Corrective Action Plans

Per the recommendation to adopt procedures to ensure compliance with 2 CFR 200.510(b) regarding the preparation and completion of the schedule of expenditures of federal awards and accompanying notes, the City demonstrates compliance through the reporting requirements of each funding agency via their specific submittal forms and platforms. However, the City's Finance Director will review 2 CFR 200.510(b) and implement a schedule of expenditures on an annual basis, and will prepare the schedule of expenses of federal awards within the guidelines. This action has already been resolved.

2025-001: Insufficient Controls Over Monitoring Federal Expenditures and SEFA Preparation (Significant Deficiency) The City concurs with the finding and will strengthen controls over monitoring federal expenditures and preparation of the Schedule of Expenditures of Federal Awards (SEFA). The Finance Department will implement centralized oversight of federal grant activity and maintain a grant tracking schedule to monitor cumulative federal expenditures by program, including reimbursements and receivables. Departments administering federal programs will be required to report grant expenditures to Finance, and periodic reconciliations will be performed between departmental records, reimbursement requests submitted to the pass-through agency, and amounts recorded in the general ledger. At year-end, the Finance Department will prepare the SEFA and perform a formal management review to ensure all federal expenditures are complete and accurately reported and evaluated against the Single Audit threshold in accordance with Uniform Guidance. Personnel involved in grant administration will receive training on applicable Uniform Guidance requirements to support compliance with federal reporting and monitoring requirements. Anticipated Completion Date: June 2026

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.

Corrective Action Planned: The auditee acknowledges that it did not have adequate procedures in place to identify all federal funding sources, track cumulative federal expenditures, and determine the applicability of Single Audit requirements.• Federal Funding Identification Procedures: Establish formal procedures to review all grant agreements, contracts, and funding documents to identify federal funding sources, including Assistance Listing (ALN) numbers and pass-through entity information. • Centralized Tracking of Federal Expenditures: Implement a tracking mechanism ( e.g., spreadsheet or accounting system enhancement) to record and monitor all federal expenditures by program throughout the fiscal year. • Periodic Monitoring of Single Audit Threshold: Perform quarterly reviews of cumulative federal expenditures to determine whether the dollar threshold (currently $1 million) for a Single Audit has been met. • SEFA Preparation and Review Controls: Develop a standardized process for preparing the Schedule of Expenditures of Federal Awards (SEFA), including a supervisory review to ensure completeness and accuracy prior to issuance. • Training and Awareness: Provide training to key personnel involved in financial reporting and grant management on Uniform Guidance requirements, including SEFA preparation and Single Audit thresholds. Anticipated Completion Date: September 30, 2026 Planned Monitoring and Follow-Up: Management will periodically review compliance with the new procedures and controls to ensure that all federal funding is properly identified, tracked, and reported, and that Single Audit requirements are evaluated timely.

Create a standardized SEFA template that includes all required fields: Assistance Listing Number, Federal Program, Federal Agency (Pass-through Agency), and total expenditures. Implement a monthly reconciliation between the general ledger (GL) and federal drawdowns to ensure the SEFA data is updated in real-time throughout the year. Establish a policy requiring the SEFA to be completed and reviewed by the Director of Finance 30 days prior to the start of the annual audit. Implement a "double-check" system where the Federal Programs Director verifies that all active federal grants are included in the draft SEFA before submission. Provide specialized training for the finance team on 2 CFR 200.502 (Uniform Guidance) requirements for SEFA preparation and reporting.

The City is taking corrective action in response to this finding by strengthening its grant management procedures. The Director of Community Development and Public Works is responsible for overseeing these improvements, which include enhancing coordination among the Public Works Analyst, Grants Coordinator, and the City's contracted engineering firm to clearly distinguish between federally and state-funded Highway Safety Improvement Program (HSIP) activities and ensure that program information aligns with current federal award documents. Key measures include requiring identification of funding sources in Staff Reports submitted to City Council prior to grant application submission, assigning unique project numbers and classifications within the City's financial system (Incode), implementing a reconciliation process to accurately align project expenditures with their funding sources before inclusion in the Schedule of Expenditures of Federal Awards (SEFA), and providing targeted staff training along with a standardized SEFA preparation checklist. All corrective actions are set for implementation effective March 18, 2026. Personnel responsible for implementation: Gerardo Marquez Position of personnel responsible: Director of Community Development and Public Works Expected date of implementation: March 18, 2026

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

Findings and Questioned Costs Relating to Federal Awards: Inadequate Internal Controls Over Compliance Related to Identification and Reporting of Assistance Listing Numbers (ALNs) in Schedule of Expenditures of Federal Awards To address this matter, management will implement the following corrective actions: • Procedures will be implemented to ensure that Federal awards are properly identified and documented by Assistance Listing Number (ALN) upon receipt. • A centralized grant tracking schedule will be maintained to link expenditure to the appropriate ALN. • A supervisory review process will be established over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to verify the accuracy of ALN classifications prior to submission.

Management will review and update processes and procedures over reporting and additional training will be provided as needed to ensure accurate grant reporting and compliance.

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

Finding: 2025-001 Reimbursable federal grant revenue Responsible Person: Cecilia Frerotte Title: Contract CFO Phone Number: 617-261-8186 Anticipated Completion Date: June 30, 2026 Corrective Action: Management will enhance grant review and reconciliation procedures to ensure that reimbursable expenditures incurred under cost-reimbursement grants are properly recognized as contribution revenue and federal expenditures in the appropriate period. These procedures will include a grant-by-grant reconciliation of reimbursement requests, refundable advances, award terms, general ledger balances, amounts reported on the Schedule of Expenditures of Federal Awards (SEFA) and amounts reported in all other grant-related compliance reports, as applicable. Management will also formalize and expand supervisory review and approval controls over all grant compliance reporting and year end financial reporting, including the SEFA. In addition, the Board plans to increase the size of the Audit Committee to include members with substantial experience in auditing and grant program oversight. The Audit Committee will meet regularly with both the external auditors and the outsourced accounting firm to provide enhanced governance and oversight of grant accounting and compliance matters.

2025-001: Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Educational Stabilization Fund ASSISTANCE LISTING Numbers: 84.425C – Governor’s Emergency Education Relief Fund 84.425R – Emergency Assistance to Non-Public Schools 84.425U – Elementary and Secondary School Emergency Relief Fund 84.425V – Emergency Assistance to Non-Public Schools Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Recommendation: We recommend that the University evaluate its cutoff procedures to ensure that federal costs are identified and reported in the correct fiscal year. We also recommend that the University evaluate its internal controls to ensure that federal awards are properly identified as such at inception. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: OSU is implementing a campus-wide Administrative Modernization Program (AMP) to update technology, improve efficiencies, and ensure a comprehensive internal control environment. This modernization includes redesigning the university’s administrative and grant processes, including budget development, payroll lifecycle, employee recruitment, grant effort reporting, procurement, and others. A primary aspect of this optimization is a transition of the university’s enterprise resource planning (ERP) system from Banner to Workday effective July 1, 2026. To reflect this system transition, OSU’s actions in response to the finding will be taken in two stages: 1. For FY26, the Division of Research and Innovation (DRI) will run reports and screen for anomalies and mismatches of revenue type and fund type to identify awards with the correct federal fund when a federal program is identified with an ALN#. The screening will take place before the fiscal year end, allowing time for corrections to be made in Banner while the fiscal year is still active. 2. For FY27 and beyond, rather than a warning, critical custom validations will be required and established in Workday as follows: • Any award that uses an ALN# also must include the appropriate Fund and Revenue Category worktags on the award line • Any award with a federal sponsor or federal prime sponsor must have ALN# entered • Any award with a federal sponsor or federal prime sponsor must include the appropriate Fund and Revenue Category worktag on the award line Name of the contact person responsible for corrective action: Jennifer Creighton, Associate Vice President for Research Administration, Finance and Operations Planned completion date for corrective action plan: Corrective action to screen for anomalies and mismatches of revenue type and fund type in Banner to ensure awards are identified with the correct federal fund will occur by June 30, 2026. The establishment of custom validations in Workday to ensure identification of federal awards will occur and be ongoing with the new system implementation after July 1, 2026.

Management will strengthen SEFA preparation and review procedures to ensure federal expenditures are complete, accurate, and properly reported in accordance with 2 CFR 200.510(b). • Reconciliation: Reconcile SEFA totals to the general ledger and grant-level records and resolve discrepancies. • Management Review: Implement documented management review of the SEFA for completeness and accuracy prior to issuance.

Finding Reference 2025-02 Corrective Action Plan: The Designated Office responsible for processing federal funds received through state agencies will deliver to the Finance Office a transaction list and a reconciliation of the disbursements made during the fiscal year. The Finance Office will review all transactions recorded during the current fiscal year and will prepare an accrual entry. These transactions will be reconciled against the transactions recorded during the subsequent fiscal year to confirm that funds were recorded in the appropriate fiscal period. The review and recording of these transactions will be completed during the final phase of the accounting closing process and prior to delivery of the Trial Balance to the external auditors. Responsible: Ms. Maria Del R. Ramos Ocasio, Accounting and Finance Manager Planned Implementation Date: In process. Expected to be completed on or before September 30, 2026.

2025-006 – Internal Control Deficiency in Financial Reporting – Untimely Recording of Grant Program Expenditures Cluster: Not applicable Sponsoring Agency: United States Agency for International Development (USAID) Award Name: USAID Foreign Assistance for Programs Overseas Award Number: 7200AA19CA00018, 7200AA21LE00003 Assistance Listing Title: USAID Foreign Assistance for Programs Overseas Assistance Listing Number: ALN 98.001 Award Year: 2024-2025 Pass-through entity: Not applicable Compliance Requirement: Schedule of Expenditure of Federal Awards Reporting and Period of Performance On January 1, 2024, the campus converted from the Kuali Financial System (KFS) to the Oracle Cloud financial system (AE). There was a pre-conversion blackout period from mid-November 2023 through January 1, 2024. Additionally, as part of this transition, advance account balances were not initially migrated and were subsequently moved into AE projects. This resulted in changes to how these balances were tracked and processed. Initially, these balances were placed in a single project, and there were delays in processing liquidations until balances could be reconciled and distributed to the individual projects established for each sub awardee. Due to these delays and the pre-conversion blackout period, a backlog of transactions was created. Reconciliations and liquidations were subsequently processed in September 2024. As of September 2024, the process for advance liquidations has been implemented, including distributing balances to the appropriate projects. These procedures are now in place and have been fully implemented through the established process. For inquiries regarding this finding, please contact Mario Reina-Guerra at mreinaguerra@ucdavis.edu.

Department: Administrative and Financial Services Title: Internal control over Medicaid SEFA reporting needs improvement Questioned Costs: None Status: Corrective action in progress Corrective Action: The DHHS Service Center will update the internal SEFA procedure to include the step of removing appropriations 0129, 0147 and 0148 from the subrecipient queries. The DHHS Service Center will update the reviewer's checklist for the SEFA to include a check that appropriations 0129, 0147 and 0148 are being excluded from subrecipient queries. The DHHS Service Center will add a note within the "Subrecipient" tab of the internal SEFA Cubes Workbook to exclude appropriations 0129, 0147 and 0148. Completion Date: February 20, 2026 (first item), and October 31, 2026 (second and third items) Agency Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626

Department: Health and Human Services Education Administrative and Financial Services Title: Internal control over PDG SEFA reporting needs improvement Questioned Costs: None Status: Corrective action in progress Corrective Action: The DHHS Service Center will consult with OSC to help ensure our current processes are correct and are designed to provide accurate information for the SEFA. The DHHS Service Center will update procedures and provide guidance/trainings as necessary to staff to ensure reporting of expenditure amounts for the SEFA is accurate. Completion Date: August 31, 2026 Agency Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626

Department: Administrative and Financial Services Title: Internal control over Health Disparities program SEFA reporting needs improvement Questioned Costs: None Status: Corrective action in progress Corrective Action: The Service Center will consult with OSC to help ensure our current processes are correct and are designed to provide accurate information for the SEFA. The Service Center will update procedures and provide guidance and trainings as necessary to staff to ensure reporting of expenditure amounts for the SEFA is accurate. Completion Date: August 31, 2026 Agency Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626

Finding 2025-702: Research and Development Cluster—Reporting in the Schedule of Expenditures of Federal Awards Planned Corrective Action: The Universities of Wisconsin (UW) will revise documented procedures for preparing the Schedule of Expenditures of Federal Awards (SEFA) to include updated steps for the compilation of federal grant activities using the new accounting system by June 30, 2026. Existing procedures will be strengthened and implemented to review whether federal expenditures related to agreements with other state agencies that specify the relevant assistance listing number are property classified in the SEFA. Additional training and guidance will be provided to UW university and administration stakeholders on revised documented procedures as a critical part of the improvement in the SEFA reporting process. Anticipated Completion Date: November 2026 Person responsible for corrective action: Josh Smith Senior Associate Vice President for Finance Universities of Wisconsin josh.smith@wisconsin.edu

Significant Deficiency 2025-002 (Internal Control Over Federal Award Reporting – ESSER III) Federal Program: Education Stabilization Fund - ARP-ESSER ALN: 84.425U Condition: Allowable ESSER III expenditures incurred during fiscal year 2023-24 were not identified or included on the Schedule of Expenditures of Federal Awards (SEFA) for that year. In addition, expenditures related to Federal Set-Aside awards were mistakenly included in the Final Expenditure Report for ESSER III, resulting from a misunderstanding of the structure of the federal awards. Recommendation: Strengthen internal controls Corrective Action: The District will provide targeted training to staff responsible for federal grant accounting to ensure a clear understanding of federal grant award structures, including the distinction between ESSER III and related Federal Set-Aside awards. This training will cover grant setup, expenditure coding, and reporting requirements. Person Responsible: Brenda VanBuskirk, Business Manager Proposed Completion Date: December 31, 2025

Planned Corrective Action: The new policy was discussed during the fiscal year for identifying federal awards. The written memo detailing the new policy was updated on September 30, 2025. This is the policy in place to be followed when preparing the schedule of expenditures of federal awards Contact Person: Name: Brianne Hoelschen Title: Controller Phone: (617) 209-5222 Email: bhoelschen@maloneyproperties.com Completion Date: September 30, 2025

Management concurs with the audit finding and has implemented a corrective action plan.