Corrective Action Plans

iLearn Schools, Inc. notes that the excess reimbursement of $85,425 was identified, properly recorded as a grant advance liability, and not recognized as revenue or expense in the current year. Going forward, all reimbursement requests will be based on actual allowable direct costs incurred. Management will establish written procedures for indirect cost recovery, implement a formal review and reconciliation process prior to submission, and provide staff training on Uniform Guidance requirements. These corrective actions will be in place for the fiscal year ending June 30, 2026. Responsible Official: Mr. Coban, Chief Financial Officer

Home Investment Partnerships Program Assistance Listing No. 14.239 Recommendation: The City should review and enhance its internal controls and procedures to ensure that all required information is included in subawards at the time of issuance and maintained in subsequent modifications. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The City will undertake additional training for departments in FY 2026, to include providing departments with a grants responsibility checklist. Name(s) of the contact person(s) responsible for corrective action: Kevin Greenlief, Director of Finance. Planned completion date for corrective action plan: Q2, 2026.

Findings and Questioned Costs Relating to Federal Awards: Insufficient Controls Related to the Application of Indirect Cost Rates The Department will strengthen its administrative and management control processes to ensure accurate preparation and calculation for the Indirect Cost. The following corrective actions will be implemented: 1. Establish Internal Review Process: The Department will implement an excel report that includes all Grants to ensure adequate calculation and review. 2. Assign Reporting Responsibility: A designated staff member will be responsible for monitoring federal reporting requirements according to NICRA limitations. 3. Review and Approval Process: Management will implement an internal review and approval process prior to report submission to ensure accuracy and completeness.

Research and Development – Assistance Listing No. 11.000 Research and Development – Assistance Listing No. 11.617 Research and Development – Assistance Listing No. 12.000 Research and Development – Assistance Listing No. 20.000 Research and Development – Assistance Listing No. 20.109 Research and Development – Assistance Listing No. 43.000 Research and Development – Assistance Listing No. 43.001 Research and Development – Assistance Listing No. 43.002 Research and Development – Assistance Listing No. 43.008 Research and Development – Assistance Listing No. 43.012 Research and Development – Assistance Listing No. 47.083 Research and Development – Assistance Listing No. 81.000 Economic Development Cluster - Assistance Listing No. 11.307 Recommendation: We recommend OSU should notify the applicable sponsors and federal agencies regarding the calculated questioned costs and make any necessary repayments or adjustments. Further, OSU should develop and document a process to ensure the PES rates are developed and billed in accordance with OSU Policy, applicable federal regulations, and the requirements of OSU’s Federal Agreements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: OSU will notify the applicable sponsors and federal agencies to resolve the questioned costs. OSU will also develop a process to ensure the correct PES rates are calculated and billed. Name(s) of the contact person(s) responsible for corrective action: Chris Kuwitzky, Senior Vice President for Administration & Finance and Chief Financial/Administrative Officer and Kenneth Sewell, Vice President for Research Planned completion date for corrective action plan: September 30, 2026

2025-004 Indirect Cost Rate Application on Federal Invoices We acknowledge BDO’s observation regarding the indirect cost rate applied to federal invoices during the period in which VOAWW transitioned from its approved NICRA rate to the de minimis rate. During this transition, VOAWW applied the NICRA rate of 17.2% while moving to the de minimis rate but did not complete the required true-up to 10% for a three-month period prior to the de minimis rate being increased to 15%. VOAWW has reviewed the circumstances that led to this error and determined that it occurred during an unusual and infrequent set of conditions. Transitions between indirect cost methodologies are rare and increases to the federal de minimis rate are also uncommon. As a result, this specific scenario is unlikely to recur. Nonetheless, VOAWW recognizes the importance of strengthening controls around indirect rate changes to ensure accurate application during any future transitions. To address this finding and strengthen controls over indirect cost rate application, VOAWW will implement the following corrective actions: • Formal Rate Transition Procedures – Before the end of FY26, the Finance Department will develop and document a standardized procedure for transitioning between indirect cost rates, including effective dates, interim rate requirements, required true-ups, and approval checkpoints to ensure accurate application during any future rate changes. • Centralized Indirect Rate Tracking – Before the end of FY26, the Finance Department will maintain a centralized indirect rate schedule that includes approval documentation, effective dates, and any required adjustments. This schedule will be referenced during invoice preparation and review to ensure consistent and accurate rate application across all federal awards. • Contract Kick-Off Meetings and Cross-Department Alignment – Before the end of FY26, Finance, Grants, and Contract Compliance will implement contract kick-off meetings for new awards and significant contract amendments to align on billing requirements, approved indirect cost rates, effective dates, and other critical compliance information and ensure consistent communication across departments. • Documentation of Important Communications – Before the end of FY26, VOAWW will implement guidance for documentation of important communications with funders that have a single audit impact. Responsible Individual: Claire Danielson, VIP of Finance Estimated Completion Date: June 30, 2026

Finding No. 2025-008 ALN No. 11.419 Program Title: Hawaii Coastal Zone Management Program Grant Award No.: NA22NOS4190022 NA23NOS4190139 NA24NOSX419C0023 NA22NOS4190065 Condition Accuity noted that State did not communicate the following award information required under 2 CFR 200.332: • Subrecipient’s unique entity identifier; • Federal Award Date; • Identification of whether the Federal award is for research and development; and • Indirect cost rate for the Federal award (including if the de minimis rate is used in accordance with 200.414). Corrective Action Plan DBEDT OPSD will strengthen internal controls over subaward identification and monitoring subrecipients to ensure that subrecipient monitoring requirements are met. The Program will communicate with the subrecipient to record their UEI. Program will supply the subrecipient with the date of the federal award, the indirect cost rate for the Federal award per CFR 200.414, and information on whether the award is for research and development. The Program will continue to supply subrecipient with Period of Performance Start and End Date, Budget Period Start and End Date, and the Assistance Listing number. Person Responsible Mary Alice Evans, Director of Office of Planning and Sustainable Development Anticipated Date of Completion April 1, 2026

SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE U.S. Department of Justice 2025-001 Department of Justice Second Chance Act Community-based Reentry Program – Assistance Listing No. 16.812 Recommendation: We recommend that TASC follow its established procedures for segregation of duties over the calculation of indirect cost allocations. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management will follow established procedure to make sure that segregation of duties over the calculation of indirect cost allocations is properly documented. Management will review the procedure with all accounting staff. Name(s) of the contact person(s) responsible for corrective action: Roy Fesmire, CFO Planned completion date for corrective action plan: June 30, 2026

Starting in May 2024, the Alliance adapted its monthly Time and Effort Report that is reviewed by Kim Atkins, Executive Director, to be used for allocation of expenses other than payroll. This ensures a consistent, reviewed and authorized report is being used for expense allocation. This report is shared monthly with the Alliance’s funding agencies along with the submission of monthly vouchers for processing. During the year ended June 30, 2025, the Alliance has ensured that allocations were signed off on by Kim and has significantly reduced the amount of finance staff time required to process the allocation of administrative costs. The data from this monthly report is entered into NetSuite for allocation of administrative costs but subsequent review of the allocation program in NetSuite determined that the proper adjustment for adding new grants had not been built into the program. The Accounting Manager, Sarah Burgess, is currently working with NetSuite to fix this problem going forward. As of July 1, 2025 the Alliance is modifying all of its grants to adopt the 15% de minimis cost rate for all expenses other than personnel, direct program, and space costs.

Notice of Intent to Adopt the DeMinimis Cost Rate For Fiscal Year 2026-2027. The purpose of this document is to formally announce that the Bamberg County Office on Aging is taking the necessary administrative steps to adjust its indirect cost recovery method. Effective July 1, 2026 (Fiscal Year 2026-2027), the agency will elect to charge a de minimis rate (15%) for indirect costs. Please be advised that we are unable to adjust the current indirect cost rate within the Grant Management System (GMS) at this time (FY 25-26), as any modification would disrupt the financial reporting and accounting structures of the active fiscal year. The South Carolina Department of Transportation (SCDOT) has been formally notified that this change is technically non-viable for the current period; therefore, the implementation of the new rate will be deferred until the commencement of Fiscal Year 2026-2027 to ensure fiscal consistency and audit compliance.

Since the prior audit period, management has taken steps to establish procedures and internal controls to ensure consistent application, billing, and reporting of indirect cost rates across all federal awards. Such steps include defining and documenting roles and responsibilities for applicable staff members during each phase of the grants management lifecycle, as well as implementing procedures and tools to ensure compliance with subrecipient monitoring requirements. These steps involve multiple levels of review for accurate and consistent application of indirect cost rates. Finance will continue implementing the corrective actions necessary to achieve effective controls over compliance with indirect cost rate requirements. Policy and procedures on allowable and allocable costs will be drafted to clearly document how direct and indirect costs will be billed to federal awards. Training will be provided to relevant staff members to ensure accurate implementation and ongoing compliance. These actions will improve our ability to manage indirect costs effectively and ensure compliance with federal requirements. The anticipated completion date remains June 30, 2026.

IDC Error, Reference 2025-003 Audit Finding: For both programs, 50 expenditure transactions were selected for testing. Of these transactions, three that were unallowed under the MTDC definition for the program as stated in the Grant Award Notification were inappropriately charged indirect cost. These transactions totaled $364.32 (TRIO Program Cluster) and $242.87 (GEAR UP) and were charged indirect cost at a rate of 8% for a total indirect cost of $29.15 and $17.57, respectively. Our sample was not, and was not intended to be, statistically valid. Cause of the Finding: The University’s system for tracking costs requires manual review and adjustment, and this review was not completed on a timely basis. This resulted in the charging of inappropriate indirect costs not being corrected during the fiscal year. Effect of the Finding: Unallowable indirect costs were charged to the program and, as such, ED provided excess funding to the University. Corrective Action Plan: To address the errors identified in the IDC funds, the following corrective actions will be taken: 1. Immediate Review and Correction of Existing Data o The IDC errors had already been identified through the University’s monthly reconciliation process, and all corrections were completed by the end of each grant’s period of performance. o The University will continue to review existing processes and work with appropriate internal stakeholders to identify systematic improvements that reduce the need for manual review and adjustment. 2. System and Process Improvements o The University will evaluate its current approach for identifying and correcting unallowable IDC charges to ensure controls operate effectively throughout the year. As part of this review, procedures will be updated to clarify when IDC corrections under $50 per award will be completed, shifting required adjustments from the grant period of performance end date to the fiscal year end to promote consistency and timely resolution. 3. Training for Staff o Grants staff will receive refresher training on the allowability of costs under the Modified Total Direct Cost (MTDC) base, including proper identification of expenditures subject to indirect cost. o Training materials will be documented for reference and future onboarding. 4. Ongoing Monitoring o The University will continue its monthly grant award reconciliation procedures, including a review of MTDC IDC charges, to ensure any unallowable expenditures are identified and corrected promptly. 5. Timeline for Implementation o Updated procedures will be updated by Grant Office staff by February 28, 2026. o Staff training sessions: First session scheduled by February 28, 2026, with periodic refreshers as available. o Ongoing monitoring procedures will continue on a monthly basis. 6. Responsible Parties The Vice President for Finance & Operations and Assistant Vice President of Financial Operations will oversee the implementation of the corrective action plan. Responsible party contact information is located at uco.edu.

NACAA has received and reviewed the draft audit report for fiscal year 2025 conducted November 25, 2025. We have provided our auditors DeLeon & Stang with a Management Response to include with the audit. This document will outline NACAA’s course of corrective action for those findings. Finding 1: The Organization charged indirect costs to the major federal program in excess of the amount permitted under its approved NICRA for the fiscal year ended September 20, 2020. In addition, amounts reported on the annual Federal Financial Report (FFR) to the federal funder were incorrect, reporting the wrong base and charged amounts. The amounts reported on the FFR did not match the actual indirect cost base and charges for fiscal year 2025. Background As noted in the audit finding, NACAA’s NICRA has historically been based on a salary and fringe benefits allocation base. During fiscal year 2025, NACAA experienced significant turnover of longtenured employees, resulting in a substantial decrease in salaries and wages and, accordingly, a reduction in the approved indirect cost rate. As a result, indirect costs were overcharged to the federal program by $96,196. The annual Federal Financial Report (FFR) submitted on November 6, 2025, was based on internal year-end reports not NACAA’s audited final numbers. The information reported as the indirect cost rates and amounts were taken from the NICRA applications for the FY24 final and FY25 provisional negotiated rates. Remediation In order to address these findings, NACAA has contacted its EPA Project Officer and Grant Specialist to discuss appropriate corrective action. We explained that NACAA is having trouble paying its overhead expenses using the current negotiated indirect cost rate of 16.84% due to the substantial changes in our staff since the rate was negotiated. NACAA’s 2025 provisional indirect costs rate was calculated based on a SWF amount of $1,306,688. At year end because of staff changes, NACAA’s 2025 SWF amount is only $950,264, which makes our base for calculating indirect costs $356,424 less than when the rate was set. The indirect cost limit based on the old SWF was $220,046, while it’s $160,024 based on the new. NACAA’s indirect costs for 2025 were $256,919. After speaking with EPA, NACAA met with its auditors and accountant to discuss corrective action. It was recommended that some of NACAA’s overhead costs that have traditionally been added to the indirect cost pool (professional fees, rent, office insurance, etc.) be charged as direct costs using NACAA’s grant-related salaries and fringe benefits to allocate expenses between direct and indirect costs. To correct the other issue related to the Federal Financial Report (FFR) errors, NACAA will work with its accountant to complete the required FFRs and other grant reports to ensure that all figures being reported at correct. Reclassifying Indirect Charges to Direct Cost Categories NACAA has contacted the EPA Grants Management team to determine if our anticipated corrective course of action would be acceptable to EPA. We have received concurrence by email that the suggestion made by NACAA’s Auditors that pro-rating costs using salary as a basis for allocating overhead charges as direct costs is reasonable. This method should be used to allocate all expenses that are “traditionally” allocated as indirect costs. NACAA is currently drafting a request to re-budget its 2026 expenses, allocating many of the expenses traditionally part of the indirect cost pool as direct expenses, pro-rating costs using salary as a basis for allocating overhead charges as direct costs. NACAA’s Project Officer needs to approve that request so an amendment can be made for the current year of NACAA’s two-year cooperative agreement. Accountability Once NACAA’s re-budgeting request has been approved, NACAA’s Operations Manager and Accountant will be responsible for ensuring that expenses are correctly allocated every month using salary as a basis for allocating overhead charges as direct costs. Please see a description of NACAA’s Time and Attendance System and Method of Fringe Benefit allocation. These will be used to determine the percentage of expenses that will be allocated as direct costs: Salaries and Wages: Time & Attendance System: NACAA’s staff complete detailed timesheets on the 15th and last day of each month. Personnel Time Allocation Policy: Traditionally, activities of the NACAA headquarters office fall into three categories: federal grant-related activities; non-grant related activities; and indirect functions. Fringe benefits are allocated into these three categories based on the number of hours worked in each. Non-grant related activities are funded by the NACAA treasury. A very modest amount of time is allocated as Indirect Salaries, Wages and Fringes. Indirect salaries are included in NACAA’s indirect cost pool. Fringe Benefits: Fringe Benefits for NACAA’s staff members include employer-paid share of payroll taxes, health, life and disability insurance and a retirement plan. NACAA allocates fringe benefits based on a fringe benefit rate and distributes them based on salaries and wages.

Planned Corrective Action: We removed all unallowable costs from our indirect cost pool to ensure full compliance with applicable cost principles. We implemented an additional layer of review during the preparation of our 2025 indirect cost rate proposal to identify and exclude any unallowable charges. We added a dedicated step to our monthly close process to review all new charges and determine whether any should be classified as unallowable. Anticipated Completion Date 12/31/2025. Responsible Contact Person: Katherine Page, Director of Finance

FINDING 2025-003 Finding Subject: Teacher and School Leader Incentive Grants – Subrecipient Monitoring Contact Person Responsible for Corrective Action: Chris Gearlds, Assistant Superintendent Contact Phone Number and Email Address: (317) 856-5265; cgearlds@decaturproud.org Views of Responsible Official: We concur with Audit Finding Description of Corrective Action Plan: The Teacher and School Leader Incentive Grant was completed during the audit period and the school district does not plan on receiving this award in the future. Therefore, further corrective action is not required and district officials will utilize this information to ensure compliance in other federal awards. Anticipated Completion Date: February 1, 2026

We have developed a communication procedure that any such project documents that are provided to the City of Vermilion Service Department or City Engineer reflecting revenue and/or expenditures related to work conducted in the City of Vermilion will be promptly provided to the Finance Office for any transaction recording required to have the dollars accurately reflected on our financial statements. This would include road work, water, waste water, storm water or other future project areas that may be included. Once received in the Finance Department, the funding status will be verified to determine if federally sourced. All federally sourced projects will be promptly recorded as revenue or expenses of the city as well as included on the SEFA for the year in question.

Finding Number: 2024-004 Anticipated Completion Date: March 31, 2026 Responsible Contact Person: Brad McCain, Chief Financial Officer Planned Corrective Action: Management has implemented procedures to verify vendor eligibility for federally funded programs in accordance with suspension and debarment requirements. These procedures include documenting SAM.gov verification or obtaining vendor certifications prior to payment for federally funded transactions and retaining evidence of verification. Finance and procurement staff will be trained on these requirements, and compliance will be monitored through periodic internal review.

Finding Number: 2024-005 Planned Corrective Action: The Special Projects Manager will ensure the County does not charge Indirect Costs in excess of the de minimis rate of 10 percent of modified total direct costs. Anticipated Completion Date: December 31, 2025 Responsible Contact Person: Philip Schaffer, Special Projects Manager

In response to the previous audit finding, CDPH submitted the required risk assessment as of January 2025, along with supporting documentation. Moving forward, CDPH will establish formal procedures to ensure that all required federal award information – such as the Assistance Listings Number, Title, and FAIN – is clearly identified in all agreements with subrecipients. Estimated Implementation Date: March 2026 Contact: • Melissa Relles • Assistant Deputy Director • Center for Preparedness and Response

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

MATERIAL WEAKNESS Preparation of Schedule of Expenditures of Federal Awards Recommendation: We recommend the School implement internal controls over SEFA including a reconciliation and review process before submission. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action Planned/Taken : Management agrees with the finding and has created and filled the position of Manager of Grants Management. This staff member will be responsible for the oversight and management of all grants, including the SEFA. Additionally, the School has contracted with an outside firm that specializes in State Board of Accounts compliance, as well as Federal Award Compliance in line with Uniform Guidance. The firm will assist in the development of the required Internal Controls and Processes, with an estimated completion date is December 31, 2025.

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

The staff has reviewed the Uniform Guidance requirements and has developed a standardized worksheet will be used for each reimbursement request, and all calculations will be reviewed by management prior to submission. All future correspondence with EDA regarding indirect costs will be documented in writing. Implementation of the worksheet has commenced.

Conservation and Rehabilitation of Natural Resources on Military Installations – Assistance Listing No. 12.005 Recommendation: CLA recommends additional internal scrutiny and controls surrounding applicable compliance requirements when there is a change in policies and procedures, such as the change in effective indirect cost rate. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Ecostudies’ policy has always been to use the NICRA rate at the start of an agreement (or when we start working on the project) through the course of the agreement/task order’s performance period, even when a NICRA rate changes during the performance period. This policy was based on discussions with other non-profit organizations with federal awards. During the FY 2024 audit we raised this issue with CLA to receive clarification and guidance. Our understanding from that discussion was that CLA agreed that our policy was acceptable and appropriate. Our corrective action will be to work with each federal partner to ensure there is clear documentation of the direct and indirect costs in the agreement. Name(s) of the contact person(s) responsible for corrective action: Gary Slater Planned completion date for corrective action plan: 10/1/2025

Type of Finding: Significant deficiency in internal controls over the calculation of Modified Total Direct Costs puts CCS at risk of an overallocation indirect costs to federal programs. View of Responsible Officials: Management accepts this finding. Effective internal control over the calculation of Modified Total Direct Costs ensures that costs are allocated correctly to programs. Training of staff and increased review over allocations would likely have prevented this error. Corrective Action: CCS will be setting up a new form to calculate the Modified Indirect Cost Rate that each division will be required to use for all contract billings that are using the de minimis indirect cost method. The indirect costs charged to each contract will be reviewed semi-annually for accuracy and consistency.

Starting in May 2024, the Alliance adapted its monthly Time and Effort Report that is reviewed by Kim Atkins, Executive Director, to be used for allocation of expenses other than payroll. This ensures a consistent, reviewed and authorized report is being used for expense allocation. This report is shared monthly with the Alliance’s funding agencies along with the submission of monthly vouchers for processing. During the year ended June 30, 2025, the Alliance has ensured that allocations were signed off on by Kim and has significantly reduced the amount of finance staff time required to process the allocation of administrative costs. As of July 1, 2025, the approved staff allocations are being uploaded into ADP in the anticipation of a direct link between ADP and the NetSuite general ledger so that personnel costs will be allocated automatically going forward. As of July 1, 2025 the Alliance is modifying all of its grants to adopt the 15% de minimis cost rate for all expenses other than personnel, direct program, and space costs.