Corrective Action Plans

2023-06 – Subrecipient Monitoring – Internal Control and Compliance over Subrecipient Monitoring (Significant Deficiency) Condition: During our audit, we noted that the City did not have established monitoring policies and procedures for its subrecipients to address the compliance requirements. Consequently, no subrecipient monitoring activities were conducted during the year. Management concurs. Corrective Actions: City staff will prepare a policy and procedure for subrecipient monitoring by April 2024. Name of Responsible Person: Robert A. López, Chief of Police Manuel Carrillo Jr., Director of Recreation & Community Services Ron Garcia, Director of Community Development Sam Gutierrez, Director of Public Works Rose Tam, Director of Finance Albert Trinh, Accounting Manager Projected Implementation Date: The City will implement the policy and procedure by April 2024.

Dear Mr. Waguespack, Please find enclosed the Louisiana Workforce Commission's response to the above-mentioned finding. On behalf of Secretary Susana Schowen, we thank your staff for their guidance and technical assistance throughout this process. If you have any questions or need additional information, please do not hesitate to give me a call at (225) 342-3474 or email at swilliams@lwc.la.gov. LWC Response: LWC concurs with this finding concluding that five close out letters were issued 111 to 183 days after monitoring report issuance and that four close out letters were not issued as of January 2024 while the monitoring reports for these reviews were issued more than 195 days prior. LWC's policy has established timelines for the monitoring process, which should be followed by all monitoring staff. As established in policy, a subrecipient has 45 days of issuance of the monitoring report to submit their corrective action plan (CAP). An extension may be granted for an additional 15 days per approval of the monitoring director. Failure to submit the CAP within the allowable timeline will result in the issuance of an initial determination letter. The subrecipient has 30 days to respond. At this point, the monitoring staff works diligently back and forth with the subrecipient in an attempt to resolve the findings. This process can be a lengthy process and may extend beyond the established timelines within the policy. Staff’s goal is to resolve each finding to re-establish compliance. However, not all efforts may resolve each finding. At the conclusion of this process and when all avenues have been exhausted, LWC makes a final determination and issues a letter. Additionally, The Louisiana Workforce Commission is currently implementing changes within the structure of the agency's executive leadership. During this transition, deficiencies and neglect of internal controls has been discovered within the Office of Workforce Development leading to non-compliance of monitoring policy and procedures. The individuals responsible for most of the neglect are no longer employed with the agency. With the onboarding of new leadership, LWC will ensure compliance with all federal and state regulations, internal controls and policies, and transparency within all levels of management. The agency will provide timely and meaningful monitoring actions and provide continuous staff training and development. LWC is currently reviewing our monitoring policy and will make updates to implement all necessary changes ensuring compliance by March 1, 2024. Staff will be re-trained on the required monitoring process and will be required to incorporate the learned information in their monitoring review process. Staff will participate in continuous trainings each quarter to identify any deficiencies in the process or in its implementation. LWC concurs with this finding concluding three Single Audit reports with findings affecting the WIOA cluster of programs, management decision letters were issued 66 to 264 days after the due date set by federal regulations. LWC staff responsible for the issuance of the management decision letters has since reviewed the policy to ensure an understanding of the submission timelines has been received and will apply this knowledge when processing the letters. For the two reports, LWC incorrectly issued management decisions letters noting no WIOA affected findings, LWC staff has performed a second review of the audit reports and management letters have been drafted and are currently under review. We expect that these management letters will be finalized and emailed to the two subrecipients within the month of February 2024, and will include follow-up requests for corrective actions on the identified findings where necessary. LWC will develop and issue a policy that requires the appointing authority to issue management decisions on Single Audit reports within six months of the acceptance of the audit report by the Federal Clearinghouse. The policy will also include second level approvals to ensure audit findings are properly identified and follow up procedures are established to ensure subrecipients take prompt and appropriate action on all audit findings. Staff will train on the proper review and submission of the single audit reports, what constitutes a finding for LWC/WIOA purposes and the work that should be completed to close out the review. A process has been implemented that requires the LWC staff responsible for the review and submission of the single audit reports to obtained an approval of all work performed prior to the issuance of the letters to the subreceipents'.

Identifying Number: 2023-001, 2023-002; Agency: internal; Name of Contact Person: Eric Kool, director of Polk County Community, Family and Youth Services; Anticipated completion date: Effective immediately/December 2023; Agency's response: Concur: We agree with this finding. The Community Family and Youth Services (CYFS) team will obtain detailed reporting data and request supporting documentation from subrecipients to reconcile/review expenses quarterly. In addition, CFYS will have other personnel and Central Accounting assist in reviewing data to ensure accuracy.

Federal Agency: U.S. Department of Transportation Program/Cluster: Highway Planning and Construction Federal Assistance Listing Number: 20.205 Pass‐through: California Department of Transportation Award No. and Year: 5923, 2022/2023 Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. All Public Works contracts receiving federal funding will be evaluated to determine if the vendor is a contractor or subrecipient going forward. This practice is already followed for the other divisions within the Department, and Public Works will now be included. Responsible Individual(s): James Bezek, Director of Resources Management Anticipated Completion Date: June 30, 2024

Federal Agency: U.S. Department of Housing and Urban Development Program/Cluster: Housing Voucher Cluster Federal Assistance Listing Number: 14.871, 14.879 Pass‐through: n/a – direct award Award No. and Year: CA131, 2022/2023 Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Views of Responsible Officials and Corrective Action Plan: The subrecipient agreement was updated to include required federal award identification elements and was approved by the Board of Supervisors and executed on July 25, 2023. Discussion between the County and the City of Vacaville, including several meetings about the new contract took place throughout the audit period of July 1, 2022 and June 30, 2023. The risk assessment was completed in November 2022. The risk assessment will be updated on an annual basis going forward. A site visit was conducted in December 2022. Monitoring activities were occurring for this contract but were not formally documented. Documentation will be retained as support monitoring activities are occurring for this contract going forward. Responsible Individual(s): James Bezek, Director of Resources Management Anticipated Completion Date: June 30, 2024

HSEM concurs with the finding. Condition A: NH HSEM Mitigation and Recovery leadership has updated the award letter templates to ensure the necessary information is included as outlined in the condition. Conditions B – D: NH HSEM Mitigation and Recovery leadership updated the Risk Assessment Quick Reference Guide (QRG) and Subrecipient monitoring QRG. A two hour in-person training was conducted on January 31, 2024, to Mitigation and Recovery staff which focused on conducting risk assessments and subrecipient monitoring. This will be reviewed with staff again during an upcoming Section meeting in March 2024.

Condition A: DHHS partially concurs. The review of expenditure details is an integral part of DHHS’ Subrecipient Monitoring and standard language is included in the templates for legal agreements. These five subrecipients were deemed low or no risk, examination of expenditure detail is considered sufficient monitoring. All five of these subrecipients had the inclusion of the monthly detail requirement in the contracts and this was performed prior to the invoice being submitted to AP for payment. DHHS will re-evaluate current practices to ensure that the documentation is sufficient for the current subrecipient monitoring process. Regarding the two selections identified as having risk assessments which did not specify recommended monitoring procedures: The Risk Assessment Tool for one subrecipient was performed after the subaward award. However, as indicated on the Tool, programmatic monitoring activities were included in the contract. DHHS reviewed the monthly back-up documentation provided with the submitted invoices prior to sending them to AP for payment. The risk assessment tool for the second selection was performed after the subaward award. However, as indicated on the tool, programmatic monitoring activities were included in the contract. We reviewed the monthly back-up documentation provided with the submitted invoices prior to sending them to AP for payment. Condition B: DHHS partially concurs. The review of expenditure details is an integral part of DHHS’ Subrecipient Monitoring and standard language is included in the templates for legal agreements. The subrecipients were deemed low or no risk, therefore, examination of expenditure detail is considered sufficient fiscal monitoring. DHHS employs the review of expenditure details, as allowed under 200.332 (d)(1), as an integral part of the Departments Subrecipient Monitoring. A review of the expenditures provides monitoring for the following concerns: • The familiarity a subrecipient has utilizing Federal funds • The subrecipient management teams’ familiarity with Federal funding • Single Audit findings • Any prior return of funding due to non-compliance • The subrecipient’s compliance with the requirements of 200.300 and 302 • Whether the subrecipient has a new financial system DHHS will re-evaluate the risk response parameters to determine that the level of documentation is sufficient to ensure that the procedures performed would be able to identify noncompliance at the subrecipient level. Condition C: DHHS concurs. DHHS will be updating procedures to include contacting vendors to remind them of the deadline regarding the submission of their single audit in the Federal Audit Clearinghouse.

The Department Concurs with paragraph A – Since this same finding was reported in March of 2023 for FY22, items a, c, and d are now included on all federal subaward contracts and policies have been updated to reflect this. The Department will ensure b is also included going forward. The Department concurs with paragraph B - The finding was a result of personnel turnover and medical issues. The Department has hired and trained additional program staff and updated policies to ensure programmatic monitoring and subsequent reports are done in a timely manner. The Department partially concurs with paragraph C. Fiscal monitoring was done for all 3 subrecipients during the federal program year. However, 1 subrecipient monitoring fell outside the state fiscal year so was not covered during the audit period. The Department has changed the wording on its risk assessment procedures to ensure no misinterpretation of the timeframe each subrecipient will be monitored in accordance with its risk assessment. The Department has also changed the requirements of the frequency of fiscal monitoring in each of the risk assessment categories. The Department Concurs with paragraph D – The Department is reviewing policies and procedures and will update them to ensure compliance with 2 CFR section 200.332(a), 2 CFR section 200.332(b) and 2 CFR section 200.521. The Department also created a tracking mechanism to ensure we receive, review, and issue management decisions (if required) in a timely manner. The Department concurs with Paragraph E - The Department is reviewing policies and procedures for both reporting and subrecipient monitoring to ensure data is tested and verified. The Department has already gained increased access to data in current software and is in the process of selecting a vendor for new software that will provide more testing and enhanced internal controls.

Condition A: DHHS concurs. Pursuant to the Subrecipient Monitoring Policy, the risk assessment and determination of subrecipient monitoring activities is performed during the procurement process with the Grants Administrator and the Program Lead. It is the responsibility of Program to perform the requested subrecipient monitoring. The Department provides annual training on the Subrecipient Monitoring Policy. We will reinforce the requirements of the Policy and the ramifications for the Department for the non-compliance in this year’s annual training. Regarding the incomplete Risk Assessment Tool, we will update the Subrecipient Monitoring Policy to include a secondary review of the Tool prior to implementation, as part of our internal controls. Condition B: DHHS does not concur. The Department employs the review of expenditure details, as allowed under 200.332 (d)(1), as an integral part of the Departments Subrecipient Monitoring. The Department’s review of the expenditures provides monitoring for the following concerns: • The familiarity a subrecipient has utilizing Federal funds • The subrecipient management teams’ familiarity with Federal funding • Single Audit findings • Any prior return of funding due to non-compliance • The subrecipient’s compliance with the requirements of 200.300 and 302 • Whether the subrecipient has a new financial system Standard language for the submission of expenditure detail is included in all templates for legal agreements. These subrecipients were deemed low or no risk, therefore, examination of expenditure detail is considered sufficient monitoring. Subrecipient monitoring activities are memorialized in the legal agreements. The Risk Assessment Tool provides a space for the monitoring activities to be selected, however, the Subrecipient Monitoring Policy does require the memorialization of the activities on the Tool for compliance, only to be memorialized in the legal agreement. Condition C DHHS partially concurs. As the subrecipient’s audit report had no findings, we are not required to issue a management decision letter. However, we will be updating our procedures to include contacting the vendors to remind them of the deadline regarding the submission of their single audit in the Federal Audit Clearinghouse.

Corrective Action Planned (Condition A): The DAS analyzed the six items erroneously reported as subawards and noted the errors were isolated to two specific agencies, the Department of Health and Human Services and the Department of Environmental Services. In response to the prior year finding 2022-002, the DAS had strengthened internal controls related to the review and validation of amounts reported by individual state agencies as pass through expenditures. This included an additional control specifically verifying SLFRF pass through expenditures reported by each agency. The DAS will offer additional training relative to identification and reporting of subaward expenditures in its annual statewide Single Audit training and re-evaluate the precision of execution of controls over the validation of pass through reporting in assembling the SEFA for fiscal year 2024. Corrective Action Planned (Conditions B through E): The State largely concurs with the findings and recommendations and has implemented procedures to address the identified conditions already or will do so. With regards to condition B, The State will work with the individual agencies to ensure that individual agencies entering into such agreements clearly indicate the terms required by Uniform Guidance, including permitted indirect cost rates and whether the award is for R&D. The State has already begun this corrective action plan with the agencies. With regards to condition C, for a. and b. for payments by agencies, there are standard procedures for review and authorization of invoices and payments and those payments are documented. For c. The State has already implemented an agency wide framework for subrecipient monitoring. The State will provide re-training for those agencies that had not properly documented monitoring as outlined by the subrecipient risk assessments and ensure monitoring reports are documented. With regards to condition D, The State has already implemented an agency wide framework to help ensure policies and procedures are in place concerning Uniform Guidance Reports. We will work those agencies that had not documented the date received and the review of the Uniform Guidance Reports to ensure written documentation occurs. Where findings have been reported in the Uniform Guidance Report, ensure timely Management Letters are documented and provided with the summary review of Uniform Guidance Report.

Cluster name: TRIO Cluster Assistance Listing number and name: 84.042 TRIO – Student Support Services 84.047 TRIO – Upward Bound Award numbers and years: P047A171009, September 1, 2017 through August 31, 2022 P047A170820, September 1, 2017 through August 31, 2023 P042A200873, P042A201342, and P042A200859, September 1, 2020 through August 31, 2025 P047A221154 and P047A221160, September 1, 2022 through August 31, 2027 Federal Agency: U.S. Department of Education Compliance Requirements: Eligibility Questioned costs: $5,612 Name of contact persons: Kristina Winterstein, Associate Controller, District Business Services Anticipated completion date: June 30, 2024 The District is aware of the importance of maintaining effective internal control over federal awards and ensuring compliance with applicable federal regulations. The District will work with the TRIO project directors at each college to review and revise existing procedures to require an independent and knowledgeable employee review and approve student eligibility determinations prior to awarding program services to them. The District will enhance communication and training efforts to ensure that the TRIO project directors and all staff administering the TRIO programs understand all eligibility requirements and related district-wide policies and procedures. As of March 21, 2024, the questioned costs for the program have been resolved.

Federal Agency Name: U.S. Department of Transportation, Federal Highway Administration Pass‐Through Entity: Nebraska Department of Transportation Assistance Listing Number: 20.205 Program Name: Highway Planning and Construction Finding Summary MAPA is the pass-through entity for several subrecipients. MAPA does not appear to have a formal policy to evaluate each subrecipient’s risk of noncompliance for appropriate subrecipient monitoring. Further, MAPA does not have a formal policy to monitor the activities of the subrecipients to the extent deemed necessary by the federal government, including the verification that subrecipients are audited when they reach Uniform Guidance spending levels and evaluation of those audits. However, the current procedures require a review of the subrecipients’ invoices, including all detailed costs by an appropriate individual at MAPA prior to payment. This process helps reduce risk of inappropriate funding to subrecipients. Corrective Action Plan MAPA will establish written internal procedures and complete a compliance risk determination for every federal subaward to evaluate subrecipient risk of noncompliance in accordance with the guidance provided in 2 CFR 200.332: Requirements for pass-through entities. In particular with regard to this finding, MAPA will verify whether every subrecipient is audited as required by the conditions cited in 2 CFR 200.332(f), and MAPA will evaluate such audits for compliance risk as part of its internal procedures. Responsible Individual Matthew Eash, Director of Finance Anticipated Completion Date June 30, 2024

Department: Education Title: Internal control over Special Education subrecipient audit procedures needs improvement Questioned Costs: None Status: Corrective action in progress Corrective Action: The Department will review the current procedure regarding the notification of management decisions related to audit findings and corrective action, to strengthen the areas where prior notifications were missed. Completion Date: April 30, 2024 Agency Contact: Nicole Denis, Director of Finance, DOE, 207-530-2161

Department: Economic and Community Development Title: Internal control over CSLFRF subrecipient audit procedures needs improvement Questioned Costs: None Status: Corrective action in progress Corrective Action: The Department engaged with their contractor to review single audits for all subrecipients receiving more than $750,000 in aggregate federal funding. The contractor will raise any findings to the attention of DECD staff who will then issue a management decision letter in keeping with federal regulations. The Department will continue its own review in conjunction with that of the contractor and address findings or concerns with subrecipients to ensure that findings are addressed and that chances of recurrence are mitigated. Completion Date: February 21, 2024 and ongoing respectively Agency Contact: Denise Garland, Deputy Commissioner, DECD, 207-624-7496

Finding No. 2023-001 Subrecipient Monitoring Cluster: Research and Development Cluster Grantor: Department of Health and Human Services and National Aeronautics and Space Administration Award Names: Biomedical Research and Research Training and Science Award Year: July 1, 2022 – June 30, 2023 Award Number: 5R01GM140457-03 and 80NSSC21K0753 Assistance Listing Numbers: 93.859 and 43.001 Pass-through entity: Not applicable The College agrees with the finding noting that a business control process was in place for the regular monitoring of subrecipients, however, the College did not retain certain documentation evidencing this review. The ongoing risk inherent with subrecipient scenarios is taken seriously by the College, but the reviews have been informally performed and without standard documentation. The College has recently added a full time equivalent to the Controller’s Office for grant administration purposes, such as this control. Through the assistance of this new employee, the College will develop a formal subrecipient process and move forward with its implementation. We anticipate certain steps in place by June 30, 2024. Stephen Nigro, Controller is responsible for implementing this corrective action plan. Contact Person: Stephen Nigro, Controller (413) 542-2101

The organization has assigned a full-time employee with prior experience in subrecipient monitoring to own this process and will make additional resources available as necessary. Organizational leadership has reviewed the subrecipient monitoring policy to verify the proper steps and processes are in place to ensure compliance.

FAIN (Federal Award Identification Number) and Federal Award Date: The following action has been implemented to include the FAIN & Award date on all awards for ALN 20.509: All awards executed for Public Transit will include a “Grant Insert Sheet”. The Grant Insert Sheet will be identified on the Part 1 Grant award detail document. Box “36” titled FAIN, will include text that reads “See attachment B”. The Grant Insert Sheet is a document that is completed by the Public Transit Unit and is provided to the Grants Unit for award execution. This sheet includes detailed information related to the award. To address the deficiency, The Grant Insert sheet has been updated to include FAIN Numbers and the Federal Award Date. To ensure the Agency of Transportation meets this compliance requirement, the Grants Unit will verify this information is included prior to award execution. Anticipated completion date: This action went into effect as of January 12, 2024. Person Responsible for Corrective Action: Ross MacDonald, Public Transit Program Manager ross.macdonald@vermont.gov Tricia Scribner, Grants Unit Manager tricia.scribner@vermont.gov Management Review Schedules In the past, The Public Transit Program has used the State Fiscal year for the timing/scheduling of the 3-year Management Reviews. For example, if the completion of the last Management Review occurred in FY 2020, then we would ensure a new Management Review began at any time during FY2023. We understand this could lead to more than exactly 3 years between these reviews. Due to this finding, we will now establish a starting month/date for each provider, with 3-year intervals between the start of each Management Review. We have attached the updated schedule and will adhere to this from this day forward. Anticipated completion date: As of December 27, 2023, the updated Management Review Schedule is in effect. Person Responsible for Corrective Action: Ross MacDonald, Public Transit Program Manager ross.macdonald@vermont.gov

On March 2, 2021, AMLR program representatives attended a Department of Interior, Office of Surface Mining Reclamation and Enforcement online training covering 2 CFR 200 and contractor or subrecipient determinations. DEP ceased issuing AMLR grants under Management Directive 305.20, Grant Administration. DEP management has determined the recipients with existing agreements are subrecipients and DEP will follow this determination consistently with future agreements and accounting. DEP has developed written policies and procedures for subrecipient monitoring and has notified grantees to implement the policies and procedures immediately to ensure timely subrecipient compliance with federal regulations. On July 28, 2023, an audit resolution letter was issued by the Department of Interior, Office of Surface Mining Reclamation and Enforcement. To further address deficiencies, training for DEP Grant Managers was held on January 24, 2024, and January 31, 2024, to provide details and instruction on reporting requirements and proper documentation to ensure subrecipient compliance with federal regulations and DEP’s role in this compliance. Anticipated Completion Date: Completed Contact Names: Patrick Webb, Director, Bureau of Abandoned Mine Reclamation; Tim Golding, Exec. Assist., Office of Admin. and Management

PDA: PDA will be hiring a complement position to develop and maintain an audit tracking report to ensure that all single audits are properly logged and processed. In addition, this position will review the financial information in each audit report to determine if all pass-through funding is properly included and subject to audit. This position will coordinate with the bureaus within PDA to ensure all required follow-up is completed in a timely manner. Anticipated Completion Date: 06/30/2024 Contact Name: Tracee Gotwalt, Audit Coordinator PDOA: The PDOA is looking to improve management decision communications in addition to more thorough evaluations as a new Comprehensive Monitoring Process pilot is starting in April 2024 to address the noncompliance of subrecipient monitoring. This has resulted in management designing control activities to achieve timely submissions in the future by initiating the following: 1. An audit tracking log has been established to track report submissions, document when they were received, initiated, findings requiring follow-up, and subsequent steps to finalize the audit. 2. A separate tracking mechanism is in place to ensure the monitoring of subrecipient activities for compliance with federal statutes, regulations, and the terms and conditions of the Agreement for the 52 Area Agency on Aging subrecipients. 3. PDOA is looking to fill a vacant position with a focus of tracking subrecipient expenditures in the aggregate and tracks Single Audit submissions on a Commonwealth wide basis since the Aging Cluster is material and has material sub-granted expenditures. 4. Since receiving the finding, PDOA has reached out to the resource account where Subrecipient Single Audit reports are received by the Federal Audit Clearinghouse (FAC) to verify all outstanding audit items for PDOA, as action is required within six months of receipt. 5. It is PDOAs impression that having increased oversight of the Schedule of Expenditures of Federal Awards (SEFA) will allow for timely dissemination of Management Decision Letters (MDL) in the six-month timeframe for making a management decision for federal award findings. 6. Additionally, PDOA will confirm a closure letter was sent to the Philadelphia Corporation for Aging documenting PDOA’s management decision regarding federal award findings, as included in their FYE 06/30/2021 Single Audit report. 7. Follow-Up procedures resulting from this finding will be reviewed and adjusted as needed to deliver optimal outcomes. Preliminary procedures will be directed to the agency’s audit review committee for resolution of completeness. 8. In the event the audit review committee determines additional steps beyond the monitoring efforts outlined above are insufficient, additional efforts will be communicated to the AAA network. Anticipated Completion Date: 06/30/2024 Contact Name: Jennifer Cave, Fiscal Management Specialist, PDOA Audit Liaison DOH: DOH’s subrecipient single audit tracking report now includes a mechanism to monitor management decision deadlines related to each entity’s FAC submission date. The process for tracking subrecipient audit reports with findings has been updated to include and highlight subrecipients’ audit reports where DOH is the lead agency for finding resolution or the report contains findings that relate to the Department. Anticipated Completion Date: 03/31/2024 Contact Name: Steven Marsden, Chief, Audit Resolution Section PDE: PDE has implemented weekly, monthly and quarterly checks to ensure that all single audits are properly logged and processed. The clerk typist will conduct a weekly review and provide confirmation to the audit coordinator by signature. Bi-weekly, the clerk typist will follow up on any single audits that remain open. Anticipated Completion Date: Completed Contact Names: Clayton Carroll, Audit Coordinator, Bureau of Budget & Fiscal Management; Jessica Sites, Director, Bureau of Budget & Fiscal Management

Program: AL 97.036 – Disaster Grants - Public Assistance (Presidentially Declared Disasters) – Subrecipient Monitoring Corrective Action Plan: The Agency’s top priority is to respond to its vacancy needs by continuing working with department Human Resources to find, hire, and train viable candidates who can perform these important functions. Contact: Erv Portis Anticipated Completion Date: Ongoing

Program: Various, including AL 84.027 – Special Education Grants to States; AL 84.173 – COVID-19 Special Education Preschool Grants; AL 84.425D – COVID-19 Education Stabilization Fund – Elementary and Secondary School Emergency Relief Fund (ESSER I and ESSER II); AL 84.425U – COVID-19 Education Stabilization Fund – American Rescue Plan – Elementary and Secondary School Emergency Relief Fund (ARP ESSER) – Subrecipient Monitoring Corrective Action Plan: First SPED subrecipient – As education subrecipients have had a significant influx of subawards to mitigate post-COVID supports for Nebraska education with limited staff capacity, the Department has remained mindful of these conditions and is on schedule to complete its annual fiscal monitoring efforts within the normal timelines afforded each year. Second SPED subrecipient – Because the UNL utilizes PVS as allowed by 2 CFR 200.430 in regard to salary and wage benefit costs for employees working on a project under a contractual grant agreement, the NDE going forward will require PVS supporting documentation be submitted as a minimum semi-annually for each contract to verify the salary and benefit costs being requested for reimbursement as recommended by the U.S. Department of Education beginning with any payments occurring after March 1, 2023. Third SPED subrecipient – The documentation to support the review of purchased services and supplies during fiscal monitoring was provided to the APA on March 4, 2024. Single Audits – The Director of Grants Management and Director of Grants Compliance will work collaboratively to ensure all subrecipient audits are reviewed and applicable management decision letters are issued within the requested timeframe. Contact: Jen Utemark, Administrator, Office of Budget & Grants Management Anticipated Completion Date: July 1, 2024

FINDING 2023-002 Finding Subject: COVID-19 – Education Stabilization Fund – Subrecipient Monitoring Summary of Finding: The School Corporation received and passed through to subrecipients $495,386 of ESF funds. The School Corporation is to clearly identify the award and applicable requirements to the subrecipients, evaluate the risk of noncompliance related to the subrecipients to determine appropriate monitoring of the subaward, and monitor the activities of the subrecipients to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Contact Person Responsible for Corrective Action: Dr. Judi Hendrix, Director of WVEC and Michelle Cronk, CFO of West Lafayette Schools Contact Phone Number and Email Address: Dr. Judi Hendrix Michelle Cronk 765-894-0333 765-746-1602 judi.hendrix@esc5.k12.in.us cronkm@wl.k12.in.us Views of Responsible Officials: We concur with the finding regarding the informing and monitoring of subrecipients for federal grants. Description of Corrective Action Plan: We concur with the findings from the State Audit regarding the 3E grants funds; 2023-002. Our Corrective Action Plan would consist of the following:  Before ESF funds are dispersed to school districts (subrecipients), the WVEC Grant Director will ask districts for proper documentation such as receipts, college entrance letters, staff documented timesheets to support their request for funding.  The WVEC Grant Director will monitor the activities of the subrecipients to ensure that the financial subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals of the grant.  Once the school district’s information and documentation is received and approved, grant funding will be dispersed. Both the Service Center Executive Director and WVEC Grant Manager will approve and sign off on any payment made to a subrecipient.  On a biannual basis (periods ending June 30 and December 31), West Lafayette School Corporation will request the monitoring documentation from WVEC to ensure that proper monitoring is taking place. The WVEC Grant Director will create a sub-grantee reporting procedure:  Monthly spreadsheet with district allowable expense and sign off by Grant Manager, WVEC Executive Director and WVEC Treasurer approval.  This will take place every pay period to monitor the disbursement of any federal funds and to ensure that they are used for allowable expenditures under the grant.  This monitoring will begin in the month of March 2024 and continue until the end of the grant or Final Report, December 31, 2024. This procedure will also be used for other federal grants received.  On a biannual basis (periods ending June 30 and December 31), West Lafayette School Corporation will request the monitoring documentation from WVEC to ensure that proper monitoring is taking place. Anticipated Completion Date: Monthly monitoring will begin promptly (March 2024) and end with the final report of 3E grant activities on December 31, 2024.

FINDING 2023-001 Finding Subject: Research and Development Cluster – Subrecipient Monitoring Summary of Finding: Audit Finding 2023-001 states that Indiana State University did not have an effective internal control system in place in order to ensure that subrecipient Federal Audit Clearinghouse reports are reviewed in a timely manner for the Research & Development Cluster. Contact Person Responsible for Corrective Action: Hope Waldbieser, Executive Director of Finance Contact Phone Number and Email Address: 812-237-3524 - hope.waldbieser@indstate.edu Views of Responsible Officials: We concur with the finding that Indiana State University should have completed the Federal Audit Clearinghouse review in a more timely manner. Indiana State University conducted the required review, but it was completed later than allowed by the excerpt of 2 CFR 200.521(d) below. 2 CFR 200.521(d) states in part: “The federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. . . . “ Indiana State University did have other aspects of subrecipient monitoring in place related to the review of financial and programmatic reports for the subrecipients. Explanation and Reasons for Disagreement: Description of Corrective Action Plan: Effective January 2024, Indiana State University will update its Subrecipient Monitoring procedures in the following ways to ensure the Federal Audit Clearinghouse is reviewed in a timely manner and that appropriate documentation is maintained. 1. Subrecipient Federal Audit Clearinghouse reviews for prior fiscal year audits will be completed quarterly (July, October, January & April) during each fiscal year. The final Subrecipient Federal Audit Clearinghouse review for prior fiscal year audits will be completed in July after all current fiscal year payments have been made. 2. In order to ensure there is a segregation of duties the Office of Contracts & Grants Director will provide the Executive Director of Finance a report of the completed review each quarter including INDIANA STATE BOARD OF ACCOUNTS 20 the final review in July for their review and approval. The Executive Director of Finance will confirm the following: a. There is adequate documentation to support each quarterly review. b. Any deficiencies pertaining to the subrecipients Federal Audit Clearinghouse findings related to an award from Indiana State University are addressed in a timely manner. 3. Any identified issues during these reviews will be appropriately addressed by management as required by 2 CFR 200.332 and 2 CFR 200.521(d). Anticipated Completion Date: Indiana State University will ensure that the revised timeline for these procedures is in place during January 2024.

Recommendation We recommend updating internal policy over subrecipient monitoring and recommend implementation of effective internal controls and procedures over subrecipient monitoring and tracking that allow for compliance with all applicable federal laws, regulations, and compliance requirements of various federal grants. It seems likely that additional monitoring activities are being performed that are not currently being documented in a central location, and therefore we recommend standardizing the documentation of such activities. Management Response Corrective Action: We concur with this finding and the auditor’s recommendation. The Department is in the process of implementing policies and procedures to ensure proper monitoring of subrecipients. This will also include training for both the financial and the grants departments. Subrecipient monitoring tools, such as excel worksheets and checklists are being reviewed and modified to fit the Department’s needs. The complete implementation of the subrecipient policies and processes is expected to be completed June 2024. Due Date of Completion: June 30, 2024 Responsible Person(s): Chief Financial Officer, Grants Unit Manager

Landesa will revise its internal controls on subrecipient financial and programmatic monitoring by clarifying required documentation and recordkeeping procedures for all subrecipients on federal awards and the supervisory review process on compliance with subrecipient reporting requirements in the Subrecipient Monitoring Policy and the Engaging Third Parties guidance. Landesa will also clarify the procedures and appropriate timelines for resolving instances of significant non-compliance with the terms and conditions of a subaward by a subrecipient on federal awards. In the event a subrecipient does not comply with programmatic and financial reporting requirements, Landesa will seek resolution in a timely manner to either correct instances of non-compliance of subrecipient or terminate subaward if there is a failure to correct on part of the subrecipient. Landesa will provide training on revisions to the policy to all relevant staff by March 2024. The Director of Program Effectiveness will monitor staff implementation of the revised policy and procedures to ensure compliance with the revised policy. Director, Program Effectiveness and Anticipated completion date: March 2024