Corrective Action Plans

VIEWS OF RESPONSIBLE OFFICIALS Management reviewed the reporting process and identified that the discrepancy resulted from reliance on PMS drawdown and cash-basis payment activity rather than cumulative accrualbased expenditures recorded in SAP. Internal procedures have been revised to ensure that Line 10.e reflects total cumulative expenditure recorded on an accrual basis, consistent with the accounting records. Implemented or Planned Corrective Measures: 1. Management Action: The interim SF-425 for Grant 02TD0022301 was formally reviewed on February 11, 2026, corrected to properly reflect cumulative expenditures in Line 10.e, and resubmitted through the Payment Management System (PMS). 2. Management Meeting: On February 25, 2026, a formal meeting was held with the Fiscal Team, Program Director, Sub-Director, Budget/Fiscal Analyst, and Fiscal Consultant to review the finding and establish the enhanced corrective plan. 3. Corrective Measure Related to Root Cause: The reporting process has been revised to ensure that all SF-425 reports are prepared using cumulative accrual-based expenditure data directly extracted from SAP, consistent with accrual accounting principles and 2 CFR §200.302(b)(2). This enhancement strengthens internal controls over financial reporting in accordance with 2 CFR §200.303 4. Implementation of a formal reconciliation process between the general ledger (SAP), supporting expenditure reports, and the SF-425 prior to submission. 5. Comprehensive Preventive Review: Management initiated a comprehensive review of all SF-425 reports submitted from July 1, 2025, to the present. This review includes reconciliation of Lines 10.e and 10.f to SAP general ledger data to confirm compliance with accrual-based reporting standards. The review will be completed no later than March 30, 2026. Results will be formally documented in accordance with the Federal Reporting Procedures Manual and presented to the Governing Board at its meeting on March 30, 2026. 6. Structural Improvements Implemented: 1. Budget/Fiscal Analyst formally responsible for extracting cumulative data from SAP, preparing SF-425, and completing standardized reconciliation of Lines 10.e and 10.f. 2. Fiscal Consultant responsible for independent review, validation of compliance with 2 CFR §§200.302 and 200.303, certification, and submission in PMS. 3. Implementation of a standardized reconciliation worksheet. 4. Training for fiscal personnel scheduled for March 5, 2026, covering revised procedures and Uniform Guidance requirements. 7. Governance and Monitoring: • Adoption of the formal Federal Reporting Procedures Manual. • Establishment of an Annual Federal Reporting Calendar reviewed monthly. • Monitoring by the Sub-Director with documentation in fiscal meeting minutes. • Formal presentation of the audit finding and revised procedures to the Governing Board on March 30, 2026. 8. All corrective actions are expected to be fully implemented no later than March 30, 2026. IMPLEMENTATION DATE March 30, 2026 RESPONSIBLE PERSONS Margot Vélez Meléndez, Director of Head Start Program

FINDING 2025-008 Finding Subject: COVID-19 - Education Stabilization Fund – Condition of Records Federal Agency: Department of Education Audit Findings: Material Weakness, Modified Opinion Contact Person Responsible for Corrective Action: Lela Simmons, CFO Contact Phone Number and Email Address: 219 391 4100 Ex 12365: lesimmons@ecps.org Views of Responsible Officials: We concur with the finding Description of Corrective Action Plan: Internal controls will be put in place to ensure all COVID 19 ESSER Funds are reported accurately to the State and Federal Department of Education. Reimbursements will be attached to State Email for disbursement. Anticipated Completion Date: We anticipate having the above corrective action plan in place by October 31, 2026

VIEWS OF RESPONSIBLE OFFICIALS We are resolving these deficiencies by leveraging the new Government ERP system, scheduled for launch in July 2026. This platform will provide the essential functionality to properly configure our Chart of Accounts, ensuring that all TANF and PTTA administrative expenditures are automatically segregated by federal award and Assistance Listing Number (ALN). This system will be the foundation for accurate, traceable, and reconcilable financial reporting, supported by robust internal controls and multi-level supervisory oversight. Action Steps: 1. ERP Chart of Accounts Configuration – Configure the ERP system with a granular Chart of Accounts that strictly segregates TANF and PTTA administrative expenditures, ensuring every transaction is coded to the correct federal grant and ALN. 2. Automated Reporting Workflow – Utilize the ERP's financial reporting modules to generate ACF-196TR reports directly from the General Ledger, ensuring reported expenditures are 100% traceable to source transactions. 3. Digital Reconciliation Workpaper – Require the ERP to generate an automated "Reconciliation Package" for every ACF-196TR submission, which links reported line items directly to General Ledger accounts, eliminating discrepancies. 4. Staff Training & ERP Stabilization – Execute comprehensive training for all finance staff on the new ERP accounting structure, reconciliation modules, and federal reporting requirements, ensuring the system is utilized for full audit compliance. IMPLEMENTATION DATE During Fiscal Year 2026-2027 RESPONSIBLE PERSON Eddie J. Burgos Auxiliary Administrator for Finance and Budget Carlos Martinez Colón Finance Director Vanessa Ayala Gerena Director of Budget

VIEWS OF RESPONSIBLE OFFICIALS ADFAN appreciates the observations presented in the audit and acknowledges the importance of strengthening its reporting processes. The agency recognizes that staffing limitations within the Finance Division have affected the ability to perform timely reviews and ensure adequate segregation of duties. Additionally, the Finance Procedures Manual referenced during the audit was approved in 2009 and is currently undergoing a comprehensive revision to reflect the agency’s present operational structure and accounting practices. ADFAN is committed to improving its internal controls, enhancing staff training, and implementing the necessary measures to ensure full compliance with federal reporting requirements moving forward. IMPLEMENTATION DATE December 31, 2026 RESPONSIBLE PERSON Yazmín Cruz Colón, Budget Director

VIEWS OF RESPONSIBLE OFFICIALS ADSEF is committed to establishing a comprehensive internal control framework. We are prioritizing the development of formal written policies, the standardization of regional data reporting, and the implementation of a rigorous oversight system to ensure all TANF programmatic reports are complete, accurate, and filed on time. Action Steps: 1. Revise the Protocol of “TANF – Reporting Procedures Manual" that defines the full data lifecycle: collection, regional validation, quality control, supervisory review, and submission. 2. Regional Standardization – Establish mandatory, standardized templates for all regional offices to report programmatic data, ensuring uniformity and minimizing data entry errors. 3. Reporting Calendar & Oversight – Implement a master’s "Federal Reporting Calendar" that tracks all due dates for ACF-199, ACF-209, and other reports, with automated alerts sent to management 30 days prior to submission. 4. Training & Certification – Launch a mandatory training curriculum for all staff involved in reporting, focusing on 45 CFR Part 265 standards, data accuracy, and the consequences of reporting failures. IMPLEMENTATION DATE During Fiscal Year 2026-2027 RESPONSIBLE PERSON Blanca M. Medina Díaz Administrator Gerhil Medina Baez Auxiliary Administrator Operational Services Johana Hernandez Andaluz TANF Program Director

VIEWS OF RESPONSIBLE OFFICIALS To resolve this, we are integrating these reporting requirements into the new Government ERP system, scheduled for launch in July 2026. This platform will provide the capability to generate accurate General Ledger data and automated financial reports, ensuring that all LIHEAP performance data is traceable to verified accounting sources and subject to multi-level supervisory approval workflows. Action Steps: 1. ERP-Driven Financial Reporting – Configure the ERP system to generate General Ledger reports that align precisely with LIHEAP financial data requirements. The ERP will serve as the "Single Source of Truth," eliminating discrepancies between accounting and reporting. 2. Automated Reconciliation Workflows – Utilize the ERP’s native reconciliation engine to automatically match expenditure records against reported LIHEAP budget obligations, ensuring figures are accurate and validated before submission. 3. Segregation of Duties (SOPs) – Formalize protocols where the ERP system enforces mandatory "Preparer-Approver-Certifier" roles. This ensures that performance data compiled by program staff is independently validated against ERP financial records by a supervisor. 4. Training on ERP Reporting – Train all staff on how to use ERP reporting modules for financial data extraction and the new protocols for reconciling this data with programmatic LIHEAP performance metrics. IMPLEMENTATION DATE During Fiscal Year 2026-2027 RESPONSIBLE PERSON Eddie J. Burgos Auxiliary Administrator for Finance and Budget Carlos Martinez Colón Finance Director Vanessa Ayala Gerena Director of Budget Nesvia Fontanez Marín Principal Accountant Federal Reports

VIEWS OF RESPONSIBLE OFFICIALS To resolve these systemic issues, the Government of Puerto Rico is transitioning to a new Enterprise Resource Planning (ERP) system, scheduled for live launch in July 2026. This modern platform will centralize our financial data and provide the necessary automation to ensure that all federal reports are accurate, traceable to source documentation, and subject to multi-level supervisory approval workflows. Action Steps: 1. ERP Implementation & Workflow – Deploy the new ERP system to centralize all financial accounting. The system will be configured to require distinct user roles for the preparation, review, and certification of federal reports. 2. Automated Traceability – Utilize ERP reporting tools to ensure all administrative expenditures are linked to valid source documentation (e.g., invoices, payroll registers), providing a clear audit trail from report to General Ledger. 3. Implement report validation tool – No federal report may be submitted until an independent, designated official has digitally validated the report against source accounting records. 4. Reconciliation SOPs – Formalize a written SOP requiring monthly reconciliations of reported federal expenditures against the ERP database. These reconciliations will be retained as evidence of review for audit purposes. 5. Training & Accountability – Conduct mandatory training for all staff on new reporting workflows and the importance of segregation of duties, ensuring all personnel understand their responsibility in maintaining accurate financial data. IMPLEMENTATION DATE During Fiscal Year 2026-2027 RESPONSIBLE PERSON Eddie J. Burgos Auxiliary Administrator for Finance and Budget Carlos Martinez Colón Finance Director Vanessa Ayala Gerena Director of Budget

VIEWS OF RESPONSIBLE OFFICIALS ADFAN concurs with the finding. The agency acknowledges the requirement to maintain written procedures in accordance with 2 CFR §200.302, including procedures related to cash management and the determination of allowable costs under federal awards. The condition identified was impacted by limited staffing resources within the Finance Area, which affected the timely completion and formalization of the required written procedures. In addition, the Finance Procedures Manual is currently under review and revision to ensure compliance with Uniform Guidance requirements and to strengthen internal controls over federal programs. As corrective action, ADFAN is completing the update and formalization of the Finance Procedures Manual, which will incorporate the written procedures required by Uniform Guidance. Upon completion, the revised manual will be formally approved, communicated to relevant personnel, and implemented across the agency. Management will also continue assessing staffing needs and resource allocation within the Finance Area to support the ongoing maintenance and monitoring of financial policies and procedures. IMPLEMENTATION DATE December 31, 2026 RESPONSIBLE PERSON Rafael López Arocho Assistant Administrator on Administration

VIEWS OF RESPONSIBLE OFFICIALS ADSEF is committed to transitioning from manual, offline tracking to a fully integrated, system-based approach within our Enterprise Resource Planning (ERP) system. Action Step: 1. ERP System Configuration: Configure the ERP system to automatically flag and categorize transactions eligible for indirect cost calculation by class object, replacing manual Excel-based methods. 2. Indirect Cost SOP-Develop and implement written formal procedures detailing the extraction of data from the ERP, ensuring traceability back to the source transaction IMPLEMENTATION DATE During Fiscal Year 2026-2027 RESPONSIBLE PERSON Eddie J. Burgos Auxiliary Administrator for Finance and Budget Carlos Martinez Colón Finance Director Vanessa Ayala Gerena Director of Budget

VIEWS OF RESPONSIBLE OFFICIALS ADSEF acknowledges the findings regarding weaknesses in the Random Moment Sampling (RMS) methodology used for allocating administrative costs. We conclude that the absence of formal written procedures, combined with insufficient communication between the Human Resources Appointments Office and the Finance Division, has contributed to inaccuracies in the distribution of administrative expenses across federal programs. ADSEF reaffirms its commitment to strengthening its cost allocation plan to ensure that only allowable costs, directly associated with the administration of federal awards, are charged to the TANF program, in strict compliance with 2 CFR §200.302. Action Steps: 1. Policy Formalization Develop, approve, and implement a comprehensive Standard Operating Procedure (SOP) that formalizes the RMS methodology, including clear and standardized definitions for all survey response categories. 2. HR–Finance Liaison Establish a structured monthly reporting protocol between the Human Resources Appointments Office and the Finance Division to ensure the RMS participant list remains accurate, complete, and current. 3. RMS Questionnaire Update Revise the RMS questionnaire to remove non-federal program selections and ensure that all response options align directly with federally allowable functions. 4. Quarterly Oversight Institute a mandatory quarterly review of RMS results by senior management to validate alignment between RMS survey data and accounting system allocations IMPLEMENTATION DATE March 31, 2027 RESPONSIBLE PERSON Eddie J. Burgos Auxiliary Administrator for Finance and Budget Coral M. Caceres Alvarez Auxiliary Administrator Human Resources Carlos Martinez Colón Finance Director Vanessa Ayala Gerena Director of Budget Gerhil Medina Baez Auxiliary Administrator Operational Services Rafael Acosta Sepulveda Program Director

VIEWS OF RESPONSIBLE OFFICIALS The data will be evaluated by the IT department to verify the controls in place at the time the files identified as duplicates were issued. Regarding the issuance, the IT department acknowledges an error in the file transmission, which resulted in the information not being matched against the issuance. The data will be available as reference for evaluation. For reconciliation purposes, work will be performed efficiently and within the established timeframes to ensure that all transactions are recorded promptly in the system. This will enable the accurate completion of the reconciliation process, as well as the recording of issuances and any other related transactions, in accordance with established procedures. IMPLEMENTATION DATE During Fiscal Year 2026-2027 RESPONSIBLE PERSON Blanca M. Medina Díaz Administrator Eddie J. Burgos Auxiliary Administrator for Finance and Budget Carlos Martinez Colón Finance Director Vanessa Ayala Gerena Director of Budget Carmen Ramírez IT Director

VIEWS OF RESPONSIBLE OFFICIALS In response to the single audit finding we will take the following actions. We will establish internal controls that provide certainty, effective monitoring data validation and accountability for those employees who approved expenditures. We will prepare written process in accordance with both state and federal regulations. We will prepare written process in accordance with both state and federal regulations. We will require relevant staff (Staff interacting with procurement, expenditures approval) a comprehensive training program on the requirements of CFR 200. IMPLEMENTATION DATE September 30, 2026 RESPONSIBLE PERSON Ivan Rentas, President

Finding Number 2023-018 Subject Heading (Financial) or AL no. and program name (Federal) 20.509 - Formula Grants for Rural Areas Planned Corrective Action We concur with the auditor’s recommendations. As of SFY 2025, OMPT has revised its procedures to strengthen internal controls and ensure payroll expenditures are charged to the appropriate grant. A project was established for each FTA grant program to receive payroll charges based on actual charges. Training was provided to OMPT staff on June 28, 2024. Anticipated Completion Date 7/1/2025 Responsible Contact Person Eric Rose/Bobby Parkinson

VIEWS OF RESPONSIBLE OFFICIALS It is recommended, among other things, to establish internal controls that provide certainty, effective monitoring, data validation, and accountability for those employees who execute the reporting processes. To this end, the personnel responsible will be convened and written processes will be issued to expedite the information requests and ensure their rapid submission. This will be in accordance with both state and federal regulations. Once the agreements are finalized, they will be submitted to the auditing firm. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Socioeconomic Development of the Family (ADSEF, by its Spanish Acronym)

VIEWS OF RESPONSIBLE OFFICIALS Review the accounting system to ensure consistency with SF– 425 reporting. Establish a protocol for the review and approval of financial reports. Designate a financial compliance officer to validate reports prior to submission. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Families and Children (ADFAN, by the Spanish Acronym)

VIEWS OF RESPONSIBLE OFFICIALS ADSEF has controls and procedural manuals related to data collection. As part of the digitization project process, ADSEF seeks to standardize procedures and ensure the organization and proper location of documents within the files. Annexes IMPLEMENTATION DATE Up to Date RESPONSIBLE PERSON Administration for Socioeconomic Development of the Family (ADSEF, by its Spanish Acronym) AUDITORS’ COMMENT ADSEF did not provide us with a manual describing the data collection process as requested during the auditing procedures. An unsigned and undated Manual was attached to the Corrective Action Plan. Also, ADSEF was required to provide us with the corresponding participant worksheet appendix and the physical file to corroborate the information included in the report. ADSEF provided us with evidence of the hand-completed forms; however, we were not provided with the physical files to validate the information included in each document. This represents a scope limitation.

VIEWS OF RESPONSIBLE OFFICIALS It is recommended, among other things, to establish internal controls that provide certainty, effective monitoring, data validation, and accountability for those employees who execute the reporting processes. To this end, the personnel responsible will be convened and written processes will be issued to expedite the information requests and ensure their rapid submission. This will be in accordance with both state and federal regulations. Once the agreements are finalized, they will be submitted to the auditing firm. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Socioeconomic Development of the Family (ADSEF, by its Spanish Acronym)

VIEWS OF RESPONSIBLE OFFICIALS It is recommended, among other things, to establish internal controls that provide certainty, effective monitoring, data validation, and accountability for those employees who execute the reporting processes. To this end, the personnel responsible will be convened and written processes will be issued to expedite the information requests and ensure their rapid submission. This will be in accordance with both state and federal regulations. Once the agreements are finalized, they will be submitted to the auditing firm. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Socioeconomic Development of the Family (ADSEF, by its Spanish Acronym)

VIEWS OF RESPONSIBLE OFFICIALS In Process Develop an operational procedures manual for each program under Uniform Guidance. Include flow outlining key processes. Assign personnel responsible for each function and establish periodic review mechanisms. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Families and Children (ADFAN, by the Spanish Acronym)

VIEWS OF RESPONSIBLE OFFICIALS It is recommended, among other things, to establish internal controls that provide certainty, effective monitoring, data validation, and accountability for those employees who execute the reporting processes. To this end, the personnel responsible will be convened and written processes will be issued to expedite the information requests and ensure their rapid submission. This will be in accordance with both state and federal regulations. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Socioeconomic Development of the Family (ADSEF, by its Spanish Acronym)

VIEWS OF RESPONSIBLE OFFICIALS It is recommended, among other things, to establish internal controls that provide certainty, effective monitoring, data validation, and accountability for those employees who execute the reporting processes. To this end, the personnel responsible will be convened and written processes will be issued to expedite the information requests and ensure their rapid submission. This will be in accordance with both state and federal regulations. Once the agreements are finalized, they will be submitted to the auditing firm. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Socioeconomic Development of the Family (ADSEF, by its Spanish Acronym)

VIEWS OF RESPONSIBLE OFFICIALS It is recommended, among other things, to establish internal controls that provide certainty, effective monitoring, data validation, and accountability for those employees who execute the reporting processes. To this end, the personnel responsible will be convened and written processes will be issued to expedite the information requests and ensure their rapid submission. This will be in accordance with both state and federal regulations. Once the agreements are finalized, they will be submitted to the auditing firm. IMPLEMENTATION DATE During Fiscal Year 2025-2026. RESPONSIBLE PERSON Administration for Socioeconomic Development of the Family (ADSEF, by its Spanish Acronym)

Corrective Action With the organization of the Business Office under the new Business Administrator, the Charter School has implemented a system that utilizing docuware support to ensure that supporting schedules and documents for claims are readily available and ensure proper safekeeping of pertinent documents. In addition, this supports that the Charter School maintains supporting documentation for seven (7) years and making it available to the NJDOE, the U.S. Department of Education, and/or their authorized representatives upon request. Person(s) Responsible Bernadette Pinto, Interim School Business Administrator Planned Completion Date June 30, 2024

FINDING 2022-004 Contact Person Responsible for Corrective Action: George ann Ewald, Director of Finance & HR Contact Phone Number: (574) 277-4452 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: The Director of Finance & HR will expand Fund 8700 to include adding line items for all allowable reimbursement costs associated with each firefighter position covered by the 2019 Staffing for Adequate Fire and Emergency Response (SAFER) federal grant. The Director of Finance & HR will ensure that all funds used to compensate each covered firefighter position will be paid entirely out of Fund 8700, only. This action will result in a negative value for Fund 8700 until which time the fund is reimbursed the allowable costs under the provisions of the federal grant. The Director of Finance & HR will generate a report for each reimbursement request, which will be limited to include only the payroll dates of the period for which the request is being submitted. The Fire Chief will review and confirm that all associated costs have been withdrawn from Fund 8700. The Fire Chief will then direct the Assistant Fire Chief to complete the reimbursement request via the FEMA GO website. Once the reimbursement request has been submitted, the Assistant Fire Chief will print the completed reimbursement request documents and obtain signatures from each of the following individuals: 1. Prepared By: (NAME), Director of Finance & HR 2. Reviewed & Approved By: (NAME), Fire Chief 3. Submitted By: (NAME), Assistant Fire Chief Anticipated Completion Date: ? Implementation: June 2023