Corrective Action Plans

Subrecipient Monitoring 2025-001 Plan: The University implemented corrective actions in response to the prior-year finding, including enhanced monitoring, oversight, and tracking procedures related to subrecipient Single Audit reviews and management decision issuance. While delays identified during the current audit period occurred during the implementation of those corrective actions, the University believes the controls now in place are designed to support timely completion and documentation of required monitoring activities in accordance with Uniform Guidance requirements. Implementation Date: 09/01/2025 Contact: LaShawnda V. Hall Assistant Vice President for Research Financial Operations Accounting Services for Research Sponsored Projects (ASRSP) Northwestern University 1800 Sherman Ave, Suite 6-6000 Evanston, IL 60201 lashawnda.hall@northwestern.edu Phone: 847.491.4716

Item: 2025-002 Assistance Listing Number: 17.280 Program: WIOA Dislocated Worker National Reserve Demonstration Grants Federal Agency: U.S. Department of Labor Pass-Through Agencies: n/a Contract/Pass-Through Grantor Identifying Number: 23A60YP000003 Award Year: September 30, 2023 to September 30, 2026 Compliance Requirement: Subrecipeint Monitoring Criteria: A Pass-Through Entity (PTE) is required to monitor the activities of subrecipients as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: (a) reviewing financial and programmatic (performance and special reports) required by the PTE, (b) following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means, and (c) issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR 200.521. Condition: The Foundation did not complete the required subrecipient monitoring related to review of subrecipient Single Audits and financial statements. Specifically, we noted no evidence that the Foundation verified whether certain subrecipients met the Single Audit threshold under 2 CFR 200.501 or obtained the subrecipients’ Single Audit reporting packages from the Federal Audit Clearinghouse. Additionally, the Foundation did not obtain or document a review of the subrecipients’ audited financial statements (or other financial information) to inform the subrecipient risk assessment under 2 CFR 200.332(b). Name of Contact Person Steve Zylstra, President & CEO Phone Number: (602) 422-9447 Anticipated Completion Date: July 31, 2026 Views of Responsible Officials and Corrective Actions: For the current audit period, the Foundation has obtained the missing single audit reports and financial statements and is in the process of completing and documenting the required reviews, updating subrecipient risk ratings and performing any necessary follow-up or management decisions by April 30, 2026. Additionally, the Foundation will establish formal written procedures to comply with 2 CFR 200.332(b), (d), and (f), 2 CFR 200.501, and 2 CFR 200.521, including clear steps and timelines for verifying Single Audit applicability, obtaining and reviewing Single Audit reports, and issuing management decisions when applicable. Lastly, the Foundation will provide periodic training to finance and program staff on subrecipient monitoring requirements under the Uniform Guidance.

Finding: 2025-032 - DMVA management did not issue a management decision for a finding relating to one Disaster Grants subrecipient’ s single audit. Questioned Costs: None Assistance Listing Number: 97.036 Assistance Listing Title: Disaster Grants Views of Responsible Officials (state whether your agency agrees or disagrees with the finding; if you disagree. briefly explain why): DMVA concurs with the finding. Corrective Action (corrective action planned): DMVA acknowledges the importance of issuing timely and adequate management decisions to ensure subrecipients take corrective action. Due to a misunderstanding in the guidance provided, DMVA failed to issue the required management decision. The management letter has since been issued to the subrecipient. Internal procedures were updated in fiscal year 2025 to eliminate a single point of failure in this requirement. The Administrative Director, in conjunction with the Finance Officer, will assess the strengthened internal procedures to ensure they meet requirements. Completion Date (list anticipated completion date): 06/30/2026 Agency Contact (name of person responsible for corrective action): Bob Ernisse, Pamela Wiederspohn

Recommendation We recommend that the Department continue to monitor its monitoring activities over subrecipients, to ensure that they are being performed timely. Management Response Corrective Action The Department acknowledges the corrective action related to the completion of required WIOA monitoring activities and has taken concrete steps to bring monitoring into compliance. NMDWS has scheduled onsite monitoring reviews and issued formal notification letters to all four subrecipients, as outlined below: • Southwestern Local Workforce Development Board: Notification letter sent January 26, 2026; onsite monitoring scheduled for March 9–13, 2026 • Northern Area Local Workforce Development Board: Notification letter sent January 26, 2026; onsite monitoring scheduled for April 20–24, 2026 • Workforce Connection of Central New Mexico: Notification letter sent January 5, 2026; onsite monitoring scheduled for May 4–11, 2026 • Eastern Area Workforce Development Board: Notification letter sent January 26, 2026; onsite monitoring scheduled for May 18–22, 2026 The Department has completed Program Years 2022, 2023 and 2024. In addition, the Department has also completed a Program Year 2024 risk assessment, which is now incorporated into the grant agreements. The WIOA Monitoring Unit will continue to utilize the Department’s Grant Risk Assessment tool for future grant agreements to ensure consistent and risk-informed monitoring. Finally, the WIOA Monitoring Unit has drafted a comprehensive subrecipient monitoring policy. This policy will establish clear monitoring standards for subrecipients and pass-through entities under WIOA Title I-B and related discretionary awards, including monitoring frequency, scope, and requirements for monitoring letters and reports. These actions are intended to address the identified deficiencies and strengthen the Department’s monitoring framework moving forward. Due Date of Completion: June 30, 2026 Responsible Party(ies): Administrative Services Division Director

Views of Responsible Officials and Planned Corrective Action 1. Person responsible: Administrative Deputy, DCBA 2. Corrective action plan: DCBA concurs with the findings and the recommendation, however, the total expenditure amount of $5,917,341 is inclusive of expenditures from a different contract held by the same agency who was identified as a contractor and not a sub-recipient. As such, expenditures under that contract would not be subject to monitoring as set forth in 2 CFR § 200.332. Therefore, the total expenditures for the four (4) subrecipient agreements that are missing monitoring reports are $585,756. To address the finding, DCBA will establish a formal monitoring plan that will include a monitoring checklist, monitoring schedule, and a detailed tracking log to ensure timely monitoring of its subrecipients. DCBA will work with CEO and/or the Auditor-Controller to identify resources to implement ongoing monitoring of subrecipients, with clear documentation and reporting. Additionally, DCBA already implemented a risk assessment process to ensure an assessment of all subrecipients is completed at least once a year. This process will be formalized in writing. The process involves identifying risk areas, including reviewing financial stability, legal risks, capacity, and performance history. The assessment process uses a risk scoring model that rates organizations using a risk level scale between 1-5 that takes into consideration operating reserves, program and fundraising efficiency, and their ability to meet financial obligations. 3. Anticipated implementation date: September 30, 2026.

2025-002 – Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D”) Sponsoring Agency: Various – All R&D awards with subrecipients from 1 campus Award Name: Various - All R&D awards with subrecipients from 1 campus Award Number: Various Assistance Listing Title: Various – All R&D awards with subrecipients from 1 campus Assistance Listing Number: Various - All R&D awards with subrecipients from 1 campus Award Year: 2024-2025 Pass-through entity: All pass-through awards for 1 campus with subrecipients The Sponsored Programs Office will implement a new process to ensure all Uniform Guidance reports for all subrecipients of federal funding are reviewed annually to ensure findings affecting our awards are appropriately addressed and that we issue a management decision to the extent applicable. The process will involve setting event reminders on all active subrecipients under federally funded projects to trigger review every 10-11 months regardless of any upcoming amendments. The targeted implementation date is August 1, 2026. For inquiries regarding this finding, please contact Patrick Woods at pjwoods@ucdavis.edu.

Corrective Actions: Staff will ensure that the Monitoring Policy will be fully implemented as recommended. In addition , changes in staffing will be addressed by additional training to ensure that consistent processes are maintained. Name of Responsible Person: Okina Dor, Director of Community Development Ryan Mulligan, Housing Manager Rose Tam, Director of Finance

Department: Defense, Veterans and Emergency Management Title: Internal control over DG – PA program subrecipient audit procedures needs improvement Questioned Costs: None Status: Corrective action in progress Corrective Action: The Department will publish revised subrecipient monitoring procedures. The Department will cross-train relevant agency staff on the procedures. The Department will implement a quarterly FAC review cycle with revised procedures. Completion Date: April 30, 2026, June 30, 2026, and July 1, 2026, respectively Agency Contact: Sunny Cyr, MEMA Business Office Director, DVEM, 207-707-2507

2025-001 Monitoring of Subrecipients Agency: National Aeronautics & Space Administration Program Titles: Surviving a mass extinction: Lessons from the post K-Pg fern spike Grant Numbers: 80NSSC23K1013 Contact Person: Emily Schwarz, Chief Financial Officer (718) 817-8730 Corrective Action: Subsequent to year end, the Garden obtained and reviewed Single Audit filings for all its Subrecipients from the Federal Audit Clearinghouse. In the Garden’s review of the Subrecipient Single Audit Reports, it did not note any findings related to its Federal programs. The Garden has implemented a control to continue to obtain and review the Single Audit filings for its Subrecipients on an annual basis. Anticipated Completion Date: Plan implemented immediately, and then continues on an ongoing basis.

AL 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Finding: Evidence was not retained of monitoring subrecipients’ financial and single audit reporting or of any follow up actions as a result of monitoring. Auditor Recommendation: The County should develop and implement policies and procedures to ensure that all subrecipient monitoring is performed and retained. Corrective Actions Taken or Planned: The County agrees and concurs. The County anticipates providing more training to grant program managers and additional reviews during FY26 as the program closes out. Point of Contact for corrective actions: Sarah Keane, Deputy CFO sarah_keane@washingtoncountyor.gov

The Bureau of Financial Operations (BFO) will continue conducting during-the-award subrecipient monitoring for the SSBG based on the results of the documented risk assessment. As it relates to the cash management portion of the finding, given the relatively small amount of funds involved and the number of counties affected, DHS has determined that it is not economically feasible to change the payment methodology at this time. Anticipated Completion Date: 06/30/2026 Contact Name: Kelly Graham, Director, Division of Financial Reporting

TANF Youth Development Program (TANF YDP) operations transitioned from the Bureau of Workforce Development Administration (BWDA) to the Bureau of Workforce Partnerships and Operations (BWPO) in January 2023. Due to this transition, BWPO did not conduct onsite monitoring of the TANF YDP program in program year (PY) 2022. BWPO did begin onsite monitoring in program year 2023 on a limited basis as a pilot with 3 local areas in September of 2024. BWPO conducted expanded monitoring efforts for PY 2024 by aligning TANF YDP monitoring with the WIOA Common Measures Data Validation cycle (larger areas are monitored annually with smaller areas monitored on a 3-year rotating schedule). PYs are July 1st to June 30th. TANF YDP PY 2024 monitoring concluded by January 2026. BWPO provided written communication to local areas within 45 days post monitoring to issue results, concerns, recommendations, and corrective actions as needed. During PY 2025, July 1, 2025 to June 30, 2026, L&I will monitor all 22 subrecipients for both program and fiscal compliance to ensure that the goals and objectives of the subaward are achieved. This will be done in coordination between BWPO and BWDA. Monitoring will then be completed annually. Currently, BWDA does reconcile the TANF Youth Development Partnership Statement of Expenditures of Financial Awards for each of the subrecipients’ single audits, reviews all TANF findings related to the TANF YDP funds and ensures all single audits are received - issuing audit management determinations. The overall goal of monitoring activities is to ensure that TANF YDF funding is used for authorized purposes by subrecipients, in compliance with Federal statutes and regulations, and that the TANF YDP program is being implemented in accordance with current PA Dept. of Labor & Industry’s policies and procedures. BWPO in collaboration with BWDA plans to begin monitoring TANF YDP activities via enhanced desk review monitoring in the spring of 2026 for PY 2025. This effort will be ongoing and moving forward for every subsequent program year either onsite or by enhanced desk review monitoring. PY 2025 monitoring will be completed by 6/30/26 with results issued as a written communication within 45 days of the monitoring completion date. Anticipated Completion Date: 06/30/2026 Contact Name: Dorraine Rauch, Division Chief

PDA: PDA is creating mechanisms to fulfill the requirements for pass-through entities within 4 to 6 months after FAC acceptance date of the audit, which include: 1. Evaluation of single audit report submissions received from BAFM to determine program purpose acceptability by verifying, at a minimum, that all agency-funded programs are properly included on the applicable financial schedules; that findings affecting the agency contain sufficient information to facilitate a management decision; and that the subrecipient has submitted an adequate corrective action plan. 2. Issuance of management decisions relative to audit findings and crosscutting findings assigned to the agency for resolution, as required by 2 CFR §200.521. 3. To impose or coordinate the imposition of remedial action in accordance with 2 CFR Part 200.339 and Management Directive 325.08 Amended, Remedies for Recipient Noncompliance with Audit Requirements, when subrecipients fail to comply with the provisions of Subpart F. PDA has developed a SEFA reconciliation process that will ensure that the SEFA is accurate, allowing for major programs to be properly identified and subjected to audit. PDA is developing a procedure for all programs to follow for any entity that is in non-compliance with the audit requirements and is failing to comply with the provisions of Subpart F. Anticipated Completion Date: 06/30/2026 Contact Name: Nichole Nedinsky, Fiscal Management Specialist, PDA Audit Coordinator PDOA: 1. Strengthen written policies and procedures governing subrecipient monitoring and audit resolution. 2. Update the audit tracker to proactively ensure the six-month management decision due date is met. 3. Implement segregation of duties between reconciliation review and management decision issuance. 4. PDOA will develop and utilize a standardized SEFA Review Checklist. 5. Conduct annual Uniform Guidance training for fiscal staff. Anticipated Completion Date: 06/30/2026 Contact Names: Jason Kavulich, Secretary of Aging; Jennifer Beck, Fiscal Management Specialist & PDOA Audit Liaison PDE: Implemented 2/17/26: Audit Coordinator verifies finding status of all single audit packages uploaded to the PDE single audit SharePoint site. Implemented 7/1/25: PDE audit section has begun to enforce timely audit submission by using remedial action within its authority as granted by federal guidelines. Implemented 7/1/25: PDE has expanded the resources available through the use of the compliance office for audit finding review and resolution in an effort to resolve all audit findings timely. Anticipated Completion Date: Completed Contact Name: Clayton P. Carroll, II, Audit Coordinator PENNVEST: PENNVEST will maintain a comprehensive tracking list that contains all equivalency projects that have disbursed any funds during the audit period. All those projects will be reviewed and reconciled to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward, including the timely submission of the single audit to the FAC. Once received, PENNVEST will reconcile the SEFA to ensure the information is accurate. PENNVEST will complete the reconciliation within six months of the FAC’s acceptance of the audit report and respond to the subrecipient with any adverse findings. Anticipated Completion Date: Completed Contact Names: Steven Anspach, Dep. Exec. Dir.; Heather Brookmyer, Loan Service Officer; Robert Boos, Exec. Dir.

Program: AL 21.027 – COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – Subrecipient Monitoring Corrective Action Plan: DNR will enhance subrecipient monitoring procedures to specifically include documented reviews of subrecipient procurement policies and procurement files to ensure compliance with applicable federal requirements and the subrecipient’s own written policies. DNR will revise subaward templates and procedures to ensure that all required federal award information and applicable terms and conditions, including closeout requirements, are consistently included in subaward agreements at the time of issuance. DNR will develop and implement formal written procedures for subrecipient Single Audit monitoring. DHHS will continue to improve subrecipient monitoring where necessary. NDCS will revise its policy to include a requirement for verifying subrecipient qualifications for federal funds. Additionally, NDCS will notify all subrecipients that proper payroll and benefit documentation must be submitted to ensure accurate cost allocation. NDCS will ensure that all required subaward documentation is provided to each subrecipient. This documentation will include: a. The subrecipient’s Unique Entity Identifier (UEI) b. Federal Award Identification Number (FAIN) c. Federal Award Date d. Federal award project description e. The name of the Federal agency, pass-through entity, and contact information for the awarding official of the pass-through entity f. Assistance Listings title and number g. A requirement that the subrecipient permit the pass-through entity and auditors to access the subrecipient’s records and financial statements h. Appropriate terms and conditions concerning closeout NDCS will incorporate these requirements into its subaward process to ensure compliance with federal regulations. Contact: Erv Portis, Shelby Mikulak, Heather Arnold, Jenise Trautman Anticipated Completion Date: June 30, 2026

Program: AL 93.575 – COVID-19 Child Care and Development Block Grant – Period of Performance Corrective Action Plan: N/A Contact: Heather Arnold Anticipated Completion Date: Complete

The Department will continue to follow the current Policy and Procedure related to the Single Audit reviews and has allocated an individual to review the Single Audits. This includes issuing a management decision letter if required, in accordance with the timeline established in federal guidance.

FINDING 2025-003 Finding Subject: Teacher and School Leader Incentive Grants – Subrecipient Monitoring Contact Person Responsible for Corrective Action: Chris Gearlds, Assistant Superintendent Contact Phone Number and Email Address: (317) 856-5265; cgearlds@decaturproud.org Views of Responsible Official: We concur with Audit Finding Description of Corrective Action Plan: The Teacher and School Leader Incentive Grant was completed during the audit period and the school district does not plan on receiving this award in the future. Therefore, further corrective action is not required and district officials will utilize this information to ensure compliance in other federal awards. Anticipated Completion Date: February 1, 2026

Assistance listing numbers and program names 97.024 Emergency Management Performance Grants Agency: Department of Emergency and Military Affairs (DEMA) Name of contact person and title: Keith Tagaban, Audit Supervisor Anticipated completion date: September 18, 2026 Agency’s Response: Concur The Department of Emergency and Military Affairs (DEMA) will maintain complete, accurate, and auditable documentation to support all federal award expenditures, matching contributions, and financial reporting in accordance with 2 CFR Part 200 and applicable award terms and conditions, with records retained for a minimum of three years following submission of the final Federal Financial Report (FFR). DEMA will ensure all FFRs are reviewed for accuracy, completeness, and compliance prior to submission and will promptly correct any identified discrepancies in coordination with the federal awarding agency. The Department will implement and enforce written policies and procedures governing reimbursement requests, financial reporting, matching requirements, and record retention, including management review to ensure costs reported are allowable, allocable, reasonable, and adequately supported, and will maintain sufficient staffing and oversight to sustain ongoing compliance.

Assistance listing numbers and program names 97.024 Emergency Management Performance Grants Agency: Department of Emergency and Military Affairs (DEMA) Name of contact person and title: Keith Tagaban, Audit Supervisor Anticipated completion date: September 18, 2026 Agency’s Response: Concur The Department of Emergency and Military Affairs will maintain required documentation to support payroll costs charged to the federal program and ensure compliance with award requirements. Internal Audit will review FY2024 payroll charges for allowability and adequate support in coordination with the State Finance Office, the Emergency Management Grants Administration Office, and State Human Resources Office. Unallowable costs, if identified, will be resolved through reimbursement adjustments or repayment, as appropriate. Payroll documentation policies will be updated, and training will be provided to ensure required records are retained for the prescribed retention period.

Assistance listing numbers and program names 84.010 Title I Grants to Local Education Agencies 84.367 Supporting Effective Instruction state Grants, Title II (formerly Improving Teacher Quality State Grants) Agency: Arizona Department of Education (ADE) Name of contact person and title: Sarka J. White, Deputy Associate Superintendent Anticipated completion date: December 2027 Agency’s Response: Concur Monitoring of CMO We will update protocols and implement an annual monitoring process specifically for charter schools with CMO relationships by integrating defined procedures to evaluate additional conflicts of interest, related party transactions, and segregation of duties concerns, while assigning a programmatic risk label in addition to the one assessed by Grants Management. To ensure accurate identification and appropriate separation of responsibilities, Title I and Title II will incorporate procedures for detecting CMO associations within both the grant review process and programmatic monitoring functions, supported by coordinated information sharing across relevant departments. Updated policies will also include requirements for disclosure of organizational associations and embed these indicators into the LEA level risk framework that determines monitoring frequency and representation based on assessed risk. Checks and balances will include programmatic follow-up on these disclosures prior to review of funding applications and or any assistance provided. Title I and Title II will revise monitoring tools to include CMO specific review steps, provide targeted staff training on identifying CMO relationships and apply enhanced oversight procedures, and carry out funding and program approval activities and monitoring activities. These can be in the form of financial and performance report reviews, Grant approvals, Data submissions, technical assistance, and onsite or virtual visits, in alignment with the strengthened risk-based model. Completion will be demonstrated through finalized procedures, documented staff training, and the application of revised monitoring methods during the next annual grant and monitoring cycle. Monitoring – Programmatic – Grant Monitoring We have revised LEA monitoring policies and procedures to incorporate coordinated processes between departments for clear identification of charter schools with CMO relationships, require now disclosure of organizational associations, and strengthen oversight of conflicts of interest, related party transactions, and segregation of duties risks. Updated procedures also define a structured, risk-based monitoring framework that assigns LEA monitoring levels, representation, and monitoring frequency based on assessed risk, independent of CMO affiliation, while integrating new indicators into monitoring tools to support consistency through equal representation and ensuring each LEA is treated as an individual LEA without respect to associations. Staff have and will continue to receive targeted training on the revised requirements, and completion will be demonstrated through the approval and publication of updated procedures, documented staff training, and application of the enhanced risk-based monitoring approach during the next LEA monitoring cycle.

Assistance listing number and program name: 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Agency: Governor’s Office of Strategic Planning and Budgeting (OSPB) Arizona Department of Housing (ADOH) Arizona Department of Water Resources (ADWR) Arizona Office of Tourism (AOT) Industrial Commission of Arizona (ICA) Name of contact persons and titles: Ben Henderson, Director Governor’s Office of Strategic Planning & Budgeting Keon Montgomery, ADOH Assistant Deputy Director of Programs Will Palmisano, ADWR Finance and Administration Assistant Director Mary-Ellen Kane, AOT Assistant Deputy Director Sylvia Simpson, ICA Chief Financial Officer Anticipated completion date: See below Agency’s response: Concur OSPB anticipated completion date: April 2027 As indicated by the auditors, OSPB has demonstrated compliance with subrecipient monitoring requirements in FY24. The audit report limits OSBP’s inclusion in this finding to the questioned costs ($1,623,846) identified by OSPB through its subrecipient monitoring. However, the identification of questioned costs is not evidence of a deficiency in OSPB’s subrecipient monitoring; rather, the opposite, it demonstrates that OSPB has sound internal controls and an effective subrecipient monitoring system in place. Accordingly, OSPB will continue with the existing comprehensive subrecipient monitoring framework as outlined below: ● On-going Grantee Support - The Office provides a variety of subrecipient support including technical assistance, Communities of Practice(COP), and regular status check meetings. ● Training - Office staff facilitate ongoing training and provide resources and guides to improve understanding of compliance requirements and provide tools to support proper grants management. ● Financial Report-Reimbursement Requests—The Office reviews the grantee's financial reports to ensure costs align with the approved budget, program objectives, and federal cost principles. ● Performance Reports—The Office reviews the submission of programmatic reports to track progress on grant goals. ● Single Audit Reports—The Office confirms any required subrecipient Single Audits, reviews a copy of the most recent Single Audit Reporting Package (SARP), issues any necessary management decisions, and conducts follow-up monitoring of Corrective Action Plans. ● Risk Assessment (RA)—The Office conducts a Risk Assessment (RA) of grantees when applying for grants to inform the grant award decision and possible grantee oversight or restrictions. Additionally, the Office conducts an annual RA of any grantee currently awarded funding. ● Monitoring Reviews - The Office utilizes the RA results to prioritize high risk grantees to be reviewed through a desk or on-site monitoring. Medium risk grantees will receive additional support and will be referred to our Compliance and Reporting team for further review if additional concerns arise. The Office has implemented all past recommendations and OSPB is committed to continuing these ongoing efforts to actively reduce the risks of waste, fraud, and abuse of federal dollars through our subrecipient monitoring process. OSPB will continue Coronavirus State and Local Fiscal Recovery Funds subrecipient monitoring and follow-up through the grant closeout in April 2027. ADOH anticipated completion date: March 2026 The ADOH has begun to develop and implement formal, documented subrecipient risk assessment procedures to ensure monitoring activities are aligned with assessed levels of risk. This will include establishing standardized criteria to evaluate subrecipient risk and documenting risk determinations. These enhancements are also consistent with recommendations identified in the State’s most recent Sunset Audit, and the Agency has already begun implementation of these procedures. The ADOH will update policies and procedures accordingly and provide staff training to ensure consistent application. These actions will strengthen internal controls and ensure compliance with applicable subrecipient monitoring requirements. The ADOH will implement procedures to strengthen subrecipient monitoring related to Single Audit requirements. This will include verifying submission to the Federal Audit Clearinghouse, obtaining and retaining copies of all applicable Single Audit reports, and maintaining a tracking mechanism to document receipt and review. The ADOH will also establish procedures to review audit findings and ensure appropriate follow-up, including verification of subrecipient corrective actions, and will support consistent implementation. ADWR anticipated completion date: December 31, 2026 Before approving an application from an eligible subrecipient for federal grant monies, ADWR as a passthrough entity, will conduct a risk assessment of the subrecipient as part of the initial award approval. ADWR will create a standardized checklist that will enable ADWR to make an informed decision regarding what monitoring tasks will be necessary consistent with 2 CFR 200.332. Once an eligible subrecipient applies for federal grant monies, ADWR will require the applicant subrecipient to fill out the checklist and establish a monitoring program consistent with the results. ADWR will develop staff training and a standard work to implement this program. If the award spans more than one year, the results of any applicable single audits will inform ADWR if changes to the monitoring program for a particular subrecipient are required. As part of a program standard work, ADWR will send a questionnaire to subrecipients regarding federal award expenditures and remind them of any single audit requirements as well as expected completion date of any applicable audits. Failure of any prescribed monitoring items will trigger award review and possible reclassification of risk, additional monitoring, and/or withholding of pending reimbursements until the subrecipient remedies an issue. AOT anticipated completion date: March 20, 2026 AOT has established a process to verify that subrecipients who receive a grant award greater than $750,000.00 are able to provide a current single audit. AOT will provide sub recipients additional written documentation identifying required completion dates and any additional instructions required. Processes and procedures have been developed and implemented. The program has concluded and no further action will be taken. AOT has established a process to ensure the required backup documentation provided by the subrecipient is acceptable for reimbursement. AOT will continue to communicate with OSPB on updates to policy to ensure the processes and procedures are being implemented within federal and state funding guidelines. The program has concluded and no further action will be taken. ICA anticipated completion date: December 31, 2025 The ICA concurs with the finding regarding subrecipient monitoring. The ICA’s involvement as a pass-through entity for the SLFRF program was a unique, one-time occurrence designed to facilitate the equitable distribution of funds to Arizona fire districts based on a methodology approved by the Office of Strategic Planning and Budgeting (OSPB). The ICA does not expect to serve as a pass-through entity for federal funds in the future. While the ICA implemented rigorous validation steps, including the thorough review of payroll records, receipts, and attestations prior to any reimbursement, the agency recognizes that formal risk assessments and subaward agreements were not executed at the onset of the program. The ICA became aware of these specific documentation deficiencies through the audit process after the program had already ended on December 31, 2025. The ICA will address the underlying control deficiency by updating its internal grant management procedures to ensure in the event the agency was to act as a pass-through entity again, formal risk assessments and standardized subaward agreements would be completed by the subrecipient as part of the requirements to receive federal monies. Additionally, the ICA has since obtained 100% of the required single audit reports from the applicable subrecipients and has verified that all necessary corrective actions for unrelated findings have been addressed.

Assistance listing numbers and program names: 21.023 COVID-19 Emergency Rental Assistance Program 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Agency: Department of Economic Security (DES) Name of contact person and title: Molly Bright, Community Services Division Assistant Director Anticipated completion date: June 30, 2026 Agency’s Response: Concur The Department of Economic Security will address the audit recommendations as follows: 1. Ensure benefit payments are for allowable costs paid to or on behalf of eligible program applicants. The Division will review and confirm that benefits payments paid to or on behalf of eligible program applicants are allowable expenditures of the federal funding being disbursed. 2. Update existing policies and procedures to include a post-review of the benefits subsystem’s automated review of eligibility requirements, such as verifying the income thresholds and geographic location aligned with the Division’s written policies and procedures, and supported by required documentation. The Division should correct any inaccurate eligibility determinations identified during the post-review. Emergency Rental Assistance Program policies and procedures require validation of eligibility based upon substantiating applicant documentation, including household income and geographic location. The Division will update Division policy to include a post-review process to identify and correct any errors or discrepancies. 3. Allocate sufficient staffing resources to perform a thorough evaluation of program benefits applications and provide training on eligibility requirements and allowable benefit payments. The Division will allocate sufficient staffing resources to evaluate program benefits applications and provide training on eligibility requirements and allowable benefit payments. 4. Work with the federal agencies to resolve the $64,131 in program funds that were spent in violation of federal regulations, policies and procedures, and may need to be returned to the federal agencies. The Department of Economic Security will address the audit recommendations as follows: 1. Ensure benefit payments are for allowable costs paid to or on behalf of eligible program applicants. The Division will review and confirm that benefits payments paid to or on behalf of eligible program applicants are allowable expenditures of the federal funding being disbursed. 2. Update existing policies and procedures to include a post-review of the benefits subsystem’s automated review of eligibility requirements, such as verifying the income thresholds and geographic location aligned with the Division’s written policies and procedures, and supported by required documentation. The Division should correct any inaccurate eligibility determinations identified during the post-review. Emergency Rental Assistance Program policies and procedures require validation of eligibility based upon substantiating applicant documentation, including household income and geographic location. The Division will update Division policy to include a post-review process to identify and correct any errors or discrepancies. 3. Allocate sufficient staffing resources to perform a thorough evaluation of program benefits applications and provide training on eligibility requirements and allowable benefit payments. The Division will allocate sufficient staffing resources to evaluate program benefits applications and provide training on eligibility requirements and allowable benefit payments. 4. Work with the federal agencies to resolve the $64,131 in program funds that were spent in violation of federal regulations, policies and procedures, and may need to be returned to the federal agencies. The Division will coordinate with applicable federal agencies to resolve these unallowable costs.

Assistance listing number and program name: 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Worker Formula Grants Agency: Department of Economic Security (DES) Office of Economic Opportunity (OEO) Name of contact persons and titles: David Almaraz, DES DERS Business Administrator Stephen Sifuentes, OEO Finance Administrator Senior Anticipated completion date: See below Agency’s Response: Concur DES Anticipated completion date: December 31, 2026 The Department will address the audit recommendations by amending its ISA subaward with the Arizona Office of Economic Opportunity. The Department will also adjust its subrecipient monitoring schedule, procedures and offer training and assistance on conference-related requirements to the Arizona Office of Economic Opportunity. OEO Anticipated completion date: June 30, 2027 The Office of Economic Opportunity (OEO) acknowledges the finding regarding the use of WIOA Dislocated Worker Formula Grant funds for conference meals and promotional items. To address these concerns, OEO has undertaken proactive measures to strengthen internal controls, enhance oversight, and improve compliance with federal cost principles. As such, OEO will utilize these findings to strengthen its existing system, address any identified deficiencies, and continue to enhance fiscal management. Through these corrective actions, the OEO is committed to full compliance and the effective stewardship of federal funds. 1. Ensure Summit costs charged to the WIOA federal program are appropriate, necessary, and managed to minimize charges to the federal award. The OEO acknowledges the auditors’ findings regarding the management of Summit costs charged to the Workforce Innovation and Opportunity Act (WIOA) federal program. OEO is committed to ensuring that all expenditures are appropriate, necessary, and managed with the highest level of fiscal responsibility to ensure charges are necessary and allowable to the federal award. To address this finding, OEO will collaborate closely with the Arizona Department of Economic Security (ADES) to develop and implement comprehensive formal policies and procedures governing the State Workforce Development Board and WIOA funded events including Summit expenditures. Our joint efforts will focus on implementing a documented review and approval process to ensure costs charged to the federal award are supported by documentation and evaluated in accordance with 2 CFR §§ 200.403. As part of this corrective action, the process will integrate cost-containment measures into the planning and approval of the events budget planning phase. This will include requiring staff to assess whether proposed costs are necessary, reasonable, allocable and limited to helping the workforce development system achieve the purpose of the Workforce Innovation and Opportunity Act (WIOA). OEO and ADES will conduct working sessions to develop, implement, and monitor these protocols, with the goal of finalizing a standardized procedure for all WIOA-funded event expenditures. This approach ensures consistency across agencies and establishes clear oversight to prevent recurrence. 2. Develop and implement written procedures, including a standardized review process, to ensure that costs charged to the WIOA federal program are allowable prior to requesting reimbursement from DES. The OEO recognizes the importance of verifying the allowability of expenditures prior to the reimbursement phase. We concur that a standardized documented review process is necessary to maintain fiscal integrity and compliance of WIOA federal program funding and federal regulations. OEO, in partnership with the ADES, will develop and formalize written internal control procedures designed to vet all costs before they are submitted to ADES for reimbursement. The proposed standardized review process will align with existing practices for monitoring and expending federal funds as described under WIOA for the State Workforce Development Board and will include: ● Pre-submission verification: Implementation of an internal review checklist based on 2 CFR 200 Subpart E Cost Principles and applicable State policy. This will ensure that every line item is: ○ Allowable under both WIOA statutory requirements and federal cost principles. ○ Allocable to the specific federal award in proportion to the benefits received. ○ Compliant with the State of Arizona Accounting Manual ○ Documented with sufficient supporting evidence (pictures, invoices, receipts, and justifications) to withstand audit scrutiny. ● Standardized approval workflow: Establishment of a clear designated approval framework. ● Policy Integration: These procedures will be codified into an OEO Fiscal Manual, providing staff with a clear roadmap for processing WIOA-related expenditures. OEO will coordinate with ADES technical assistance teams to ensure our internal review templates align with ADES’s appropriate reimbursement systems. This collaborative design phase will ensure that once a request reaches ADES, it has already undergone a vetting process, thereby reducing errors. 3. Work with federal grantor and/or DES to resolve the $90,015 of questioned costs associated with the 2024 Summit and any subsequently held Summits. OEO will collaborate with the ADES, the primary grant recipient, to establish the most appropriate course of action for resolving any unallowable expenditures. Initially, OEO will work with ADES to precisely define the actual allowable amount based on programmatic cost allowability, which may require consultation with the original federal grantor, for final clarification on disputed cost. Subsequent steps for resolution will be guided by ADES’s direction and the requirements of the federal grantor.

Finding Number: 2024-049 Finding Name: Inadequate Review of Subrecipient Single Audit Reports Finding Condition(s): The Illinois Department on Aging (IDOA) did not adequately document review of single audit reports received from its subrecipients for the Aging Cluster program on a timely basis. Name of Contact Person(s): • Teri McKeon, Deputy Chief Financial Officer / Bureau Chief Business Services - Illinois Department on Aging, Division of Financial Administration • Sarah Harris, Chief Financial Officer - Illinois Department on Aging, Division of Financial Administration Corrective Action(s): The IDOA does not currently issue management decision letters but is working with the Grants Accountability & Transparency Unit to retroactively complete management decision letters once staff is fully hired and trained. As the IDOA brings the management decision letters and reconciliations up to date, it will allow for a determination of whether additional staff for these functions is necessary to maintain compliance. Proposed Completion Date: October 31, 2026

Finding Number: 2024-043 Finding Name: Inadequate Review of Subrecipient Single Audit Reports Finding Condition(s): The Illinois Criminal Justice Information Authority (ICJIA) did not adequately review single audit reports received from its subrecipients for the Crime Victim Assistance Program (CVA) program on a timely basis. Name of Contact Person(s): • Hemant Modi, Chief Fiscal Officer – Illinois Criminal Justice Information Authority, Office of Fiscal Management • Karen Crawford, Chief Grantee Auditor – Illinois Criminal Justice Information Authority, Office of Fiscal Management Corrective Action(s): ICJIA is in the process of hiring a full-time staff person to focus on the State’s Grant Accountability and Transparency Act (GATA) requirements over ICJIA’s reviews of its subrecipients’ single audit reports. Proposed Completion Date: July 1, 2026