Corrective Action Plans

Context and Cause – During the year ended June 30, 2025, a severance payment was issued to an employee that worked on more than one federal program. The payment was an allowable cost, but was not allocated across the other federal programs based on time and effort per their policy. While internal controls and procedures have been established for payroll expenses, the procedures were bypassed when processing the severance payment. It should be noted that the employee spent the majority of their time on the program the severance was allocated to, and the transaction was isolated. Recommendation – The Organization should follow establish written policies and procedures for allocation of costs. Allocation spreadsheets currently used for the allocation of payroll should be used for all payroll related costs. Action Taken: OMEP will utilize standard allocation procedures for all payroll related payments going forward. Responsible parties: Controller. Anticipated completion date: June 30, 2026.

Management engaged an external HR consultant to assist with revising the Accounting Policy Manual to formally document written policies and procedures related to compensation and fringe benefits. Draft policies have been developed and are currently under management review for accuracy and alignment with existing practices. The finalized policies will be presented for Board approval and implemented by March 18, 2026, and responsibility for ongoing monitoring and periodic review has been assigned to the Chief Financial Officer and Director of Administration to ensure continued compliance. Training will be provided to applicable staff, and compliance with the updated policies will be incorporated into management’s periodic internal reviews.

Criteria or Specific Requirement: Subparts D and E of 2 CFR Part 200 require a nonfederal entity to establish written policies, procedures, and standards of conduct, including procedures to implement the cash management requirements of 2 CFR section 200.305, procedures that comply with the procurement standards of 2 CFR sections 200.318 through 200.326, and procedures for determining the allowability of costs in accordance with Subpart E of 2 CFR Part 200. Specifically, 2 CFR sections 200.430, 200.431, and 200.475 require written policies concerning compensation for personal services, fringe benefits, and travel costs, respectively. Views from Responsible Officials: Management agrees with the finding. Management has established written policies and procedures after yearend that were the policies and procedures followed during the year under audit and meets the requirements of Subparts D and E of 2 CFR Part 200. Contact Person: John Jacques Date of Completion: November 14, 2025

Finding: During the audit, it was identified that severance pay for a former employee was charged to the Title I, Part A program. This expenditure is unallowable under 2 CFR §200.431(i), which permits severance payments only when reasonable, necessary, and consistent with written policy and prior approval requirements. Root Cause: The unallowable cost occurred due to a breakdown in internal controls among Payroll, HR, Finance, and Federal Programs. The Payroll Department processed the severance payment without verifying the funding source’s allowability, and there was no secondary review by Finance, HR, or Federal Programs to identify and reclassify the cost prior to posting. This lack of coordinated oversight led to the unallowable charge to Title I, Part A. Corrective Action Steps 1. Reimbursement of Unallowable Costs o The organization will reimburse the Title I, Part A program from local funds for the total amount of severance pay charged in error. o Documentation of the reimbursement (journal entry and general ledger report) will be retained in the audit file. 2. Policy and Procedure Revision o The organization will revise its federal programs expenditure review, payroll, finance, and HR procedures to ensure all personnel-related transactions - including severance, stipends, and separation payments - are reviewed for federal allowability before processing. o Payroll must verify the allowability of the funding source with the Federal Programs Office prior to processing any non-routine payments. o HR will confirm appropriate coding and funding source alignment during separation processing. o A pre-approval checklist will be implemented for all employee separation and severance actions. 3. Staff Training o Payroll, HR, Finance, and Federal Programs staff will receive targeted training on EDGAR Subpart E (Cost Principles) and allowability standards under Title I, Part A. o Training will emphasize cross-departmental accountability and the importance of accurate funding verification. o Attendance and training documentation will be retained for audit records. 4. Ongoing Monitoring and Quality Control o The Federal Programs Director, Payroll Director, Finance Director, and HR Director will jointly conduct quarterly monitoring reviews of payroll and personnel transactions charged to federal grants to verify allowability and compliance. o The reviews will include reconciliation of HR separation records, Payroll disbursements, and Federal Programs expenditure reports. o The first joint monitoring review will occur within 60 days of CAP approval. Responsible Parties: • Chief Financial Officer (CFO): Oversees reimbursement, approves policy updates, and ensures CAP implementation. • Finance Director: Verifies accurate cost classification, supports monitoring reviews, and ensures compliance with fiscal controls. • Federal Programs Director: Ensures compliance with federal allowability requirements and leads monitoring activities. • Payroll Supervisor: Confirms allowability of all payroll transactions before disbursement. • HR Director: Ensures accurate coding, separation documentation, and funding alignment for personnel actions. Completion Timeline: • Reimbursement: Within 30 days of CAP submission. • Policy and Procedure Revision: Within 45 days. • Training and Monitoring Implementation: Within 60 days. Verification of Implementation: Evidence of completion - including reimbursement documentation, revised policies and procedures, training records, and the first monitoring report - will be submitted to the auditor and TEA as required.

The District will reconcile the Human Resources spreadsheet to the Grant Information to the payroll information entered into Skyward. Currently underway checking personnel by personnel, initiating needed updates and changes.

Identifying Number: 2005-003 Audit Finding: The District must demonstrate that costs incurred are allowable and internal controls are in place to record hours worked and required educational credentials for staffing levels. Hours per timesheet did not reconcile to hours per payroll system for services rendered for four samples and one sample did not hold the required educator credentials for their staffing level. Corrective Actions Taken or Planned (Timesheets): The District agrees with the finding. The District will implement and strengthen the following internal controls to ensure that hours paid agree with time reported by June 30, 2026. a. Training – The District has fully implemented an electronic time keeping system for hourly employees. Training has been provided to all hourly staff, and supervisors responsible to review and approve time reported. Person responsible for implementation: Erin Thompson, Chief Finance Officer b. SOP: Business & Finance will continue training of employees and supervisors who review and approve time worked. Person responsible for implementation: Erin Thompson, Chief Finance Officer c. MonitoringLeadership will periodically meet with the Department Director to verify compliance. Person responsible for implementation: Dr. Latanya Franklin Chief Academic & Accountability Officer d. Reporting: On a district-wide basis, the Payroll Department will provide to management when adherence to procedures is not followed. Person responsible for implementation: Erin Thompson, Chief Finance Officer Corrective Actions Taken or Planned (Credentials): The District agrees with the funding. The District will implement and strengthen the following internal controls to ensure staff have the required educational credentials. a. SOP: Human Resources maintain a central repository documenting certification-related notifications Person responsible for implementation: Micah Enders, Executive Director Human Recourses b. Monitoring: On a quarterly basis, reviews will be conducted to track and update certification status. Person responsible for implementation: Micah Enders, Executive Director Human Recourses c. Reporting: As part of the quarterly monitoring, a quarterly compliance report will be submitted to management. Person responsible for implementation: Micah Enders, Executive Director Human Recourses

Criteria: According to 2CFR 200.431(c) the recipient or subrecipient must allocate fringe benefits to Federal awards and all other activities in a manner consistent with the pattern of benefits attributable to the individuals or group(s) of employees whose salaries and wages are chargeable to such Federal awards and other activities, and charged as direct or indirect costs following the recipient's or subrecipient's accounting practices. Condition: The School over-allocated health insurance benefits to the Child Nutrition Cluster.Cause: The School was using an outdated allocation formula that did not reflect changes to personnel in the program. Effect: The School over-allocated health insurance benefits to the Child Nutrition Cluster. Recommendation: We recommend that the School review fringe benefit allocations at the start of each school year, and then at least quarterly throughout the year to monitor for personnel changes that may impact allocations so that allocations may be adjusted timely. Action: As of the date of this exit conference, we will adopt the recommendation. Health benefits will no longer be allocated to the Child Nutrition Cluster. All other fringe benefit costs will be directly allocated.

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.

The department will adopt written policies with the Uniform Guidance for federally funded grant programs accepted by the department.

Condition: ALC has not implemented all policies and procedures required by 2 CFR Part 200, specifically for cash management, allowability of costs, procurement, compensation, and fringe benefits. Planned Corrective Action: The American Loggers Council will develop written policies and procedures to comply with 2 CFR Part 200, specifically for cash management, allowability of costs and procurement. Policies and procedures related to compensation and fringe benefits currently do not apply to the Organization because they do not have any employees. These policies and procedures will be reviewed and approved by the executive director and executive committee. Contact Person: Scott Dane Anticipated Date of Completion: December 2025

Program Name - Temporary Assistance for Needy Families (TANF); Services for Trafficking Victims; Violence Against Women Formula Grants CFDA Number- 93.558 16.320, 16.588 Finding Type - Significant Deficiency and Noncompliance Condition and Description - During our procedures, we noted, the Agency did not properly allocate its employees' leave hours for employees working on multiple activities. For 13 out of 20 samples selected for testing, Controls were not in place to ensure that leave time was proportionately distributed based on actual time worked on each activity. YWCA Response - The YWCA Victim Services acknowledges this finding and has implemented the following corrective action plan to ensure compliance. Corrective Action Plan - No employee leave hours are to be billed to the TANF grant. The cost of employee leave will be borne by non-governmental grants for all Victim Service staff. Time Frame for Correction - Corrective action was implemented in April 2025. Individuals Responsible- Marcy Dix, Director of Grant management with oversight from Jodi Breithart, CMA, MAcc, Vice President of Finance.

Management agrees with the finding and in the summer of 2024, contracted with a third party accounting company to provide services.

Management Response #2024-002: Due to the financial system and time keeping infrastructure, the Corporation did not maintain evidence of fringe benefit cost objectives calculations. Also, the current fringe cost rate and allocations is based on historical assumptions. Corrective Action Plan: • The finance team will work to ensure fringe costs are entered into the financial system based on actual costs paid by the Corporation for each employee. • The grants finance department will also create actual to budget reports in accordance with HRSA guidelines for fringe costs • The Finance Team will develop fringe costs reports to calculate, monitor and support the current rate. This will allow us to ensure the fringe cost allocation conform to the current regulations. Management expects to be completed by December 31, 2026. Responsible Party: Tamara Barnes, CFO

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

2024-002 - LACK OF WRITTEN FISCAL POLICIES AND PROCEDURES As of March 27, 2025, scaleLIT has updated its fiscal policies and procedures to reflect all the federal guidelines required by the Uniform Guidance. The scaleLIT Board Treasurer has reviewed and approved the updates.

Finding 2024-002: Healthy Start Fringe Rate Grantor: Department of Health and Human Services Program Title: Healthy Start Initiative Award Name: Healthy Start Initiative‐Eliminating Racial/Ethnic Disparities Award Number: H4927805 Assistance Listing Title: Healthy Start Initiative Assistance Listing Number: 93.926 Award Year: April 1, 2023 – August 31, 2024 Passthrough Entity: None Management agrees with the finding and recommendation. The fringe benefits were originally budgeted at 27% on the initial grant application in 2019 which has been approved by the awarding agency. The actual fringe rate posted to each department increased to 29% in FY2024. Management utilized the 29% fringe rate to charge the award based on a provision noted on the award granting the permission to re-allocate up to 25% of the award amount in each budgeted category. Management will establish a quarterly review process owned by Finance to ensure the appropriate or agreed-upon negotiated fringe rate is being charged for all awards. Management will contact DHHS for instruction on returning the funds as the FY25 benefit calculation will be adjusted to remove $5,906 of excess benefits for the Healthy Start grant. Management will remediate this finding by June 30, 2025.

iv. Management Response and Corrective Action Plan: Program staff allocate their time spent at work each day based on their client load and recurring weekly activities, e.g., case conferencing meetings. Staff must allocate their daily time and activity hours on their timesheets corresponding to the project/s each client is enrolled in. Leave allocations should reflect each payroll period’s project time and activity actual percentages. Staff must manually record this information on complicated timesheets and consequently errors are made as not all staff are equally administratively adept. While there are multiple levels of review over timesheets, as the company has grown, it has become apparent that NBCC must integrate a more reliable method of always ensuring accurate allocation calculation of regular and leave hours. The expectation was that our new payroll solution provider, Paychex, was going to custom tailor a system that prevented such calculation errors, but this has not been the case thus far. Therefore, NBCC is actively once again researching payroll companies in an effort to find a solution better aligned with our timesheet needs. In the interim, management will work to edit our existing timesheet template to create a more user-friendly timesheet tool that auto-calculates where necessary and as appropriate so as to avoid misallocation. Management will also conduct additional timesheet trainings with staff as necessary. The end goal will be to secure a new payroll solution provider with system functionality that eliminates this kind of human error. v. Contact Person (s) Responsible for Corrective Action: Kristine Schwarz, Executive Director, kschwarz@sbnbcc.org Victoria Garfield, Grants Administration Director, vgarfield@sbnbcc.org Michael Dzierski, Finance Director, mdzierski@sbnbcc.org vi. Anticipated Completion Date: The anticipated completion date of the first step of editing our existing timesheet and retraining all staff as necessary is June 30, 2025. The anticipated completion date of the second step of having an integrated new payroll system with a new payroll solution provider will be dictated by the identification of a new vendor, and the subsequent development and implementation process of the new system, with an estimated completion date of December 31, 2025.

2024-007 FINDING: NONCOMPLIANCE WITH ACTIVITIES ALLOWED OR UNALLOWED AND ALLOWABLE COSTS AND COST PRINCIPLES REQUIREMENTS Corrective Action Plan: The University has implemented more stringent review procedures to prevent the recurrence of this issue. Responsible University Personnel: Andrea Middleton, Director of Financial Services/Assistant Controller; Villalyn Baluga, Associate Vice President for Finance. Anticipated completion date: Already implemented.

Program: AL 15.611 – Wildlife Restoration and Basic Hunter Education and Safety – Allowability & Subrecipient Monitoring Corrective Action Plan: NGPC will continue to work closely with our subrecipients. We will review subrecipient monitoring procedures and determine documentation that can be provided to meet the intent of federal regulations. Contact: Eli Kass Anticipated Completion Date: July 1, 2025

Planned Corrective Action: The District agrees with the finding. We will work with DOE and other district finance officers to ensure processes going forward are accurate and appropriate with no programs being overcharged. Anticipated Completion Date: 06/30/2025 Responsible Contact Person: Lindsay Laxton, CFO

Identifying Number: 2024-001: Audit Finding: Per relevant statutory and regulatory provisions, costs must be allowable as specified in the references indicated for each program. Criteria must be met to determine if costs, such as separation leave costs (2 CFR section 200.431(b)), severance costs (2 CFR section 200.431(i), and post-retirement health benefits (PRHB) costs (2 CFR section 200.431(h)) are allowable. The District must demonstrate that costs incurred are allowable. The Auditor noted overpayment of various payroll after the time of employee resignation in the Special Education Cluster (IDEA) 84.027/84.173. The District did not follow internal control processes / procedures as outlined per the Employee Handbook related to the employee resignation process for payroll financed by federal assistance. Employees no longer employed for the District were paid with federal assistance that were unallowable. There were questioned costs of $26,857. Corrective Actions Taken or Planned: The District agrees with the finding. KCPS will strengthen and/or implement the following internal controls by June 30,2025 to ensure separating staff members are promptly offboarded, mitigating overpayments of wages: a. Training: Human Resources will review/train all supervisors on the employee separation process and provide ongoing technical assistance. Person responsible for implementation: Micah Enders Executive Director of Human Resources b. SOP: Human Resources will create a central repository using a dedicated email, streamlining the notification process and reducing the lag time between supervisors and Human Resources. Person responsible for implementation: Jordan Gordon Chief Operating Officer c. Monitoring: Human Resources will conduct monthly reviews with budget holders aimed to verify and confirm active employee listing. Human Resources will maintain this record with certification of accuracy via signature from the Budget Holder. Person responsible for implementation: Micah Enders Executive Director of Human Resources d. Reporting: As part of progress monitoring, separations will be included in the HR weekly quality assurance review. As discrepancies are identified, technical assistance will be scheduled and documented with the appropriate supervisor. In addition, Finance, Human Resources and Information Technology departments will identify and source a digital tool to automate exception reporting. Person responsible for implementation: Jordan Gordon Chief Operating Officer

The department will adopt written policies with the Uniform Guidance for Federally Funded Grant Programs accepted by the department.

Finding 2023-003: Establish and maintain effective internal control over the Federal award Plan: We have ensured all policies and procedures have been vetted by an attorney and approved by the River View Board of Trustees and the Claremont Learning Partnership Board of Directors. Moving forward, the Executive Director will ensure that all policies and procedures stay current and are reviewed by the Board annually. FY-22 & FY-23 Audits were completed in tandem, all corrections were made as soon as the issue was identified. Expected Implementation Date: RiverView amended the policy on June 17, 2025, CLP amended the policy on July 3, 2025. Contact: Cathy Pellerin Executive Director, Claremont Learning Partnership 169 Main Street; Claremont, NH 03743 603-287-7120

Finding: 2023-005 • Condition: There are no written policies and procedures for allowable costs/cost principles, cash management, procurement and suspension and debarment requirements. • Planned Corrective Action: Financial policies and procedures will be created and implemented. Contact Person: Katherine Jaeger Anticipated Date of Completion: 6/30/2025

Management Response #2023-006: Due to the financial system and time keeping infrastructure, the Corporation did not maintain evidence of fringe benefit cost objectives calculations. Also, the current fringe cost rate and allocations is based on historical assumptions. Corrective Action Plan: • The finance team will work to ensure fringe costs are entered into the financial system based on actual costs paid by the Corporation for each employee. • The grants finance department will also create actual to budget reports in accordance with HRSA guidelines for fringe costs. • The Finance Team will develop fringe costs reports to calculate, monitor and support the current rate. This will allow us to ensure the fringe cost allocation conform to the current regulations. Responsible Party: Tamara Barnes, CFO