Corrective Action Plans

We concur with the finding. The pandemic caused by the outbreak of COVID-19 disrupted and delayed many accounting and reporting processes during the fiscal years 2020 and 2021 since the Municipality had to shut down operations for various months. Consequently, several projects and tasks calendarized were postponed or delayed, including certain reports and controls required by the Federal Regulations. As of the date of this Corrective Action Plan, the transaction detail of the Disaster Grant costs incurred on fiscal year ending on June 30, 2021 was produced, under alternate methods, from the Finance Department’s accounting system and submitted to the external auditor. Expected Implementation Date: The transaction details applicable to financial statements of fiscal periods ended June 30, 2021 were completed. Transactions detail analysis during the following fiscal years were already completed. Responsible Person: Finance Department Director and Federal Program Director.

We concur with the finding. The pandemic caused by the outbreak of COVID-19 disrupted and delayed many accounting and reporting processes during the fiscal years 2020 and 2021 since the Municipality had to shut down operations for various months. Consequently, several projects and tasks calendarized were postponed or delayed, including certain reports and controls required by the Federal Regulations. As of the date of this Corrective Action Plan, the transaction detail of CDL costs incurred on fiscal year ending on June 30, 2021 was produced, under alternate methods, from the Finance Department’s accounting system and submitted to the external auditor. Expected Implementation Date: The transaction details applicable to financial statements of fiscal periods ended June 30, 2021 were completed. Transactions detail analysis during the following fiscal years were already completed.Responsible Person: Finance Department Director and Federal Program Director.

Finding 2021‐013 Gift Cards – Activities Allowed or Unallowed; Allowable Costs/Cost Principles – Noncompliance and Material Weakness in Internal Controls over Compliance Corrective Action Plan Management will review current policies and will ensure that policies and procedures are adhered to ensure that proper reconciliations are done. Expected Completion Date Fiscal Year 2025.

Finding 2021‐011 Expenditure Documentation – Activities Allowed and Unallowed, Allowable Costs/Cost Principles – Noncompliance and Material Weakness in Internal Control over Compliance Corrective Action Plan Management will implement policies and procedures to ensure supporting documentation over expenditures are retained. Expected Completion Date Fiscal Year 2025.

The Board of County Commissioners will take measures to ensure future compliance with all requirements of federal grants.

Management and accounting personnel will create procedures to ensure that direct cost is charged at the actual amounts incurred and will develop a payroll cost allocation and allocable direct cost allocation methodology that ensures costs are charged in compliance with the applicable federal costs principles.

We concur with this finding and have implemented measures to mitigate the repetition or additional occurrences. We mplemented an electronic system to more efficiently collect and store expenditures and supporting documentation, eliminating a paper filing system. We updated our fiscal policies and procedures in 2022 to document a standardized process for documenting expenditures and retaining receipts. For instance, invoices cannot be processed without adequate documentation. Additionally, credit card holders are responsible for submitting electronic credit card receipts to the fiscal office monthly. In 2022, an updated credit card policy was provided to all employees. The adherence to the credit card policy is monitored by the Fiscal Office and CEO. Responsible person(s): Jemea Dorsey, CEO and Jeanetta Johnson, Fiscal Manager Anticipated Completion Date: FY 2022

In response to finding number 2021-SA3, management agrees with the finding and will design, implement, and maintain policies and procedures that ensure expenditures are reviewed for allowability before being charged to Federal awards. Management will also design, implement, and maintain policies and procedures that ensure costs are reviewed for allowability before being charged to Federal awards. Further, management will perform budget-to-actual analysis on a periodic basis to ensure costs do not exceed limitations.

Training finance staff assigned on management and reports preparation, as required by this federal award. stablish adequate internal control regarding documents, establish and provide the necessary and required training, including guidelines and procedures, to all personnel who work directly or indirectly with the management of these federal funds. Key Task / Action Items Locate and document all required reports and reconciliations as required. We are implementing a supervision process and instructions will be given to finance’s staff and personnel to increase the ability to search, identify and produce financial documents and reports. Resources Coronavirus Relief Fund (CRF) PHE-Testing and Contact Tracing 2 CFR Section 200.302 (a) of the Uniform Guidance 2 CFR Section 200.403 Puerto Rico Department of Health; Guidelines for the Writing of Proposals and Request for Funds Directed to the Research System Project for the Municipal Case Investigation and Contact Case Investigation and Municipal Contact Tracing System Project Response to COVID-19. Lead Staff Finance’s Director Federal Program Directors Completion date Estimated completion date of December 31, 2023. Actual Completion Date In progress Implementation Progress/Comments The Municipality used the funds in accordance with the proposal and the guidelines established by AAFAF and PR Department of Health for these purposes. Coronavirus Relief Fund (CRF) Public Health Emergency (PHE) (Testing and Contact Tracing). According to the information obtained from Mr. Carlos R. Nazario Barreto, Senior Business Consultant of the SAB Consulting, regarding the compliance of the Municipality, we were provided with the table of the monitoring of the Proposed Municipal System of Investigation of Cases and Tracking of Contact (SMIRC) of the Municipality of Añasco. The referred table of the monitoring of the Proposed Municipal System of Investigation of Cases and Tracking of Contact of the Municipality of Añasco was send to the external auditor as part of this Corrective Action Plan. The detailed table is maintained by the Municipality as part of the federal program supporting documentation. These funds were initially administered and disbursed by former municipal administration personnel. At the time of the audit, we did not find the documents and reports as the files were not available. Following the Auditor's recommendations and as a corrective action, we are currently working on the review of the fiscal documents submitted by the Municipality to determine if there are any reports that need to be worked on and to submit them to AFFAF, PR-OMB or the agencies concerned.

Training finance staff assigned on management and reports preparation, as required by this federal award. Establish adequate internal control regarding the activity, filing and custody of reports, as required by the federal awards and the pass-through entity, and in a way that documents and supports the compliance with reporting requirements Locate and document all required reports and reconciliations as required. We are implementing a supervision process and instructions will be given to finance’s staff and personnel to increase the ability to search, identify and produce financial documents and reports. The Municipality used the funds in accordance with the proposal and the guidelines established by AAFAF for these purposes according to Coronavirus Relief Fund (CRF) Transfer Application Assistance Program to Municipalities. The detailed report, “Assistance Program to Municipalities Program Closure Report-Añasco” dated 4/11/2023 was send to the external auditor as part of this Corrrective Action Plan. The detailed report is maintained by the Municipality as part of the federal program supporting documentation. These funds were initially administered and disbursed by former municipal administration personnel. At the time of the audit, we did not find the documents and reports as the files were not available. Following the Auditor's recommendations and as a corrective action, we are currently working on the review of the fiscal documents submitted by the Municipality to determine if there are any reports that need to be worked on and to submit them to AFFAF, PR-OMB or the agencies concerned.

Recommendation The Center should develop written procedures to review all expenditures to ensure they are within the proper period of performance of the grant. Repeat Finding No Action Taken Island Health Care will take the following actions to address this recommendation: • Conduct a pre-approval of expenditures, verifying that the expense is allowable under the grant terms and fall within the period of performance • Utilize a pre-approval form that includes details of the proposed expenditure, its necessity, and confirmation in the form of authorized signatures, that it is within the grant period • Require all relevant supporting documentation with the date the expense was incurred, ensuring it falls within the grant’s period of performance. This is further reviewed by the CFO who will verify that the expenditure meets all requirements and is then able to record it in the accounting system • Conduct regular review of expenditures to ensure compliance with the grant period and maintain audit trail • Review these procedures annually to ensure the ongoing compliance with the grant’s period of performance

Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Repeat Finding No Action Taken Island Health Care will take the following actions to address this recommendation: Timesheet and Payrate Review and Approval: • Standardize timesheet submission and approval process • Utilize an electronic timesheet system to document the verification of employee payrates and ensure there is a detailed audit trail that records all submissions, reviews, and approvals by supervisors. • Conduct regular audits to verify timesheets and payrates are reviewed and approved by supervisors NonPayroll Expenditures: • Evaluate and improve upon existing processes to ensure internal controls over nonpayroll expenditures are working. This includes enforcement of approval policies with mandatory documentation and regular monitoring throughout the process for a clear audit trail. • Conduct regular audits to verify nonpayroll expenditures have been reviewed and approved by supervisors.

Recommendation The Center should develop written procedures to review all expenditures to ensure they are within the proper period of performance of the grant. Repeat Finding No Action Taken Island Health Care will take the following actions to address this recommendation: • Conduct a pre-approval of expenditures, verifying that the expense is allowable under the grant terms and fall within the period of performance • Utilize a pre-approval form that includes details of the proposed expenditure, its necessity, and confirmation in the form of authorized signatures, that it is within the grant period • Require all relevant supporting documentation with the date the expense was incurred, ensuring it falls within the grant’s period of performance. This is further reviewed by the CFO who will verify that the expenditure meets all requirements and is then able to record it in the accounting system • Conduct regular review of expenditures to ensure compliance with the grant period and maintain audit trail • Review these procedures annually to ensure the ongoing compliance with the grant’s period of performance

Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Repeat Finding No Action Taken Island Health Care will take the following actions to address this recommendation: Timesheet and Payrate Review and Approval: • Standardize timesheet submission and approval process • Utilize an electronic timesheet system to document the verification of employee payrates and ensure there is a detailed audit trail that records all submissions, reviews, and approvals by supervisors. • Conduct regular audits to verify timesheets and payrates are reviewed and approved by supervisors NonPayroll Expenditures: • Evaluate and improve upon existing processes to ensure internal controls over nonpayroll expenditures are working. This includes enforcement of approval policies with mandatory documentation and regular monitoring throughout the process for a clear audit trail. • Conduct regular audits to verify nonpayroll expenditures have been reviewed and approved by supervisors.

Finding: 2020-002 - Allowable Costs & Period of Performance Material Weakness in Internal Controls Over Compliance and Instances of Noncompliance Recommendation: The Organization should implement controls to ensure accurate recordkeeping and document retention to substantiate expenditures allocated to grants. Corrective Action Plan: In working with HighPoint CPA, the WWBC has implemented the online accounting system DEXT: all invoices, receipts, bank statements and deposits are loaded in the program and the Executive Director is responsible for categorizing the data, ensuring proper fiscal grant management and is reviewed by the HighPoint CPA team and is reconciled with QuickBooks. The finance committee, which meets the 2nd Tuesday of every month reviews the past month’s financials to ensure compliance. Paper copies are also printed out and filed. Anticipated Completion: January 2021 Responsible Party: Executive Director

We concur with this finding and have implemented measures to mitigate the repetition or additional occurrences. In 2020, we implemented an electronic system to more efficiently collect and store expenditures and supporting documentation, eliminating a paper filing system. We updated our fiscal policies and procedures in 2022 to document a standardized process for documenting expenditures and retaining receipts. For instance, invoices cannot be processed without adequate documentation. Additionally, credit card holders are responsible for submitting electronic credit card receipts to the fiscal office monthly. In 2022, an updated credit card policy was provided to all employees. The adherence to the credit card policy is monitored by the Fiscal Office and CEO. Responsible person(s): Jemea Dorsey, CEO and Jeanetta Johnson, Fiscal Manager Anticipated Completion Date: FY 2022

The fiscal coding system implemented in the accounting software includes specific codes for subrecipient expenditures, enabling clear tracking and reconciliation of subaward amounts. The new bookkeeping firm with ensure subrecipient expenditures are reconciled to reimbursement request amounts by February 28, 2026. Implement a standardized reconciliation process and maintain supporting documentation in a centralized location, including detailed reconciliation worksheets by March 31, 2026. Train staff involved in subrecipient monitoring and reimbursement submissions on Uniform Guidance requirements, including 2 CFR 200.332 pass-through entity responsibilities by April 30, 2026. Perform periodic internal reviews to ensure compliance and documentation completeness, with monthly reconciliation reviews during active subaward periods beginning May 2026. Develop comprehensive subrecipient monitoring procedures manual documenting all required monitoring activities, reporting requirements, and documentation standards by June 30, 2026. Establish annual risk assessments of subrecipients and implement risk-based monitoring approaches, including site visits for high-risk subrecipients by July 31, 2026.