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.

2025-005 Auditor’s Recommendation: UCM should develop and implement comprehensive written policies and procedures addressing allowability and documentation standards. Controls should ensure only actual costs are charged. Staff responsible for grant accounting should receive Uniform Guidance training. Corrective Action: UCM will develop and implement comprehensive written policies and procedures addressing cost eligibility, documentation standards, and the requirement that only actual costs are charged to Federal awards. The procedures will be designed to ensure costs charged to Federal awards are permitted under the award terms, properly supported, accurately recorded, and consistent with Uniform Guidance requirements. UCM will update its grant accounting procedures to require supporting documentation for all costs charged to Federal awards, including invoices, receipts, payroll records, allocation schedules, contracts, purchase approvals, proof of payment, and other relevant source documents. Estimated, unsupported, or budgeted amounts will not be charged to Federal awards unless specifically permitted by the award terms and adjusted to actual costs within the required reporting period. UCM will also implement a documented review process to confirm that Federal award expenditures are based on actual costs incurred. The review will include verification that the expense was incurred during the grant period, relates to the approved program, is supported by adequate documentation, is charged to the correct funding source, and agrees to the general ledger and supporting records. Evidence of review and approval will be retained with the grant files. Staff responsible for grant accounting, Federal award reporting, payroll allocation, accounts payable, and program budget oversight will receive Uniform Guidance training. Training will include cost eligibility, documentation standards, actual cost requirements, cost allocation, and grant expenditure review procedures. Responsible for Corrective Action: Shruti Jha, Senior Director of Finance Liya Tseye & Carmen Romero, Accountants Gina Macanlalay, Director of Family Achievement Program Laura D’Ambrogi, Grants Manager Anticipated Completion Date: December 31, 2026

VIEWS OF RESPONSIBLE OFFICIALS As a result of a Specific Conditions letter issued by the United States Department of Education (USDE), in March 2021 the Puerto Rico Department of Education (PRDE) signed a contract with a Third-Party Fiduciary Agent (“TPFA”) to oversee the administration of federal funds. As this was the first time the PRDE was required by the USDE to contract a TPFA, the PRDE received support and guidance from the USDE. The USDE reviewed and approved the key procurement terms of the RFP, including the stipulated fixed fee provision for payment of TPFA services and expenses. The following is the PRDE's response to Finding Reference Number 2025-003. Statement of Condition 1 — Reasonableness of the Average Hourly Rate The PRDE does not agree with the implication, in Statement of Condition 1, that the average hourly rate is unreasonable. As the contract stipulates a fixed monthly fee, the reasonableness of the hourly rate should be calculated over an extended performance period, as the hours worked during a particular month fluctuate depending upon the level of work required to be performed. In the sample of invoices examined for the twelve-month period beginning June 2024 and ending May 2025, the total invoice amounts over the twelve-month period, less related expenses and the 1.5% contribution fee to the Government of Puerto Rico, divided by the total hours worked, results in an average hourly rate of $407.83, which is slightly above the noted “reasonable” rate which was addressed over 5 years ago in the RFP. Adjusting for a cumulative inflation rate of 24.48% since 2020, the RFP range of rates would have been between $81 and $438, so the average hourly rate of $407.83 is within that range. However, it should be noted that the rates in the RFP were expected to be local billing rates and not rates of a global consulting firm providing TPFA services from a team of experienced international senior professionals. The range of rates noted in the invoice template, i.e., $195–$695, and highlighted in each TPFA monthly invoice, approximates rates of the US General Services Administration (GSA). The PRDE does not agree with the recommendation that contract terms with the vendor should be revised before the contract expires. As this was the first time the PRDE was required to contract the services of a TPFA, the PRDE received guidance from the USDE, which reviewed and approved the key procurement terms of the RFP, including the stipulated fixed fee provision for the payment of TPFA services and expenses. The fixed fees were a result of extensive negotiations between the PRDE and the selected vendor and, although the hours and expenses are disclosed in each monthly invoice, this is provided for informational purposes only and, as stated in each invoice, “is not to be used to calculate the Total Amount Due,” which in each month is the applicable fixed fee. In addition, the PRDE does not agree with the recommendation that the TPFA submit supporting evidence for the reimbursement of expenses because (i) the TPFA contract is a fixed fee that is inclusive of all professional service fees and expenses, (ii) the TPFA provides an explanation of major expenses incurred within each monthly invoice, and (iii) the monthly fixed fee invoice is not requesting any specific reimbursement for expenses incurred. Statement of Condition 2 — Allocability Between Federal and Non-Federal Funds The PRDE does not agree with the finding that there is no basis for the allocation of costs between Federal and non-Federal funds. The funding of TPFA invoices from various federal funds was a result of (i) reasonable discussions between the PRDE and the USDE, (ii) the USDE's authorization for the availability of federal funds to pay TPFA invoices, and (iii) the actual availability of both federal and state funds at the PRDE from which to pay TPFA invoices. Furthermore, the TPFA services are applicable to all federal funds under the TPFA's administration, and its work is not directly tied to any specific grant. The funding for TPFA services is divided between federal and state funds as agreed to between the PRDE and the USDE, and payment for those services is determined based upon the availability of both federal and state funds. TPFA services are conducted for the benefit of the entire PRDE organization and, as such, are overhead costs not directly tied to any specific program or purpose. In addition, funds used to pay TPFA invoices are sourced from grant administration accounts that are specifically designated for the payment of overhead costs. Auditor Comment on Management Response for Finding No. 2025-003 The 2 CFR 200.1 establishes that: “Indirect [facilities & administrative (F&A)] costs mean those costs incurred for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved. To facilitate equitable distribution of indirect expenses to the cost objectives served, it may be necessary to establish a number of pools of indirect (F&A) costs. Indirect (F&A) cost pools must be distributed to benefitted cost objectives on bases that will produce an equitable result in consideration of relative benefits derived.” This information was not provided for our evaluation. Also, we made reference to the Program Determination Email for ALNs. 84.938 and 84.425 dated September 18, 2024 (Audit Control Number 02-21-39634), received from Ms. Catherine Miers of the Office of Elementary and Secondary Education of the US Department of Education (USDE), in which they required that the PRDE provide documentation for the following corrective actions: “revised the contract terms to include a reconciliation of total hours and rates to adjust the payments made to the vendor before the contract expiration; requested that adequate supporting evidence from the vendors be presented for any expenses to be reimbursed by the PRDE; and develop an adequate review of the vendors invoice to properly identify the actual hours of services that benefited the Federal programs so a correct allocation of the costs incurred can be made within Federal programs and state funds”. IMPLEMENTATION DATE None RESPONSIBLE PERSON Jullymar Octtaviani Vega Sub-Secretary of Administration Edgar Delgado Serrano Interim Director of Federal Affairs Office

Federal Program: U.S. Department of Homeland Security - FEMA Assistance Listing Number: 97.036 - Disaster Grants - Public Assistance Passthrough Entity - Arkansas Department of Emergency Management Program Year: 2025 Management concurs with the finding. Corrective Action Planned: 1. Process Improvement: Management has updated its internal grant reimbursement request process. All future reimbursement requests now require a "Duplicate Payment Verification" step, where the preparer must reconcile the current request against the cumulative total of previous requests to ensure no individual transaction is billed twice. 2. Enhanced Oversight: A secondary review by Julie Haney will now explicitly include a cross-reference of payroll periods to the general ledger to confirm the uniqueness of each request. Anticipated Completion Date: The repayment will be initiated by 05/01/2026, and the updated reconciliation procedures have been implemented as of 03/31/2026. Responsible Official: Julie Haney CFO

Finding No. 2025-071 - Deficiencies were identified in the Office of Children’s Services FY25 foster care base rate setting methodology. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): DFCS disagrees with this finding. DFCS evaluated two foster care base rate proposals using the established Hornsby Zeller Methodology. The first option applied the traditional methodology and the second followed the same structure but incorporated Urban West regional expenditure data, which includes Alaska and eleven other western states as well as Hawaii. This change was implemented because Urban West data more accurately reflects Alaska’s high cost of living environment, whereas reliance on national averages has historically produced rates below Alaska’s true cost of care. Both options were reviewed with departmental legal counsel, who were involved in the original settlement, division leadership and the Commissioner’s Office. DFCS advanced the second option, resulting in an approximate 3000 increase to foster care base rate stipends effective July 1,2025. DFCS disagrees with the conclusion that the cost-of-living (inflation) factor should be adjusted to include inflation from 2016 forward. When the 2018 Foster Care Base Rates were established, inflation up to that point was already incorporated into the rate calculation. The current rate-setting process correctly used the 2018 rates as the baseline, which already accounted for prior inflation. Adding inflation from 2016 again would result in double-counting. DFCS disagrees with the conclusion that the rate-setting process did not follow the Hornsby Zeller methodology. The methodology was followed in full. As part of the rate analysis, DFCS applied the national average cost-of-living factor as outlined; however, the resulting amount did not adequately meet the needs of the children under the care and responsibility of the Department. DFCS is fiduciarily required to ensure that rates are sufficient to meet the actual needs of children in out-of-home care, and the national average input did not satisfy that obligation. To ensure the methodology produced accurate and appropriate results, DFCS utilized the Urban West index, an allowable and geographically relevant data source under the methodology. This adjustment did not change the methodology itself it refined the underlying input to better reflect Alaska’s actual cost of living and support the intended purpose of the rate-setting process. Corrective Action (corrective action planned): DFCS will continue to consult with legal counsel regarding any future methodology changes and will follow all guidance provided. Completion Date (list anticipated completion date): DFCS considers this matter resolved. Agency Contact (name of person responsible for corrective action): Nancy Miller, Finance Officer

FINDING 2025-005 Finding Subject: Contact Person Responsible for Corrective Action: Tracey Haas, Business Manager Contact Phone Number and Email Address: 219-873-2000 x 8346 thaas@mcas.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: We will implement a system of internal controls to ensure allowable costs are documented and that receive board approval for all pay rates moving forward. However, we disagree with the finding on the allowable costs pertaining to the Financial Consulting Claims. We wrote them into the grant, and the grant was approved. There was also no Business Manager or Chief Financial Officer in place during the pandemic, resulting in the need for the consulting firm. Anticipated Completion Date: We anticipate that this correction will be in place by July 2026.

The Department of Environmental Services respectfully submits the following corrective action plan for the year ended June 30, 2025, on behalf of the State of South Carolina. The finding from the schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the numbers assigned in the schedule. FINDINGS—FEDERAL AWARD PROGRAM AUDIT U.S. Environmental Protection Agency Performance Partnership Grants – Assistance Listing No. 66.605 Disposition of Audit Finding: The Department of Environmental Services agrees with the audit finding. Corrective Action: According to (g),(vii),(B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; Many DES staff will work on multiple grants, and effort between grants may change from week to week. Reviewing the effort compared to amounts charged to a Federal grant for a single pay period may not be an accurate reflection of what the DES employees work over the life of that grant award. Reconciliations between payroll and effort occur over the life of the grant to ensure that all charges applied are reasonable and support the overall goal of the project on the longer term. To support this effort, budget staff will perform more periodic reviews of effort as compared to funding to identify situations where the difference between payroll and effort recorded are not on track to support the overall charges to a federal award. Anticipated Completion Date: Processed started July 1, 2025 and will ongoing. Simon Li will be responsible for corrective action: • Simon Li at 803-898-3443

FINDING 2025-006 Finding Subject: Title I Grants to Local Educational Agencies - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Contact Person Responsible for Corrective Action: Jennifer Felke & Jill VanDriessche Contact Phone Number and Email Address: 574-936-3115, jfelke@plymouth.k12.in.us, Views of Responsible Officials: We concur with the finding. We believe this finding to be the result of an isolated incident that was reported to SBOA and Title. Description of Corrective Action Plan: The Business Manager/Treasurer provides to the corporation grant administrator monthly grant reports, as well as a grant tracking spreadsheet. The appropriations for each grant are entered into Komputrol, according to the budget located in the approved grant documents. The appropriations are presented to the Grant Administrator for approval. All spending from each grant is approved by the corporation grant administrator. Any wages paid via the corporation payroll that is charged to grant funds is approved by the business manager/treasurer and the corporation grant administrator. The Payroll Specialist/Deputy Treasurer completes the payroll and sends the distribution account records to the Business Manager/Treasurer and Grant Administrator. Any payroll claims for payment via grant funds is required to have three signatures for approval. We believe the system of internal control in place has been strong and in compliance since March 2025. Anticipated Completion Date: March 1, 2025 and ongoing

FINDING 2025-004 Finding Subject: Child Nutrition Cluster, Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Contact Person Responsible for Corrective Action: Jennifer Felke & Amy Kraszyk Contact Phone Number and Email Address: 574-936-3115, jfelke@plymouth.k12.in.us, Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Since January 2025, the internal controls that resulted in this finding have been corrected. The finding stated that “The lack of internal controls and noncompliance over Allowable Activities and Allowable Costs/Cost Principles is an isolated incident.” The Food Service Director and the Business Manager/Treasurer meet monthly to review the school lunch accounts and to concur with the month end balances. The Deputy Treasurer approves all monthly fund transfers completed by the Business Manager. Anticipated Completion Date: January 1, 2025 and ongoing

Westminster College Corrective Action Plan (CAP) Federal Program: Economic Adjustment Assistance Program, Assistance Listing Number 11.307 Finding 2025-001: Questioned Costs – Allowable Costs/Costs Principles (material weakness) Name of Contact Person: Gerald J. Ganz, Jr., Vice President, CFO Specific Corrective Action: To prevent recurrence, the College is implementing the following measures: 1. Enhanced Funding Source Review Procedures: The College will develop and enforce a standardized review process requiring staff to verify and document the original funding source for any expenditure prior to charging it to a federal award. This process will include mandatory cross-checking between project accounting records, bond expenditures logs, and grant reimbursement requests. 2. Strengthened Internal Controls Over Capital Project Accounting: The College will implement additional controls within the accounting system to ensure expenditures tied to capital projects are flagged and reviews for potential dual funding before being charged to any federal program. 3. Training and Guidance for Staff: All personnel involved in grant management, accounting, and capital project administration will receive updated training on Cost Principles under 2 CFR 200.400-200.406, with emphasis on allocability, reasonableness, and the proper handling of applicable credits. 4. Ongoing Monitoring and Review: Quarterly internal compliance reviews will be conducted to confirm adherence to the new procedures, and corrective measures will be taken immediately if discrepancies are identified. The College is committed to ensuring full compliance with federal regulations and strengthening internal controls to safeguard all funding sources. We appreciate the opportunity to improve our processes and will implement the recommended procedures to ensure the integrity of future federal program expenditures. Anticipated Completion Date: June 30, 2026

Finding Number 2025-002 Condition: The District could not provide supporting documentation for one (1) invoice charged to the program. Management Response/Plan: The District acknowledges the finding and has strengthened internal controls over disbursements by implementing centralized invoice retention procedures and requiring verification of supporting documentation prior to payment approval. Staff have been retrained on documentation requirements, and periodic monitoring will be conducted to ensure all expenditures are properly supported and maintained. Anticipated Date of completion: June 2026 Name of Contact Person: Dr. Joe Mullikin

Finding Number 2025-001 Condition: The District was unable to provide documentation for three invoices charged to the program. The District was also unable to provide supporting documentation for one employee time card. Management Response/Plan: The District acknowledges the finding and has strengthened internal controls over disbursements by implementing centralized invoice retention procedures and requiring verification of supporting documentation prior to payment approval. Staff have been retrained on documentation requirements, and periodic monitoring will be conducted to ensure all expenditures are properly supported and maintained. Anticipated Date of completion: June 2026 Name of Contact Person: Dr. Joe Mullikin

The District will become more thoroughly aware of applicable compliance requirements and seek guidance in writing when necessary from the appropriate granting agencies. Anticipated Completion: January 1, 2026 Responsible Party: Lynette Thrasher, lthrasher@mcusd1.net 815-472-6477

Finding Number 2024-096 Subject Heading (Financial) or AL no. and program name (Federal) ALN: Multiple Federal Program name: Multiple Planned Corrective Action The Office of Management and Enterprise Services (OMES), Central Purchasing Division, respectfully submits this response regarding the use of federal funds in connection with statewide contracts established through the Rolling Request for Proposal (RFP) pilot program. Since the audit period, OMES has implemented significant enhancements to its statewide contracting processes to further strengthen documentation, oversight, and compliance with both state procurement law and Uniform Guidance. These enhancements also address the recommendations identified in this finding. Compliance with Uniform Guidance (2 CFR Part 200) OMES affirms that procurements conducted under the Rolling RFP pilot program were performed in accordance with applicable provisions of Uniform Guidance and the Oklahoma Central Purchasing Act, including but not limited to 2 CFR §§ 200.317, 200.318, and 200.404. Pursuant to 2 CFR §200.317, OMES follows the same procurement policies and procedures for federal funds as are used for non-federal funds. The Rolling RFP model did not eliminate competitive procurement. Rather, it modified the timing of vendor qualification by allowing qualified vendors to compete for inclusion on the statewide contract throughout the open solicitation period while agencies continued to conduct project specific Statements of Work under those contracts. Consistent with 2 CFR §200.318(a), OMES maintains oversight to ensure that procurements are conducted in a manner providing full and open competition, and that contractors perform in accordance with the terms, conditions, and specifications of their contracts. The Rolling RFP model increased vendor participation and competition by allowing qualified suppliers to submit responses on a continuous basis, thereby expanding the competitive pool available to agencies. Further, in accordance with 2 CFR §200.404, OMES ensures that costs are reasonable by requiring evaluation of pricing at both the contract award level and the transaction level. Vendors are vetted through a formal evaluation process, and Statements of Work (SOWs) are developed with agency and subject matter expert involvement to confirm that pricing reflects what a prudent person would incur under similar circumstances. Vendor pricing remained subject to procurement review, agency evaluation, statement-of-work negotiations, market comparisons, procurement approval processes, and applicable fair and reasonable price determinations required under state procurement law and Uniform Guidance. Additionally, OMES Central Purchasing operates under formalized internal procedures, including its Framework Agreement Creation Standard Operating Procedure, which explicitly requires adherence to Uniform Guidance. The SOP mandates vendor vetting, competitive evaluation, including the contract clauses required by 2 CFR §200.327 and Appendix II to Part 200, and documented evaluation methodologies to ensure transparency, consistency, and compliance in all framework (statewide) agreements. In addition, OMES has adopted the first-ever Oklahoma Procurement Manual, which establishes standardized statewide guidance for procurement planning, contract administration, federal grant compliance, documentation standards, and competition requirements. The manual reinforces Uniform Guidance requirements and provides agencies with consistent statewide procurement procedures for acquisitions involving both state and federal funds. Program Structure and Administrative Considerations The Rolling RFP pilot program functioned as a framework agreement structure, wherein suppliers were pre-qualified through a competitive solicitation process and agencies subsequently issued project-specific Statements of Work. This approach was designed to align with allowable procurement methods under Uniform Guidance. OMES recognizes, however, that the continuous open nature of the solicitation created administrative challenges and increased complexity in maintaining consistent documentation and oversight as vendor participation scaled. Documentation and Administrative Enhancements Although the pilot program did not have a standalone written procedure specific to Rolling RFPs during the audit period, it operated under existing procurement statutes, standardized solicitation procedures, evaluation documentation, internal operating procedures, and statewide contract templates. Documentation practices have since been further standardized and consolidated. While the program operated under existing procurement statutes, solicitation procedures, evaluation documentation, and internal operating practices, OMES has since implemented additional written procedures, standardized documentation requirements, and centralized guidance to improve consistency, transparency, and ease of audit review. These enhancements strengthen an already competitive procurement process by providing more comprehensive documentation of procurement decisions and contract administration. Program Closeout Following a comprehensive review, the State Purchasing Director formally determined that the Rolling RFP pilot program would be closed effective July 1, 2024. All resulting contracts have transitioned to standard statewide contract structures, which incorporate defined solicitation periods and controlled opportunities for vendor participation through supplemental solicitations. Because the pilot program has been discontinued and replaced with traditional statewide contracting methods, legislative recommendations regarding continuation of the pilot are no longer necessary. Remedial Actions Aligned to Uniform Guidance In response to audit observations and in furtherance of compliance with Uniform Guidance, OMES is implementing the following corrective actions: 1. Enhanced Competition at the Transaction Level (2 CFR §200.319) For all service-based procurements utilizing statewide contracts, agencies will be required to conduct a documented second level of competition (e.g., multiple quotes, mini-bids, or competitive SOW processes) to ensure full and open competition at the task/order level. 2. Structured Re-Competition of Vendor Pools OMES will replace continuously open solicitations with time-bound supplemental RFPs, ensuring periodic recompetition and maintaining a manageable and auditable procurement environment. 3. Strengthened Cost Analysis and Documentation (2 CFR §200.324) OMES will reinforce requirements for price analysis and cost reasonableness determinations at both the contract and transaction levels, with enhanced documentation standards to support audit review. 4. Formalized Policies and Procedures (2 CFR §200.318(a)) OMES Central Purchasing is dedicated to documenting all procurement processes, particularly those impacting purchases using federal funds. This includes comprehensive SOPs, required contract attachments (including federal terms), and standardized evaluation and recordkeeping practices. Specifically, we have created SOPs for pilot programs and for statewide contracts generally. While comprehensive written procedures specific to the Rolling RFP pilot program had not yet been consolidated into a standalone procedure during the audit period, the program operated under existing procurement statutes, statewide solicitation procedures, evaluation documentation, internal operating procedures, and standardized contract documents. OMES has also implemented standardized procurement templates and required federal contract attachments that incorporate the clauses required under 2 CFR §200.327 and Appendix II to Part 200. These standardized documents promote consistent compliance across procurements utilizing federal funds. 5. Statewide Procurement Manual OMES has recently released the first-ever Oklahoma Procurement Manual, which provides statewide guidance to agencies and includes a dedicated section on federal grant compliance. The manual reinforces Uniform Guidance requirements, including competition, cost reasonableness, and documentation standards. 6. Ongoing Oversight and Training OMES will continue to provide training, procurement memoranda, and guidance to agencies to ensure consistent understanding and application of federal requirements, while reinforcing that subrecipients are responsible for compliance with the specific terms of their federal awards. Anticipated Completion Date Sine Die Responsible Contact Person Amanda Otis, State Purchasing Director for the State of Oklahoma

Finding Number 2024-074 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.027 Federal Program name: Coronavirus State And Local Fiscal Recovery Funds (CSLFRF) Planned Corrective Action Office of Management and Enterprise Services – Grants Management Office Response: OMES-GMO respectfully disagrees with the conclusion that adequate supporting documentation was unavailable and that OMES-GMO's procedures do not ensure that key documentation elements are provided prior to reimbursement. The State Auditor and Inspector's Office requested documentation directly from the Department of Human Services (DHS) but did not contact OMES-GMO to determine whether additional supporting documentation or clarification was available before concluding that the documentation was insufficient. Throughout the administration of the CSLFRF program, OMES-GMO requested to be included in audit documentation requests involving agency expenditures to ensure that all available supporting documentation could be provided and that any questions regarding reimbursement requests, contract administration, or project documentation could be addressed before conclusions were reached. Had OMES-GMO been afforded the opportunity to supplement the agency's submission, additional documentation supporting the reimbursement requests and contract administration could have been provided for consideration. OMES-GMO recognizes that the contractor invoices could have contained greater detail. While OMES-GMO believes sufficient supporting documentation existed to demonstrate the allowability and allocability of the costs, it agrees that enhanced invoice detail would improve transparency, strengthen the audit trail, and facilitate the audit process. Prior to this audit, OMES-GMO had already strengthened its reimbursement review procedures to help ensure that key documentation elements are obtained before reimbursement. Beginning in SFY 2025, all CSLFRF payment requests from state entities have been processed through the newly implemented OMES Grants Management System (OGX), which provides an additional layer of internal control. The system requires a two-tier review and approval process by the requesting state entity before reimbursement requests are submitted to OMES-GMO. Once received, each request undergoes a three-tier review by separate OMES-GMO team members using the approved CSLFRF award, supporting documentation submitted by the state entity, and applicable program eligibility requirements before payment is authorized. This process provides multiple levels of review designed to help ensure that reimbursement requests are adequately supported and consistent with applicable ARPASLFRF requirements. OMES-GMO respectfully requests that future audit documentation requests involving CSLFRF reimbursements be coordinated with both the administering agency and OMES-GMO. This collaborative approach would help ensure auditors have access to the complete documentation maintained by all parties and allow for a more comprehensive evaluation of compliance before deficiencies are concluded. 830 – Oklahoma Department of Human Services The Oklahoma Department of Human Services (OKDHS) does not concur that the full $67,998 identified in the finding should be classified as questioned costs. OKDHS acknowledges that the original JGC invoices did not contain the level of project- and staff-specific detail recommended in the finding. However, the absence of all supporting detail on the face of an invoice does not, by itself, establish that the underlying costs were unallowable or unsupported. The applicable Federal cost principles require costs to be adequately documented, but do not require all supporting documentation to be contained within the vendor invoice itself. Following the identification of SAI's specific concerns, OKDHS provided additional underlying documentation, including detailed timekeeping records identifying staff, hours worked, projects associated with the work, and descriptions of the activities performed. SAI subsequently indicated that the total hours reflected on the invoices materially agreed to the total hours reflected in the underlying timekeeping records. Accordingly, the additional documentation substantiates that the underlying labor hours were incurred and provides support regarding the nature of the services performed. For the $13,320 associated with SB 1186, the finding acknowledges that SB 1186 funded only one project. Therefore, there is no allocation of the invoiced costs among multiple SB 1186 projects at issue. To the extent the subsequently provided timekeeping and supporting records substantiate that the services were performed in support of the authorized project, OKDHS does not believe the full amount should remain classified as questioned costs solely because the original invoice summarized the services performed. For the $54,678 associated with HB 2884, OKDHS acknowledges that the distribution of costs among individual projects reflected on the invoice does not directly correspond to the project designations reflected in the detailed timekeeping records. However, the detailed records substantiate the total hours worked and the nature of the administrative and program management services performed. HB 2884 expressly authorized OKDHS to retain up to two percent of the funds appropriated by the act to reimburse costs incurred by OKDHS, or costs incurred on the agency's behalf, associated with administration of the appropriated funds and programming required under the act. JGC provided program management and administrative services supporting OKDHS's implementation and administration of the ARPA-funded projects. Additionally, 2 CFR § 200.405(d), as cited in the finding, recognizes that when a cost benefits two or more projects or activities and the proportional benefit cannot be readily determined because of the interrelationship of the work involved, the cost may be allocated to benefited projects on a reasonable documented basis. Accordingly, a difference between the project designation reflected in an employee's detailed time record and the allocation of shared administrative costs among benefited projects does not, by itself, establish that the underlying cost was unallowable. OKDHS recognizes that the documentation maintained with the reimbursement requests did not clearly demonstrate the relationship between the detailed timekeeping records and the methodology used to allocate shared administrative costs among the HB 2884 projects. OKDHS will review the allocation methodology and supporting records to confirm that the costs were allocated among benefited projects on a reasonable basis and will correct any actual unsupported or ineligible costs identified through that review. OKDHS has also strengthened its documentation expectations for administrative cost reimbursements. Going forward, supporting documentation will provide a clearer audit trail between the underlying services performed, applicable projects or activities, and the amounts invoiced or allocated. Where administrative services benefit multiple projects and cannot reasonably be assigned based solely on direct project hours, the allocation methodology and basis will be documented and retained with the supporting records. Accordingly, OKDHS agrees that documentation supporting the allocation methodology should be strengthened but does not concur that the documentation deficiency, in itself, supports questioning the full $67,998 where underlying records substantiate the labor incurred and services performed Anticipated Completion Date Completed Responsible Contact Person OMES: Elizabeth Base DHS: Lindsey Kanaly

Assistance listing numbers and program names: 21.023 COVID-19 Emergency Rental Assistance Program 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Agency: Department of Economic Security (DES) Name of contact person and title: Molly Bright, Community Services Division Assistant Director Anticipated completion date: June 30, 2026 Agency’s Response: Concur The Department of Economic Security will address the audit recommendations as follows: 1. Ensure benefit payments are for allowable costs paid to or on behalf of eligible program applicants. The Division will review and confirm that benefits payments paid to or on behalf of eligible program applicants are allowable expenditures of the federal funding being disbursed. 2. Update existing policies and procedures to include a post-review of the benefits subsystem’s automated review of eligibility requirements, such as verifying the income thresholds and geographic location aligned with the Division’s written policies and procedures, and supported by required documentation. The Division should correct any inaccurate eligibility determinations identified during the post-review. Emergency Rental Assistance Program policies and procedures require validation of eligibility based upon substantiating applicant documentation, including household income and geographic location. The Division will update Division policy to include a post-review process to identify and correct any errors or discrepancies. 3. Allocate sufficient staffing resources to perform a thorough evaluation of program benefits applications and provide training on eligibility requirements and allowable benefit payments. The Division will allocate sufficient staffing resources to evaluate program benefits applications and provide training on eligibility requirements and allowable benefit payments. 4. Work with the federal agencies to resolve the $64,131 in program funds that were spent in violation of federal regulations, policies and procedures, and may need to be returned to the federal agencies. The Department of Economic Security will address the audit recommendations as follows: 1. Ensure benefit payments are for allowable costs paid to or on behalf of eligible program applicants. The Division will review and confirm that benefits payments paid to or on behalf of eligible program applicants are allowable expenditures of the federal funding being disbursed. 2. Update existing policies and procedures to include a post-review of the benefits subsystem’s automated review of eligibility requirements, such as verifying the income thresholds and geographic location aligned with the Division’s written policies and procedures, and supported by required documentation. The Division should correct any inaccurate eligibility determinations identified during the post-review. Emergency Rental Assistance Program policies and procedures require validation of eligibility based upon substantiating applicant documentation, including household income and geographic location. The Division will update Division policy to include a post-review process to identify and correct any errors or discrepancies. 3. Allocate sufficient staffing resources to perform a thorough evaluation of program benefits applications and provide training on eligibility requirements and allowable benefit payments. The Division will allocate sufficient staffing resources to evaluate program benefits applications and provide training on eligibility requirements and allowable benefit payments. 4. Work with the federal agencies to resolve the $64,131 in program funds that were spent in violation of federal regulations, policies and procedures, and may need to be returned to the federal agencies. The Division will coordinate with applicable federal agencies to resolve these unallowable costs.

FA 2024-002 Strengthen Controls over Journal Entries Compliance Requirement: Activities Allowed or Unallowed Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program COVID-19-10.555 – National School Lunch Program Federal Award Number: 245GA324N1199 (Year: 2024), 225GA324N1099 (Year: 2024) Questioned Costs: Unknown Description: The policies and procedures of the School District were insufficient to ensure that journal entries made for the Child Nutrition Cluster were properly documented. Corrective Action Plan: All journal entries transferring cash from the School Nutrition Fund to the General fund will be done on a more frequent basis and include the detail of amounts used to arrive at the amount of the transfer. Estimated Completion Date: October 17, 2025 Contact Person: Danny Durham, Director of School Nutrition Telephone: 478-994-2031 Email: danny.durham@mcschools.org

VIEWS OF RESPONSIBLE OFFICIALS The PRDE does not agree with the Recommendation to establish an allocation method for TPFA invoices because TPFA services are overhead costs paid from administrative funds and are not tied to any specific federal grant. In addition, the PRDE does not agree that contract terms should be revised before the contract expiration to require a reconciliation of total hours and rates because again, payments to the TPFA are overhead costs not directly tied to any specific program. Finally, the PRDE does not agree with the recommendation that the TPFA submit supporting evidence for the reimbursement of expenses because (i) the TPFA contract is a fixed fee that is inclusive of all professional service fees and expenses and (ii) the TPFA provides an explanation of major expenses incurred within each monthly invoice. Auditor Comment on Management Response for Finding No. 2024-004 As stated in CONDITION 2., “…on invoice 830311-2023-32 the amount of $1,978,791 (85% of total invoice amount) was charged to several programs of ALN 84.425, although the services described in the invoice were not related only to these programs; therefore, the cost objective is not chargeable in accordance with the relative benefit received.” Further, the 2 CFR 200.1, establishes that: “Indirect [facilities & administrative (F&A)] costs mean those costs incurred for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved. To facilitate equitable distribution of indirect expenses to the cost objectives served, it may be necessary to establish a number of pools of indirect (F&A) costs. Indirect (F&A) cost pools must be distributed to benefitted cost objectives on bases that will produce an equitable result in consideration of relative benefits derived.” This information was not provided for our evaluation. Also, we made reference to the Program Determination Email for ALNs. 84.938 and 84.425 dated September 18, 2024 (Audit Control Number 02-21-39634), received from Ms. Catherine Miers of the Office of Elementary and Secondary Education of the US Department of Education (USDE), in which they required that the PRDE provide documentation for the following corrective actions: “revised the contract terms to include a reconciliation of total hours and rates to adjust the payments made to the vendor before the contract expiration; requested that adequate supporting evidence from the vendors be presented for any expenses to be reimbursed by the PRDE; and develop an adequate review of the vendors invoice to properly identify the actual hours of services that benefited the Federal programs so a correct allocation of the costs incurred can be made within Federal programs and state funds”. IMPLEMENTATION DATE None RESPONSIBLE PERSON Jullymar Octtaviani Vega Sub-Secretary of Administration María de los Angeles Lizardi Valdés Office of Federal Affairs Director

Management disagrees with the following A) Management determined the expenditures charged to the 2021-#3 project MSOC Security Sustainment Costs, for camera, installation and project management were clearly related to the Investment justification which requested sustainment and upgrade to the existing MSOC the IJ states : “Investment provides maintenance and upgrades of software/hardware (I.e. servers/workstations), video surveillance management systems, operating systems, cameras systems, access control and communication systems for Plaquemines Port Harbor and Terminal District B) Management determined the questioned cost charged to the 2023-#3 project GIS for the cameras and the conference room were supported with the investment justification however management agrees the invoices for Survey totaling $95,900 should not have been changed to the grant. C) Management determined the expenditures charged to the 2023-#4 project Cybersecurity Network and IT: For Datto Backup, which is the name of the program, and cyber security training are valid expenses and align with the investment justification Management will ensure the following processes are added to the financial management policies and procedures over federal and state funds • The District will establish formal procedures requiring that all PSGP expenditures be cross-checked against the approved Investment Justification (IJ) and verified for compliance with the grant’s period of performance prior to payment. No disbursement of federal funds will occur unless documentation demonstrates that the expenditure directly aligns with the approved grant scope and timing. • This documentation will be required within the system in order to process payments to the vendor. • The District will consult with FEMA to assess the allowability of identified questioned costs. Management will follow FEMA’s guidance to resolve any discrepancies and ensure that all expenditures meet federal standards. • Mandatory training sessions are being scheduled for staff involved in grant administration and financial management. These sessions will cover Uniform Guidance requirements, documentation standards, and procedures for verifying expenditure eligibility under PSGP. These actions reflect the District’s commitment to regulatory compliance, fiscal responsibility, and continuous improvement in federal grant management practices.

Corrective Action Taken Management concurs with the finding. The Organization transferred $151,099.42 from its operating funds back into the SFSP program account prior to the financial statements being available to be issued, thereby restoring the unallowable charge. Additionally, to prevent recurrence, the Organization obtained competitive bids and received approval for a written payroll services contract before June 2025, in advance of the start of the camp season (i.e. the Organization’s operating period). This process was conducted in accordance with federal procurement requirements. Planned Ongoing Corrective Action: The Organization has strengthened its procurement and contract approval procedures to ensure all future contracts funded by the SFSP are subject to competitive bidding, documented in writing, and approved by the State agency prior to charging costs to the program. Responsible Official: Chaim Mendel Friedman, Camp Program Administrator, is responsible for overseeing corrective actions and ensuring compliance with procurement standards and cost allowability requirements. Completion Date of Corrective Actions: Corrective actions were completed prior to the date the financial statements were available to be issued, with continuing oversight in subsequent program years.

COVID-19-Coronavirus State and Local Relief Funds (CSLRF)-Assistance Listing No. 21.027 Allowable Activities/Costs Recommendation: The Town should review and enhance controls and procedures where necessary. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Town will continue to review and enhance controls where necessary to ensure that all State and Local Fiscal Recovery Funds (SLFRF) expenditures support an eligible COVID-19 public health or economic response. Name(s) of the contact person(s) responsible for corrective action: Tyler Home, Director of Finance Planned completion date for corrective action plan: 07/01/2024

Georgia Tech management agrees that internal audit reports demonstrated departmental deficiencies in knowledge of policies and procedures that needed to be addressed. Upon disclosure of Internal Audit’s recommendations, the departments and central offices immediately responded with additional training, proactive compliance reviews, and re-enforcement of existing policies and procedures via Institute wide communications and enhanced reviews of support. New system controls regarding spend authorizations were put in place, with Georgia Tech’s Internal Audit department continuing to test these controls through the month of February. Central and departmental units within Georgia Tech will continue to work together to further enhance guidance and training to faculty and staff and to identify and test controls in our systems that will mitigate these issues.

The County Commission will work directly with the vendor to ensure future payment requests properly align with payment information listed on the federal contract.

FA 2024-001 Strengthen Controls over Transfers Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principle Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education Assistance Listing Number and Title: 10.553 - School Breakfast Program 10.555 - National School Lunch Program COVID-19-10.555 - National School Lunch Program Federal Award Number: 245GA324N1199 (Year: 2024), 225GA324N1099 (Year: 2024) Questioned Costs: $803,845.92 Prior Year Finding: None Identified Description: The polices and procedures of the School District were insufficient to provide adequate internal controls over transfers of Child Nutrition Cluster funds. Corrective Action Plans: The School District will review current internal control procedures related to School Nutrition Fund transfers. Development and/or modification of current policies and procedures will be determined as needed to ensure that all expenditures, including transfers, are used for allowable purposes. In addition, the School District will implement a monitoring process to ensure that all expenditure activity is compliant with the School District's policies and procedures. Estimated Completion Date: June 30, 2025 Contact Person: Debbie Woerner, Finance Director/Asst Superintendent Telephone: 770-567-8489 ext. 1030 Email: woerned@pike.k12.ga.us

Item 2023-006 Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services (Repeat 2022- 008) Federal Grant/Contract Number: 10CH011215-03-03; 10CH011215-03 C3; 10CH011215-04; 10HE000901-01-C6 Grant period – 2022 & 2023 The HS program has established an internal process of requester/approver in place to review transaction requested. Documents then get reviewed again by HR or Finance staff based on the transaction type before getting processed.