Corrective Action Plans

Management concurs with the finding and will ensure that construction grant expenditures are recorded in the financial system in the proper period by documenting appropriate procedures in coordination between Sponsored Projects Accounting office and the Property Accounting office. Completion Date: December 31, 2025 University Contact and Responsible Party: Krystina J. Gross, Associate Vice Chancellor for Finance and Sponsored Projects, (314) 935-2073

Condition: Expenditures of federal funds representing <0.25% of total expenditures of federal funds for the year ended September 30, 2024 were charged to various federal programs and were not reported on the Schedule of Expenditures of Federal Awards (SEFA) for the period ended September 30, 2024. Planned Corrective Action: Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivables activity. Meetings will be help at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by Treasury and Accounting staff and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff. Contact person(s) responsible for corrective action: VP, Treasury Management Controller Anticipated Completion Date: Control will be documented by March 31, 2025 and operational for the quarter ending by June 30, 2025.

Finding ALN 11.307 During testing of the Economic Adjustment Assistance (ALN 11.307) grant two issues were noted. The federal expenditure amount was reported incorrectly on the SEFA provided by Louisville Metro and information in the loan payment system was incorrect for two written off loans. The amount reported on the SEFA was $1,501,755. The correct federal expenditure amount is $3,072,347. An adjustment to the SEFA was made to correct the federal expenditure amount. The loan payment for the written off loan, Barbie Bac’z, did not follow the order of priority. The METCO Board approved $14,699 to be written off for The Limbo LLC per the 12/14/23 METCO memo. However, the amount on the grant portfolio that was written off was $14,577. The difference between the minutes and the grant portfolio is $122. “We recommend communication between the OMB Grants division and the agency handling a federal grant be improved to ensure the SEFA is accurate. Auditor’s Recommendation We recommend management periodically reconcile the RLF loan system to catch errors before too much time has passed and make corrections when needed. We recommend that management correct the next semi-annual report and the information used to prepare the chart attached to the semi-annual report is for the correct fiscal year.” Management Response Management concurs with the auditors’ finding and recommendation. Metro Government will implement controls for periodic reconciliation of the RLF loan system to catch errors before too much time has passed in addition to a year-end review for a secondary supervisor and management review to ensure an accurate outcome before submission for audit review. Anticipated Completion Date Periodic Reconciliation of RLF program quarterly beginning April 1, 2025 Annual Review to be completed by July 15 for fiscal year ending June 30 Contact Responsible For Corrective Action Richard Champion Louisville Metro Finance Director (502) 574-1881

Management did not have an independent reviewer for the SEFA document preparation this year which resulted in an error being identified by the auditors. The error was mathematical in nature and could have been identified by a second reviewer. For future reporting, the SEFA will be reviewed by the Executive Director, Accountant, and Board Treasurer prior to being sent to the auditors and will be distributed in ‘draft’ form until completed.

Finding Number: 2024‐001 Program Name/Assistance Listing Titles: Emergency Connectivity Fund; Education Stabilization Fund Assistance Listing Numbers: 32.009; 84.425 Contact Person: Jackie Mattinen, Director of Finance Anticipated Completion Date: February 28, 2025 Planned Corrective Action: The Gilbert Public Schools Finance Department will provide financial oversight of all State and Federal fund applications and will require finance approval prior to submittal of all State and Federal fund applications initiated by all District departments and schools.

Schedule of Expenditures of Federal Awards (SEFA) Preparation Corrective Action Plan As part of the year-end closing process and in preparation for the audit, UMHS finance department was understaffed and to help in the interim, CLA was hired to add capacity and help with accounting functions for UMHS, including the SEFA. The auditors noted that the SEFA had been provided to them without proper review by the management of UM HS. In response, UM HS reviewed the SEFA for fiscal year 2024. Going forward, UMHS is adding more staff capacity to the finance department and recently hired two new experienced finance team members with knowledge in payroll, AP and procurement. Additionally, UMHS initiated recruitment for a permanent Director of Finance in summer 2024 and the search to hire for this position is open and ongoing. If in the future a third-party consultant or firm is secured by UMHS, the organization will prepare entries, reports, or schedules for UMHS management and will thoroughly review and approve all items to ensure accuracy prior to submission to the auditors. Timing for Implementation: Immediate and Ongoing Person(s) Responsible: Executive Director, Director of Finance, or Other Designee

Views of Responsible Officials and Planned Corrective Actions: We have improved our procedures to identify if the award is a pass-through federal award at the initial review stage, ensuring proper reporting on the Schedule of Expenditures of Federal Awards (SEFA).

Finding 2024-004: Schedule of Expenditures of Federal Awards (SEFA) – Material Weakness Condition: While performing our audit procedures, we noted that CAFB included the a $5 million grant from Fairfax County on their SEFA even though CAFB is considered a beneficiary related to this grant. Views of Responsible Officials and Planned Corrective Actions: As stated in the report, the Organization respectfully disagrees with both the substance and the severity of the finding. In RSM’s proposal to the Organization, the firm indicates that it offers proactive advice to its clients: “Specialists RSM has a deep bench of specialists locally and nationwide available to advise CAFB and the engagement team on issues as they arise. Relevant specialists cover areas such as: unrelated business income from alternative investments, multi-state taxation, Federal single audits, and information technology. Proactive resolution of accounting issues We find that year-round communication and a proactive approach to accounting issues help clients avoid surprises at the end of the audit process. For this reason, we encourage clients to call us to discuss new transactions as they arise.” [emphasis added] We agree that the independent auditor cannot be part of the Organization’s internal controls. In this instance, the Organization conducted its own research into the nature of the beneficiary agreement and reached a conclusion that it should not be included on the SEFA. During audit planning, we discussed this position with the audit partner and manager who recommended that it should be included on the SEFA. Following the resignation of the engagement partner and manager, a new resource assigned to conclude our engagement by the firm disagreed with that position and raised this finding. Had the initial audit team remained and we excluded the grant, we assume that we would have received a finding for its exclusion. As to the severity of the finding, we disagree that the instance rises to the level of a material weakness. Although we concede the amount of the award ($5 million) is significant, its inclusion/exclusion from the SEFA did not impact the selection of major programs and was a singular decision-making instance of an unusual form of award, irrespective of the amount involved. As for corrective action, considering the infrequency of beneficiary agreement awards to non-profit organizations, it is improbable that the Organization will receive such an award again. Nevertheless, if the Organization encounters an unusual transaction or award, we will continue to perform our own research on the award/transaction and form our independent conclusion (as we did in this instance) and refrain from taking actions that might imply the independent auditor is part of the Organization’s internal control structure.Anticipated Completion Date: February 2025

Corrective Action: - The Organization will issue new letters of confirmation requests to all counties under contract that are to be sent to the audit firm and the Chief Financial Officer of the Organization, who is the responsible party. - The Organization has established policies and procedures to understand and ensure compliance with the Organization’s contractual obligations.- The Organization has implemented procedures to determine the source of funding received through various county contracts. - The Organization has implemented review procedures to ensure the Schedule is complete, accurate, and prepared in accordance with the requirements set forth within 2 CFR 200.510(a).

Criteria: According to 2CFR 200.510(b), the auditee must repare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the financial stat ments that includes all amounts spent on federal programs subject to single audit during the reporting period. Condition: The client prepared Schedule of Federal Expen itures of Federal Awards (SEFA) unde stated the Child Nutrition Cluster 10.555/10.553 expenses by $19,651 and understated Education Stabilization Fund 84.425U expenditures by $81,428. Lastly, the client prepared SEFA overstated federal expenditures by $69,851 for a federal award that is not subject to single audit requirements. Cause: The School reported 2024 program revenue rather than expenditures for the Child Nutrit on Cluster 10.555/10.553. The School's review procedures did not catch a federal award that was excluded from the SEFA, nor a federal award that was included in the SEFA that should not have been. Effect: Audit adjustments were made to increase the Child Nutrition Cluster 10.555/10.553 expenses by $19,651 and increase the Education Stabilization Fund 84.425U expenditures by $81,428. Lastly, an audit adjustment was made to reduce federal expenditures b $69,851 for a federal award that is nit subject to single audit requirements. Recommendation: We recommend the School prepare the SEFA utilizing federal award expenfitures, rather than revenue. In addition, we recommend that he school's SEFA review procedures in 1ude a comparison to the prior year audited SEFA for awards that may have been excluded. Lastly, we recommend that the school research each new federal award on SAM.gov to determine whetlher Single audit requirements apply. Action Taken: As of the date of the exit conference, we have adopted the above recommendations.

Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the oversights that occurred during the preparation of the SEFA. To address this, management has implemented the following corrective action plans: Enhancement of SEFA Preparation Procedures and Review Process: All financial statements and supporting documentation will undergo a thorough internal review by management and outsourced accountants before being presented to auditors. Management and outsourced accountants will work together to cross-verify information with grant agreements and funding sources, ensure that all Federal and pass-through awards are accurately identified and included, confirm the agreement on allowable Federal expenditures, and ensure that only allowable expenditures are included on the SEFA. Management is committed to ensuring accurate and compliant reporting of Federal expenditures.

Corrective Action: Management will continue to stress the importance of following the detailed procedures for preparation and review of the SEFA. The SEFA checklist is updated to include a thorough review of expenditure details to ensure no prior-year expenses are reported. Responsibility for compiling the SEFA was assigned to a Senior Program Accounting Manager who is tasked with assuring the schedule and all the support reconciliation are complete and accurate. Both the Director of Program Accounting and the Executive Director of Finance/Controller will review the SEFA for completeness, accuracy, and compliance with CFR Section §200.510(b). Estimated completion date: June 30, 2025 Individual Responsible for Corrective Action Plan: Contact: Reginald Gregory Title: Executive Director/Controller Phone Number: 202-772-4300

Internal controls will be reviewed and modified as needed to ensure compliance with federal statutes, regulations and the terms and conditions of the federal award. DED will increase future communication with the Office of the State Comptroller when reporting expenditures of the SSBCI program to insure proper categorization of technical assistance expenditures.

Office of the State Comptroller will review the instructions provided to State Agencies with the Sub-Schedules and consider changes to make them clearer that State Agencies should review and include all Federal expenditures for their Agency. OSC will also review the process used for determining if any additional programs should be included on State Agency Sub-schedules.

Finding Reference Number: 2024-002. Corrective Action: Sea Mar will train its accounting and finance staff to recognize the difference between a state and local grant and a federal grant by learning how to read and interpret the provisions of the gran and determine whether this is a federal or state and local grant. The training will be conducted by the CFO and Controller of Sea Mar, and staff members will have to acknowledge they understand by signing acknowledgement forms stating they received the training and understand the differences. Staff will also be instructed not to rely on the name of grant because many times the name of the grant is not indicative of the agency that is funding the grant. Controls will also be developed to ensure the SEFA captures all the appropriate information and during the contract review process it will be noted whether grants are federal or not. Name of Contact Person: Dustin Greer, CFO, DustinGreer@seamarchc.org Projected Completion Date: 3/31/2025

The Agency updated procedures for developing the SEFA in accordance with 2 C.F.R. 200.510 (b) to include the following process improvements: The agency has modified its current process in determining the value of federal awards expended for the various federal loans in Federal, which will include all Federal loans within their affordability period in the compliance period. The compliance period requirements under the guidance §200.502 (b) are any new loans made or received during the audit period that are still within their affordability period. Add an additional process step regarding the requirements for the SEFA to be presented accurately when an expenditure is reclassified to another general ledger account across all programs to ensure the SEFA presentation accounts for the correct expenditures during the audit period. The agency has modified its current process to ensure the direct and indirect costs charged to the federal programs include only the costs incurred during the current fiscal year.

Condition: The schedule of expenditures of federal awards (SEFA) contained inaccuracies and incomplete information that was identified during the audit. Planned Corrective Action: The School District will develop a SEFA checklist to help ensure all federal expenditures are properly reported. Additional processes will be put in place by management to review the SEFA in advance of the annual audit to effectively meet audit report timelines and help ensure completeness, validity, and accuracy of the final SEFA reporting. Contact person responsible for corrective action: Patricia Carion/Piper Bognar Anticipated Completion Date: 07/31/2025

Finding 2024-004 U.S. Department of Treasury Federal Award Year Ending June 30, 2024 COVID-19: Coronavirus State and Local Fiscal Recovery Funds Lack of internal controls over the preparation of the Schedule of Expenditures for Federal Awards Finding: The Schedule of Expenditures for Federal Awards for the year ended June 30, 2024, was initially overstated by $529,900 due to an improper subrecipient verses beneficiary determination for the COVID-19 coronavirus state and local fiscal recovery funds. Corrective Actions Taken or Planned: When reviewing revised grants, particularly pass-through grants, look for any new language in the updated review that could affect the classification of the grant as a federal award and update any relevant schedules accordingly. Look into other alternatives for additional reviews on grants. Contact person responsible for corrective action: Heather Brouse, CFO, and Melissa King, Accountant

A review and training of the award set up process is being conducted to ensure all team members in Office of Sponsored Programs (OSP) follow the correct procedures for moving an advance fund number into a fully executed award. Implementation of a new electronic research administration system, Novelution, is currently underway. Internal controls will be incorporated into this system to track advance awards and their conversion into fully executed awards. This control will improve tracking and communication via systems to avoid the duplication of fund numbers for the same award. On a quarterly basis, Research Accounting Services (RAS) will send reports of advance funds to OSP to follow up on the status. RAS is also incorporating additional reviews during the SEFA preparation process. They will review advance funds to check with OSP to see if the fully executed agreements have been received from the sponsor and if any updates are needed. Novelution will also be a more robust system that will provide full grants management for agreements in order to provide more transparency across central units that will minimize these types of errors from occurring in the future. This is expected to be completed prior to the close of FY2025.

Views of Responsible Officials: Management concurs with the recommendation. Following discussions with our Grants Director, we became aware, after submitting the SEFA to the auditors, that the pass-through federal grants in place during FY2024 needed to be added to the SEFA. To ensure proper reporting moving forward, Sage Intacct was rolled out on July 1, 2024, as CSWE’s new accounting system. This update will help our grants and finance teams better track and report these pass-through grants on the SEFA.

2024-003 – Material Weakness – Internal Control Material Weakness in Internal Control: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Responsible Person for Corrective Action: Thomas Newman, Executive Director Corrective Action to be Taken: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years. The anticipated completion date for this corrective action is 6/30/2025.

Planned Corrective Action: Management will develop internal controls and oversight over the schedule of expenditures of Federal awards. Contact Person: Name: Brianne Hoelschen Title: Controller Phone: (617) 209-5222 Email: bhoelschen@maloneyproperties.com Anticipated Completion Date: June 30, 2025

RECOMMENDATION: Marshall Jones recommends that the School establish a process to track the expenditures of federal awards during the year, including awards for which purchases are made on the School’s behalf by the passthrough grantor. This will better enable the School to timely prepare a complete and accurate SEFA. RESPONSE: DeKalb Preparatory Academy intends to hire a Chief Financial Officer (CFO) to oversee financial operations. The CFO will be responsible for ensuring accurate tracking and management of all revenues and expenditures, including those from state, local, and federal sources.

Carl Biber Chief Financial Officer 317 Western Boulevard Jacksonville, North Carolina 28546 Anticipated Completion Date: June 30, 2025 Annually, the Authority will perform additional verifications of the completeness of the Schedule of Expenditures of Federal awards by confirming directly with the mortgagee the balance as of year-end and activity for the year then ended.

2CFR 200.510(b) requires organizations to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total of federal awards as determined in accordance with 2 CFR 200.502. The original SEFA prepared by the School District was not complete and accurate. The School District will implement a procedure to ensure that accounting records are closed timely, internal accounts are reconciled, and appropriate workpapers are prepared to support SEFA balances. The School District will implement these procedures for the 2025 fiscal year end.