Corrective Action Plans

Finding 1205712 (2025-002)

Material Weakness 2025

Paine College

GA

Questioned Costs Eligibility Internal Control / Segregation of Duties § 200.303 § 200.328

Uniform Guidance Financial and Compliance Audit-June 30, 2025, Ending Fiscal Year Paine College has developed a structured corrective action plan to address findings (2025- 001, 2025-002, 2025-003, 2025-004, and 2025-005) identified in the Uniform Guidance Financial and Compliance Audit. The institu...

Uniform Guidance Financial and Compliance Audit-June 30, 2025, Ending Fiscal Year Paine College has developed a structured corrective action plan to address findings (2025- 001, 2025-002, 2025-003, 2025-004, and 2025-005) identified in the Uniform Guidance Financial and Compliance Audit. The institution is prioritizing the strengthening of internal controls, the improvement of financial oversight, and the enhancement of compliance monitoring to ensure responsible stewardship offederal funds and long-term institutional stability. The corrective action outlines each audit finding and the steps the College is taking to resolve the identified concerns. The second (2025-002) finding pertains to compliance with federal eligibility requirements for the TRIO Upward Bound Program. Federal regulations require at least two-thirds of program participants to be both low-income and first-generation college students. The audit identified that the program fell below the required threshold. To address this issue, the College is strengthening participant eligibility verification procedures and implementing additional monitoring to ensure compliance throughout the program year. Recruitment strategies are also being enhanced to increase the number of eligible participants served by the program. In addition, staff will continue to receive targeted training to ensure accurate eligibility documentation and consistency between program records and federal reporting requirements. Corrective Action 2025-002: Strengthen participant eligibility verification, improve recruitment of eligible participants, enhance APR reporting accuracy, and provide compliance training for TRIO staff. Target resolution 2025-2026 Program Year

View Audit 397416

Finding 1205711 (2025-007)

Material Weakness 2025

Paine College

GA

Student Financial Aid Internal Control / Segregation of Duties

Uniform Guidance Financial and Compliance Audit-June 30, 2025, Ending Fiscal Year Paine College has developed a structured corrective action plan to address findings (2025- 001, 2025-002, 2025-003, 2025-004, and 2025-005) identified in the Uniform Guidance Financial and Compliance Audit. The institu...

Uniform Guidance Financial and Compliance Audit-June 30, 2025, Ending Fiscal Year Paine College has developed a structured corrective action plan to address findings (2025- 001, 2025-002, 2025-003, 2025-004, and 2025-005) identified in the Uniform Guidance Financial and Compliance Audit. The institution is prioritizing the strengthening of internal controls, the improvement of financial oversight, and the enhancement of compliance monitoring to ensure responsible stewardship offederal funds and long-term institutional stability. The corrective action outlines each audit finding and the steps the College is taking to resolve the identified concerns.

View Audit 397416

Finding 1205707 (2025-006)

Material Weakness 2025

Paine College

GA

Student Financial Aid Internal Control / Segregation of Duties Questioned Costs

Uniform Guidance Financial and Compliance Audit-June 30, 2025, Ending Fiscal Year Paine College has developed a structured corrective action plan to address findings (2025- 001, 2025-002, 2025-003, 2025-004, and 2025-005) identified in the Uniform Guidance Financial and Compliance Audit. The institu...

Uniform Guidance Financial and Compliance Audit-June 30, 2025, Ending Fiscal Year Paine College has developed a structured corrective action plan to address findings (2025- 001, 2025-002, 2025-003, 2025-004, and 2025-005) identified in the Uniform Guidance Financial and Compliance Audit. The institution is prioritizing the strengthening of internal controls, the improvement of financial oversight, and the enhancement of compliance monitoring to ensure responsible stewardship offederal funds and long-term institutional stability. The corrective action outlines each audit finding and the steps the College is taking to resolve the identified concerns.

View Audit 397416

Finding 1205703 (2025-005)

Material Weakness 2025

Paine College

GA

Student Financial Aid Questioned Costs Subrecipient Monitoring

Uniform Guidance Financial and Compliance Audit-June 30, 2025, Ending Fiscal Year Paine College has developed a structured corrective action plan to address findings (2025- 001, 2025-002, 2025-003, 2025-004, and 2025-005) identified in the Uniform Guidance Financial and Compliance Audit. The institu...

Uniform Guidance Financial and Compliance Audit-June 30, 2025, Ending Fiscal Year Paine College has developed a structured corrective action plan to address findings (2025- 001, 2025-002, 2025-003, 2025-004, and 2025-005) identified in the Uniform Guidance Financial and Compliance Audit. The institution is prioritizing the strengthening of internal controls, the improvement of financial oversight, and the enhancement of compliance monitoring to ensure responsible stewardship offederal funds and long-term institutional stability. The corrective action outlines each audit finding and the steps the College is taking to resolve the identified concerns. Corrective Action 2025-005: Administrative and Fiscal Affairs 1235 Fifteenth Street, Augusta, GA 30901 Implement the Return to Title IV monitoring system, weekly credit balance tracking, counseling verification procedures, and strengthen coordination between Financial Aid, Registrar, and Business Office Target resolution: Spring-Summer 2026

View Audit 397416

Finding 1205699 (2025-003)

Material Weakness 2025

Paine College

GA

Cash Management Internal Control / Segregation of Duties § 200.305

Uniform Guidance Financial and Compliance Audit-June 30, 2025, Ending Fiscal Year Paine College has developed a structured corrective action plan to address findings (2025- 001, 2025-002, 2025-003, 2025-004, and 2025-005) identified in the Uniform Guidance Financial and Compliance Audit. The institu...

Uniform Guidance Financial and Compliance Audit-June 30, 2025, Ending Fiscal Year Paine College has developed a structured corrective action plan to address findings (2025- 001, 2025-002, 2025-003, 2025-004, and 2025-005) identified in the Uniform Guidance Financial and Compliance Audit. The institution is prioritizing the strengthening of internal controls, the improvement of financial oversight, and the enhancement of compliance monitoring to ensure responsible stewardship offederal funds and long-term institutional stability. The corrective action outlines each audit finding and the steps the College is taking to resolve the identified concerns. The third (2025-03) and fourth (2025-004) findings relate to federal cash management practices for Title Ill and TRIO grant programs. The audit determined that federal funds had been drawn down prior to immediate program expenditures, resulting in excess cash balances. To correct this issue, the College implements formal grant cash management procedures to ensure that internal controls over federal funds management are strong. Please review the details below: Corrective action 2025-003: Establish formal grant cash management procedures, implement monthly reconciliation of drawdowns vs. expenditures, and increase oversight of grant balances. Target resolution: FY 2026

View Audit 397416

Finding 1205697 (2025-003)

Material Weakness 2025

Miles College

AL

Allowable Costs / Cost Principles Cash Management § 200.305 § 200.430

Finding 2025-003 - U.S. Department of Education (USO), TRIO Programs (Significant Deficiencies): Information on the federal program - Student Support SeNices, FAL No. 84.042A, June 30, 2025; Ronald McNair Program, FAL No. 84.217A, June 30, 2025. Under 2 CFR 200.305, non-Federal entities must request...

Finding 2025-003 - U.S. Department of Education (USO), TRIO Programs (Significant Deficiencies): Information on the federal program - Student Support SeNices, FAL No. 84.042A, June 30, 2025; Ronald McNair Program, FAL No. 84.217A, June 30, 2025. Under 2 CFR 200.305, non-Federal entities must request Federal funds only for allowable program costs that have been incurred, and must maintain contemporaneous supporting documentation demonstrating: a. Actual, allowable expenditures existed at the time Federal funds were drawn; and b. Records supporting the nature and timing of those expenditures were on file and readily available. These requirements ensure 1. Corrective Action Description a. The College now mandates that GS drawdown requests include approved documentation stored on the accounting drive, effective July 31, 2025. b. Time and Effort reports must be submitted monthly with supervisor sign-off before reaching the Office of Sponsor Programs, showing 100% time allocation. Any changes will require a Personnel Action Form and administrative approval signatures. c. showing 100% time allocation. Any changes will require a Personnel Action Form and administrative signatures of approval. 1. Person Responsible and Department Diana Knighton Senior Vice President, Finance and Business Administration Miles College 5500 Myron Massey Boulevard Fairfield, AL 3506 (205) 929-1442 dknighton@miles.edu 2. Implementation Timeline This procedure took effect as of July 31, 2025. 3. Planned Preventive Measures Following the policy and procedures to support all drawdowns with proper documentation. 4. Disagreement with the Finding None

View Audit 397405

Finding 1205695 (2025-002)

Material Weakness 2025

Miles College

AL

Student Financial Aid Cash Management Allowable Costs / Cost Principles § 200.305

Finding 2025-002 - U.S. Department of Education (USO}, Title IV Student Financial Aid Programs (significant deficiency): Information on the federal program - Federal Pell Grant Program, FAL No. 84.063, June 30,2025; Federal Work-Study Program, FAL No. 84.033, June 30, 2025; Federal Supplemental Oppo...

Finding 2025-002 - U.S. Department of Education (USO}, Title IV Student Financial Aid Programs (significant deficiency): Information on the federal program - Federal Pell Grant Program, FAL No. 84.063, June 30,2025; Federal Work-Study Program, FAL No. 84.033, June 30, 2025; Federal Supplemental Opportunity Grant Program, FAL No. 84.007, June 30, 2025; Federal Direct Student Loan Program, FAL No. 84.268, June 30, 2025; Teachers Education Assistance for College(TEACH),FAL No. 84.379, June 30, 2025. Under 2 CFR 200.305 and the U.S. Department of Education's cash management requirements at 34 CFR 668.162, institutions must draw down Title IV funds only for expenditures 1. Corrective Action Description The College now requires all drawdowns to include supporting documentation of the funds requested from GS, along with sign-offs on preparation and approval. Supporting documents are stored securely on the College's accounting drive for easy access. 2. Person Responsible and Department Diana Knighton Senior Vice President, Finance and Business Administration Miles College 5500 Myron Massey Boulevard Fairfield, AL 3506 (205) 929-1442 dknighton@miles.edu a. Implementation Timeline This procedure took effect as of July 31, 2025. b. Planned Preventive Measures Following the policy and procedures to support all drawdowns with proper documentation. c. Disagreement with the Finding None

View Audit 397405

Finding 1205691 (2025-001)

Material Weakness 2025

Miles College

AL

Student Financial Aid Matching / Level of Effort / Earmarking Questioned Costs

Finding 2025 - 001 - U.S. Department of Education (USD), Title IV Student Financial Aid Programs (material weakness): Information on the federal program - (Federal Award Identification): - Federal Pell Grant Program, FAL No. 84.063, June 30, 2025; Federal Supplemental Opportunity Grant Program, FAL ...

Finding 2025 - 001 - U.S. Department of Education (USD), Title IV Student Financial Aid Programs (material weakness): Information on the federal program - (Federal Award Identification): - Federal Pell Grant Program, FAL No. 84.063, June 30, 2025; Federal Supplemental Opportunity Grant Program, FAL No. 84.007, June 30, 2025; Federal Work-Study Program, FAL No. 84.033, June 30, 2025; Federal Direct Student Loan Program, FAL No. 84.268, June 30, 2025; Federal Teacher Education Assistance for College (TEACH), FAL No. 84.379, June 30, 2025. Institutions must determine a student's financial need by subtracting the expected family contribution and estimated financial assistance from the cost of attendance. 34 CFR 668.2 and 34 CFR 637.S(a). 1. Corrective Action Description The College has engaged a financial aid consultant to support the development of cost-of-attendance budgets and ensure they align with industry best practices, thereby making improvements to the College's financial aid operating system. After evaluating the auditors' sample of forty students, the College confirmed that no instances of over/under awarding occurred. There were clarifications and changes made to the initial cost of attendance budgets provided to the auditors that led to the questioned cost. The College will implement ongoing monitoring each semester to further enhance operational efficiency and effectiveness. The cost of attendance budgets has been uploaded into the College's financial aid system to prevent the recurrence of this issue for the current and future years. a. Responsible Person and Department Diana Knighton Senior Vice President, Finance and Business Administration Miles College 5500 Myron Massey Boulevard Fairfield, AL 3506 (205) 929-1442 dknighton@miles.edu b. Implementation Timeline January 18, 2026, for the spring semester c. Planned Preventive Measures The College hired a financial aid consultant to assist the financial aid Director with best practices and to make modifications to the ERP system to provide better operating efficiency and effectiveness. d. Disagreement with the Finding None

View Audit 397405

Finding 1205687 (2025-001)

Material Weakness 2025

Mount Zion Madison Street Properties

WA

HUD Housing Programs Questioned Costs Cash Management

Management agrees with the finding and funds will be moved from replacement reserve to residual receipts account.

View Audit 397404

Finding 1205686 (2025-005)

Material Weakness 2025

Quay County

NM

Procurement, Suspension & Debarment

The County acknowledges the importance of documenting suspension and debarment verification for federally funded transactions. The County will update procurement policies and procedures to clearly assign responsibility for suspension and debarment checks, including situations where third-party procu...

The County acknowledges the importance of documenting suspension and debarment verification for federally funded transactions. The County will update procurement policies and procedures to clearly assign responsibility for suspension and debarment checks, including situations where third-party procurement services are used. Corrective Action Plan Timeline: June 2026 Designation Of Employee Position Responsible for Meeting Deadline: Finance Director

View Audit 397398

Finding 1205685 (2025-002)

Material Weakness 2025

East-West University

IL

Questioned Costs Reporting Significant Deficiency

2025-002: Enrollment Reporting - Student Financial Aid Cluster -Assistance Listing Number 84.007, 84.033, 84.063, and 84.268 - Year Ended August 31, 2025 Condition Found During our Enrollment Status Changes testing, we selected forty students for our sample. In our sample of forty we tested twenty g...

2025-002: Enrollment Reporting - Student Financial Aid Cluster -Assistance Listing Number 84.007, 84.033, 84.063, and 84.268 - Year Ended August 31, 2025 Condition Found During our Enrollment Status Changes testing, we selected forty students for our sample. In our sample of forty we tested twenty graduated students to verify that they were reported within sixty days and we tested twenty current students to note that their student status is reported correctly. We noted ten students were not reported within the required sixty days. We consider this finding to be a significant deficiency relating to the Reporting Compliance Requirement. Corrective Action Plan The delay in Enrollment Reporting was due to staffing turnover within the Registrar's Office, which disrupted and delayed normal graduation reporting. East-West University has reviewed and strengthened its enrollment reporting procedures to ensure timely and accurate submission of student status changes. The University has: Filled vacant position and provided training to new staff on reporting requirements. Implemented a cross-departmental review process between the Program Directors, Registrar and Financial Aid offices to verify graduation and updated the National Clearing House enrollment status to meet the reporting requirements. As of Spring 2025 Quarter, all graduates have been reported on time. Responsible Person for Corrective Action Plan Registrar Raymond Zhen, Network Spcialist Xinghua Gou Implementation Date of Corrective Action Plan April 2025

View Audit 397395

Finding 1205680 (2025-001)

Material Weakness 2025

East-West University

IL

Questioned Costs Student Financial Aid Eligibility

2025-001: Incorrect Direct Loans Disbursement Amount - Student Financial Aid Cluster Assistance Listing Number 84.007, 84.033, 84.038, 84.063, 84.268, Grant Period - Year Ended August 31, 2025 Condition Found During our student file testing we noted two students out of forty were disbursed the incor...

2025-001: Incorrect Direct Loans Disbursement Amount - Student Financial Aid Cluster Assistance Listing Number 84.007, 84.033, 84.038, 84.063, 84.268, Grant Period - Year Ended August 31, 2025 Condition Found During our student file testing we noted two students out of forty were disbursed the incorrect Direct Loan amount. Based on the student’s enrollment status and need, the University over awarded the students by $1,229. We consider this error in awarding to be an instance of noncompliance of the Eligibility Compliance Requirement. Corrective Action Plan Financial Aid office will make sure the correct amount is awarded based on the student enrollment status and need of the student. EWU will make the proper adjustments to the Direct Subsidized Loan to reflect the correct amount for the two students. Responsible Person for Corrective Action Plan Director of Financial Aid Cesar Campos Implementation Date of Corrective Action Plan March 06, 2026

View Audit 397395

Finding 1205671 (2025-001)

Material Weakness 2025

Madison Interfaith Residential Community, Inc.

CT

Subrecipient Monitoring Reporting

Management acknowledges the finding regarding the replacement reserve account not being funded at the minimum level required by the USDA‑RD approved budget. To address this issue, the Project will make a deposit to fully restore the replacement reserve to the required threshold in accordance with US...

Management acknowledges the finding regarding the replacement reserve account not being funded at the minimum level required by the USDA‑RD approved budget. To address this issue, the Project will make a deposit to fully restore the replacement reserve to the required threshold in accordance with USDA‑RD guidelines. In addition, we will continue to monitor reserve balances throughout the year and communicate with USDA‑RD if significant variances arise.

View Audit 397381

Finding 1205669 (2025-008)

Material Weakness 2025

City of South Gate

CA

Allowable Costs / Cost Principles § 200.430

Management’s Response Regarding Corrective Action Taken or Planned Management acknowledges this finding and concurs that payroll costs charged to the Housing Choice Voucher (HCV) Program under CFDA 14.871 must be supported by recordsthat accurately reflect actual work performed, as required under 2 ...

Management’s Response Regarding Corrective Action Taken or Planned Management acknowledges this finding and concurs that payroll costs charged to the Housing Choice Voucher (HCV) Program under CFDA 14.871 must be supported by recordsthat accurately reflect actual work performed, as required under 2 CFR 200.430(i). The City's prior practice of using predetermined allocation percentages to distribute payroll across multiple funding sources did not fully satisfy the federal standards for documenting actual time worked on HCV-eligible activities. Management notes that the projected questioned costs of $214,045 represent a projection of potential unallowable payroll charges based on the sample tested, that were unsupported due to insufficient time documentation and are not necessarily unallowable. The City will coordinate with HUD to determine the appropriate resolution of these questioned costs. The corrective actions outlined in Finding 2025-007 apply equally to the HCV Program. Specifically: 1. Actual Time Reporting: All Housing Authority employees who perform HCV program activities are required to document actual hours worked per program activity on their timesheets, effective immediately. 2. Discontinuation of Fixed Allocations: Predetermined allocation percentages will no longer serve as the basis for payroll charges to the HCV Program. All charges must be supported by actual time records. 3. Timesheet System and Training: Housing Authority staff will be included in the system enhancement and training initiatives described in Finding 2025-007, with particular emphasis on documentation standards under the HCV Program's applicable requirements4. Quarterly Internal Compliance Reviews: HCV payroll charges will be included in the Accounting & Finance Division's quarterly compliance reviews, with findings reported to the City Manager and the Housing Authority Director.

View Audit 397378

Finding 1205667 (2025-007)

Material Weakness 2025

City of South Gate

CA

Allowable Costs / Cost Principles § 200.430

Management’s Response Regarding Corrective Action Taken or Planned Management acknowledges this finding and concurs that payroll costs charged to federal awards must be supported by documentation accurately reflecting the actual work performed, as required under 2 CFR 200.430(i). The City's prior pr...

Management’s Response Regarding Corrective Action Taken or Planned Management acknowledges this finding and concurs that payroll costs charged to federal awards must be supported by documentation accurately reflecting the actual work performed, as required under 2 CFR 200.430(i). The City's prior practice of distributing payroll costs using predetermined allocation percentages for employees working across multiple programs did not fully satisfy federal requirements for documenting actual time expended on CDBG-eligible activities. Management notes that the projected questioned costs of $217,355 represent a projection of potential unallowable payroll charges based on the sample tested, that were unsupported due to insufficient time documentation and are not necessarily unallowable. The City isprepared to work with HUD to determine the appropriate resolution of these questioned costs. The City is implementing the following corrective actions: 1. Actual Time Reporting: Effective immediately, all employees who charge any portion of their time to federal grant programs—including CDBG—are required to document actual hours worked on each program or activity in their timesheets. Time entries must correspond to specific program activities and must be reviewed and certified by the employee's supervisor each pay period. 2. Discontinuation of Fixed Allocation Percentages: The City is eliminating the use of predetermined payroll allocation percentages as the basis for charging personnel costs to federally funded programs. Future payroll charges to federal awards will be based exclusively on actual documented hours, in compliance with 2 CFR 200.430(i). 3. Staff Training: The City will provide mandatory training to all employees who charge time to federal programs, supervisors responsible for timesheet review, and payroll staff. Training will cover the requirements of 2 CFR 200.430, the City's updated time documentation procedures, and the consequences of noncompliance.4. Quarterly Internal Compliance Reviews: Beginning in Q1 of FY 2025-26, the Accounting & Finance Division will conduct quarterly reviews of payroll charges to all federal programs to confirm that expenditures are supported by compliant time records. Results will be reported to the applicable department directors.

View Audit 397378

Finding 1205661 (2025-001)

Material Weakness 2025

Sto-Rox Plaza, Inc.

PA

HUD Housing Programs

Finding 2025-001 Department of Housing and Urban Development Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, ALN 14.155. Recommendation: The Property should ensure that established procedures are followed to review the Form HUD-50059 ensuring all document...

Finding 2025-001 Department of Housing and Urban Development Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, ALN 14.155. Recommendation: The Property should ensure that established procedures are followed to review the Form HUD-50059 ensuring all documentation used to calculate the tenant rent and assistance payment is supported and properly calculated. In addition, the Property should calculate the amount owed to the affected tenant as a result of the error and correct it through either a tenant credit or a reimbursement payment, in accordance with HUD requirements. Action taken: The Property Management Company will review with the on-site manager the proper protocols to ensure that established procedures are being followed to review the Form HUD-50059 ensuring all documentation used to calculate the tenant rent and assistance payment is supported and properly calculated. The Property Management Company has reviewed the process with the on-site manager regarding the process of calculating the amount owed to an affected tenant in the event of an error. The management company has recapped with the on-site manager the proper method to correct it through either a tenant credit or a reimbursement payment, in accordance with HUD requirements. If the Department of Housing and Urban Development has questions regarding this plan, please call Dan Barbusio at 412-646-5193.

View Audit 397361

Finding 1205660 (2025-001)

Material Weakness 2025

Pyramid Learning Corp.

PR

Subrecipient Monitoring

CORRECTIVE ACTION PLAN In past years the accounting services provided to Pyramid Learning Corp. were contracted and external accounting companies. We acquired specialized accounting software to be utilized internally. Since we started utilizing this new software, our staff has made significant effor...

CORRECTIVE ACTION PLAN In past years the accounting services provided to Pyramid Learning Corp. were contracted and external accounting companies. We acquired specialized accounting software to be utilized internally. Since we started utilizing this new software, our staff has made significant efforts to update the system. However, the data needed to fully update the new accounting and financial software labor intensive and time consuming making it difficult to maintain a month to month database. Currently with the new system all the new current data has been recorded and is up to date. This new system provides us with the capability to maintain accounting and financial reports such as Balance Sheets, Statements Activities and Bank Reconciliation forms. Thus, providing a monthly snapshot of all the company accounts with the most current information. Improving transparency and the capacity to correct any discrepancies in a timely manner.

View Audit 397354

Finding 1205659 (2025-003)

Material Weakness 2025

Cornerstones Inc, Cornerstones Housing Corporation & Rihc Partners, Lp

VA

Questioned Costs Eligibility Internal Control / Segregation of Duties § 200.303 § 200.334

Finding 2025-003 – Incomplete Eligibility Documentation Management agrees with the recommendation and will implement stronger processes to ensure that records confirming the eligibility of program participants are obtained and properly maintained. Specifically, all program staff documenting client e...

Finding 2025-003 – Incomplete Eligibility Documentation Management agrees with the recommendation and will implement stronger processes to ensure that records confirming the eligibility of program participants are obtained and properly maintained. Specifically, all program staff documenting client eligibility will receive related training on eligibility requirements and best practices for related recordkeeping. While the organization will take these steps to help prevent reoccurrence of this finding, management also states that it directly sought and followed guidance from the program pass-through entity specific to client eligibility which was deemed in this audit to be inconsistent with requirements guiding the federal program. At the time of writing, this matter is being evaluated by the pass-through entity with further guidance forthcoming. Therefore, in addition to the steps outlined above, the organization will also further verify any guidance received from pass-through entities or other monitoring agencies to ensure its internal processes align directly and specifically with all requirements of the federal program. The contact persons for the Corrective Action Plan are Bill Threlkeld, VP of Community Resources Partnerships; Ted Lewis, EVP of Operations and Information Technology (IAT Co-Chair); and Aaron Hernandez, Sr. Director, Finance (IAT Co-Chair). The anticipated completion date is June 30, 2026. In addition to these specific steps, Cornerstones has strengthened its compliance review operations overall through the addition of a staff member who will focus primarily on compliance issues across the organization. Cornerstones has also formed an Internal Audit Team (IAT) comprised of organizational leadership that will provide objective assurance that the organization operates in full alignment with laws, regulations, contract provisions, and ethical standards.

View Audit 397353

Finding 1205658 (2025-002)

Material Weakness 2025

Cornerstones Inc, Cornerstones Housing Corporation & Rihc Partners, Lp

VA

Questioned Costs Cash Management Internal Control / Segregation of Duties § 200.303 § 200.334

Finding 2025-002 –Missing Records (Repeat Finding 2024-002) Management agrees with the recommendation and will implement stronger review processes to ensure proper documentation is in place to support pay-for-performance outputs and outcomes. Specifically, all program staff providing client charting...

Finding 2025-002 –Missing Records (Repeat Finding 2024-002) Management agrees with the recommendation and will implement stronger review processes to ensure proper documentation is in place to support pay-for-performance outputs and outcomes. Specifically, all program staff providing client charting and documentation will receive related training, both internally as well as from identified external sources. Accordingly, program staff attended a training on case management provided by an external partner in November 2025. In addition, a Case Manager Case Note Template has been developed that specifically outlines documentation required to support pay-for-performance outputs and outcomes including client intake, goals, activities and progress, and outcomes, as well as best practices for documenting client services. Finally, the organization will work with its external partners (PTEs, monitoring agencies, etc.) to ensure that requirements are consistently stated across all pertinent organizations and described in common nomenclature to avoid confusion and/or inadvertent omissions, which have been key factors contributing to the reoccurrence of this finding in FY25. The contact persons for the Corrective Action Plan are Lacy Stokes, VP of Family Empowerment and Self-Sufficiency; Ted Lewis, EVP of Operations and Information Technology (IAT Co-Chair); and Aaron Hernandez, Sr. Director, Finance (IAT Co-Chair). The anticipated completion date is May 31, 2026.

View Audit 397353

Finding 1205657 (2025-001)

Material Weakness 2025

Cornerstones Inc, Cornerstones Housing Corporation & Rihc Partners, Lp

VA

Questioned Costs Cash Management Eligibility § 200.303 § 200.334

Finding 2025-001 – Incomplete Eligibility Documentation (Repeat Finding 2024-001) Management agrees with the recommendation and will implement stronger processes to ensure that records confirming the eligibility of program participants are obtained and properly maintained. Specifically, all program ...

Finding 2025-001 – Incomplete Eligibility Documentation (Repeat Finding 2024-001) Management agrees with the recommendation and will implement stronger processes to ensure that records confirming the eligibility of program participants are obtained and properly maintained. Specifically, all program staff documenting client eligibility will receive related training, both internally as well as from identified external sources. Accordingly, program staff attended a training on case management provided by an external partner in November 2025. Internal training will center on the Employment and Training Eligibility Determination form developed by the program pass-through entity in March 2026. This document provides a detailed checklist of the specific information required to verify client eligibility prior to delivering program services. Finally, the organization will work with its external partners (PTEs, monitoring agencies, etc.) to ensure that requirements are consistently stated across all pertinent organizations and described in common nomenclature to avoid confusion and/or inadvertent omissions, which have been key factors contributing to the reoccurrence of this finding in FY25. The contact persons for the Corrective Action Plan are Lacy Stokes, VP of Family Empowerment and Self-Sufficiency; Ted Lewis, EVP of Operations and Information Technology (IAT Co-Chair); and Aaron Hernandez, Sr. Director, Finance (IAT Co-Chair). The anticipated completion date is May 31, 2026.

View Audit 397353

Finding 1205656 (2025-002)

Material Weakness 2025

Independence Heights INC

TX

Questioned Costs Reporting Internal Control / Segregation of Duties

Audit Finding 2025-0002 - The Project missed one monthly deposit to the reserve for replacement in 2025. - Management response: The Project will make the additional deposit of $1,317 on May 3, 2026.

View Audit 397352

Finding 1205655 (2025-001)

Material Weakness 2025

Independence Heights INC

TX

Questioned Costs HUD Housing Programs Reporting

Audit Finding 2025-0001 Funds were withdrawn from the replacement reserve without HUD’s written authorization. Management response: The Project had shortfalls of operational cash and used some funds from the reserve for replacement account to pay for operating expenses and also used some of the fund...

Audit Finding 2025-0001 Funds were withdrawn from the replacement reserve without HUD’s written authorization. Management response: The Project had shortfalls of operational cash and used some funds from the reserve for replacement account to pay for operating expenses and also used some of the funds to replace funds previously withdrawn from the security deposit account. Management will deposit the unauthorized funds as soon as funds are available.

View Audit 397352

Finding 1205654 (2025-003)

Material Weakness 2025

Northeast Kingdom Community Action, Inc.

VT

Reporting

North East Kingdom Community Action, Inc (Organization) has an internal review process to accrue for revenue not yet invoiced for reimbursement grants based on expenditures made. The Organization received a congressional award for the purchase and renovation of a building. This award is directly fun...

North East Kingdom Community Action, Inc (Organization) has an internal review process to accrue for revenue not yet invoiced for reimbursement grants based on expenditures made. The Organization received a congressional award for the purchase and renovation of a building. This award is directly funded by USDA Rural Development department and has special reporting requirements for reimbursement. Due to USDA staff shortages at the Vermont/New Hampshire offices, there was a delay in receiving the required forms to submit for reimbursement. There were questions regarding the reimbursement request and eligibility of the expenditures, an entry was not made until the requisition had been reviewed and approved. The Organization’s regular accrual process was delayed due to this uncertainty. With the federal government shut down effective October 1, 2025, the Organization did not receive a response until January 9, 2026. The Organization recorded the receivable at the time of submittal of the reimbursement request in January 2026. The auditors recorded an audit adjustment as of September 30, 2025 and identified this as a material weakness due to the timing of the recording. The Organization will continue to accrue revenue not yet invoiced for reimbursement grants based on expenditures made. In the event that there is a similar incident as noted above, the Organization will record revenue based on its best estimate, closer to the year end close, when not known within a reasonable timeframe. Person Responsible: Linda Lotti, Director of Finance, 802-334-7316 Estimated completion: February 2026

View Audit 397341

Finding 1205653 (2025-001)

Material Weakness 2025

Monterey One Water

CA

Reporting Internal Control / Segregation of Duties

The Agency acknowledges the auditors' findings and agrees that improvements are necessary to strengthen internal controls over the preparation of the SEFA. The Agency has taken immediate steps to correct the errors identified in finding SA 2025-001 and is implementing additional controls to ensure t...

The Agency acknowledges the auditors' findings and agrees that improvements are necessary to strengthen internal controls over the preparation of the SEFA. The Agency has taken immediate steps to correct the errors identified in finding SA 2025-001 and is implementing additional controls to ensure that SEFA amounts are recorded accurately and timely for current and future fiscal years. Management will establish a clear year-end cutoff process to ensure that federal expenditures are recorded in the appropriate fiscal period. A formal review step will also be implemented to verify the completeness and accuracy of reported amounts prior to finalizing the SEFA. Collectively, these measures will help ensure that federal expenditures are consistently reported in the correct fiscal year going forward. Person Responsible: Steve Carrigan - Sr. Director of Administrative Services Implementation date: July 1, 2026

View Audit 397330

Finding 1205652 (2025-001)

Material Weakness 2025

Manatee County, Florida

FL

Questioned Costs Reporting Internal Control / Segregation of Duties § 200.303

The Manatee Clerk of the Circuit Court and Comptroller’s Corrective Action Plan for the conditions identified on the Schedule of Findings and Questioned Costs – Federal Programs and State Projects is provided below. Please note that Manatee County has provided separate responses in the letter that f...

The Manatee Clerk of the Circuit Court and Comptroller’s Corrective Action Plan for the conditions identified on the Schedule of Findings and Questioned Costs – Federal Programs and State Projects is provided below. Please note that Manatee County has provided separate responses in the letter that follows. 2025-001- Significant Deficiency- Internal Controls over Reporting- Condition- There was no evidence of the controls in place to review and approve reports prior to submission. Response- The Manatee County Clerk of the Circuit Court and Comptroller's Office is implementing an enhance tracking procedure in order to ensure the completeness and timeliness of all reporting. The county departments will submit all grant information including but not limited to progress reports and reimbursement requests to the Clerk's Office for our approval before they are submitted to the granting agency. The following are Manatee County's management responses to the internal control findings: 2025-001 Significant Deficincy - Internal Controls over Reporting Finding: There is no evidence of the internal control requiring review and approval prior to submission of the cash on hand quarterly report and the FFATA reports prior to submission. Manatee County has updated our procedures for reporting to clarify both separation of preparation and approvals of reports as well as timeliness of submission. In regard to internal controls for approvals, we have updated our procedures to clarify that signatures are required by both preparers and approvers of the report pre-submission. In regard to timing, for cash on hand quarterly reports, these reports are due no later than the 30th of the month following the quarter being reported (e.g., if the reporting period is October, November, and December, the report must be submitted by January 30th). The Grants Division Manager will be responsible for ensuring that this process is followed, and coordinate with the Fiscal team and CFO for all necessary reports. FFATA reports are due in the sam.gov system no later than the 30th of the month following the month in which the subaward was obligated (e.g., if obligated in November, the report must be submitted by December 30th of that same year). The Grants Division Manager will be responsible for ensuring that this process is followed. The Grants Division plans to perform trainings Spring 2026 for all Manatee County employees who touch grants to ensure awareness across all grants.

View Audit 397324

Corrective Action Plans

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