Corrective Action Plans

Finding COVID-19 – 2025-001 Allowable Costs/Cost Principles Information on the federal program: Federal agency: U.S. Department of Homeland Security Pass-through program from: State of New York Division of Homeland Security and Emergency Services Federal Assistance Listing Number: 97.036 COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Contract/pass-through entity identifying number: 140215 Award period of performance: January 20, 2020 – July 1, 2022 Planned corrective action: COVID-19-eligible pharmacy costs consisted of a high volume of lower-cost items and were identified through a process distinct from other cost categories. Cost data were obtained from NYP’s materials management system, which records purchase orders placed with primary vendors for medications and supplies. NYP submitted for FEMA reimbursement only those medication costs identified as related to the treatment of patients during the COVID-19 pandemic. Pharmacy vendors may adjust purchase orders when medications or supplies are unavailable or available in quantities different from those requested. The internal control process for the pharmacy portion of NYP’s COVID-19 submissions did not verify that purchase orders were fulfilled as recorded, supported by vendor invoices and receipt documentation, and paid before the associated costs were included in reimbursement claims. Going forward, designated Finance and Pharmacy personnel will reconcile purchase orders to vendor invoices, receipt records, and proof of payment before submission; exceptions will be resolved and documented, and management will periodically review the control’s operation to confirm that only eligible, incurred, and paid costs are claimed. Name of responsible officials: Richard Einwechter Vice President, Financial Operations (212) 585-6589 rie9001@nyp.org Gary Sorkin Vice President Insurance and Risk Management (212) 297-5714 gas9063@nyp.org

The County will implement a documented review and approval process for expenditures included in reimbursement requests. Supporting documentation will be reviewed prior to submission to verify that amounts claimed agree to underlying records, including invoices, force account equipment records, and other applicable supporting documentation. Evidence of the review and approval will be retained with the reimbursement documentation. The County has reached out to the Minnesota Department of Public Safety to update the claimed costs as necessary for the mathematical error. Responsible Person: Joe Martin, County Administrator & Carol Blaschko, Finance Director Anticipated Completion Date: 12/31/26

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

State of Missouri Single Audit Corrective Action Plan Year Ended June 30, 2025 State Agency: Department of Health and Senior Services Audit Finding Number: 2025-010 - CACFP Subrecipient Reimbursements Name of the contact person responsible for corrective action: Sarah Walker, Administrator, Bureau of Community Food and Nutrition Assistance (BCFNA), Division of Community and Public Health Anticipated completion date for corrective action: Not Applicable The Missouri Department of Health and Senior Services (DHSS) disagrees with this finding because the controls over meal reimbursements are in compliance with the federal U.S. Department of Agriculture (USDA) requirements and guidance. In addition, the nearly identical audit finding of fiscal year 2023 was not sustained by the federal funding agency. One hundred percent of the 43 overclaim exceptions noted by the SAO were either under the USDA’s acceptable minimum threshold of $600 or were recouped from subsequent claims in accordance with USDA and DHSS program requirements. The remaining 7 errors were underclaims. None of the error items noted by the SAO which exceeded the established USDA threshold resulted in questioned costs. The following SAO statement is factually incorrect: “Since meal reimbursements are made without any supporting documentation, the BCFNA relies on system edit checks and subrecipient monitoring procedures to prevent and detect meal reimbursement claim errors.” BCFNA is in compliance with USDA regulation as well as DHSS policies and procedures in regard to reviewing supporting documentation. In accordance with USDA regulations, sponsors are required to maintain documentation for three years in addition to the current year. However, this documentation is not required to be submitted to the state agency prior to every month’s claim reimbursement. The SAO said, “If similar errors were made on the remaining population of CACFP meal reimbursements totaling approximately $69.9 million, unallowable costs could be significant.” The SAO’s projection of a full year of ineligible sponsor claims is not supportable to determine this finding is material noncompliance. The sample of those sponsors is not representative of the population and cannot be assumed to be a claim error for the whole year, as it is based on a biased population of reviews performed by DHSS. DHSS’s risk-based monitoring approach of reviewing higher risk subrecipients more frequently would lead to higher claim amounts than a sample of the population as a whole. Each of the claims in question were recouped in subsequent months in accordance with USDA regulations and BCFNA policies and procedures, resulting in no loss of federal program funds or questioned costs. Further, all but one of the items with $2,000 or more in overclaims were due at least in part to temporary eligibility issues resulting from untimely submission of Income Eligibility Forms (IEFs). These were identified as a result of BCFNA’s well-designed monitoring processes and remedied in following months when parents or guardians provided the completed eligibility forms and should not be automatically assumed to account for a full year of overclaims.

DEPARTMENT OF AGRICULTURE 2025-006 Technical Assistance and Training Grant – Assistance Listing No. 10.761 Recommendation: We recommend management evaluate the circumstances surrounding the duplicate reimbursement and assess whether enhancements to existing reimbursement review procedures are necessary to identify and prevent duplicate reimbursement requests from being processed and charged to federal awards. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Existing reimbursement review procedures have been reinforced, and additional verification steps will be incorporated into the approval process to help prevent duplicate reimbursements from being charged to federal awards in the future. Name(s) of the contact person(s) responsible for corrective action: Jeff Fournier, Finance Director Planned completion date for corrective action plan: June 30, 2026 If the Department of Housing and Urban Development or Department of Agriculture have questions regarding this plan, please call Jeff Fournier at (413) 665-1271.

FA 2025-002 Improve Controls over Expenditures Compliance Requirements: Internal Control Impact: Compliance Impact: Federal Awarding Agency: Pass-Through Entity: Assistance Listing Numbers and Titles: Federal Award Number: Questioned Costs: Description: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agricu lture Georgia Department of Education 10.553 - School Breakfast Program; 10.555 - National School Lunch Program 255GA324N1199 (Year: 2025) $40,701 A review of expenditures charged to the Child Nutrition Cluster revealed that the School District's internal control procedures were not operating appropriately to ensure that expenditures were appropriately reviewed, approved, and documented. Corrective Action Plans: Procedures have been reviewed with program and department leaders to ensure that all expenditures have proper approval before submitting for payment. Expenditures without proper approval will be returned to the responsible department. Board Policy DJED has been reviewed with all department heads to ensure understanding of policy and requirements for obtaining mult iple quotes for certain thresholds. Guidelines have been reviewed with the program manager and school nutrition bookkeeper to ensure all expenditures are recorded in the correct fiscal years. Estimated Completion Date: August 31, 2026 Contact Person: Stephanie Clark, Chief Financial Officer Telephone: 912-876-4854 Email: sclark@liberty.k12.ga.us

FEMA Public Assistance Advances and Completed Reimbursement Management position. Management accepts the need to address the reported documentation and control deficiency. The original $666,000 and subsequent advances have been fully reimbursed to the Municipality’s FEMA fund; completed reimbursement is distinct from resolution of the historical finding. Management response. The original $666,000 was reimbursed in full to the Municipality’s FEMA fund bank account before the issuance of the Single Audit Report for the fiscal year ended June 30, 2025. The Municipality provided the supporting evidence of these reimbursements to the independent auditors for their review and examination before issuance of their report. The reimbursement occurred after June 30, 2025 and is reported as subsequent corrective action. No principal remains outstanding on these municipal interfund advances. The reimbursement evidence is available, upon request, for review and examination by the cognizant agency for audit, if designated, or the applicable oversight agency for audit; FEMA; COR3; and any other pertinent regulatory or oversight entity and its authorized representatives. Héctor Rubén Caraballo Díaz, Director of Finance, will coordinate timely access to the supporting records and municipal personnel under 2 CFR 200.337. The Municipality will protect sensitive information in public filings while providing authorized reviewers the records needed for their examination. The supporting package includes the municipal advance chronology, COR3 reimbursement and credit documentation, and the May 11, 2026 bank confirmation for a cash transfer to the FEMA account. Management’s full-repayment representation reflects the combined settlement of the advances and related credits. Management confirms that no principal remains outstanding for the original $666,000. Management’s representation of full reimbursement is not a representation that FEMA or COR3 has issued a final allowability or closeout determination. The transfer confirmation records approval and transmission; the resolution file will also retain evidence of the receiving-account posting and the reconciliation supporting the application of credits. These records substantiate completed repayment and preserve the distinction between settlement of principal and compliance with the original award conditions. Finding 2025-008 retains $666,000 in questioned costs for insufficient documentation of the final use and disposition of the original advance. Management’s reimbursement disclosure supplements that finding and does not depend on a change to its wording. Reimbursement does not retrospectively authorize the original use of restricted cash or automatically eliminate the historical finding. The responsible agency or pass-through entity will determine the disposition of questioned costs and any required remedy under 2 CFR 200.521. Management requests full consideration of the reimbursement evidence and appropriate credit for amounts already restored. Restoration to the municipal FEMA fund is not, by itself, repayment to the grantor or formal agency resolution. Corrective Action 1. Completed: reimburse the original $666,000, and provide the supporting evidence to the independent auditors for review and examination before report issuance. Preserve the evidence, dated transmittal, recipients, and index of documents provided. Delivery for examination is not represented as auditor agreement with management’s conclusions. 2. Complete the reviewed reconciliation of advances, COR3 credits, and the May reimbursement to bank and interfund records, and retain the separate tracing of the original use. Document credit eligibility, the source of legally available repayment funds, any excess, and the fiscal year 2026 entries. This reconciliation documents completed interfund settlement and the amounts for which management requests credit in agency resolution. 3. Preserve the posting of the May transfer in the receiving FEMA bank account, the reciprocal municipal ledger entries, and the dated delivery of the evidence to the auditors. For each COR3 credit applied, document the project, underlying eligible expenditure, original municipal funding, entitlement to reimbursement, and absence of duplicate recovery. A COR3 receipt by itself does not demonstrate repayment of an interfund advance. 4. Prohibit advances of FEMA cash for unrelated municipal operations. Permit an interfund reimbursement only after review establishes the specific award, eligible cost previously paid, lawful purpose, available support, and absence of duplicate reimbursement. 5. Retain a transaction-level account of the original $666,000 advance and its ultimate use, distinct from the later restoration. Identify the affected disaster and award, disbursements, eligible-cost support, and any unsupported use. Present the original questioned amount, amounts restored, any amount the agency sustains, and additional remedies separately; repayment will not be netted against the historical finding to imply that no reportable condition occurred. 6. Maintain monthly FEMA bank, project, interfund, and reimbursement reconciliations, with separate preparer and reviewer approval. Resolve exceptions promptly and retain the evidence supporting each release of funds. 7. Provide the reconciled resolution file to COR3 and request written disposition of Finding 2025-008 and its $666,000 questioned cost. Evaluate and address substantiated interest, grant repayment, accounting adjustments, or other remedies required by applicable rules or a written agency determination, preserving available review or appeal rights. Obtain instructions identifying the required recipient, award, amount, and credit for the completed restoration; do not assume that an interfund reimbursement extinguishes a separate grant repayment obligation. 8. Assess Federal cash balances, disbursement timing, and any applicable interest or excess-cash return requirement under the governing award and payment rules. Document the period and legal basis of any amount due rather than estimating interest without authority. The restoration will not be used to support duplicate Federal reimbursement or an unsupported new draw. 9. Keep the reimbursement evidence available for regulatory examination now. Submit the evidence already available to COR3 by September 30, 2026, identify supplemental reconciliation work due October 31, 2026, and complete the resolution submission by November 30, 2026 or any earlier agency deadline. Preserve the distinction between documents already delivered to the auditors and later supplements; do not describe subsequent workpapers as having been provided before report issuance. Implementation Milestones Required Action Owner Completion Evidence Target Date Reimburse original and subsequent advances to the FEMA fund. Finance Director Advance chronology, COR3 credits, May 11 transfer evidence Completed May 11, 2026 Provide reimbursement evidence to the independent auditors. Finance Director Evidence for review and examination; dated preissuance transmittal; regulatory access Completed before report issuance Approve transfer controls and reconcile the completed settlement. Finance Director Approved procedure, signed reconciliation, ledger support Sep. 30, 2026 controls; Oct. 31, 2026 reconciliation and tracing Provide available reimbursement evidence to COR3; complete resolution file and request written disposition. Finance and FEMA Program Staff / Resolution file, transmittal, agency correspondence Sep. 30, 2026 initial evidence; Nov. 30, 2026 complete file; decision external Demonstrate monthly preventive controls. Finance and FEMA Program Staff / Three consecutive reviewed monthly reconciliations Dec. 31, 2026 Responsible official. Héctor Rubén Caraballo Díaz, Director of Finance Anticipated completion. Principal reimbursement completed May 11, 2026; evidence delivered to the auditors before issuance. Documented preventive controls and three monthly reviews by December 31, 2026. Formal resolution of any retained questioned costs remains subject to COR3 or FEMA under 2 CFR 200.521. Evidence of completion. Retain evidence of full settlement of the original $666,000 and subsequent advances, the application of credits, reconciliation to the FEMA fund and municipal ledgers, and preissuance delivery to the auditors. Demonstrate preventive controls for three monthly cycles. Track any retained questioned cost and additional remedy until the responsible agency documents its disposition, with appropriate recognition of restored amounts. Auditor revision of the finding is not a closure condition.

Panthera continued strengthening its internal controls through 2025 and early 2026 by expanding its use of Rippling to support more consistent HR workflows, documentation, and approval tracking. We also transitioned portions of our international workforce from DEEL to Safeguard, which offers stronger compliance monitoring and country‑specific employment controls. This shift enhances our ability to maintain complete personnel files, ensure accurate payroll processing, and meet federal requirements for allowability of labor costs. In addition, the new timesheet module implemented across 2024–2025 continues to improve documentation of personnel activity and verification of payroll‑related charges. The organization also experienced a leadership transition with the departure of our CAO in late 2025 and the onboarding of a new Chief People Officer in early 2026. This change has brought renewed focus to HR governance, process standardization, and long‑term workforce planning, further reinforcing Panthera’s commitment to strong internal controls over federal expenditures.

Recommendation: We recommend the Human Services Department develop a uniform payroll allocation process that will allocate all employee costs to each program based on actual hours worked, including fiscal and administrative employees. They should also implement a uniform account structure that includes the objects necessary to track program costs, so they can be used to accurately calculate and report costs in accordance with all program requirements. In addition, the Department should redesign its accounting, reporting and reconciliation structure to include all programs and prevents double reporting from happening. Explanation of disagreement with audit finding: There is no disagreement with the finding. Action planned in response to finding: Management has begun a review of the Human Services Department payroll allocation process. Name(s) of the contact person(s) responsible for corrective action: Melissa Diener, Assistant Finance Director Planned completion date for corrective action plan: The County has begun evaluating procedures and will implement as soon as possible.

Inadequate Support for Federal Reimbursement - Literacy - OPI - The Montana Office of Public Instruction partially concurs with this finding. The prior audit was not completed in time for the Office to implement changes before the fiscal years reviewed in the current audit. The Office implemented more stringent criteria for cash requests from schools in late 2024, and these requirements have been in place since that time. Although there has been considerable pushback from local education agencies due to the added burden, the Office has remained firm on the information required. Cash requests are audited quarterly by the Internal Control Auditor against submitted budget documents, and any issues identified are addressed. The more stringent criteria are fully implemented, and no further corrective actions are needed beyond continuing the current process. Responsible Party - April Grady, Chief Financial Officer, Montana Office of Public Instruction Target Implementation Date - 12/31/2026

Inadequate Supporting Documentation for Local Agency Costs - WIC - DPHHS - The Montana Department of Public Health and Human Services does not concur because the recommendations would require receipt level documentation for every subrecipient transaction, which federal regulation does not require, and because the department’s existing monitoring framework meets the requirements of 2 CFR 200.332. Paragraph citations in this response refer to the Uniform Guidance as revised effective October 1, 2024; for awards issued before that date, the corresponding provisions are 2 CFR 200.332(b), (d), and (e). Under 2 CFR 200.332(c), a pass‑through entity must evaluate each subrecipient’s risk of noncompliance and risk of fraud to determine the appropriate level of subrecipient monitoring. Under 2 CFR 200.332(e), the required monitoring activities include reviewing financial and performance reports, following up on deficiencies and ensuring the subrecipient takes timely and appropriate action, and issuing management decisions on audit findings. Under 2 CFR 200.332(f), additional tools such as training and technical assistance, on‑site reviews, and agreed‑upon procedures engagements may be used depending on the risk assessment. The regulation does not require transaction level or receipt level documentation for all subrecipient expenditures as a condition of reimbursement. The department acknowledges that the auditors identified expenditures for which receipt‑level support was not on file at the time of review. The department’s position is that the controls described above, rather than universal receipt‑level retention, are the level of monitoring 2 CFR 200.332 requires given the risk profile of the Women, Infants, and Children (WIC) local agency network, and that the department retains the documentation it obtains when additional support is requested. Based on the department’s understanding of the audit results, the auditors did not report any unallowable costs during their review, and their finding focused solely on whether every cost was fully supported by receipt‑level documentation. Extending receipt‑level submission and retention to every expenditure would add substantial administrative work for the department and its local agencies without a corresponding improvement in the department’s ability to detect unallowable costs, which the existing expense report review and biennial on‑site review already address. For these reasons, the department does not concur with the recommendations. As provided in 2 CFR 200.511(c), the discussion above is the department’s detailed explanation of why it believes the recommended corrective action is not required. Responsible Party - Brenda Crawford, Internal Control and Compliance Officer, Montana Department of Public Health and Human Services Target Implementation Date - N/A

Inadequate Supporting Documentation - Title 1 - OPI - The Montana Office of Public Instruction partially concurs with this finding. The prior audit was not completed in time for the Office to implement changes before the fiscal years reviewed in the current audit. More stringent criteria for cash requests from schools were put in place in late 2024, and these requirements have been followed since that time. Although there was considerable pushback from local education agencies, the Office remained firm on the information required. The Office audits cash requests quarterly against submitted budget documents, and any issues identified are addressed. The more stringent criteria are fully implemented, and no further corrective actions are needed beyond continuing the current process. Responsible Party - April Grady, Chief Financial Officer, Montana Office of Public Instruction Target Implementation Date - 12/31/2026

Inadequate Support for Federal Reimbursement - Title I - OPI - The Montana Office of Public Instruction partially concurs with this finding. Training and new process documentation were implemented in April 2025 to correct the issue. The previous audit was not completed until October 2024, with the final audit committee meeting held in December 2024, and the new process was put in place and communicated as quickly as possible. The process is now functioning correctly. The Office has implemented a tracking mechanism to ensure appropriate time reporting. For fiscal year 2027, the Office has added an additional monthly review of each federal budget to confirm that time reported aligns with expected and allocated time for each project. Responsible Party - April Grady, Chief Financial Officer, Montana Office of Public Instruction Target Implementation Date - 12/31/2026

Noncompliant Fixed-Amount Subawards - Immunization - DPHHS - The Montana Department of Public Health and Human Services does not concur. All subawards, including those referenced in the finding, were explicitly listed in the federally approved budget documents and the Notice of Award (NOA). These materials contained the subaward amounts that the auditors questioned and were formally reviewed and approved by the Centers for Disease Control and Prevention (CDC). The approval included the fixed-amount subaward methodology and the department’s planned use of funds. In addition, the CDC conducted a technical review during the same period and identified no findings or compliance issues, including none related to fixed-amount subawards or internal controls. In September 2025, the department consulted program officials at the CDC, who reaffirmed that the approved NOAs and budgets are sufficient evidence of federal approval and compliance. Responsible Party - Brenda Crawford, Internal Control and Compliance Officer, Montana Department of Public Health and Human Services Target Implementation Date - N/A

Inadequate Supporting Documentation - Foster Care - DPHHS - The Montana Department of Public Health and Human Services reviewed the fiscal year 2024 payment error and will address the affected reimbursement. The department will continue applying its improved internal control procedures to ensure compliance. Responsible Party - Brenda Crawford, Internal Control and Compliance Officer, Montana Department of Public Health and Human Services Target Implementation Date - 7/1/2024

Inadequate Supporting Documentation - Transit - MDT - The Montana Department of Transportation’s Transit Section will continue working closely with subrecipients to ensure proper documentation is consistently provided and retained. The fully staffed Transit Section is reviewing reimbursement submissions more thoroughly, reinforcing documentation expectations and strengthening the department’s internal controls. Cost principle training is now part of the onboarding process for Transit Section staff, and additional training will be provided as new regulations or guidance become available. Responsible Party - Kimberly Doherty, Accounting Systems Supervisor, Montana Department of Transportation Target Implementation Date - 12/31/2026

Noncompliant Duplicate Expenditure Recording - ESSER - OPI - The Montana Office of Public Instruction concurs with this finding. The Office has created a procurement unit to ensure contract terms meet program needs. The Office has also implemented approval workflows for contract funding to ensure budgets are aligned before contracts are executed. Internal controls between procurement, programs, and accounting will continue to be strengthened to prevent future overpayments. The grant is closed, and the temporary grant-funded staff are no longer with the agency. Moving forward, new grant managers will receive clearer direction on the agency’s internal controls. Responsible Party - April Grady, Chief Financial Officer, Montana Office of Public Instruction Target Implementation Date - 12/31/2026

Noncompliant Contractor Overpayments and Unallowable Charges - ESSER - OPI - The Montana Office of Public Instruction concurs with this finding. The Office and the University of Montana - Western established a teacher residency program originally funded with Elementary and Secondary School Emergency Relief funds. The agreement set a fixed amount per student, but the University billed the Office for fringe benefits for each participant, which caused total costs to exceed the contract amount. The current agreement and program structure have been updated to prevent this issue. The Office has created a procurement unit to ensure contract terms support program needs. The Office has also implemented approval workflows for contract funding to confirm that budgets are aligned before agreements are executed. Internal controls between procurement, programs, and accounting will continue to be strengthened to prevent future overpayments. Responsible Party - April Grady, Chief Financial Officer, Montana Office of Public Instruction Target Implementation Date - 12/31/2026

Noncompliant Direct and Indirect Cost Charges - ESSER - OPI - The Montana Office of Public Instruction partially concurs with this finding. Spreadsheets supporting items 0005169673 and 0005227738 were provided to the Legislative Audit Division on August 11, 2026. The Central Services Division spent direct time on the Elementary and Secondary School Emergency Relief (ESSER) reporting, and those hours were charged directly to that program. Administrative and management staff also spent time preparing reports for quarterly briefings, presentations to community partners, responses to school and community inquiries, and newsletter submissions. The Office charged those hours to the ESSER program as they were directly related to the required reporting. However, the Office concurs with the questioned indirect cost charges in addition to personal services. The Office has implemented a tracking mechanism to ensure appropriate time reporting. For fiscal year 2027, the Office has added a monthly review of each federal budget to confirm that time reported aligns with the expected and allocated time for each project. Responsible Party - April Grady, Chief Financial Officer, Montana Office of Public Instruction Target Implementation Date - 12/31/2026

Inadequate Support for Federal Reimbursement - ESSER - OPI - The Montana Office of Public Instruction has already implemented more stringent criteria for cash requests from schools. Although this has created additional burden for local education agencies, the Office has remained firm on the information required. These criteria were implemented in late 2024 and have been required since that time. Cash requests are audited quarterly by the Internal Control Auditor against the budget documents submitted, and any issues identified are addressed. No further action is needed other than continuing the current process. Responsible Party - April Grady, Chief Financial Officer, Montana Office of Public Instruction Target Implementation Date - 12/31/2026

Inadequate Supporting Documentation - Disaster Grants - DMA - The Montana Department of Military Affairs, Disaster and Emergency Services Division partially concurs. The Division validated the reviewed project costs through its internal review and through additional Federal Emergency Management Agency (FEMA) processes, including the Validate As You Go procedure, and determined the costs to be allowable. The division acknowledges the cited federal compliance criteria and recognizes the opportunity to strengthen the consistency, accessibility, and retention of project documentation. To enhance existing processes, the division has implemented a standardized project file structure that clearly identifies the location of supporting documentation and ensures official grant files are complete rather than relying solely on documentation stored within federal systems. This process is being applied to the disasters that occurred in December 2025 and were federally declared in April 2026. The division will continue to evaluate and refine its documentation practices while maintaining appropriate controls, reviews, validations, payments, and closeout procedures for federally funded projects. Responsible Party - Janae Brower, Chief Financial Officer, Montana Department of Military Affairs Target Implementation Date - 10/31/2026

Erroneous Beneficiary Payments - CHIP - DPHHS - The Montana Department of Public Health and Human Services does not concur. The department identified an interface issue with its contractor and promptly corrected the affected payments. The unadjusted claim amount totaled approximately $26,000 and affected 48 beneficiaries out of $146.6 million in total contractor‑paid claims during the audit period, representing approximately 0.018 percent of total claims paid. The department determined this amount to be immaterial to the fiscal year‑end financial statements. Had the amount been significant, the department would have corrected the affected payments before fiscal year‑end. The department worked with its contractor to resolve the interface issue, which was fully corrected in April 2026. Responsible Party - Brenda Crawford, Internal Control and Compliance Officer, Montana Department of Public Health and Human Services Target Implementation Date - N/A

Inaccurate Subsidy Payments - Adoption Assistance - DPHHS - The Montana Department of Public Health and Human Services agrees that its prior method for tracking subsidy rate changes was manual and was not sufficient to ensure all scheduled rate changes were applied. The practice of including multiple rates in adoption subsidy agreements was discontinued in 2023. When the error was identified, the department conducted a full review of the affected activity to determine the scope of the issue, identified additional errors, and reported those errors to the auditors. The department corrected all payment errors, repaid the affected federal funds, and implemented tracking controls over the remaining scheduled subsidy rate changes. The department completed this corrective action in March 2026. Responsible Party - Brenda Crawford, Internal Control and Compliance Officer, Montana Department of Public Health and Human Services Target Implementation Date - 3/20/2026

Inadequate Supporting Documentation - SPED - OPI - The Montana Office of Public Instruction partially concurs with this finding. The prior audit was not completed in time for the Office to implement changes before the fiscal years reviewed in the current audit. The Office implemented more stringent criteria for cash requests from schools in late 2024, and those requirements have been in place since that time. Although there has been considerable pushback from local education agencies due to the added burden, the Office has remained firm on the information required. Cash requests are audited quarterly by the Internal Control Auditor against submitted budget documents, and any issues identified are addressed. These criteria are fully implemented, and no further corrective action is necessary beyond continuing the current process. Responsible Party - April Grady, Chief Financial Officer, Montana Office of Public Instruction Target Implementation Date - 12/31/2026

Views of Responsible Officials: Management agrees with the finding. Management identified the VAT overcharge prior to the audit and requested a refund from the staffing agency. The staffing agency issued a credit of approximately $200,000 in 2026. Management identified approximately $40,000 that could have been allocated back to certain affected awards. However, because some awards were closed, actual credits or adjustments program expenses and budgets were not applied. Management will enhance its review process over staffing agency invoices and vendor credits to ensure costs and related credits are reviewed for allowability, allocability, and proper award-level treatment. Name and Title of Responsible Officials: Oliver Rivers, Chief Operating Officer and Deniz Sarkinovic, Senior Director of Compliance Anticipated Completion Date: September 30, 2026