Corrective Action Plans

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

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

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

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

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

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

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

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

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

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

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

The Home contacted the Office of Refugee Resettlement (ORR) and was instructed to keep the funds and submit a carry-over request for these funds.

Finding 2023-004 – Special Education Cluster – Earmarking Contact Person Responsible for Corrective Action: Kimberly Nieves Contact Phone Number: 219-508-0504 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: The Director of Business Affairs & HR will work with the Special Education Coop to ensure compliance with the Earmarking requirement. Anticipated Completion Date: February 2024

Pacific University acknowledges the importance of an effective control environment. University policies do require approval of all timesheets. Management will re-emphasize the importance of this key approval control and periodically review supervisor compliance (with follow-up on exceptions). The approval requirement will also be added to Pacific’s mandatory annual compliance training for supervisors.

Finding Number: 2023‐010 Federal Program, Assistance Listing Number and Name: 14.218, Department of Housing and Urban Development, Community Development Block Grant/Entitlement Grants Cluster, Community Development Block Grant/Entitlement Grants (CDBG) 14.241, Department of Housing and Urban Development, Housing Opportunities for Persons With Aids (HOPWA) 14.905, Department of Housing and Urban Development, Lead Hazard Reduction Demonstration Grant Program (Lead) Condition: Original Finding Description: The City duplicated costs charged to certain grants. Contact Person Responsible for Corrective Action: Regina Greear (ODFS) and Cynthia Saxton (OGA) Anticipated Completion Date: June 2023 Planned Corrective Action: The City will review during the AFCAP process and implement additional training that includes a review of its journal entry controls and approval processes to ensure journal entries are posted accurately and no duplicates costs.

Identifying Number: 2023-001 Finding: For 3 out of the 26 transactions selected for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds program, the expenditures were recorded for an inaccurate amount. For 1 out of 25 transactions selected for the Transitional Living for Homeless Youth program, the expenditure was not accrued in the appropriate fiscal year in accordance with U.S. GAAP. Corrective Action Plan for Audit Finding 2023-001: The first item above related to rental payment. Incorrect payment made due to incorrect information/approval from the program. An additional level of lease review by Director of Finance and Business added to confirm payment matches lease upon initiation of new leases and lease renewals. The second item above related to a gas card account. The Director of Finance & Business and Director of Accounting have discussed this. An item added to year-end/audit check list to review October statement and identify/accrue any expenses incurred on or prior to September 30. Responsible for Corrective Action Plan: Julie Pool, Director of Finance & Business

Finding Number 2023-002 • Significant deficiency in internal controls over compliance related to allowable costs and period of performance. Criteria • 2 U.S. CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards require that costs must be necessary and reasonable for the performance of the Federal Award, that costs be determined in accordance with GAAP, and that costs be adequately documented including the allocation of those costs. Condition/Context for Evaluation • IPHC’s internal controls over non-payroll charges to the Federal Award did not include review for allowability, accrual in the proper period, or that adequate documentation existed to support the amounts charged or allocated. Three out of 25 nonpayroll disbursements tested did not include evidence supporting one or more of these controls. Questioned Costs • $2,674 Cause • IPHC’s operation of internal controls were not sufficient to ensure allowable costs were charged in accordance with 2 U.S. CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Effect or Potential Effect • As a result, charges were made to Federal awards that were not allowable. Repeat Finding • Not applicable. Recommendation • We recommend that IPHC ensure internal controls include reviewing costs charged to the Federal Award for conformity with 2 U.S. CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards for allowability, allocability, and reasonableness. o Allowability 200.403, 200.404, 200.405 o Allowable budget period – 200.403 (h) Contact Person(s): • Executive Director: David Wilson (david.wilson@iphc.int); • Assistant Director: Andrea Keikkala (andrea.keikkala@iphc.int) Explanation and specific reasons for disagreement with the audit finding or that corrective action is not required (if applicable): Not applicable. Corrective action planned: We acknowledge that the deficiencies identified, while minor in dollar value to the grant, represent areas for improvement. The specific issues identified were: 1. Field office rental: A field office rental statement was partially charged to the incorrect fiscal year. Reason: The landlord submitted the invoice for payment after the year-end close (FY2022) and was subsequently fully charged to FY2023, instead of being split across fiscal years. 2. Postage (2 elements): The IPHC loads postage stamps on a stamps.com account to process missing logbook notices to vessel owners, a function that pertains to a grant. Clear delineation of the cost of the stamps allocated to the grant and the stamps allocated to activities that do not qualify under the grant were not enumerated. The employee that requested the stamps in the procurement software did so because the lead team member was not available. When procuring the stamps the face-value of a stamp was used at $0.60 instead of $0.57, a discount the organization receives due to bulk purchase and stamp.com membership. The cost of this error was $9.96. At the start of FY2023, we used a single operating Fund (Fund 30 – Statistics) to record income and expenses for data related activities that included some grant funds. During the course of the year, we commenced the development of the new 5-year grant application with NOAA Fisheries to cover IPHC’s Directed Commercial Catch Sampling of Pacific halibut in Alaska (IPHC Grant 802) (Grant Number: NOAA-NMFS-AK-2023-2007663) from FY2022-FY2026. During this grant renewal/development process, a decision was taken to split Fund 30 – Statistics into two, with Fund 35 AK Cost-Recovery being created. This new Fund 35 was developed to contain only those expenses and income that were deemed as eligible under the grant rules. Over the course of the year, the Secretariat categorized income and expenses between the two Funds, which involved recoding some transactions coded to Fund 30 at the start of the fiscal year, to Fund 35 later in the year. For FY2024, we will continue to undertake monthly reconciliation and month-end close processes to ensure charges are appropriately coded and attributed. In addition, the year-end reconciliation and close processes will support the attestation of funds spent under the grant within one month of the fiscal year ending. This proactive approach aims to ensure timely completion for the single audit, allowing for comprehensive scrutiny of costs assigned to the grant before incorporating financial statements for review during the single audit process. Further, we will ensure preliminary scrutiny and month-end close of financial reports pertaining to grant funds before loading them to the auditors for review. Finally, our procedures have already been improved to ensure that costs charged to the federal awards are charged to the appropriate activity code and are allowable under federal cost principles. Anticipated completion date: Completed - 1 December 2023, and annually by year-end closeout.

Finding Number: FS-2023-003 Contact Person: Richard Edwards, Director and Veryl Begay, Business Manager Anticipated Completion Date: March 31, 2024 Planned Corrective Action: When the Business manager left without turning over access or authority, KRCI struggled to perform even the smallest of tasks. In Addition to the obstruction and difficulty finding records, the former Business Manager with the approval of a Board Member, removed numerous records from the campus when clearing their office. A police report was made regarding the potential theft and a folder containing credit card information was returned by the former employee, but KRCI is not confident that all records belonging to the Campus were returned. No central system was established for archiving and security of procurement records. There were no backup systems or redundancy, and separation of duties did not exist due to the extremely limited staff.

Management will ensure an effective review of reimbursement requests prior to submission to ensure all costs requested are legitimate and allowable. Contact Person: Mayor Leroy Sullivan and Sandra Williams. Anticipated Completion Date: Annual basis/as needed

The finding is correct in the fact that money was charged to the wrong grant award. However, as a whole with the grant awards from all of the American Rescue Plan Act, Vantage Career Center gave more money to students then the grants required. Moving forward the Treasurer will be more involved with the requirements of administering the grants from the beginning.

Management agrees with this finding and will implement a more detailed review process of FEMA grant reimbursement requests for future disasters to ensure equipment hour costs reported are accurate. Anticipated Completion Date: June 30, 2024. Responsible Contact Person: David Yellott.

Finding: 2023-002: Questioned Cost – Material Weakness Costs for US Department of Transportation, Mobility Management Grant 20.507 Section 5307 included a $30,000 charge for use of the Data Management System (DMS). The charge is based on a contract rate charged to outside entities that varies depending on the number of users. Management stated the charge was to recoup costs for use of the DMS. Costs for the DMS consist of historical costs to get the system functioning, along with current personnel costs to operate the system and provide the contracted training. The historical costs occurred outside the period of performance and are thus unallowable. Personnel costs are already being charged to the grant through the allocated payroll and benefits of trainers and other personnel, and thus should not also be charged through the contract rate. In addition, if the contract rate includes a profit component this would also be unallowable to charge to the grant. Auditor Recommendation: We recommend that costs charged to federal grants be reviewed by an individual familiar with the Cost Principles for Nonprofit Organizations contained in 2 CFR, Section 200 as part of the SEFA review process. Contact Person Responsible for the Corrective Action: Lisa Cappellari, Chief Financial Officer, LisaC@paratransit.org Management Response and Corrective Action Plan: After the end of Fiscal Year 23-24 on 6/30/2024, Jody Wadley, Finance and Grants Manager, and Lisa Cappellari, Chief Financial Officer, will compile all expense to be charged to any federal grants. Tiffani Scott, Chief Executive Officer, will review the expense against the Cost Principles for Nonprofit Organizations contained in 2 CFR, Section 200 to make sure all expense is eligible.

Condition: A sample of 118 payroll-related expenditures were randomly selected for testing using a random sampling approach, of which included a total of 37 district employees paid & claimed under this grant. These payroll-related expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. Upon completing this testing, we noted the following discrepancies: -There were 4 employee salary & benefits claimed that were not included in the 22-4998-E3 grant budget detail. The budget specified teachers & paraprofessionals, and support staff were not included, resulting in known questioned costs of $4,857.50. -There were 11 employees where a portion of the claimed payroll & benefits were deemed allowable per the budget but $8,947.88 was deemed not allowable, resulting in known questioned costs of $8,947.88. -Additionally, there were $6,686.25 of the employee salary & benefits that was not deemed allowable per the budget as the pay period dates did not align with “loss of learning” related pay dates or other approved activities. Plan: The District will review its policies and procedures to ensure that potential expenditures are approved are deemed to be allowable before spending federal funds. In addition, the District will consider implementing a monitoring process to ensure that control procedures are being followed. Anticipated Date of Completion: 6/30/2024 Name of Contact Person: Dr. Dwayne E. Evans, Superintendent of Schools Management Response: The District is currently strengthening internal control procedures over grant reporting and monitoring.

Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023

The District acknowledges the finding regarding the unallowed costs associated with the 21st CCLC Grant. During the audit process, we found that salary costs within this grant were included in error and should not have been. We have contacted both the fiscal department for 21st CCLC and NYSED Grants Finance, in hopes to correct this issue. We adjusted the FS10F report for final expenses and copies are being sent out to the appropriate departments for correction. This issue should be resolved by January 2024 and will be implemented by the Business Manager, Christopher Karwiel.