Corrective Action Plans

Reference Number: 2025-001 Description: Finding 2025-001 - Federal ALN 93.778 Medicaid Cluster Corrective Action Plan: The District will update the setup for Medicaid reporting in Skyward Qmlativ to back out expenditures coded to federal grants, specifically project numbers 341 and 347. Anticipated Corrective Action Plan Completion Date: Corrective action was implemented on July 23, 2025. The district has reviewed reports generated after this date and verified the accuracy of reporting. Contact Information: For additional information regarding this finding please contact Beth Sheridan, Assistant Superintendent of Finance and Operations, at 262-560-2119. Beth Sheridan Assistant Superintendent of Finance and Operations

Research and Development Cluster— Assistance Listing Nos. Various Recommendation: We recommend that the University review its procedures around review and approval of R&D expenditures to ensure that only valid expenditures are reported. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The University does have existing internal control processes over its federal grants. The principal investigators code, approve, and submit expenditures for payment. In addition, principal investigators receive periodic grant reports which include the detail of all transactions charged to their grants for review. The University will add an additional control step to review coding of research and development payment requests in the ERP system prior to payment. Names of the contact persons responsible for corrective action: Gerri Stepanek and Carole Kampf Planned completion date for corrective action plan: September 1, 2025

Finding Number: 2024-041 Audit Type: Single Audit Finding Title: Unsupported FEMA Reimbursements Related Finding: 2024-031 (Yellow Book) 1. Contact Person Responsible for Corrective Action Name: Shannah Weaver Title: City Clerk Department: Finance Department 2. Planned Corrective Action The City will implement a documentation checklist and assign a grants compliance officer to ensure all FEMA reimbursement requests are fully supported. 3. Anticipated Completion Date September 30, 2026 4. Management's Response Management concurs and will ensure all FEMA-related expenditures are properly documented and retained. 5. Status of Prior Year Finding This is a new finding.

Finding Number: 2024-042 Audit Type: Single Audit Finding Title: Misallocation of Expenditures Across Federal Awards Related Finding: 2024-028 (Yellow Book) 1. Contact Person Responsible for Corrective Action Name: Shannah Weaver Title: City Clerk Department: Finance Department 2. Planned Corrective Action The City will revise its grant accounting procedures to ensure expenditures are properly allocated to the correct federal awards. 3. Anticipated Completion Date September 30, 2026 4. Management's Response Management concurs and will implement additional review steps during the grant reimbursement process. 5. Status of Prior Year Finding This is a new finding.

Finding 2024-001 (A/B – Activities Allowed or Unallowed and Allowable Costs / Cost Principles) US Department of Homeland Security Federal Emergency Management Agency (FEMA), Assistance Listing 97.036 COVID-19 – Disaster Grants – Public Assistance (Presidentially Declared Disasters) Name of contact person: Warren Pate, Vice President Finance Corrective action: The Vice President Finance will oversee repayment to FEMA a total of $79,118.82, representing invoices that were submitted for reimbursement more than once ($77,521.50), and an invoice for which reimbursement was requested greater than the invoice amount ($1,597.32). Additionally, a review of all project amounts planned to be submitted for future FEMA reimbursement will be conducted at the direction of the Vice President Finance, to ensure the completeness and accuracy of all project details. Proposed completion date: March 31, 2025

Views of Responsible Officials and Planned Corrective Actions: Management agrees and recognizes the importance of consistent allocation methodologies. Corrective Action: Increase the Cost Allocation Plan defining allocation bases for shared expenses, supported by documentation and reviewed annually.

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.

WWBIC plans to develop and adopt a written Cost Allocation Plan that complies with 2 CFR 200. Ml P's Cost Allocation Module will be implemented for efficiency and automation. WWBIC plans to use a direct method of recording staff time, by requiring staff to allocate time on time sheets by funding source. Once payroll postings align with funding sources, direct wages will be used as the allocation base. The 3rd party payroll integration with Paylocity will be implemented to use this method. This project is currently under development with our payroll system, Paylocity and the accounting team.

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 2025. Anticipated Completion Date: December 31, 2025

An error was identified in the Excel spreadsheet (Model) used to allocate technology costs to projects where Coleridge is obligated to provide Administrative Data Research Facility (ADRF) services. The effect of this error was costs were under-allocated to projects. Corrective Action Plan: 1. The error in the Model has been corrected. 2. Control checks will be built into the Model to highlight when calculations are not working, or outputs fall outside expected ranges. 3. On a monthly basis, the Controller will review the Model and sign off in writing that the allocations are correct. No invoices will be released until the review and sign-off has been completed. 4. On an annual basis, an internal audit will be performed on the Model to validate that calculations are working as intended. The audit will be conducted by a member of the Finance department who is not a user of the Model. Any issues identified during the audit will be documented. The Controller will take action to remediate all issues and certify in writing when this work has been completed. No invoices will be released until the certification has been completed.

Belmont County Department of Job and Family Services reviews employee’s job duties routinely to determine the most appropriate and accurate cost pool they should be assigned. The essential job duties and how they align with the program area determine cost pool assignment based on the agency’s interpretation. As a result of this finding, BCDJFS will reassign the FCFC Coordinator to the shared cost pool and reimburse the shared cost pool from the applicable FCFC allocations through a MOU signed between the council and BCDJFS

All grant expenditures are reviewed by the Director of Grants and Compliance so that no grant expenditures are paid prior to services being received. The current Director of Grants and Compliance took over this position and procedure in November 2024. The material weakness occurred during a time of significant turnover among leadership staff at First Step, prior to the new DIrector of Grants and Compliance taking over this position and procedure. The Director of Grants and Compliance will have the responsibility to ensure the corrective action plan is in place.

Generally, 4th Quarter cross charges are processed in January. ACED will process cross-charges monthly and accrue any remaining costs incurred (payroll and non-payroll), should there be any, at the end of the 4th Quarter. This procedure is written in our policies and procedures manual. (p. 38) D. Timetable of dates for performance of planned corrective action steps, including completion date: This process was written into our policy and procedures manual (attached) which was awaiting HUD’s review and will be implemented in the 3rd quarter of 2025 to align with the CDBG 2025 program year. Accruals for the end of 2025 will be submitted before January 2026.

ACED has developed a procedure to ensure that cross charges are done timely. The process is outlined in the attached policy and procedure manual. (p. 38). Since the error occurred due to staff turnover, current ACED staff have been trained and others cross-trained to process cross charges and properly record them in JDE. ACED will re-examine all cross-charges to identify charges that were not properly recorded in JDE.

We agree with the findings and recommendations. This was an isolated incident whereas the payment amount was mistakenly pulled from the wrong line on a contractor’s pay application. This overpayment was missed in the subject fiscal year as the program was still active. Once the overpayment was identified, the county sought reimbursement from the vendor for the overpayment and has since received the funds. The reimbursement will be included as program revenues in the next audit report. The County will reconcile contract values as each pay application is processed in lieu of awaiting program/project closeout in the future.

FINDING 2024-003 Finding Subject: COVID 19 Coronavirus State and Local Fiscal Recovery - Subrecipient Monitoring Contact Person Responsible for Corrective Action: Gretchen Parker Contact Phone Number and Email Address: 765-648-6113 gparker@cityofanderson.com Views of Responsible Officials: "We concur with the finding." Description of Corrective Action Plan: The city has several individuals involved in the monitoring of activities related to the COVID 19 Coronavirus State and Local Fiscal Recovery federal award. The city has implemented procedures to ensure oversight and review of subrecipient reports is properly documented. Anticipated Completion Date: September 1, 2025

We have adjusted our policies and procedures to assure that every claim submission is reviewed by both the Controller and CFO prior to submission. Claim forms and appropriate documentation will be submitted to the Controller who will give initial review. Review will consider timeliness of items claimed as well as appropriateness for the particular federal grant. CFO will then provide final authorization in writing to both grant accountant and controller at which time claim for reimbursement can be submitted by grant accountant.

Significant improvements were made in 2024, and again this year’s findings highlight the need for stronger documentation of signed contracts, approved rate changes, and allocation support. To address this, we are further expanding use of the HR Solution’s (Rippling) workflow and document management tools to automate approvals and ensure a complete audit trail. In addition, our new global hub structure, with dedicated HR support functions, will provide greater oversight and consistency across entities. These measures will enhance compliance and reduce the risk of recurrence going forward.

U.S. Department of Housing and Urban Development – CFDA 14.228 Condition: The County charged payroll costs using an internal allocation method that included salaries, benefits, and supplies, rather than actual expenditures. This method was not supported by an approved cost allocation plan. Additionally, the hours charged were based on total grant administration time, not specific to the CDBG program. Recommendation: The County should ensure that all costs charged to federal programs are based on actual expenditures or an approved cost allocation plan. Documentation should be maintained to support all reported costs, and internal controls should be strengthened to prevent reliance on unsupported methodologies. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned in response to finding: The County will not be applying for any CDBG grants in the future unless there is adequate administrative cost allocation in the grant. The County will continue to make every effort to adequately close out CDBG grants and provide reports to the granting organization as staff and priorities allow. Name(s) of the contact person(s) responsible for corrective action: Under direction of the County Administrative Officer, the Senior Financial Analyst Suzie Hawkins Planned completion date for corrective action plan: Completed and on-going

Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.

2024-005 Lack of Written Allocation Plan for Shared Costs Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the finding. A plan has been written for FY25.

Item: 2024-002 Assistance Listing Number: 93.940 Programs: HIV Prevention Activities Health Department Based Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Arizona Department of Health Services Compliance Requirement: Allowable Activities and Costs Criteria or Specific Requirement: In accordance with 2 CFR 200.405 - Allocable Costs - (d) If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. Condition: Costs charged to the federal program were based on an allocation methodology that was not properly updated for the current period Name of Contact Person: Rosalie Johnson, Chief Financial Officer Phone Number: (602) 595-8109 Anticipated Completion Date: January 1, 2025 Views of Responsible Officials and Corrective Actions: Management agrees with the finding. The Organization will update allocations timely going forward.

Item: 2024-001 Assistance Listing Number: 93.914 Programs: HIV Emergency Relief Project Grants Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Maricopa County Department of Public Health Services Compliance Requirement: Allowable Activities and Costs Criteria or Specific Requirement: In accordance with 2 CFR 200.405 - Allocable Costs - (d) If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. Condition: Costs charged to the federal program were based on an allocation methodology that was not properly updated for the current period. Name of Contact Person: Rosalie Johnson, Chief Financial Officer Phone Number: (602) 595-8109 Anticipated Completion Date: January 1, 2025 Views of Responsible Officials and Corrective Actions: Management agrees with the finding. The Organization will update allocations timely going forward.

Correction action • Finance will work HR and Program staff to document written procedures for staffing allocations. • Finance will strengthen monthly project monitoring of project activity and also ensure that budget changes, if necessary, are approved by the Grants Manager. • Drawdown process is being revised to ensure that the general ledger activity, pending draw request, and vendor payables are all in sync. • Finance will contact Grant Manager responsible for each grant to develop plan of action for returning any overdrawn funds. Responsible Person • Associate Director - Finance Anticipated completion date • September 30, 2025