Corrective Action Plans

Grantee Response and Corrective Action Plan: We concur with this finding and have implemented measures to mitigate the repetition of additional occurrences. In July 2023, a new policy was implemented that requires employees to record their time as a percentage across all grants in which they work. The employee records this allocation at least weekly within a time keeping software system. Employees and supervisors are now required to review and acknowledge payroll allocations across grants by signing weekly timesheets. Timesheets will be retained and used as backup by the Grants Department when invoicing the Grantor for expense reimbursement. In addition, we have updated our Policy and Procedures Manual to reflect this policy.

BA has worked with Accountant to ensure all employees complete Time and Effort sheets. These requirements have been reviewed with Building Administrators and all federally paid employees will sign the certifications. BA will review to ensure all employees have completed and will report any missing signatures with employee’s supervisors.

2022-004- Internal Control Over Compliance and Compliance – Activities Allowed or Unallowed and Allowable Costs/ Cost Principles Contact: Jordan Kramer Title: Chief Financial Officer Phone Number: 202-624-7787 Anticipated Completion Date: Done. Management’s Corrective Action Plan: Since August 2022, in response to technical issues with an import file that caused some timesheet allocations to not be correctly coded, the CFO has added a layer of review for payroll entries to match import file values to approved timesheets. NGA accounting team members began to train and reach out to employees to reinforce the importance of completing timesheets accurately and promptly following NGA employee policies. NGA accounting since February 2023, has completed the indirect cost, compensated absences, and fringe calculations as a part of the same process for uploading payroll entries. This ensures that the calculations are accurately calculated based on the payroll file. This has ensured that these entries are produced each payroll period and correspond to supervisor-approved timesheets under 2 CFR 200.430 Compensation – Personal Services.

Plan: 1. Mandatory Time and Program Effort Records: OBT has implemented allocations by program in our payroll software. Hourly employees allocated to multiple programs will clock in and out for each program and all timecards are approved by management. Reports are reviewed every payroll for accuracy. 2. Training: OBT will provide training to all employees on the importance of accurate time and effort reporting for federal programs, ensuring that employees understand the requirements and their responsibilities in maintaining these records. 3. Internal Controls: OBT has implemented internal controls to review and verify the accuracy of time and effort records, ensuring that charges to federal awards comply with regulations. 4. Monitoring and Auditing: OBT will conduct regular monitoring and internal audits quarterly to validate the accuracy and completeness of time and effort records. Name of Contact Person: Carla Licavoli, Chief Operating & Compliance Officer Target Date: Management has already begun implementing mandatory time and program effort records during the year ending June 30, 2024. OBT will continue to monitor and improve these processes, ensuring full compliance with federal regulations and reducing the risk of questioned costs.

In a previous period and by previous auditors, PAX was told that because we were using a percentage of effort calculation in budgeting that time sheets were no longer needed for this purpose. At that time, we abandoned the time sheet process (which was arduous). Based upon current auditor’s advice, PAX will, going forward, establish an effort verification reporting system. This system will accurately capture the effort spent by each employee on specific grants, ensuring proper allocation of wages and salaries to the respective federal awards. Dije Kucana, Comptroller, effective immediately

Item 2021.003 – Activities Allowed or Unallowed Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently reinforces its internal controls over nonpayroll expenditures to ensure all expenditures were approved by the appropriate supervisor. Repeat Finding Yes Action Taken Island Health Care will take the following actions to address this recommendation: Timesheet and payrate review and approval: • Standardize timesheet submission and approval process. • Utilize and electronic timesheet system to document the verification of employee payrates and ensure there is a detailed audit trail that records all submissions, review, and approval by supervisors. • Conduct regular audits to verify timesheets and payrates are reviewed and approved by supervisors. Nonpayroll Expenditures: • Evaluate and improve upon existing processes to ensure internal control over nonpayroll expenditures are working. This includes enforcement of approval policies with mandatory documentation and regular monitoring throughout the process for a clear audit trail. • Conduct regular audits to verify nonpayroll expenditures have been reviewed and approved by supervisors.

Item 2021.003 – Activities Allowed or Unallowed Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently reinforces its internal controls over nonpayroll expenditures to ensure all expenditures were approved by the appropriate supervisor. Repeat Finding Yes Action Taken Island Health Care will take the following actions to address this recommendation: Timesheet and payrate review and approval: • Standardize timesheet submission and approval process. • Utilize and electronic timesheet system to document the verification of employee payrates and ensure there is a detailed audit trail that records all submissions, review, and approval by supervisors. • Conduct regular audits to verify timesheets and payrates are reviewed and approved by supervisors. Nonpayroll Expenditures: • Evaluate and improve upon existing processes to ensure internal control over nonpayroll expenditures are working. This includes enforcement of approval policies with mandatory documentation and regular monitoring throughout the process for a clear audit trail. • Conduct regular audits to verify nonpayroll expenditures have been reviewed and approved by supervisors.

Recommendation: The Auditor recommends that the Entity implement controls for documenting and retaining information on expenditures charged to federal awards to follow the requirements over 2 CFR Section 200.430(g)(i) and in addition the Entity is properly paying employees at the approved pay rate. Action Taken: 1. Policy Revision and Development: o Develop or revise existing policies to clearly define the processes for documenting and retaining expenditure information related to federal awards. These policies should explicitly follow the requirements over 2 CFR Section 200.430(g)(i), ensuring that all expenditures are properly documented and justified as per federal award conditions. Specifically, approval of differential rates will be added to those policies. o Ensure that the policy includes guidelines for regularly reviewing employee pay rates against approved rates for compliance with federal award conditions. 2. Training and Awareness Programs: o Implement comprehensive training programs for all staff involved in charging costs to federal awards. This training should cover the importance of compliance with federal regulations, specifically focusing on the documentation and retention of expenditure information and adherence to approved pay rates. o Schedule regular refresher training sessions to ensure ongoing compliance and awareness. 3. Enhanced Monitoring and Audit Trails: o Introduce monitoring mechanisms to regularly review expenditures charged to federal awards for compliance with documented policies and federal requirements. o Develop an audit trail system that allows for the easy retrieval of documentation supporting expenditures and payroll compliance. This system should enable auditors to trace the documentation back to the federal award and the approved budget items. 4. Internal Control Improvements: o Review and strengthen internal controls related to the processing of expenditures and payroll to ensure that all transactions are authorized, recorded accurately, and in compliance with federal award requirements. o Implement segregation of duties where possible, to reduce the risk of errors or fraud in the charging of costs to federal awards. 5. Regular Compliance Reviews and Updates: o Conduct periodic internal reviews to assess compliance with federal award requirements and the effectiveness of the implemented corrective actions. o Ensure that any changes in federal regulations or award-specific requirements are promptly incorporated into the hospital's policies and training programs. 6. Documentation and Communication: o Maintain comprehensive records of all actions taken to address the audit findings, including policy revisions, training sessions, and internal review outcomes. Specifically, records for those these expenditures will remain onsite and not sent to long-term storage if the employee or vendor no longer has a relationship with the facilities. o Communicate regularly with federal awarding agencies to update them on the corrective actions taken and to seek guidance on compliance matters as needed. Implementation Timeline and Responsibility Assignment: • Management positions including the CEO, CFO and CNO for the 2021 fiscal year are no longer employed by Terry Memorial Hospital District. Administration employed in 2023 acknowledges these deficiencies and accepts responsibility for developing, applying and maintaining this corrective action plan going forward. • Assign specific responsibilities to designated staff members or departments for each component of the corrective action plan. • Set clear deadlines for the completion of each action item, with an initial goal to address all significant deficiencies within one to three months from the date of the audit report. Monitoring and Reporting: • Establish a mechanism for ongoing monitoring of the effectiveness of the corrective action plan, with periodic reports to senior management and the board of directors. Feedback Loop: • Create a feedback loop with employees and management to continuously improve internal controls and compliance processes based on practical experiences and challenges encountered during implementation. Responsible Person: Whitney Wilson, CFO

Personnel files were not maintained while CRA was without a Director and human resources professional for 2020 and 2021. We have since hired a Human Resources Director, Beth Anne Falco, who is in the process of bringing all employee files current. As part of the updated files, CRA intends to issue new employee forms in the beginning of FY25, which will include updated job descriptions, salary information, payroll, and benefits.

Finding Reference Number #SA2021-003: Pro-Rating Annual Payroll Costs Charged to Grant Assistance Listing Number: 21.019 Assistance Listing Title: COVID-19 - Coronavirus Relief Fund Name of Federal Agency: Department of Treasury Pass Through Entity: California Department of Finance Federal Award Identification Number: 390 • Name(s) of the contact person: Shay Narayan, Director of Finance; Carmen Gusman, Deputy Director of Finance • Corrective Action Plan: Now that payroll services and the budget unit are both fully staffed, the City will be able to develop procedures that will ensure personnel budgets and costs are accurately pro-rated to the appropriate funding source. Additionally, the City expects to have sufficient staffing to work more closely with grantors make certain the all eligible costs are accounted for. • Anticipated Completion Date: 06/30/24

Finding Reference Number #SA2021-002: Support for Payroll Costs Charged to Grant CFDA number: 20.507 CFDA Title: Federal Transit – Formula Grants (Urbanized Area Formula Program) Name of Federal Agency: Department of Transportation - Federal Transportation Administration Federal Award Identification Number: CA-2021-009-01, CA-2020-005-01, CA-2020-005-02 • Fiscal Year of Initial Finding: 2019 • Name(s) of the contact person: Shay Narayan, Director of Finance; Carmen Gusman, Deputy Director of Finance • Corrective Action Plan: The City is conducting a cost allocation study which includes a federal cost allocation plan. We anticipate incorporating the new allocations into the FY 2024-25 Annual Budget. • Anticipated Completion Date: 07/01/2024

Audit Finding Reference: 2021-007 Lack of Documentation to Support Distribution of Wages Management’s View and Planned Corrective Action: After review we have also determined that this documentation was lacking. Since 2021 many changes have occurred. A Time and Effort policy and procedure has been established, documented and implemented. Federally funded stipends are no longer processed until the Time and Effort Log of hours have been received. Once we have received the form(s), which we now attach to the position in our accounting system we then process in payroll. This procedure is also located in our Federal Funds Handbook. A communication will be sent to Grant Manager’s reminding them of the Time & Effort policy and procedures. Name of Contact Person and Completion Date: Name 1 Amber Wheeler Name 2 Danielle Rossetti Anticipated Completion Date : Procedure has changed a reminder will be communicated by March 30th.

Finding 2021‐006 Payroll Documentation – Activities Allowed and Unallowed, Allowable Costs/Cost Principles – Noncompliance and Material Weakness in Internal Control over Compliance Corrective Action Plan Management will review current employee pay rates within the payroll module and ensure that rates agree to the most current pay rate as is specified in the employee’s current personnel action form. Expected Completion Date Fiscal Year 2025.

Head Start Cluster ‐ Assistance Listing Number 93.600 Recommendation: The Association follow its own documented controls to ensure it prepares adequate time‐and‐effort documentation to support payroll costs charged to the federal grant. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Containment Supervisors have had long‐time systems in place to review activity logs and their alignment with electronic time sheets. OCCDA policy changes in 2020 are documented in the staff handbook, which states that timesheets are submitted and approved electronically in EWS. In October 2023, a statement was added to the timekeeping system that states, “Submission of this electronic form constitutes your signature on the form. By electronically signing this form you are attesting to the accuracy of the information contained therein and the submission is authorized by you.” Root Cause Due to a lack of knowledge of the new system, fiscal staff could not pull reports out of the timekeeping system. Action Taken Upon implementation of the new timekeeping system in previous years, the staff handbook was updated to reflect the procedure of electronic submission of timesheets but the fiscal policy will be updated to accurately reflect procedures by February 2024. Beginning in 2023, the staff allocations have been uploaded on a shared document where the Fiscal Manager and payroll both have access. Allocations are reviewed whenever there are any changes in duties or funding and at a minimum of quarterly. When there are changes, a formal status change is completed by HR and sent to payroll for processing and updates in the spreadsheet and the software. Beginning in January 2024 timesheets will be entered into the timekeeping system by staff indicating the number of hours spent in each funding program allowing for real time, accurate allocation of time. Time entry will continue to be reviewed by supervisors or the next in the chain of command when the supervisor is unavailable and paid based on the entered time. Quarterly allocations will be reviewed in the payroll system to ensure that we are staying within the budget. Name(s) of contact person(s) responsible for corrective action: Fiscal Manager Planned completion date for corrective action plan: March 2024 (Q1)

In response to finding number 2021-SA3, management agrees with the finding and will design, implement, and maintain policies and procedures that ensure expenditures are reviewed for allowability before being charged to Federal awards. Management will also design, implement, and maintain policies and procedures that ensure costs are reviewed for allowability before being charged to Federal awards. Further, management will perform budget-to-actual analysis on a periodic basis to ensure costs do not exceed limitations.

Policies will be placed and adopted by the agency that meet the UG code. These policies will be placed in the fiscal manual. The fiscal manual will be created by using federal guidelines and by using the DDAP fiscal manual as guidance.

JFT does have all the board minutes on file. However, because we were a small agency, salary rates were not often changed. Additionally, all salary rates and changes were always driven by the ability to obtain the funding needed. Since we were small and there was not always a lot to discuss with the board our board only met twice a year. Therefore, all salary was discussed with the board president, then taken to the board unfortunately there is no formal documentation at this time. As of 2023 our board now meets quarterly. Therefore, the following policy will be included in the fiscal manual: the JFT board of directors will hold a public meeting quarterly. All matters of pay rates and salaries will be approved at the start of each grant cycle. State and county grants will be discussed prior to the July 1 start dates, all federal will be discussed prior to October 1. Any changes in salary must be approved by the board and documented in official board minutes. All board minutes will be placed in a lock file in the Fiscal Coordinator’s office.

Starting in 2023 all employees of the Organization will complete formal time sheets. These sheets will be signed by the Administrative Coordinator and by the Fiscal Coordinator and then entered into the system each pay period to rectify this finding.

Deficiencies in Activities Allowed, Allowable Costs, and Period of Performance Controls over compliance with Payroll - Significant Deficiency Recommendation: The auditor recommends that the Entity implement controls for documenting and retaining information to indicate the Entity follows the requirements over 2 CFR section 200.430(i), and that alll pay rates be reviewed for approval and propriety. Action Taken: EPHCC will implement additional controls to ensure the following: 1. All employees must submit an approved timesheet or time and effort for each pay period. 2. All payroll transactions for staff from staffing agencies need to be reviewed by the accounting manager to ensure invoice has correct rate and that staff is paid for all hours worked on timesheet. 3. Upon hiring staff from staffing agencies, EPHCC shall document and retain information that all pay rates are reviewed byt the CEO for approval and propriety. Responsible Official: Chief Financial Officer, Lizabeth Romero Timeline for Implementation: Effective by May 2023

Management Response: Due to turnover program pay records such as timesheets and equivalent documentation could not be located. The missing files had been stored on a drive maintained by a former employee and could not be recovered. The City implemented a records retention policy in 2023 and established a system to ensure that all documentation supporting expenditures is properly gathered, organized, and retained in compliance with federal requirements.

In a previous period and by previous auditors, PAX was told that because we were using a percentage of effort calculation in budgeting that time sheets were no longer needed for this purpose. At that time, we abandoned the time sheet process (which was arduous). Based upon current auditor’s advice, PAX will, going forward, establish an effort verification reporting system. This system will accurately capture the effort spent by each employee on specific grants, ensuring proper allocation of wages and salaries to the respective federal awards. Dije Kucana, Comptroller, effective immediately

Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Repeat Finding No Action Taken Island Health Care will take the following actions to address this recommendation: Timesheet and Payrate Review and Approval: • Standardize timesheet submission and approval process • Utilize an electronic timesheet system to document the verification of employee payrates and ensure there is a detailed audit trail that records all submissions, reviews, and approvals by supervisors. • Conduct regular audits to verify timesheets and payrates are reviewed and approved by supervisors NonPayroll Expenditures: • Evaluate and improve upon existing processes to ensure internal controls over nonpayroll expenditures are working. This includes enforcement of approval policies with mandatory documentation and regular monitoring throughout the process for a clear audit trail. • Conduct regular audits to verify nonpayroll expenditures have been reviewed and approved by supervisors.

Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Repeat Finding No Action Taken Island Health Care will take the following actions to address this recommendation: Timesheet and Payrate Review and Approval: • Standardize timesheet submission and approval process • Utilize an electronic timesheet system to document the verification of employee payrates and ensure there is a detailed audit trail that records all submissions, reviews, and approvals by supervisors. • Conduct regular audits to verify timesheets and payrates are reviewed and approved by supervisors NonPayroll Expenditures: • Evaluate and improve upon existing processes to ensure internal controls over nonpayroll expenditures are working. This includes enforcement of approval policies with mandatory documentation and regular monitoring throughout the process for a clear audit trail. • Conduct regular audits to verify nonpayroll expenditures have been reviewed and approved by supervisors.

Finding 2020-009 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Costs Principles Name of Contact Person: Jonathan Lomack, Acting Tribal Administrator Corrective Action Plan: The finance department was notified of this finding during the audit and immediately corrected the method of converting timecard totals to hours. Personnel files have been reviewed and updated for all current employees. Proposed Completion Date: Complete as of December 2023

Corrective Action Plan: During the remaining of the year 2023, job descriptions will be sent to all employees for their review and signature. Contact Person: Edgardo Gonzalez, Human Resource Director Anticipated Completion Date: No later than December 31, 2023