Corrective Action Plans

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

The Department of Human Services (DHS) adopted the electronic Timeforce (STATS) system for payroll, replacing manual processes. Time and attendance are approved through management levels, with payroll based on Notice of Personnel Action (NOPA) cost centers. Financial Analysts reconcile payroll, and a workflow ensures accurate NOPA listings for payroll purposes. Additionally, in order to ensure that Notice’s of Personnel Actions are updated on a timely basis, ensuring that salaries are charged to the respective account, DHS has implemented the following process: (1) Provisional Payroll Codes are requested prior to the close of the Fiscal Year by the Department of Finance through the Office of Management and Budget through the established process. (2) Once the codes are received, the Division of Human Resources will update the most current Personnel Distribution Sheets to reflect active employees. (3) The sheets will be submitted to Fiscal certification by the CFO, (4) NOPAS are updated with the provisional codes.

Once payroll is processed by the Department of Finance, on the payday, a Flex Earnings Report is generated by the staff. A reconciliation is performed to ensure that all employees and their respective fringe benefits are captured and drawn. The Department of Finance posts said payroll. Staffing continues to identify deficiencies in the posting which occur in varying periods after the actual pay day. DHS has incorporated into its internal controls a step to ensure that the accounts, in retrospect, are reconciled to the actual Flex earning report. DHS intends on meeting with the Department of Finance to identify the nuances that create postings to occur contrary to the Flex Earning Report account coding.

The Government concurs with the auditor’s findings and recommendations. VIDE is addressing audit findings related to payroll activities by enhancing internal controls to ensure compliance with federal regulations. Key measures include improving timesheet management through electronic submission, mandatory supervisor review, and secure storage. Additionally, VIDE will strengthen rate verification processes with a standardized checklist for comparing NOPA rates with payroll system rates, requiring payroll staff to complete it at each pay cycle and maintain a discrepancy tracker. Mandatory training sessions will be conducted for employees and supervisors to ensure understanding of the new policies, covering timesheet completion, rate verification, and adherence to guidelines.

VIDE acknowledges the audit findings regarding the Special Education Cluster payroll discrepancies and concurs with the recommendation. VIDE is taking immediate action to align payroll controls with established fiscal improvement plan. To address the pay rate discrepancies between NOPAs and the payroll register, the Budget Team and the Deputy Commissioner of Fiscal and Administrative Services will review and approve every personnel action in the ERP prior to the NOPA being executed. This review matches the action against the approved grant application or staffing list to ensure the pay rate is accurate before the payroll cycle begins.

VIDE acknowledges the audit findings regarding the Special Education Cluster payroll discrepancies and the unreported fraud incident and concurs with the recommendation. VIDE is taking immediate action to align payroll controls with the established fiscal improvement plan and to institutionalize a mandatory federal reporting protocol for fraud. To address the pay rate discrepancies between NOPAs and the payroll register, the Budget Team and the Deputy Commissioner of Fiscal and Administrative Services will review and approve every personnel action in the ERP prior to the NOPA being executed. This review matches the action against the approved grant application or staffing list to ensure the pay rate is accurate before the payroll cycle begins. To address fraud reporting, VIDE will implement a Federal Mandatory Disclosure Policy in strict accordance with 2 CFR §200.113 that designates the Office of the Commissioner and the Internal Audit Division as the responsible parties for reporting any credible evidence of fraud, bribery, or gratuity violations to the Federal awarding agency and the OIG. Accordingly, the specific incident cited in the finding regarding the $5,221 theft related to bus driver timesheets will be immediately reported to the U.S. Department of Education’s Office of Inspector General via the online hotline and formal written correspondence to cure the non-compliance. Furthermore, to prevent recurrence of the specific falsified timesheet scheme, VIDE will implement a Service Verification Log for bus drivers and similar service staff wherein supervisors will be required to cross-reference timesheets against daily trip logs or service logs before approving time in the payroll system. Finally, to ensure ongoing compliance, the Office of Fiscal and Administrative Services will conduct monthly spot checks of ERP logs to ensure pre-execution reviews are occurring, and the Internal Audit Division will maintain a log of all investigations to verify that a Notification of Federal Disclosure is attached to any file involving federal funds.

We acknowledge that some timesheets were currently unavailable because the employees in question are no longer employed at DPNR, and as a result, their user profile is no longer active within the system. We have requested assistance from the Department of Finance in retrieving the necessary timesheets unfortunately, the required information has not yet been provided. DPNR will continue to collaborate with the Department of Finance to ensure the retrieval of any relevant files or reports, and we remain committed to resolving all the findings. We recognize that these findings highlight areas where improvements are necessary to ensure better compliance with applicable policies and regulations governing payroll and grant management. We are committed to implementing corrective actions and enhancing internal controls to prevent recurrence.

The Government concurs with the finding. OTAG implemented enhanced payroll controls including a dual manual and electronic timesheet system, verification of pay rates against NOPA forms, and separation controls to discontinue benefit charges upon employee separation or retirement.

VIDE acknowledges the audit finding regarding the Child Nutrition Cluster payroll and concurs with the recommendation. Because this is a recurring finding from prior year 2022-023, VIDE will develop and institute stricter fiscal controls to address the root causes of documentation and allocation discrepancies for this program. To prevent discrepancies including unapproved project codes and pay rate mismatches between NOPAs and payroll registers, the Fiscal Team will take the lead in preparing and maintaining the official staffing list for federally funded personnel within this program, an effort that involves reviewing the grant application for all positions and informing HR of required action entries. Furthermore, VIDE will implement a control where the Budget Team and the Deputy Commissioner of Fiscal and Administrative Services will review and approve every personnel action in the ERP prior to the NOPA being executed to match the action against the approved grant application or staffing list and ensure the project code and pay rate are accurate before the payroll cycle begins. To address the unavailability of timesheets, the program will implement a strict reconciliation protocol wherein the Program Director or designee will verify that the payroll register aligns with approved timesheets prior to performing the drawdown and posting. These timesheets will then be digitally archived in a centralized SharePoint repository organized by pay period to ensure that time and effort documentation is securely retained and immediately available for audit review. To support these new protocols, mandatory training will be conducted for relevant staff and supervisors on these new timesheet procedures, federal time and effort requirements, and the new NOPA reconciliation workflow. Finally, the Office of Fiscal and Administrative Services will conduct monthly spot checks of the SharePoint repository and ERP logs to measure the effectiveness of these controls.

The Department of Human Services (DHS) adopted the electronic Timeforce (STATS) system for payroll, replacing manual processes. Time and attendance are approved through management levels, with payroll based on Notice of Personnel Action (NOPA) cost centers. Financial Analysts reconcile payroll, and a workflow ensures accurate NOPA listings for payroll purposes. Additionally, in order to ensure that Notices of Personnel Actions are updated on a timely basis, ensuring that salaries are charged to the respective account, DHS has implemented the following process: Provisional Payroll Codes are requested (1) Provisional Payroll Codes are requested prior to the close of the Fiscal Year by the Department of Finance through the Office of Management and Budget through the established process.(2)Once the codes are received, the Division of Human Resources will update the most current Personnel Distribution Sheets to reflect active employees. (3) The sheets will be submitted to Fiscal for certification by the CFO. (4) NOPA's are updated with the provisional codes.

Implement procedures to ensure supervisors’ approval of all federally funded timecards by a set deadline. HR will run a “missing timecard report” each pay cycle to ensure time cards are properly completed. Will conduct annual training on federal compliance requirements.

We acknowledge that the purchase of gift cards was not an allowable expense under federal grant guidelines. During the COVID-19 pandemic, our staff were tasked with responding to urgent and overwhelming public health demands, particularly as the New Mexico Department of Health became overextended. To recognize staff who went above and beyond to ensure timely case reporting and investigations for tribal communities, gift cards were used as a form of appreciation. Moving forward, we will ensure full compliance with federal grant requirements. Specifically: 1. We will adhere strictly to the cost principles and allowability guidance outlined in federal regulations and the terms of each Notice of Award. 2. In instances where the allowability of an expense is unclear, we will proactively seek guidance and written approval from our Federal Grant Management Officer before incurring the cost. 3. We will provide refresher training to program and fiscal staff on allowable costs under federal awards to prevent recurrence of similar findings. These corrective actions will ensure future expenditures are fully compliant with federal guidelines and that staff recognition practices remain appropriate, allowable, and consistent with award terms. • Immediate (Already in Effect): Ceased use of gift cards and other unallowable incentives. • Within 30 Days: Finance and program leadership will review current grant guidance and distribute a written summary of allowable/unallowable costs to all program managers. • Within 60 Days: Refresher training on federal cost principles (2 CFR 200) and Notice of Award guidance will be provided to all program and fiscal staff. • Ongoing: When ambiguity exists regarding allowable costs, staff will consult with the Federal Grant Management Officer prior to obligating or expending funds. Designation of Employee Position Responsible for Meeting Deadline Program Managers/Directors, Finance Officer, and Accounting Manager.

FINDING 2023-005 – Allowable Costs: Significant Deficiency over Internal Controls over Compliance Condition/context – In a sample of 25 payroll disbursements and 25 non-payroll disbursements, it was found that time and effort for 11 salaried employees were not supported by documentation for the allocation. The sample of non-payroll disbursements had 4 transactions without the documented methodology or support for the allocation between programs. Corrective Action Plan: • Implemented a formal time and effort reporting process (Allocation Method) for all employees whose salaries are charged to more than one funding source, in compliance with federal requirements. • Developing and enforcing a standardized cost allocation methodology for shared non-payroll expenses, ensuring documentation is retained for all allocation decisions. • Training program and finance staff on allowability and allocation requirements under 2 CFR Part 200. • Periodically reviewing cost allocations to ensure continued reasonableness and compliance with applicable grant terms. • Policy and Procedures updated/Staff Training on new Timesheet processes Name of Contact Person: Chris Flaherty, Chief Executive Officer 707.890.6491 Laura Williams, Chief Financial Officer 707.335.0010 Projected Completion Date: Corrected: September 2025