Corrective Action Plans

VIEWS OF RESPONSIBLE OFFICIALS ADSEF will provide training to personnel on the requirements and regulations related to subrecipient monitoring. Recommendation to management will be implemented, internal controls and compliance measures that allow for the identification, reporting, and monitoring of subrecipient activities Prevention Activities/TANF. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Socioeconomic Development of the Family (ADSEF, by its Spanish Acronym)

2023-006 Management Response: Management respectfully disagrees with this Finding. • Under Condition, the finding states, “Time and effort is being tracked and maintained by employees, including hours charged to the specific efforts for the programs.…” This is not accurate. Employees report their time worked each day, including the amount of time they worked on different projects if applicable. Employees report this in our commercial HRIS/Payroll system, where it is maintained and where it is reviewed and approved by the employee’s manager. The employees report the time they worked and which project(s) they worked on, their managers review and approve the time and the distribution, and the data is tracked and maintained in our HRIS/Payroll system (ExponentHR). • Also under Condition, the finding states, “The specific amount of employee salaries and wages that are allocated to specific federal programs for reimbursement, and which are less than the amounts reflected in time and effort records, are determined by members of the finance staff.” It is correct that we would have to invoice sponsors for less than the total cost of an employee’s allocated time and effort if a sponsor’s budget is not sufficient to cover that full amount. This is the correct procedure to follow. Employees correctly continue documenting their hours worked on a specific project even if the budget is expended and the accounting staff can no longer bill the sponsor. If a particular grant does not have sufficient sponsor funds, then the Grants Accounting staff reduce the bill accordingly. • Also under Condition, the finding states, “The rationale for the amount actually allocated for reimbursement, if less than the amount reflected in time and effort records, is not documented”. This is incorrect. Our monthly invoices to each sponsor accumulate, with each invoice clearly showing not only that month’s expense but also the year-to-date expense and remaining balance, which forces the sponsor invoice to stop at an amount less than the total cost of employees’ time and effort when the budget is exhausted. • Also under Condition, the finding states, “Review and approval of the allocation of employee compensation to specific federal programs reimbursement requests is not maintained.” Each employee records their hours worked, and the project(s) on which they worked those hours, in our HRIS/Payroll system. The employee’s manager reviews and approves both the hours worked and the projects on which the hours were worked. This review and approval is maintained in our HRIS/Payroll system. Financial staff calculate the amount to allocate to specific federal programs based on these HRIS/Payroll system records (or other records such as clinical units produced, based on the terms of each grant). Separate accounting staff review the sponsor invoice and post the Receivable once they deem the invoice correct. • Under Cause, the finding states, “…..the Organization has not implemented a structured process for documenting the extent to which allowable [emphasis added] compensation costs will be allocated for reimbursement to specific federal programs in instances where the allowable compensation cost exceeds the amount allocated for reimbursement.” This means that we do not have a process for documenting how much of a payroll expense already deemed allowable on a particular grant will actually be invoiced there. We disagree and believe that the presence and documentation of a limited sponsor budget, along with cumulative tracking and documentation of compensation expenses against that budget, proves and documents why sometimes full compensation costs are not charged to a grant. • Under Possible Effect, the finding addresses possible effects of “the absence of documented allocation methodologies.” We don’t agree that our process could lead to improper allocation between federal programs (as the finding states) nor to misstating federal expenditures (as the finding states). When a sponsor’s budget is insufficient to cover its appropriately allocated compensation costs, those costs are paid from unrestricted, non-federal funds. As also noted in the finding, no questioned costs were identified.

Plan: BCPN confirms that indirect costs are calculated in accordance with government guidelines outlined in 2 CFR Part 200. Anticipated Date of Completion: 4/26/2025 Name of Contact Persons: Ieesha Jones Management Response: Due to adopting to use a calendar year instead of a fiscal year, BCPN's indirect costs for FY24 will be reflected in the financial statements for the period ending June 30, 2024, rather than December 31, 2023. We confirm that the indirect costs are being billed and spent in compliance with the guidelines outlined in the government contract and there is no need for funds to be returned.

Public Health agrees with the recommendation. Public Health will develop a process for conducting risk assessments of subrecipient funding, develop and implement procedures for obtaining single audit reports from subrecipients, as well as a system to monitor and track compliance with the single audit mandate among subrecipients. Public Health will ensure each subaward includes all requirements imposed on the subrecipient so that the federal award is used in accordance with Federal Statutes, regulations, and terms of conditions of the federal award. Estimated Implementation Date: May 2025 Contact: Melissa Relles, Assistant Deputy Director Division of Operations, Center for Preparedness and Response California Department of Public Health

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

Consortium’s Fiscal Agent will ensure that supporting documentation will be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost.

The Village Treasurer will start preparing the Schedule of Expenditures of Federal Awards each year or contract with a CPA firm for assistance in preparing the Schedule of Expenditures of Federal Awards each year.

Management acknowledges that the organization operated with provisional rates in 2023 and did not update to actual indirect rates. Management has calculated actual rates for 2023, will update its NICRA for new provisional rates for 2025 and will institute a policy of updated rates on an annual basis including computing actual indirect cost rates at the conclusion of each audit. Anticipated Completion Date: 3/31/2025 Responsible Contact Person: Tony Ricciardella, Interim Chief Financial Officer and Alison Roca, Controller

All future federal expenditures will be reconciled to the disbursement ledger.

Action taken in response to finding: Trilogy submitted an application to apply for a new indirect cost rate in January 2024, we also received provisional approval from the federal agency to continue use of our prior approved indirect cost rate. Since then, Trilogy has clearly defined compliance requirements for maintaining an up-to-date indirect cost rate. This includes developing a timeline of responsibilities, documents and steps needed for approval. This also includes the development of an annual calendar for Finance to be proactive about expiring NICRA agreements. Name(s) of the contact person(s) responsible for corrective action: Richard Powell, Shunita Rhodes Planned completion date for corrective action plan: August 2023 and January 2024.

Views of Responsible Officials: Prior to receiving this finding, HIPS was not in the practice of saving documentation of financial or programmatic reporting submission. Staff responsible for submissions are now documenting submission of reports as of 2024. Incorrect application of the de minimis rate was due to an error in the funder-provided spreadsheet. HIPS Finance Manager has been tasked with checking all spreadsheet calculations prior to submissions of financial reporting.

The Agency agrees with the finding. When granting funds as a subaward to a pass-through entity, the Agency will update its master templates for subawards to include the required information. In addition, when the sub agreements are routed for signature and reviewed by the Chief Financial Officer, they will be double-checked to ensure compliance with this requirement.

The Agency agrees with the finding. When granting funds as a subaward to a pass-through entity, the Agency will update its master templates for subawards to include the required information. In addition, when the sub agreements are routed for signature and reviewed by the Chief Financial Officer, they will be double-checked to ensure compliance with this requirement.

The Agency agrees with the finding. When granting funds as a subaward to a pass-through entity, the Agency will update its master templates for subawards to include the required information. In addition, when the sub agreements are routed for signature and reviewed by the Chief Financial Officer, they will be double-checked to ensure compliance with this requirement.

Material Weakness over Schedule of Expenditures of Federal Awards (SEFA) Reporting Repeat Finding: Yes Auditee’s Corrective Action Plan: The City has purchased Workday, an Enterprise Resource Planning (ERP) system, and implemented the software with the assistance of Accenture consultants. Although Workday is “live” as of August 2022, the City is currently working to refine the software and fully utilize functionality. The Workday grants modules requires the grant funding source be defined prior to grant approval and fields are available for the AL titles and numbers and sub-recipients’ information. The implementation of the Workday grants modules centralizes much of the grant management function by requiring the agencies to upload the grant documents into Workday. The City has: • Held weekly meetings for two years with agency grant representatives to design and configure the Workday grant module. • Uploaded the grant award, sponsor information and grant budget data into a Workday. • Implemented a “new grant” request which uses a Workday business process. • In the process of reviewing and correcting recoverable costs per grant award so it is properly recorded. • Within Workday we are able to track grant performance period, CFDA, manage and capture grant related expenditures and calculate automated billing to sponsors on recoverable costs Business processes have been developed and implemented in Workday’s grant management module to include: Definition of the grant funding source by creating a system-generated grant work tag (identifier) upon receipt of the Sponsor’s Notice of Award; populated fields in Workday with passthrough award data with Prime Sponsor and Bill to sponsor Billing data, and modification of the create award process to add the Grants Management Office to final approval. In FY 24 the City implemented a citywide Grants Management Committee coordinated by the Mayor's Office of Performance and Innovation. Through feedback from this workgroup we identified an expanded scope of responsibility for the Grants Management Office; including oversight and compliance, technology, training and budget monitoring. In the short term a new Grants Director position was created and onboarding is to occur in the first quarter of FY25. Contact Person: Michael Moiseyev, Chief Financial Officer, Baltimore City. Completion Date: June 2024

The Treasurer will review the Schedule of Expenditures of Federal Awards to ensure all federal awards are being reported and the expenditures are properly reported.

Individuals Responsible for Corrective Action Plan: BGCA Fiscal Team-Shelby Mahoney; Alliance Director Corrective Action: Review all federal grant contracts to determine if any separate funding sources should be listed for total funds received. Anticipated Completion Date: December 31, 2024

Individuals Responsible for Corrective Action Plan: BGCA Fiscal Team – Shelby Mahoney, Senior Accounting Manager Corrective Action: Alliance team will enhance procedures and internal controls with respect to preparation and review of the SEFA by reviewing detail of expenses included in prior year with current year expenses, to prevent duplicate entries being reported. Anticipated Completion Date: December 31, 2024

REFERENCE # 2023-001 Rail and Transit Security Grant Program (ALN # 97.075) - Deficiency-Non-Compliance Agency: U.S. Department of Homeland Security Criteria: Subrecipient Monitoring - As stated in Uniform Grant Guidance - §200.331 Requirements for pass-through entities, all pass-through entities must: Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: • Subrecipient name (which must match the name associated with its unique entity identifier); • Subrecipient’s unique entity identifier; • Federal Award Identification Number (FAIN); • Assistance Listing Number (ALN) Number and Name; the pass-through entity must identify the dollar amount made available under each Federal award and the ALN number at time of disbursement; • Identification of whether the award is Research & Development; and • Indirect cost rate for the Federal award (including if the de minimis rate is charged per §200.414 Indirect (F&A) costs); Condition/Context: Metropolitan Transportation Authority (“MTA”) has subrecipient monitoring procedures in place. MTA has corporate policies and procedures regarding subrecipient contracts. We reviewed Rail and Transit Security Grant Program’s subrecipient monitoring compliance. This program had one subrecipient. Based on our review of the subrecipient contract for this program, we noted that the subrecipient contract did not have all the required elements as stated in §200.331. Recommendation: We recommend that MTA implement policies and procedures to communicate the federal grant information to all subrecipients in accordance with Uniform Grant Guidance CFR 200.331 Subrecipient Requirements. Corrective Action Plan The MTA Office of Security has updated it Sub-recipient contract to include the ALN Number – 97.075, Identification of whether the award is R&D and Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414 as per the checklist. Action date March 31, 2025 Final Implementation Date March 31, 2025 Name And Phone Number Of Person Responsible For Implementation Daemion De Vonish Work Ph# 212-878-4768

All three of the subawards selected for testing, the recipient’s UEI number was missing from the subaward. Recommendation: ACT evaluates policies and procedures to ensure all required information is communicated with the subrecipient. Views of Responsible Officials and Planned Corrective Action: ACT accepts the auditors’ recommendation. We will review and update policies and procedures to ensure all required information is included in subaward agreements and communicated to subrecipients, including the recipient’s UEI numbe

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.

Action taken in response to finding: Trilogy submitted an application to apply for a new indirect cost rate in January 2024, we also received provisional approval from the federal agency to continue use of our prior approved indirect cost rate. Since then, Trilogy has clearly defined compliance requirements for maintaining an up-to-date indirect cost rate. This includes developing a timeline of responsibilities, documents and steps needed for approval. This also includes the development of an annual calendar for Finance to be proactive about expiring NICRA agreements. Name(s) of the contact person(s) responsible for corrective action: Richard Powell, Shunita Rhodes Planned completion date for corrective action plan: August 2023 and January 2024.

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 Department Concurs with paragraph A – Since this same finding was reported in March of 2023 for FY22, items a, c, and d are now included on all federal subaward contracts and policies have been updated to reflect this. The Department will ensure b is also included going forward. The Department concurs with paragraph B - The finding was a result of personnel turnover and medical issues. The Department has hired and trained additional program staff and updated policies to ensure programmatic monitoring and subsequent reports are done in a timely manner. The Department partially concurs with paragraph C. Fiscal monitoring was done for all 3 subrecipients during the federal program year. However, 1 subrecipient monitoring fell outside the state fiscal year so was not covered during the audit period. The Department has changed the wording on its risk assessment procedures to ensure no misinterpretation of the timeframe each subrecipient will be monitored in accordance with its risk assessment. The Department has also changed the requirements of the frequency of fiscal monitoring in each of the risk assessment categories. The Department Concurs with paragraph D – The Department is reviewing policies and procedures and will update them to ensure compliance with 2 CFR section 200.332(a), 2 CFR section 200.332(b) and 2 CFR section 200.521. The Department also created a tracking mechanism to ensure we receive, review, and issue management decisions (if required) in a timely manner. The Department concurs with Paragraph E - The Department is reviewing policies and procedures for both reporting and subrecipient monitoring to ensure data is tested and verified. The Department has already gained increased access to data in current software and is in the process of selecting a vendor for new software that will provide more testing and enhanced internal controls.

Corrective Action Planned (Condition A): The DAS analyzed the six items erroneously reported as subawards and noted the errors were isolated to two specific agencies, the Department of Health and Human Services and the Department of Environmental Services. In response to the prior year finding 2022-002, the DAS had strengthened internal controls related to the review and validation of amounts reported by individual state agencies as pass through expenditures. This included an additional control specifically verifying SLFRF pass through expenditures reported by each agency. The DAS will offer additional training relative to identification and reporting of subaward expenditures in its annual statewide Single Audit training and re-evaluate the precision of execution of controls over the validation of pass through reporting in assembling the SEFA for fiscal year 2024. Corrective Action Planned (Conditions B through E): The State largely concurs with the findings and recommendations and has implemented procedures to address the identified conditions already or will do so. With regards to condition B, The State will work with the individual agencies to ensure that individual agencies entering into such agreements clearly indicate the terms required by Uniform Guidance, including permitted indirect cost rates and whether the award is for R&D. The State has already begun this corrective action plan with the agencies. With regards to condition C, for a. and b. for payments by agencies, there are standard procedures for review and authorization of invoices and payments and those payments are documented. For c. The State has already implemented an agency wide framework for subrecipient monitoring. The State will provide re-training for those agencies that had not properly documented monitoring as outlined by the subrecipient risk assessments and ensure monitoring reports are documented. With regards to condition D, The State has already implemented an agency wide framework to help ensure policies and procedures are in place concerning Uniform Guidance Reports. We will work those agencies that had not documented the date received and the review of the Uniform Guidance Reports to ensure written documentation occurs. Where findings have been reported in the Uniform Guidance Report, ensure timely Management Letters are documented and provided with the summary review of Uniform Guidance Report.