Corrective Action Plans

Reference Finding Number: 2023-001 Eligibility and Allowable Costs To Whom It May Concern, This letter is in reference to the 2023 audit conducted by Capin Crouse on Harmony Community Development Corporation (Harmony CDC). Please find below the corrective action plan devised by Harmony CDC management to address the findings in the audit: The (SOP) standard operating procedure will be revised to ensure client documentation is being stored in more than one place. There will be a process to backup all files on an external drive. This will serve as a secondary storage place. Currently client documentation is stored in the housing portal and on the shared drive in the organization. In addition, a required documentation checklist will be maintained and verified for each client. A policy will be developed to complete quarterly internal audit reviews and evaluate 10-15% of the client case files. Staff will conduct ongoing peer reviews of the client files. When a staff member is on a Leave of Absence, the employee’s network access will be revoked during the time off. If a staff member is on a disciplinary action plan, the employee’s network access will be monitored. Mandatory compliance & ethical training will be completed by all employees. All employees will review and sign employee handbooks, conflict of interest and code ethics. Person Responsible for Corrective Action Plan: Mark Porter, Executive Director Anticipated Date of Completion: May 1, 2024 and ongoing internal audits quarterly

Planned Corrective Action: To ensure grant funds are not utilized prior to final approval, grant application documents will be submitted to DESE by August 15th to ensure approval is given prior to costs being incurred. Additionally, we will identify alternative funding sources in the event grant approval is delayed and costs must be incurred.

The Agency will no longer hold assets in an advisory investment account but transfer assets to a qualified bank for low-risk savings, money market, or certificate of deposit account where no advisory fees are charged. The Agency will no longer sponsor employee meals but utilize federal awards according to HHSS expenditure guidelines.

Finding 2023-001 Corrective Action Plan: The Organization will implement accounting policies and procedures to ensure expenditure approvals are formally documented. Subsequent to year-end, the Organization has already implemented a new credit card system to help automate and track the approval process. Name of Responsible Person: Laura Minzenberg Anticipated Completion Date: May 2024 04/02/2024 Date

Education Stabilization Fund – Assistance Listing No. 84.425 Recommendation: CLA recommends the School ensures it documents the underlying support for how allowable payroll expenditures were charged to the program along with approval of that determination. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned in response to finding: The School will ensure as they allocate wages to federal programs going forward they will specifically identify the underlying disbursements and document their approval of that allocation. Name of the contact person responsible for corrective action: Abdi Shekh Planned completion date for corrective action plan: June 30, 2024.

Finding 2023-003: 2023-003 - Significant Deficiency in Internal Control over Compliance and Noncompliance – Allowable Costs/Cost Principles Contact: Michael Bailey, Chief Financial Officer Corrective Action Plan: The Accounting department at Alaska Behavioral Health has stabilized staffing in accounting personnel, including the replacement of the Chief Financial Officer. Prior to submission of financial reports, the CFO will review and verify that personnel related expenditures are supported by payroll allocation records, and other direct expenditures have adequate documentation associated with the allowable expenditure. Proposed Completion Date: 06/30/2024

2023-002 Significant Deficiency in Internal Control over Compliance, Other Matters Recommendation: We recommend the County establish internal control procedures to ensure that all amounts charged to grant programs for employee payroll costs be reconciled to the specific employee payroll records and that supporting documentation be maintained throughout the grant award period and beyond. Views of responsible officials: Management concurs with the finding. There were minimal variances in the number of employees tested and the County believes the wage report discrepancies are isolated due to the complexity of the EMS salary structure. The County claimed $26,038,852 of the $37,618,256 total eligible expenses available. Action planned/taken in response to finding: Effective fiscal year 2024, Management will implement the following corrective action: The County will create a process to ensure the payroll wage reports generated by Human Resources agrees to support documentation. Name of the contact person responsible for corrective action plan: Pete Winton Planned completion date for corrective action plan: The above action plan will be implemented in fiscal year 2024.

Recommendation: Transactions should be recorded in accordance with GAAP with a review and approval for financial reporting as well as for compliance with allowability requirements. Training on cost principles per the Uniform Guidance should be provided to the finance department and program managers. Ac􀆟on Taken: This transaction happened early on when the WIG grant was first awarded. Soon after, it was apparent this had been done incorrectly. The current Finance staff has attended a two-day Uniform Guidance training course and continues to read and review 2 CFR 200 regularly. If a transaction is in question, we reach out to auditors/consulting team. The corrective action planned is continual training on Uniform Guidance and the addition of a Compliance Director to our team. The contact person responsible for the corrective action is Wendi Speed, CFO. The anticipated completion date is June 30, 2025.

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with financial reporting requirements for the Child Care and Development Fund Cluster. Questioned Costs: Assistance Listing # 93.575 93.575 COVID-19 93.596 Status: Corrective action in progress Corrective Action: The Child Care and Development Fund (CCDF) program was previously managed by the Department of Social and Health Services and the Department of Early Learning. Since the program transitioned in 2019, the Department has been making efforts to strengthen internal controls over payments to child care providers and other CCDF grant requirements. The Department implemented grant-level management of all federal funds, including the CCDF grant. The Department allocated the CCDF grant to eligible clients and allowable activities in compliance with 45 CFR 98.67. As part of the audit resolution process, the Department of Health and Human Services (HHS), Administration for Children & Families (ACF), which oversees the CCDF program at the federal level, reviews all State Auditor’s Office (SAO) findings and issues management decision letters. The Department received a management decision letter dated October 3, 2023, from HHS for finding 2021-033 (2020-038) which states: “The ACF noted that the auditor raised concern about the Department’s accounting procedures and efforts made to trace expenditures at the transaction-level. As the basis for the finding, the auditor used CFRs (200.53, 200.303, 200.403, 200.410) that do not apply to CCDF. Federal regulations allow Lead Agencies to expend and account for CCDF funds in accordance with their own procedures.” In addition, ACF did not sustain the disallowance of questioned costs and stated: “Although the Department’s internal controls were lacking, the ACF has not identified any funds that were expended on ineligible activities.” The ACF recommended: “…that the Department work with the auditors to determine an appropriate methodology that can be tested to ensure child care payments comply with Federal regulations.” The Department met with ACF and SAO on November 8, 2023, to discuss the ACF decision at which time ACF upheld the above statements that the activities allowed finding was not substantiated. The Department is committed to collaborating with SAO to determine an appropriate methodology that identifies a sampling unit that can be used to accurately test compliance. The SAO maintained that the program is not auditable without child-level data. The Department does not currently have the staff and resources to develop and maintain the business process redesign, as well as the information technology initiatives necessary to meet the level of assurance recommended by SAO. In response to the auditor’s recommendations, the Department submitted a budget request for the 2024 supplemental budget. Funding was provided to develop and maintain the business process that would allow adjustments to include child-level data beginning July 2024. The conditions noted in this finding were previously reported in findings 2022-044 and 2021-038. Completion Date: Estimated December 2025 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with period of performance requirements for the Child Care and Development Fund Cluster. Questioned Costs: Assistance Listing # 93.575 93.575 COVID-19 93.596 Status: Corrective action in progress Corrective Action: The Child Care and Development Fund (CCDF) program was previously managed by the Department of Social and Health Services and the Department of Early Learning. Since the program transitioned in 2019, the Department has been making efforts to strengthen internal controls over payments to child care providers and other CCDF grant requirements. The Department implemented grant-level management of all federal funds, including the CCDF grant. The Department allocated the CCDF grant to eligible clients and allowable activities in compliance with 45 CFR 98.67. As part of the audit resolution process, the Department of Health and Human Services (HHS), Administration for Children & Families (ACF), which oversees the CCDF program at the federal level, reviews all State Auditor’s Office (SAO) findings and issues management decision letters. The Department received a management decision letter dated October 3, 2023, from HHS for finding 2021-033 (2020-038) which states: “The ACF noted that the auditor raised concern about the Department’s accounting procedures and efforts made to trace expenditures at the transaction-level. As the basis for the finding, the auditor used CFRs (200.53, 200.303, 200.403, 200.410) that do not apply to CCDF. Federal regulations allow Lead Agencies to expend and account for CCDF funds in accordance with their own procedures.” In addition, ACF did not sustain the disallowance of questioned costs and stated: “Although the Department’s internal controls were lacking, the ACF has not identified any funds that were expended on ineligible activities.” The ACF recommended: “…that the Department work with the auditors to determine an appropriate methodology that can be tested to ensure child care payments comply with Federal regulations.” The Department met with ACF and SAO on November 8, 2023, to discuss the ACF decision at which time ACF upheld the above statements that the activities allowed finding was not substantiated. The Department is committed to collaborating with SAO to determine an appropriate methodology that identifies a sampling unit that can be used to accurately test compliance. The SAO maintained that the program is not auditable without child-level data. The Department does not currently have the staff and resources to develop and maintain the business process redesign, as well as the information technology initiatives necessary to meet the level of assurance recommended by SAO. In response to the auditor’s recommendations, the Department: • Implemented written procedures for period of performance requirements effective December 6, 2023. • Submitted a budget request for the 2024 supplemental budget. Funding was provided to develop and maintain the business process that would allow adjustments to include child-level data beginning July 2024. The conditions noted in this finding were previously reported in findings 2022-043, 2021-037 and 2020-041. Completion Date: Estimated December 2025 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with matching, level of effort, and earmarking requirements for the Child Care and Development Fund Cluster. Questioned Costs: Assistance Listing # 93.575 93.575 COVID-19 93.596 Amount $0 Status: Corrective action in progress Corrective Action: The Child Care and Development Fund (CCDF) program was previously managed by the Department of Social and Health Services and the Department of Early Learning. Since the program transitioned in 2019, the Department has been making efforts to strengthen internal controls over payments to child care providers and other CCDF grant requirements. The Department implemented grant-level management of all federal funds, including the CCDF grant. The Department allocated the CCDF grant to eligible clients and allowable activities in compliance with 45 CFR 98.67. As part of the audit resolution process, the Department of Health and Human Services (HHS), Administration for Children & Families (ACF), which oversees the CCDF program at the federal level, reviews all State Auditor’s Office (SAO) findings and issues management decision letters. The Department received a management decision letter dated October 3, 2023, from HHS for finding 2021-033 (2020-038) which states: “The ACF noted that the auditor raised concern about the Department’s accounting procedures and efforts made to trace expenditures at the transaction-level. As the basis for the finding, the auditor used CFRs (200.53, 200.303, 200.403, 200.410) that do not apply to CCDF. Federal regulations allow Lead Agencies to expend and account for CCDF funds in accordance with their own procedures.” In addition, ACF did not sustain the disallowance of questioned costs and stated: “Although the Department’s internal controls were lacking, the ACF has not identified any funds that were expended on ineligible activities.” The ACF recommended: “…that the Department work with the auditors to determine an appropriate methodology that can be tested to ensure child care payments comply with Federal regulations.” The Department met with ACF and SAO on November 8, 2023, to discuss the ACF decision at which time ACF upheld the above statements that the activities allowed finding was not substantiated. The Department is committed to collaborating with SAO to determine an appropriate methodology that identifies a sampling unit that can be used to accurately test compliance. The SAO maintained that the program is not auditable without child-level data. The Department does not currently have the staff and resources to develop and maintain the business process redesign, as well as the information technology initiatives necessary to meet the level of assurance recommended by SAO. In response to the auditor’s recommendations, the Department submitted a budget request for the 2024 supplemental budget. Funding was provided to develop and maintain the business process that would allow adjustments to include child-level data beginning July 2024. The conditions noted in this finding were previously reported in findings 2022-042, 2021-036 and 2020-040. Completion Date: Estimated December 2025 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with requirements to ensure payments to child care providers for the Child Care and Development Fund Cluster programs were allowable and properly supported. Questioned Costs: Assistance Listing # 93.575 93.575 COVID-19 93.596 Amount 356,042,172 Status: Corrective action in progress Corrective Action: The Child Care and Development Fund (CCDF) program was previously managed by the Department of Social and Health Services and the Department of Early Learning. Since the program transitioned in 2019, the Department has been making efforts to strengthen internal controls over payments to child care providers and other CCDF grant requirements. The Department implemented grant-level management of all federal funds, including the CCDF grant. The Department allocated the CCDF grant to eligible clients and allowable activities in compliance with 45 CFR 98.67. As part of the audit resolution process, the Department of Health and Human Services (HHS), Administration for Children & Families (ACF), which oversees the CCDF program at the federal level, reviews all State Auditor’s Office (SAO) findings and issues management decision letters. The Department received a management decision letter dated October 3, 2023, from HHS for finding 2021-033 (2020-038) which states: “The ACF noted that the auditor raised concern about the Department’s accounting procedures and efforts made to trace expenditures at the transaction-level. As the basis for the finding, the auditor used CFRs (200.53, 200.303, 200.403, 200.410) that do not apply to CCDF. Federal regulations allow Lead Agencies to expend and account for CCDF funds in accordance with their own procedures.” In addition, ACF did not sustain the disallowance of questioned costs and stated: “Although the Department’s internal controls were lacking, the ACF has not identified any funds that were expended on ineligible activities.” The ACF recommended: “…that the Department work with the auditors to determine an appropriate methodology that can be tested to ensure child care payments comply with Federal regulations.” The Department met with ACF and SAO on November 8, 2023, to discuss the ACF decision at which time ACF upheld the above statements that the activities allowed finding was not substantiated. The Department is committed to collaborating with SAO to determine an appropriate methodology that identifies a sampling unit that can be used to accurately test compliance. The SAO maintained that the program is not auditable without child-level data. The Department does not currently have the staff and resources to develop and maintain the business process redesign, as well as the information technology initiatives necessary to meet the level of assurance recommended by SAO. In response to the auditor’s recommendations, the Department submitted a budget request for the 2024 supplemental budget. Funding was provided to develop and maintain the business process that would allow adjustments to include child-level data beginning July 2024. The conditions noted in this finding were previously reported in findings 2022-041, 2021-033, 2020-038, 2019-035, 2018-034, 2017-024, 2016-021, 2015-023, 2014-023, 2013-016, 12-28, 11-23, 10-31, 9-12 and 8-13. Completion Date: Estimated December 2025 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with requirements to ensure payments to child care providers paid with Temporary Assistance for Needy Families funds were allowable and property supported. Questioned Costs: Assistance Listing # 93.558 Amount $107,338,725 Status: Corrective action in progress Corrective Action: The Working Connections Child Care (WCCC) program was previously managed by the Department of Social and Health Services (DSHS) and the Department of Early Learning. Since the program transitioned in 2019, the Department has been making efforts to strengthen internal controls over payments to child care providers and other grant requirements. The Department implemented grant-level management of all federal funds, including the Temporary Assistance for Needy Families grant. This consisted of making significant grant level adjustments between allowable grant sources to properly spend grant dollars within the allowable period of performance and ensure level of effort and matching requirements were met. The Department’s grant adjustments were processed based on eligible clients and allowable activities. The Department does not currently have the staff to develop and maintain the business process redesign, as well as the information technology initiatives necessary to meet the level of assurance recommended by the State Auditor’s Office. In response to the auditor’s recommendations, the Department submitted a budget request for the 2024 supplemental budget. Funding was provided to develop and maintain the business process that would allow adjustments to include child-level data beginning July 2024. The conditions noted in this finding were previously reported in findings 2022-035 and 2021-028. Completion Date: Estimated December 2025 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with requirements for monitoring subrecipients to ensure payments were allowable, properly supported and met period of performance requirements for the Coronavirus State and Local Fiscal Recovery Funds. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $312,659,850 Status: Corrective action in progress Corrective Action: The Department partially concurs with the finding. The Department’s Office of Refugee and Immigrant Assistance (ORIA) administered this funding through the Washington COVID-19 Immigrant Relief Fund program and contracted with a subrecipient organization to conduct eligibility determinations to approve and disburse funds to undocumented immigrants. This program is now closed, with all subrecipient contracts ended and the final payments sent in early 2023. The Department is taking action to strengthen internal controls over subrecipient monitoring for ORIA’s contracts. By July 2024, the Department will: • Complete a review of all active contracts utilizing federal funding to ensure subrecipients are accurately identified. • Explore the feasibility of increasing ORIA and Economic Services Administration accounting staff resources to support the workload increase associated with monitoring subrecipients. By October 2024, the Department will convene a work group with contracts and accounting staff to create effective internal controls and written procedures for fiscal and program monitoring of ORIA’s subrecipient contracts. This will include the following: • Verify the subrecipient status for each contract is correctly determined and recorded in the Agency Contracts Database. • Include the required subrecipient language in the contract. • Obtain a copy of the indirect rate certification or cost allocation plan from the subrecipient. • Complete risk assessments. • Create appropriate monitoring plans for each subrecipient. • Conduct fiscal monitoring of each subrecipient to obtain assurance that the use of federal funds complies with federal laws and regulations. • Create corrective action plans when required. By January 2025, the Department will ensure all ORIA program staff responsible for monitoring receive training on the updated procedures. In addition, the Office of the Secretary will request the Department’s Internal Audit and Consultation office conduct an internal audit of ORIA to ensure the program implements strong internal controls, properly accounts for federal funds, and materially complies with federal requirements. The Department does not concur with the questioned costs. The funds were used to assist Washington workers/families who were affected by the COVID-19 pandemic but were unable to access federal stimulus programs and other social support due to their immigration status. Repayment of these funds would only hinder the state’s ability to provide critical services to our clients. If the grantor contacts the Department regarding the questioned costs, the Department will discuss this with the Department of Health & Human Services and will take additional action as appropriate. Completion Date: Estimated January 2025 Agency Contact: Richard Meyer External Audit Compliance Manager PO Box 45804 Olympia, WA 98504-5804 (360) 664-6027 Richard.Meyer@dshs.wa.gov

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements to ensure payments to subrecipients of the Emergency Rental Assistance program were allowable and properly supported. Questioned Costs: Assistance Listing # 21.023 COVID-19 Amount $4,123,486 Status: Corrective action complete Corrective Action: The funding for the Emergency Rental Assistance program ended on June 30, 2023. The Department is no longer funding this program. To address the control deficiencies reported in the prior year’s finding, the Department improved internal control processes, resulting in improved compliance. The Department strives to meet all federal requirements and any repayment of questioned costs will be determined through the normal audit resolution process with the U.S. Treasury. The conditions noted in this finding were previously reported in finding 2022-016. Completion Date: July 2023 Agency Contact: Gena Allen, CFE Internal Control Officer PO Box 42525 Olympia, WA 98504-2525 (360) 480-5149 Gena.Allen@Commerce.wa.gov

Finding 2023-037 – Corrective Action Plan Auditee Views: PRO met with the Department of Housing and the legal services vendors. The Department of Housing is collecting backup documentation for the vendors to support payment. This has been shared with PRO via SharePoint. The Department may also request additional backup documentation from the vendors to further support these costs. Corrective Action: Obtain additional documentation from the legal services vendors and maintain SharePoint to ensure PRO has access to supporting documentation. Anticipated Completion Date: Completed and Ongoing Contact Person: Tara Booker, Executive Director of Homelessness and Community Supports, Department of Housing tara.booker@housing.ri.gov

FINDING 2023-005 Compliance Requirement(s): Allowable Activities, Allowable Costs / Cost Principles Audit Findings: Material Weakness, Other Matters Summary of Finding: An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the following compliance requirements: Allowable Activities, Allowable Costs / Cost Principles The School Corporation paid trash removal services from the School Lunch fund without a methodology or supporting documentation for the amount charged. Without a reasonable methodology for the expenses paid, the amount was considered a questioned cost. The total amount charged to the School Lunch fund was $15,448. Internal controls over vendor disbursements were in place but were not operating effectively during the audit period. Additionally, there was no documentation indicating that payroll disbursements were reviewed or approved by a second individual not involved in the original payroll process. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Views of Responsible Officials: We Concur with this finding. Description of Corrective Action Plan: The School will start to divide trash removal services between cafeteria accounts and building accounts when being paid monthly. Verification of percentage coming from each account will be discussed. Internal controls will be put in place to document that payroll disbursements are being reviewed by a second individual. Payroll disbursement reports will be presented to the correct central office employee. Anticipated Completion Date: Immediately

UWGC has developed a procedure to ensure that prior to submission of invoices to federal awarding agencies, management prepares a monthly analysis based on 211 call logs to support the actual amounts allocated across all programs and invoiced to the awarding agencies that are reconciled to payroll reports, which then will allow UWGC to present evidence that all hours submitted for reimbursement are supported with the appropriate allocation. The process will include management staff from both 211 and finance departments thus maintaining internal controls. Additionally, this procedure will be reviewed at least annually by both departments as it relates to the allocation methodology to ensure that its appropriate given changes in the program and workforce.

UWGC has developed a procedure as outlined below in “Payroll Allocation Grants” to ensure that prior to submission of invoices to federal awarding agencies, management prepares a monthly analysis based on 211 call logs to support the actual amounts allocated across all programs and invoiced to the awarding agencies that are reconciled to payroll reports, which then will allow UWGC to present evidence that all hours submitted for reimbursement are supported with the appropriate allocation. The process will include management staff from both 211 and finance departments thus maintaining internal controls. Additionally, this procedure will be reviewed at least annually by both departments as it relates to the allocation methodology to ensure that its appropriate given changes in the program and workforce.

UWGC has developed a procedure as outlined below in “Payroll Allocation Grants” to ensure that prior tosubmission of invoices to federal awarding agencies, management prepares a monthly analysis based on 211 call logs to support the actual amounts allocated across all programs and invoiced to the awarding agencies that are reconciled to payroll reports, which then will allow UWGC to present evidence that all hours submitted for reimbursement are supported with the appropriate allocation. The process will include management staff from both 211 and finance departments thus maintaining internal controls. Additionally, this procedure will be reviewed at least annually by both departments as it relates to the allocation methodology to ensure that its appropriate given changes in the program and workforce.

Agency will implement as after-the-fact review for salaried employees. Timecards are actual time worked on project as instructed by Cal OES. Paycor allocations (which are budgeted allocations) are driving the salaried employees' allocations to the labor distribution report. Salaried employees, regardless of their time worked, are allocated 86.67 hours per pay period and by percentage of their labor allocation. Agency will review timecards to labor distribution and make the necessary adjustments after posting the Payroll Import by creating a journal entry to ensure that the project is charged accurately. Timecards are never altered as they are approved with 2 approvals.

2023-003 - Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Significant Deficiency) Condition: During our audit, we noted that three (3) out of forty (40) samples summed up to $39,055.50 had no proper source documents to support the transactions charged to the grant brought by lost official receipts, hence, identified as not adequately documented. Alternatively, the City created a memo to document the loss of receipts signed by the department head. Management concurs. Corrective Actions: The City has an existing purchasing policy and procedures requiring documentation of all purchases made. Finance department has already sent a reminder to all department heads regarding the policy and procedure and why they must comply. Implemented Name of Responsible Person: Manuel Carrillo Jr., Director of Recreation & Community Services

Condition - The Special Education District prepared, and the cognizant agency approved, a grant budget that included $637,216 of salaries for learning loss, summer enrichment and after school programs (run by member districts). The Special Education District claimed grant expenditures for payments to member districts as salaries. Plan - Management will ensure compliance with all aspects of the program in the future. Anticipated Date of Completion - July 1, 2024. Name of Contact Person - Greg Wetheim, Director. Management Response - Management does not agree with this finding. Management reached out to the cognizant agency which provided the following response - "The ESSER III Cooperative grant was state set-aside funds that were originally awarded to ISBE. ISBE determined that to meet the stipulations of Learning Loss-Summer Enrichment-After School Program reservations, the most efficient way to reach the maximum number of students would be through the cooperatives providing for their member districts. Henry-Stark County Special Education District met those requirements and fulfilled their financial obligations by providing evidence-based activities through their member districts"

Finding Number: 2023-003 Program: U.S. Department of Health and Human Services ALN Number: 93.243 ALN Name: Substance Abuse and Mental Health Service Projects of Regional and National Significance Grant Award Number: 1H79TI084507-01 Planned Corrective Action: Management has implemented a process wherein the Human Resources department sends the Termination Log weekly to the Payroll Department for comparison with the Payroll Department’s records and ensure that status changes for employees are properly recorded. Further, an adjustment was made subsequent to year-end to adjust the overpayment and remove the amount from the cumulative charges to the grant funds. Person(s) Responsible: Mordechai Schechter, Chief Financial Officer Expected Completion Date: June 30, 2024

Finding Number: 2023-002 Program: U.S. Department of Health and Human Services ALN Number: 93.243 ALN Name: Substance Abuse and Mental Health Service Projects of Regional and National Significance Grant Award Number: 1H79TI083607-01 Planned Corrective Action: Management will hire a HR Assistant to help review/ manage the review of timecards going forward. Person(s) Responsible: Mordechai Schechter, Chief Financial Officer Expected Completion Date: June 30, 2024