Corrective Action Plans

The Town recognized its lack of understanding of Uniform Guidance as it relates to federal grant programs and hired an outside consultant on August 1 6, 2022, to administer the federal grants to ensure that the Town would comply with all federal program requirements. The Town was led to believe that they were in compliance with all federal program requirements. The Town will develop, formally adopt, and implement written policies and procedures to comply with Uniform Guidance (2 CFR 200).

CIF grew substantially in FY 24 following execution of the Federal award. This finding reflects the learning phase as CIF came into compliance with the Uniform Guidance. Beginning in FY 26, CIF implemented a system for documenting time and effort in a manner that complies with Federal requirements which involves timesheets that record actual time spent on a funding source and are accompanied by supervisory approvals. This system has been formally documented in the FY 26 update to the CIF Financial Policy and includes annual training for staff responsible for managing payroll allocations and Federal reporting. Charges to Federal awards for salaries and wages are now based on records that accurately reflect the work performed. The records are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The records support 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 allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.

Material Weakness Item 2025-005 -Activities Allowed and Una/lowed Costs - U.S. Department of Health and Human Services, Health Center Program Cluster (Assistance Listing Number 93.224/93.527) Notice of Award Number 6 HB0CS00505-23-04, 6 H2ECS45602-02-04, 1 HBLCS50772-01-00 and 6 HBHCS46163-03-01 During our audit, we noted that LBUCC charged salaries to the Section 330 grant based on pre-determined allocations or budget rather than actual hours worked. LBUCC utilized timesheets that reflect the allocations as its time and effort documentation. Recommendation: We recommend that LBUCC implement a time and effort reporting system that tracks actual hours worked on each program or grant. We recommend that they require supervisors to review and approve the actual time spent on grant activities and that such review and approval be documented. Action Taken: LBUCC will implement a time and effort reporting system to include a semi-annual certification for all employees funded by the HRSA 330 grant and a time card reporting system for those funded by multiple grants. Effectivity Date: Time and effort reporting will be implemented in January 2026 and fully in place by 1/31/2026

REFERENCE: 2025-001 – Allowable Costs/Cost Principles HIV Emergency Relief Project Grants (Assistance Listing No. 93.914) Federal Grantor: Health Resources and Services Administration Facility: Bailey-Boushay House Finding: At Bailey-Boushay House, controls over the required allowability criteria with regard to payroll expense were not performed and/or documented throughout the year. Corrective Action Plan: At Bailey-Boushay House, each Friday and Monday prior to running payroll, approval reminders are sent to all staff with the time-keeping policy attached. At least two different leaders and/or the scheduling coordinator send these reminders. Staff have been educated on the two-step approval system and it will impact their performance evaluation if there is continued non-compliance. The Finance Manager reviews the timecard allocations and populates the hours charged to the grant per the timecard on to the salary allocation spreadsheet. The salary allocation spreadsheet is utilized in completing the reimbursement request. The timecards and the allocation spreadsheet are included in the reimbursement request. Beginning in January 2026, the salary allocation spreadsheet and timecards will be reviewed and signed off by the Director of Outpatient Programs as part of the reimbursement request approval process. Additionally, timecard approval compliance for prior periods will be reviewed during Bailey-Boushay weekly leadership meetings. Person Responsible: Rob Hays, Executive Director – Bailey-Boushay House Expected Completion: January 2026

Finding 2025-001 – Allowable Costs The BOCES concurs with the finding 2025-001. Corrective Action: The BOCES will implement the following corrective actions to be completed by November 30, 2025: 1. The BOCES will develop and implement new written policies and procedures for time and effort reporting. 2. All grant-funded employees will receive training on the new procedures. 3. The BOCES will implement a new system to track and certify employee time. Contact Person: Daniel Henner, Business Administrator (315) 796-9902 dhenner@herkimer-boces.org

The District will use the Federal Uniform Grant guidance to ensure that the all costs are allowable. Any individual that is charged to a federal grant will keep time and effort reporting documentation.

Auditor Description of Condition and Effect: During testing, we identified 1 instance out of 40 disbursement selections tested in which the District was unable to provide supporting documentation for charges incurred under the grant. Additionally, we noted 15 instances out of 40 selections tested where the District could not provide evidence of review and approval for grant expenditures. Finally, we identified 3 instances out of 40 selections tested where the hours reported on timesheets did not agree with the hours charged to the grant. The District’s failure to maintain supporting documentation for certain grant expenditures, provide evidence of review and approval, and accurately report time charged to the grant increases the risk of noncompliance with federal requirements under 2 CFR Part 200. These deficiencies create an increased risk of questioned costs which could ultimately lead to disallowed costs and the potential repayment of grant funds to the granting agency. Additionally, inaccurate reporting and weak internal controls diminish the reliability of financial information submitted to the grantor, reduce accountability, and heighten the risk of errors or fraudulent activity. Auditor Recommendation: We recommend that the District review its written policies and procedures over federal awards to ensure that controls are in place that will require that all expenditures for either payroll or disbursements have the appropriate documentation and evidence of review and approval prior to payment. Corrective Action: The District will review its written policies and procedures over federal awards to ensure that all expenditures have the appropriate documentation and evidence of review and approval prior to payment. Responsible Person: Maria Gistinger, Interim Chief Financial Officer Anticipated Completion Date: June 30, 2026

Finding: 2025-001 Condition Found: During testing of payroll charges, 3 of the 25 employees tested had salary charges which exceeded the Executive Level II cap. Upon further review of the full population, a total of 4 employees were identified whose salary charges to the grant exceeded the cap. Although the Organization calculated the capped allowable salaries for each employee, the allocations entered into the payroll system reflected full gross wages rather than the capped amounts, resulting in the excess salaries. Individual(s) Responsible for Corrective Action: Philip Kneer, CFO Brandon Gilbert, Corporate Compliance Officer / Co-Director of HR April Bledsoe, / Co-Director of HR Planned Corrective Action: Integrate automatic HRSA salary cap checks into payroll and HRIS systems. Create salary cap flags that prevent or warn when charges exceed allowable rates. Implement quarterly salary compliance audits comparing employee salaries to HRSA limits. Anticipated Completion Date: Update payroll system control within the HRIS/Payroll system by February 28, 2026 First quarterly salary compliance audit to be completed by February 26, 2026

Corrective Action Plan Finding Reference: 2025-001 – Allowable Activities/Allowable Costs Federal Program: CFDA 84.010 – Title I Fiscal Year Ended: June 30, 2025 Corrective Action Plan Condition The audit identified weaknesses in internal controls over payroll charges to Title I, creating a risk that costs may be charged to the program in error. Root Cause Although program coding is built into the payroll system during employee setup, controls were not consistently documented or monitored, particularly for staff working across multiple funding sources and for private school Title I employees. A lack of secondary review allowed for one miscoding error and inconsistent position information between contracts and timesheets. Corrective Actions to Be Taken 1. Payroll Coding Review: Implement a second-level review process, led by the Business Manager, to verify all federal program payroll coding each pay period before submission. 2. Position Alignment: Require a monthly reconciliation of contracted positions against timesheet records to ensure consistency. 3. Private School Documentation: Effective immediately, require written wage documentation from private schools for all Title I-funded employees, with documents retained for audit purposes. 4. Update the written procedures related to federal and state funded payroll charges and provide refresher training for payroll and program staff by December 31, 2025. Responsible Officials - Business Manager – Oversight and monitoring of corrective actions - HR/Payroll Specialist – Implementation of payroll coding and reconciliation procedures - Title I Coordinator – Verification and retention of private school documentation Completion Date All corrective actions will be fully implemented by December 31, 2025. Monitoring and Sustainability The District will conduct quarterly internal reviews of Title I payroll activity, maintaining a monitoring log, requiring time and effort sheets and retaining documentation in the business office. Annual refresher training will be provided to ensure ongoing compliance with federal requirements. Views of Responsible Officials The District concurs that stronger documentation and monitoring are necessary. Program coding is established in the payroll system during employee setup, and controls exist to ensure proper allocation. The purpose of the timeclock system is to log hours. The issue arose due to insufficient secondary review rather than the absence of program coding. Immediate corrective measures have already been taken, and the District is committed to implementing the above actions to ensure full compliance with 2 CFR 200.303 and 2 CFR 200.430(g).

Condition: The fiscal year 2025 schedule of federal expenditures of federal awards (SEFA) that was initially provided to the auditors included payroll and fringe expenses that were incorrectly coded to the grant. Planned Corrective Action: The Agency agrees with the recommendations above and will implement a process to ensure that a reconciliation of the listing of grant eligible employees to those employees that were being coded to the Special Education Cluster in the general ledger is performed. Contact person responsible for corrective action: Emily Herbert, Director of Business and Finance Anticipated Completion Date: June 30, 2026

Finding 2025-001: Head Start Cluster Semi-Annual Certification Procedures U.S. Department of Education Type of Finding: Control Pass-through agency: Michigan Department of Education Assistance Listing Number: 93.600 Award numbers: 05CH011882-04, 05CH011882-05 Award year ends: November 30, 2024 and November 30, 2025 Recommendation: The School District should provide training to educate all employees working in federal programs of the requirements for verifying program employee listings are complete under Uniform Guidance, and the School District should require proper time-and-effort documentation to be timely reviewed and approved by the appropriate program supervisor. Action Taken: The Business Manager will provide semi-annual certification templates to all program directors. The Business Manager and program directors will review staff listings together to ensure all necessary employees are listed. Training on the certification process will be provided to all directors of federally funded programs. All federally funded salaried employees are required to complete certifications twice each year. The first submission is due to the Business Manager by January 15, and the second is due by July 15. The Business Manager will verify and maintain all certification records. Responsible Person and Anticipated Completion Date: Business Manager, November 2025 If the Michigan Department of Education has questions regarding this plan, please call CJ Van Wieren at (231) 893-1005.

Improper Time & Effort Reporting Condition: 2 CFR 200.430 of the Uniform Guidance mandates that personnel compensation charged to federal awards must be based on records that accurately reflect the work performed. When an employee works on multiple cost objectives (e.g., multiple awards or activities), this often necessitates the use of personnel activity reports or similar timekeeping documents to accurately allocate salaries and wages. During the audit, we found that proper personnel activity reports were not being maintained for multiple cost objective employees charged to Title IV and to the Special Education Cluster. While we were able to support that the amounts charged to the grants were reasonable, through review of the employee's Outlook calendars, daily schedules, etc., the documentation required by federal guidance was not available. We recommend that management provide training to all multiple cost objective employees on how to properly document their time and then to Implement oversite procedures requiring that those personnel activity reports be submitted to management for review on a monthly basis. Corrective Action: The District has begun training all staff and grant Directors on the proper documentation required to properly support the time and effort employees spend on various grants. In addition, the Grant Director will begin reviewing this documentation on a periodic basis, to ensure complete compliance. Contact Person Responsible for Corrective Action: Chanda Cleaves, Executive Director of Finance Completion Date: This issue will be corrected moving forward.

Admin Offices 4301 S Cowan Rd Muncie, IN 47302 765-747-5222 office CORRECTIVE ACTION PLAN OF CURRENT AUDIT FINDINGS June 30, 2025 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2025 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Significant Deficiency Context: During testing of allowable activities and costs, it was observed that the School Corporation allocated payroll and benefit expenses to the school lunch fund for the employee overseeing the food service management company. Five payroll transactions totaling $5,476 were selected for testing. For each transaction tested, the School Corporation allocated 18% of the employee’s time to the school lunch fund. Although the employee completed an annual self-certification estimating time spent on food service duties, there was no detailed time and effort log to support actual hours worked. Additionally, no internal control existed to provide a documented secondary review of the self-certification for accuracy and completeness. Contact Person Responsible for Corrective Action: Brad DeRome Contact Phone Number: 765-747-5222 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: The School Corporation will no longer charge any payroll and benefit expenses to the school lunch fund. Anticipated Completion Date: July 1, 2025.

2025-002 – Lack of Written Policies and Procedures. Auditor Description of Condition and Effect. Although the Village has processes in place to cover these areas, and drafts of formal written policies covering the above items that address all of the area required by the Uniform Guidance have been developed, these policies have not yet been formally approved and adopted by the Village. As a result of this condition, the Village did not fully comply with the Uniform Guidance applicable to the above noted grants. Auditor Recommendation. We recommend that the Village review and approve the draft policies as soon as practical, but no later than the end of fiscal year 2026. Corrective Action. The Village has prepared a policies and procedures manual for the federal grant programs, which will be approved by the Village Council before the end of fiscal year 2026. Responsible Person. Vicki Burrell, Village Clerk. Anticipated Completion Date: February 2026.

To safeguard from future errors and ensure data accuracy, Human Resources partnered with Enterprise Application Services department to develop an automated process that populates earnings codes and project account codes based on employee, job record and earnings code. This enhancement streamlines data entry by consolidating it into a single interface, reducing the risk of manual entry errors. Additionally, the HR Technology Manager has implemented a new monitoring report to track employees with multiple salary distribution accounts as a part of payroll process. The biweekly report will be automatically generated and sent via email to HR’s HRIS Consultants for review. The HRIS Consultants will analyze the report, resolve any discrepancies and escalate any issues to the HR Technology Manager or Lead Application Consultant as necessary. These processes will be routinely reviewed, with adjustments made as needed.

We agree with the recommendations offered, and as of the date of this report, have already established and implemented a written incentive compensation policy that contains all the elements required by the Uniform Guidance.

As noted above, we are working with consultants and our government partners to determine and define the requirements for each relevant program. We understand the recommendations offered and will review, and possibly revise, our policies and procedures, including supervisory review of documentation to support the allowability of costs charged to federal agreements. We will also review existing policies and procedures for preventing or detecting and correcting unallowable costs charged to federal agreements to ensure consistent application of those policies and procedures for all costs charged to federal agreements. The anticipated completion date is October 2026.

Recommendation We recommend that UVNR strengthen its payroll review and approval procedures by requiring that: - The final timesheet used to process payroll be reviewed and approved by the appropriate supervisor before payroll is submitted; - Approved timesheets be reconciled to the payroll register and retained with the payroll documentation; - Timesheet calculations and total hours be independently reviewed for math accuracy; - Version controls be implemented to clearly identify the final approved timesheet when corrected or revised timesheets are submitted; and - Payroll errors and discrepancies be documented and corrected promptly through a subsequent payroll. Management Response Corrective Action: The identified exceptions resulted from isolated administrative errors in the payroll review process and did not reflect intentional noncompliance. Specifically, one exception occurred because an updated Excel timesheet was used for payroll processing without obtaining the required supervisory approval or retaining documentation demonstrating approval of the final version. The second exception resulted from a clerical error in totaling hours on a timesheet. Management acknowledges that these errors indicate opportunities to strengthen payroll review, documentation, and reconciliation procedures. To address the finding, UVNR has implemented enhanced payroll controls designed to improve the accuracy, completeness, and documentation of payroll transactions charged to federal awards: • All payroll timesheets must receive documented supervisory approval before payroll is processed. Only the final approved version of the timesheet may be submitted for payroll processing. • Payroll staff will reconcile approved timesheets to the payroll register prior to payroll submission and retain the approved timesheets with the supporting payroll documentation. • An independent review of timesheet calculations and total hours will be performed before payroll is finalized to verify mathematical accuracy. • Version control procedures have been established to ensure that revised or corrected timesheets are clearly identified as the final approved version, with prior versions retained as appropriate for audit purposes. • Any payroll discrepancies identified after processing will be documented and corrected through the next available payroll cycle, with supporting documentation maintained for the adjustment. • In addition, management will provide refresher training to supervisors and payroll personnel regarding timesheet approval requirements, documentation retention, and payroll review procedures to promote consistent compliance with internal controls and federal grant requirements. Management expects these corrective actions to strengthen internal controls over payroll processing and prevent similar exceptions in the future. Due Date of Completion July 21, 2026 Responsible Party(ies) Co-Executive Directors

The Government concurs with the auditor’s findings and recommendations and finalizing a comprehensive corrective action plan to strengthen grant management and compliance through the Public Finance Management initiative including the development of a three-tier overarching Financial and Compliance policy and procedures framework. The Government’s Audit Committee is leading the development of a structured, three-tier policy and procedures framework under the Public Finance Management project. This framework includes Tier 1, which establishes the overarching Financial and Compliance Policy; Tier 2, which defines Standard Operating Procedures (SOPs) to promote cross-agency consistency; and Tier 3, which outlines detailed, step-by-step procedures that clearly define roles and responsibilities and accountability measures to ensure compliance with all federal regulations including fiscal and administrative requirements for expending and accounting for payroll expenditures. Regular training sessions will be provided to staff involved in grant management to ensure they understand and adhere to compliance requirements with monitoring and evaluation occurring by the OMB Compliance Unit supported by the Government’s Audit Committee, to assess and improve the effectiveness of controls.

VIDE will strengthen payroll and personnel action controls by requiring the Budget Team and Deputy Commissioner to review and approve all personnel actions before NOPA execution to validate pay rates. Furthermore, Payroll will establish a final review step to reconcile approved hours against both the payroll processing register and the final reimbursement invoice. Approved timesheets, Notices of Per Diem, and related payroll support will be centrally retained in SharePoint by pay period and attached to applicable invoices or general ledger journal entries. Program staff and supervisors will receive mandatory training on updated timesheet procedures and federal time and effort requirements. The Office of Fiscal and Administrative Services will also conduct monthly spot checks of SharePoint repositories and ERP logs to document compliance, identify control gaps, and ensure timely corrective action. Finalization of the formal SOPs and supporting controls is a top priority to achieve the necessary level of control precision and prevent repeat findings.

VIDE will strengthen payroll and personnel action controls by requiring the Budget Team and Deputy Commissioner to review and approve all personnel actions before NOPA execution to validate pay rates. Furthermore, Payroll will establish a final review step to reconcile approved hours against both the payroll processing register and the final reimbursement invoice. Approved timesheets, Notices of Per Diem, and related payroll support will be centrally retained in SharePoint by pay period and attached to applicable invoices or general ledger journal entries. Program staff and supervisors will receive mandatory training on updated timesheet procedures and federal time and effort requirements. The Office of Fiscal and Administrative Services will also conduct monthly spot checks of SharePoint repositories and ERP logs to document compliance, identify control gaps, and ensure timely corrective action. Finalization of the formal SOPs and supporting controls is a top priority to achieve the necessary level of control precision and prevent repeat findings.

VIDE will strengthen payroll and personnel action controls by requiring the Budget Team and Deputy Commissioner to review and approve all personnel actions before NOPA execution to validate pay rates. Furthermore, Payroll will establish a final review step to reconcile approved hours against both the payroll processing register and the final reimbursement invoice. Approved timesheets, Notices of Per Diem, and related payroll support will be centrally retained in SharePoint by pay period and attached to applicable invoices or general ledger journal entries. Program staff and supervisors will receive mandatory training on updated timesheet procedures and federal time and effort requirements. The Office of Fiscal and Administrative Services will also conduct monthly spot checks of SharePoint repositories and ERP logs to document compliance, identify control gaps, and ensure timely corrective action. Finalization of the formal SOPs and supporting controls is a top priority to achieve the necessary level of control precision and prevent repeat findings.

DPNR recognizes the discrepancies identified between the employee pay rates reflected in the payroll registers and the Notices of Personnel Action (NOPAs) that were provided during the audit. Preliminary review indicates that the payroll system calculates employee compensation based on approved personnel actions maintained within the payroll system; however, it is possible that the NOPAs provided for audit testing did not reflect the most current approved personnel actions or subsequent amendments affecting employee compensation. Additionally, DPNR's procedures for maintaining and readily retrieving complete personnel and payroll support documentation were not sufficiently centralized to ensure that the most current supporting records were consistently available for audit review. DPNR will conduct a comprehensive internal review of the payroll transactions identified in the audit sample to determine the cause of the discrepancies between the payroll registers and the NOPAs provided during the audit. The review will include: • Verification of the official personnel actions maintained in the payroll system; • Review of any amended or revised NOPAs affecting employee compensation; • Reconciliation of payroll registers to approved personnel actions; • Verification that salaries and wages charged to Federal awards are properly supported and accurately reflected in official records; and • Identification and correction of any deficiencies in document retention or record management procedures.

OMB acknowledges the findings and notes that OMB does not calculate or determine fringe benefit amounts charged to payroll expenditures. However, OMB will coordinate with the Department of Finance to communicate the identified discrepancy and will work collaboratively to strengthen review procedures over payroll cost allocations charged to federal programs. In addition, OMB will reevaluate its existing oversight controls to ensure that payroll expenditures charged to federal awards are supported by appropriate documentation and reviewed for compliance with applicable federal requirements.

The Government will implement enhanced internal control procedures to ensure that payroll expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) are complete, accurate, and fully supported by transaction-level detail in accordance with 2 CFR 200.303, 2 CFR 200.403(g), and 2 CFR 200.430(i). Corrective actions will include the following: 1. Implementation of Monthly Payroll Reconciliations: The Government will establish a formal reconciliation process requiring monthly reconciliation of payroll expenditures recorded in the accounting system to detailed payroll records generated from the payroll system. o All variances will be identified, investigated, resolved, and documented. o Supporting documentation (e.g., payroll registers, timesheets, and cost allocation reports) will be retained and readily available for audit review. This aligns with enterprise expectations that reconciliation exceptions must be logged, investigated, and resolved with supporting evidence retained. 2. Development and Formalization of Standard Operating Procedures (SOPs): The Government will develop and/or enhance SOPs governing: o Payroll cost charging to federal awards o Documentation standards required to support payroll expenditures o Reconciliation procedures between payroll system and general ledger o SEFA preparation and validation procedures These SOPs will ensure consistency, completeness, and compliance with Uniform Guidance requirements. 3. Strengthening Documentation Controls: Payroll costs charged to federal awards will be supported by documentation that: o Accurately reflects the work performed o Reconciles to total compensation (100% effort) o Is incorporated into official records and retained in accordance with record retention policies Documentation reviews will be incorporated into routine processing and supervisory review controls. 4. Independent Review and Oversight: Reconciliations and payroll allocations to federal programs will be subject to supervisory or independent review to verify: o Accuracy and completeness o Proper allocation across funding sources o Consistency with grant terms and conditions Evidence of review and approval will be maintained. 5. SEFA Validation and Pre-Submission Review: Prior to finalizing the SEFA, the Government will implement a mandatory validation step requiring: o Reconciliation of SEFA totals to the general ledger o Verification that all amounts reported are supported by transaction-level payroll detail o Confirmation that all adjustments are documented and approved This aligns with established CAP practices requiring documented reconciliation outputs that demonstrate control effectiveness. 6. Training and Capacity Building: Relevant personnel will receive training on: o Federal cost principles under 2 CFR 200 o Payroll documentation and certification requirements o SEFA preparation and reconciliation expectations Training will ensure consistent application of policies and improve compliance. 7. Ongoing Monitoring and Compliance Reviews: The Government will implement periodic (quarterly) compliance reviews to: o Assess the effectiveness of payroll reconciliation controls o Ensure documentation requirements are consistently met o Identify and remediate any recurring issues timely These monitoring activities are consistent with prior CAP approaches that require periodic review of payroll documentation and reconciliation practices.