Corrective Action Plans

Finding Number 2024-003: Activities Allowed or Unallowed; Allowable Costs/Cost Principles and Matching – Significant Deficiency in Internal Control Over Compliance and Noncompliance Corrective Action: In the immediate term, oversight of the manual process for preparing the Time & Allocation Excel Sheet and Request for Reimbursement (RFR) payroll calculations will be strengthened. Policies will be implemented to ensure quarterly attestations, timely budget-to-actual reconciliations, and documented review of reimbursement requests. Management will also work with the Payroll Service Provider to implement software upgrades that improve allocation accuracy and reduce errors through straight-through-process improvements. Name of Responsible Individual(s): Jason Brenier, Judy Bokhari, and Luz Gonzales-Toscano Anticipated Completion Date: January 2025 – immediate term and December 2026 software implementation.

We will continue to enforce and refine the internal controls implemented in April 2024. Records will be reviewed regularly to ensure compliance. This will be added to the finance and operation manual

Finding: 2024-002 Improper Approvals of Payroll Name of contact person: Vince Collins, Executive Director Corrective Action: the Organization started its formal approval process for pay raises and pay changes during 2025. As a part of the Organization’s remediation they created formal agreements and pay raise letters for approvals. Proposed Completion Date: Before September 30, 2025, the Organization’s 2024 audit period single audit submission deadline.

Effective January 1, 2025, employees are required to complete a monthly Personnel Activity Report (PAR) where the employees document the percentage of time they spent for each grant/program during the month with a brief description of the work performed for each project. The completed form is signed by the employee and their supervisor, then retained for our records. Effective September 1, 2025, monthly PARs will include contemporaneous certification by the employee that the distribution of hours worked is correct.

EPHC uses a third-party vendor to process payroll. This system does not have the capability to allocate salaried employees based on time spent on the program recorded in the time keeping system. Because of this, the hours worked in each program need to be converted into percentages before payroll is submitted for processing. To ensure accuracy, EPHC will have a second reviewer confirm the manual entry conversion from hours worked to percentage of time worked for salaried employees for the remaining duration of time in a third-party payroll system. Effective January 2026, EPHC will implement a new payroll system that will be processed in-house. This system has improved functionality that will eliminate the need to make this conversion and the potential for errors.

Condition In two instances, the amounts recorded in the General Ledger (GL) did not match the corresponding amounts recorded in the payroll system. Corrective Action Plan Corrective Action Planned: Efforts were taken to verify Dayforce is configured to allocate salary expenses to an employee’s home agency and department, regardless of where the employee assigns their hours in the timekeeping system. While the timesheet programmatic reflects the agency and department where hours and dollars are functionally charged, the payroll register aligns with the General Ledger based on home agency coding. As a result, the Payroll Register and General Ledger will reconcile with each other but may not align with programmatic reports, which are based on timesheet-level allocations. This system behavior is consistent with current configuration and financial reporting practices. The Payroll Department and the DHHS will meet in Q3 2025 to ensure grant/expense tracking activities are working as intended. Name(s) of Contact Person(s) Responsible for Corrective Action: Sue Drummond, Director Payroll & HRIS Interface Anticipated Completion Date: Completed January 2025.

For payroll, procedures will be implemented to ensure that payroll costs allocated to federal grants are supported by actual time. For nonpayroll, procedures will be enhanced to ensure proper allocation of nonpayroll costs to federal grants. Allocations will be reviewed and monitored on a monthly and quarterly basis to prevent misallocation and ensure compliance with the Uniform Guidance. Personnel Responsible for Implementation: Executive Director Christy Zamani, and Beaulieu Accountancy Corporation Date of Implementation: August 5, 2025

Management will update the entity’s accounting policies and procedures to include specific guidance on payroll allocation and documentation requirements for personnel expenses charged to Federal awards.

Planned Corrective Action: The District is in the process of reviewing and updating controls to ensure required time and effort logs are kept in the District's fiscal management system and routine submission of forms is enforced by the grant managers. Anticipated Completion Date: June 30, 2026 Responsible Contact Person: Marleni Bruner, Joanette Thomas, Lisa Robinson

Comments on findings and recommendations The organization concurs with the finding and agrees that after-the-fact time documentation is necessary to comply with federal requirements, even when employees' assignments and hours are consistent. Actions taken or planned The organization has performed a time-study during 2024 to support allocations to programs and has been implemented in 2025. Anticipated completion date January 1, 2025

Finding 2024-010 – Material Weakness – Allowable Costs/Cost Principles Condition The District supports time charged to federal awards via semi-annual certifications which are approved by the grant administrator or the building principal. In order for a cost to be supported at the time of final reimbursement, the semi-annual certifications should be approved by the grant administrator or the building principal. Title I Grants to Local Educational Agencies (ALN 84.010) The final reimbursement claim for the Title I Grants to Local Educational Agencies (Title I) program were due to Wisconsin Department of Public Instruction (DPI) on September 30, 2024; however, the final reimbursement claim for the Part A award was not submitted to DPI until November 18, 2024, and the CSI award was not submitted to DPI until October 1, 2024, due to an extension. Five of the 40 individuals sampled had their semi-annual certifications not approved timely and were approved after the due date of the final reimbursement claim, but before the date of the actual submission of the final reimbursement claim. An additional two individuals of the 40 sampled had their semi-annual certifications approved after the final reimbursement claims were submitted. Upon further review of all the spring semi-annual certifications for the Title I awards, there were an additional 50 individuals that had their semi-annual certifications approved by the principal after the due date of the final reimbursement claim but before the submission of the final reimbursement. Additionally, nine individuals had their semi-annual certifications approved after the final reimbursement date of the Part A award and another 59 individuals from Part A did not have their semi-annual certifications approved at all. Head Start Cluster (ALN 93.600) The final reimbursement claim for the program was submitted to the Federal agency on November 22, 2024. Four of the 40 individuals sampled had their semi-annual certifications approved by the Head Start administrator after the submission date of the final reimbursement claims. Upon further review of the all the spring semi-annual certifications, there was an additional individual that had their semi-annual certifications approved by the principal after the due date of the final reimbursement claim and another four individuals that did not have their semi-annual certifications approved at all. The samples were not statistically valid. Corrective Action Plan The Office of Finance agrees that it is important that certifications be completed in a timely manner and award reimbursements are submitted within the deadlines. The Office of Finance and the District as a whole is working on improving its internal controls system wide. We are committed to developing sound processes and procedures that are in full compliance with federal and state regulations. An example of a process improvement is to send out reminders on a regular schedule to school leaders and central office employees for programmatic compliance. These activities will be completed in advance of due dates going forward to ensure timely submission of grant claim reimbursements. Annual training for school leaders and central office staff is also part of the process improvement plan underway. Name(s) of Contact Person(s) Responsible for Corrective Action: Chief Financial Officer, State and Federal Programs Director, Comptroller, Grant Accounting Manager Anticipated Completion: 06.30.2026

The Board of Health will adopt updated written policies periodically in accordance with the Uniform Guidance to help improve internal controls over federal compliance for the findings listed in this number.

Finding 2024-02 Insufficient Documentation of Personnel Expenses Condition: The Organization charges a material amount of payroll-related costs to its major federal program. However, it does not maintain sufficient documentation to support the level of effort charged to the award, as required by federal regulations. While staff members are required to complete timesheets, the current format does not capture the level of detail needed to substantiate payroll allocations to federal programs. Additionally, there is no formal process for supervisory review and approval of these timesheets. Although no overcharges or double-dipping were identified, the lack of adequate documentation results in known and likely questioned costs due to noncompliance with documentation requirements. Corrective Actions Taken or Planned: The Organization will develop and implement a standardized timesheet template (Gusto) that captures employee name, pay period, hours worked by funding source, and supervisory approval. Provide mandatory training for all staff whose salaries are charged in whole or in part to grants on documentation and time allocation requirements. Require monthly reconciliation of time sheets to payroll records before submission to grants. The Organization will conduct quarterly internal reviews to ensure compliance and adjust as needed.

Due to limited staffing resources, the Organization was not able to ensure maintenance of adequate documentation. The Organization has made efforts to ensure that proper documentation is maintained and accessible by necessary staff.

Family Star acknowledges the FY24 finding related to labor allocation. During that fiscal year, the organization experienced several operational challenges, including insufficient documentation and oversight of labor allocation reporting. These administrative issues were contributing factors in a broader leadership restructuring, which included the elimination of five middle management positions. As a result, responsibilities for labor allocation were reassigned to ensure proper oversight. Since that time, Family Star has already taken intentional steps to strengthen internal controls and improve the accuracy and consistency of key administrative functions. Labor time reporting is now aligned with organizational slot distribution across programs and funding sources to ensure compliance and transparency moving forward. To further reinforce accountability, we have implemented a new monthly monitoring procedure. On the first Wednesday of each month, the Senior Director of Community Partnerships and the HR Specialist jointly review and archive labor allocation records. This process ensures allocations are preserved, updates are made in a timely and compliant manner, and labor costs are supported by accurate documentation. These measures are designed to increase transparency, enhance internal controls, and ensure labor allocations are properly managed going forward.

2024-107 Review of Reimbursement Request Did Not Detect an Error in Amount Reported Condition: The September 2024 reimbursement request included wages paid in August 2024 instead of September 2024 in error. This is not a systemic problem but an isolated occurrence resulting in an immaterial difference in the amount reimbursed and the amount that should have been requested for September 2024 wages paid. Corrective Action Planned: We acknowledge the finding and have strengthened our review process for reimbursement requests to prevent similar errors. Finance staff verify payroll periods against reimbursement periods before submission, and supervisors perform an additional review. This process includes careful cross-checking against the appropriate pay periods. This was an isolated occurrence with immaterial impact, but corrective steps will ensure accuracy in future requests. Person Responsible for Corrective Action: Robert Thompson, Chief Executive Officer Anticipated Completion Date: Implemented

2024-106 Lack of Time and Effort Documentation Policy Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. Corrective Action Planned: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward. Person Responsible for Corrective Action: Robert Thompson, Chief Executive Officer Anticipated Completion Date: October 2025

Type of Finding: Significant deficiency in Internal Control over Compliance relating to inadequate allocation of wages to federal programs may result in noncompliance with grant regulations. Views of Responsible Officials: Management accepts this finding. Effective internal control over the allocation of wages to federal programs ensures we remain in compliance with allowable costs. In one region, two employees in ADP were not set up correctly to ensure the proper allocation of hours worked per the timesheets to the associated job cost centers. Training of staff along with additional supervision over allocations would likely have prevented this error. Corrective Action: The set up of all employees has been reviewed and now corrected. In addition, new employee set up will be reviewed by a designated staff member to ensure consistency. A new report has been developed that will be reviewed for each pay period to ensure all employees, allocating their time are set up properly.

2024-001 Head Start – Assistance Listing No. 93.600 Significant Deficiency in Internal Control Over Compliance and Noncompliance – Inadequate Payroll Review and Documentation B. Allowable Costs/Cost Principles Recommendation: The auditor recommended that management establish detective controls to ensure payroll expenses are being charged consistent with established policies and approved allocations. Action Taken: We agree with the recommendation and portions of the plan were implemented in February 2024, while the remainder was implemented in July 2025. In January 2024, the ELI team reviewed team members and their respective salary allocations, specifically for the Early Head Start program. Allocations were documented and updated in Axiom, ELI’s payroll system of record. Those allocations were then updated in early February 2024 and regular meetings to review, document and update allocations as needed, have since been held on a consistent basis. The secondary piece, corrected in July 2025, was a system correction for allocation of PTO and Holiday pay, those were not being allocated to EHS consistent with the agreed upon allocations and not going to EHS as they should have been. This has been corrected in Axiom and the ELI accounting team will now perform regular reviews to confirm allocation in agreement with the agreed upon amounts. In addition, correcting entries for 2024 and 2025 will be made by August 31, 2025.

Management will continue to reinforce utilization of the time tracking system that was implemented in 2024. In addition, management will ensure that the timecards submitted by staff are reviewed and approved timely.

Gateway Domestic Violence Services, in 2024, was utilizing paper timesheets that included the funder allocation for each staff person. The funder allocations were then entered into QuickBooks spreadsheets. In February of 2025, we engaged with Paychex Payroll Services which utilizes simple online software built to streamline payroll and automate taxes. It does include a job costing process that allows for identifying payroll costs to be distributed appropriately to funders. This electronic payroll system decreases the chances of human error. Also in August of 2025, there is a change in personnel to Finance & Operations Director rather than Finance and Operations Manager. The new position comes with increased responsibilities and increased skills. This position will be responsible for reconciling payroll allocations from Paychex to Payroll allocations in QuickBooks to government funding reports to ensure accuracy. These changes along with the systems that we have had in place should help prevent this issue from being repeated.

2024-001. Allowable Costs/Cost Principles United States Department of Health and Human Services, Substance Abuse and Mental Health Services Administration Passed Through Vibrant Emotional Health: Substance Abuse and Mental Health Services Administration - 988 National Suicide Prevention Lifeline ALN: 93.243 Substance Abuse and Mental Health Services Administration - Disaster Distress Helpline ALN: 93.243 Passed Through New York State Office of Mental Health: Substance Abuse and Mental Health Services Administration - 988 S11MY1 ALN: 93.243 Condition: Time records prepared by employees reflect the total hours worked for the day, but do not reflect the actual time spent on programs funded by each federal award, rather they are based on budgeted hours. Recommendation: The Organization’s use of Personnel Activity Report (PAR) equivalent documentation should allow each employee to accurately reflect the time work is performed for each federal award. Corrective Action: The Organization will complete the implementation of procedures for its time keeping records, which will provide information for PAR equivalent documentation. Actual time worked performing duties funded by each federal award will be reflected. Responsible Contact Person(s): Meryl Cassidy, Executive Director Response of Suffolk County, Inc., - P.O. Box 300 - Stony Brook, New York 11790 Anticipated Completion Date: December 31, 2025.

Management Response: We have had significant turnover in HR and Payroll and documentation was not maintained properly. We have a new HR Director and new Payroll Manager who will work closely together and are aware of record keeping and maintaining files for compliance. A checklist has been created to ensure all required documents are on file. Anticipated Completion Date: We are conducting a file review and will ensure all documents are in order by September 30, 2025. Responsible Party: HR Director, Payroll Manager, Benefits Coordinator and Business Manager will have oversight.

Reference # and title: 2024-004 Controls and Compliance over Disbursements Federal program and specific federal award identification: AL Number Award Year FEDERAL GRANTER/ PASS THROUGH GRANTOR/PROGRAM NAME United States Department of Education; passed through Louisiana Department of Education Title I 84.010A 2024 COVID-19 Education Stabilization Funds: Education Stabilization (ESSER II) 84.425D 2021 Education Stabilization (ESSER III) 84.425U 2021 United States Department of Agriculture; passed through Louisiana Department of Education Child Nutrition Cluster: School Breakfast Program 10.553 2024 National School Lunch Program 10.555 2024 Criteria or specific requirement: Sound internal controls over federal program require that expenditures be made in accordance with the federal program budgets, properly documented and recorded. Additionally, 2 CFR section 200 requires nonpayroll expenditures over the micro purchase threshold be adequately vetted with a competitive process such as quotes or bids. Additionally, for an employee who works in part on a federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources, the School Board must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to (a) the consolidated cost objective, and (b) each program or other cost objective supported by non-consolidated Federal funds or other revenue sources. Employee pay should be reviewed to ensure that payment amount is correct. Employee attendance should be documented on a consistent basis. Condition found: In testing expenditures over federal programs, the following exceptions were noted: Title I: In testing 19 payroll transactions for the Title I program, there were 4 exceptions noted where the time certifications were completed, but not in a timely manner. Child Nutrition: In testing 17 payroll transactions for the Child Nutrition program, the following exceptions were noted:  3 exceptions noted where the time certifications were completed, but not in a timely manner.  3 exceptions noted where the timesheet for the employee was not reviewed by a Supervisor.  5 exceptions noted where the employee was not paid in accordance with the salary schedule. This related to 3 employees in which the employees were underpaid. In testing 23 vendor disbursements, it was noted that travel reimbursements are paid annually and not on a timely basis. Education Stabilization: In testing 17 payroll transactions for the ESSER programs, the following exceptions were noted:  2 exceptions noted where the employee was not paid in accordance with the salary schedule. This related to 1 employee in which the employees were underpaid. In testing 23 vendor disbursements for the ESSER programs, the following exceptions were noted:  1 exception noted in which the purchase could not be traced to the approved budget.  9 exceptions noted in which the School Board could not provide any support reflecting quotes were obtained before the purchase was made. Corrective action planned: The School Board will correct this immediately. We will have time certifications done on a timely basis and all timesheets reviewed by a supervisor. Payroll will be checked that it is being paid by the corresponding salary table. Travel will be required to be submitted and paid monthly. Quotes will be acquired when needed.

Due to limited staffing resources, the Organization was not able to ensure maintenance of adequate documentation. The Organization has made efforts to ensure that proper documentation is maintained and accessible by necessary staff.