Corrective Action Plans

2024-004 Higher Educational Institutional Aid – Assistance Listing No. 84.031X Recommendation: We recommend the College review policies and procedures to ensure all personnel on federal grants documented time and effort reports as stated in federal regulations. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: A standard template will be used for all grants for time and effort reporting and a standard procedure for approvals will be enforced to show proper approvals from supervisors. Name(s) of the contact person(s) responsible for corrective action: Dr. Dustin Grover, VP of Academic Affairs; Amy Ishmael, VP of Student Affairs; Brando Glick, VP of Fiscal Affairs Planned completion date for corrective action plan: 12/31/24

Name of Contact Person: Elena Begojevic, Business Manager Corrective Action Plan: Human resources manager will collaborate with both a business manager and a grant manager to ensure that employees’ time is being charged to the correct programs and grants in accordance with approved budgets. The human resource manager will prepare a payroll action form that will list available and applicable funding sources to cover the payroll expenses of an employee. The independent payroll contractor will maintain payroll action notices (PAN) for employees who are covered by multiple funding sources or funding sources other than general fund. In addition, she would update payroll distribution coding in the accounting software to match PAN. She would also match coding on timesheets with coding on PAN and in the accounting software. In case of a discrepancy, she would reach out to a business manager and/or a grant manager on how to resolve it. The Superintendent will review account coding each payroll while performing a review of the payroll check register. In addition, budgeted account codes will be compared to the actual codes being used in payroll on a periodic basis. Proposed Completion Date: Implemented July 1, 2024

Corrective Steps Taken –The School District will direct personnel to oversee the compliance of the Career and Technical Education grants and verify employees are completing the “Time and Effort” reporting as required by the grant and the School Districts policy of same – annual certification for all employees paid through federal grants.

2024-004 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) – 93.323 Activities Allowed or Unallowed and Allowable Costs and Cost Principles Condition Three employees were paid an additional amount using program funding in order to reflect the administrative burden associated with running the program for three years. For two of the employees, no personnel activity reports or other time records could be provided to support those costs. For the third employee, a monthly log of hours worked on grant activities was provided. However, it only showed the total hours for that month and did not break them out by date of occurrence. Additionally, no supervisor review or other control over that log occurred. Lastly, the employees’ contracts were not amended and approved by the Board to reflect these additional amounts. Recommendation Employees with grant administration responsibilities should undergo training to better their understanding of the compliance requirements that accompany Federal programs. Additionally, controls should be implemented to ensure that all required records are prepared, as well as to ensure that the Board approves all wage rates. Comments on the Finding Staff are aware of the oversight and will strive to improve the process. Action Taken Staff involved in grant administration will review training available from the Kansas State Department of Education regarding federal programs. Additionally, a year-end review of gross wages will be implemented to ensure that paid amounts match the approved contracts.

The District will work with the Assistant Superintendent of Curriculum and Instruction and the payroll supervisor to ensure that pars are matching what is being charged in the payroll system. A form will be created to ensure that they align and both parties will sign off on it quarterly.

The District will implement a system of internal controls to ensure that all certifications are completed by employees working in the federal award programs and in a timely manner. Additionally, the District will ensure that the time being charged to the grant agrees to actual time spent working in the grant for each employee. Anticipated completion Date: Currently in process with final expected date of October 31, 2024.

View of responsible officials and planned corrective action: NorthWoods management will train Program Directors to add a USFW code to their current time sheet tracking for all USFWS activities in September 2025. This will be reviewed regularly in current time sheet review procedures for accuracy. Semi-annually, program director match contributions will be reconciled from time sheet reports with the general ledger for USFW agreements by the Business Manager, and reviewed by the Program Directors. Northwoods management will obtain a review of matching contributions documentation procedures from a qualified non-profit accountant.

Finding #2023-003 – Statement of Condition: During our testing of payroll costs charged to ALN 97.036, we identified one instance in which employee's payroll cost was calculated using an incorrect pay rate. As a result, the payroll expenditure charged to the federal program was overstated. Response: Management concurs with the finding and will enhance its payroll review procedures to verify that payroll costs charged to federal awards are calculated using the correct authorized pay rates. The matter was corrected by December 31, 2024

Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the times sheet and pay rates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently reinforces its internal controls over nonpayroll expenditures to ensure all expenditures were approved by the appropriate supervisor. Repeat Finding Yes Action Taken Action Taken Island Health Care will take the following actions to address this recommendation: Timesheet and Payrate Review and Approval: • Standardize timesheet submission and approval process • Utilize an electronic timesheet system to document the verification of employee payrates and ensure there is a detailed audit trail that records all submissions, reviews, and approvals by supervisors • Conduct regular audits to verify timesheets and payrates are reviewed and approved by supervisors Non Payroll Expenditures: • Evaluate and improve upon existing processes to ensure internal controls over non payroll expenditures are working. This includes enforcement of approval policies with mandatory documentation and regular monitoring throughout the process for a clear audit trail • Conduct regular audits to verify nonpayroll expenditures have been reviewed and approved by supervisors

Allowable Costs/Payroll Disbursements Recommendation: We recommend that the auditee implement procedures to ensure that: all employee pay rates charged to Federal awards are appropriately approved and documented, and complete and accurate timesheets or equivalent time-and-effort records are maintained for all payroll costs charged to Federal awards. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Most Federal grants are renewed annually and have not requested any salary rate adjustments. Payroll line items are a lump sum. Serenity House since 2020 performs annually in May a market rate survey for all job positions to ensure wage rates are equitable to fair market for our County and Non-Profit job type. The sources are documented in the workbook that the annual raise percentages; wage adjustments are calculated for board approval. Our annual performance raises and adjustments is a pool of 1 to 5%, and 3 to 6 employees are below market rate each year. People with a market adjustment do not receive a merit increase. 2023 Merit increase is% that is allocated based on performance scores and management team comparison to everyone in that job category. People are scored by manager this score is reviewed by all managers that have employees in that grouped job class. The reviewing managers agreed highest performer with a 5% and lowest performer 1% Raise distribution is based on the performance review score. 2022 Employees are hired for a specific job when they are given their first time card grant line items for the grant they work on are on the time sheet. That time sheet is reviewed and corrected by the immediate supervisor then reviewed by the operations manager. Turned into the main office receptionist who checks submission against the employee list. Checks math and signatures, initials the times card takes up to payroll. 2023 Payroll double checks each time card when entering time into the payroll module. After all time is enter another employee checks the system addition to timecard. 2020 When Checks are manually signed the time is on the timecard and each check is reviewed. Each employee Name(s) of the contact person(s) responsible for corrective action: Kristin Cowan Planned completion date for corrective action plan: July 1 2023

Finding 2023-002 – Improve Controls and Documentation Over Payroll Condition: Supporting documentation for certain employee pay rates and mid-year pay increases charged to federal grants was not readily available for audit review. Corrective Action: The City and School Department will strengthen procedures for maintaining payroll documentation supporting grant-funded salaries and wages. Personnel action forms, collective bargaining agreements, salary schedules, and documentation supporting pay rate changes will be centrally retained and made available for audit purposes. Periodic reviews will be performed to verify that payroll charges to federal awards are adequately supported. Planned Implementation Date: June 30, 2027 Responsible Official: School Business Manager, Human Resources Director, and Payroll Department

Responsible Parties: Erik Estill and Russell Raney Finding: Due to the passage of time, the turnover of staff, and the use of a third-party payroll provider, supporting documentation necessary to verify and document vendor payments and payroll transactions was not available, resulting in the inability to obtain sufficient, appropriate audit evidence related to these amounts. Corrective Action: The school (LEAD Academy) contracted with New Schools for Alabama (NSFA) during 2023 to handle all their finance and accounting needs. By the end of 2023, the school also transitioned all payroll services to New Schools for Alabama. Prior to 2024, a third-party vendor was handling/processing payroll for LEAD Academy. Additionally, procedures were not in place to maintain monthly payroll data (timesheets, leave balances, documentation of annual salaries) prior to 2024. All financial records are now maintained digitally, with the original documents residing at the school. Additionally, NSFA worked with existing staff regarding proper documentation and filing of financial records and helped establish a new filing system. In 2024, payroll processing for the school was transitioned to NSFA, utilizing the state approved accounting/payroll software. Monthly procedures are now in place for the submission, approval and documentation of all payroll transactions. Expected Completion Date: September 30, 2024

Responsible Parties: Erik Estill and Russell Raney Finding: Due to the passage of time, the turnover of staff, and the use of a third-party payroll provider, supporting documentation necessary to verify and document payroll transactions was not available, resulting in the inability to obtain sufficient, appropriate audit evidence related to these amounts. Corrective Action: The school (LEAD Academy) contracted with New Schools for Alabama (NSFA) during 2023 to handle all their finance and accounting needs. By the end of 2023, the school also transitioned all payroll services to New Schools for Alabama. Prior to 2024, a third-party vendor was handling/processing payroll for LEAD Academy. The upload file produced by the vendor was not accurately formatted, resulting in incorrect entries to some general ledger accounts, which required extensive corrections by NSFA to the FY 2023 financials. Many of these corrections involved federal ESSER funding, and the school was not able to identify specific individuals paid with ESSER funds or provide backup documentation. Additionally, procedures were not in place to maintain monthly payroll data (timesheets, leave balances, documentation of annual salaries) prior to 2024. All financial records are now maintained digitally, with the original documents residing at the school. Additionally, NSFA worked with existing staff regarding proper documentation and filing of financial records and helped establish a new filing system. In 2024, payroll processing for the school was transitioned to NSFA, utilizing the state approved accounting/payroll software. Monthly procedures are now in place for the submission, approval and documentation of all payroll transactions. Expected Completion Date: September 30, 2024

Condition: Due to a lack of effectively designed and implemented controls to ensure compliance with allowable cost principles, management requested reimbursement based upon employment contract agreements rather than actual payroll costs incurred for the individuals working under the grant. Planned Corrective Action: The organization will implement internal controls to ensure expenditure is allowed in accordance with 2 CFR 200 Subpart E. Costs must be necessary, reasonable, and allocable. Contact person responsible for corrective action: Charles Berry (CFO) Anticipated Completion Date: 06/30/2026

Recommendation: We recommend that management implement a requirement for employees to complete level of effort forms attesting to actual time spent working on the federal program on a regular basis, but no less than annually, during the fiscal period. These forms should be reviewed by a supervisor knowledgeable of the employee’s activities and grant requirements and retained thereafter. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management established a standardized quarterly process for updating Level of Effort (LOE) forms. All completed forms are retained and archived within the organization’s SharePoint environment to support proper documentation and audit readiness. Name(s) of the contact person(s) responsible for corrective action: Deidre Calcoate, Executive Director Planned completion date for corrective action plan: 01/09/2025

Recommendation: We recommend that management implement a requirement for employees to complete level of effort forms attesting to actual time spent working on the federal program on a regular basis, but no less than annually, during the fiscal period. These forms should be reviewed by a supervisor knowledgeable of the employee’s activities and grant requirements and retained thereafter. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management established a standardized quarterly process for updating Level of Effort (LOE) forms. All completed forms are retained and archived within the organization’s SharePoint environment to support proper documentation and audit readiness. Name(s) of the contact person(s) responsible for corrective action: Deidre Calcoate, Executive Director Planned completion date for corrective action plan: 01/09/2026

Contact Person: Iftin Hagimohamed; Chief Financial Officer Stephanie Sosa: Finance Manager Explanation and specific reasons for disagreement with the audit finding or that corrective action is not required (if applicable): Management concurs with the finding. Personnel costs were allocated based on budget estimates rather than after-the-fact documentation as required under 2 CFR §200.430(i). Status: Corrective Action Taken Corrective action planned: Voices of Tomorrow will strengthen its payroll and time-and-effort documentation practices to comply with 2 CFR 200.430(i). The Organization will implement an after-thefact time and effort reporting process that accurately reflects actual work performed by employees whose compensation is charged to federal programs. Specific actions include: • Implementing standardized time-and-effort certification forms for all staff charged to federal awards • Requiring periodic after-the-fact reviews and supervisory approvals • Updating internal policies to clearly define documentation requirements • Training staff and supervisors on Uniform Guidance time-and-effort standards Anticipated completion date: June, 30 2026

FINDING 2023-009 Finding Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Costs Principles Contact Person Responsible for Corrective Action: Ahnaf Tahmid & Marlaina Johns Contact Phone Number and Email Address: 574-393-6000, atahmid@sbcsc.k12.in.us, mjohns2@sbcsc.k12.in.us Views of Responsible Officials: We concur with the findings Description of Corrective Action Plan: Payroll Human Resources worked with Regional Data Services to identify the cause of the issue and made corrections to prevent the data being lost on the administrative side moving forward. This involved updates to software stores and archives. The Director of Federal Grants is responsible for ensuring that each grant fiscal officer reviews and signs the Payroll (Distribution) Certification Report. This report lists all individuals paid from the grant fund, the amount paid per paycheck, and the complete fund number. Fiscal officers are required to review the information and provide their signature to confirm its accuracy. The reports are then distributed to the fiscal officers for each grant. Each fiscal officer reviews the listed payments to confirm that the employees charged to the fund were appropriately paid from that grant and that the amounts are accurate. The fiscal officer signs the report to certify its accuracy or documents any discrepancies that require correction. After the report is signed, the Finance Department retains it for future audit purposes. Vendor Contracts All contracts and MOUs follow a controlled approval process to ensure proper oversight and legal compliance. Once drafted, each agreement is submitted for review, and the Legal Department evaluates any document requiring an Opinion of Counsel or involving a waiver of the Corporation’s or School Board’s legal rights. Legal also maintains electronic copies of all finalized agreements. Contracts may only be approved by the Superintendent or the School Board, and MOUs must first be reviewed and approved by the Superintendent before going to the Board. After all required reviews and approvals are completed, the agreement is formally executed and electronically filed by the Legal Department. All required documentation specified in the contract will be retained, along with all related vendor invoices. Correction Date October 5, 2023 payroll and December 2024 vendor

FINDING 2023-004 Finding Subject: Title I Grants to Local Educational Agencies - Allowable Costs/Cost Principles Contact Person Responsible for Corrective Action: Ahnaf Tahmid & Marlaina Johns Contact Phone Number and Email Address: 574-393-6000, atahmid@sbcsc.k12.in.us, mjohns2@sbcsc.k12.in.us Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: Human Resources worked with Regional Data Services to identify the cause of the issue and made corrections to prevent the data being lost on the administrative side moving forward. This involved updates to software stores and archives. Corrected Date 06/30/2025

Contact Person Responsible for Corrective Action Plan: G. Janina Trzmiel, Chief School Financial Officer Corrective Action Plan: We agree with the auditors’ comments and have taken the following actions: The Board will implement policies to ensure that all employees who begin to work under a federal or state fund sign certifications of all time working on a single award. Anticipated Completion Date: September 30, 2024

Item 2023-006 Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services (Repeat 2022- 008) Federal Grant/Contract Number: 10CH011215-03-03; 10CH011215-03 C3; 10CH011215-04; 10HE000901-01-C6 Grant period – 2022 & 2023 The HS program has established an internal process of requester/approver in place to review transaction requested. Documents then get reviewed again by HR or Finance staff based on the transaction type before getting processed.

In response to the noted deficiencies in salary rates and allocated costs, Management introduced Personnel Action Forms (PAFs) to document any changes in an employee’s salary or supervisory status. These forms ensure that salary adjustments are properly recorded and authorized in alignment with standard operating procecures and with the necessary supervisory approval. If a salary or supervisory status changes is due to a promotion or interim role, a formal letter accompanies the PAF, clearly outlining the terms of the change. These letters require signatures from the employee, their supervisor, and the CEO and are securely stored in the employee’s e-file with Human Resources. To further improve the documentation process, Management is transitioning to a new Applicant Tracking System (ATS) that integrates with Management’s PEO system, Paychex. This system allows for electronic distribution and automatic storage of offer letters, ensuring they are consistently filed and easily retrievable. These procedures reinforce the existing Payroll policy, ensures staff receive targeted training on relevant requirements such as timesheet approvals, and incorporates additional review measures into the payroll process. Furthermore, the Grants Director must review timesheets and payroll rates for allocations before payroll costs are requested for reimbursement. The payroll platform has been upgraded to manage employee pay rate changes, and the Human Resources manager is required to maintain approved documentation of pay rate changes in a centralized location, thereby ensuring full compliance with federal requirements relating to allowable salary costs and time and effort documentation. In addition, employees whose compensation is charged to federal awards complete biweekly time and effort certifications identifying the program or cost objective worked. Certifications are approved by the employee’s supervisor and retained in payroll records. Payroll charges to federal awards are based solely on certified time.

The department will adopt written policies with the Uniform Guidance for Federally Funded Grant Programs accepted by the department.

Contact Person – Benjamin Schafer, Executive Director Corrective Action Plan – Training will be provided for all employees involved with the grant if the Cooperative receives a similar grant in the future. Completion Date – As needed

Audit Finding: 2023-002 – Lack of Documentation of Review and Approval Planned Corrective Action(s): SIG-NAL will enhance internal controls by implementing formal review and approval processes for payroll, expenses, and financial reporting. The organization will require documented evidence (digital or written) of all reviews and approvals and will maintain these records in a standardized, centralized system. The Finance Team will ensure that all controls are performed and documented in accordance with 2 CFR Part 200 requirements. Updated internal control policies and procedures adopted in 2025 address these requirements and are being fully implemented. Anticipated Completion Date ● March 2026 Responsible Party ● Director of Operations, with support from the Finance Team and Executive Director