Corrective Action Plans

Federal regulations, Title 2 U.S. Code of Federal Regulations §200.511 states, “At the completion of the audit, the auditee must prepare, in a document separate from the auditor's findings described in §200.516 Audit findings, a corrective action plan to address each audit finding included in the current year auditor's reports.” See Correction Action Plan for table/chart.

To prevent future occurrences, Genesee Health Plan has updated its payroll allocation procedures, and employees now track time directly through the payroll system.

2025-018 WIOA Cluster 17.258, 17.259, 17.278 Recommendation: We recommend the Department develop procedures and controls to ensure expenditures coded to the GDF from timesheets or manual adjustments do not exceed the 15% limit. Action taken in response to finding: In FY26, phase codes associated with federal grant activity will be further disaggregated and mapped in MMARS screen BQ87 (Federal Grant Phase Budget Status). This enhancement has improved the accuracy and clarity of budget-to-actual comparisons by providing a clearer breakout of expenditures by phase. It will also strengthen internal controls and facilitate better alignment between MMARS, Finance Data Mart, and federal reporting requirements. This new internal controls has been deployed on all FY26 grants and was not audited during this period. Name(s) of the contact person(s) responsible for corrective action: Finance: Sarah Shannon, Ken Luke Planned completion date for corrective action plan: Process is in place and completed on 12/31/2025 and practice is deployed for all new grants requiring break out amounts.

2025-017 WIOA Cluster 17.258, 17.259, 17.278 Recommendation: We recommend the Department complete implementation of its corrective action plan from the prior year. The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort and a combination code that is allowable under the program. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Action taken in response to finding: Ongoing training is provided for new staff to ensure they correctly enter combo codes that align with the activities performed. To strengthen oversight, a custom report has been developed to identify employees with missing combo codes each week, allowing Finance staff to proactively follow up and ensure proper time charging weekly. Finance will continue to enhance the custom report to ensure all paid TRCs are linked and properly monitor any missing combo codes in timesheets each pay period. Any new additional pay entered by Human Resource in the HR/CMS system, Human Resource will notify Finance to ensure a proper combo code or an appropriate account is assigned. Finance will collaborate with departments throughout the fiscal year to update labor distribution profiles, ensuring that employees are defaulted to the correct funding sources in accordance with approved labor distribution profiles for accurate and efficient time reporting. A custom report has been developed for managers and time approvers to validate that employee labor distribution profiles are regularly confirmed and updated in accordance with weekly time and effort. To further strengthen internal control preventive measures Finance will be monitoring variances between charged payroll data in relation to the labor distribution profiles to identify any large variances that need to be addressed. Name(s) of the contact person(s) responsible for corrective action: Finance: Anna Yong, Vina Yung, Sarah Shannon, Mai Giang, Stephanie Wong, HR/Payroll: Cheryl Stanton, Linda Stevens, DCS: David Manning, Beth Goguen Planned completion date for corrective action plan: 6/30/2026

2025-005 Employment Service Cluster - Assistance Listing No. 17.207, 17.801 Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort and a combination code that is allowable under the program. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Action taken in response to finding: Ongoing training is provided for new staff to ensure they correctly enter combo codes that align with the activities performed. To strengthen oversight, a custom report has been developed to identify employees with missing combo codes each week, allowing Finance staff to proactively follow up and ensure proper time charging weekly. Finance will continue to enhance the custom report to ensure all paid TRCs are linked and properly monitor any missing combo codes in timesheets each pay period. Any new additional pay entered by Human Resource in the HR/CMS system, Human Resource will notify Finance to ensure a proper combo code or an appropriate account is assigned. Finance will collaborate with departments throughout the fiscal year to update labor distribution profiles, ensuring that employees are defaulted to the correct funding sources in accordance with approved labor distribution profiles for accurate and efficient time reporting. A custom report has been developed for managers and time approvers to validate that employee labor distribution profiles are regularly confirmed and updated in accordance with weekly time and effort. To further strengthen internal control preventive measures Finance will be monitoring variances between charged payroll data in relation to the labor distribution profiles to identify any large variances that need to be addressed. Name(s) of the contact person(s) responsible for corrective action: Finance: Anna Yong, Vina Yung, Sarah Shannon, Mai Giang, Stephanie Wong, HR/Payroll: Cheryl Stanton, Linda Stevens, DCS: David Manning, Beth Goguen Planned completion date for corrective action plan: 6/30/2026

Legal Services Corporation Grants – Assistance Listing No. 09.706060 Aging Cluster – Special Programs for the Aging, Title III, Part B – Assistance Listing No. 93.044 Recommendation: We recommend that the Organization consider updating its cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations that are calculated in a consistent manner that ensure costs are applied uniformly to respective benefited activities, and that are reflective on employees’ time and effort records. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations. Lastly, the Organization could consider removing LSC from the general fund into its own fund, and using fringe benefit rate and indirect cost rate allocation methods to simplify its cost allocation process. Explanation of Disagreement With Audit Finding: Management partially agrees with this finding. First, 45 CFR Part 1635 codifies the timekeeping requirement. CLS keeps track of every case and time dedicated by staff in strict compliance with this requirement. Manual adjustments primarily result from planned internal reconciliations and reviews designed to ensure the accuracy of CLS allocations. These reconciliations are conducted on a monthly basis and form an integral part of the Organization’s internal control framework. Action Taken in Response to Finding: Additionally, with respect to the Native American grant transactions, CLS implemented the necessary correction to the referenced percentage effective beginning in 2026. Name of the Contact Person Responsible for Corrective Action: Silvia Zelaya, Finance Director Planned Completion Date for Corrective Action Plan: January 2027

FINDING 2025-014 Name of Responsible Individual: Assistant Vice President for Post Award Corrective Action: The University initiated the Effort Certification process to capture the full calendar year 2025 in April 2026. This represents a one-time extended certification period designed to include previously uncertified periods that had concluded, specifically the second half of FY25 (January–June 2025) and the first half of FY26 (July–December 2025). In May 2025, the non-accounting functions of Grants and Contracts Accounting at Howard University were transitioned to the Office of Research, Sponsored Programs Office. During this organizational transition, the University prioritized the completion and accuracy of all costing allocations to ensure payroll data was complete and reliable for effort certification purposes. This period was also utilized to identify and resolve any backlog of costing allocations and award charges and stabilize the Office of Research. Addressing these items ensured that effort reflected complete and accurate payroll activity, thereby enabling Principal Investigators to appropriately review and certify their effort. The Sponsored Programs Office (SPO) now leads post-award financial oversight and collaborates with Human Resources (HR) and Finance to ensure designated personnel are identified and granted system access to enter costing allocations and labor cost transfers in Workday. In addition, in response to the auditor’s recommendation to enhance internal controls and ensure timely monitoring of effort reporting, Howard University has implemented the following corrective actions: Hired Dedicated Departmental Support – Six College Research Administrators (CRAs) and an Associate Director of CRA’s were hired to support high-volume research colleges. The CRAs ensure timely and accurate labor cost transfers, effort certification, and costing allocation entries during award setup and throughout the award lifecycle. Enhanced Effort Reporting Process – SPO will lead improvements to the effort certification process, including: • Advance communication to PIs, CRAs, and Deans outlining certification deadlines • Clear guidance on when labor cost transfers may occur outside the certification cycle • Reinforcement that all effort changes must be reflected in the effort system to ensure alignment with payroll. • Training – Targeted training will be delivered to Principal Investigators, CRAs, and other research stakeholders to support consistent application of policies and procedures. Monitoring and Oversight – Monthly and quarterly reconciliation reports will be developed to track and validate timely and accurate payroll allocations for research personnel. Anticipated Completion Date: August 30, 2026

2025-002. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Special Education Cluster: Special Education Grants to States: IDEA, Part B ALN: 84.027 Pass-through Entity Number: 0032-25-0875 Condition: One instance within the audit sample where the personnel activity report (PAR) supporting the allocation of payroll costs to the federal award was not maintained for an employee. The District did not have procedures in place to ensure signed PARs are obtained from departing employees before they leave employment, or have an immediate supervisor with knowledge of the employee’s work certify the PAR as an alternative. Planned Corrective Action: The District will change the procedures for obtaining signed personnel activity reports (PARs) from employees whose salaries are 100% charged to one federal grant program. The District will no longer utilize semi-annual PARs for employees who are 100% charged to one federal grant program; going forward, all employees whose wages and salaries are partially or fully allocated to one or multiple federal grant programs will be required to sign monthly personnel activity reports. Responsible Contact Person: Mr. Joseph C. Dragone Interim Assistant Superintendent for Finance and Operations 150 Park Avenue Amityville, NY 11701 Phone: (631) 565-6015 Email: jdragone@amityvilleufsd.org Anticipated Completion Date: June 30, 2026.

2025-002 Special Education Cluster – 84.027, 84.173 Recommendation: We recommend procedures be strengthened to ensure that time and effort certifications are completed in a timely manner. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The District has begun reviewing and strengthening its internal procedures to ensure that required time and effort certifications for employees charged to the Special Education Cluster are completed accurately and in a timely manner. Going forward, the District will reinforce timelines for completion, provide reminders to responsible staff, and implement additional monitoring procedures to ensure certifications are collected, reviewed, and retained in accordance with federal requirements. Name(s) of the contact person(s) responsible for corrective action: Special Education Department, in coordination with Business office. Planned completion date for corrective action plan: April 30, 2026

Corrective Action Plan – Material Weakness & Material Noncompliance (Single Audit) Entity Name: Froedtert ThedaCare Health (FTCH) Corrective Action Plan For the Fiscal Year Ended June 30, 2025 Finding 2025-001 – Material Noncompliance (Major Federal Program) Federal Program U.S. Department of Health and Human Services – National Institutes of Health (NIH) – Cancer Control ALN: 93.399 Finding Description The audit identified material weakness and material noncompliance with federal program requirements related to payroll, fringe benefits and indirect costs. Specifically, FTCH did not comply with NIH Salary Cap requirements, which resulted in questioned costs that were quantitatively and qualitatively material. Cause of the Finding FTCH did not apply the NIH salary cap limitations correctly during the period under review. Corrective Action Planned • The Entity will take the following corrective actions to address the material noncompliance:  Performing a comprehensive review of all FTCH grants, both under consideration and currently active, to determine whether a salary cap limitation applies. Where applicable, management will confirm that the salary cap is being consistently and accurately applied in accordance with governing requirements. Any discrepancies identified have been or will be corrected in a timely manner.  Enhancing pre-award and pre-submission compliance controls through updates to grant review procedures and compliance checklists. These updates are designed to ensure that grants subject to salary cap limitations are clearly flagged and that salary calculations are reviewed and documented prior to submission and award acceptance.  Providing targeted training for staff involved in grant administration, budgeting, payroll processing, and financial reporting to ensure consistent understanding and application of salary cap requirements and related internal control procedures.  Conducting periodic internal monitoring reviews of salary charges to federal awards to assess ongoing compliance, validate the effectiveness of internal controls, and identify potential issues before they result in noncompliance. Results of these reviews will be documented, and corrective actions implemented as appropriate. Personnel Responsible: SVP Finance Anticipated Completion Date: May 31, 2026 Status of Corrective Action Corrective action has been initiated and will be completed within the stated timeframe. Management Certification Management certifies that the corrective actions described above are accurate, appropriate, and will be implemented as represented. ____________________ Matt Partridge SVP Finance April ___, 2026

Finding: 2025-028 - One of 10 employee timesheets tested did not support the charges billed to the Congressionally Mandated Projects (CMP) program. Questioned Costs: 2,273 Assistance Listing Number: 66.202 Assistance Listing Title: CMP Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with this finding. Corrective Action (corrective action planned): This finding has been corrected. The Division of Community and Regional Affairs (DCRA) and the Division of Administrative Services (DAS) have reviewed and updated timesheet processing functions in DCRA. DAS has provided information and training to DCRA timekeepers and management staff on timesheet entry, timekeeping procedures, and time entry and review processes in the accounting system. Both DCRA and DAS management will continue to monitor time entry and timesheet processing to ensure that time is entered accurately. Completion Date (list anticipated completion date): I The corrective action plan was fully implemented on January 31, 2026. Agency Contact (name of person responsible for corrective action): Nichole Tham, Division Operations Manager, Division of Community and Regional Affairs.

Single Audit Finding No. 2025-068 - For two out of 40 timesheets tested (five percent), the employees’ hours were inaccurately recorded in the State’s accounting system. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): I The department agrees with this finding and recommendation. Corrective Action (corrective action planned): Department management will implement additional training for time collectors and payroll entry staff and strengthen the review process to ensure the accuracy of timesheet entry moving forward. Completion Date (list anticipated completion date): June 30, 2026 Agency Contact (name of person responsible for corrective action): Shanna Burns, Human Resources Consultant 5

Single Audit Finding No. 2025-063 - Three of 40 timesheets tested (eight percent) were entered into the State’s accounting system with incorrect coding. Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree, briefly explain why): The department agrees with this finding and recommendation. Corrective Action (corrective action planned): The department will reinforce timesheet entry and processing procedures, and the finance officer will provide additional training to administrative staff to avoid future errors. Completion Date (list anticipated completion date): June 30, 2026 Agency Contact (name of person responsible for corrective action): Michael White, Financial Services Manager

Title II, Part A-Supporting Effective Instruction Stat Grants – Assistance Listing No. 84.367 Special Education Cluster (IDEA programs) – Assistance Listing No. 84.027, 84.173 Title I-A-Grants to Local Educational Agencies – Assistance Listing No. 84.010 Recommendation: The District should design and implement controls to ensure semi-annual time and effort certification are obtained and reviewed timely. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: To address the material weakness related to untimely and incomplete approval of Time and Effort certifications, MPS implemented process improvements to strengthen internal controls, increase accountability, and ensure certifications are completed prior to reimbursement submissions. MPS performed the following with respect to enhancing the internal controls surrounding this process: Prior to Collection • Adjusted certification timelines to allow adequate review and approval, • Established centralized email account to improve communication reliability, • Reassigned responsibility to the ESEA Manager for stronger oversight, • Beginning FY26, implemented a monthly grant report to monitor expenditures and detect and correct errors in a timely manner, • Communicated certification timelines to district leadership in advance of the collection window. During Collection • Sent daily communications and district-wide reminders, • Monitored completion through daily reporting, • Provided real-time technical support. Post Collection Window • Continued system-generated reminders, • Conducted targeted outreach via email, phone, and virtual meetings, as appropriate, • Launched a formal escalation process through supervisory channels when needed as described in our communications outlined above. These actions are supported by documented procedures and enhanced oversight to ensure timely completion of certifications and compliance with federal cost requirements. Name(s) of the contact person(s) responsible for corrective action: State and Federal Program Director, ESEA Coordination and Compliance Manager Planned completion date for corrective action plan: Completed as of December 2025.

Special Education Cluster (IDEA programs) – Assistance Listing No. 84.027, 84.170 Recommendation: The District should implement controls that allow for the identification and proper classification of vendor payments to applicable grant period. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The District will strengthen internal controls to ensure that vendor payments are appropriately aligned with the correct grant reporting period. MPS will implement a standardized review process to validate that vendor invoices and related purchase orders are coded to the correct grant period, establish clear procedures for identifying the period of performance for goods and services, enhance coordination between program and finance staff to validate the timing and allowability of expenditures, conduct periodic monitoring of vendor payments to ensure compliance with grant period requirements, and provide training to relevant staff relating to grant period compliance and expenditure classification. Name(s) of the contact person(s) responsible for corrective action: Senior Director of Specialized Services, Accounting Director (Deputy CFO), Financial Reporting Manager Planned completion date for corrective action plan: 6/30/2026

Corrective Action Plan Audit Finding Reference Number: 2025-001 Federal Program: Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Number (ALN): 21.027 Federal Agency: U.S. Department of the Treasury Contact Person(s) Responsible for Corrective Action: Whitney Gustin Connor, Executive Director Planned Corrective Action: Kid's First will implement the following procedures to address the lack of time and effort documentation and supervisory review for salary allocations charged to SLFRF grants: Require written supervisory review and approval of salary allocation percentages for all employees charged to federal grants. Develop and document procedures for periodic reconciliation of salary charges to actual time and effort records, in accordance with 2 CFR 200.430. Anticipated Completion Date: July 31, 2026

Finding Number: 2025-002 Planned Corrective Action: The City concurs with the finding and will take the following actions in response: • 100% Federally Funded Employees: Columbus Public Health will require all employees whose salaries are 100% funded by a single federal award to comply with 2 CFR § 200.430 through after-the-fact time and effort certifications completed quarterly of the grant period. These certifications will confirm that 100% of the employee’s actual work performed was allocable to the federal award and will include both employee certification and supervisory review. They will be due 30 days following the quarterly end date. In addition, CPH will implement enhanced internal monitoring procedures, including periodic activity verification and supervisory attestation by the Fiscal Analyst, to ensure that work performed aligns with the grant’s scope and that payroll charges are accurate and properly supported;• Partially Federally Funded Employees: Employees whose salaries are allocated across multiple funding sources will follow full federal time and effort reporting requirements in accordance with 2 CFR § 200.430. These employees will complete afterthe- fact time and effort reporting reflecting the actual distribution of work performed across all cost objectives. Reported time will be supported by appropriate documentation and will not be based on budget estimates. Supervisors will review and formally sign off on reported time and effort on at least a quarterly basis to ensure accuracy, reasonableness, and alignment with actual activities. Additional internal monitoring, including periodic review and payroll-to-activity reconciliation reviewed by the Fiscal Analyst, will be conducted to ensure compliance and proper allocation of personnel costs. Anticipated Completion Date: 7/1/2026 Responsible Contact Persons: Anita Clark, Assistant Health Commissioner, Columbus Public Health Katie Pettiford, Fiscal Manager

Views of Responsible Officials: Management concurs with the finding. During FY2025, in response to Federal stopwork orders and related cost reduction measures, IntraHealth experienced significant disruption, including staff terminations and the planned integration of operations with Global Communities. As part of this transition, the legacy timekeeping system was retired at the end of its renewal period, with the intent to move to Global Communities’ timekeeping process shortly thereafter. During the interim period, time for the remaining staff was captured using manual timesheets. In two instances, documented supervisory approval could not be located because the employees’ supervisor separated from IntraHealth during the transition period. Planned Corrective Actions: Effective April 1, 2025, all IntraHealth staff transitioned to Global Communities following the completion of operational integration, IntraHealth has transitioned to Global Communities’ timekeeping and payroll process using ADP, which includes electronic time entry, supervisor review/approval workflow, and centralized record retention. Management believes this materially strengthens controls by reducing reliance on manual documentation, and improving the retention and retrievability of approvals. Management will also reinforce the requirement that time records are approved prior to payroll processing and will perform periodic monitoring to confirm compliance with the approval control.

2025-006 – Allowable Costs/Cost Principles Corrective action plan: Contractors have been tasked with training and implementation during fiscal year 2026. Revised accounting staff structure will provide better on-going implementation and monitoring compliance. Personnel responsible for corrective action: Heather King, Interim Chief Operating Officer Estimated corrective action completion date: March 2026

The Organization will develop and implement formal written policies and procedures to ensure that payroll charges to federal awards are based solely on actual costs incurred, in compliance with federal requirements. As part of this effort, the Organization will require all employees whose salaries are charged in whole or in part to federal awards to complete time and effort documentation for each payroll period. This documentation will accurately reflect the actual hours worked on federal program activities as well as other activities, as applicable. Supervisors or designated management personnel will review and approve all time and effort reports on a timely basis. Evidence of this review, including signatures or electronic approvals, will be maintained in accordance with record retention policies. The approved time and effort documentation will serve as the basis for allocating personnel costs to federal awards. The Organization will ensure that payroll charges are adjusted, if necessary, to align with actual time worked. Documentation supporting these allocations will be retained and made available for audit or review. Training will be provided to all relevant staff to ensure understanding and consistent application of the new procedures. Implementation of these policies and procedures will occur June 15 2026, and ongoing monitoring will be conducted to ensure compliance.

2025-05 Allowability of Payroll Expenditures (repeat finding see 2025-02} Federal Agency- US Department of Housing and Urban Development Continuum of Care Program -Assistance Listing# 14.267 Hennepin County Contract HS00001366 Year ended June 30, 2025 Material Weakness in Internal Control over Compliance, Noncompliance Other Matter Recommendation - Controls be strengthened to ensure the accuracy and completeness of payroll documentation and additional training be provided to staff involved in the payroll process to ensure policies and procedures are followed. Personnel files should include complete and approved documentation of employee pay rates and verified final allocations to programs. Payroll documentation should include an after-the-fact determination of actual hours worked in each program or function of Agate Housing and Services, Inc. Corrective action -Agate Housing and Services, Inc. implemented a new payroll system on January 1, 2025 which incorporates built-in authorization controls and requires all employees to submit time based on actual hours worked in each program or function of the agency where required and by contract allocation method where approved. Management has also reviewed the pay-rate discrepancy identified during the audit and has taken corrective action to ensure the employee was compensated accurately. Going forward, management will perform periodic reviews to confirm pay rate changes are properly documented and that all payroll entries align with approved personnel records. Name of contact person responsible for corrective action - Donna Rapacz, Chief Operating Officer Completion date - Management implemented the above procedure as of January 1, 2025.

Payroll The University acknowledges the finding related to discrepancies between payroll charges, personnel action forms, and time and effort reporting. We understand the requirement that all salary and wage charges to federal awards must be supported by accurate records and internal controls in accordance with Uniform Guidance §200.430. Corrective Actions 1. Alignment of Personnel Actions and Payroll Distribution: The University will implement additional review steps to ensure that labor distribution reports match the approved personnel action forms before payroll is charged to the grant. Any discrepancies must now be corrected before processing. 2. Strengthened Time and Effort Verification: Time and effort reports must now be reviewed and reconciled against the percentages authorized on personnel action forms. Reports that do not match will be returned to departments for correction before certification. 3. Enhanced Internal Controls and Documentation: A standardized monthly reconciliation process will be established to ensure consistency between personnel records, effort reporting, and payroll charges. 4. Staff Training: Training will be provided to fiscal managers, the Office of Research and Sponsored Programs, human resources, and payroll personnel on Uniform Guidance requirements, proper effort reporting, and documentation standards. 5. Periodic Monitoring: Supervisory reviews will be conducted to ensure continued compliance and to identify discrepancies proactively. The University believes these corrective measures will strengthen internal controls and ensure that payroll charges to federal programs are accurate, allowable, and properly documented.

Finding 2025-003 - U.S. Department of Education (USO), TRIO Programs (Significant Deficiencies): Information on the federal program - Student Support SeNices, FAL No. 84.042A, June 30, 2025; Ronald McNair Program, FAL No. 84.217A, June 30, 2025. Under 2 CFR 200.305, non-Federal entities must request Federal funds only for allowable program costs that have been incurred, and must maintain contemporaneous supporting documentation demonstrating: a. Actual, allowable expenditures existed at the time Federal funds were drawn; and b. Records supporting the nature and timing of those expenditures were on file and readily available. These requirements ensure 1. Corrective Action Description a. The College now mandates that GS drawdown requests include approved documentation stored on the accounting drive, effective July 31, 2025. b. Time and Effort reports must be submitted monthly with supervisor sign-off before reaching the Office of Sponsor Programs, showing 100% time allocation. Any changes will require a Personnel Action Form and administrative approval signatures. c. showing 100% time allocation. Any changes will require a Personnel Action Form and administrative signatures of approval. 1. Person Responsible and Department Diana Knighton Senior Vice President, Finance and Business Administration Miles College 5500 Myron Massey Boulevard Fairfield, AL 3506 (205) 929-1442 dknighton@miles.edu 2. Implementation Timeline This procedure took effect as of July 31, 2025. 3. Planned Preventive Measures Following the policy and procedures to support all drawdowns with proper documentation. 4. Disagreement with the Finding None

Management’s Response Regarding Corrective Action Taken or Planned Management acknowledges this finding and concurs that payroll costs charged to the Housing Choice Voucher (HCV) Program under CFDA 14.871 must be supported by recordsthat accurately reflect actual work performed, as required under 2 CFR 200.430(i). The City's prior practice of using predetermined allocation percentages to distribute payroll across multiple funding sources did not fully satisfy the federal standards for documenting actual time worked on HCV-eligible activities. Management notes that the projected questioned costs of $214,045 represent a projection of potential unallowable payroll charges based on the sample tested, that were unsupported due to insufficient time documentation and are not necessarily unallowable. The City will coordinate with HUD to determine the appropriate resolution of these questioned costs. The corrective actions outlined in Finding 2025-007 apply equally to the HCV Program. Specifically: 1. Actual Time Reporting: All Housing Authority employees who perform HCV program activities are required to document actual hours worked per program activity on their timesheets, effective immediately. 2. Discontinuation of Fixed Allocations: Predetermined allocation percentages will no longer serve as the basis for payroll charges to the HCV Program. All charges must be supported by actual time records. 3. Timesheet System and Training: Housing Authority staff will be included in the system enhancement and training initiatives described in Finding 2025-007, with particular emphasis on documentation standards under the HCV Program's applicable requirements4. Quarterly Internal Compliance Reviews: HCV payroll charges will be included in the Accounting & Finance Division's quarterly compliance reviews, with findings reported to the City Manager and the Housing Authority Director.

Management’s Response Regarding Corrective Action Taken or Planned Management acknowledges this finding and concurs that payroll costs charged to federal awards must be supported by documentation accurately reflecting the actual work performed, as required under 2 CFR 200.430(i). The City's prior practice of distributing payroll costs using predetermined allocation percentages for employees working across multiple programs did not fully satisfy federal requirements for documenting actual time expended on CDBG-eligible activities. Management notes that the projected questioned costs of $217,355 represent a projection of potential unallowable payroll charges based on the sample tested, that were unsupported due to insufficient time documentation and are not necessarily unallowable. The City isprepared to work with HUD to determine the appropriate resolution of these questioned costs. The City is implementing the following corrective actions: 1. Actual Time Reporting: Effective immediately, all employees who charge any portion of their time to federal grant programs—including CDBG—are required to document actual hours worked on each program or activity in their timesheets. Time entries must correspond to specific program activities and must be reviewed and certified by the employee's supervisor each pay period. 2. Discontinuation of Fixed Allocation Percentages: The City is eliminating the use of predetermined payroll allocation percentages as the basis for charging personnel costs to federally funded programs. Future payroll charges to federal awards will be based exclusively on actual documented hours, in compliance with 2 CFR 200.430(i). 3. Staff Training: The City will provide mandatory training to all employees who charge time to federal programs, supervisors responsible for timesheet review, and payroll staff. Training will cover the requirements of 2 CFR 200.430, the City's updated time documentation procedures, and the consequences of noncompliance.4. Quarterly Internal Compliance Reviews: Beginning in Q1 of FY 2025-26, the Accounting & Finance Division will conduct quarterly reviews of payroll charges to all federal programs to confirm that expenditures are supported by compliant time records. Results will be reported to the applicable department directors.