required to complete an application for ARP ESSER funding, which was submitted to the Indiana Department of Education (IDOE), the pass-through entity for approval. The application included a district level budget identifying how the LEA intended to spend program funds. Per the School Corporation’s approved application, program funding was budgeted for salaries and respective benefits for Director of Student Support, Title I Aide, Career Coach, Summer School Positions, and a Social Emotional Academic Learning Liaison, as well as for equipment as classified under the facilities acquisition and construction expenditure account. The School Corporation noted on their application that the funds budgeted for equipment were strictly for the costs of the equipment and did not include any costs for labor. A sample of 31 claims charged to the ARP ESSER program for which reimbursement was received during the audit period was selected for testing to verify the expenditures were in conformance with the applicable cost principles. Of the 31 claims tested, four claims totaling $693,454, each of which were paid to the same contractor, included costs for labor and project management related to air handling units in multiple buildings. Due to the magnitude of the exceptions identified, all remaining payments made to this contractor for which the School Corporation received reimbursement during the audit period were abstracted and reviewed. Upon review of these claims, additional labor and project management costs of $306,745 were identified. The aggregate total of $1,000,199 expended for labor and project management costs are considered questioned costs as they were not approved by IDOE prior to being expended as required by the terms and conditions of the federal award. In addition, the School Corporation submitted twice to IDOE, four different invoices for expenditures related to the ARP ESSER program. As a result, the School Corporation received duplicate reimbursements for the expenditures on each of the four invoices, resulting in the School Corporation receiving $50,000 more than their approved allocation of ARP ESSER funding. The management of the School was aware of this error; however, did not contact IDOE to resolve the issue, nor did they return the funds to the State. Lastly, the School Corporation submitted to IDOE a request for reimbursement for expenditures totaling $12,113 for the Governor Emergency Education Relief Fund (GEER) program. The School Corporation received the reimbursement of $12,113 twice from IDOE. This resulted in the School Corporation receiving an extra $12,113 of GEER funding that they should not have received. The management of the INDIANA STATE BOARD OF ACCOUNTS 38 Culver Community Schools Corporation Karen Shuman, Superintendent www.culver.k12.in.us 700 School Street Aubbeenaubbee Township – Fulton County Culver, IN 46511-0231 North Bend Township – Starke County Phone (574) 842-3364 Tippecanoe Township – Pulaski County Fax (574) 842-4615 Union Township – Marshall County _________________________________________________________________ School was aware of this duplicate payment received from IDOE; however, did not contact IDOE to resolve the issue, nor did they return the funds to the State. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure costs are included in the approved budget, are only requested once, and are not retained if received in error. Contact Person Responsible for Corrective Action: Casey Howard Contact Phone Number: 574-842-3364 x806 Views of the Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The Superintendent, Treasurer, Deputy-Treasurer and/or Grant writer will review all grant applications prior to submission. Upon grant approval the same parties will again review approval and review dollar amounts, allowable expenses, etc. The Superintendent, Treasurer, Deputy-Treasurer and/or Grant Writer will review all grant reimbursements and monitor/finance reports prior to submission. A grant amendment has been requested in January 2024 to include additional allowable expenses. Anticipated Completion Date: February 2024 INDIANA STATE

Finding 2023-006: Matching Federal Agency Name: Department of Health and Human Services FFAL #93.087 Program Name: Enhance Safety of Children Affected by Substance Abuse Finding Summary: The Center’s controls did not detect or correct the errors identified, which results in a reasonable possibility that the Center could submit disallowed costs under the federal awards and would not be able to detect and correct noncompliance in a timely manner. The secondary review of match claim workbook did not identify the clerical errors. During testing of expenditures, the following items were identified: a) The number of hours an employee worked per the approved timesheet vs. the hours claimed in the match claim workbook resulted in a clerical error. (1 instance) b) Per review of the supporting timesheet and paystub, an employee had mobile crisis pay which was not accurately reduced in the calculation for match in the match claim workbook (2 instances). Responsible Individuals: Staff Supervisors (Michelle Theesfeld, Kari Van Dam) and Project Accounts Manager (Marsha Bomgaars) Corrective Action Plan: Staff supervisors are to compare ClickTime entries with payroll system entries to ensure they match. The Project Accounts Manager will compare all ClickTime reports and payroll reports to ensure they match and are accurate. CEO will review all grant staff that also provide mobile crisis to ensure that mobile crisis pay is removed before allocating salary and fringe benefits to grant programs. Anticipated Completion Date: Beginning in January 2023, the Center began reconciling ClickTime reports with payroll reports using an excel spreadsheet to identify discrepancies between the ClickTime timecards and the payroll register to help ensure all hours are accurately reported.

ALN No. 93.498, Provider Relief Fund; Award Year: Period 5: January 1, 2022 to June 30, 2022 Finding: Activities Allowed or Unallowed – The controls were not sufficient to ensure that depreciation expense for capital purchases were excluded when the capital expense was also submitted for program reimbursement. Status: Corrective action in progress. Corrective Action: Internal controls will be strengthened in future periods to ensure that ledger details are appropriately filtered to exclude depreciation expense for costs already considered during the review of capital expenditures. The Director of Finance will review ledger details prior to submission to ensure only appropriate ledger accounts are included in requests for reimbursement. Person(s) Responsible for Implementing: Jia Paulucci, Director of Finance and Lindsey Soboloski, Controller Implementation Date: February 12, 2024

The Payroll Department has taken immediate action to develop additional safeguards to ensure changes in pay records are accurately reflected on pay lines. We developed monitoring reports to review data extracted from Kronos to data loaded to pay lines. The central Payroll team will use these reports to identify potential discrepancies and correct pay lines prior to giving department liaisons access to the system to review payroll data. Additionally, Payroll will conduct its routine Kronos Security Audit with Business Officers in October. Once complete, Payroll will communicate with designated HR/Payroll Liaisons and Kronos timekeepers to remind them of their roles and responsibilities as it pertains to monitoring and reviewing payroll data during payroll processing. Lastly, Payroll has worked with Human Resources IT to develop a query that will mimic the paysheets and provide an additional review tool at the department and budget center level. Once fully tested it will be rolled out to the Business Officers to assist in the payroll review process. Anticipated Completion Date: December 31, 2023 Person Responsible for Corrective action: Amelia Hood, Director of Payroll Contact/Responsible Party: Sherri Rowland, AVP and Controller Contact Information: sherrir@clemson.edu