Corrective Action Plans

Condition During testing of cash disbursements, the audit team was unable to locate adequate supporting documentation for selected transactions sufficient to determine whether the costs charged were allowable and the activities were allowed under the applicable federal award(s). Documentation such as invoices, receipts, contracts, approvals, or evidence linking the expenditure to an allowable activity could not be located or provided by the Institute. Criteria Per 2 CFR § 200.403, costs charged to a federal award must be necessary, reasonable, and adequately documented. Per 2 CFR § 200.302 and § 200.334, non-federal entities must maintain financial records, including source documentation (e.g., invoices, receipts, canceled checks, time and effort records) that support the allowability, allocability, and reasonableness of costs charged to federal awards, and these records must be retained and readily accessible for a minimum of three years. Additionally, 2 CFR § 200.404 and § 200.405 require that costs be allocable and consistently applied to allowable program activities. Cause The Institute's recordkeeping and document retention practices did not ensure that supporting documentation for cash disbursements was consistently maintained, organized, or readily retrievable. This may be attributable to insufficient internal controls over document retention, lack of a centralized filing/records system, or turnover in staff responsible for maintaining disbursement records. Effect Without adequate supporting documentation, the Institute cannot demonstrate that disbursed funds were used for allowable costs and allowed activities in accordance with the terms of the federal award(s). This exposes the Institute to the risk of questioned costs, disallowed expenditures, required repayment to the funding agency, and potential findings of noncompliance in future audits. It also limits the Institute's ability to demonstrate accountability and stewardship over federal funds. Recommendation We recommend that the Institute strengthen internal controls over cash disbursements to ensure supporting documentation (invoices, receipts, approvals, and evidence of allowable activity) is obtained and retained for every transaction prior to disbursement. The Institute should implement a centralized, organized recordkeeping system (physical or electronic) for disbursement documentation, with clear responsibility assigned for maintenance and retrieval. The Institute should also provide training to relevant staff on documentation retention requirements under 2 CFR Part 200. Management’s Response Management agrees with the finding and recommendation. The Institute recognizes that complete and readily retrievable supporting documentation is necessary to demonstrate the allowability, allocability, and reasonableness of costs charged to all awards. Management will strengthen its cash disbursement and record-retention procedures to ensure invoices, receipts, approvals, contracts, and other applicable supporting documentation are maintained for each transaction. Action Taken The Institute implemented a centralized electronic recordkeeping process for cash disbursement documentation and assigned responsibility for maintaining and retrieving supporting records. Documentation supporting the expenditure and applicable approvals are retained with the transaction records. Relevant staff have been instructed on documentation and record-retention requirements applicable to federal awards. Management will hold an annual training at the beginning of the new fiscal year available to all ERI employees.

Responsible Official’s Response and Corrective Action Planned: Management has implemented a new process to include financial oversight and review of all documents prior to submission to FEMA for reimbursement going forward. Since the Finding last year, we have not had the opportunity to utilize this new process as the FEMA expenditures in question were prior to last year’s Finding. We will continue to meet with all leadership staff to discuss documentation requirements necessary for FEMA reimbursements. Lastly, Management will only sign off on reimbursed costs after all changes to FEMA requests have been adequately documented.

THE COALITION WILL MAINTAIN A CENTRALIZED GRANT REGISTER IDENTIFYING EACH AWARD NUMBER, PROJECT CODE, BEGINNING DATE, ENDING DATE, AND APPROVED PERIOD OF PERFORMANCE. FINANCE WILL USE THE REGISTER DURING MONTHLY CLOSE AND GRANT REVIEW TO VERIFY THAT PAYROLL AND NON-PAYROLL EXPENDITURES ARE CHARGED TO THE CORRECT ACTIVE GRANT/PROJECT. BEFORE AND AFTER AN AWARD END DATE, FINANCE WILL REVIEW PROJECT ACTIVITY FOR COSTS POSTED OUTSIDE THE APPROVED PERIOD, CONFIRM WHETHER ANY PRE-AWARD OR CLOSEOUT COST IS AUTHORIZED, AND RECLASSIFY MISCODED TRANSACTIONS BEFORE GRANT REPORTING IS FINALIZED. NEW AWARD/PROJECT CODES WILL BE ESTABLISHED AND COMMUNICATED BEFORE COSTS ARE CHARGED TO A SUCCESSOR AWARD. IN ADDITION, AFTER THE MONTHLY CLOSE PROCESS IS COMPLETE, FINANCE WILL DISTRIBUTE GRANT STATEMENTS TO ADMINISTRATION TO REVIEW EXPENDITURES AND REMAINING GRANT BALANCES FOR REASONABLENESS. THIS PROVIDES AN ADDITIONAL LAYER OF OVERSIGHT TO VERIFY THAT GRANT-RELATED EXPENSES HAVE BEEN RECORDED ACCURATELY.

Management appreciates the opportunity to respond to Finding 2025-001. The questioned cost relates to payment for CRE’s federally required financial audit for the year ended December 31, 2025. The costs of the audit were in fact liquidated by virtue of an audit engagement letter received. The audit procedures addressed financial activity, finalyear expenditures, financial reporting, internal control, and compliance requirements associated with the five-year ACF award that concluded in 2025. The payment was not intended to support future program operations, future service delivery, or activities to be performed under a subsequent award period. Management respectfully requests that ACF evaluate the questioned cost based on the purpose of the expenditure, the benefit received by the federal award, and the documentation supporting the transaction. The audit was required because of the financial activity conducted under the completed ACF award. The audit tested costs incurred, funds drawn, financial reporting, internal control, and compliance obligations arising from that award. Management does not believe the cost provided a programmatic or administrative benefit to a later federal award. CRE charged the audit cost to the award that received the benefit of the audit services because management determined that award to be the appropriate cost objective. Charging the cost to a subsequent award solely because the audit work or payment occurred after the award end date would have resulted in a different federal award, and potentially a different federal agency, bearing the cost of audit procedures performed on activity attributable to the completed ACF award. Management acknowledges that the period-of-performance requirements are an important compliance consideration and does not assert that the allocation rationale alone overrides those requirements. However, management believes the facts and circumstances distinguish this transaction from an advance payment or prepayment for future program services. The audit was completed, the amount was supported by documentation, the cost was not charged to another federal award, and the Federal Government received the intended financial oversight and compliance benefit associated with the completed award. Accordingly, management respectfully requests that ACF consider allowing the portion of the audit cost that is reasonably attributable to the completed ACF award. If ACF determines that a portion of the cost is not allowable based on the period of performance, management requests that the final determination clearly distinguish any disallowance based on timing from the allowability, reasonableness, allocability, and documentation of the audit service itself. Management also requests that the final finding accurately describe the nature of the questioned cost as a federally required financial audit of activity for the year ended December 31, 2025. The current characterization of the payment as a prepayment to a third party for services to be provided in 2026 does not fully describe the purpose of the expenditure and may imply that the payment supported 2026 program activity, which management believes is inconsistent with the underlying purpose and benefit of the audit services. CRE has procedures to review both the period in which contracted services are performed and the award that receives the benefit of those services. As a corrective action, for future grants approaching expiration, CRE will obtain written guidance from the awarding agency before charging audit, closeout, or other post-award professional service costs to an expiring award. CRE will also document the basis for any allocation decision, including the applicable award, period of performance, benefit received, and supporting documentation retained for audit review.

Beginning with FY2026, a new Federal Programs Supervisor/Director was hired by the Board, and a Fiscal Administrator was appointed on August 27, 2025. These new designees will ensure that all federal programs operate within their allowable costs, activities, procurement, suspension and debarment guidelines. Approved budgets will be reviewed and complied with as purchases are made and reviewed monthly thereafter.

Beginning with FY2026, a new Federal Programs Supervisor/Director was hired by the Board, and a Fiscal Administrator was appointed on August 27, 2025. These new designees will ensure that all federal programs operate within their allowable costs, activities, procurement, suspension and debarment guidelines. Approved budgets will be reviewed and complied with as purchases are made and reviewed monthly thereafter.

FA 2025-002 Strengthen Controls over Expenditures Compliance Requirement: Internal Control Impact: Compliance Impact: Federal Awarding Agency: Pass-Through Entity: Assistance Listing Number and Title: Federal Award Number: Questioned Costs: Repeat of Prior Year Finding: Description: Activities Allowed or Unallowed Allowable Costs/Cost Principals Material Weakness Material Noncompliance U.S. Department of Education Georgia Department of Education COVID-19 - 84.425U -American Rescue Plan Elementary and Secondary School Emergency Relief Fund S425U210012 (Year: 2024) $20,928.34 FA 2024-002, FA 2023-002, FA 2022-002 A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund Program revealed that the School District's internal control procedures were not operating to ensure that expenditures were appropriately documented to support allowability. Corrective Action Plans: • The CFO will ensure that every journal entry has all the supporting documentation that will show appropriate approval before entering into PCG and that the documentation explains clearly the purpose for journal entry. • Payroll will reorganize how documentation is kept of each pay period to ensure it makes a complete monthly folder. Payroll will not process any timesheets that need signatures for approval. If not able to get signed in time for current pay period, it will be processed in the next one. CFO will review all salaries after they have been entered into PC Genesis to ensure that they are being processed correctly. Estimated Completion Date: December 18, 2026 Contact Person: Torrence H. Freeman Ill, CFO Telephone: 706-665-8577 Email: tfreeman@talbot.k12.ga.us

FA 2025-001 Strengthen Controls over Expenditures Compliance Requirement: Internal Control Impact: Compliance Impact: Federal Awarding Agency: Pass-Through Entity: Assistance Listing Number and Title: Federal Award Number: Questioned Costs: Repeat of Prior Year Finding: Description: Activities Allowed or Unallowed Allowable Costs/Cost Principals Material Weakness Material Noncompliance U.S. Department of Education Georgia Department of Education 84.010 - Title I Grants to Local Educational Agencies S010A230010 (Year: 2024), S010A240010 (Year: 2025) $127,026.07 FA 2024-001, FA 2023-001, FA 2022-001 The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it related to the Title I Grants to Local Educational Agencies program. Corrective Action Plans: • The CFO will make sure that the voucher packets are properly prepared before the final steps. The packets must include approved requisition forms with school admin level approval, secondary approval from federal director if federal funds are used, and a completed purchase order signed by superintendent. • The CFO and Board Office Secretary will make sure that payments match the invoices. If there are any changes, those changes are documented correctly. • The CFO and payroll clerk will ensure all salary sheets are attached to contracts and are available for review. • The CFO will run a report to check additional payments against additional time sheets and will sign off on it. Estimated Completion Date: December 18, 2026 Contact Person: Torrence H. Freeman Ill, CFO Telephone: 706-665-8577 Email: tfreeman@talbot.k12.ga.us

In order to avoid this situation happening in the future, instruction will be provided to all personnel emphasizing that every purchase should be made through a purchase order. This will ensure that we follow the BGCPR formal procedure and ensure better internal control is being followed. In addition, we will emphasize that no shipment should be received if such purchase is not in accordance with the specification disclosed in the purchase order. Contact Person: Purchase and procurement personnel Carlos Rivera Paul Barreras Amarilis Rodríguez (PACNA’s Project Manager) Team: Finance Team Anticipated Completion Date: September 30, 2026

BGCPR will provide additional training and guidance to Human Resources personnel to ensure consistent adherence to the internal procedures established. Contact Person: Yezaida Reyes Angel Morales Paul Rivera Team: Finance, Compliance and Human Resources Team Anticipated Completion Date: September 30, 2026

BGCPR will provide additional training and guidance to Human Resources personnel to ensure consistent adherence to the internal procedures established. Contact Person: Yezaida Reyes Angel Morales Paul Rivera Team: Finance, Compliance and Human Resources Team Anticipated Completion Date: September 30, 2026

2025-002 a. Name of Contact Person Responsible for Corrective Action: LaKenya Thomas– Executive Director of Finance & Business Affairs b. Corrective Action Planned: We will implement policies or procedures to establish an internal control system that will ensure strong financial accountability and to ensure compliance with all state and federal grant requirements. c. Anticipated Completion Date: Immediately.

#2025-003 - Accounts Payable Cut-Off/ Period of Performance Corrective Action Planned: Certain grants - particularly at the Center for Adult College Success - were prepaid by the funder in order to disburse funds quickly, with grant conditions permitting continued work beyond the nominal completion date. TalentFirst closed these grants out in the accounting records before the full period of performance had concluded, resulting in expenses recorded in the wrong period. Management has implemented a contract timeline document that tracks each grant and contract's actual period of performance and governs when a grant is closed out in the accounting records - grants are no longer closed out until the full period of performance has concluded. Management is also moving away from structuring large prepaid contracts, in part to ease the cash flow pressure that structure creates. Anticipated Completion Date: Already implemented. Responsible Party: Finance Manager, with oversight by the President.

Description: During our testing of payments charged to the federal major program, we noted that employee timesheets lacked evidence of review and approval. Certain employees charged to the grant did not prepare timesheets and a separate tracking system was used. Federal regulations require that expenditures charged to Federal awards be properly reviewed, approved, and documented to ensure allowability and compliance with grant terms. Recommendation: Review the requirements of CFR 200.430 and ensure that current processes, whether digital or hard-copy driven, are consistent with the requirements of the Uniform Guidance. In addition, management should consider adding additional staff to its accounting and/or grants management team. Responsible Contact: Laura McQuay, Vice President & Chief Financial Officer Corrective Action Planned: The Organization has made significant progress in strengthening its timekeeping processes, as described in finding number 2025-002. This program ended in March 2025, and therefore management was unable to complete full remediation of the processes before completion of the grant. Anticipated Completion Date: December 31, 2027

Description: During our testing of payments charged to the federal major program, we noted that employee timesheets lacked evidence of review and approval. Federal regulations require that expenditures charged to Federal awards be properly reviewed, approved, and documented to ensure allowability and compliance with grant terms. Recommendation: Review the requirements of CFR 200.430 and ensure that current processes, whether digital or hard-copy driven, are consistent with the requirements of the Uniform Guidance. In addition, management should consider adding additional resources to its payroll approval process. Responsible Contact: Laura McQuay, Vice President & Chief Financial Officer Corrective Action Planned: Management: The Organization has made significant progress in strengthening its timekeeping processes over the past 18 months. In 2025, the agency transitioned approximately 800 weekly transitional workers from a paper-based timekeeping process to an electronic timekeeping system. In 2026, the agency implemented an upgraded workforce management system that provides enhanced scheduling, monitoring, and supervisory oversight capabilities. Management recognizes the importance of full compliance with timekeeping requirements. Given the size and complexity of the Organization's operations, including a large workforce distributed across multiple programs and locations, implementation of system and process changes requires substantial planning, training, and operational coordination. To support these efforts, the agency has dedicated additional resources and established clearly defined responsibilities to drive implementation and oversight. The agency continues to refine procedures, provide training, and leverage system capabilities to strengthen controls and ensure consistent compliance across the Organization. Anticipated Completion Date: December 31, 2027

The organization will develop a process of checks and balances to ensure that supporting documentation is provided and attached to justify the draw down requests. A reconciliation of expenditures recorded on the books and submitted request for reimbursement. All excess funds will be returned to the funding source. Responsible Individual: Chief Financial Officer - Scott Korba Estimated Completion Date:

A designated Finance staff member with knowledge of the Uniform Guidance requirements will be responsible for overseeing SEFA preparation for each fiscal year-end. A grant-by-grant SEFA reconciliation will be completed prior to yearend close, with particular attention to period-end cutoff. The SEFA will be independently reviewed by the Finance Director and compared to grant expenditure reports before the audit commences. Management will engage its external accountants earlier in the year-end close process.

Finding Number: 2025-001 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Corrective Action Plan In March 2026, following the recognition of the issue, APS immediately conducted a comprehensive review of all payroll related charges, and promptly corrected the accounting records and updated the SEFA to remove all duplicated costs. In response to this finding, APS implemented additional policies, procedures, and controls to strengthen oversight of payroll processing and grant expenditure reporting. Specifically, APS established a documented review process to identify and investigate duplicate payroll postings prior to and following the upload of payroll data to the general ledger and grant accounting records. In addition, APS enhanced its system change management procedures to ensure that future modifications or upgrades to payroll and grants management systems include validation testing of key controls before implementation. APS will continue to review payroll charges and grant expenditures regularly and maintain documentation of all review and reconciliation activities to ensure costs charged to federal awards are accurate, allowable, properly supported, and recorded only once. APS implemented the corrective action plan on April 30, 2026. Management's contact responsible for the implementation of the Corrective Action Plan: Name: Jane Hopkins Gould Position: Chief Financial & Operating Officer Telephone number: 301-209-3276

Corrective Action Plan: Management is in the process of working with HHS to renew the Provisional Rate agreements. The anticipation is that the agreement will be completed by the end of 2026. Anticipated Completion Date: December 31, 2026

Period of Performance California Department of Social Services CDSS agrees with this finding. State operations costs incurred from July through September 2024 were incorrectly charged to FFY 2025 when the federal drawdown was processed in October, rather than being charged to FFY 2024. The issue identified in the audit period has been corrected in the ACF-696 report submitted on April 30, 2026. Upon identifying the error, CDSS provided additional training to staff and added a second level of supervisory review to ensure the appropriate federal fiscal year is applied when processing drawdowns that cross both the state and federal fiscal years. These corrective actions are intended to prevent similar misclassifications and strengthen compliance with federal reporting requirements. Estimated Implementation Date: July 2026 Contact: - Rosali Bautista, Chief, Accounting and Reporting Bureau, Accounting and Fiscal Systems Branch, Finance and Accounting Division

Period of Performance California Department of Public Health The California Department of Public Health (CDPH) agrees with this finding. CDPH is reviewing and updating existing processes and training materials to ensure expenditures are charged to the appropriate federal award and within the applicable period of performance. CDPH will coordinate with relevant staff in the Financial Management Division to strengthen grant monitoring during the award closeout process and will continue to review expenditures on an ongoing basis to prevent the misclassification of post-award costs. Estimated Implementation Date: June 2027 Contact: - Louise Karsten, Emergency Funding Coordination Branch Manager, Center for Preparedness and Response

Period of Performance Employment Development Department Employment Development Department (EDD) agrees that it did not have documented procedures or formal ongoing monitoring activities to adequately ensure that payroll charges to Federal awards fell within the authorized award dates before costs were charged to the grant. As a result, payroll costs were incurred outside of the approved period of performance and were not prevented or detected in a timely manner. EDD’s Unemployment Insurance Branch (UIB) established the procedures to be overseen by the UIB Budget Unit to ensure proper controls are in place moving forward and costs are appropriately charged to current and future grants. See artifacts titled ‘Project-Activity Code Establishment Procedure for DUA Revised 7.6.26’ and ‘UIAN DUA Template for Code Release Instructions’. To address the 25 instances where payroll hours were charged to a grant after the approved period of performance end date of May 22, 2025, the Department identified and removed those expenditures from the federal grant and reallocated them to an appropriate state funding source via ledger adjustments. Adjustments were processed during the month end closing process for May and June. As a result, all expenditures outside of the grant’s period of performance have been identified and appropriately removed from the federal grant. Estimated Implementation Date: Currently implemented Contact: - Diane Underwood, Division Chief, Unemployment Insurance Branch

Planned Corrective Action: Management agrees with the finding regarding unallowable items that included human resources services claimed under professional development supplies and food costs claimed under instructional supplies. To address this deficiency, management has implemented the following corrective actions: • Ensure all allowable expenses are reviewed by the Senior Vice President prior to voucher submission under the grant terms and conditions • Establish a formal process to ensure all expenses are coded accurately These enhancements have been implemented and will be applied to strengthen internal controls. Contact person responsible for corrective action: Mary Ann Mahon-Huels, President & CEO Anticipated Completion Date: July 31, 2026

The Partnership will implement controls to ensure that program costs are not incurred or charged to federal awards until formal award and budget approval has been received. This will include a required verification step within the finance function prior to cost authorization, documented evidence of approval dates, and staff training on allowability and timing requirements. Existing procedures will be updated to prevent premature charging of expenditures and to ensure ongoing compliance with Uniform Guidance.

Finding 2025-003 a. Name of Contact Person Responsible for Corrective Action: Jeff Jones, Business Manager b. Corrective Action Planned: Additional Training has been provided during professional development sessions to keep in the forefront the importance of preventing conflicts of interest as well as possible nepotism as defined by Miss. Code Ann. § 25-1-53 and Miss. Code Ann. § 25-4-105(1). New hires are required to disclose possible conflicts of interest during the application process. Department heads making recommendations for hire are required to disclose if they are related to the person they are recommending for hire. c. Anticipated Completion Date: Training was provided in February, 2026, after disclosures were added to the employment applications in the human resource software asking the applicant to disclose if they are aware if they are related to anyone currently working in the district. As soon as the violation was identified, the Office of Child Nutrition at the Mississippi Department of Education was notified