Corrective Action Plans

Finding 1179589 (2023-002)

Material Weakness 2023

IL

The Project has procedures in place to record vendor transactions in the period incurred. The Project will maintain its financial statements on the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (GAAP). The Project will utilize the accounts payable module to ...

The Project has procedures in place to record vendor transactions in the period incurred. The Project will maintain its financial statements on the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (GAAP). The Project will utilize the accounts payable module to record invoices and obligations as incurred and will establish recurring and standard journal entries for routine accruals as applicable.

View Audit 391997

Finding 1179587 (2023-001)

Material Weakness 2023

Urban Development Corporation

IL

Internal Control / Segregation of Duties

The Project has procedures in place to record transactions in the Financial Statements that identify sources and are traceable to assigned accounts. The Project will ensure that all transactions are appropriately posted. The Project transitioned to a new accounting software application during the mo...

The Project has procedures in place to record transactions in the Financial Statements that identify sources and are traceable to assigned accounts. The Project will ensure that all transactions are appropriately posted. The Project transitioned to a new accounting software application during the months of January 2023 through August 2023 and processed financial transactions in parallel software applications during the period. Transactions were recorded in batch into the new software application and were supported by a manual disbursement log, present for the audit.

View Audit 391997

Finding 1179585 (2023-003)

Material Weakness 2023

Huerfano County

CO

Reporting § 200.303 § 200.502 § 200.510

Recommendation: We recommend the County implement a countywide system to allow for a more automated system of tracking federal expenditures, that may include updated processes to be developed to set up new organization codes which would require grant managers to provide the required information need...

Recommendation: We recommend the County implement a countywide system to allow for a more automated system of tracking federal expenditures, that may include updated processes to be developed to set up new organization codes which would require grant managers to provide the required information needed for accurate SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has implemented new process to ensure accurate preparation of their SEFA’s.

View Audit 391977

Finding 1179354 (2023-005)

Material Weakness 2023

East Alabama Regional Planning and Development Commission

FL

Reporting Matching / Level of Effort / Earmarking § 200.510

We will reconcile the reports submitted to the federal awarding agency to the expenditures recorded in the accounting records and SEFA to ensure accurate reports going forward.

View Audit 391711

Finding 1179349 (2023-004)

Material Weakness 2023

East Alabama Regional Planning and Development Commission

FL

Subrecipient Monitoring § 200.332 § 200.501

We will implement the required procedures surrounding the subrecipient monitoring process and follow them consistently.

View Audit 391711

Finding 1179344 (2023-003)

Material Weakness 2023

East Alabama Regional Planning and Development Commission

FL

Allowable Costs / Cost Principles Reporting Significant Deficiency

We plan to start the next fiscal year's audit right after issuance of September 30, 2023 financial statements to catch up on the filing of the reporting package.

View Audit 391711

Finding 1179209 (2023-001)

Material Weakness 2023

Food Bank of Delaware, Inc.

DE

Reporting Subrecipient Monitoring Internal Control / Segregation of Duties § 200.303 § 200.510

Root Cause Management concurs that federal expenditures totaling approximately $5,842,346 under ALN 21.029 were omitted from the initially prepared SEFA, along with an additional $206,139 of other federal programs, for a total of $6,048,485. The omission resulted from incomplete grant tracking repor...

Root Cause Management concurs that federal expenditures totaling approximately $5,842,346 under ALN 21.029 were omitted from the initially prepared SEFA, along with an additional $206,139 of other federal programs, for a total of $6,048,485. The omission resulted from incomplete grant tracking reports not reconciled to the general ledger and grant agreements; absence of an independent secondary review; and procedures that did not fully capture pass-through and subrecipient activity. Objective Design and implement effective internal controls to ensure the SEFA is complete, accurate, and in compliance with 2 CFR §200.510(b) and §200.303; prevent recurrence of material omissions; and sustain readiness for Single Audit reporting. 1. Comprehensive Reconciliation Process Implement a standardized monthly and year-end reconciliation that ties federal award expenditures (including drawdowns and indirect costs) to the general ledger, award agreements/portals, and program manager reports. Create a SEFA Reconciliation Workbook with crosswalks by ALN, passthrough entity, award number, program, and period of performance. 2. Federal Awards Inventory & Certification Maintain a centralized Federal Awards Inventory listing all awards by ALN, award number, passthrough entity, and funding stream. Require annual certifications from responsible leadership team members confirming completeness and accuracy of reported expenditures and period-of-performance coverage. 3. Formal Review Workflow (Independent of Preparer) Establish a documented two-tier review: (1) VP of Finance prepares SEFA and reconciliation; (2) Leadership Team Members perform independent reviews using a SEFA Checklist covering ALNs, pass-throughs, subrecipient disclosures, notes (basis, indirect cost rate), and period-of-performance matching. Evidence the review via dated sign-offs. 4. Subrecipient & Pass-through Controls The VP of Finance create procedures to identify all pass-through and subrecipient transactions. Maintain subrecipient listings with amounts passed through and ensure required disclosures (ALN, pass-through numbers) are captured in SEFA. Reconcile subrecipient agreements and payment registers to SEFA. Leadership Team Members perform independent reviews for accuracy and completeness. 5. Close Calendar & Training Adopt an annual SEFA close calendar with milestones (pre-close, interim, final). Provide annual training for finance and program staff on Uniform Guidance reporting requirements and the SEFA Checklist; include updates to OMB Compliance Supplement as applicable. 6. Monitoring & Continuous Improvement Quarterly CAP monitoring by VP of Finance with status reports to the Finance Committee. Track metrics (e.g., % variance between GL and SEFA, number of checklist exceptions) and remediate promptly. Conduct a pre-audit SEFA "dry run" at least 60 days before year-end close. Roles & Responsibilities • VP of Finance: CAP owner; oversight, quarterly monitoring, reports to Finance Committee, designs reconciliation and review workflow; ensures adherence to checklist and certifications; prepares SEFA, reconciliation workbook, and supporting schedules. • Responsible Leadership Team Member/Program Managers: Certify award activity and completeness; provide supporting documentation. Timeline & Milestones Immediate (within 30 days): Approve CAP; establish Federal Awards Inventory template; draft SEFA Checklist; schedule training. Short term (within 60-90 days): Implement monthly reconciliation; obtain program certifications; pilot independent review on QI data. By next year-end close: Execute full close calendar; complete pre-audit SEFA dry run; document reviewer sign-offs; present monitoring results to Finance Committee. Compliance References • 2 CFR §200.510(h): SEFA preparation requirements (completeness, ALN, pass-through, etc.). • 2 CFR §200.303: Internal controls over federal awards. Management Statement (for 2 CFR §200.511(c) submission) Management agrees with the finding and has initiated the corrective actions described herein. The CAP will be monitored quarterly by the VP of Finance, with status updates provided to those charged with governance until all actions are fully implemented and operating effectively.

View Audit 391575

Finding 1179028 (2023-011)

Material Weakness 2023

Kagman Community Health Center, Inc.

MP

Reporting § 200.328

Corrective Action Plan Action Item Responsible Party Timeline Monitoring Establish procedures to track and monitor all federal reporting deadlines, including SF-425 and UDS reports. CFO Immediate Monthly review Maintain supporting documentation for federal financial and program reports in accordance...

Corrective Action Plan Action Item Responsible Party Timeline Monitoring Establish procedures to track and monitor all federal reporting deadlines, including SF-425 and UDS reports. CFO Immediate Monthly review Maintain supporting documentation for federal financial and program reports in accordance with record-retention policies. CFO / Accounting Staff Immediate Periodic internal review Implement supervisory review procedures to verify the accuracy and timeliness of federal reports prior to submission. CFO / Executive Management Immediate Each reporting cycle Establish formal turnover procedures for federal reporting responsibilities to ensure continuity of reporting and documentation during personnel transitions. CFO Within 30 days Management oversight ________________________________________ Management Response Management, under the direction of the Chief Financial Officer, acknowledges the findings related to the timeliness of federal financial reporting. Management recognizes that the late submission of certain SF-425 reports resulted from prior turnover in accounting and executive management personnel and the absence of formal procedures for monitoring federal reporting deadlines and maintaining supporting documentation. As of FY2026, management implemented supervisory oversight and a personnel exit clearance process to ensure continuity and completeness of financial records. Management also provides the Board with updates on personnel transitions and associated risks to support proper oversight and timely remediation of identified issues. As of FY2026, procedures have been implemented requiring that all supporting documentation and attachments be uploaded and maintained within the online accounting system and google shared drive to strengthen internal controls, improve transparency, and ensure consistent documentation practices.

View Audit 391459

Finding 1179026 (2023-010)

Material Weakness 2023

Kagman Community Health Center, Inc.

MP

Procurement, Suspension & Debarment § 200.317 § 200.327

Corrective Action Plan Action Item Responsible Party Monitoring Require that procurement transactions be properly identified and tracked by federal program to ensure completeness and traceability. CFO / Procurement Staff Monthly review Maintain complete procurement documentation, including records o...

Corrective Action Plan Action Item Responsible Party Monitoring Require that procurement transactions be properly identified and tracked by federal program to ensure completeness and traceability. CFO / Procurement Staff Monthly review Maintain complete procurement documentation, including records of competition, procurement method, and verification of suspension and debarment in accordance with federal requirements. CFO / Procurement Department Periodic internal review Reconcile procurement-related expenditures to the SEFA and underlying accounting records to ensure a reliable population for compliance testing. CFO Documented reconciliation In FY 2026, management developed and implemented a formal Records Retention Policy to ensure that accounting records, supporting documentation, and organizational records are properly maintained and retained in accordance with applicable regulatory and audit requirements CFO Management oversight Implement supervisory review of procurement activity to ensure compliance with federal procurement requirements. CFO / Board Finance Committee Quarterly review ________________________________________ Management Response Management notes that no additional federal grants, other than the HRSA Section 330 program grant (Assistance Listing 93.224), were received in FY2025 or FY2026. Prior management did not provide a reconciled SEFA schedule for earlier reporting periods, which contributed to the documentation limitations identified during the audit. Beginning in FY2026, management has developed a detailed SEFA tracking schedule for the HRSA Section 330 grant that identifies the date federal funds were drawn down, the amount received, the related expenditures, and the corresponding disbursement dates. This schedule is maintained to improve reconciliation between drawdowns, expenditures, and the general ledger and to ensure documentation is readily available for audit and compliance purposes. In FY2026, management implemented an updated and comprehensive set of policies and procedures designed to strengthen internal controls and promote consistent, standardized accounting and administrative practices. These updates establish clearer documentation requirements, defined responsibilities, and improved oversight to ensure compliance with applicable regulations and the safeguarding of organizational records and financial information. ________________________________________ Responsible Official: Chief Financial Officer Expected Completion Date: FY 2026

View Audit 391459

Finding 1179025 (2023-009)

Material Weakness 2023

Kagman Community Health Center, Inc.

MP

Period of Performance § 200.309

Corrective Action Plan Action Item Responsible Party Monitoring Require that federal grant expenditures be tracked by program and period of performance to ensure costs are incurred within approved timeframes. CFO / Grants Accounting Monthly review Maintain supporting documentation to substantiate th...

Corrective Action Plan Action Item Responsible Party Monitoring Require that federal grant expenditures be tracked by program and period of performance to ensure costs are incurred within approved timeframes. CFO / Grants Accounting Monthly review Maintain supporting documentation to substantiate the timing of costs incurred and the liquidation of obligations in accordance with federal requirements. CFO / Accounting Staff Periodic internal review Reconcile grant expense records to the SEFA to ensure a complete and reliable population for compliance testing. CFO Documented reconciliation In FY 2026, management developed and implemented a formal Records Retention Policy to ensure that accounting records, supporting documentation, and organizational records are properly maintained and retained in accordance with applicable regulatory and audit requirements. CFO Management oversight Implement supervisory review of grant expenditures to confirm compliance with performance requirements. CFO / Board Finance Committee Quarterly review ________________________________________ Management Response Management notes that no additional federal grants, other than the HRSA Section 330 program grant (Assistance Listing 93.224), were received in FY2025 or FY2026. Prior management did not provide a reconciled SEFA schedule for earlier reporting periods, which contributed to the documentation limitations identified during the audit. Beginning in FY2026, management has developed a detailed SEFA tracking schedule for the HRSA Section 330 grant that identifies the date federal funds were drawn down, the amount received, the related expenditures, and the corresponding disbursement dates. This schedule is maintained to improve reconciliation between drawdowns, expenditures, and the general ledger and to ensure documentation is readily available for audit and compliance purposes. In FY2026, management implemented an updated and comprehensive set of policies and procedures designed to strengthen internal controls and promote consistent, standardized accounting and administrative practices. These updates establish clearer documentation requirements, defined responsibilities, and improved oversight to ensure compliance with applicable regulations and the safeguarding of organizational records and financial information. ________________________________________ Responsible Official: Chief Financial Officer Expected Completion Date: FY 2026

View Audit 391459

Finding 1179024 (2023-008)

Material Weakness 2023

Kagman Community Health Center, Inc.

MP

Cash Management § 200.305

Corrective Action Plan Action Item Responsible Party Monitoring Maintain complete and accurate records of federal drawdowns, disbursements, and related trial balance activity in accordance with record-retention policies. CFO / Accounting Staff Monthly review Implement procedures to review unearned r...

Corrective Action Plan Action Item Responsible Party Monitoring Maintain complete and accurate records of federal drawdowns, disbursements, and related trial balance activity in accordance with record-retention policies. CFO / Accounting Staff Monthly review Implement procedures to review unearned revenue balances and related cash activity to ensure federal funds are drawn and disbursed in compliance with cash management requirements. CFO Monthly reconciliation In FY 2026, management developed and implemented a formal Records Retention Policy to ensure that accounting records, supporting documentation, and organizational records are properly maintained and retained in accordance with applicable regulatory and audit requirements. CFO Management review Strengthen supervisory oversight of drawdowns and reimbursement requests to ensure compliance with Uniform Guidance and applicable federal regulations. CFO / Board Finance Committee Quarterly review ________________________________________ Management Response Management notes that no additional federal grants, other than the HRSA Section 330 program grant (Assistance Listing 93.224), were received in FY2025 or FY2026. Prior management did not provide a reconciled SEFA schedule for earlier reporting periods, which contributed to the documentation limitations identified during the audit. Beginning in FY2026, management has developed a detailed SEFA tracking schedule for the HRSA Section 330 grant that identifies the date federal funds were drawn down, the amount received, the related expenditures, and the corresponding disbursement dates. This schedule is maintained to improve reconciliation between drawdowns, expenditures, and the general ledger and to ensure documentation is readily available for audit and compliance purposes. ________________________________________ Responsible Official: Chief Financial Officer Expected Completion Date: FY 2026

View Audit 391459

Finding 1179023 (2023-007)

Material Weakness 2023

Kagman Community Health Center, Inc.

MP

Allowable Costs / Cost Principles Reporting

Corrective Action Plan Action Item Responsible Party Monitoring Implement a formal reconciliation process to ensure federal grant expenditures recorded in the general ledger reconcile to the SEFA prior to year-end reporting. CFO / Finance Department Documented reconciliation Establish a standardized...

Corrective Action Plan Action Item Responsible Party Monitoring Implement a formal reconciliation process to ensure federal grant expenditures recorded in the general ledger reconcile to the SEFA prior to year-end reporting. CFO / Finance Department Documented reconciliation Establish a standardized grant expenditure tracking schedule for each federal award to ensure costs charged to the program are properly supported and traceable to accounting records. CFO / Grants Accounting Periodic internal review Maintain supporting documentation (invoices, payroll allocations, grant records) in a centralized electronic filing system for accessibility and audit readiness. CFO / Accounting Staff Ongoing monitoring In FY 2026, management developed and implemented a formal Records Retention Policy to ensure that accounting records, supporting documentation, and organizational records are properly maintained and retained in accordance with applicable regulatory and audit requirements. CFO Reviewed by management Conduct periodic internal reviews of grant expenditures to verify compliance with federal cost principles and ensure adequate supporting documentation. CFO / Finance Management Quarterly review ________________________________________ Management Response Management would like to clarify that the HRSA Health Center Program (No. 93.224) was inadvertently affected by this finding. The organization maintained a SEFA schedule for the HRSA Section 330 program grant; however, because the overall SEFA schedule did not fully reconcile to the general ledger, the auditors were unable to rely on the population of expenditures for testing. As a result, detailed testing samples could not be provided during the audit. Management is strengthening reconciliation procedures to ensure that the SEFA fully reconciles to the general ledger and supporting grant expense schedules prior to audit to support accurate reporting and facilitate audit testing. ________________________________________ Responsible Official: Chief Financial Officer Expected Completion Date: FY 2026

View Audit 391459

Finding 1179022 (2023-006)

Material Weakness 2023

Kagman Community Health Center, Inc.

MP

Reporting Internal Control / Segregation of Duties § 200.510

Corrective Action Plan Action Item Responsible Party Monitoring Require the SEFA to be reconciled to grant expense schedules and underlying accounting records prior to submission. CFO Documented reconciliation Implement supervisory review procedures to verify the accuracy and completeness of amounts...

Corrective Action Plan Action Item Responsible Party Monitoring Require the SEFA to be reconciled to grant expense schedules and underlying accounting records prior to submission. CFO Documented reconciliation Implement supervisory review procedures to verify the accuracy and completeness of amounts reported on the SEFA. CFO / Finance Management Review prior to submission Ensure supporting documentation for all federal expenditures reported on the SEFA is maintained in accordance with record-retention policies. CFO / Accounting Staff Periodic internal review Strengthen internal controls over federal grant reporting to improve the reliability of SEFA preparation and reduce the risk of recurrence. CFO / Board Finance Committee Annual oversight review ________________________________________ Management Response In FY 2026, management implemented updated and comprehensive policies and procedures designed to strengthen internal controls and promote consistent accounting and administrative practices. These updates establish clearer documentation requirements, defined responsibilities, and improved oversight to support compliance with applicable regulations and safeguard organizational records and financial information. In FY 2026, management also established a separate grant bank account to strengthen the segregation and monitoring of federal award funds, improving the tracking, accountability, and reconciliation of federal expenditures. In addition, management will update the organization’s Federal Financial Reporting Policy to formally include procedures for the preparation, reconciliation, and review of the Schedule of Expenditures of Federal Awards (SEFA) to ensure accuracy, consistency, and compliance with federal reporting requirements. ________________________________________ Responsible Official: Chief Financial Officer Expected Completion Date: FY 2026

View Audit 391459

Finding 1177968 (2023-005)

Material Weakness 2023

Wyoming Weatherization Services

WY

Reporting Internal Control / Segregation of Duties

2023-005: Segregation of Duties (Significant Deficiency) Views of Responsible Officials and Planned Corrective Actions: The Organization’s Executive Office Staff are responsible for the financial transactions and communicate frequently and dependably about transactions, receipts, and accounting issu...

2023-005: Segregation of Duties (Significant Deficiency) Views of Responsible Officials and Planned Corrective Actions: The Organization’s Executive Office Staff are responsible for the financial transactions and communicate frequently and dependably about transactions, receipts, and accounting issues. In this way, a segregation of duties is maximized given the small staff and limited ability of the Organization to expand staff. The Organization has two Office Assistant Managers. The first is the assistant to the CFO. This assistant is responsible for weekly payroll, reviewing client file completions after the first assistant reviews them, assisting with expense reports, and assisting with quarterly and yearly reports. She has Board of Directors approval to sign checks and approve bills on an as-needed basis in the event that other authorized signors are unavailable. This ensures that all checks and payments have dual signatures, as required. In the absence of the CFO or CEO, the checks and bills approved by the assistant are subsequently reviewed. She also is the supervisor of the second Office Assistant Manager. The second assistant is responsible for entering receipts/bills on a daily basis, printing and balancing accounts payable and checks, and providing the first review of client file completions. This assistant has no check-signing or bill approval authority. She also has no access to payroll, journal entries, or bank information. The CEO also believes that distributing monthly financial reports to the Organization’s Board of Directors creates transparency that compensates for this deficiency in segregation of duties. Anticipated Completion Date - Ongoing, see corrective action plan above. Contact Person - Janelle Anderson, Chief Financial Officer

View Audit 391403

Finding 1177962 (2023-002)

Material Weakness 2023

Center for Pan Asian Community Services, Inc.

GA

Allowable Costs / Cost Principles

We have implemented internal controls to ensure disbursements are properly reviewed and approved and all documentation and are retained on file based on the Center’s documentation retention policy. Implementation date: June 16, 2025

View Audit 391400

Finding 1177961 (2023-001)

Material Weakness 2023

Center for Pan Asian Community Services, Inc.

GA

Eligibility

We have reviewed the sliding fee calculations calculated by the system and have implemented internal control procedures to ensure the discount fees are calculated and applied correctly. Implementation date: June 16, 2025

View Audit 391400

Finding 1177927 (2023-001)

Material Weakness 2023

Nesivos Bais Yaakov

NY

Subrecipient Monitoring Reporting Internal Control / Segregation of Duties § 200.512

The Organization has developed and implemented written procedures to ensure timely submission of the data collection form and reporting package to the FAC. These procedures: (1) assign primary responsibility for the FAC submission to the Director; (2) require preparation of the FAC submission checkl...

The Organization has developed and implemented written procedures to ensure timely submission of the data collection form and reporting package to the FAC. These procedures: (1) assign primary responsibility for the FAC submission to the Director; (2) require preparation of the FAC submission checklist immediately upon receipt of the draft auditor’s reports; and (3) incorporate the FAC deadline into the Organization’s annual compliance calendar. Training on the new procedures was provided to key finance staff.

View Audit 391290

Finding 1177762 (2023-005)

Material Weakness 2023

Calhoun, Greene, Jersey, and Macoupin Counties Regional Office of Education No. 40

IL

Reporting

ROE 40 will implement sufficient controls over the preparation of the cash basis financial statements for management or employees in the normal course of performing their assigned functions to prevent or detect financial statement misstatements and disclosure errors and omissions in a timely manner....

ROE 40 will implement sufficient controls over the preparation of the cash basis financial statements for management or employees in the normal course of performing their assigned functions to prevent or detect financial statement misstatements and disclosure errors and omissions in a timely manner. ROE 40 will include the Schedule of Expenditures of Federal Awards in the financial statements, if necessary.

View Audit 391143

Finding 1177761 (2023-004)

Material Weakness 2023

Calhoun, Greene, Jersey, and Macoupin Counties Regional Office of Education No. 40

IL

Allowable Costs / Cost Principles

ROE 40 will use time and effort documentation to distribute salary and benefit costs for employees paid from multiple funding sources. Procedures will be put into place to ensure that employee withholdings are correct and to ensure that Medicare tax is properly calculated.

View Audit 391143

Finding 1177760 (2023-003)

Material Weakness 2023

Calhoun, Greene, Jersey, and Macoupin Counties Regional Office of Education No. 40

IL

Cash Management

ROE 40 will put into place a system to ensure timely expenditure reporting for both federal and state programs. Regular review will ensure that expenditures are placed into line items properly, thus making sure expenditures do not exceed budgeted amounts. Procedures will be put in place to ensure an...

ROE 40 will put into place a system to ensure timely expenditure reporting for both federal and state programs. Regular review will ensure that expenditures are placed into line items properly, thus making sure expenditures do not exceed budgeted amounts. Procedures will be put in place to ensure an expenditure is not submitted for reimbursement prior to the ROE paying for the expenditure.

View Audit 391143

Finding 1177692 (2023-001)

Material Weakness 2023

Alameda County Deputy Sheriff's Activities League Inc.

CA

Material Weakness Reporting Internal Control / Segregation of Duties

Late Submission of the Single Audit - (Material Weakness) - Repeated (Prior Year Finding 2022-002): Management's Response: Management acknowledges the ﬁnding related to the late submission of the SF-SAC Single Audit Data Collection Form for the year ended June 30, 2023. The delay was primarily attri...

Late Submission of the Single Audit - (Material Weakness) - Repeated (Prior Year Finding 2022-002): Management's Response: Management acknowledges the ﬁnding related to the late submission of the SF-SAC Single Audit Data Collection Form for the year ended June 30, 2023. The delay was primarily attributable to a period of signiﬁcant organizational transition, including major management changes and a downsizing of the organization, which substantially constrained internal capacity during the audit and reporting period. As a result, certain required information necessary to complete the Single Audit was not available within the required timeframe. Management recognizes the importance of timely Single Audit submission and the impact of late ﬁling on the organization’s low-risk auditee status. To remediate this issue, management has implemented corrective actions to strengthen planning and oversight of the audit process, including establishing earlier internal deadlines for year-end close activities, improving cross-functional coordination for audit deliverables, and engaging auditors earlier following year end. Management has also implemented a formal tracking process to monitor Single Audit milestones and submission deadlines to ensure timely ﬁling with the Federal Audit Clearinghouse going forward. Estimated Completion Date: Management expects these corrective actions to be eﬀective beginning with the single audit for the ﬁscal year ending June 30, 2024. Responsible Party: Accounting Manager

View Audit 391109

Finding 1176972 (2023-006)

Material Weakness 2023

Papa Ola Lokahi

HI

Cash Management Material Weakness § 200.305

Views of Responsible Officials and Planned Corrective Action The Organization notes the following existing internal control practices, as it relates to cash management subsequent policy and process development and implementation, and the additional controls to be implemented: A. System, Process & Re...

Views of Responsible Officials and Planned Corrective Action The Organization notes the following existing internal control practices, as it relates to cash management subsequent policy and process development and implementation, and the additional controls to be implemented: A. System, Process & Review Controls In Practice. 1. System Controls. The Organization operates in an environment in which system, process & review controls of the United States Department of Health and Human Services (HHS) are practiced in processing cash (draw) transactions in both the Electronic Handbook (EHB) and Payment Management System (PMS) systems, operated by HHS. Only the director of administrative operations and the CEO have system access to the EHB and PMS systems. 2. Process & Review Controls – EHB & PMS. Cash management requests (aka federal draws) are computed by, and entered into the EHB, including the Organization’s justification of the expenditure, by the director of administrative operations, including the CEO on the approval request. The propriety of the cash draw is reviewed by the HHS assigned grants management specialist; and inquiry action, if needed, documented by e-mail from the grants management specialist; and approval documented in the EHB. Once the draw is approved, the director of administrative operations enters information into the PMS, noting that the CEO, is the authorized organization representative (AOR). The grants management specialist must then approve the draw request once more in the PMS system before a PMS representative approves the draw request. 3. Process & Review Controls – Finance Committee & Full Board. The Organization’s monthly Board process and review controls include review of the Organization’s: Statement of Financial Position, Statement of Revenues and Expenditures, Statement of Revenues and Expenditures – Net Income/(Loss) by Fund, Fund Details – Additional Information and Statistics, Active Subcontract Summary, Active Subcontract Listing Related to Funds – Additional Information and Statistics, Native Hawaiian Health Program (Fund 007V), and Native Hawaiian Health Scholarship Program (Fund 017V). B. Internal Control Environment Policy Establishment – July 2025. In July 2025, the Organization developed the following cash management related policies and related procedures: Internal Control Environment; Implementation of Significant Accounting Policies; Revenue Recognition Policy, Including Federal Draws; Implementation of HRSA Related Policies, including cash management processes and procedures. C. Additional Process & Review Controls – March 2026. Beginning March 2026, for federal draws, process and review internal controls will be implemented, via the chief of staff’s review of the director of administrative operations cash management analyses, federal grant receivable composition, reconciliation and related federal grant revenue computations, prior to any director of administrative operations and chief executive officer action in EHB and PMS, respectively.

View Audit 390799

Finding 1176971 (2023-005)

Material Weakness 2023

Papa Ola Lokahi

HI

Allowable Costs / Cost Principles Material Weakness Matching / Level of Effort / Earmarking

Views of Responsible Officials and Planned Corrective Action The Organization understands the criteria cited re: Title 2, Subtitle A Chapter II, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), §200.334, requiring “Fina...

Views of Responsible Officials and Planned Corrective Action The Organization understands the criteria cited re: Title 2, Subtitle A Chapter II, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), §200.334, requiring “Financial records, supporting documents, statistical records, and all other non-Federal records must be retained for a period of three years from the date of submission of the final expenditure report…”, and recommendation made. However, because two programs are listed U.S. Department of Education and the U.S. Department of Health and Human Services, the Organization will work with the auditors to: A. Better understand the findings (i.e., inconsistent document retention substantiating contractor performance of services) identified by the field work and expenditure and contractor testing, as it relates to which program, and which subrecipient contractor the findings relate to; B. Clarify the specific source and subcontractor awarding and payment criteria as noted in the Organization’s award and sub-award criteria, and subsequently reflected in the subcontractor contract(s); C. Analyze the findings to identify root causes and/or conditions in related contract monitoring processes that resulted in inconsistent document retention practices; and D. Address and implement corrective actions through identified needs (e.g., policy development and implementation, contract monitoring processes and procedures). The Organization will prioritize the above with the auditors as soon as possible, so the appropriate corrective actions can be addressed.

View Audit 390799

Finding 1176970 (2023-004)

Material Weakness 2023

Papa Ola Lokahi

HI

Reporting Significant Deficiency Matching / Level of Effort / Earmarking § 200.512 § 200.514

Views of Responsible Officials and Planned Corrective Action The Organization concurred with the prior year (2022-004) and current year renumbered recommendation (2023-004), acknowledging that the unexpected resignation of the former independent auditor (January 2023), and the domino effect of a del...

Views of Responsible Officials and Planned Corrective Action The Organization concurred with the prior year (2022-004) and current year renumbered recommendation (2023-004), acknowledging that the unexpected resignation of the former independent auditor (January 2023), and the domino effect of a delay in securing a new independent auditor (April 2023) and related Organization and new auditor scheduling and staffing challenges, persists. The Organization notes the status and progress of the following single audits: • June 30, 2022, filed in the Federal Audit Clearinghouse in February 2025; • June 30, 2023, field work began March 2025, report draft issued February 2026 and scheduled for Board action; • June 30, 2024, field work began January 2026 and in progress; and • June 30, 2025, pending receipt of auditor engagement letter. The Organization notes the corrective actions that have been implemented, regarding internal controls to ensure compliance with the Uniform Guidance with respect to the submission deadline of single audit reports and the Data Collection Form: A. Internal Controls in Practice Since Inception of New Auditor Engagement – April 2023 As noted in the prior year corrective action response, the Organization established internal compliance controls related to the timely submission of single audit reports. Such process and review controls are implemented by the director of administrative operations, chief of staff (since December 2024), and chief executive officer; and subsequently communicated to the Board finance sub-committee and full Board, including the documented Board action(s) taken (e.g., Board agenda, minutes). B. Financial Policies and Procedures – May 2025. By May 2025, the Organization completed financial policies related to: implementation of significant accounting policies, internal control environment, cash and banking, cash disbursements and check issuance, payroll processes, procure to pay and revenue recognition policies, processes and procedures. Note the internal control policy of the Organization documents process and review controls, which were already in practice, applying to the timely filing of single audit reports. The current practices of the Organization, to the present period of the report dated March 2, 2026, is consistent with established process and review controls for timely submission of single audit reports.

View Audit 390799

Finding 1176969 (2023-003)

Material Weakness 2023

Papa Ola Lokahi

HI

Procurement, Suspension & Debarment § 200.318 § 200.320

Views of Responsible Officials and Corrective Action While the Organization concurred with the prior year (2022-003) and current year renumbered recommendation (2023-003), the Organization notes the corrective actions that have been implemented, specifically related to the incorporation of the procu...

Views of Responsible Officials and Corrective Action While the Organization concurred with the prior year (2022-003) and current year renumbered recommendation (2023-003), the Organization notes the corrective actions that have been implemented, specifically related to the incorporation of the procurement standards of the Uniform Guidance to its policies and procedures to ensure compliance with Federal standards, including 2 CFR §200.318(h); and development of a comprehensive HRSA group of related policies and procedures. A. Financial Policies – May 2025. While the Organization initially prioritized the completion and distribution of the updated financial policies and procedures by December 31, 2024, by May 2025, the Organization completed financial policies related to: implementation of significant accounting policies, internal control environment, cash and banking, cash disbursements and check issuance, payroll processes, procure to pay and revenue recognition policies, processes and procedures. In addition, when applicable, documenting procurement circumstances, processes, decisions and CEO approval was implemented via memo(s) to the procurement file (MTPF). B. Procurement Related Processes – May 2025. Simultaneous to the policy work described above, several processes to guide and align procurement practices, throughout the Organization, was initiated, including the use of MTPF, Request(s) for Professional Services Qualifications, Request(s) for Professional Services, Request(s) for Proposal, and to date implementation of the processes continue. C. HRSA Policies – July 2025. By July 2025, the Organization developed HRSA related policies re: implementation of HRSA policies; executive performance evaluation, non-executive performance evaluation, executive compensation, non-executive compensation, timesheets, suspension & debarment procedure, financial management system, legislative mandates, legislative mandates process & procedure and cash management for federal draws and return of funds. D. Board Policy Provision & Awareness – August 2025. In August 2025, the Board was provided policies developed within the Organization’s policy framework, including the above policies. The current practices of the Organization, to the present period of the report dated March 2, 2026, is consistent with such developed policies.

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