Corrective Action Plans

DJFS will begin to use project numbers to allow for an additional check of all amounts reported. DJFS is also going to provide federal grant information to the Auditor’s office as soon as they complete their final report in order to give the Auditor’s office adequate time to review the information with MUNIS and will afford the Auditor’s office more time to compile the SEFA and have a secondary review to avoid any computational or clerical errors.

Finding No. 2025-001 Significant Deficiency in Internal Control over Compliance, Other Matters Condition The Organization had revisions to the SEFA and management’s review and approval process did not detect the following errors that were identified during the audit procedures performed: - An incorrect de minimis indirect cost rate was used and charged to a federal award. - Approximately $65,000 of federal expenditures were omitted from the initial SEFA. - Subrecipient costs from the prior year were charged to the current year due to incomplete accruals in the prior year. As a result, the SEFA was not complete or accurate prior to submission for audit. Planned Corrective Action: Management concurs with the findings and related recommendations. While the Organization completed its federal award activity in May 2025 and does not currently anticipate additional federal award activity, it recognizes the importance of compliance with grant reporting requirements, including the accurate preparation of the Schedule of Expenditures of Federal Awards (SEFA). In response to this finding, the Organization has taken the following corrective actions: Indirect Cost Rate: Updated our grant setup checklist to ensure the correct de minimis indirect cost rate is applied. The Organization has initiated and is currently processing the repayment of the overcharged indirect costs to the primary awardee. SEFA Completeness & Year-End Cutoff: Implemented a formal year-end SEFA reconciliation procedure. This includes a secondary review by the Director, Accounting to cross-reference general ledger federal expenditures against grant award agreements and to verify that all subrecipient accruals are recorded in the proper fiscal period. These improvements in our review and approval functions are designed to prevent future reporting omissions and ensure timely, accurate SEFA preparation should the Organization be subject to Single Audit requirements in the future. Anticipated Completion Date: July 31, 2026 Name of Contact Person: Melinda O’Leary, Chief Financial Officer & Vice President If the Cognizant or Oversight Agency for Audit has questions regarding this plan, please call Melinda O’Leary, Chief Financial Officer & Vice President at 571-483-1324.

SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS – ALL FEDERAL PROGRAMS 2025-002 Reporting Compliance Requirement – Schedule of Expenditures of Federal Awards (SEFA) Finding Summary 2 CFR § 200.510 requires that the City prepare appropriate annual financial statements, including the Schedule of Expenditures of Federal Awards (SEFA), which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. The City did not have proper controls in place to ensure completeness of the SEFA and compliance with this requirement. During our audit, we noted the City did not have sufficient controls in place to ensure the accurate preparation of the SEFA in compliance with this requirement. The City’s SEFA for fiscal 2025 was overstated by $147,700 in federal expenditures due to the inclusion of costs that were incurred in the previous fiscal year. Corrective Action Plan Actions Planned – The SEFA overstatement resulted from including prior-year expenditures in the 2025 reporting period. The City did not prepare a SEFA in the previous fiscal year because federal expenditures did not meet the Single Audit threshold; this contributed to the oversight in tracking the timing of eligible expenditures. To strengthen the year-end reporting process, the City has implemented updated procedures requiring a grant-level reconciliation of expenditures and revenues at year-end to ensure they are recorded in the proper fiscal period before preparing the SEFA. Federal grant coordinators and Finance Department staff will jointly review federal expenditures for accuracy and timing. This strengthened process will help ensure complete and accurate federal expenditure reporting in the SEFA. Official Responsible – Kim Sommerland, Finance Director. Planned Completion Date – June 30, 2026. Disagreement With or Explanation of Finding – The City agrees with the finding and has implemented additional procedures to strengthen controls over reporting. Plan to Monitor – The Finance Director will verify that year-end grant reconciliations are completed and reviewed prior to SEFA preparation.

Condition: The Outdoor Recreation Acquisition, Development and Planning program and the Drinking Water State Revolving Fund program expenditures on the schedule of expenditures of federal awards (SEFA) initially presented for audit were not complete and accurate. Planned Corrective Action: The Finance Department recently hired a new Grants Manager after being without this critical position for almost a year. The Grants Manager, along with the Grant Specialist and the Financial Reporting team accountants, plan to work together to improve the tracking and reconciliation of grant activity. In addition, the City implemented eCivis Euna Grants, a grant application, tracking, and reporting system, in November of 2025. The Grants Team will be working with Departments to document the grants process formally for the City and this will ensure that all grants are accounted for and tracked in the Euna grants system. This renewed capacity and new initaitives, supported by the new administrative cost recovery framework and the City's grants management platform, reflects a broader commitment to managing external funding with the same discipline applied to locally generated revenues. Contact person responsible for corrective action: Julie Cunningham, Grants Manager. Anticipated Completion date: 05/01/2027

Fergus has adopted and implemented policy: 252.0 Federal Funding Compliance to establish formal procedures and ensure ongoing compliance with applicable federal regulations, including 7 CFR 4280, Subpart A and 2 CFR 200. Anticipated completion date: August 31, 2026

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS – ALL FEDERAL PROGRAMS 2025-001 Reporting Compliance Requirement Finding Summary 2 CFR § 200.510 requires that the City of South St. Paul, Minnesota (the City) prepare appropriate annual financial statements, including the Schedule of Expenditures of Federal Awards (SEFA), which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. During our audit, we noted the City did not have sufficient controls in place to ensure the accurate preparation of the SEFA in compliance with this requirement. The City’s SEFA for fiscal 2025 was overstated by $749,656 in federal expenditures, due to the inclusion of costs that were incurred in the previous fiscal year. Corrective Action Plan Actions Planned – The City has implemented new processes and procedures in 2026 which address this internal control finding to comply with the Uniform Guidance in the future. Finance department personnel will work with federal grant coordinators to assure that federal expenditures are accurately reported on the SEFA for all federal programs. Official Responsible – Clara Hilger, Finance Director. Planned Completion Date – June 30, 2026. Disagreement With or Explanation of Finding – The City agrees with this finding. Plan to Monitor – The City’s Finance Director, Clara Hilger, will ensure the new process and procedures implemented in this area ensure future compliance with the Uniform Guidance.

The Homeland Security and Emergency Management Agency (HSEMA) agrees with the conditions and recommendations of this finding. From PSJC’s perspective, this finding includes prior year (FY2020) approved expenditures not reported in FY2025 SF-425. We believe there was a transparency gap, as the discrepancies between the SF-425 reports and the SEFA expenditure totals should have been identified, disclosed and brought to our attention in prior audit engagements. Overall, we concur with the findings. The SEFA was adjusted in fiscal 2020 for expenditures that were not approved, however we did not capture the approved expenditures in the following years on SF425. Management will ensure that SEFA expenditure and SF 425 cash disbursements are aligned. We will perform first and second level review of the SF425 and SEFA. Management also concurs with the fact that the subrecipient passthrough on the SEFA should be non-district agencies. We will review the SEFA and report only non-district agencies as pass through to subrecipients.

The Department of Behavioral Health (DBH) Office of the Chief Financial Officer (OCFO) concurs with this finding. FFATA Reporting Compliance: In February 2026, the DBH Grants Management Office created an FFATA procedure to ensure compliance with timely FFATA reporting. As a result of this finding, the procedure has been updated to report bi-weekly rather than monthly to ensure reporting under 30 days. The GMO Director will also provide continuous training to staff outside of the GMO to ensure staffing will not become a barrier, as experienced in early 2026. As of June 1, 2026, all FFATA entries as of the May 25th purchase order (R071) report have been reported. Additionally, as we plan for the forthcoming electronic grants management system (eGMS) we’re in discussion to add a report feature that will provide needed info for FFATA entry i.e., UEI, FAIN, award amount and purchase order # to automate the process. SEFA Reporting Compliance: Prior to the submission of the SEFA, the grant expenditures will be reviewed with the Accounting Officer, The AFO, and the Grants Program Manager for a detailed review of the SEFA to confirm expenditures are correctly categorized by fund and grants, reconciles to the DIFS R019 report and reflects the amount expended for sub-recipients. Effective FY26, subrecipient totals are uniquely identified with an account number that will reflect in the R019 report as a subset of total expenditures. This report will be used to complete the SEFA going forward.

The Department of Behavioral Health (DBH) Office of the Chief Financial Officer (OCFO) concurs with this finding. FFATA Reporting Compliance: In February 2026, the DBH Grants Management Office created an FFATA procedure to ensure compliance with timely FFATA reporting. As a result of this finding, the procedure has been updated to report bi-weekly rather than monthly to ensure reporting under 30 days. The GMO Director will also provide continuous training to staff outside of the GMO to ensure staffing will not become a barrier, as experienced in early 2026. As of June 1, 2026, all FFATA entries as of the May 25th purchase order (R071) report have been reported. Additionally, as we plan for the forthcoming electronic grants management system (eGMS) we’re in discussion to add a report feature that will provide needed info for FFATA entry i.e., UEI, FAIN, award amount and purchase order # to automate the process. SEFA Reporting Compliance: Prior to the submission of the SEFA, the grant expenditures will be reviewed with the Accounting Officer, The AFO, and the Grants Program Manager for a detailed review of the SEFA to confirm expenditures are correctly categorized by fund and grants, reconciles to the DIFS R019 report and reflects the amount expended for sub-recipients. Effective FY26, subrecipient totals are uniquely identified with an account number that will reflect in the R019 report as a subset of total expenditures. This report will be used to complete the SEFA going forward.

The Office of the State Superintendent of Education (OSSE) concurs with the auditor’s finding and recommendations related to this finding. This oversight occurred during the transition to the new corrective action plan instituted during the prior fiscal year. OSSE is confident in its new review process of FFATA that will prevent the underlying reporting issue from recurring. OCFO concurs with the auditor’s finding. The original classification reflected OCFO’s judgment during report compilation rather than lack of control. Based on the initial analysis, the OCFO had not bifurcated the amount of the subrecipients’, School Food Authorities (SFAs) and Food Service Program Sponsors (SFSPs), expenditures in the SEFA under the Passed Through to Subrecipients column. CNC program operated as a reimbursement mechanism where School Food Authorities (SFAs) and Summer Food Services Program (SFSP) Sponsors received payments as Subrecipients. Subsequently reviewed, OCFO bifurcated the related expenditure in the SEFA, which resulted in updating the SEFA accordingly. OCFO remains committed to complying with its policies and procedures and will implement an additional layer of review to ensure the accuracy of the SEFA.

The Division is in the process of designing and implementing a precise control to ensure that the amount of food distributed is properly reviewed and that the Division maintains such evidence. Anticipated Completion Date: 9/30/2026 Responsible Contact Person: Michael Zielinski, Major, Divisional Commander.

A designated Finance staff member with knowledge of the Uniform Guidance requirements will be responsible for overseeing SEFA preparation for each fiscal year-end. A grant-by-grant SEFA reconciliation will be completed prior to yearend close, with particular attention to period-end cutoff. The SEFA will be independently reviewed by the Finance Director and compared to grant expenditure reports before the audit commences. Management will engage its external accountants earlier in the year-end close process.

Management's View and Corrective Action Plan Audit Finding for the Year Ended December 31, 2025 2025-001 – Schedule of Expenditures of Federal Awards Reporting Significant Deficiency - Community Development Block Grant Cluster Entitlement/Special Purpose Grants Response Management agrees that the Community Development Block Grant Cluster Entitlement/Special Grant was not identified in the system as federally funded at the time of grant set up in 2024. During the preparation of the prior year Schedule of Expenditures of Federal Awards (“Federal Schedule”), this award was omitted from the Federal Schedule since it was not identified as a federal grant within the grant listings. Management has implemented the following improvements: • Management will confirm federal grants with all government agencies the Association has received grants from each calendar year end • Retrain staff on identification of federal grants • Institute appropriate review procedures of the Federal Schedule Completion date: March 31, 2026 Responsible person contact name: Heather Livernois, Vice President, Finance/Chief Accounting Officer

SEFA Reporting Significant Deficiency - Ryan White HIV/AIDS Program Parts A and B Management’s Views and Opinion Sunset Park Health Council, Inc. acknowledges the finding and agrees that the Ending the HIV Epidemic: A Plan for America — Ryan White HIV/AIDS Program Parts A and B grant should have been identified and reported as a federal award on the Schedule of Expenditures of Federal Awards (“SEFA”) beginning with the applicable award period. Management notes that the omission resulted from the Assistance Listing Number (“ALN”) not being identified at the time of the initial grant setup, which impacted the subsequent classification of the award for SEFA reporting purposes. Once identified during the FY2025 audit process, management corrected the matter by including the cumulative federal expenditures under the award on the FY2025 SEFA. Management also notes that there were no questioned costs and that the omission did not impact the prior-year major program determinations. Sunset Park is committed to strengthening its grant setup, award identification, and SEFA review controls to ensure that all federal awards, including federal pass-through awards, are accurately identified, classified, and reported in accordance with Uniform Guidance. The corrective actions described below are intended to improve the completeness and accuracy of federal award reporting and to prevent similar omissions in future reporting periods. Corrective Action Plan: To mitigate this risk, the following controls and procedures will be implemented: 1. Quarterly Grant Review All active and new grants will be reviewed on a quarterly basis by the Director of Grants and Grant Accountants to ensure completeness and accuracy of key award data, including CFDA/ALN identification. Any discrepancies will be identified and corrected timely. 2. AAW (Award Authorization Workflow) Control All Award Authorization Work (AAW) forms submitted to NYU Research Data Management (RDM) will require review and initial approval by the Director of Grants prior to submission, confirming that all required fields, including CFDA/ALN, are complete. 3. RDM Submission Verification Each submission to RDM will require confirmation and acknowledgment that all award data has been properly entered and recorded for both new and existing grants. 4. Chartstring Verification Control As part of the chartstring distribution process, Grant Accountants will confirm that all relevant grant attributes, including CFDA/ALN numbers, have been accurately established and communicated to program teams. 5. SEFA and Interim Review Procedures During interim reviews and annual SEFA preparation, each Grant Accountant will verify that all assigned grants are properly classified as federal or non-federal and that all applicable CFDA/ALN numbers are included and accurately reported. Responsible Parties: • Director of Grants • Grant Accountants • NYU Research Data Management (RDM) Implementation Timeline: Full implementation of corrective actions by August 31, 2026 Training: Grants Fiscal staff will undergo CFDA/ALN identification and SEFA reporting training by August 31, 2026. Training will be recorded and incorporated into onboarding for new staff. Conclusion: These corrective actions strengthen internal controls over grant setup and reporting, ensuring accurate identification of federal funding sources and completeness of SEFA reporting in compliance with Uniform Guidance. Responsible Individual Leonardo Arias Email: Leonardo.Arias@nyulangone.org

March 31, 2026 To: Clausell & Associates, P.C. From: Javonna Latimore, Executive Director of Meals on Wheels of Middle Georgia, Inc. COMMENT#2025-001 CONTROLS OVER FINANCIAL STATEMENT PREPARATION SHOULD BE IMPROVED Views of Responsible Officials and Planned Corrective Actions: We concur with this finding. The Organization has contracted with a seasoned outside accounting professional to assure that the financial system is designed to properly report financial activity by funding source and statements are completed and prepared timely. In addition, the Organization has committed to upgrading our accounting system software along with appropriate amendments to the formal accounting policy and procedures manual to cover the proper internal controls for accurately reporting financial activities (expenses) for each grant and making sure that the allocation of expenses is supported by a methodology governed by generally accepted accounting principles. The Organization will maintain a backup copy of all financial data on-site. The accounting process and the software backup process will be completed by July 31, 2026. The Organization is also engaged to have training on common software applications and cybersecurity awareness. Date to be implemented: On-going and completed by July 31, 2026. Persons responsible: Javonna Latimore, CEO, and financial consultant COMMENT#2025-002 POLICIES AND PROCEDURES AND INTERNAL CONTROLS OVER DISBURSEMENTS SHOULD BE IMPROVED Views of Responsible Officials and Planned Corrective Actions: We concur with this finding. The Organization will immediately assign a committee to take the lead in establishing policies and procedures and internal controls over the procurement process. The Organization has engaged a third party to help establish values of in-kind contributions. Date to be implemented: On-going and completed by July 31, 2026. Persons responsible: Javonna Latimore, CEO (contact person) under the direction of the board of directors with the outside consultant. COMMENT#2025-003 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED. Coronavirus State and Local Fiscal Recovery Funds, Aging Cluster, and Social Services Block Grant-Home Delivered Meals and Community Development Block Grant FALN 14.218, 21.027, 93.045, 93.053 and 93.667 GENERAL Views of Responsible Officials and Planned Corrective Actions: See Comment 2025-001 and 002. Date to be implemented: See Comment 2025-001 and 002. Persons responsible: See Comment 2025-001 and 002.

The Town of Spruce Pine will strengthen internal controls over the identification, tracking, and reporting of federal and state awards. Management will maintain a comprehensive, centralized listing of all known and potential federal and state awards throughout the fiscal year, including assistance listing numbers, award amounts, and pass‑through information. Grant expenditures and receivables will be reconciled to the general ledger on a monthly basis. Prior to submission to the auditors, the SEFSA be independently reviewed for completeness, accuracy, and compliance with federal and state requirements.

2025-001 – Completeness of certain programs on the prior years’ Schedules of Expenditures of Federal Awards (SEFA) Cluster: Not applicable Sponsoring Agency: Tennessee Emergency Management Agency Award Name: Presidential Disaster Declaration for Severe Storms, Straight-line Winds, and Flooding May 3-4, 2020; Presidential Disaster Declaration for COVID-19 beginning January 2020 Award Number: FEMA-4550-DR-TN; FEMA-4514-DR-TN Assistance Listing Title: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Award Year: 2022, 2024 Pass-through entity: Not applicable A reconciliation process was implemented by the Electric Power Board of the Metropolitan Government of Nashville and Davidson County (the “Board” or “NES”) in FY2025, the result of which was the discovery of the understatement referenced in the finding. FEMA expenses are now reconciled to, and obligation dates retrieved from, the Federal FEMA Grants Portal to ensure project expenses are accurately reported in the proper fiscal year. Further, NES leadership and staff have been trained on the new policies and procedures, with trainings occurring in October and November 2025. The Corporate Controller, Controls and Compliance Manager, and their respective teams will meet on a quarterly basis, beginning in December 2025, to discuss SEFA activities to ensure future SEFA reports are complete. For inquiries regarding this finding, please contact Tabitha Beach at tbeach@nespower.com who is responsible for the corrective action.

ECA agrees with this finding and has created a policy for identification and verification of funding sources for all contracts. This will ensure that all contracts are screened for federal funding regardless of what is listed in the contract/award/agreement. ECA will review its existing contracts to confirm all funding sources.

Ignacio School District has already taken steps in changing the overall process of managing our Federal Award grants and overall year-end closing entries. The district will be working closely with our new auditors to ensure that Single Audits are completed annually moving forward. Our district has implemented scheduled monthly Requests For Funds and budget reviews for each grant to confirm that the grants are being spent according to their approved applications. The Superintendent and Finance Director meet to review the overall process to ensure grant compliance. This includes, but is not limited to assuring that the district charges a de minimis indirect cost rate and submitting End of Year reports to CDE. The district has assigned responsibility of Federal Grant oversight to new personnel. To assure a segregation of duties, there are three district office personnel involved in the management and oversight of the grants. The district has also been trained on proper closing entry procedures for all year-end closing entries and year-end Annual Financial Reporting of grants.

The County acknowledges the importance of proper documentation for subrecipient monitoring. To address this finding, the County will implement the following: 1. Enhanced Review Process – County departments responsible for subrecipient agreements will conduct a thorough review of subrecipient monitoring activities to ensure compliance with federal and regulations. This will include verifying that all required monitoring steps, including risk assessments and are properly conducted and documented. 2. Documentation and Record-Keeping Improvements – County departments will be required to maintain clear and consistent documentation of all subrecipient monitoring activities. This includes risk assessments, financial reports, site visit records (if applicable), and any corrective actions taken.

Condition: During the years ended June 30, 2023, 2024, and 2025, National Church Residences entered into capital advance grant agreements (Section 202) with HUD, which were directly funded to affiliates of National Church Residences, and, in turn, National Church Residences entered into notes receivable from the related parties in the same amount as the capital advance. The loan expenditures and outstanding loan balances related to the ALN 14.157 U.S. Department of Housing and Urban Development - Supportive Housing for the Elderly (Section 202) - Capital Advance were not included on the SEFA for the years ended June 30, 2025, 2024, and 2023. Planned Corrective Action: National Church Residences is in the process of establishing additional layers of internal controls to help ensure that all new agreements and any subsequent modifications are captured timely, completely, and accurately within the special purpose financial statements and SEFA. Contact person responsible for corrective action: Lindsey Dehring, Vice President of Financial Planning & Analysis Anticipated Completion Date: July 1, 2026

Program: COVID-19 - Epidemiology and Laboratory Capacity for Infectious Disease (ELC) Assistance Listing No.: 93.323 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Public Health Award No.: COVID-19ELC114 Award Year: 2021 Compliance Requirement: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of Expenditures of Federal Awards Type of Finding: Material Weakness in Internal Control Over Compliance Department’s Management Response: Management agrees with the recommendation to enhance internal controls to ensure federal expenditures are reported accurately and completely on the SEFA in accordance with the Uniform Guidance. View of Responsible Officials and Corrective Action: To ensure compliance with §200.510(b) of the Uniform Guidance, the Auditor Controller’s Office will issue additional detailed instructions clarifying the period covered by the amounts to be reported when requesting departmental information for the County’s SEFA. These clarifications will support consistency, accuracy, and improved internal controls over federal expenditure reporting. Name of Responsible Persons: Jason McGuire, Deputy Director, Auditor-Controller Implementation Date: August 2026

The Town will ensure that all grant funds are accounted for in the proper budget year, to include revenue and expenses. This will involve Finance staff and the grant manager for each grant noting the proper budget year on invoices and revenue receipts. A label will be created to note these items. Finance staff will also create new line items to ensure separation of grants from other special revenue. Additionally, the Town will reflect Retainage Payable on balance sheets. The estimated completion date is June 1, 2026. Jay Hendrix, Town Manager, is responsible for overseeing the corrective action plan and that implementation occurs by the estimated completion date.

The Town will ensure that all grant funds are accounted for in the proper budget year, to include revenue and expenses. This will involve Finance staff and the grant manager for each grant noting the proper budget year on invoices and revenue receipts. A label will be created to note these items. Finance staff will also create new line items to ensure separation of grants from other special revenue. Additionally, the Town will reflect Retainage Payable on balance sheets. The estimated completion date is June 1, 2026. Jay Hendrix, Town Manager, is responsible for overseeing the corrective action plan and that implementation occurs by the estimated completion date.

Program: Congressionally Recommended Awards / HOME Investment Partnerships Program / Homeland Security Grant Program / Epidemiology and Laboratory Capacity for Infectious Disease Federal Financial Assistance Listing Number: 16.753 / 14.239 / 97.067 / 93.323 Federal Grantor: U.S. Department of Justice / U.S. Department of Housing and Urban Development / U.S. Department of Homeland Security / U.S. Department of Health and Human Services Award No. and Year: Multiple Compliance Requirements: Other – Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the County) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. §200.331 of the Uniform Guidance states the County is responsible for making case-by-case determinations to determine whether the entity receiving the Federal funds is a subrecipient. In addition, §200.303 of the Uniform Guidance states that the County must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA we noted the following: • The Sheriff-Coroner Department did not properly identify the amount expended for the Congressionally Recommended Awards, AL No. 16.753. The expenditures reported by the Department were overstated by $2,638,516. • The Orange County Community Resources Department did not properly identify the amount of Federal funding passed through to subrecipients for the HOME Investment Partnerships Program, AL No. 14.239. The amount passed through to subrecipients reported by the Department was overstated by $4,500,624. • The Sheriff-Coroner Department did not properly identify the amounts expended for the Homeland Security Grant Program, AL No. 97.067. The expenditures reported by the Department were overstated by $715,489. • The Orange County Health Care Agency (HCA) did not properly identify the amount expended for the Epidemiology and Laboratory Capacity for Infectious Disease program, AL No. 93.323. The expenditures reported by the Agency were overstated by $486,000. Cause: As a result, the County lacked adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the County’s processes for recording and tracking expenditures of Federal awards are not designed so that expenditures are identified when incurred. In addition, the County’s processes for identifying and reporting subrecipients are not designed to ensure appropriate reporting on the SEFA. Effect: Adjustments to the SEFA were required. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures and amounts passed through to subrecipients were reconciled to the supporting records. Repeat Finding from Prior Years: No. Recommendation: The County, including all its reporting departments, should follow existing policies, procedures and internal controls to ensure all expenditures and amounts passed through to subrecipients are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. Management Response and Corrective Action Plan: Health Care Agency: 1. Person Responsible: David Santalahti, HCA Claims & Financial Reporting Manager 2. Corrective action plan: HCA Accounting will review and enhance its procedures and training for analysis and tracking federal award expenditures to ensure expenditures are reported in the appropriate fiscal year period. 3. Anticipated Implementation date: June 30, 2026 Orange County Community Resources: 1. Person Responsible: Bill Malohn, OCCR Accounting Manager 2. Corrective action plan: Concur. OCCR has established policies and internal controls to ensure all expenditures and amounts passed through to subrecipients are accurately tracked and reported on the SEFA. Appropriate personnel review amounts coded to federal programs for completeness and accuracy. We prepare and review the SEFA in a timely manner and reconcile to underlying records as well as the basic financial statements. In this particular situation, we miscategorized one provider as a subrecipient and reported the related funding as such on the SEFA. This oversight had no impact on the total amount we reported on the SEFA. We will be sure to follow our policies and procedures to ensure accurate SEFA reporting. 3. Anticipated Implementation date: February 2, 2026 Sheriff-Coroner: 1. Person Responsible: Monique Vansuch, Fiscal Administrator 2. Corrective action plan: The Sheriff-Coroner Department acknowledges the finding and recognized federal grant expenditure incurred is defined as when expenditures are delivered and/or services are performed rather than when the expenditures are paid. We will strengthen the internal controls to ensure grant expenditures are reported per the Uniform Guidance. 3. Anticipated Implementation date: June 30, 2026