Corrective Action Plans

Corrective Action: Management is in the process of updating its written procedures to ensure that allowable costs and cost principles comply with 2 CFR 200.403. This includes Grants Accounting implementing a manual process that empowers program employees to submit and approve Time & Allocation Excel Sheets. These sheets include attestations certifying actual labor costs on a monthly basis. This information is then taken to inputted by the grants accounting team into the Request for Reimbursement (RFR). This measure ensures that labor costs are accurately reflected and compliant with regulatory requirements. In addition, Management will implement policies and procedures regarding regular review of allocations for workers compensation and other similar expenses to ensure accuracy. Finally, Management is committed to optimizing the efficiency and accuracy of its Time & Allocation to Grants by leveraging its Payroll Software Technology to strengthening its accounting process and internal controls. Name of Responsible Individual(s): Jason Brenier, CFO Anticipated Completion Date: April 2024.

Action Taken/to be Taken: Accounting staff is implementing a new process for payroll to record employee payroll expense based on the department that the employee works in. The last payroll in 2023 reflects a change in the time reporting process, and accounting staff will continue to ensure compliance with Uniform Administrative Requirements.

Views of Responsible Officials: We agree with the auditor's findings. We have corrected our methodology for deriving allocated dollars based on hours worked such that they agree.

2022-003 – Payroll Time Approval – Significant Deficiency in Internal Controls over Compliance Recommendation: The Auditor recommends LIFE implement controls for documenting and retaining information to indicate the Entity follows the requirements over 2 CFR section 200.430(i), and that all time charged to the grant are reviewed for approval. Action Taken: LIFE Management will: • Review, update and adhere to established policies/procedures that align with the compliance of 2 CFR, 200.430(i). • Implement LIFE’s newly customized timekeeping system that enables accurate recording of time spent on grant-related activities and that ensures capabilities for supervisory review and approval. • Conduct training sessions for all staff to educate them about any updated policies regarding timekeeping procedures, the new online timekeeping portal and adherence to federal regulations. • Schedule internal audits and reviews, at minimum, once a fiscal quarter to ensure that the new timekeeping system is being used correctly and that all time charged to grants is appropriate and compliant with LIFE’s policies/procedures and federal regulations. Due Date of Completion: January 31, 2023 Responsible Official: Executive Director

Finding Reference # 2022-002, Material Weakness in internal control over compliance and instance of immaterial noncompliance. Compliance Requirement: Allowable Costs Auditor’s Recommendation: We recommend management return to the previous process for recording payroll costs to grants and programs by which individual employee salaries and wages are allocated based on actual time spent on various activities and are directly charged to the respective activity cost centers benefited. Corrective Action: In 2022, we began outsourcing our payroll processing to Paychex, Inc. During that transition, we changed our process for entering payroll into our accounting software and began using aggregation of total employee hours. Management will return to the practice of allocating payroll per employee instead of using aggregate totals, effective immediately. Management will also contact grantors to resolve any errors in cost reimbursements resulting from 2022 payroll allocation corrections.

A policy will be developed and submitted for board approval outlinging the payroll internal control processes as it relates to timesheets, payroll service reports, and approval process. Newly adopted written procedures will be developed to align with the newly adopted board policy. The following district office staff members will participate in training provided by a private consultant ont he newly adopted policy and procedures along with the required process for documenting all personnel services charged by Title I Grants: CSFO, Federal Programs Bookkeeper, Federal Programs Secretary, Centralized LSA Bookkeeper, State Funds Bookkeeper 2, Accounts Payable Clerk, and Payroll Clerk. The CSFO will develop a turn-around training and trail all school level staff to include bookkeepers and principals on the following topics: Completing and documenting time and effort sheets, properly documenting and affirming salaries of Title I employees, checks and balances for payroll and timesheets, adhering to board approved policies and procedures for completing timesheets, signing timesheets, and balancing timesheets against payroll service reports. An internal audit team will be developed to periodically check compliance to newly adopted policies and procedures. All time and effort sheets will be submitted at the onset of employment for review and compliance with a follow up mid-year certification of time and effort on the federal programs.

A policy will be developed and submitted for board approval outlinging the payroll internal control processes as it relates to timesheets, payroll service reports, and approval process. Newly adopted written procedures will be developed to align with the newly adopted board policy. The following district office staff members will participate in training provided by a private consultant ont he newly adopted policy and procedures along with the required process for documenting all personnel services charged by Education Stabilization Fund: CSFO, Federal Programs Bookkeeper, Federal Programs Secretary, Centralized LSA Bookkeeper, State Funds Bookkeeper 2, Accounts Payable Clerk, and Payroll Clerk. The CSFO will develop a turn-around training and trail all school level staff to include bookkeepers and principals on the following topics: Completing and documenting time and effort sheets, properly documenting and affirming salaries of Education Stabilization Fund employees, checks and balances for payroll and timesheets, adhering to board approved policies and procedures for completing timesheets, signing timesheets, and balancing timesheets against payroll service reports. An internal audit team will be developed to periodically check compliance to newly adopted policies and procedures. All time and effort sheets will be submitted at the onset of employment for review and compliance with a follow up mid-year certification of time and effort on the federal programs.

Personnel Responsible for Corrective Action: This initiative was a collaboration between the Finance Grants Team, Brandie Hall and Bobby Morris-Culp, and the COO, Jennifer Johnson, representing the programs side of the contract. Anticipated Completion Date: A proper Time Activity Report was implemented October 1, 2022. Corrective Action Plan: Although Foster Adopt Connect did not receive the results from the 2021 Independent Audit conducted by other auditors until November of 2022, due to the close time proximity, was able to design a compliant Time Activity Report and have staff utilize said reports to track time beginning October 1, 2022, which was the beginning of the FFY/Contract funding period. This would indicate that this is not in fact, a repeat finding.

Finding 2022-004 - Strengthen controls surrounding program-related record keeping including increasing the frequency of reconciliation's and program wage allocation procedures to match the payroll cycle. Program Affected Under the U.S. Department of Health and Human Services - Award Year October 1, 2021 - September 30, 2022: Assistance Listing 93.262 Occupational Safety and Health Program Corrective Action The Organization agrees with the finding. The Organization has implemented both time and effort reporting by pay period and wage reconciliations as part of a monthly close process. Responsible individual - JJ Bartlett Completion 9/30/2023

Finding: The Organization allowed payroll related costs to be submitted for reimbursement under the grant for time that did not match approved timesheets. This is not in compliance with program allowable cost requirements. The amount of payroll and related costs discovered to be incorrect was a net amount of $25, which when projected onto the remaining payroll and related costs that were not tested, amounted to $1,038. Corrective Action Taken or Planned: The Organization will review audit findings and ensure accurate future reimbursements, develop a comprehensive process for verifying time sheets against service delivery, and implement a paper timesheet system in which supervisors must enter time based on timesheets, ensuring 1:1 reimbursement. Name of Contact Person: Jacob Ducey, Grants Manager Phone Number of Contact Person: (540) 907-4555 Projected Completion Date: October 31, 2023

Item: 2022-003 Assistance Listing Number: 84.425U Programs: American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) Federal Agency: U.S. Department of Education Pass-Through Agencies: Arizona Department of Education Pass-Through Grantor Identifying Number: Unknown Award Year: April 19, 2022 to September 30, 2024 Criteria: In accordance with 2 CFR § 200.430 – Compensation – the entity’s system of internal controls should include a process to review after-the-fact interim charges made to federal awards based upon budget or allocation estimates. Condition: The entity’s system of internal controls did not include a process to review after-thefact interim payroll charges made to federal awards based upon budget or allocation estimates. Name of Contact Person: Doug Taylor, CFO Phone Number: (602) 230-1116 Anticipated Completion Date: December 31, 2023 Views of Responsible Officials and Corrective Actions: Special Olympics Arizona, Inc. will revise its policies and procedures to require that actual time be recorded on timesheets for the actual efforts spent on Federal awards. Management will utilize actual time and effort when charging expenditures to Federal awards going forward.

Item: 2022-002 Assistance Listing Number: 21.027 Programs: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Agencies: Arizona State Office of the Governor; Maricopa County Pass-Through Grantor Identifying Number: Unknown Award Year: January 1, 2022 to December 31, 2024; January 28, 2022 to June 30, 2023 Criteria: In accordance with 2 CFR § 200.430 – Compensation – the entity’s system of internal controls should include a process to review after-the-fact interim charges made to federal awards based upon budget or allocation estimates. Condition: The entity’s system of internal controls did not include a process to review after-thefact interim payroll charges made to federal awards based upon budget or allocation estimates. Name of Contact Person: Doug Taylor, CFO Phone Number: (602) 230-1116 Anticipated Completion Date: December 31, 2023 Views of Responsible Officials and Corrective Actions: Special Olympics Arizona, Inc. will revise its policies and procedures to require that actual time be recorded on timesheets for the actual efforts spent on Federal awards. Management will utilize actual time and effort when charging expenditures to Federal awards going forward.

Assistance listing number and program name: 12.401 National Guard Military Operations and Maintenance (O&M) Projects Agency: Department of Emergency and Military Affairs (DEMA) Name of contact person and title: Jensen Forde, CFO Anticipated completion date: April 30, 2024 Agency’s Response: Concur DEMA HR anticipates having this completed by April 2024 at the latest. All employee records will be audited, corrected and maintained per the finding. HR staff has received a copy of the Department’s Record Retention Schedule and effective immediately will adhere to the policy.

Response. Agreed. Where feasible, the Housing Trust will aim to improve management of all federal grants. A process of documentation verification prior to any requests made for financial draws will include employee, supervisor, business operations manager, and executive director level approvals to ensure compliance and availability of funds. A monthly federal request for reimbursements with all grantee information will be used and reconciled monthly with QuickBooks. This report will mirror the SEFA form so auditors will receive the information in a timely manner. For any quarterly reports, the three months of reporting will again be reconciled prior to submission. All new processes and compliance will be updated in the policies and procedure manual. As the Executive Director prepares the 2024 budget, a reorganization of the business operations department will be sought. A new position to prepare and work on all federal grant tasks will be hired and report to the Business Operations Manager. In the meantime, the Business Operations Manager has started to develop checks and balances. Corrective Action Plan Timeline: Immediately Designation Of Employee Position Responsible For Meeting Deadline: Business Operations Manager

Views of Responsible Officials: When SAMU commenced operations at the end of June 2022, the Welcome Respite Project (funded by FEMA) was SAMU's only active project. The HR platform/timekeeping software, Gusto, was implemented prior to the project start date (i.e. employees offer letters and onboarding materials were sent via the platform). Incoming staff were provided with an overview of how to use Gusto during onboarding, one-on-one meetings with supervisors, and staff meetings. Employee time was remunerated according to the rates authorized. During 2022, staff entered their hours in Gusto and were not engaged in outside, non-project-related activities. In 2022 we had only one project and therefore, some salaried staff were instructed that the completion of a timecard was not needed. However, that changed in 2023 as the new Managing Director requested that all staff, including salaried staff, complete timecards appropriately. Additional project codes were implemented in January 2023 and October 2023. SAMU provided updated guidance on timekeeping and use of project codes during the course of several staff meetings and one-on-one meetings. In 2023, SAMU developed a Gusto training and continues to reinforce timekeeping policies and expectations during meetings. Rate and position changes were and continue to be communicated to staff via official HR letters and stored in program files.

Management understands that according to CFR 200.430(i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Hood River County is currently working toward stronger internal controls, education of staff, and a more intense review process. It is expected that these changes will take time. The new Grants Committee is meeting monthly to keep grant management in the forefront of all those concerned.

Management understands that valid data must substantiate Payroll expenses charged to any grant. Therefore, Hood River County has formed a Grant Review Committee to implement processes and procedures to include reviewing after-the-fact time and effort documentation compared to budgeted amounts charged to federal grants to ensure that amounts charged are appropriately supported. This committee has started monthly meetings. New payroll tracking procedures are in the testing phase to see if they are the solution to this problem. This should not be a future problem in fiscal year end 2024.

Management understands that valid data must substantiate Payroll expenses charged to any grant. Therefore, Hood River County has formed a Grant Review Committee to implement processes and procedures to include reviewing after-the-fact time and effort documentation compared to budgeted amounts charged to federal grants to ensure that amounts charged are appropriately supported. This committee has started monthly meetings. New payroll tracking procedures are in the testing phase to see if they are the solution to this problem. This should not be a future problem in fiscal year end 2024.

Criteria - 2 CFR 200.430(i) requires the auditee to establish and maintain effective internal control over the allocation of personnel expenses whereby charges to Federal awards for personnel-related expenditures are supported by official records of the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: The non-federal entity's system of internal controls includes processes to review after-the-fact interim charges 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. Condition – Personnel costs allocated to the award did not agree to time and effort reports maintained for those employees charged to the award. Cause – PPHS does not have a process whereby time and effort reports are reconciled to payroll allocated to federal awards. Effect – Time and effort reports documented that 100% of employee time should have been allocated to the award. However, some employees wages were only partially allocated to the award. Corrective Action Plan – PPHS had significant turnover in finance personnel during the 22-23 school year. For FY23, we contracted with accounting consultants to assist with financial management and reporting and with improving processes and procedures, including reconciling personnel costs with grant claims. We will continue to improve our process for reconciling personnel costs allocated to federal awards with time and effort reports. Contact Person(s) Responsible for CAP – Todd Burleson, Financial Controller. Anticipated completion date – Processes were improved in FY23 through assistance from accounting consultants. Policies and procedures updates will be implemented in FY24.

Significant Deficiency in Internal Control over and Compliance over Programs Coronavirus State and Local Fiscal Recovery Funds - Assistance Listing No.21 .027 Recommendation: CLA recommends that the program manager and a member of the finance committee knowledgeable about 2 CFR § 200.430(i)(1) review the executive director costs charged to the Coronavirus State and Local Recovery Funds program. Action planned in response to finding: Executive Director's time and effort reports will be reviewed by a member of the Finance Committee, who also serves as an Officer of the Board, on a quarterly basis to insure correct assignment of hours. Names of the contact persons responsible for corrective action: Michael Cade, Michael McGauly, and Matt Stacey Planned completion date for corrective action plan: November 14, 2023

Significant Deficiency in Internal Control over and Compliance over Programs Coronavirus State and Local Fiscal Recovery Funds - Assistance Listing No. 21.027 Recommendation : CLA recommends increased payroll training and reconciliation procedures. Action planned in response to finding : Classification of payroll hours assigned to Coronavirus State and Local Fiscal Recovery Funds, and all others, are to be reviewed and signed off on by accounting or administrative staff before submission of payroll. Names of the contact persons responsible for corrective action: Maria Hemmen, Brooke Johnson or Matt Stacey. Planned completion date for corrective action plan: October 27, 2023

Finding 2022-002 - Significant Deficiency in Internal Control over Compliance: While allocations and allocation methodologies were reviewed by executive and senior management of Rising Communities, these reviews were not adequately documented. Rising Communities has / will take steps to address this f inding. First, Rising Communities’ new f inancial system requires that all journal entries, including journal entries for the recording and allocation of payroll, be approved by a manager. This control has been in place since the beginning of the third quarter of 2022. Second, Rising Communities will implement a process where the appropriate member of the executive management team reviews allocation methodologies and specif ic allocation percentages for staf f . When a change to either the methodology or percentages needs to be made, the appropriate executive management team member will approve before implementation. Third, Rising Communities will utilize systems to back test allocation methodologies and allocation percentages. Rising Communities has implemented a time tracking as of January 2023, and will contract with a new payroll provider, Paylocity, in January 2024 to further ref ine their allocation practices. Rising Communities also utilizes a project management system which executive management reviews on a continual basis, providing them with qualitative information on where Rising Communities resources are being allocated. Finally, Rising Communities with its new financial system, is continually implementing new and more efficient ways of supporting program managers allowing them to have signif icantly greater insight into the spending on their respective programs. Contact Person Responsible for Corrective Action: Michelle Burton, CEO Anticipated Completion Date: November 2023

Organization's Response: MCJ agrees that the salary expense for the one employee noted in the Finding was not correctly allocated. Prior to this Finding, MCJ had already implemented a process that allows review of payroll allocations each per pay period. Since April 2023, a payroll allocation spreadsheet is generated and regularly reviewed for correct grant allocation. Furthermore, since that time, the finance team meets throughout the fiscal year to ensure salaries are being allocated according to grant budgets with the appropriate allocation percentages.

Finding: 2022-003 – Payroll Documentation Auditor Description of Condition and Effect: Salaries and wages were allocated using percentages to distribute payroll costs allocated to grants. Costs were not consistently allocated to reflect the activity actually performed in five out of the six payroll cycles that we tested. The Organization did have a system of controls in place for the fiscal year ending September 30, 2022 requiring employees report time spent in specific areas on their timesheets. However, the control was overridden by management and was not applied on a consistent basis. There were payrolls tested where timesheet was not compared to payroll journals provided by the payroll service, the accounting records, or the reimbursement requests for grants. Payroll costs reflected in the books and records of the Organization did not agree to the payroll journals, timesheets, and reimbursement requests. This required the Organization to use spreadsheets and calculation to support grant funding requests. Some timesheets were found to be inaccurate, resulting in employee personnel costs being reimbursed without proper documentation. Auditor Recommendation: We recommend that the Organization improve its financial management policies and procedures to ensure that multiple staff members are involved in the process of reviewing and allocating personnel expenses to grants. Policies and procedures over payroll should include employees entering time accurately across areas where they spent time, supervisory review, recalculation and approval of timesheets, review of timesheets and compiled time reporting before it is sent to the payroll provider and review of the reporting provided after the payroll run. Payroll postings input into the accounting system should accurately reflect time spent in each grant area (class) and grant reporting and reimbursement requests should be prepared using those numbers. Corrective Action: SIREN will improve its internal controls and policies to ensure that multiple staff members are involved in the process of reviewing and allocating personnel expenses to grants. Multiple staff members will review and ensure that grant reporting and reimbursement requests are based on the actual payroll postings input into the accounting system. Responsible Person Martha Richard Anticipated Completion Date: September 30, 2023

Management's Action Plan: Kevin Holland, Vice-President-Stone County and Operations will oversee the supervisory review and approval of timesheets for the next few pay cycles to ensure management is reviewing 100% of the records. He will also work to ensure none of them are being missed through special circumstances as has happended in the past in order to achieve and sustain 100% compliance. Name of Person Responsible for the Plan: Kevin Holland, Vice-President Stone County & Operations. Anticipated Completion Date of the Plan: 3 payroll cycles spanning six weeks. Approximately mid-December 2023 for completion.