Corrective Action Plans

Views of Responsible Officials and Planned Corrective Action: ASBO has entered a contract with a new 3rd party administrator to provide oversight for all subgrant awardees. This contact is active now. We developed our contract to ensure improved monitoring for expenditures and verification of receipts. Also, we are in the process of developing a portal which will allow this contractor and ASBO to have full access to all documents from subgrantees. Our new vendor does have prior experience with subgrants management. In addition, ASBO commits internally to the following: • We will monitor all capital purchases when the invoices are received at our office. • We will pull a random sample of five invoices per month and conduct our own review of expenses. Views of Responsible Officials and Planned Corrective Action (Continued): Highlights for the Baker contract: ASBO’s broadband grant program management vendor-partner, Michael Baker International (MBI), is contracted for the following activities and deliverables: • Developing the workflow, process, and online forms that facilitate project monitoring and expense reimbursement. • Responsible for pursuing and documenting additional information required for project monitoring and reimbursement activities. These activities shall be completed within the framework of the Broadband Grants Project Monitoring and Reimbursement System (see below for details) and not through external email or other document exchange system. • Develop and apply standardized naming conventions for all project documents that will be maintained throughout the life of the project. Documents shall be stored in a manner that promotes transparency and facilities ease of use by auditors. • Take all reasonable measures to ensure grant activities are implemented in a manner that ensures transparency, accountability, and oversight sufficient to (1) minimize the opportunity for waste, fraud, and abuse; (2) ensure that subrecipients use funds to further the objectives of Federal programs and the Arkansas State Broadband Office; and (3) allow the public to understand and monitor subgrants awarded under the program. • Ensuring all reimbursement activity complies with Federal requirements, including Section 60102 of the Infrastructure Act, 2 C.F.R. Part 200 and any supplemental guidance issued by the Federal government. • Responsible for knowing what constitutes eligible and ineligible expenses under both state and Federal rules. • Provide education and guidance to subrecipients and the ASBO on key oversight and compliance requirements. • Ensure payment activities follow all state and Federal policies and procedures. Contractor acknowledges policies may change over the life of the contract. • Identify policies the ASBO is required to adopt and assist in drafting those policies to ensure ASBO compliance with Federal regulations. • Assist the Arkansas State Broadband Office in enforcing program rules and laws and imposing penalties for nonperformance, failure to meet statutory obligations, or wasteful, fraudulent, or abusive expenditure of funds. Such penalties include, but are not limited to, imposition of additional award conditions, payment suspension, award suspension, grant termination, de-obligation/clawback of funds, and debarment of organizations and/or personnel. Views of Responsible Officials and Planned Corrective Action (Continued): • Conduct audits of subrecipients as are necessary and appropriate. Contractor shall report the results of any audits it conducts to the Arkansas State Broadband Office. • Develop a template contract for subrecipients, specifying key terms including contract length, performance standards, construction and service rollout schedules, competitive access requirements, regulatory compliance requirements, environmental controls, grant reporting and data sharing requirements, monitoring and oversight procedures, and penalties for non-compliance. • Retain and provide to the Arkansas State Broadband Office upon request all records, documents, and communications of any kind that relates in any manner to grant awards and project procurement, performance, and reimbursement. This data shall be labeled and stored in a manner that promotes transparency and facilitates ease of use by auditors. Additionally, MBI is building two new systems for ASBO and subgrantee use: 1. Broadband Grants Project Monitoring and Reimbursement System 2. Grant Application Submission, Evaluation, Award, and Appeal System These systems will have the following features: • Facilitate inputs, responses, data gathering, analysis, and adjudication decision recommendations and subsequent documentation of payment decisions for the Arkansas State Broadband Office’s final approval. • Provide a secure mechanism for grant applications and safeguard protected, proprietary, and other confidential information. • Assign a unique identifier to each application and each project. Contractor shall develop and apply a standardized naming convention to all applications and associated documents that will be maintained throughout award, technical review, project monitoring, and project closing. Documents shall be named and stored in a manner that facilitates ease of use by auditors. • System shall exhibit built-in quality controls, such as pre-screening, that assist applicants in submitting applications that meet all minimal requirements for consideration (such as requiring a SAM number). • MBI shall be responsible for pursuing and documenting additional information required for clarification of submitted applications, technical reviews of applications, and project monitoring Views of Responsible Officials and Planned Corrective Action (Continued): • and reimbursement activities. These activities shall be completed within the framework of the Grant Application Submission, Evaluation, Award, and Appeal System or the Broadband Grants Project Monitoring and Reimbursement System and not through external email or other document exchange systems. Anticipated Completion Date: System anticipated go live Date: April 26, 2024 Contact Person: Name: Glen Howie Title: Director Agency: Department of Commerce, Arkansas State Broadband Office Address: 1 Commerce Way, Suite 601 City, State, Zip: Little Rock, AR 72202 Phone Number: 501-682-1123 Email Address: Glen.howie@arkansasEDC.com

Contacts: Alex Antkowiak, David Kilpatrick, and Katherine Robinson Titles: VP Accounting and Senior Director, Education Programs & Productions, and Payroll Manager, respectively Anticipated Completion Date: September 2024 Corrective Action: The Center is committed to ensuring the appropriate documentation is in place to adhere to federal regulations regarding activities allowed or unallowed and allowable costs. In response to the audit finding, the Center is taking the following corrective actions to address the audit recommendations: • Accounting will convene meetings with Production and Operations Managers to communicate the Fiscal Year 2023 Federal Award Findings, study and strengthen internal controls in place, review the general criteria within 2 CFR Section 200.403 for manager awareness, and reinforce the importance of accuracy and timeliness of pay rates. • Production and Operations Managers will enact recommendations from Accounting Personnel to strengthen internal controls, proactively communicate with Unions throughout the year and prior to year-end to stay informed of any changes to rates established in Collective Bargaining Agreements and apply changes in pay rates prospectively from date of notice and retrospectively when required. • The Payroll Department, in collaboration with Accounting, will establish a schedule to sample support from managers for compliance with transparency initiatives. Status as of February 2024: The Theater for Young Audience Touring Production and Operations Manager in charge of payroll processing has updated processes to create an audit trail for pay rate calculation, update payroll submission form to include a PDF copy of the audit trail for Payroll Department’s inspection.

FINDING 2023-004 Finding Subject: Special Education Cluster (IDEA) - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Summary of Findings: The School Corporation was a member of the Clark County Joint Services Program (Cooperative) during fiscal year 2021-2022. The Cooperative did not have internal controls in place over payroll transactions to ensure expenditures were allowable and in conformance with the cost principles. The Treasurer reviewed a report which showed the total amount paid from each fund and account; however, a detailed payroll report was not reviewed which would have identified the employee being paid from the grant fund. For vendor disbursements, although the Deputy Treasurer matched the invoice to the purchase order and provided it to the Corporation Treasurer for review and signature of the accounts payable voucher prior to payment, the control was not effective and did not detect or allow correction of errors. In the initial sample of 6 vendor disbursements, one claim was unable to be provided. Contact Person Responsible for Corrective Action: Ashley Compton, Director of Special Education, Tamara Swarens, Director of Elementary Curriculum and Allison Vanover, Corporation Treasurer Contact Phone Number and Email Address: 812-246-3375 alcompton@scsc.school tswarens@scsc.school avanover@scsc.school Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Silver Creek School Corporation does not operate under the Special Education Coop any longer. The AP Specialist makes sure that there is an appropriate claim for each payment we make, there are two signatures on each claim and the claims are approved by the Treasurer. Check processing is completed by the Deputy Treasurer as the third check. The AP Specialist now scans each invoice to the FMS accounting system to ensure that we have all back up for the claims. With the new Directors of Curriculum and Special Education, we only reimburse for positions that are charged to the federal grant that have gone through a multi-step process to ensure that they get coded to the right place. The process is also reviewed at the time a request for reimbursement is made. Anticipated Completion Date: March 2024

FINDING 2023-003 Finding Subject:􀀃Special Education Cluster (IDEA) - Earmarking Summary of Finding: The School Corporation was a member of the Clark County Joint Services Program (Cooperative) during fiscal year 2021-2022. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Non-Public Proportionate Share expenditures for all grant awards were not expended as required by IDOE for the individual member schools. The Cooperative categorized each expenditure by location and the total amount did not meet or exceed the required proportionate share as outlined on the award letter. The Cooperative was required to spend a total of $59,633 for 20611-158-PN01 and $35,470 for 20619-158- PN01. $32,798 was identified as being spent for 20611-158-PN01, which was less than the required proportionate share. The Cooperative was unable to provide documentation to identify the expenditures spent for 20619-158-PN01. Contact Person Responsible for Corrective Action: Ashley Compton, Director of Special Education and Allison Vanover, Corporation Treasurer Contact Phone Number and Email Address: 812-246-3375 alcompton@scsc.school avanover@scsc.school Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Silver Creek School Corporation does not operate under the Special Education Coop any longer. The Special Education Director has a beginning of the year consultation with the private school principal to discuss and finalize the proportionate share budget. The Corporation Treasurer and Special Education Director will review and co-complete the semi-annual prop share workbook to ensure that private school funding is expended in a timely manner. Anticipated Completion Date: March 2024

􀀃 Finding􀀃2023􀍲004􀀃 􀀃 Finding􀀃Subject:􀀃Child􀀃Nutrition􀀃Cluster􀀃–􀀃Allowable􀀃Activities,􀀃Allowable􀀃Cost/Cost􀀃 Principles􀀃 Summary􀀃of􀀃Finding:􀀃Internal􀀃Controls􀀃were􀀃not􀀃effective􀀃and􀀃did􀀃not􀀃prevent􀀃unallowable􀀃 activities/cost􀀃 Contact􀀃Person􀀃Responsible􀀃for􀀃Corrective􀀃Action:􀀃Director􀀃of􀀃Food􀀃Service􀀃 Contact􀀃Phone􀀃Number􀀃and􀀃Email􀀃Address:􀀃(260)431􀍲2030,􀀃msnyder@sacs.k12.in.us􀀃 􀀃 Views􀀃of􀀃Responsible􀀃Official:􀀃We􀀃concur􀀃with􀀃the􀀃finding.􀀃 Description􀀃of􀀃Corrective􀀃Action􀀃Plan:􀀃 All􀀃claims􀀃shall􀀃be􀀃created􀀃by􀀃the􀀃Assistant􀀃Food􀀃Service􀀃Director􀀃and􀀃reviewed􀀃for􀀃 compliance􀀃within􀀃the􀀃allowable􀀃cost􀀃category􀀃prior􀀃to􀀃payment􀀃by􀀃the􀀃Director􀀃of􀀃Food􀀃 Service.􀀃In􀀃the􀀃event􀀃that􀀃the􀀃Director􀀃of􀀃Food􀀃Service􀀃must􀀃initiate􀀃a􀀃claim􀀃first,􀀃the􀀃 Assistant􀀃Food􀀃Service􀀃Director􀀃would􀀃then􀀃review􀀃the􀀃claim􀀃prior􀀃to􀀃issuance.􀀃All􀀃claims􀀃are􀀃 returned􀀃to􀀃the􀀃Assistant􀀃Food􀀃Service􀀃Director􀀃for􀀃review􀀃of􀀃accuracy􀀃after􀀃the􀀃payment􀀃 method􀀃has􀀃been􀀃authorized􀀃to􀀃ensure􀀃accuracy􀀃and􀀃compliance.􀀃Both􀀃parties􀀃will􀀃initial􀀃 documents􀀃appropriately,􀀃as􀀃well􀀃as􀀃maintain􀀃all􀀃copies􀀃of􀀃proof􀀃of􀀃purchase/service􀀃with􀀃 original􀀃claim􀀃form􀀃documents.􀀃􀀃 Anticipated􀀃Completion􀀃Date:􀀃3/18/24􀀃

The Department has instituted additional internal controls to ensure that expenditures are liquidated within 90 days of the end of the period of performance as required. This includes a monthly reconciliation of all federal sources performed by the Grants Manager and reviewed by the respective Budget Manager and Finance Director to address any identified issues before the liquidation date. As a redundancy measure, the Budget Manager reviews AP contract activity associated with federal fund sources via the Provider Utilization Report to monitor the liquidation rate in correlation with the liquidation date to ensure all expenditures are captured within the period of performance. Post-liquidation date journal activity is mainly aligned with transactional code cleanup, not necessarily new expense posting outside the period of performance. As such, it doesn’t include or constitute changes to previously submitted federal reporting. To mitigate transactional errors, the Budget Manager, in coordination with the Grants Manager, thoroughly reviews the coding of procurement requests that utilize federal funds for the appropriateness of use and accuracy. This includes deactivating federal fund sources in the statewide accounting system to prevent transactions posting outside of the period of performance. These additional internal controls related to the period of performance were implemented in July 2023. The Office of Internal Audit will perform a review of the updated processes to ensure they are effective in correcting the above findings no later than March 31, 2024.

The Department has instituted additional internal controls to ensure that expenditures are liquidated within 90 days of the end of the period of performance as required. This includes a monthly reconciliation of all federal sources performed by the Grants Manager and reviewed by the respective Budget Manager and Finance Director to address any identified issues before the liquidation date. As a redundancy measure, the Budget Manager reviews AP contract activity associated with federal fund sources via the Provider Utilization Report to monitor the liquidation rate in correlation with the liquidation date to ensure all expenditures are captured within the period of performance. Post-liquidation date journal activity is mainly aligned with transactional code cleanup, not necessarily new expense posting outside the period of performance. As such, it doesn’t include or constitute changes to previously submitted federal reporting. To mitigate transactional errors, the Budget Manager, in coordination with the Grants Manager, thoroughly reviews the coding of procurement requests that utilize federal funds for the appropriateness of use and accuracy. This includes deactivating federal fund sources in the statewide accounting system to prevent transactions posting outside of the period of performance. These additional internal controls related to the period of performance were implemented in July 2023. The Office of Internal Audit will perform a review of the updated processes to ensure they are effective in correcting the above findings no later than March 31, 2024.

We concur with this finding. Although the Wagner-Peyser Program transitioned to TCSG in December of 2022, related activities also continued at GDOL. Staff at the career centers continued to serve Georgia taxpayers in need of employment services rather than turning them away. As a result, staff continued to charge the Wagner-Peyser grant, and there were Wagner Peyser grant funds still remaining at GDOL. Journal vouchers were entered to allocate indirect costs to the Wagner-Peyser grant pursuant to GDOL's federally approved cost allocation plan. Journal vouchers were also used to correct other expenditures that should have been charged directly to Wagner Peyser. GDOL will ensure that all journal vouchers are properly supported by documentation, either attached directly to the journal voucher or the journal voucher will reference the supporting documentation which can be retrieved either electronically or manually.

Finding Number: 2023-001 – Period of Performance Planned Corrective Action: The item in question was a deposit for an event that took place in August 2023. It was made in June 2023. While the $24k payment was a valid payment within the grant terms, it was inadvertently recorded as an expense item in our 2023 schedule of expenditures of federal awards instead of as a prepaid asset. Upon discovery we implemented new procedures whereby payments made at year end will be subjected to an additional review to ensure they are recorded in the proper period. Person Responsible: Stephen Mack, Chief Financial Officer Expected Completion Date: Immediately

AOE will do review training to ensure all positions processing reimbursement requests fully understand what is required for backup on payment requests. This training will be conducted jointly by the business office and our compliance team and will be completed by the end of FY24 and will include the following key points. 1. Verity the entity on the backup. 2. The period of reimbursement matches the reimbursement request period. 3. The amount on the backup must be the same and cannot be higher (or lower) than the request. Position Responsible for Implementation of Corrective Action Name: Sean Cousino Position: Deputy CFO Email: sean.couisno@vermont.gov Phone Number: 802 595-3693 Date of Implementation of Corrective Action: 7/01/2024

AOE will do review training to ensure all positions processing reimbursement requests fully understand what is required for backup on payment requests. This training will be conducted jointly by the business office and our compliance team and will be completed by the end of FY24 and will include the following key points. 1. Verity the entity on the backup. 2. The period of reimbursement matches the reimbursement request period. 3. The amount on the backup must be the same and cannot be higher (or lower) than the request. Position Responsible for Implementation of Corrective Action Name: Sean Cousino Position: Deputy CFO Email: sean.couisno@vermont.gov Phone Number: 802 595-3693 Date of Implementation of Corrective Action: 7/01/2024

The Department will review its procedures and internal controls and update as necessary to ensure that expenditures are incurred within the allowable period of performance for respective awards. It should be noted that during the period of performance for which this audit was conducted there were a large number of personnel changes and shifts. The position that was responsible for the majority of these duties retired in January 2024. We proactively hired for her replacement a year before she retired. Over the course of the year our replacement took over more and more duties. In the process of this replacement, we have completed a tremendous amount of evaluation of our assigned duties, processes, workflow, training, and documentation. Not only in this role, but we are also undergoing a division and business unit wide analysis of our internal controls and workflow. It should also be noted that the UI admin funds are considered ‘formula funds’ from the US DOL. We are expected to run this program year-round with no gaps in service or performance. The funding that we receive from US DOL is based on an antiquated formula that breaks down the amount that is budgeted by Congress between 52 state and territories. We generally do not receive enough funding for the entire year. Also, with the recent trend of Congress to utilize the tool of the Continuing Resolution our funding is often ambiguous until most of the program year is over. We have at times seen our funding cut once a budget had been passed by Congress even though there was only about 3 months left in the program year. We are still expected to run this program and ‘find other sources of funding’. This does make the adherence to the period of performance challenging. However, as we evaluate our internal controls and procedures over the coming months, we will make note of every opportunity to strengthen this function to ensure that all charges applied to program funds are relevant, within the period of performance of the award, and are correctly reviewed and signed. Cameron Wood, UI Director, Cameron.Wood@vermont.gov Scheduled Completion Date of Corrective Action Plan: August 31, 2024

The Department will review its procedures and internal controls and update as necessary to ensure that expenditures are adequately reviewed and signed off on. It should be noted that during the period of performance for which this audit was conducted there were a large number of personnel changes and shifts. The position that was responsible for the majority of these duties retired in January 2024. We proactively hired for her replacement a year before she retired. Over the course of the year our replacement took over more and more duties. In the process of this replacement, we have completed a tremendous amount of evaluation of our assigned duties, processes, workflow, training, and documentation. Not only in this role, but we are also undergoing a division and business unit wide analysis of our internal controls and workflow. Cameron Wood, UI Director, Cameron.Wood@vermont.gov Scheduled Completion Date of Corrective Action Plan: August 31, 2024

Action taken in response to finding: • Staff will verify that costs were incurred within the grant period. • Staff will verify that payroll costs are charged according to the period end date and not the pay date.

Action taken in response to finding: • All costs charged to grants will be reviewed and verified. • Indirect costs will be checked and verified for all grants

FINDING 2023-004 Finding Subject: Special Education Cluster (IDEA) - Earmarking Summary of Finding: The Greater Lafayette Area Special Services (GLASS) and Local Education Agency, Lafayette School Corporation, concur with the audit 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 non-public 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. Contact Person Responsible for Corrective Action: Lissa Stranahan Contact Phone Number and Email Address: (Phone) 765-771-6013 (Email) lstranahan@lsc.k12.in.us Views of Responsible Officials: We concur with the finding. 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. 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 this action taken.

FINDING 2023-001 Finding Subject: Emergency Connectivity Fund Program - Allowable Costs/Cost Principles, Special Tests and Provisions - Restricted Purpose Summary of Finding: The Emergency Connectivity Fund (ECF) Program established by the American Rescue Plan Act of 2021 was for the purchase of eligible equipment, advanced communications, and information services for use by students, school staff, and library patrons at locations that include locations other than at a school or library. The ECF Program provides funding to meet the remote learning needs of students, school staff, and library patrons who would otherwise lack access to connected devices and broadband connections sufficient to engage in remote learning during the COVID-19 emergency period. To ensure that funding is focused on unmet need, the grantor agency requires schools to certify, as part of their funding application, that they are only seeking support for eligible equipment and/or broadband connectivity to provide to students and school staff who would otherwise lack access to connected devices and/or broadband connectivity sufficient to engage in remote learning. The unmet need at the time of the funding application can be based on an estimate. However, when the School Corporation files the request for reimbursement only equipment and services provided to students or school staff who would otherwise lack broadband services and/or devices sufficient to engage in remote learning should be requested. The School Corporation made four reimbursement requests during the audit period. All four reimbursement requests were selected for testing to verify the expenditures were in conformance with the applicable cost principles. Of the four reimbursement requests tested, issues were identified with three of the reimbursement requests. The issues identified were as follows: 1) For two reimbursement requests the amount requested, in total, exceeded the expenditures posted to the grant fund. The total amount requested for reimbursement was $616,800; however, total expenditures in the fund were $615,400. As such, the amount requested and received exceeded the amount spent out of the grant fund by $1,400. The School Corporation did not perform a reconciliation, which would have identified the error and allowed them to move the associated expenses to the grant fund, nor did the School Corporation return the additional funds to the grantor agency. At the end of the audit period, the $1,400 was included in the fund’s overall ending cash balance. 2) For one reimbursement request, although an invoice was submitted as evidence of expenditures, the funding received from the grantor agency was not used to pay this invoice. Instead, the School Corporation paid for that invoice using a lease program and opted instead to use the funding received over the course of the next five years to cover maintenance and service costs for school technology. This information was not disclosed with the initial reimbursement request, nor has a substitution request been sent to the awarding agency. The amount received from the grantor agency and not paid to the vendor, $500,000, will be considered questioned costs. At the end of the audit period, this money had not been expended, and was included in the fund’s overall ending cash balance to be used for future maintenance and service costs for school technology. INDIANA STATE BOARD OF ACCOUNTS 33 Contact Person Responsible for Corrective Action: Troy Cloum Contact Phone Number and Email Address: 765-771-6065 tcloum@lsc.k12.in.us Views of Responsible Officials: Option 1: We concur with the finding. The corporation will develop, outline, and communicate internal control procedures to ensure that grant funds are spent on authorized purchases, that reimbursements are requested only for the amounts actually expended, and that the documentation utilized for seeking reimbursement is allowable and accurate. Description of Corrective Action Plan: 1. The Chief Financial Officer shall review the Internal Control Manual and develop a proper policy and procedure for Grant Purchases and for Grant Reimbursements. 2. The Chief Financial Officer will meet with each Grant Administrator to review the procedures and purchasing guidelines. 3. The Chief Financial Officer will meet with the Business Office Staff and review the procedures and purchasing guidelines. 4. Signed attendance logs for each training shall be collected and recorded. Anticipated Completion Date: The projected completion date is March 22, 2024.

FA 2023-001 Improve Controls over Expenditures Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principle Cash Management Program Income Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education Assistance Listing Number and Title: COVID-19 - 84.425U - American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Number: S425U210012 Questioned Costs: $309,623 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School emergency Relief Fund Program. Corrective Action Plans: No after-school program expenditures have been or will be included int eh ESSER expenditures for FY2024. Estimated Completion Date: July 1, 2024 Contact Person: Chris Griner, Chief Financial Officer Telephone: 706-546-7721 Email: grinerc@clarke.k12.ga.us

FINDING 2023-003 Finding Subject: Child􀀃Nutrition􀀃Cluster􀀃􀍲􀀃Activities􀀃Allowed􀀃or􀀃Unallowed,􀀃Allowable􀀃Costs/Cost􀀃Principles,􀀃Special􀀃 Tests􀀃and􀀃Provisions􀀃􀍲􀀃School􀀃Food􀀃Service􀀃Accounts􀀃 Summary of Finding: An􀀃effective􀀃internal􀀃control􀀃system􀀃was􀀃not􀀃in􀀃place􀀃at􀀃the􀀃School􀀃Corporation􀀃to􀀃ensure􀀃compliance􀀃with􀀃 requirements􀀃related􀀃to􀀃the􀀃grant􀀃agreement􀀃and􀀃the􀀃Activities􀀃Allowed􀀃or􀀃Unallowed,􀀃the􀀃Allowable􀀃Costs/Cost􀀃 Principles,􀀃and􀀃the􀀃Special􀀃Tests􀀃and􀀃Provisions􀀃􀍲􀀃School􀀃Food􀀃Service􀀃Accounts􀀃compliance􀀃requirements.􀀃 Contact Person Responsible for Corrective Action: Lela Simmons Contact Phone Number and Email Address: (219) 391- 4100, lesimmons@ecps.org Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: The􀀃Food􀀃Service􀀃director􀀃responsibilities􀀃is􀀃to􀀃overseeing􀀃all􀀃function􀀃of􀀃the􀀃Food􀀃Management􀀃Company.􀀃Food􀀃 Service􀀃Director􀀃will􀀃be􀀃required􀀃to􀀃draft􀀃internal􀀃controls􀀃and􀀃detail􀀃instruction􀀃for􀀃the􀀃school􀀃corporation􀀃to􀀃ensure􀀃 all􀀃documentation􀀃procedures􀀃match􀀃the􀀃FSMC􀀃invoice.􀀃The􀀃school􀀃corporation􀀃will􀀃not􀀃pay􀀃any􀀃unallowable􀀃cost􀀃by􀀃 state􀀃regulation􀀃and􀀃rules.􀀃All􀀃state􀀃reporting􀀃documents􀀃and􀀃invoice􀀃will􀀃continue􀀃to􀀃be􀀃reviewed􀀃and􀀃signed􀀃off􀀃by􀀃 the􀀃district􀀃CFO.􀀃A􀀃copy􀀃of􀀃all􀀃documents􀀃will􀀃be􀀃held􀀃in􀀃the􀀃food􀀃director􀀃office.􀀃 Anticipated Completion Date: We anticipate having the above corrective action plan in place by September 30, 2024.

Type of Finding: Significant Deficiency in Internal Control over Compliance relating to inadequate documentation and controls in place to ensure costs are reasonable and intended for the program charged. Views of Responsible Officials: Management accepts the finding. Effective internal control over the allocation of indirect costs exceeding the de minimis cost rate of 10%, which can be attributed to a lack of communication and review of the total expenditures being charged to the federal program. Program managers were accidentally invoicing before reconciling adjustments made. More thorough training of staff, along with careful supervisory review of total expenditures being charged to the federal program, and invoicing would likely have prevented this error. Corrective Action: An annual training of all grant accountants is being developed and will cover indirect and allowable costs. In addition, a process for secondary review of all invoices is being developed.

2023-001 Significant Deficiency: Internal Controls over Allowable Costs Status: In progress Planned Corrective Action: Management will design, implement, and monitor controls for the retention of employee benefit election forms to adequately document costs charged to federal programs. Anticipated Completion Date: March 31, 2024 Responsible Party: Alec Lundberg, Chief Financial Officer

FINDING 2023-003 Information on the federal program: Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-022-PN01, 20611-022-PN01, 21611-022-PN01, 22611-022-PN01 Pass-Through Entity: Indiana Department of Education 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 Greene Sullivan Special Education Cooperative (Cooperative). During fiscal year 2021-2022 and 2022-2023, the Cooperative operated the special education programs and spent the federal money on behalf of all its members.  As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Although the Cooperative has a separate object code to identify expenditures for the purpose of proportionate share, there is no identifier or separate way to track which member school the funding was expended for. As such, the Non-Public Proportionate Share expenditures for the 19611-022-PN01, 20611-022-PN01, 21611-022-PN01, and 22611-022-PN01 grant awards could not be verified for the individual member schools. Additionally, the Cooperative did not obtain a waiver from the Indiana Department of Education for the amount unspent for the requirement on the 19611-022-PN01 and 20611-022-PN01 grant awards. For the 21611-022-PN01 grant award, a waiver was obtained from the IDOE which was used to cover a portion of the member school's required proportionate share amount; however, the remaining amount, which the Cooperative claimed to have expended, could not be traced to documentation that indicated which member school the expenditure was applied to. For the 22611-022-PN01 grant award, no waiver was obtained, and the amounts spent could not be traced to documentation that indicated which member school the expenditure was applied to. Also, the total amount expended for proportionate share was less than the total amount required when all member school proportionate share requirements were totaled. The lack of internal controls and noncompliance were isolated to the 19611-022-PN01, 20611-022-PN01, 21611-022-PN01, and 22611-022-PN01 grant awards. The minimum earmarking requirement for the 19611-022-PN01, 20611-022-PN01, 21611-022-PN01, and 22611-022-PN01 grant awards were $1,931, $3,486, $6,832, and $1,794, respectively. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will take the following corrective action: 1 – Southwest School Corporation will establish a system of internal controls and procedures to ensure non-public proportionate share funds are appropriately allocated to the member school based on expenses charged directly on behalf of the member school. Supporting documentation for these expenses should be retailed for audit. 2 – Greene Sullivan Special Education Cooperative will require all staff to complete the appropriate google form following the completion of each session with Non-Public students. An example of this documentation is the Proportionate Share Service Log. This document will allow for ease of tracking funds per provider/school district. This will allow for successful usage of funds. In the event that funds are not successfully used, a waiver will be requested barring board approval. Responsible party and timeline for completion: Chris Stitzle, Superintendent, April 1, 2024

FINDING 2023-004 Finding Subject: Child Nutrition Cluster – Allowable Activities & Allowable Costs / Cost Principals Summary of Finding: Internal controls were not in place to ensure compliance with requirements related to the grant agreement, specifically the requirement: Allowable Activities & Allowable Costs / Cost Principals. Contact Person Responsible for Corrective Action: Scott Weltz, Amanda Brackett Contact Phone Number and Email Address: 765-654-5585, weltzs@frankfort.k12.in.us, bracketa@frankfort.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Internal controls will be established and followed to ensure compliance with requirements related to the grant agreement. The Deputy Treasurer or designee will provide payroll distribution reports to the Director for review of payroll claims against the grant. Anticipated Completion Date: Effective immediately and ongoing

Corrective action plan: HHSC completed the correction of the rate prior to year-end close on August 25, 2023. General Ledger Cost Allocation Team will work with CFO Operations Support to develop a query to identify journal transactions that post in the CAPPS Financials general ledger module before the project start date. This query will be run monthly and any exceptions will be corrected. An additional review of the new fiscal year payroll projects will be performed by both Budget and the General Ledger Chartfield teams as part of annual fiscal year close coordination. Implementation date: August 31, 2024 Responsible person: Heather Nevill, Director, Fund Management

FINDING 2023-008 Information on the federal program: Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Numbers: 22611-022-PN01 Pass-Through Entity: Indiana Department of Education 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 Greene Sullivan Special Education Cooperative (Cooperative). During fiscal year 2022-2023, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Although the Cooperative has a separate object code to identify expenditures for the purpose of proportionate share, there is no identifier or separate way to track which member school the funding was expended for. As such, the Non-Public Proportionate Share expenditures for the 22611-022-PN01 grant award could not be verified for the individual member schools. Additionally, the Cooperative did not obtain a waiver from the Indiana Department of Education for the 22611-022-PN01 grant award, no waiver was obtained, and the amounts spent could not be traced to documentation that indicated which member school the expenditure was applied to. Also, the total amount expended for proportionate share was less than the total amount required when all member school proportionate share requirements were totaled. The lack of internal controls and noncompliance were isolated to the 22611-022-PN01 grant award. The minimum earmarking requirement for the 22611-022-PN01 grant award was $1,620. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will take the following corrective action: 1 – Northeast School Corporation will establish a system of internal controls and procedures to ensure non-public proportionate share funds are appropriately allocated to the member school based on expenses charged directly on behalf of the member school. Supporting documentation for these expenses should be retailed for audit. 2 – Greene Sullivan Special Education Cooperative will require all staff to complete the appropriate google form following the completion of each session with Non-Public students. An example of this documentation is the Proportionate Share Service Log. This document will allow for ease of tracking funds per provider/school district. This will allow for successful usage of funds. In the event that funds are not successfully used, a waiver will be requested barring board approval. Responsible party and timeline for completion: Mark A Baker, Superintendent Effective April 2024