Corrective Action Plans

Action Taken: The Organization is now aware that utilization of budget estimates is not allowed for charging payroll and will utilize proper accounting treatment going forward.

Finding Reference Number: SA2022-004 Documenting Payroll Costs Charged to Grant Assistance Listing Numbers: 20.507 Assistance Listing Title: COVID-19 – Federal Transit Cluster - Formula Grants (Urbanized Area Formula Program) Name of Federal Agency: Department of Transportation Federal Award Identification Number: CA-2019-111-01, CA-2020-141-00 • Fiscal Year of Initial Finding: 2022 • Name(s) of the contact person: Isaac Moreno, Finance Director • Corrective Action Plan: The City of Turlock will immediately begin to perform time studies of those individuals whose time is charged to grants and use the results of the time study to determine the allocation percentage, in order to address this finding. • Anticipated Completion Date: 6/30/2024

Audit Finding Reference: 2022-001 Improve Time and Effort Documentation Planned Corrective Action: We understand the importance and requirement regarding this finding. Semi-Annual certification of all staff funded fully out of grants will be completed. Monthly Time and Effort certifications will be completed for all staff funded out of multiple accounts, grant or local. Stipend and Payment for additional work forms will be completed for all staff supporting grant funded activities outside of contractual time. These forms will be re­ viewed and maintained by Grant administrators. The district will use forms created and recommended for use by Massachusetts Department of Elementary and Secondary Education. Sample forms are attached. Name of Contact Person and Completion Date: Laureen Cipolla, Accountability and Student Achievement, laureen.cipolla@leominsterschools.org 978-537-7700 x l345 Anticipated date of completion - 6/30/23

The District will review the Uniform Guidance requirements and ensure all expenditure adjustments are well supported with information to help ensure the federal monies are used on program activities as prescribed in the grant agreements.

Finding 2022-002 Internal Controls over Allowable Costs The auditors recommend the following: 3. Management implement procedures to ensure all expenditures are properly reviewed and approved, and supporting documentation maintained in accordance with federal regulations. Context SDA was unable to produce backup for several invoice payments and evidence of one Time & Effort Certification for allocation to specific grants. Staffing Corrective Action SDA continues to have an outside accounting firm conduct a semi-annual review of financial statements and invoice documentation in advance of the official audit process. The addition of internal staff provides audit support needed to validate that the new systems, procedures and processes implemented by SDA to correct the 2022 audit findings. Process Corrective Action In 2023, SDA introduced training for managers on the requirement of Time & Effort Certification submission for all staff and contractors who are working on grant-funded projects. The updated process requires Mangers to approve a signed Time & Effort Certification with any invoice approval. The Director of Finance and Administration will rigorously enforce the SDA policy that all invoices, receipts, and Time and Effort Certifications must be submitted to receive payment for any work completed. Systems Corrective Action In mid-2023, SDA implemented a centralized and password protected e-filing system to hold all important records for all programs and every area of the business including finance, human resources, and administration. To further ensure that all payments made by the organization have appropriate invoice backup, Bill.com, an invoice and payables tracking system, was implemented fully in 2023 with an approval chain that houses evidence of all transactions.

Payroll and Personnel Files Significant Deficiency in Internal Control over Payroll and Personnel Files - Accurate and Completeness of Personnel Files During the month of August, the Office of Human Resources and Labor Relations was audited by the ADA. It is to this that we respond to the findings indicated in the audit, as follows: Over the past few years we have developed an internal control, using a document entitled Check sheet, which contains the list of documents required for the appointment of employees and another for the audit of files. It contains three columns for the collation of documents required by the Analysts of the Appointments and Changes Section and ends with the collation of the Division Supervisor, before being referred to the Personnel Officers of our regions. This document has been modified according to needs, changes, procedures and new regulations. It is important to mention that many of our audited personnel records pertain to employees appointed in years where the required requirements or documents were minimal, and no evidence was required or maintained in the personnel file. Related to the academic preparation contained in the personnel files, they are documents required by the Recruitment and Selection Section and these respond to the minimum requirements and alternatives of the class, according to the Agency's Classification Plan. Each class specification sets minimum requirements for the position the candidate will hold. On the other hand, when the previously known Administration of Health Services Facilities (AFASS) closed in 1999, its employees went to the Department of Health with the file they had, whose procedures and processes were not uniform to those of our Agency. The Regions and Hospitals have delegated the verification of documents, to work on appointments and other personnel transactions, such as job reclassifications, promotions and others. This delegation brings the process of standardizing and authorizing DSP-29 by the Recruitment and Selection Section, to ensure that it is complied with as established in the Classification Plan. The agency is in the process of updating these documents as long as a change in the employee's job classification is applied. These are transactions that allow us to update the employees’ record to the new class they will occupy. In the case of Doping Test results, we mention that these are found in the Medical Record of each employee. By HIPPA law, these are not filed in the personnel file. Of the aspects pointed out in the audit, the Department of Health has developed greater review and audit measures by the analysts of our agency, before the defunct Quality Control Section, who watched over and audited the personnel files of the Regions, providing control and compliance with the documents required according to the Regulations and Standards that govern the Office of Human Resources and Labor Relations. The Office of Human Resources presented a work plan to implement an effective and efficient personnel file review procedure to comply with and improve the agency's personnel processes and transactions.

Finding: 2022-005: Significant Deficiency in Internal Controls over Compliance – Allowability– Payroll Transactions Name of Contact Person: Shema Jones CFO Catholic Community Service 1803 Glacier Highway Juneau, AK 99801 Corrective Action: • All payroll journal entries will be reviewed and approved by program staff and the Controller since the Staff Accountant prepares the journal entries. • CCS will implement a process for Controller to review payroll entries after they are imported for accuracy between Paycor and the accounting system. • CCS will be looking into whether program staff should start direct charging their time. CCS will set up an after- payroll review to be done by program and finance/HR to review for any possible errors missed prior to running payroll. If errors are found, corrective entries will be made immediately. Also, we will be looking into whether an indirect rate would simply our very complicated allocation system we currently use. Additionally, program staff will review all new or adjusted allocations in Paycor. • Program staff will review all new or changed payroll allocations for employees they supervise. • Detailed allocation reports will be sent to program staff for review. • Program staff are to review preliminary and final reports monthly to check for any discrepancies. • The finance staff currently looks at reports monthly for discrepancies. Proposed Completion Date: 2/28/23

Personnel costs will be charged to the program based on actual time recorded in the organization’s case management software. Hours will be audited quarterly to ensure accuracy and completeness. The Center notes that the grantor, the State Bar of California, never requested the Center to charge payroll expenses to the program based on actual time documents, nor had they ever noted this discrepancy during their periodic audits of the program.

The School System concurs with the auditor’s findings and recommendations. As an on-going effort, the process for creating pay elements for specialized compensation will be monitored for accuracy during the creation stages. Electronic alerts generated in the oracle system will be re-employed to notify appropriate finance personnel when new elements are created by the Payroll Department to ensure the distribution accuracy of salary expenses along with applicable fringes to the appropriate grant accounts. This will prevent manual journal entry realignment postings of large data sets of salary and fringes to the primary assignment costing versus accounts created specifically for specialized pay that is approved in the respective grant application as an allowable cost.

Coronavirus State and Local Fiscal Recovery Funds _ Assistance Listing No. 21.027 Recommendation: We recommend that the Association adopt a formal policy for tracking employee time and effort supporting grant expenses. Additionally, management should summarize the actual time employees spend on grant award programs and adjust the budgeted cost allocations to reflect the actual time spent. A second person knowledgeable of grant award requirements should review the time and effort summaries for proper completion and recording. This will help ensure that internal contols over compliance are established and will help ensure that cost charged to grant award programs are supported and allowable. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Staff now complete a Time and Effort Certification form from the State of Arzona for each pay period to reflect time spent on each grant. Name(s) of the contact person(s) responsible for corrective action: Frank Caruso, Director of Finance and Operations. Planned completion date for corrective action plan: Already corrected, January 2023.

Community Partners acknowledges that payroll costs did not consistently have sufficient documentation to support the hours charged to the program. Prior leadership did not establish clear guidelines for staff and program personnel to emphasize the time and effort requirements of federal awards. Current management has implemented guidelines and review procedures to ensure that compliance staff verify that hours charged to programs are appropriately supported. The person responsible for the corrective action detailed above will be Joyce Williams, Chief Financial and Operations Officer, (213) 346‐3202. We anticipate corrective action will be completed by June 30, 2024.

FA 2022-001 Improve Controls over Employee Compensation Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 – National School Lunch Program Federal Award Number: 225GA324N1199 (Year: 2022) Questioned Costs: $41,309.92 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over the employee compensation process as it relates to the Child Nutrition Cluster. Corrective Action Plans: The Hancock County School District has updated the internal controls over the employee compensation process as it relates to the Child Nutrition Cluster and has corrected the employee codes for the director and former director to ensure that the correct employees are paid from CNC. Estimated Completion Date: June 30, 2024 Contact Person: Matthias Jones, Finance Director Telephone: (706) 444-5775 Ext. 125 Email: mjones@hancock.k12.ga.us

Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Substance Abuse and Mental Health Services Projects of Regional and National Significance Assistance Listing Number: 93.243 Federal Award Identification Number and Year: H79TI081935 – 2022, H79TI080298 – 2022, H79TI085517 – 2022 Pass-Through Agency: Pierce County Pass-Through Number(s): SC-107323, SC-105454, SC-110121 Award Period: May 31, 2019 through May 30, 2024, September 30, 2017 through September 29, 2022, September 30, 2022 through September 30, 2027 Criteria or specific requirement: 2 CFR 200.430(i)(1)(viii) states that “budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim changes made to a Federal award based on budget estimates. All necessary adjustments must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: Grant hours are not consistently tracked on the employee monthly timesheet. Wages charged to the program are based on budgeted estimates. Per 2 CFR 200.430(i)(1)(viii), this is not allowed without additional steps to ensure accuracy, allowability and proper allocation. Insufficient evidence was presented to support a reasonable reflection of employee federal and non-federal activity. The alliance does not have a written policy nor system of internal controls to review and true-up grant wages to actual. Questioned costs: $447,634 Context: A sample of 40 was made from a population of 504 transactions charged to the major program for salaries and benefit expenses. Of the 40 sampled costs, all were found to be out of compliance with the provisions for 2 CFR 200.430 Compensation - personal services of Uniform Guidance. Sampled wages totaled $137,021.54. Total salaries and wages totaled $971,744 of the $1,599,883 tracked to the major program. Extrapolating the error to the actual costs reported on the SEFA results in a likely questioned cost amount of $447,634. Cause: Management was aware that estimated budgeted costs alone are not sufficient to support personnel costs charged to Federal awards. Effect: Charging grant wages based on estimates rather than actual hours worked on the program may raise compliance concerns. Estimating grant wages without adequate support for time and effort documentation may result in noncompliance with grant regulations. This can also lead to overcharging or undercharging the federal grant, which may result in penalties or repayment obligations. Repeat Finding: No. Recommendation: We recommend that the Alliance incorporate a system of internal controls that clearly documents the time and effort that each individual employee spends on each grant per month. This can be done by adjusting the format of the monthly timesheet to include a column that specifies how many hours per day were spent on which federal and nonfederal activities. PCA can further enhance clarity, accountability, and transparency by moving from a "day" format to an "hour" format on their timesheets. View of Responsible Official: Pierce County Alliance has enjoyed the decades long relationship with our prior audit firm. We had been advised to record staff time on an hourly basis. We were then redirected to record time on a daily basis. However, with this recommendation, we are being redirected to record on an hourly basis. At no time has a finding been previously issued on how staff time is recorded, on timesheets or on the back end of our third-party payroll software. Corrective Action: Pierce County Alliance will reinstitute an hourly timesheet format in order to account for positions with multiple funding sources.

Finding 2022-002: Allowable Costs/Cost Principles U.S. Department of Health and Human Services- Passed through DHS- Tit le IV-E Foster Care (ALN 93.658) Condition: During our audit, it was noted that there was no process in place to ensure that payroll costs were alloca ted among grant funded programs in accordance with the Uniform Guidance. During our testing, we noted that payroll was allocated based on a semi-annual time study. The time study wa s used to allocate the payroll costs for the year, without determining if the semiOannual periods were representative of the time worked by employees for the remainder of the year. Criteria: The Code of Federal Regulations (2 CFR 200.430) requires that payroll costs be allocated in an equitable manner. Cause: The County Children's Services department does not have adequate procedures in place to verify that payroll costs are allocated in an equitable manner in accordance with the Uniform Guidance. Effect: The County Children's Services department may not be allocating payroll costs equitably. Questioned Costs: The amount of questioned cost, if any, is not able to be determined. Recommendation: We recommend that the County Children's Services department establish procedures that provide a system and related documentation to support an equitable allocation of payroll costs. Management Response: The Department reviews the staff time study categories every six months (Staff time studies are conducted in May and November). The Department will now review the staff time study categories every three months to determine if the staff percentages are accurate. This three-month review will be added to the time study policy and will include discussions with each supervisor to confirm the staff categories. This confirmation will be documented on the staff category listing. Anticipated Completion Date: Immediate

Finding No. 2022-003 Area: Allowable Costs/Cost Principles Views of Auditee and Planned Corrective Action Condition 1. Disagree with the finding. The Education Stabilization Fund (ESF) of the Public System was awarded to and was designed to provide additional funding (supplement) support to the local school system (PSS) as a result of the impact of the COVID-19 pandemic. Background: On March 16, 2020 PSS suspended classroom instruction, ease central office operation to a certain level, implemented furloughs, and effectuated cost-containment initiatives, among drastic measures to mitigate the crisis brought about by the pandemic. Of the public elementary, middle, and high schools on Saipan, Tinian, and Rota, only one school - Kagman Elementary School - was provided limited instruction (during summer of 2020). Kagman Elementary School was the first to reconfigure its facilities to maintain a safe (social distancing) facility for in-person student learning. The $480,743 as cited (Condition 1) was an ESF-approved and sanctioned funding allocation. However, the change in funding source was initiated after the payroll processing. And in order to reflect the correct funding source, the JE adjustment was initiated. Due to JE limitation these entries are not reflected to “subsidiary” ledgers. Condition 2. Disagree with the finding. Cited in this finding were three (3) 190-day employees. The 190-day employees worked for ten months, however, their pay is stretched out over a period of twelve months. Further, these pay periods are inclusive of the days that they are not supposed to report to work including summer months. Hence, no timesheet(s) is/are required. Anticipated Completion Date: N/A Name of Contact Person and Title Contact Person – Arlene Lizama, Director of Finance Contact – arlene.lizama@cnmipss.org

FINDING 2022-006 Finding Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Summary of Finding: Finding: Documentation for 3 employees was not available to verify the contract amounts. Recommendation: Documents be retained to support amounts paid. Contact Person Responsible for Corrective Action: Kareemah Fowler, Assistant Superintendent of Business and Finance Contact Phone Number and Email Address: (574) 393-6088; kfowler@sbcsc.k12.in.us Views of Responsible Officials: We disagree with the finding. Explanation and Reasons for Disagreement: While we agree that the single source document used by the State to validate a teacher’s contract was not available for 3 employees. We provided sufficient alternate documents that would allow the State to validate the contract amount being paid, and whether the proper employees were paid from or should have been paid from the Education Stabilization Funds. The documents provided sufficient data to support the questioned cost of $26,207 outlined in the finding. We will be working with our software vendor to rectify the glitch that prevented us from providing the documentation requested by the State for future audit. Description of Corrective Action Plan: We will be working with our software vendor to rectify the glitch that prevented us from providing the documentation requested by the State. Anticipated Completion Date: January 2024

FINDING 2022-003 Finding Subject: Title I Grants to Local Educational Agencies - Allowable Costs/Cost Principles Summary of Finding: Finding: Documentation for 10 employees was not available to verify the contract amounts. Recommendation: Documents be retained to support amounts paid. Contact Person Responsible for Corrective Action: Kareemah Fowler, Assistant Superintendent of Business and Finance Contact Phone Number and Email Address: (574) 393-6088; kfowler@sbcsc.k12.in.us Views of Responsible Officials: We disagree with the finding. Explanation and Reasons for Disagreement: While we agree that the single source document used by the State to validate a teacher’s contract was not available for 10 employees. We provided sufficient alternate documents that would allow the State to validate the contract's amount being paid, and whether the proper employees were paid from or should have been paid from the Title I funds. The documents provided sufficient data to support the questioned cost of $203,488 outlined in the finding. We will be working with our software vendor to rectify the glitch that prevented us from providing the documentation requested by the State for future audit. Description of Corrective Action Plan: We will be working with our software vendor to rectify the glitch that prevented us from providing the documentation requested by the State. Anticipated Completion Date: January 2024

We will be performing a reconciliation between HR and Payroll to ensure that individuals being paid by a grant are documented correctly and paid according to that documentation.

We agree with this finding regarding the allocation of payroll costs for one-time bonus payments. We have taken steps to correct the issues identified and during June 2023 we modified our procedures for allocation of payroll costs to federal programs. In June 2023, we changed our payroll processing vendor. This will allow us to have better controls over our payroll processing. We will make sure all staff certify their time and effort expended for each payroll.

Recommendation: We recommend that the University increase the time and effort certification process to be more timely. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action in Response to Finding: Sponsored Projects Administration (SPA) will decrease the amount of the time between the end of the semi-annual reporting periods and distribution of the Personnel Activity Reports (PARs). Deadlines for either certifying that the charges to sponsored awards reported on the PARs reasonably reflects the work activities for those projects or notifying SPA that salary adjustments are required. SPA will send reminder notices periodically prior to the deadline. After the deadline for the reporting period, past due notices will be sent repeatedly after the deadline until certification or notification of adjustments is received. SPA will establish a system for accepting change notifications and closely monitor the status of retroactive labor adjustments so that updated PARs can be issued, reviewed, and certified in a timely manner. Name of the contact person responsible for corrective action: Dawn Boatman, Assistant Vice President for Research Administration Planned completion date for corrective action plan: July 1, 2023

Recommendation: We recommend that the University increase the time and effort certification process to be more timely Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action in Response to Finding: Sponsored Projects Administration (SPA) will decrease the amount of the time between the end of the semi-annual reporting periods and distribution of the Personnel Activity Reports (PARs). Deadlines for either certifying that the charges to sponsored awards reported on the PARs reasonably reflects the work activities for those projects or notifying SPA that salary adjustments are required. SPA will send reminder notices periodically prior to the deadline. After the deadline for the reporting period, past due notices will be sent repeatedly after the deadline until certification or notification of adjustments is received. SPA will establish a system for accepting change notifications and closely monitor the status of retroactive labor adjustments so that updated PARs can be issued, reviewed, and certified in a timely manner. Name of the contact person responsible for corrective action: Dawn Boatman, Assistant Vice President for Research Administration Planned completion date for corrective action plan: July 1, 2023

FINDINGS - FEDERAL AWARD PROGRAMS AUDIT SIGNFICANT DEFICIENCY/COMPLIANCE 2022-01 Procurement Policies and Procedures Recommendation: Quotes should be obtained whenever possible when purchases are expected to be between $10,000 and $250,000. If purchases are to equal or exceed $250,000, the proper bidding procedures should be followed. Bidding procedures, quotes, and efforts to give preference to minority or women-owned businesses should be documented, including documenting if bids or quotes could not be obtained. A procurement policy should be established as soon as possible and an individual should be assigned to monitor the implementation of the policy. Action Taken: The Organization has begun the process of establishing a procurement policy and have it completed by March 16, 2023. The Organization will also go back to purchases starting July 1, 2022, that exceeded the micro purchase threshold of $10,000 and prepare the required documentation as listed in the recommendation. This will be completed by April 30, 2023. Any purchases exceeding the micro purchase threshold of $10,000 going forward will be supported by the required documentation.

Wabanaki Public Health and Wellness received our FY21 audit in April 2023, which did not allow for the changes to be made in time for FY22. The corrective action plan from FY21 continues to be our course of action and will be fully implementing the following to ensure compliance in FY23. Wabanaki Public Health & Wellness has transitioned to an allocation-based payroll in the summer of FY 2022. This change was determined the best practice for the organization to help set standards for forth coming periods. The payroll process is timely and consistent with the allocation base. Staff will maintain clocking hours for time worked, after each quarter a review of actual time spent on grants is compared to the allocated time for each grant. These times studies will the determine the reconciling JE, if any, will be processed to show the actual amounts due for the grants. The time studies will effectively assist in the allocation for the next quarter to determine how each staff member is allocated for payroll. Each WPHW staff member will receive a certification letter for them to review and sign to verify the hours in which they have worked. These certification letters will be built by the Senior Accountant that oversees the payroll entry process. The Director of Finance will have a review process to verify that all staff members have had a full-time study review and that certification letter are correct before staff receive them and the Financial Quality and Compliance Manager will review entire process for each of the first two quarters. Through the multi-step review the overall payroll allocation and expenditure process will be more defined and follows the internal control processes. After receiving the FY22 audit we will be switching back to time-based payroll processing based on actual hours posted by staff. Beginning effective 3rd quarter FY23 our payroll process will remain with Director of HR and the Financial Quality & Compliance Manger reviewing and submitting payroll through TRAXpayroll. The accounting team will then use the Project hours report from Bamboo HR, directly tied to staff time sheets, to input the data for actual hours worked into the payroll workbook to build the JE for each remaining payroll for FY23. The JE will be entered into the financial software prior to the federal draw. Person(s) Responsible: Beth McLean Timing for Implementation: Summer 2023

Condition: Time records provided to support salaries and wages charged to the school lunch revolving fund were not approved by supervisory personnel. Corrective Action Planned: The District has implemented procedures utilizing time clock systems. The Administrative Assistant assigned to the Food Service Program reviews the system report to verify hours worked and absences. The report is then printed, reviewed and signed-off by the Food Service Manager prior to submitting the wage/hourly report to payroll. Anticipated Completion Date: January 2023 Contact: Ronald D. Tarro, Director of Business & Finance

Program: AL 20.509 ? Formula Grants for Rural Areas ? Allowability & Subrecipient Monitoring Corrective Action Plan: The Controller Division, Audit Section, will provide support through continued engagement and work collaboratively as an additional resource to the NDOT Transit staff and transit recipients. NDOT Transit staff in collaboration with the Controller Division will be improving the standard operating Procedures which will be utilized for the in-depth review of monthly invoices moving forward. Contact: Khalil Jaber Anticipated Completion Date: Ongoing