Corrective Action Plans

The Department will enforce policies and procedures to ensure that the calculated rates are in agreement with the approved indirect cost rate.

California Department of Transportation (Caltrans) has determined that federal award information is not always disseminated to the project managers. Caltrans will review current policies and procedures of each division and revise, if necessary, so that best practices are followed. Caltrans Internal Audits Office will be working with Local Assistance’s single audit report monitoring process and take on the responsibility to monitor for all Caltrans divisions. Estimated Implementation Date: June 2025 Contact: Ben Shelton, Chief – Caltrans Internal Audits Office Division of Risk and Strategic Management

Due to limited staffing resources, the Organization was not able to ensure maintenance of adequate documentation. The Organization has made efforts to ensure that proper documentation is maintained and accessible by necessary staff.

In 2025, the Chief Financial Officer in conjunction with the entire fiscal team is looking into an allocation methodology for OTPS that would be suitable for AEA. Laura Perozo, Chief Financial Officer, is monitoring this process and will make this correction by June 30, 2025.

Item: 2023-003 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, 2024 Views of Responsible Officials and Corrective Actions: Management agrees with the finding. The Organization will update allocations timely going forward.

Item: 2023-002 Assistance Listing Number: 93.914 Programs: HIV Prevention Emergency Relief Project Grants Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: Maricopa County 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, 2024 Views of Responsible Officials and Corrective Actions: Management agrees with the finding. The Organization will update allocations timely going forward.

Finding 2023‐001 Material weakness in internal controls over compliance and instances of noncompliance related to allowable costs/cost principles compliance requirements. Corrective Action Plan: We will implement the process of allocating bonuses in proportion to the time and effort charged to the grant unless otherwise agreed upon with the grantors. We will also implement the process of allocating overhead costs such as for the audit and insurance that benefit federal programs and others, based on the proportional benefit received. Anticipated Completion Date: December 31, 2024 Name(s) of the Contact Person(s) Responsible for Corrective Action: Josh Freese, Finance Manager

Planned Corrective Action: Management contact the facility receiving the overpayment to recoup the funds or ask the facility to provide proof the funds were used for qualifying purposes under the program. If funds are returned, they will be redistributed to other facilities or returned to the Grantor no later than December 31, 2024. Person(s) Responsible: John Matson, Executive Director

Over the past year, we have made significant improvements, reducing the occurrence of these findings compared to 2022. To continue to improve on and address this, we implemented a new HR solution, Rippling, in 2024, which will ensure all future agreements and rate changes are properly tracked and documented. This system will enhance our document retention process and ensure compliance with federal regulations moving forward.

In August 2023 ACED was notified with the finding of the 2022-005 CDBG Single Audit that the use of the blended fringe rate was not correct. Beginning in 2024, ACED began to use an actual rate as shown in JD Edwards. ACED was unaware that the fringe rates need to be calculated per pay period, per employee. ACED will take corrective measures to calculate the fringe rates each pay period per employee.

ACED will process cross charges timely to ensure the correct funding source is charged. Because it would be impossible to accrue cross-charges for the very last pay period, before the next year, ACED will establish a process to drawdown cross-charges for each pay period in the month of December.

Responsible: Denice Hairston, Chief Quality, Compliance and Accountability Officer Corrective Actions: Maintain the updated subrecipient award agreements to ensure the final approved scope of work and project description are specified. Completion Date: March 29, 2023 Explanation: Policies and procedures were updated in 2023 in response to an OJJDP/OCFO recommendation to ensure subaward files contain the requisite components for the award agreement. In addition to these updates, which include a master file checklist, National CASA/GAL has updated the subrecipient Terms & Conditions agreement to include CFR requirements as recommended. This finding was noted in the 2022 audit which was issued August 13, 2024. The 2023 audit, completed in September 2024, included in its scope, similar subrecipient awards from the same federal grant that had been reviewed in the 2022 audit and OJJDP/OCFO monitoring visit. National CASA/GAL did not have an opportunity between the 2022 and 2023 audits to cure this finding in practice until the issuance of new subrecipient awards in 2024.

The Authority will limit advancing funds from the Section 8 Housing Choice Voucher and Emergency Housing Voucher Programs, to allowable Fees only. The Authority’s Executive Director, Trey George, has assumed the responsibility of executing this corrective action as of November 1, 2024.

Planned Corrective Action: MARR will retain a CPA consultant to recommend to management the establishment of procedures and controls to allocate costs between grants based on actual costs attributed to grant and the particular expenditure allowed by the grant. All such allocations will be supported by activity-level substantiation and be reviewed. Documentation of the allocation methodology, review and approval will be maintained in writing. MARR will retain a CPA consultant to implement a full-range of control over costs charged to federal programs. MARR's primary decision-making authority regarding such controls shall be placed with the MARR's president. MARR's protocol shall ensure that such costs are the direct benefit to the program, are reviewed, approved, documented and ensure the accounting and reporting process be accurate. Further , controls over grant billings will be established to ensure expenditures represent actual costs incurred. All control activities, including independent review, should be documented and evidence of review and approval will be maintained.

COVID-19 Block Grants for Community Mental Health Services - Assistance Listing No. 93.958 Recommendation: We recommend the A&A and BHRS departments jointly review its procedures for recorded expenditures being allocated by the A&A department to the MHS grant to ensure that there is documentation supporting the allocation of expenditures and that it is retained. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Aging and Adult Services Department (A&A) and Behavioral Health Recovery Services (BHRS) will jointly review the procedures for recording expenditures allocated to MHS grants to ensure there is adequate documentation supporting the allocation of expenditures. Names of the contact persons responsible for corrective action: Aimee Espinoza, Auditor- Controller and Tarrah Shockley, Division Chief. Planned completion date for corrective action plan: June 30, 2024

September 9, 2024 Re: MTBH 2023 Single Audit To Whom it May Concern: In response to our recent MTBH 2023 Single Audit findings related to reimbursement request "KV-4", MTBH will implement a review process for future grant reimbursement requests, effective immediately. I, Jenny Haught, will complete and send the reimbursement requests to Michael Cantrell, President and CEO for review. Upon his review and approval, I will send the reimbursement requests to the appropriate person per the grant agreement for official reimbursement. In response to our recent MTBH 2023 Single Audit findings related to quarterly progress reports, MTBH will implement a review process for future grant reporting, adhering to the grant agreement, effective immediately. Sincerely, Jenny Haught, Vice President of Finance

Finding 2023-003 Finding Subject: Covid-19 – Coronavirus State and Local Fiscal Recovery Funds – Subrecipient Monitoring Summary of Finding: The County did not include all required information in the subrecipient agreements during the audit period. Contact Person Responsible for Corrective Action: Debbie Morton-Crum, County Auditor Contact Phone Number: 765-482-2940 Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The County Commissioners are responsible for the American Rescue Plan project list along with that responsibility is to have a sub-recipient agreement in place with those outside entities that received American Rescue Plan grant monies from the County. An Internal Control is now in place that requires a sub-recipient agreement in place before a warrant can be paid to those outside entities. We will put procedures in place to ensure that money disbursed to sub-recipient is monitored. Anticipated Completion Date: December 2024

The Council has implemented and followed a cost allocation plan to share costs among different grants consistently. The Council has instituted a timekeeping and reporting system that properly allocates the cost of salaries and benefits to programs and grants. Data gathered from this system includes the ratio of hours worked in each program to hours worked overall which is used to allocate other expenditures that are attributable to more than one program or grant. The Council will be within compliance of U.S. Code of Federal Regulations (CFR), Title 2: Grants and Agreements, Part 200 – Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart E – Cost Principles Sec. 200.405 Allocable Costs.

Internal controls for proper vetting and approval of spreadsheets are being implemented to safeguard the accuracy of payroll report totals that tie back to labor percentages allocated to individual employee labor totals, billed to the grant.

Finding 2023-002: Overdrawn Federal Funding Condition The auditors identified duplicated federal award expenditures amounting to $380,644, resulting in overdrawn federal funds by $380,644. The excess cash on hand was not returned to the funding source in a timely manner. Correction action: NACDD has experienced drastic change in size over the past 3-4 years. Current policies and procedures have not been adequate for the size and volume of the transactions experienced in FY 23. In addition, there has been significant finance/accounting staff turnover including leadership of the Finance team. +The impact of this deficiency was isolated to one cooperative agreement which closed out as of 9.30.23. NACDD performed efficient and effective subsequent disbursement procedures after year end to ensure that expenses for this grant and others were recorded in the appropriate fiscal year. In the process of preparing the FFR and researching further additional expenditures related to this grant, expenses included in the initial subsequent disbursement adjustments, related to this grant were duplicated. +The Correction action plan includes previously implemented augmentation of the Finance staff. Since the end of the FY 23 fiscal year, the finance department has been fully staffed with knowledgeable accounting professionals, many who have financial federal grant experience. There is now a financial analyst on staff whose main responsibility is to reconcile and record federal grant expenditures and receivables. This process is done monthly. We believe that this additional procedure will eliminate the recurrence of this and any other like issues. Procedures related to the weekly PMS drawdown have been expanded to include reconciling the accounts receivable by grant with the PMS accounts to allow only amounts listed in PMS which are supported with appropriate expenditures to be drawn. +Implementation of corrective measures: The above expanded procedures and oversight have been in effect for most of the FY 24 fiscal year. PMS drawdowns are now done weekly with worksheets that tie in detail to the weekly expenditures. In addition, a control checklist will be created and utilized by the Finance staff leadership to monitor and document the successful implementation of corrective measures. + Additional over-arching controls – The Finance team will execute an interim audit process inhouse as of 6.30.24 and every year going forward to further identify errors and irregularities that may exist. If necessary, additional policies and procedures will be implemented to provide greater scope and assurance in preventing financial reporting errors. Responsible Person Trish H. Strong, CFO Anticipated completion date June 30, 2024

Management acknowledges that there were deficiencies in the process at the beginning of the fiscal year, which is why the organization changed payroll systems. The issue in question is from the time that the organization was transitioning to the new system. This matter was addressed. We also established a Grants Compliance Team that will be responsible for the compliance oversight of awards and added checks and balance to ensure award expenses are allowable and allocable.

Identifying Number: 2023-003 Finding: Allowable Costs Corrective Action Taken or Planned: Procedures have been updated to include procedures and internal controls for regular review of the general ledger of their programs and reconcile to the vouchers prior to submission to the granting agency. Anticipated Implementation and Responsible Official: April 30, 2024, Suresh Sharma, Chief Financial Officer

This finding is related to activities on our VOCA grants. As was the case in Finding #005, the majority of the exceptions were related to either finding #2 above or were related to the process in place prior to May 2023. Again, in May 2023 FRLS added an electronic transaction approval process via teams, that documents approvals for all our AP, AR and other transactions initiated by our accounting staff. These are reviewed and approved by the CFO before being posted into the GL. It was also noted that our process of allocating costs from our overhead cost centers to our various grants, was not fully documented. The CFO will undertake a review of this process to ensure that we are in compliance with allowable cost documentation requirements. We will also review and update our documentation of allocations and ensure that each month’s allocation is properly approved. This review will be completed within the next 90 days.

Finding Number: 2023-001 Condition: VAIA’s controls requiring investigators to monitor expenses, ensure that costs benefitting multiple projects are allocated using a reasonable methodology, as required by Uniform Guidance, and ensure that allocation errors are timely corrected were not supported by adequate training of investigators and their delegates. Planned Corrective Action: VAIA requires laboratory personnel to review and approve monthly Vivarium transactions by protocol, since investigators and their delegates are the only individuals at VAIA in a position to know with certainty how Vivarium costs proportionately benefit multiple funding sources. Following VAIA’s customary review and approval process, VAIA’s internal controls subsequently identified an improperly calculated allocation. Taking swift action, the allocation was corrected, and funds were returned to the Federal Government within 90 days of identifying improper allocation as required by NIH Grants Policy Statement section 7.5. VAIA management disclosed this correction to our external auditors and the award’s Grant Management Officer. VAI’s corrective action plan for Vivarium charges includes the following: - Deploying an automated front-end solution that requires a protocol review and approval by our IACUC office before a protocol is made available for use by individual sponsored projects. - Evaluating additional opportunities to utilize technology to enhance the control environment, particularly with respect to cost allocation of vivarium charges, - Ensuring proper allocation through three meetings per laboratory in 2024 to review Vivarium costs charged to federally sponsored projects. - Providing additional continuing education on cost allocation principles for those making allocation determinations Contact person responsible for corrective action: Craig Reynolds, Vice President for Research Protections Anticipated Completion Date: 12/31/2024

Higher Education Institutional Aid – Fostering Inclusive Excellence for STEM Achievement – Assistance Listing No. 84.031C Recommendation: We recommend the University calculate the indirect costs when the direct cost is incurred instead of claiming the amount per the budget to ensure indirect costs are consistently calculated and allocated throughout the grant term. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to the finding: The Finance department implemented a quarterly process aimed at accurately calculating indirect costs, ensuring their recognition period when expenses are incurred. Name(s) of the contact person(s) responsible for corrective action: Shalini Patel, Controller Planned completion date for a corrective action plan: April 1, 2024