Corrective Action Plans

Finding: The Department of Health did not have adequate internal controls to ensure payments to subrecipients were allowable, met cost principles, and were within the period of performance for the Immunization Cooperative Agreements program. Questioned Costs: Assistance Listing # 93.268 93.268 COVID-19 Amount $416,027 Status: Corrective action not taken Corrective Action: The Department does not concur with the finding. The Department disagrees with the State Auditor’s Office (SAO) assessment of a material weakness in internal controls over the consolidated contract provider payment process for the Immunizations Cooperative Agreements program. The level of documentation received from the subrecipient accounting system provided assurance that the exceptions questioned by SAO met federal cost principles for allowability and period of performance. The Department has established processes in place to ensure payments are allowable and meet cost principles for the program. These include: • Program staff maintain detailed budget information for each subrecipient by project area, and as A-19s are submitted, program and accounting staff update budget spreadsheets. When reviewing the support provided by the subrecipient, staff ensure amounts submitted by project are reasonable and align with expectations for the budget period submitted. • Program staff refer to the federal Immunization Program Operations Manual to determine procedures related to allowable costs, purchases, and procurement. • The Fiscal Monitoring Unit provides technical assistance and training to program staff and subrecipients while onsite and at the request of the entities receiving funding. • Program staff provides policy guidance, technical assistance, and training to subrecipients related to program compliance requirements. The program has continued to strengthen processes to ensure supporting documentation aligns with the agency’s documentation matrix for subrecipients in accordance with assigned risk level. The Department is planning on meeting with federal grantors to work through the exceptions and questioned costs identified in the finding. The conditions noted in this finding were previously reported in finding 2022-031. Completion Date: Not applicable Agency Contact: Jeff Arbuckle External Audit Manager PO Box 47890 Olympia, WA 98504-7890 (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements for monitoring subrecipients to ensure payments were allowable, properly supported and met period of performance requirements for the Coronavirus State and Local Fiscal Recovery Funds. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $95,560 Status: Corrective action complete Corrective Action: The Department’s Eviction Rental Assistance program which was funded with the Coronavirus State and Local Fiscal Recovery Funds ended in June 2023. During the audit period, the Department implemented procedures to strengthen internal controls to ensure expenditures were allowable, properly supported, and in compliance with the subrecipient fiscal monitoring requirements. The Department’s Homelessness Assistance Unit implemented the following corrective actions: · Updated unit reimbursement procedures to include a requirement for supporting documentation that details transaction level expenditure information for direct expenses that reconciles to payment requests. · Provided training to staff on reviewing transaction level supporting documentation to ensure expenditures reconcile with reimbursement requests and are within the period of performance. · Added a review note to each reimbursement request to document the grant coordinator’s review of documentation and reconciliation to payment requests. · Worked with the Department’s internal control officer for review and feedback of the updated procedures. The Department is currently working to standardize a reimbursement documentation process that is in compliance with federal requirements. The Department will discuss any repayment of questioned costs through the normal audit resolution process with the Department of Treasury. The conditions noted in this finding were previously reported in finding 2022-019. Completion Date: April 2024 Agency Contact: Gena Allen, CFE Internal Control Officer PO Box 42525 Olympia, WA 98504-2525 (360) 480-5149 Gena.Allen@Commerce.wa.gov

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements to ensure payments to subrecipients of the Emergency Rental Assistance program were allowable and properly supported. Questioned Costs: Assistance Listing # 21.023 COVID-19 Amount $4,123,486 Status: Corrective action complete Corrective Action: The funding for the Emergency Rental Assistance program ended on June 30, 2023. The Department is no longer funding this program. To address the control deficiencies reported in the prior year’s finding, the Department improved internal control processes, resulting in improved compliance. The Department strives to meet all federal requirements and any repayment of questioned costs will be determined through the normal audit resolution process with the U.S. Treasury. The conditions noted in this finding were previously reported in finding 2022-016. Completion Date: July 2023 Agency Contact: Gena Allen, CFE Internal Control Officer PO Box 42525 Olympia, WA 98504-2525 (360) 480-5149 Gena.Allen@Commerce.wa.gov

Finding: The Washington State Department of Transportation did not have adequate internal controls over and did not comply with cash management requirements for the Formula Grants for Rural Areas program. Questioned Costs: Assistance Listing # 20.509 Amount $41,555 Status: Corrective action complete Corrective Action: The audit identified a payment that was entered into the Electronic Clearing House Operation (ECHO) system with incorrect project information. The Department has since implemented additional controls to help ensure the draws of program funds are timely and accurate and are drawn for the correct program. To address the audit recommendations, the Department: • Assigned Project Support and Receivable (PS&R) staff to submit Public Transportation ECHO draws. Two additional staff have been identified as backup in this process to ensure draws are processed timely. • Rescheduled the entry of draw information into the ECHO system to the morning to allow for timely corrections as needed. • Updated the ECHO system to allow automatic confirmation email for payments entered into the system. Additionally, • The PS&R Manager will automatically receive draw confirmation emails and conduct a review and check as the draws are being submitted. • Additional checks and balances will be performed by the person entering information into the ECHO system. • The Public Transportation division has a validation process in place for staff to check the amounts with the project. The Department will continue to review procedures regularly and update as required to ensure compliance. The questioned costs identified in the audit have been reimbursed to the incorrectly charged federal program. Completion Date: October 2023 Agency Contact: Jesse Daniels External Audit Liaison PO Box 47320 Olympia, WA 98504-7320 (360) 705-7035 danielje@wsdot.wa.gov

Finding: The Employment Security Department made improper payments to ineligible beneficiaries of the Unemployment Insurance program. Questioned Costs: Assistance Listing # 17.225 17.225 COVID-19 Amount $603 Status: Corrective action not taken Corrective Action: The Department does not concur with the finding. The State Auditor’s Office (SAO) made the assertion that the Department incorrectly interpreted guidance in the Unemployment Insurance Program Letter (UIPL) No. 16-20 requiring claimants to provide proof of employment to receive Pandemic Unemployment Assistance (PUA) payments. However, the section cited by SAO was paragraph b(ii) which only lays out the requirements for establishing the respond-by dates for providing documentation for review. The deadline for responses is different depending on whether the PUA claim was filed before January 31, 2021, or on/after that date. This paragraph does not establish the requirements for payment or non-payment of PUA weeks. In our finding response, the Department cited section C.2 of the UIPL, which states: If, in that timeframe, the individual fails to provide documentation or fails to show good cause to have the deadline extended, an overpayment must be established for all of the weeks paid beginning with the week ending January 2, 2021. This is because the individual cannot be deemed ineligible for a week of unemployment ending before the date of enactment solely for failure to submit documentation. Therefore, the three cases identified by SAO should not be exceptions under this guidance. Further, the Department received guidance from the U.S. Department of Labor on January 11, 2021, which confirmed the proper methodology used by the Department. Completion Date: Not Applicable Agency Contact: Jay Summers External Audit Manager PO Box 9046 Olympia, WA 98507-9046 (360) 529-6718 Joshua.Summers@esd.wa.gov

COLGATE UNIVERSITY. Corrective Action Plan – Finding 2023-001. Responsible Official – Kyle Dombrowski, Director of Tax and Financial Reporting. We will perform and document a review of reimbursement submissions before they are processed to ensure that reimbursement requests are not in excess of funds disbursed for the period. After the error in the Federal Direct Loan reimbursement for November 2022 was identified, we implemented a new requirement that the Director of Tax and Financial Reporting or the AVP/Controller must review the reimbursement request calculated by the Assistant Controller/Director of Grant Accounting before it can be processed. As of June 30, 2023, this review was fully implemented. Anticipated Completion Date: 3/27/2024.

District will work with legal counsel to establish parameters to execute verification for cause as outlined in USDA Food and Nutrition Services, Child Nutrition Programs Eligibility Manual for School Meals - Determining and Verifying Eligibility, Section 6 - Verification. District will work within established parameters to verify district employee salaries of approved applications submitted by district employees

Finding 2023-003 – Material Weakness AL No: 20.507 Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Formula Grants - Direct Award Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles. Condition: The District’s internal controls over compliance requirements did not identify ineligible costs applied to four separate Federal Transit Administration (FTA) grants as follows. • Section 5307 Grant Award CA-2020-173-01: The District overclaimed Route 42 and Woodland fixed route operating expenses that should have been reimbursed by a local match as required by other FTA grants applied to the same routes, resulting in ineligible costs of $1,073,260 being charged to the program. Questioned Costs: $1,073,260. • Section 5307 Grant Award CA-2022-140-01: The District overclaimed Route 42 expansion fixed route operating expenses that should have been reimbursed by a local match as the wrong federal percentage was applied in the claims, resulting in ineligible costs of $33,129 being charged to the program. Questioned Costs: $33,129. Section 5307 Grant Award CA-2022-147-04: The District overclaimed communication expenses for Woodland paratransit operating routes, resulting in ineligible costs of $12,513 being charged to the program. Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part 200, Subpart F (Uniform Guidance), Section 200.516. • Section 5307 Grant Awards CA-2022-204-01 and CA-2021-162-03: The District claimed engine overhaul expenses that did not qualify as preventative maintenance costs allowed by the terms and conditions of the grant, resulting in ineligible costs of $17,902 being charged to the program. Questioned Costs: Ineligible costs were below the $25,000 floor for questioned costs under 2 CFR Part 200, Subpart F (Uniform Guidance), Section 200.516. Criteria: 2 CFR Part 200, Subpart E (Uniform Guidance) Section 200.303 states that “The nonfederal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Cause: Several federal grants applied to these routes had local match requirements that were not captured by the District’s review procedures due to recent staff turnover and lack of documented procedures to track expenses charged to all funding sources combined. Not all paratransit operating expenses were reported and tracked separately in the allocation spreadsheet leading to expenses being double claimed under different grants for different purposes. This is due to the allocation spreadsheet not having a summary page totaling all expenses charged to programs to make sure the total expenses allocated agree to the total population of expenses allocated. Effect: Expenses were charged to more than one grant when filing claims and ineligible costs were applied, resulting in the overclaimed amounts cited above. Context: The ineligible costs were discovered through reconciliation of the operating expenses and capital costs from the claims to the general ledger. It was noted that the District did not have any FTA awards for capital maintenance during the year. The overclaimed amounts of $1,073,260, $33,129, and $12,513 have been removed from revenue as the FTA has currently approved the District claiming the expenses under different grants. There were potentially additional operating expenses under Paratransit services that could have offset some of these overclaimed amounts. The ineligible costs of $17,902 have been submitted to the FTA through a budget revision to allow for capital funding under the two related awards and is currently pending FTA approval. Recommendation: We recommend the District develop written procedures for allocating expenses to routes and purposes used to claim expenses under federal grants and to track the different funding sources applied. A summary tab should be added to the allocation spreadsheet to sum amounts for each route computed on separate tabs on the spreadsheet to make it easier to reconcile total operating expenses, preventive maintenance, insurance, communications and other expenses allocated to the population of expenses in the general ledger. View of Responsible Officials and Planned Corrective Action: Management acknowledges the audit finding and agrees with the recommendation. The District is taking immediate corrective action by training staff and seeking temporary assistance to support operations during ongoing training and improvement. While the new financial system aimed to enhance our processes and efficiencies, we recognize the need to modify the general ledger processes to better detect required transactions. The District will focus promptly on resolving these issues to prevent future errors and oversights. Further, we will prioritize reviewing all grant award agreements and collaborating closely with our grant program coordinators to ensure compliance and accuracy in grant-related activities.

Views of Responsible Officials and Planned Corrective Action: Due to the health concerns of the pandemic as well as unprecedented claims volume, claimants were not required to come into a local office for identity verification, the waiting week was waived for 2020, and the requirements for work search were adjusted in order to protect employees and claimants. Before the pandemic, all claimants were required to come to the local office to verify their identity. Removing these process controls resulted in several consequences as itemized below: • By waiving the waiting week, the claimant was able to receive payment the following week. For example, a fraudster could file a claim on Friday, then receive payment on Sunday, removing the typical week that an employer would respond to validate the separation from employment. • The information mailed to the employer and claimant were not received before payments were made due to the lack of waiting week. • Businesses were closed at that time and did not respond to the unemployment paperwork timely to report fraudulent claims. • Identity theft fraudsters often changed the address of the individuals for which they had filed claims in order to prevent the victims from being notified and reporting the fraud. In 2020, the work search requirement was reinstated. In 2021, all claimants had to verify their identity in-person at the local office before the claim was opened for a regular unemployment claim. The UIdentify program was utilized for identity verification for the PUA claims filed after January 1, 2021. The waiting week was reinstated in January 2021, which lengthened the time period for employers to respond before payment was issued. In addition, Internal Audit created the Fraud Investigation Unit and hired additional staff to focus on investigating the identity theft fraud claims. When the perpetrator is identified, a determination is issued and an overpayment is established in the perpetrator’s name/SSN for collection. The NASWA Integrity Data Hub (IDH) crossmatch was implemented in July 2020 as well in an effort to identify additional fraudulent claims for investigation. ADWS was the first UI program to implement 2 projects with the Department of Labor for identity verification. One is using Login.gov and the other involves the United States Postal Service where they verify the identity of claimants for using multifactor authentication and in person presentation of ID. The Login.gov pilot started in 2022 and the USPS pilot project started in 2023. 1. The Login.gov project uses the current system that Federal agencies use to verify identity and went into service in Arkansas as of March 2022. A link is given to the claimant, when they select verify ID through login.gov and go through the steps to verify their identity through the federal government system. If they are approved, we are sent an IA2 verification to the UI processing system to allow staff to match back to the claim to prove ID verification. 2. The United States Postal Service project, implements in Arkansas March 2023, offers the claimant the same link as Login.gov, but grants the additional option to verify their identity at any US Post Office in the country. A barcode is created and must be taken with a valid government-issued ID (they are given examples) along with proof of current address to the post office in person. If they are approved, we are sent an IA2 verification to the UI processing system to allow staff to match back to the claim to prove ID verification. Anticipated Completion Date: Corrective action was taken for the ALA staff recommendations. Contact Person: Name: Sheri Rooney Title: Program Administrator Agency: Division of Workforce Services Address: 2 Capitol Mall City, State, Zip: Little Rock, AR 72201 Phone Number: 501-682-3382 Email Address: Sheri.Rooney@arkansas.gov

Views of Responsible Officials and Planned Corrective Action: Due to the health concerns of the pandemic as well as unprecedented claims volume, claimants were not required to come into a local office for identity verification, the waiting week was waived for 2020, and the requirements for work search were adjusted in order to protect employees and claimants. Before the pandemic, all claimants were required to come to the local office to verify their identity. Removing these process controls resulted in several consequences as itemized below: • By waiving the waiting week, the claimant was able to receive payment the following week. For example, a fraudster could file a claim on Friday, then receive payment on Sunday, removing the typical week that an employer would respond to validate the separation from employment. • The information mailed to the employer and claimant were not received before payments were made due to the lack of waiting week. • Businesses were closed at that time and did not respond to the unemployment paperwork timely to report fraudulent claims. • Identity theft fraudsters often changed the address of the individuals for which they had filed claims in order to prevent the victims from being notified and reporting the fraud. In 2020, the work search requirement was reinstated. In 2021, all claimants had to verify their identity in-person at the local office before the claim was opened for a regular unemployment claim. The UIdentify program was utilized for identity verification for the PUA claims filed after January 1, 2021. The waiting week was reinstated in January 2021, which lengthened the time period for employers to respond before payment was issued. In addition, Internal Audit created the Fraud Investigation Unit and hired additional staff to focus on investigating the identity theft fraud claims. When the perpetrator is identified, a determination is issued and an overpayment is established in the perpetrator’s name/SSN for collection. The NASWA Integrity Data Hub (IDH) crossmatch was implemented in July 2020 as well in an effort to identify additional fraudulent claims for investigation. ADWS was the first UI program to implement 2 projects with the Department of Labor for identity verification. One is using Login.gov and the other involves the United States Postal Service where they verify the identity of claimants for using multifactor authentication and in person presentation of ID. The Login.gov pilot started in 2022 and the USPS pilot project started in 2023. 1. The Login.gov project uses the current system that Federal agencies use to verify identity and went into service in Arkansas as of March 2022. A link is given to the claimant, when they select verify ID through login.gov and go through the steps to verify their identity through the federal government system. If they are approved, we are sent an IA2 verification to the UI processing system to allow staff to match back to the claim to prove ID verification. 2. The United States Postal Service project, implements in Arkansas March 2023, offers the claimant the same link as Login.gov, but grants the additional option to verify their identity at any US Post Office in the country. A barcode is created and must be taken with a valid government-issued ID (they are given examples) along with proof of current address to the post office in person. If they are approved, we are sent an IA2 verification to the UI processing system to allow staff to match back to the claim to prove ID verification. Anticipated Completion Date: Corrective action was taken for the controls the ALA staff recommended. Contact Person: Name: Sheri Rooney Title: Program Administrator Agency: Division of Workforce Services Address: 2 Capitol Mall City, State, Zip: Little Rock, AR 72201 Phone Number: 501-682-3382 Email Address: Sheri.Rooney@arkansas.gov

Finding Reference Number 2023-001 Description of Finding: The Children's Institute (CI) was non-compliant in maintaining contractual obligations established by the Fiscal Year 2022-23 Agreement with an awarding agency concerning financial responsibility and maintaining accurate and complete records for one of CI's Family Support Services (FSS) programs. Statement of Concurrence or Nonconcurrence CI leadership has reviewed the 2023-001 findings and concur with the recommendations stated. Corrective Action: Training: 1. FSS managers and supervisors were trained on billing reconciliation process, June-July 2023. 2. The Chief Program Officer, in collaboration with the Director of Compliance, will oversee the development of a training program for all current and new hire FSS employees for billing and documentation requirements by December 31, 2023. Process Improvement: 1. Monthly office billing reconciliation process was developed by FSS leadership and CI Finance team and implemented, July 2023. 2. The Chief Program Officer, in collaboration with the Director of Compliance, will develop a policy around billing reconciliation by November 15, 2023. Monitoring: 1. The COO, in collaboration with the Director of Compliance, will create a task force by November 15, 2023, to oversee development of documentation and billing policy and procedure, training and auditing standards. 2. CI executive leadership will contract with an external auditing firm to perform a baseline billing and documentation audit and prepare recommendations for process improvements on all remaining FFS programs. 3. A 20% random sample of case files, for the FSS program referenced in these findings, will be internally audited quarterly for accuracy and completeness of billing and documentation, to begin by November 30, 2023. CI will extend these internal auditing practices to all FSS programs after baseline external audits are complete.

Finding 2023-001: Student Financial Assistance Cluster, Department of Education Programs Program Name: Federal Direct Student Loans CFDA Numbers: 84.268 Corrective Action Plan: The University will update written procedures to clearly identify a step to manually do enrollment testing following all conferral of degrees. For those regularly scheduled graduation periods and following the submission of both the degree and last of term enrollment files, we will randomly sample 10% of graduated students and manually verify their statuses. For degrees conferred outside of the regularly scheduled graduation periods, each record will be manually verified. This will ensure recorded graduation records will be verified within the National Student Clearinghouse to ensure alignment between degree history and enrollment history. The error was found to be a bug in the reporting software that happened in the current fiscal year. The University’s processes in previous years were correct as this error was not present. Completion Date: Estimated March 2024

The findings from the year ended June 30, 2023, schedule of and questioned costs are discussed below. The findings are numbered consistently with the number assigned in the schedule. FINDINGS 2023-001 and 2023-002: Late R.E.A.C. Submission. RECOMMENDATION: We recommend that the management agent and governance review their procedures and begin the audit earlier to ensure that the financial information is available for a timely submission. CLIENT RESPONSE: We agree with the findings and the recornrnended procedures will be adopted.

The Town concurs with the finding; however, it will be corrected as the Town will have fully spent the funds by the next filing due March 31, 2024.

Views of responsible officials and planned corrective actions: The County does not have available funding to hire a grant compliance officer, however, the County plans to seek training resources for current staff responsible for grant administration

Finding: 2023-004 Name of Contact Person: Amia Massey, Director, Human Resources Criteria: In accordance with 45 CFR 304 and the Division of Social Services Fiscal Manual, management should have an adequate system of internal control procedures in place to ensure that salaries are being paid at the approved rate in accordance with the county pay plan. Recommendation: Require the Human Resources Department and County Program Directors to implement procedures to ensure that pay rates are properly entered into the payroll processing system at the time the pay rate is established. Corrective Action/Management’s Response: Management concurs with this finding and will adhere to the Corrective Action Plan in this audit report. The County will pursue the automation of the Personnel Action Form (PAF) in Munis. As this will take several months to complete, the county has implemented the following temporary measures: • HR staff responsible for entering new hires or any other pay changes into the county’s personnel system will be required to give the processed paper PAF to their supervisor prior to the end of each pay period • The supervisor will review the PAF, comparing it to Munis to ensure the hourly rate in the personnel system matches the submitted PAF • If correct, the supervisor will then sign off on the PAF and return it to the entering HR staff member for inclusion in the employee’s personnel file • If the supervisor detects an error, they will indicate as such to the entering employee, so the error can be corrected • This process must be completed prior to the end of each applicable pay period to ensure pay changes are correct for that pay period and/or any errors are corrected prior to payroll processing • It will be the entering HR staff member’s responsibility to ensure they have received all PAFs back from their supervisor prior to the end of each applicable pay period Proposed Completion Date: Management will implement the temporary measures immediately. Completion of the automation of the PAF in Munis should take six (6) to nine (9) months (5/21/2023 to 8/21/2023).

Finding: 2023-001 Name of Contact Person: Angela Karchmer, Social Services Director Criteria: In order for costs to be allowable for purposes of reimbursement they must be allowable in accordance with 45 CFR section 1356.60 and the NC Division of Social Services Manual. All County Department of Social Services employees which provide direct services must maintain daysheets in accordance with the NC Department of Social Services Information System Policy. Recommendation: Require the County Program Directors to implement procedures to ensure that daysheets are properly supported by documentation of time charged to each program. Corrective Action/Management’s Response: Management concurs with this finding and will adhere to the Corrective Action Plan in this audit report. The County has implemented the following process: Daysheet/Documentation Reviews: • QA are conducting random checks bi-weekly to ensure daysheets and documentation are coded correctly. • QA maintains a log of all audits completed. • Audit results are sent to supervisors and social workers for review of the findings. If errors are found discussion takes place regarding how to correct errors. • Supervisors conduct random checks of daysheets and discuss finding during supervision. • All new staff are required within 30 days to watch the state webinar on daysheet entry and take a quiz to insure comprehension. • Daysheet trainings are conducted twice a year for all staff. • DSS Management will work with the Gaston County IT department to upgrade the current daysheet system to allow for better tracking of employee daysheets. • Children and Family Services supervisors will be required to conduct 1 intensive daysheet review per worker each month, attaching eligibility determination paperwork, narratives verifying the work, and ensuring the appropriate funding code is used in daysheets. This paperwork will be reviewed by the program coordinator and administer via an electronic system (Polimorphic). • Supervisors will ensure daysheets are current within 7 days, minimizing errors, and ensuring accuracy. Proposed Completion Date: Management and the Board will implement the above procedures immediately.

Upon learning of the possibility of frauduelent activity, the University began an internal audit review and all activity on the grant was stopped. Throughout the process, the University coordinated with the Ohio Department of Development. The internal audit procedures led to the determination that $209,101 was incorrectly reported by the program advisor and was not detected by the program director. These funds were returned to the Ohio Department of Development on October 11, 2023. The program has been termianted and program income returned. The individuals involved with this program are no longer employees of the University. The University is in the process of seeking reimbursement from the former employee. An internal controls questionnaire was prepared and reviewed for the other Small Business Development Center (SBDC) program noting no areas of concern. The FY24 internal audit plan will include additional review of the remaining SBDC program as well as review of controls within the department which previously managed the program noted in the finding. In addition, training related to roles and responsibilities for supervisors/approvers will be provided in FY24 to emphasize the guidance provided in the grants manual. Contact person responsible for the corrective action: Mark Polatajko, Senior Vice President for Finance and Administration.

Consortium’s Fiscal Agent will ensure that supporting documentation will be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost.

Consortium’s Fiscal Agent shall maintain all invoices and proof of payment for all financial transactions and records should be maintained in an orderly manner to support all transactions.

Criteria: Regulations require that the Organization must submit the single audit data collection form and reporting package within the earlier of 30 calendar days after receipt of the auditor’s report or 9 months after the end of the audit period, to comply with 2 CFR § 200.512(a)(1). Condition: The Organization submitted their 2021 Single Audit Data Collection form on September 7, 2023, which was 20 months after the end of the audit period. Effect: The Organization did not comply with 2 CFR § 200.512(a)(1). Per 2 CFR § 200.516(a)(2), this results in material noncompliance with the provisions of Federal statues, regulations and terms and conditions of Federal awards related to major programs. Cause: The Organization failed to submit their 2021 Single Audit Data Collection form before the end of September 2022 – the 9 month post-audit period ending deadline. Recommendations: We recommend management finalize and submit their single audit data collection forms within the 9 month window moving forward. Views of Responsible Officials: The Organization agrees with the finding and will work to implement the recommendations.

As more fully described above, additional internal control procedures and practices will be implemented effective July 1, 2024, to ensure that underlying cost documentation is adequate, reasonable, and complete in accordance with 2 CFR and other regulatory requirements. More specifically, vendor invoices and the like will be scanned and electronically saved on QBO, as incurred. On the other hand, contractors were engaged to perform certain tasks and were not constrained by hours. If the subject service required on-site intervention by the contractor with a POF client at 3 AM, then the contractor was expected to and had agreed to deliver. The contractor would report any such encounters at the subsequent weekly meetings with certain contractors present. Consistent with IRS employer guidelines, POF did not supervise contractors or dictate work habits or work schedules. Instead, POF defined what each contractor was expected to do or deliver. It was incumbent upon the contractor to determine how best to accomplish the assigned and agreed upon duties defined in their jointly signed agreement. POF’s contractors were and are professionals with state credentials, degrees, or certifications which permit them to serve other NPOs or customers as independent contractors. In many cases, their work products were summarized during the previously mentioned POF weekly meetings and transmitted to Wright State University (now the Ohio State University) where the data were aggregated independently by these contracted third parties and made available to POF’s funders. Effective July 1, 2024, copies pf these weekly report summaries will be routinely saved to provide further evidence of POF’s monitoring of contractors’ activities and adherence to contract terms.

Year Ended December 31, 2022 Contact – Randy Willard, New Director of Finance Telephone Number – (410)-733-9113 Completion Date – First Quarter of 2024 Information on Federal Program(s) U.S. Department of State Name of Program: Program to End Modern Slavery Assistance Listing Number: 19.019 Grant Award Number: S-SJTIP-17-CA-1018/S-SJTIP-18-CA-1014/ S-SJTIP-18-CA-3035 Grant Award Period: October 1, 2017 to June 30, 2022, October 1, 2018 to December 31, 2022, October 1, 2021 to September 30, 2024 Management’s Corrective Action Plan: The financial impropriety was within a subrecipient organization that affected numerous projects/donor funding and not only the PEMS2 funds. GFEMS completed the necessary reporting to the Office of the Inspector General (OIG) for the Department of State. There were no costs or loss sustained from the incident because GFEMS subtracted the misappropriated amount, $4,979.75, from the final disbursement to the subrecipient. GFEMS will continue to apply its existing due diligence and subgrantee monitoring procedures to minimize risk of fraud and non-compliance of subgrants awarded. This will include review of subgrantees policies, procedures, vouchers, receipts, and audit reports as well as desk and site visit financial monitoring, as appropriate.

(B) The Department will review and revise, as necessary, its taxi claim billing requirements and rates to ensure that they are consistent. In addition, the Department will devise controls to ensure that taxi claims are paid in accordance with established requirements and rates and explore controls to ensure that only permitted providers bill as a taxi. The Department is working on reductions in the max fee and unit limits for taxi claim billing codes, which it will have completed by the end of October 2021. In addition, the Department is considering systematically pricing the code at each taxi provider?s specific Public Utilities Commission (PUC) rate. This change, if pursued, will require a system change request, which will take a year or more, which is why the Department has selected an implementation date of December 2022. If this proves infeasible, alternate controls will be implemented. HCPF has met with DORA PUC. The Department is trying to establish a process to decide if the PUC taxi rate still applies or an internal rate can be created. Because of these discussions and needed system changes the implementation date has been moved to December 2023. (D) The Department intends to define in rule the types of documentation that NEMT providers must keep on hand and make clear that they must furnish records to the Department upon request. The July 2022 date will allow for the completion of formal rulemaking. The Department further intends to develop and implement a process to perform regular risk-based provider file reviews with a focus on noncompliant providers. These reviews will ensure, at a minimum, that the providers? paid claims are supported with appropriate documentation and represent the least costly option appropriate to meet each recipient?s needs. The Department met with the RAC team on February 22, 2023 to come up with a process to perform small audits for claims from providers that are outside the Intelliride service area. New systems will be implemented which has pushed the anticipated completion date to December 2023. (E) The Department will amend its contract with its NEMT broker by adding a mandatory annual audit so that it can reconcile trip scheduling data with paid claims data. This will help ensure that the Department pays accurately, pays for NEMT services, and pays for the least costly transportation option appropriate for each recipient. The Department chose July 2022 to add the audit through its annual contract amendment and renewal processes. The contract amendment was completed and signed June 30, 2022 that included a clause for an annual audit of claims. (F) The Department will develop a data review process to reconcile interChange data on NEMT trip claims to interChange data on Medicaid medical claims. This process will entail periodic reviews of NEMT claims to see if members have corresponding medical claims on those dates. If they do not, the Department will follow up with the appropriate NEMT provider to investigate. The July 2022 implementation date reflects the potential need for system changes. This is implemented, the Department has been pulling claims data and where corresponding medical claims are not found HCPF is investigating on a case by case basis to find the cause. (G) Department staff will work with the Department?s Program Integrity (PI) staff on processes to investigate and recover, as appropriate, the overpayments and inappropriate payments that the audit identified as known or likely questioned costs, and repay the federal portion, as appropriate. The December 2022 implementation date reflects the time needed to investigate and when appropriate, recover any overpayments. This has been implemented and the federal portion has been returned to CMS. (H) The Department will develop a process to track staff time and productivity to ensure that it has sufficient staff assigned to oversee and administer NEMT. This process will include documenting time spent each week on various tasks to get a sense of where help is needed, and which tasks take up the most staff resources. Based on its findings, the Department will explore staffing options, as needed. The Department selected the July 2022 implementation date to allow for data collection through the end of State Fiscal Year 2021-22. This has been implemented. New NEMT staff was hired November 1, 2022 to act as the liaison to the counties and clients in the 55 counties outside of the Intelliride service area.

Management Response and Corrective Action: HACLA administers the third largest Housing Choice Voucher program in the United States with an allocation of 52,646 vouchers and 44 percent of all HACLA certificate and voucher resources are housing formerly homeless individuals and families. The average income of all program participants is $19,815 per annum while the rents in Los Angeles are high. These participants have extremely low incomes, are at-risk households, living in a high-rent market, and without the subsidy would not be able to afford decent, safe, and sanitary housing. Further, the program is a valuable resource because in any given night there are more than 75,000 unsheltered residents in the Los Angeles area. HACLA?s highest priority is to house individuals which without the assistance of the program would be unable to pay rent and fall into homelessness or forced back to homelessness. With that said, program compliance is also a high priority for HACLA. As stated in Title 24 Code of Federal Regulations (24 CFR) ?982.516(a) the public housing authority must conduct a reexamination of family income and composition at least annually. Given HACLA?s very large program and the population it serves it is impossible to complete the annual reexamination within 12 months for 100% of the participants. Due to extenuating circumstances such as health issues, the death of the head of household and other challenges the family may be facing, it is impossible to have 100% compliance with this CFR. The housing authority must provide flexibility and extensions. The alternative would be for the housing authority to move forward with terminating the assistance in order to be fully compliant with the CFR--a position that HACLA does not take lightly given the humanitarian crisis in Los Angeles. The CFR is simply no longer in line with the realities of administering the program, and the expectation of the community. HACLA believes that HUD recognizes this in its monitoring practices for SEMAP. Nonetheless, HACLA?s goal is to complete all annual reviews within 12 months and will strike an appropriate balance to do so. These audit findings will assist HACLA in further advocating with HUD to adjust the regulatory requirement on annual reexamination completion time periods to be more in line with the reality of the homeless families that HACLA serves. HACLA?s Section 8 Department has the controls in place to ensure annual reexaminations are completed timely. Management will continue to proactively work with staff on an ongoing basis to ensure that participant families submit documentation timely or begin the intent to terminate process. This is a fine line, however, as HACLA is in the business of housing not terminating families. In line with HACLA?s Vision Plan, Executive Management is committed to improve processes across business lines. In mid-2022, HACLA contracted with Guidehouse, Inc., a consulting firm that works with housing authorities across the country such as the largest--the New York City Housing Authority, to identify and implement process improvements to simplify operations, meet regulatory requirements more efficiently and provide better customer services to applicants, participants and landlords. Guidehouse is in the process of that analysis and it is HACLA?s expectation that there will be an improvement and associated training in the annual reexamination completion process through better monitoring reports and dashboards to be provided in a shift to a better housing program platform as they have recommended. Person Responsible: Director of Section 8