Corrective Action Plans

Finding 2025-002: Allowable Costs – Payroll Assistance Listing #: 93.671 Recommendation: Deleon & Stang recommends MSP make changes overall its timekeeping processes to ensure that payroll costs accurately reflect work performed and if budget estimates are utilized, that they are reconciled and trued up on a consistent basis. Management Response: MSP agrees with the recommendation and remains committed to improving its timekeeping and payroll allocation processes. Management is working with ADP to implement a system that captures actual employee time by program and grant, ensuring payroll costs are accurately charged and supported by documented effort. Until full implementation is complete, periodic reconciliations between budgeted and actual time will be performed. Action Plan: 1. Complete ADP system enhancements that allow employees to record time by department,program, and grant. 2. Establish written procedures requiring staff to allocate hours based on actual workperformed. 3. Implement monthly reviews and reconciliations of payroll allocations against actual timerecords. 4. Train supervisors and employees on the revised timekeeping process. 5. Perform quarterly management reviews of payroll distributions and make necessaryadjustments to ensure compliance with Uniform Guidance requirements. 6. Target full implementation and testing of the enhanced timekeeping system prior to thenext audit cycle.

Management Response and Corrective Action Plan Finding 2025-001 – Allowability Federal Agency: United States Department of Health and Human Services Program Name: Research and Development (R&D) Assistance Listing Number: 93.859 Responsible Individual: BIDMC – Jarod Kohr, Director, Research Finance or The Center - Roy Bourne, Director, Research Finance and Operations Contact Information: BIDMC - jkohr@bidmc.harvard.edu; 617-216-7479 The Center - rbourne2@joslin.harvard.edu; 617-309-5741 A review of Beth Israel Deaconess Medical Center’s (BIDMC) salary allocation process revealed 53 instances out of approximately 11,000 records of allocation in excess of NIH Salary Cap limits (0.04%). BIDMC acknowledges discovery of system limitations that will correct future instances. Accordingly, management has concluded that controls are operating as intended, but will be enhanced to limit human errors. Corrective Action Plan: - Management will implement a calculation control that will prevent the ability to save changes to salary allocation that exceeds the salary cap for the respective period. (Completed) - Management will implement a calculation control that will prevent the ability to reflect a percent salary higher than the percent effort for any salary cap controlled grant. (Completed) - Management will monitor monthly changes to effort/salary allocations in the Time and Effort system for calculated variances. (Ongoing) Expected Completion Date: October 1, 2026 Status of Completion: In process The Center’s management acknowledges that an invoice was incorrectly matched to a purchase order; however, this was not reflective of the overall control environment. The Center maintains established controls over purchase order invoice processing, including system-generated duplicate invoice detection, cost matching tolerances, and restrictions preventing matching to closed purchase orders. Transactions outside established parameters are automatically flagged for manual review. Management performed a targeted review of these transactions, noting expenditures were properly allocated with the exception of the item noted in this finding. Accordingly, management has concluded that controls are operating effectively overall, Accordingly, management has concluded that controls are operating effectively overall, while continuing to evaluate and enhance processes to further mitigate the risk of recurrence. Corrective Action Plan: - Management will reinforce matching requirements through targeted training and communication with Accounts Payable and Purchasing (Completed) - Periodic reconciliation reviews will be performed to identify and correct any misallocated costs as necessary (Completed) - The Center’s planned implementation of a new ERP system on October 1, 2026 will introduce enhanced automated matching controls, further reducing the likelihood of recurrence Expected Completion Date: October 1, 2026 Status of Completion: In process

PAYROLL CONTROLS Criteria: In accordance with the documentation standards of 2 CFR section 200.430(a), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is reasonable for the services rendered, conforms to the established written policy of the recipient or subrecipient and is determined and supported as provided in 2 CFR section 200.430(g), which states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: Payroll testing was completed for a sample of 40 individuals for which time and expenses were charged to R&D grants. Within that selection, we noted instances where payroll controls did not function properly in regard to percentage of time allocated to a grant, proper pay code inclusion, fringe benefit calculation and timely and supervisor level review of time sheets. Context: Management was able to isolate the time allocation error to 20 employees for which the time and costs charges to the grants were in excess of actual time allocation. This resulted in $87,831.53 in excess charged to the grants. Additional control deficiencies did not result in significant improper grant expenditures. Cause: A new payroll system was implemented in fiscal 2025. Grant allocation percentages were not accurately established in the payroll system upon conversion. Effect: Time charged to grant efforts by certain individuals exceeded actual time worked. Recommendation: Review controls should be enhanced to ensure grant expenditures accurately reflect payroll costs. Corrective Actions Taken or Planned: Management identified the issue early following implementation of the new payroll system and performed a detailed review to isolate the impacted population. Corrections were made to payroll allocations for the affected employees, and reimbursement adjustments were processed as appropriate. To prevent recurrence, management has implemented the following control enhancements: - Standardized procedures for establishing and validating grant allocation percentages within the payroll system; - Enhanced supervisory review requirements for time reporting and payroll approvals; - Periodic monitoring and reconciliation of payroll charges to grant budgets; - Additional training for payroll and grant accounting personnel on system configuration and compliance requirements. Responsible Parties: VP of Accounting and Controller and VP of Audit & Compliance. Anticipated Completion Date: Completed in fiscal year 2025; ongoing monitoring procedures are in place.

Item 2025.001 - Activities Allowed or Unallowed Recommendation We recommend that the Organization consistently enforce its internal controls over payroll to ensure that the allocations are reviewed and approved by the appropriate supervisor. Repeat Finding Not a repeat finding. Action Taken The Health Center converted the payroll system from Paycom to Paylocity which has capacity for grant hours tracking. We should have compliance in three months after implementation. The first pay date using Paylocity will be 7/2/2026 covering the pay period from 6/14/2026 to 6/27/2026. In addition, The Health Center's new GL system, Sage lntacct, also has grant accounting capability. With these two systems conversions, we should be able to track time and effort compliance.

Audit Finding Reference: 2025-004 Maintain Approved Rate Support for Employee Pay Rates and Time and Effort Support Planned Corrective Action: The District will strengthen internal controls over payroll costs charged to federal programs by implementing the following corrective measures: 1. Identify all employees whose salaries and wages are charged, in whole or in part, to the Child Nutrition Cluster and other federal awards. 2. Implement a formal process requiring completion of appropriate time and effort certifications in accordance with Uniform Guidance requirements and District policy. 3. Establish procedures to ensure certifications are completed in a timely manner, signed by employees and/or supervisors as required, and maintained in a centralized location. 4. Develop a compliance tracking system to monitor the collection and retention of required documentation throughout the year. 5. Conduct periodic reviews of payroll allocations to verify that payroll charges are supported by appropriate documentation and accurately reflect the work performed. 6. Provide annual training to Child Nutrition, Payroll, Human Resources, and Business Office personnel regarding federal time and effort documentation requirements and record retention responsibilities. Planned Implementation Date of Corrective Action: The District has implemented procedures to identify all federally funded employees and will require completion and retention of all applicable time and effort documentation beginning immediately and for all future reporting periods. Person Responsible for Corrective Action: HR Generalist for Cafeteria Derek Pinto, Assistant Superintendent of Finance

Finding 2025-001 Condition: Time and effort certifications were not maintained for grant employees. Corrective Action Planned: Southbridge Public Schools will be creating and implementing procedures for time and effort certifications. The procedure will include use of the form distributed by the Massachusetts Department of Elementary and Secondary Education for employees who are paid by a grant and require a time and effort certification. Anticipated Completion Date: July 31, 2026 Contact: Matthew Robidoux – Business Manager

2025-001 Aging Cluster-Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers- Assistance Listing No. 93.044. Special Programs for the Aging, Title III, Part C, Nutrition Services- Assistance Listing No. 93.045. Nutrition Services Incentive Program- Assistance Listing No. 93.053 Condition Found Out of forty payroll transactions tested, we noted 14 instances where part-time employees did not have their timecard approved by their supervisor. We consider this condition to be a material weakness relating to the Allowable Costs/Cost Principles compliance requirement. Statistical sampling was not used in making sample selections. Corrective Action Plan DuPage Senior Citizens Council will strengthen controls over payroll timecard approval to ensure all part time employee timecards are reviewed and approved by an appropriate supervisor prior to payroll processing. Management will formalize and document supervisory approval requirements within written payroll procedures. Payroll will not be processed unless all required timecards reflect documented supervisory review and approval. Oversight of compliance with these procedures will be supported through periodic review by the Executive Director and the outsourced accounting firm through documented policy and process reviews. Responsible Person for Corrective Action Plan Executive Director, with support from the Payroll Clerk Implementation Date of Corrective Action Plan DSCC began implementing this process in May 2025. The corrective action was effective immediately at that time and is considered fully implemented.

2025-001 Special Education Cluster – 84.027, 84.173 Recommendation: We recommend procedures be implemented to ensure that time and effort certifications are completed in a timely manner. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Following the identification of this omission at the end fiscal 2025, the district immediately re-established the time and effort documentation procedures and monitoring processes. Note that all staff charged to the grant in FY25 are employees who are wholly assigned to provide direct services to special education students. Time and effort documentation has been fully restored as of July 1, 2025 and is currently being maintained and monitored. Name(s) of the contact person(s) responsible for corrective action: Julie Kirrane, Bedford Public Schools Dir. of Finance. Planned completion date for corrective action plan: Corrective action has been completed.

Management’s Response Regarding Corrective Action Taken or Planned These rules apply to costs charged directly to federal programs, such as the 5311 grants that require a 44.67% match when used for operating expenses. All maintenance and administrative staff time is eligible as direct costs for these grants as their time is only spent on transit activities and not administrating non-transit programs. Staff apply payroll costs and on either actual vehicle miles or hours based their type of work, as recommended by the National Rural Transit Assistance Program, for time by staff that cannot be directly tied to a specific grant source.

Views of Responsible Officials and Planned Corrective Action Management agreed with the findings and indicated that corrective actions were implemented in January 2026 to ensure employee time is properly tracked and allocated by program, including updated timesheet procedures and enhanced supervisory review.

Views of Responsible Officials and Planned Corrective Action Management agreed with the findings and indicated that corrective actions were implemented in January 2026 to ensure employee time is properly tracked and allocated by program, including updated timesheet procedures and enhanced supervisory review.

Finding 2025-001 Fiscal year in which the finding occurred: 2025 Pass-Through Entity, if pass-through or Federal Grantor Agency, if direct: U.S. Department of Labor Contact person responsible for the corrective action: Michael Brey Description of Audit Finding: An effective internal control system was not designed or implemented at the Organization related to payroll and incentives/subscriptions to ensure compliance with requirements related to the grant agreements and Allowable Costs/Cost Principles compliance requirements. Corrective Action to be Taken: Beginning in April 2026, the organization has changed the process to record payroll to be charged to the grant. A spreadsheet has been created to track each payroll register and the amounts paid to each employee assigned to the grant. This data will be tracked throughout the year and checked against the payroll amount allowed per the grant budget. If any adjustments are required, that will happen in June and December. The payroll spreadsheet will be reviewed by a second employee to validate the spreadsheet is correct. Beginning in February 2026 the organization has corrected the subscription pricing to $1,500 per eligible shop. Additionally, the organization identified that certain shop incentives were being overcharged to the grant due to sales tax being added to the tool kit. The organization has adjusted the composition on the tool kit to reduce the amount including sales tax to be under the $8,500 allowable limit. Any excess incentive awarded in 2026 will not be submitted to the DOL for reimbursement from the grant. The tracking file for shop incentive awards is reviewed by the Controller. Correcting adjustments will be made to the grantor financial reports in 2026 to correct the overcharged payroll costs and incentives/subscription costs identified in 2025 and to properly reflect the cumulative grant expenditures in accordance with Allowable Costs/Cost Principles compliance requirements. Grantor financial reports will be reviewed by a second employee. Anticipated completion date: New process in place effective 4/1/26.

Finding Number: 2025-002 Finding Name: Allowable Costs Finding Condition(s): During testing of allowable costs, we identified shared payroll and other costs charged to federal programs for which adequate support for the cost allocation methodology was not maintained. Specifically, allocation schedules and underlying documentation supporting how payroll allocation percentages were determined were incomplete or unavailable. As a result, we were unable to conclude that all sampled costs were allocated to the federal programs in proportion to the relative benefit received. Name of Contact Person(s): Mark Yates, Interim CFO, 312-479-5395 Corrective Action(s): Management will retain detailed allocation support and maintain its allocation methodology in accordance with applicable requirements. This documentation will be preserved to support the development and implementation of the management corrective action plan and to demonstrate consistency and compliance going forward. Anticipated Completion Date: May 31, 2026. Management agrees with the finding. The issue resulted from a system conversion and transition between payroll providers. Moving forward, management will ensure that appropriate documentation is consistently maintained and retained to support all payroll-related transactions.

Contacts: Brian Lutz, VP of Accounting; Rob Busteed, Director of Accounting Contact Phone Numbers: 479-967-5570 Ext. 2013; 479-725-5117 Audit Period Ending: June 30, 2025 2025-001: The Corporation failed to meet the 80% level of effort requirements as stipulated in the grant agreements. Management concurs with the finding. Arisa’s time-keeping application is designed to meet FLSA recordkeeping requirements. This system does not contain a solution to subdivide hours worked by project in a manner that would satisfy level of effort reporting. Arisa will require employees in positions that are partially or fully funded through a federal contract containing level of effort requirements to complete and submit a separate paper timesheet documenting time worked on the federal contract. In addition, subcontractors will be required to include a certification on their invoices that applicable level of effort requirements were met. Program Staff were alerted of the deficiencies in April 2026. Completion date: May 2026.

Management will formally document the CEO and CFO approval of all pay rate changes. Anticipated Completion Date: May 11, 2026

As required by the OMB Uniform Guidance, we have provided our response and corrective action plan addressing the finding in the Schedule of Findings and Questioned Costs for the year ended August 31, 2025. Finding 2025-001: Allowable Costs – Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Management’s Views – Management agrees with the finding. LAJH acknowledges that payroll reimbursement calculations submitted under the federal program were prepared using subsequent employee pay rates rather than the contemporaneous pay rates applicable during the grant performance period and that certain duplicative expenditures were included in error. Management recognizes that these errors resulted in overstated costs totaling $79,825. Corrective Action Plan – LAJH will implement enhanced internal control procedures over the preparation and review of payroll costs charged to federal awards. Specifically, management will require all payroll reimbursement calculations to be supported by contemporaneous payroll registers and employee pay rate documentation applicable to the period during which services were performed. Person Responsible for Corrective Action: Robin Ray, Corporate Controller Anticipated Completion Date: May 31, 2026

Recommendation: CT State Community College should strengthen internal controls to ensure that part-time and extension credit lecturer payroll and fringe benefits costs are based on actual time worked and are properly approved. Corrective Action Plan as Reported by the CT State Community College: CSCU is working to resolve the technical limitations that resulted in the relevant audit finding. Once resolved, reports will be generated and shared with the campuses to verify services provided. This will ensure that part-time and extension credit lecturer payroll is based on actual time worked that is properly approved and verified. Task Due Date Status Provide access to the template for the reporting requirements 1/8/2026 Completed Provide requirements for the report that would meet the needs of the audit requirement 1/12/2026 Review requirements and outline any questions / concerns with producing the requested report 1/20/2026 Regroup as a team to discuss next steps and review workplan for report implementation 1/21/2026 Completed Develop, test, and migrate report (detailed work plan to follow) 4/1/2026 Implement report for approval by each campus (Spring 2026 Semester) 5/1/2026 CT State Community College Anticipated Completion Date: May 1, 2026 CT State Community College Contact Person: Jennifer Person, Assistant Vice Chancellor of Human Resources and Labor Relations jennifer.person@ct.edu (860) 723-0258 Corrective Action Plan as Reported by the Office of Policy and Management: The Office of Policy and Management has no additional response beyond that offered by the CT State Community College. Office of Policy and Management Anticipated Completion Date: May 1, 2026 Office of Policy and Management Contact Person: Yvonne T. Addo, Chief Administrative Officer yvonne.addo@ct.gov (860) 418-6360

Management agrees with the finding. The Agency’s current approach was designed to balance compliance needs with limited resources. Management will assess feasible improvements to its documentation practices to enhance support for payroll allocations to federal awards while remaining mindful of funding and staffing constraints.

The District will ensure that a semi-annual certification is completed at least twice a year and signed by a knowledgeable supervisor or the employee, confirming those employees who worked solely on a single federal program or cost objective.

Views of Responsible Officials: All the Foundation's employees now complete an excel timesheet that is then submitted to their supervisor for review and approval. Payroll is processed only after all employee timesheets are approved and received by the Senior Accountant who processes payroll.

Allowable Costs/Cost Principles Finding Summary: During the testing performed, it was noted that the Organization transferred payroll costs between programs, however, no time and effort certification or equivalent documentation was updated to reflect the changes. Additionally, the transfer of payroll costs between grants was not properly reflected within the accounting system records by grant. Responsible Individuals: Andre Stringfellow, Chief Financial Officer Corrective Action Plan: Procedures were in progress towards the end of the current year. Staff will be trained to ensure future changes in payroll costs are updated timely within the system and documentation maintained. Staff will be trained to ensure future changes in payroll costs are updated timely within the system and documentation maintained. Anticipated Completion Date: August 2026

Blood Diseases and Resources Research (ALN 93.839) Recommendation: We recommend that the Organization reviews their calculations around payroll costs before drawdowns and that evidence of this review is retained. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management is in the process of implementing an upgraded grants payroll allocation costs software (Paas 2.0) that contains system controls that will detect payroll changes and automatically update, thus preventing such errors in the future. In addition to these automated software controls, management will implement review procedures in parallel as a secondary measure of control to detect and prevent such errors. Management anticipates the implementation and completion of the software project and related procedures in July 2026. Name of the contact person responsible for corrective action: Mahtab Khan Planned completion date for corrective action plan: July 2026

Continuum of Care Assistance Listing No. 14.267 Payroll Disbursements Recommendation: We recommend that LAHSA implement procedures to ensure that timesheet approval is documented timely. Explanation of disagreement with audit finding: There is no disagreement withthe audit finding. Action taken in response to finding: LAHSA has enhanced its internal controls over timesheet approvals to ensure timely documentation. Timesheet approval status reports are reviewed on a weekly basis during Chief level meetings to monitor compliance. Timesheets not approved within two days of the established deadline are escalated to the respective Chief and Deputy Chief for immediate follow-up. If timesheets remain unapproved after an additional two days, the matter is further escalated to the CEO, for prompt resolution. These procedures establish clear accountability and escalation protocols to ensure timely approval of timesheets Names of the contact persons responsible for corrective action: Gita O'Neill, Keshia Douglas, Christopher Williams, and Paul Rubenstein. Planned completion date for corrective action plan: Implemented

Management’s Views and Corrective Action Plan: Management’s Views: Management agrees with the finding. While the hours charged to the federal programs were reasonable and supported, the lack of timely supervisory approval represents a breakdown in the District’s established internal control procedures over payroll processing. Management acknowledges the importance of ensuring that all payroll charges to federal awards are properly reviewed and approved in accordance with District policy and federal requirements. Corrective Action: The District’s Human Resource Department will verify timecard approvals on Mondays. If Monday falls on a holiday, approvals will be verified on the Friday before. Human Resources will verify that each employee has approved his or her timecard for the prior week and that the employee’s Supervisor or Director has also approved the timecard. For timecards not approved by the employee, an email will be sent to the employee and the Supervisor or Director will be included. For timecards not approved by the Supervisor or Director, an email will be sent to the Supervisor or Director requesting approval, and the CEO will be included. Prior policy did not specify actions when timecards are not approved. Responsible Party: The District’s Human Resources Director and Department Directors Implementation Date: June 1, 2026 Monitoring Procedures: The Human Resources Director will maintain documentation of the weekly review process, including any follow-up communications. Compliance with the timecard approval policy will be periodically reviewed to ensure the control is operating effectively. Any recurring issues will be communicated to executive management for further action. Monitoring procedures were not included in prior policy.

Condition: Tests indicated that seven employees did not have propery time and effort documentation. Upon further examination, it was determined that the salary and wages for these employees were charged to a federal program when they should not have been. Recommendation: We recommend that the School District implement procedures to improve communication between the special education director and the director of business services. Furthermore, we recommend that the School District implement procedures that better monitor which employees are being paid out of which fund. Corrective Action Taken: Management has agreed with the recommendations and procedures have been implemented to ensure that better communication takes place.