Findings Citing § 200.302

Criteria: In accordance with 2 CFR 200.302(b)(7) and 2 CFR 200.403, charges to federal awards must be supported, allowable, reasonable, and allocable to the applicable federal program. Payroll and benefit costs charged to federal awards should be calculated using accurate payroll information and reviewed to ensure amounts charged to federal awards are supported by underlying records and properly allocated. Condition: During testing of allowable costs for Major Program 93.912, we identified one instance in which payroll benefit costs charged to the federal award were overstated by $383 due to an error in the calculation of payroll-related benefits associated with an individual employee. Cause: Controls over the preparation and review of payroll benefit allocations charged to federal awards were not operating effectively, as the review process did not identify the calculation error. Effect or Potential Effect: As a result of the exception identified during audit testing, management performed additional procedures over the affected population and determined that an incorrect payroll benefit base had been used in calculating benefit allocations charged to federal awards for certain employees for which payroll and benefits are allocated to federal programs. Management identified unsupported payroll benefit costs and indirect costs charged to the following federal programs: Program 93.912 - $15,046; Program 93.387 - $1,901; and Program 93.889 - $29,718, for total questioned costs of $46,665. Management has indicated its intent to return these funds to the grantor agencies. Accordingly, the $46,665 of unsupported costs was removed from expenditures reported on the Schedule of Expenditures of Federal Awards, and no known questioned costs are reported in the Schedule of Findings and Questioned Costs. Questioned costs: $46,665 Repeat finding: No Recommendation: We recommend management strengthen controls over the preparation and review of payroll benefit allocations charged to federal awards. Review procedures should include verification of the payroll and benefit amounts used in the allocation calculations and reconciliation of allocated costs to supporting payroll records prior to charging amounts to federal awards. Management should also implement procedures to periodically monitor and validate allocation methodologies to prevent similar errors from occurring in future periods. View of responsible officials and planned corrective actions: Management agrees with the finding and recommendation. See the accompanying corrective action plan for management’s planned corrective actions.

U.S. Department of Health and Human Services Assistance Listing Number 93.224 Health Center Program Cluster Program Year 2025-2026 Criteria or Specific Requirement – Per 2 CFR §200.305(b) and (b)(1) and §200.302(b)(6), non-federal entities must maintain or demonstrate the willingness to maintain both written procedures that minimize the time elapsing between the transfers of funds and disbursement by the recipient. Advance payments must be limited to the minimum amounts needed and timed to be in accordance with the entity’s actual, immediate cash requirements. Condition – During testing of cash management requirements, we selected a federal cash draw of $150,000 made on April 15, 2025. The draw was supported by payroll expenditures for the periods April 1, 2025 through April 15, 2025 and April 16, 2025 through April 30, 2025, which were not disbursed until April 30, 2025 and May 15, 2025, respectively. As a result, federal funds were drawn approximately 15 and 30 days prior to the related payroll disbursements, indicating the draw may not have been limited to the Organization's immediate cash needs as required. Additionally, the Organization was unable to provide sufficient documentation demonstrating the basis for the draw request and compliance with federal cash management requirements. Cause – The Organization did not have adequate procedures and review controls in place to ensure Federal cash draws were supported by eligible expenditures and requested only for actual, immediate cash needs. In addition, supporting documentation for cash draw requests was not consistently maintained and reviewed. Effect or Potential Effect – Without adequate documentation and controls over the timing of federal cash drawdowns, the Organization may be unable to demonstrate that funds were drawn only for actual, immediate cash requirements and disbursed as close as administratively feasible to receipt. This could result in excess federal cash on hand, liability for interest earned on advance funds, required repayment of unsupported or prematurely drawn amounts, and other federal corrective action. Questioned Costs – None Context – A sample of four federal cash draws were tested from a population of 37 draws. The sampling methodology used is not and is not intended to be statistically valid. The exception identified related to one of the draws selected for testing. Identification as a Repeat Finding – No Recommendation – We recommend the Organization implement formal policies and procedures requiring federal funds to be drawn only for actual, immediate cash needs and as close as administratively feasible to the related disbursements. The procedures should also require personnel to verify that expenses supporting each draw are allowable, properly documented, and recorded in the correct accounting and federal award period. Draw requests should be reconciled to the underlying expenditures and independently reviewed and approved before submission. Views of Responsible Officials and Planned Corrective Actions – The Organization concurs with the finding and is developing and implementing formal cash management policies and procedures to ensure federal draw requests are supported by allowable expenditures, requested only for immediate cash needs, and properly documented. Management will require reconciliation of draw requests to supporting expenditures, implement independent review and approval procedures, and monitor compliance with the new controls.

Identification of the Federal Program: 10.720 – Infrastructure Investment and Jobs Act Community Wildfire Defense Grants Criteria: 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition: Homer Electric Association, Inc. has not developed written procedures for determining the allowability of costs. Cause: Management did not have written procedures for determining the allowability of costs. Effect: Unallowable costs could be charged to the program. Questioned Costs: None Recommendations: Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials: Management of Homer Electric Association, Inc. concurs with the auditors’ finding regarding the absence of written procedures for determining the allowability of costs in accordance with 2 CFR Part 200.302(b)(7). While Homer Electric Association, Inc. applies applicable federal cost principles when administering grant-funded activities and no unallowable costs were identified, these practices were not formally documented in written procedures during the audit period. Management acknowledges that written procedures are required to ensure consistency, continuity, and clear guidance for personnel involved in federal grant administration. To address this matter, management will develop and implement written procedures for determining the allowability of costs charged to federal programs. These procedures will reference applicable Uniform Guidance cost principles and outline review and approval responsibilities to ensure compliance prior to costs being charged to federal awards. The procedures will be communicated to appropriate staff and incorporated into Homer Electric Association, Inc.’s grant administration practices. Management believes these corrective actions will strengthen internal controls over federal financial management and support continued responsible stewardship of grant funds for the benefit of Homer Electric Association, Inc.’s members.

Finding Number: 2025-004 Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2024, 2023 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Allowability Criteria: Under 2 CFR 200.403, costs charged to federal awards must be allowable, meaning they are necessary, reasonable, allocable, adequately documented, and comply with the terms and conditions of the federal award. Additionally, 2 CFR 200.302(b)(7) requires financial management systems to include effective internal controls over accountability of expenditures, including proper review and approval. Per 2 CFR 200.303, the Entity must establish and maintain effective internal control over federal awards to provide reasonable assurance that expenditures are allowable and in compliance. Condition: During testing of expenditures charged to the Airport Improvement Program, we identified that the Airport did not consistently follow its established invoice approval procedures. Specially, two of five checks tested, invoices totaling $1,469,973, lacked documented evidence of CEO and Vice President of Landside, Planning & Infrastructure’s approval prior to payment. The invoices were approved for payment by the Vice President of Finance and Administration. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The CEO and Vice President of Landside, Planning & Infrastructure did not sign off on invoices for Airport Improvement Program expenditures as an indication of their approval and allowability. There is an increased risk of expenditures not being allowable if the control process is not properly followed. Recommendation: The Airport should ensure that all purchasing controls are followed when incurring expenditures of federal funds and that purchases are properly approved prior to payment. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.

Condition: During the audit of the Organization’s compliance with the Reporting compliance requirement for the year ended December 31, 2025, we identified errors between expenditures reported by the Organization and actual expenditures incurred under the program. Specifically, the Organization overreported ERA2 expenditures by $42,200 for the year ended December 31, 2025. The amounts reported to Cuyahoga County did not agree with the Organization’s underlying accounting records and supporting documentation. However, the reporting errors did not result in repayments of funds received. We consider this item to be a significant deficiency in internal control over compliance with the major program. Criteria: Title 2 CFR §200.302(b) requires recipients of federal awards to maintain records that accurately identify the source and application of federal funds and to ensure that financial reports submitted to federal awarding agencies are accurate, current, and complete. In addition, ERA2 reporting guidance issued by the U.S. Department of the Treasury requires that reported expenditures reflect actual, allowable costs incurred during the reporting period. Cause: The overreported expenditures resulted from appropriately designed reconciliation controls over the preparation and review of ERA2 reporting that were not implemented. Specifically, the operations team responsible for reporting ERA2 expenditures to Cuyahoga County on a monthly basis did not obtain reconciling information from the Organization’s finance department prior to submitting reporting of ERA2 expenditures, resulting in duplications and errors in reported amounts. Effect: As a result of this deficiency, ERA2 expenditures reported for the year ended December 31, 2025 were overstated by $42,200. Inaccurate reporting impairs the reliability of program data used by the federal awarding agency to monitor program performance and compliance. Context: Testing of the Organization’s annual reporting of the ERA2 program expenditures to Cuyahoga County, Ohio. We noted as part of our review of the annual reporting did not reconcile to the underlying accounting records or amounts reported on the SEFA by $42,200. Questioned Costs: None Recommendation: We recommend that the Organization strengthen internal controls over ERA2 reporting by: Ensuring reporting ERA2 expenditures are reconciled to the general ledger prior to submission; Implementing independent supervisory review of all ERA2 reports; Ensuring that reported expenditures reflect only allowable costs actually incurred during the reporting period. Views of Responsible Official: Management concurs with the finding. The reporting differences resulted from inadequate reconciliation between the programmatic report and the Organization's accounting records prior to submission. Communication between operations and finance staff have been strengthened to improve accuracy, completeness, and consistency of future reporting in other programs. Additionally, this federal funding program has come to an end.

2025-004 - Lack of Written Federal Program Policies Type: Material Weakness Condition: The Organization does not have documented policies and procedures specific to the administration of the Community Resilience Hubs for Detroit Neighborhoods program. This includes the absence of written guidance on key compliance areas such as payments, procurement, allowability of costs charged to federal programs, compensation, and travel costs under Uniform Guidance. Criteria: Per 2 CFR 200.303 and 200.331 of the Uniform Guidance, non-federal entities are required to establish and maintain effective internal controls and written policies to ensure compliance with federal statutes, regulations, and the terms and conditions of federal awards. These policies should be tailored to the specific requirements of each federal program. Cause: The entity has not developed formal written policies and procedures for the Community Resilience Hubs for Detroit Neighborhoods program, possibly due to reliance on informal practices or general administrative policies that do not address federal-specific requirements. Effect: Without documented policies, there is an increased risk of noncompliance with federal requirements, inconsistent program administration, and lack of accountability. This may result in questioned costs, audit findings, or potential repayment of federal funds. Recommendation: We recommend that the Organization develop and implement written policies and procedures specific to the Community Resilience Hubs for Detroit Neighborhoods program. These should include: - Payments in accordance with §200.302 (6) - Procurement in accordance with §200.318 - Allowability of costs charged to federal programs in accordance with §200.302 (7) - Compensation in accordance with §200.430 and §200.431 - Travel costs in accordance with §200.474. Training should also be provided to staff responsible for administering the program to ensure consistent application of these policies. Views of Responsible Officials: Management acknowledges the auditor’s finding regarding the absence of formally documented federal program policies. We recognize the importance of maintaining written procedures to ensure consistent compliance with Uniform Guidance requirements and to strengthen internal controls over federal awards. While informal practices have historically guided our federal program administration, we agree that formalizing these policies will enhance transparency, accountability, and operational efficiency. Management is currently in the process of developing written policies covering key areas such as procurement, allowable costs, subrecipient monitoring, and cash management. We anticipate completing this documentation and implementing the policies by December 31, 2026. We are committed to continuous improvement and appreciate the auditor’s recommendations as part of our efforts to maintain strong compliance and stewardship of federal funds.

Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 200.302(a), Financial Management, states that each state must expend and account for the federal award in accordance with state laws and procedures for expending and accounting for the state’s own funds. In addition, the state’s and the other nonfederal entity’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award.Condition:Soliya reported program expenditures on the SEFA in excess of the amount permitted under the federal award. Specifically, program costs were recorded based on amounts submitted for reimbursement rather than amounts ultimately determined to be eligible and reimbursable under the award. As a result, federal expenditure reported on the SEFA submitted to the auditors was overstated by $6,015. The SEFA presented herein was adjusted to reflect the correct amount of eligible expenditures. Cause: Soliya did not maintain effective controls over the review of grant expenditures and SEFA reporting to ensure that only eligible grant costs were reported as federal expenditures. In addition, management did not adequately identify, track, and exclude costs not permitted under the award from amounts reported on the SEFA. Effect: As a result, the SEFA included expenditures exceeding the amount permitted under the award, causing federal expenditures to be overstated. This resulted in inaccurate federal reporting and increased the risk of noncompliance with applicable award requirements and Uniform Guidance cost principles. Questioned Costs: None. Context: The nature of these findings is detailed in the condition section above. Repeat Finding: This finding is not a repeat finding from prior year. Recommendation: Soliya should strengthen controls over grant accounting and SEFA preparation to ensure costs not permitted under the federal award are identified, reviewed, and excluded from federal expenditures reported on the SEFA. This should include procedures to review costs for compliance with award requirements, reconcile grant activity to supporting documentation, and verify that only eligible expenditures are reported. Views of Responsible Officials: Management agrees with the finding and recommendation set forth within and has developed a corrective action plan to address the instances of noncompliance.

AL title: Workforce Innovation and Opportunity Act (WIOA Cluster) Name of federal agency: Department of Labor Name of pass-through entity: California Employment Development Department Repeat finding: Yes Criteria: Under the Uniform Guidance, specifically 2 CFR 200.430, charges to Federal awards for compensation must be supported by a system of internal control which provides reasonable assurance that costs are allocated appropriately and accurately. Per 2 CFR §200.403, allowable costs must be "necessary, reasonable, and adequately documented." Additionally, 2 CFR §200.302(b)(3) requires non_x0002_Federal entities to maintain records that sufficiently detail financial transactions to support Federal expenditures. Condition: During our testing of payments charged to the federal major program, we noted that employee timesheets lacked evidence of review and approval. Certain employees charged to the grant did not prepare timesheets and a separate tracking system was used. Federal regulations require that expenditures charged to Federal awards be properly reviewed, approved, and documented to ensure allowability and compliance with grant terms. Cause: The Federal program was new to the organization and controls over the program had not been fully established. Turnover in the accounting department contributed to the lack of resources for tracking these costs. Effect: Management provided documentation on personnel costs allocated to the program, but was unable to provide evidence of review. Lack of review increases the risk of unauthorized or unallowable costs being charged to the Federal award, potentially leading to questioned costs and noncompliance with Federal grant requirements. Context: This issue applied to approximately 50% of the compensation costs charged to the grant expenditures. Management performed time studies on some of the employees whose costs were shared among programs, and the local granting organization did not cite this as a finding in their review of their subrecipient's activities. Questioned cost: Unable to be determined. Recommendation: Management should review the requirements of CFR 200.430 and ensure that current processes, whether digital or hard-copy driven, are consistent with the requirements of the Uniform Guidance. In addition, management should consider adding additional staff to its accounting and/or grants management team. Views of responsible officials: The Organization has made significant progress in strengthening its timekeeping processes, as described in finding number 2025-002. This program ended in March 2025, and therefore management was unable to complete full remediation of the processes before completion of the grant.

Criteria and Condition: While the Organization has some written financial management procedures documentation, it does not meet all the recent specific requirements under 2 CFR 200.302 in the Uniform Grant Guidance. Context: The financial management requirements under 2 CFR 200.302 require each non-federal entity maintain effective control over, and accountability for all funds, property, and other assets, including having written procedures in place. Key changes which effect the Organization include: • Increased documentation • Time and effort reporting for payroll • Specific purchasing consideration Cause: The Organization did not implement adequate controls to ensure compliance with this reporting requirement. Potential Effect: Errors could occur in financial reporting. Recommendation: We recommend the Organization update its existing policies to comply with the requirements under 2 CFR 200.302. Views of Responsible Officials and Planned Corrective Actions: Management understands the importance of defining and following the necessary policies and procedures to remain in compliance with the requirements under 2 CFR 200.302. The Organization will implement these policies and procedures to ensure that the organization will comply going forward.

FINDING 2025-001 – Allowable Cost Principles and Activities Allowed or Unallowed Significant Deficiency in Internal Control over Compliance Assistance Listing Number: 21.029 Federal Program Name: COVID-19 - Coronavirus Capital Projects Fund Award Year: 2024 Criteria: Uniform Guidance requires non-Federal entities to establish and maintain effective internal controls over Federal awards, including ensuring transactions are properly recorded, reported, and allowable. Specifically: • 2 CFR §200.302(b)(1) and (b)(2) require financial management systems to provide accurate, current, and complete disclosure of financial results and to identify expenditures by Federal award. • 2 CFR §200.302(b)(6) requires written procedures for determining the allowability of costs. • 2 CFR §200.303 requires entities to establish and maintain effective internal controls over compliance, including appropriate segregation of duties. Condition and context: The Cooperative did not have formalized written policies and procedures governing the coding, review, and reporting of expenditures charged to Federal awards, including payroll costs in effect during 2025. Additionally, adequate segregation of duties is not in place over the review and approval of expenditure coding and financial reporting. Questioned costs: None. Effect: The absence of formal policies, procedures, and proper segregation of duties increases the risk that expenditures are not accurately, completely, or timely recorded and reported by Federal award. This may result in: • Financial reports that do not reflect complete and accurate program expenditures for the reporting period; • Increased risk of noncompliance with Federal reporting requirements; • Potential misstatement or omission of allowable costs; and • Delays in reimbursement or increased risk of questioned costs. Cause: The deficiencies are due to a lack of formalized written policies and procedures over expenditure coding, allowability determinations, and reporting, as well as inadequate segregation of duties in the preparation, review, and approval of grant-related expenditures and reports. Repeat finding: Yes. Recommendation: We recommend the Cooperative develop and implement written policies and procedures to ensure timely, consistent, and correct coding of all grant-related expenditures (payroll and non-payroll). Within these policies and procedures, we recommend establishing review and approval controls, including periodic review of expenditure coding by supervisory or accounting personnel. Implementing these policies and procedures will ensure expenditures are recorded within the appropriate reporting period. We note that due to the timing of the prior audit the Cooperative did not have time to develop and implement policies and procedures for 2025 but subsequently has formalized policies and procedures. Views of responsible officials and planned corrective actions: While Wabash currently maintains informal procedures for coding and reviewing invoices and payroll records, we recognize the need for a formalized, written policy governing expenditures charged to federal awards. To address identified significant deficiency, Wabash implemented a comprehensive written policy as of June 30, 2026. This policy will formalized the coding, review, and reporting processes for all federal expenditures. Contact Person(s): Cheryl Gaither, Controller Justin Gephart, Chief Operating Officer

Section Ill - Federal Awards Findings and Questioned Costs Finding 2025-001 - Cash Management - U.S. Department of Agriculture (Assistance Listing Number 10.557, WIG Special Supplemental Nutrition Program for Women, Infants, and Children) Passed Through New York State Department of Health, Contract Number C38291GG - (Significant Deficiency) Criteria: Nonfederal entities other than states are required to have internal controls in place to ensure compliance with the requirements of cash management that are contained in 2 CFR sections 200.302(b)(6) and 200,305, 31 CFR Part 205, 48 CFR sections 52.216-?(b) and 52.232-12. Statement of Condition: During our audit, we noted that there is no evidence of review of WIG vouchers submitted for payments. Cause: The Center does not have a policy in place requiring the review of WIG vouchers to be documented. Effect: Failure to document review of WIG Vouchers may result in unauthorized or incorrect payments from the WIG grant. Questioned Costs: None Context: Although there is no evidence of review and approval of the WIG Vouchers, the amounts of all four sample vouchers tested agreed to the underlying records and supporting documents. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Center implement a policy that requires all WIG voucher and supporting records to be reviewed and that such review be documented. Management Response: Management agrees with the finding and will implement these steps to ensure compliance with the federal cost principles, strengthen internal controls, and reduce the risk of questioned costs.

Finding 2025-001 Federal Program Habitat Conservation Assistance Listing Number 11.463 Federal Agency U.S. Department of Commerce Finding Type Significant Deficiency in Internal Control Over Compliance Compliance 1. Compliance Requirements Allowable Costs/Cost Principles — Uniform Guidance requires written procedures for determining allowability of costs, tied to 2 CFR 200.302(b)(7). 2. Cash Management — 2 CFR 200.302(b)(6) requires written procedures to implement the cash management requirements in 2 CFR 200.305. 3. Procurement and Suspension and Debarment — 2 CFR 200.318–200.327 require documented procurement procedures, and 2 CFR 200.318(c) requires written standards of conduct for employees involved in contractor selection, award, and administration. Questioned Costs None Criteria Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. In addition, the Uniform Guidance includes certain written policy requirements applicable to non-federal entities, which may include, as applicable, written procedures for determining the allowability of costs, written cash management procedures, written procurement procedures, standards of conduct covering conflicts of interest, and other written policies or procedures required by the specific compliance requirements applicable to the federal program. Condition During our audit, we noted that the Organization did not have a comprehensive set of written policies and procedures addressing key Uniform Guidance requirements applicable to the administration of federal awards. Cause Management indicated that the Organization has historically relied on informal practices, institutional knowledge, and existing general written accounting policies to administer federal awards. However, these policies had not been formally updated to incorporate the specific written policy and procedural requirements of the Uniform Guidance. Repeat Finding? No Effect/Potential Effect Without formal written policies and procedures that address Uniform Guidance requirements, the Organization is at increased risk that compliance with federal awards may not be maintained if laws and regulations change, if knowledgeable staff turnover occurs, and that the Organization may be required to repay federal awards if costs are questioned or disallowed. Recommendation We recommend that management review the Uniform Guidance requirements applicable to the Organization’s federal award programs and update its written policies and procedures to specifically address all required written policy areas. At a minimum, the updated policies should address the written policy and procedure requirements applicable to the Organization’s federal programs, such as: • Procedures for determining the allowability of costs charged to federal awards; • Cash management procedures, if applicable; • Procurement standards and written procurement procedures, if applicable; • Standards of conduct addressing conflicts of interest related to procurement and federal award administration; • Subrecipient monitoring procedures, if applicable; • Procedures for maintaining supporting documentation and demonstrating compliance with federal award requirements; and • Any additional written policy requirements included in the federal award terms and conditions or applicable compliance supplement. Management should ensure that the updated policies are formally approved, communicated to appropriate personnel, and reviewed periodically for continued compliance with current Uniform Guidance requirements and federal award terms and conditions. Views of Responsible Officials and Correct Action Plan Management agrees with the finding. The Organization acknowledges that it does not currently have written policies and procedures addressing certain required Uniform Guidance compliance areas. Management will develop, approve, and implement written policies and procedures designed to comply with applicable Uniform Guidance requirements, including policies over allowable costs/cost principles, cash management, and procurement, including suspension and debarment. Management will also communicate the new policies to relevant personnel and provide training as needed to support consistent implementation

Finding 2025-001 – Reporting – Late Submission of SF-425 Identification of Federal Program: Name of Program: Personal Responsibility Education Program Innovative Strategies (PREIS) Assistance Listing Number: 93.092 Award Identification Number: 90AP2700-05-00 & 90AP2700-04-00 Federal Award Year: 2024-25 and 2025-26 Name of the Federal Agency: US Department of Health and Human Services Criteria: In accordance with 2 CFR §§ 200.302 and 200.328 and the terms and conditions of Notices of Award 90AP2700-04-00 and 90AP2700-05-00, the Organization is required to submit financial reports as required by the terms and conditions of the Federal award. Federal Financial Reports (SF-425) must be submitted within the prescribed due dates established by the awarding agency as follows: • Reporting Period 1 (Sep 30 – Mar 31): Due April 30 • Reporting Period 2 (Apr 1 – Sep 29): Due October 30 • Annual report: Due December 30 Condition: The Organization did not submit the required SF-425 Federal Financial Reports within the required due dates for multiple reporting periods. Supporting documentation reviewed (HHS SF-425 submissions) indicated reporting dates extending beyond required deadlines. Reporting Period End Date March 31, 2025 September 29, 2025 September 29, 2025 Report Type Semi-Annual Semi-Annual Annual Due Date April 30, 2025 Date Submitted May 5, 2025 October 30, 2025 December 4, 2025 December 30, 2025 January 23, 2026 Days Late 5 days 35 days 24 days Cause: The condition resulted from insufficient awareness of the specific reporting deadlines and the absence of formalized internal controls and tracking procedures over federal reporting requirements. Effect: Late submission of SF-425 reports results in noncompliance with federal award requirements and may expose the Organization to additional oversight, delayed reimbursements, or other administrative actions by the awarding agency. Questioned Costs: None Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization implement a formal federal grant reporting calendar to track all SF-425 due dates and assign responsibility for monitoring compliance to designated grants compliance personnel to ensure timely submissions. View of responsible officials and planned corrective actions: Management agrees with the finding. The late submissions of the required SF-425 Federal Financial Reports resulted from insufficient awareness of the specific reporting deadlines and the absence of formalized internal controls and tracking procedures over federal reporting requirements. Management will implement a formal federal grant reporting calendar and assign monitoring responsibility to designated grants compliance personnel. The corrective actions will be fully implemented by the Organization and will be monitored on an ongoing basis. (See Corrective Action Plan.)

Section III – Major Federal Awards Programs – Findings and Questioned Costs Finding 2025-005: Activities Allowed or Unallowed / Allowable Costs - Inadequate Chart of Accounts Segregation for Unallowable Costs (Material Weakness) Federal Program : Grants for Transportation of Veterans in Highly Rural Areas Assistance Listing Number : 64.035 Criteria: Under 2 CFR 200.302(b)(3), non-Federal entities must maintain records that adequately identify the source and application of funds and must segregate unallowable costs to ensure compliance with cost principles. Condition: The chart of accounts does not sufficiently segregate unallowable costs from allowable program expenditures. Certain unallowable expenditures were coded to general operating accounts without clear differentiation. Cause: The Center lacks a detailed coding structure and written policies requiring explicit identification and segregation of unallowable costs. Effect: There is increased risk that unallowable costs could be charged to Federal awards, leading to potential noncompliance, questioned costs, or improper reimbursement requests. Recommendation: Management should implement a revised chart of accounts that clearly differentiates allowable vs. unallowable costs, supported by updated written policies and staff training. Repeat Finding: This is a repeat finding.

Section III – Major Federal Awards Programs – Findings and Questioned Costs (Cont.) Finding 2025-006: Activities Allowed or Unallowed / Allowable Costs - Insufficient Budget-to Actual Reviews (Material Weakness) Federal Program : Grants for Transportation of Veterans in Highly Rural Areas Assistance Listing Number : 64.035 Criteria: Under 2 CFR 200.302(b)(5) and established internal control frameworks such as COSO, entities must compare actual expenditures to budgeted amounts to ensure proper financial management and compliance with award terms. Condition: Budget-to-actual analyses were not consistently performed or documented for certain Federal programs. Cause: The Center lacks a formalized review schedule and adequate documentation procedures. Effect: Failure to identify variances may result in overspending, underspending, or misclassification of Federal program costs. Recommendation: Management should implement formal, periodic budget-to-actual reviews supported by standardized documentation requirements. Repeat Finding: This is a repeat finding.

Section III – Major Federal Awards Programs – Findings and Questioned Costs (Cont.) Finding 2025-010: Reporting - Insufficient Policies to Ensure Completeness and Accuracy of Reports (Material Weakness) Federal Program : Grants for Transportation of Veterans in Highly Rural Areas Assistance Listing Number : 64.035 Criteria: Under 2 CFR 200.328 and 200.302(b)(2), entities must maintain internal controls to ensure that financial and performance reports are accurate, complete, and supported by appropriate documentation. Condition: Reports submitted for Federal awards were not consistently reviewed for accuracy, and review procedures were not documented. Cause: The Center lacks a formal reporting policy and does not have a documented review process in place. Effect: There is an increased risk of inaccurate reporting to Federal awarding agencies, which may impact funding decisions and compliance status. Recommendation: Management should establish a formal reporting policy requiring documented supervisory reviews prior to the submission of financial and performance reports. Repeat Finding: This is a repeat finding.

Finding 2025-002 – Earmarking FEDERAL PROGRAM INFORMATION: - Workforce Innovation and Opportunity Act (WIOA) – A.L.N.# 17.258/259/278 CRITERIA: - 2 CFR 200.302(b)(3): Recipients must maintain records that adequately identify the source and application of Federal funds. - 2 CFR 200.327–328: Financial and performance reports must be accurate, current, and complete. - OMB Compliance Supplement (Part 4, earmarking section): Requires that a specified portion of expenditures be used for certain categories, which must be verifiable through the accounting system. CONDITION: During our testing of earmarking requirements for the WIOA, we were unable to perform the required calculations because the financial data reported to the awarding agency did not reconcile to the County’s underlying accounting records. Due to these identified discrepancies, we were unable to verify earmarking requirements. CONTEXT: We selected twelve monthly reports for the WIOA program, and we noted for the reports selected, amounts reported did not agree to the underlying accounting records and thus we could not verify compliance with earmarking requirements. CAUSE: The County has not implemented effective reconciliation procedures to ensure that reports submitted to the awarding agency agree to the underlying accounting records. Additionally, there is no validation of the accuracy of expenditures reported for earmarking purposes. EFFECT: Because the submitted reports did not reconcile to the accounting records, we were unable to determine whether the County complied with the earmarking requirements of the program. QUESTIONED COSTS: None RECOMMENDATION: We recommend the County identify all eligible expenses and revisions prior to reporting submissions so that accurate information is available to ensure compliance with earmarking requirements.

FINDING 2025-003 Subject: Drinking Water State Revolving Fund - Allowable Costs Agency: Environmental Protection Agency Federal Program: Drinking Water State Revolving Fund Assistance Listings Number: 66.468 Federal Award Number and Year (or Other Identifying Number): DW23148904 Pass-Through Entity: Indiana Finance Authority Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The financial management system of each nonfederal entity must provide written procedures for determining the allowability of costs in accordance with federal regulations and terms and conditions of the federal award. The policy should provide clear guidance as to what costs constitute appropriate direct and indirect charges to federal awards as well as provide for consistency in charging practices across the Town. The Town did not have written procedures for determining the allowability of costs in accordance with Subpart E of 2 CFR 200 and the terms and conditions of the federal award as required by 2 CFR 200.302(7). Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (7) Written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award." INDIANA STATE BOARD OF ACCOUNTS 19 TOWN OF CENTERVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management of the Town had not established an effective system of internal controls that would ensure providing and maintaining on file written procedures for determining allowability of costs in accordance with terms and conditions of the federal award. These policies and procedures should also be implemented in the processes involving the expenditures of federal grant awards. The Town Council was not aware of the requirement to establish allowable costs policies over federal expenditures. Effect Without written procedures for determining the allowability of costs, the Town lacks documented guidance to ensure expenditures related to federal programs are evaluated consistently and in accordance with applicable grant requirements. Questioned Costs There were no known questioned costs identified. Recommendation We recommended that the Town's management and governance establish a proper system of internal controls and develop written policies and procedures to ensure expenditures made using federal grant funds are done so in accordance with allowable costs/cost principles guidelines as established in the federal compliance supplement and other OMB guidelines and considerations. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Finding 2025-001 – Cash Disbursements and Procurement Material Weakness Condition and Context: Sound, adequate internal controls as well as HUD rules and regulations require adequate accounting and record keeping for all expenditures. During review of disbursements, nine paid invoices could not be located (including one credit card statement with supporting documentation). Criteria: 2 CFR § 200.302 requires records supporting Federal expenditures to be supported by source documentation, and 2 CFR § 200.334 requires financial records and supporting documentation related to Federal awards to be retained for the applicable retention period. Cause: The Authority did not have effective procedures to ensure that complete supporting documentation was retained and readily retrievable after disbursements were processed. Effect: Without adequate supporting documentation, the Authority cannot demonstrate that the expenditures were valid, properly authorized, accurately classified, incurred for an appropriate purposes, or allowable under applicable funding requirements. Because the deficiency affects the Authority’s ability to substantiate recorded expenditures and could allow material errors, unauthorized expenditures, or misappropriation of assets to occur without timely prevention or detection, we consider this deficiency to be a material weakness in internal control over financial reporting. Questioned Cost: Total unsupported disbursements were $64,621. Recommendation: We recommend the Authority implement required documented review and approval by an individual independent of payment preparation, maintain supporting documentation in a centralized electronic records system with routine backups, periodically review disbursement files to verify that documentation is complete and retrievable, contact the applicable vendors and attempt to obtain replacement documentation for the unsupported transactions identified during the audit, and evaluate whether any expenditures that remain unsupported should be repaid to the applicable program.

Criteria: Under 24 CFR § 905.306, Capital Fund Program grant funds are made available to a Public Housing Authority through an Annual Statement/Budget that is subject to HUD review and approval. Until HUD approval is obtained, the Authority is not authorized to obligate or expend grant funds. Additionally, 2 CFR § 200.302(b)(6) requires recipients to maintain records that adequately identify the source and application of federally funded activities, and financial reporting must accurately reflect the status of federal awards. Condition: During our audit, we noted that the Authority recorded a Capital Fund Program accounts receivable and recognized related grant revenue for a Capital Fund grant year that had not received HUD approval of the Annual Statement/Budget as of fiscal year-end. Because the budget had not been approved, the Authority was not authorized to access or obligate the funding, and the receivable and revenue recognition were premature. Context: Prior to the audit, the Authority recorded $412,400 in revenue related to 2026 CFP. As of fiscal year-end, the 2026 Capital Fund Program budget had not been approved by HUD, and the final grant award amount was unknown. Therefore, the Authority had not established an entitlement to the funding, and the related revenue and receivable were improperly recognized. Cause: Management did not have adequate procedures in place to verify HUD approval of Capital Fund budgets prior to recording related receivables and revenue in the general ledger. Effect: As a result, Capital Fund grant revenue were overstated by approximately $338,062 at fiscal year-end. This resulted in a misstatement of the Authority's financial statements and did not accurately reflect the status of available federal funding. Recommendations: We recommend that management implement procedures to verify HUD approval of Capital Fund Program Annual Statements/Budgets prior to recording related receivables and revenue. Grant revenue and receivables should only be recognized when the Authority has met all applicable requirements establishing its entitlement to the funding. Questioned Costs: $338,062. Management Views: The auditee acknowledges the deficiency in enforcing Housing Quality Standards (HQS) as highlighted in the finding. In response to this issue, the management commits to implementing a comprehensive Corrective Action Plan.

Assistance Listing Number: 93.193 Name of Federal Program: Urban Indian Health Services; COVID-19 Urban Indian Health Services Name of Federal Agency: Department of Health and Human Services Award Period: January 1, 2025 – December 31, 2025 Criteria or Specific Requirement: Per 2 CFR Part 200, non-federal entities receiving federal awards must establish and maintain written policies and procedures addressing areas including, but not limited to: procurement (§200.317–§200.327); travel costs (§200.475); methods for avoiding duplication of costs (§200.403); subrecipient monitoring (§200.332); cash management and allowable costs (§200.302, §200.305). Condition: The organization has not implemented all policies and procedures required under the Uniform Guidance. Specifically, certain written policies and procedures required by 2 CFR Part 200, such as cash management, allowability of costs, equipment management, conflict of interest, procurement, travel, compensation, and fringe benefits, were either incomplete, not formally documented, or not in place during the audit period. Cause: Due to timing constraints and a small staff size, the Council has not detailed its policies to conform with the requirements of the Uniform Guidance. Effect or Potential Effect: Without documented and implemented policies and procedures, the organization increases the risk of noncompliance with federal regulations, inconsistent application of requirements, unallowable costs being charged to federal awards, and potential questioned costs or sanctions from funding agencies. Repeat Finding: Yes, this is a repeat of Finding 2024-003. Recommendation: Management should develop, formally adopt, and implement all required Uniform Guidance policies and procedures. Policies should be documented, communicated to relevant staff, and periodically reviewed to ensure ongoing compliance. Views of Responsible Officials: Management agrees with the finding and revise its policies and procedures to meet the criteria of the Uniform Guidance.

2 CFR 1000.10 gives regulatory effect to the Department of Treasury for 2 CFR part 200.302. 2 CFR 200.302(a) states, in part, the non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.302(b)(2) further states, in part, the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosures of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. Additionally, the U.S. Department of the Treasury Coronavirus Local Fiscal Recovery Fund (SLFRF) Award Terms and Conditions provides that "Recipient agrees to comply with any reporting obligations established by Treasury as they relate to this award." The U.S. Department of the Treasury requires non0entitlement unit’s (NEU’s) that are allocated less than $10 million in SLRF Funding to submit an annual Project and Expenditure Report. This report is required to include project descriptions, obligations and expenditures including current period obligation, cumulative obligation, current period expenditure, and cumulative expenditure, and other information. Due to deficiencies in the Township's internal controls over SLFRF reporting, the Township understated current period obligations, current period expenditures, and cumulative expenditures by $304,200, $786,589, and $786,589, respectively, in the annual project and expenditure report for the period of April 1, 2024 to March 31, 2025. Additionally, the Township overstated current period obligations and current period expenditures by $2,606,935 and $1,204,345, respectively, in the annual project and expenditure report for the period of April 1, 2025 to March 31, 2026. Failure to report accurate obligation and expenditure amounts could result in the Department of Treasury taking action against the Township for failure to comply with programmatic requirements. This noncompliance also resulted in the opinion over this major federal program being qualified. The Township should implement policies and procedures to review the reports prior to submission to help ensure the reports are complete and accurate.

Condition 2025-02 The Organization did not have written procedures for determining the allowability of costs charged to Federal awards. In addition, the Organization did not have documented procurement policies and procedures governing procurement transactions under Federal awards. Criteria 2 CFR Section 200.302(b)(7) requires a recipient or subrecipient's financial management system to provide for written procedures for determining the allowability of costs in accordance with Subpart E of 2 CFR Part 200 and the terms and conditions of the Federal award. 2 CFR Section 200.318(a) requires a recipient or subrecipient to maintain and use documented procedures for procurement transactions under a Federal award. The procedures must conform to applicable Federal, State, and local laws and regulations and the standards identified in 2 CFR Sections 200.317 through 200.327. Cause The Organization had not established and implemented formal written policies and procedures to govern Federal award expenditures and procurement activities. Effect The absence of written allowable cost and procurement procedures increases the risk that Federal funds may be used for costs that are not allowable under the terms and conditions of the Federal award or that procurement transactions may not comply with applicable Federal requirements. Recommendation We recommend that the Organization establish, document, and implement written procedures for determining the allowability of costs charged to Federal awards. We also recommend that the Organization establish and implement documented procurement procedures addressing, at a minimum, procurement methods, competition requirements, contractor selection and evaluation, cost and price analysis, contractor responsibility, conflicts of interest, suspension and debarment, applicable contract provisions, procurement records, and other requirements applicable to Federal awards. Views of Responsible Officials In 2026, written procedures governing the allowability of costs charged to Federal awards and procurement activities involving Federal funds were developed, documented, and implemented. Responsibility for implementing and maintaining these procedures has been assigned to the Finance Department. The procedures address applicable Federal requirements for determining allowable costs and procurement activities and will be reviewed periodically and updated as necessary to maintain compliance with applicable Federal requirements.

FINDING 2025-004 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 2025 Compliance Requirements: Allowable Costs/Cost Principles, Period of Performance Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-003. Condition and Context As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with applicable requirements. The City had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. INDIANA STATE BOARD OF ACCOUNTS 21 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Prior to the receipt of direct COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF), all eligible entities were required to execute a Financial Assistance Agreement (Agreement), which included the Award Terms and Conditions that recipients must comply with in carrying out the objectives of their award. Per the Agreement, the City was responsible for the effective administration of the federal award, as well as the application of the sound management practices and administration of federal funds in a manner consistent with program objectives and terms and conditions of the award. Recipients may use the SLFRF funds for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act, as added by section 9901 of the American Rescue Plan Act of 2021. The SLFRF program provides substantial flexibility for each recipient to meet the local needs within four separate eligible use categories. Recipients may use the SLFRF funds to:  Respond to the COVID-19 public health emergency and its negative economic impacts.  Respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of eligible employers that have eligible workers who are performing essential work.  Provide government services, to the extent COVID-19 caused a reduction in revenues collected in the most recent full fiscal year of the recipient.  Make necessary investments in water, sewer, or broadband infrastructure. The City elected to receive the standard revenue loss allowance, allowing it to claim its total SLFRF funds allocation of $3,821,386 as revenue loss to use for government services. The allocated funds may only be used to cover costs incurred from the period beginning on March 3, 2021, and ending on December 31, 2024. Obligations for costs incurred are required to be liquidated no later than December 31, 2026. During the audit period, the City identified that it had not properly obligated its remaining unspent SLFRF funds by the required deadline. Based on guidance from its financial consultant, the City reevaluated activity recorded in its Coronavirus State and Local Fi fund and adjusted the fund to include health insurance payments that had previously been made from another City fund. These payments related to a contractual agreement executed in July 2024 for coverage from August 2024 through July 2025. Health insurance costs incurred and paid between January and July 2025 totaled $591,563. Of the total SLFRF funds balance, the City had $77,706 in funds that were properly obligated by December 31, 2024, but remained unspent. These obligated funds were reclassified to cover $77,706 of the $591,563 in health insurance costs incurred between January and July 2025, leaving $513,857 of those costs without a corresponding obligation as of the December 31, 2024 deadline. In addition, the City incurred and paid health insurance costs totaling $619,875 for the period August through December 2025, which occurred after the contractual coverage period ended. These costs also were not obligated by December 31, 2024. As a result, a total of $1,133,732 in SLFRF funds expenditures were not obligated within the required timeframe and were not paid within the period of performance. Accordingly, these costs do not meet program requirements and are considered unallowable. The City also did not have written procedures for determining the allowability of costs in accordance with subpart E of C CFR 200. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 22 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.300(b) states in part: "The non-Federal entity is responsible for complying with all requirements of the Federal award. . . ." 2 CFR 200.302 states: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. . . . (7) Written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award." INDIANA STATE BOARD OF ACCOUNTS 23 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (g) Be adequately documented. . . ." 31 CFR 35.5 states in part: "(a) . . . A recipient may only use funds for the purposes enumerated in § 35.6 (b) through (f) to cover costs incurred during the period beginning March 3, 2021, and ending December 31, 2024 . . . (c) . . . A recipient must return any funds that have not been obligated by December 31, 2024, pursuant to orders placed for property and services or entry into contracts, subawards, and similar transactions that require payment other than funds in the amount reported to Treasury by April 30, 2024, as the estimate of funds that the recipient will expend to comply with a requirement under federal law or regulation or provision of the award terms and conditions to which a recipient becomes subject as a result of receiving or expending funds. A recipient must return funds obligated for a use . . . by December 31, 2024, but not expended by December 31, 2026. . . ." Cause A proper system of internal controls over the SLFRF funds expenditures was not designed by management of the City to ensure the SLFRF funds were being used appropriately. The City did not have policies and procedures in place to ensure that its SLFRF funds were properly obligated by the December 31, 2024 deadline. Effect The lack of an effective internal control system enabled material noncompliance with the Allowable Costs/Cost Principles and Period of Performance compliance requirements to occur and remain undetected. Payments made from the SLFRF funds which were not obligated as of December 31, 2024, as required by the federal grant funding resulted in payments not made in compliance with the period of performance, and, therefore, were not allowable costs. Questioned Costs We identified $1,133,732 in known questioned costs as noted above in the Condition and Context. Recommendation We recommended that management of the City establish a proper system of internal controls and develop policies and procedures to ensure that expenditures of federal awards are allowable costs and occur within the period of performance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-006 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 2025 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-005. INDIANA STATE BOARD OF ACCOUNTS 26 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with applicable requirements. The City had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. Recipients are required to submit an initial interim report and quarterly or annually submit Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates are based upon the type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The City was classified as a city with a population below 250,000 residents that was allocated less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF). As such, an annual P&E report, covering one calendar year from April 1, 2024 to March 31, 2025, was prepared and submitted by the Clerk-Treasurer to the Treasury by April 30, 2025. The P&E report data to be submitted included, but was not limited to, current period and total cumulative obligations and current period and total cumulative expenditures. We were unable to trace the annual P&E report to the City's records. The errors identified were as follows:  Total cumulative obligations were overstated by $1,133,732.  Current period obligations were understated by $97,891.  Current period expenditures were understated by $41,094.  Total cumulative expenditures were understated by $2,696. In addition, the P&E report required obligations and expenditures to be reported by project. The City completed the report utilizing total amounts for all projects. There were 11 projects appropriated using the SLFRF funds award. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 27 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds, . . ." Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds, page 13, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." Cause The City officials appropriated the entire SLFRF award funds in May 2022 and reported the entire award amount as obligated in the P&E reports completed in 2023, 2024, and 2025. City officials were not aware that appropriating the funds alone does not constitute obligations of the award. Additionally, correcting adjustments made after the report was submitted partially contributed to the differences noted in expenditures. City officials were also not aware that obligations and expenditures could not be reported in total but should be reported by project. Effect Without a proper system of internal controls in place that operated effectively, the City did not file an accurate annual P&E report as required under the federal award. As such, the City did not accurately report current period obligations, current period expenditures, cumulative obligations, and cumulative expenditures when filing the P&E report for the period April 1, 2024 to March 31, 2025. As a result, material noncompliance occurred and remained undetected. Noncompliance with the provisions of federal statues, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a proper system of internal controls and develop and implement reporting policies and procedures to ensure that all required reports are completed and accurate when submitted. INDIANA STATE BOARD OF ACCOUNTS 28 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 29

2 CFR 1000.10 provides that, except for the deviations set forth elsewhere in this Part, the Department of Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards set forth at 2 CFR part 200. 2 CFR 200.302(b)(2) further states, in part, the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosures of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. 31 CFR § 35.4(c) requires, in part, that during the period of performance, recipients shall provide periodic reports providing detailed accounting of the uses of funds. Additionally, the U.S. Department of the Treasury Coronavirus Local Fiscal Recovery Fund (SLFRF) Award Terms and Conditions, Section 3, provides that "Recipient agrees to comply with any reporting obligations established by Treasury as they relate to this award." The U.S. Department of the Treasury requires non-entitlement unit’s (NEU’s) that are allocated less than $10 million in SLRF Funding to submit an annual Project and Expenditure Report. This report is required to include project descriptions, obligations and expenditures including current period obligation, cumulative obligation, current period expenditure, and cumulative expenditure, and other information. Due to deficiencies in the City's internal controls over SLFRF reporting, the City understated current period obligations by $82,787 in the annual project and expenditure report for the period of April 1, 2024 to March 31, 2025. Additionally, the City overstated current period obligations by $1,399,323 and understated current period expenditures by $1,389,245 in the annual project and expenditure report for the period of April 1, 2025 to March 31, 2026. Failure to prepare and submit accurate reports for all required data elements, including obligation and expenditure amounts, could result in the Department of Treasury taking action against the City for failure to comply with programmatic requirements, such as eliminating or reducing future grant funding or imposing penalties. This noncompliance also resulted in the opinion over this major federal program being qualified. The City should establish and implement policies and procedures to review the reports prior to submission to ensure the reports are accurate, current and complete.

Criteria – Federal regulations (2 CFR 200.302 and 2 CFR 200.303) require recipients of federal awards to maintain effective internal controls over federal programs and financial transactions to provide reasonable assurance that expenditures are properly authorized, allowable, and in compliance with applicable program requirements. Sound internal control practices include independent review and approval of invoices prior to payment and recording. Condition – During testing of expenditures charged to the federal program, it was noted that invoices were processed and recorded by the accounting staff without documented evidence of review and approval by an individual independent of the recording function. The Organization did not maintain documentation demonstrating supervisory approval of invoices prior to payment. Context and Cause – The Organization has not implemented a formal policy requiring documented review and approval of invoices by personnel independent of the accounting function responsible for recording transactions. Effect of Condition – Without documented independent approval, there is an increased risk that unallowable, unsupported, inaccurate, or unauthorized expenditures could be charged to the federal program without timely detection. Questioned Cost – None. Recommendation – Management should establish and implement procedures requiring all invoices to be reviewed and approved by an authorized individual independent of the employee responsible for recording the transaction. Evidence of approval should be documented and retained with the supporting invoice documentation. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding and will implement procedures requiring documented supervisory review and approval of invoices prior to payment and recording. Documentation of approvals will be retained with the payment records to strengthen internal controls over federal expenditures.

Criteria – Pursuant to 2 CFR 200.302 and 2 CFR 200.303, recipients of federal awards are required to establish and maintain effective internal controls over federal funds. Appropriate internal controls over cash management include independent review and approval of cash draw requests to ensure drawdowns are accurate, supported, and limited to immediate cash needs. Condition – During our testing of cash draw requests, we noted the Organization did not maintain documented evidence of an independent review and approval of cash draw requests. Cash draw requests were prepared and submitted by the accounting employee responsible for recording the related accounting transactions, with no documented review by another authorized individual. Context and Cause – The Organization has not established procedures requiring documented independent review and approval of cash draw requests before submission. Effect of Condition – The lack of independent review increases the risk that cash draw requests may contain errors, unsupported amounts, or drawdowns that do not comply with federal cash management requirements. Such errors may not be detected in a timely manner. Questioned Cost – None. Recommendation – Management should implement procedures requiring all cash draw requests to be reviewed and approved by an individual independent of the employee preparing and recording the transaction. Evidence of the review and approval should be documented and retained with the draw request documentation. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding and will implement procedures requiring documented supervisory review and approval of all cash draw requests prior to submission. Supporting documentation and evidence of approval will be retained to demonstrate compliance with established internal control procedures.

Assistance Listing Number: 93.193 Name of Federal Program: Urban Indian Health Services; COVID-19 Urban Indian Health Services Name of Federal Agency: Department of Health and Human Services Award Period: January 1, 2025 – December 31, 2025 Criteria or Specific Requirement: Per 2 CFR Part 200, non-federal entities receiving federal awards must establish and maintain written policies and procedures addressing areas including, but not limited to: procurement (§200.317–§200.327); travel costs (§200.475); methods for avoiding duplication of costs (§200.403); subrecipient monitoring (§200.332); cash management and allowable costs (§200.302, §200.305). Condition: The organization has not implemented all policies and procedures required under the Uniform Guidance. Specifically, certain written policies and procedures required by 2 CFR Part 200, such as cash management, allowability of costs, equipment management, conflict of interest, procurement, travel, compensation, and fringe benefits, were either incomplete, not formally documented, or not in place during the audit period. Cause: Due to timing constraints and a small staff size, the Council has not detailed its policies to conform with the requirements of the Uniform Guidance. Effect or Potential Effect: Without documented and implemented policies and procedures, the organization increases the risk of noncompliance with federal regulations, inconsistent application of requirements, unallowable costs being charged to federal awards, and potential questioned costs or sanctions from funding agencies. Repeat Finding: Yes, this is a repeat of Finding 2024-003. Recommendation: Management should develop, formally adopt, and implement all required Uniform Guidance policies and procedures. Policies should be documented, communicated to relevant staff, and periodically reviewed to ensure ongoing compliance. Views of Responsible Officials: Management agrees with the finding and revise its policies and procedures to meet the criteria of the Uniform Guidance.

Finding 2025-001 Identification of the federal program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Noncompliance over policies Criteria: 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition: The Cooperative has not developed written procedures for determining the allowability of costs. Cause: Management did not have written procedures for determining the allowability of costs. Effect: Unallowable costs could be charged to the program. Questioned costs: None Recommendations: Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of responsible officials: Management understands and agrees with the finding and has developed written procedures to be used for any future grants.

Finding 2025-002 Identification of the federal program: 90.100 – Denali Commission Program Noncompliance over policies Criteria: 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition: The Association has not developed written procedures for determining the allowability of costs. Cause: Management did not have written procedures for determining the allowability of costs. Effect: Unallowable costs could be charged to the program. Questioned Costs: None Recommendations: Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of responsible officials: Management concurs with this audit finding and will take corrective action by developing a written policy for the determination and segregation of unallowable costs from allowable costs. Informal unwritten procedures have been taken in the invoice review process prior to payment to ensure unallowable costs are separated from allowable costs, but a written policy has not been previously developed.

2025-001 Unsupported Capital Fund Accounts Receivable and Related Excess Federal Cash Drawdown Public Housing Capital Fund Program, ALN 14.872 Significant Deficiency in Internal Controls Other Matter to be Reported Under the Uniform Guidance Condition: During the testing of Capital Fund Program drawdowns, the auditor identified two drawdowns for costs that had not been paid. The first drawdown related to revenue recorded with a due from HUD balance in the prior year. The Authority drew down the funds to make a payment to reduce the net pension liability, but the payment was never made. The second drawdown was due to the Authority receiving a duplicate invoice that had not been paid; the funds were drawn down before the invoice was identified as a duplicate. As a result, the Capital Funds held in the Authority’s bank accounts were not eligible for payment and are due back to HUD. The unsupported prior year due from HUD amount also resulted in a correction of error in the current-year financial statements. Context: The auditor haphazardly selected 19 drawdowns, representing approximately 70% of total Capital Fund drawdowns, from the population, which we consider to be a statistically valid sample size. The auditor reviewed the drawdowns and supporting documentation to ensure proper procedures are being followed and that the Authority is in compliance with HUD requirements. Criteria: Per 2 CFR 200.302(b)(6), the Authority is required to maintain financial management systems and written procedures that minimize the time between receipt of federal funds and disbursement for program purposes. Advance draws must be limited to the minimum amounts needed and timed to the Authority’s actual, immediate cash requirements. HUD regulations require the Authority maintain complete records of Capital Fund Program obligations and expenditures per 24 CFR 905.326. Cause: The Authority’s controls were not effective to prevent or detect the missed payment. The process for drawdown funds prior to payment did not allow for the controls to detect the duplicate invoice until the packet moved to the accounts payable process. Effect: The Authority recorded an unsupported Capital Fund accounts receivable and drew federal funds for costs that had not been paid. A material correction of error was recorded in the current year financial statements, and the Authority owes the related funds back to HUD. Questioned Costs: $0, the Authority did not misspend any funds related to these identified issues. The excessive draws totaled $293,151, representing the Capital Fund amounts drawn for the unpaid prior year accounts receivable balance and duplicate invoice. The Authority is required to return these funds and any interest earned on them to HUD. Auditor’s Recommendations: The Authority should continue to develop and implement internal controls over grant drawdowns and financial reporting to ensure reporting will be accurate and timely and that variances between expected and actual outcomes are investigated.

Federal Agency: U.S. Department of Energy Federal Program: Energy Efficiency and Renewable Energy Information Dissemination, Outreach, Training and Technical Analysis/Assistance Assistance Listing Number: 81.117 Federal Award Identification Number(s) and Federal Award Year(s): DE-EE0009951 (2022), DE-EE0011801 (2025), DE-EE0011383 (2024) Pass-Through Entity: Not applicable—direct award Compliance Requirement: L—Reporting Criteria or Specific Requirements: Under 2 CFR §200.302(b)(2)–(3), the Organization’s financial management system must provide accurate, current, and complete financial reporting and maintain records supported by source documentation. Additionally, 2 CFR §200.303(a) requires effective internal control over Federal awards. Controls over financial reporting should provide reasonable assurance that reports agree to supporting accounting records and that differences are identified and resolved. Documentation should be retained to demonstrate the reconciliation and review performed. Condition: For the six SF-425 financial reports selected for testing, the Organization did not retain sufficient documentation demonstrating reconciliation of reported amounts to the underlying accounting records or the substantive review of those reconciliations. We corroborated segregation of duties between preparation and review and obtained evidence of approval and timely submission. However, the approval evidence did not demonstrate the procedures performed to verify the completeness and accuracy of the reported amounts. Our compliance testing did not identify reportable noncompliance with the applicable reporting requirements. Cause: The Organization’s reporting procedures did not ensure that supporting reconciliations and evidence of the scope of supervisory review were consistently documented and retained. Effect: Insufficient documentation of reconciliations and supervisory review limits the Organization’s ability to demonstrate that reporting controls operated effectively and increases the risk that inaccurate or unsupported amounts could be reported without timely detection and correction. Perspective Information: We selected six quarterly SF-425 financial reports covering three awards under ALN 81.117. The documentation deficiency described above affected all six selected reports. The selections included two reports each for SolSmart 2.0, Advancing Equity, and SEAC 2.0. Questioned Costs: None. Repeat Finding: None. Recommendations: We recommend that management retain a complete supporting package for each financial report, including the accounting records used at the time of preparation, a reconciliation to the amounts reported, and explanations of reconciling items. A knowledgeable individual other than the preparer should review the report and supporting reconciliation for completeness and accuracy and document the review and resolution of any differences. Management should also evaluate subsequent accounting adjustments to determine whether previously submitted reports require correction under the applicable reporting requirements. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See attached corrective action plan.

2 C.F.R. Subpart E § 200.302(b)(2) requires that entities must present accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. 31 CFR § 35.4(c) further states in part that during the period of performance, recipients shall provide periodic reports providing detailed accounting of the uses of funds. The State and Local Fiscal Recovery Funds (SLFRF) annual Project and Expenditure Report requires quantifiable objective criteria containing reported obligations and expenditures for the following Key Line Items: a. Current period obligation b. Cumulative obligation c. Current period expenditure d. Cumulative expenditure The Current Period Expenditures for the Health Department / Records Center / Coroner / GIG Loan on the County's submitted SLFRF Project and Expenditure Report for the grant period ending December 31, 2025 were overstated by $1,059,739. This was due to expenditures paid for using interest revenue were improperly reported as SLFRF grant expenditures in quarter 4. All other amounts were properly reported. Failure to complete and submit accurate reports for required data elements could result in the loss or reduction of future grant funding or penalties imposed by the federal agency. The County should establish and implement procedures to review reports submitted to the federal grantor before submission to ensure that all amounts are reported correctly.

2 CFR 200 outlines the following policies required for a County spending Coronavirus State and Local Fiscal Recovery Funds: • 2 CFR 200.302(b)(7) for determining the allowability of costs in accordance with Subpart E-Cost Principles; • 2 CFR 200.430 for allowability of compensation costs; • 2 CFR 200.318(c)(2) for organizational conflicts of interest; • 2 CFR 200.320(b)(2) for selection and awarding of contracts for competitive proposals; and • 2 CFR 200.319(d) for minimum evaluation criteria for bids and proposals During testing we noted that the County Commissioner’s department did not have sufficient written policies addressing the above requirements. Failure to adopt and implement policies could lead to noncompliance with federal requirements. We recommend the County approve and implement the above policies to ensure compliance with federal requirements.

2 CFR 200 outlines the following policies required for a County spending for Foster Care Title IV-E funds: • 2 CFR 200.302(b)(7) for determining the allowability of costs in accordance with Subpart E-Cost Principles; During testing we noted that the County Children Services department did not have sufficient written policies addressing the above requirement. Failure to adopt and implement policies could lead to noncompliance with federal requirements. We recommend the County approve and implement the above policies to ensure compliance with federal requirements.

Criteria: Under 2 CFR § 200.305(b) of the Uniform Guidance, advance payments to a non-federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-federal entity in carrying out the purpose of the approved program. Under 2 CFR § 200.302(b)(6), the entity must maintain written procedures to implement these payment requirements. Additionally, 2 CFR § 200.346 provides that any federal funds paid in excess of the amount the entity is entitled to under the award constitute a debt to the federal government, and 2 CFR § 200.344 requires the entity to promptly refund any balance of unobligated cash advanced that it is not authorized to retain. Condition: During our testing of cash management for the Part C Capacity Development award, we noted that the Institution requested an advance of $15,000 from the federal awarding agency for the purchase of equipment. The equipment was ultimately acquired at a cost lower than the amount requested. As a result, the $15,000 advanced remained undisbursed as of December 31, 2025. At the time of our audit, the Institution had not returned the excess funds to the federal awarding agency. Effect: The Institution held federal cash in excess of its immediate needs, which is not in compliance with the cash management requirements of the Uniform Guidance. The undisbursed balance represents a liability to the federal government and may generate interest that must be remitted. Failure to return these funds could result in the federal agency disallowing costs or requiring repayment, imposing other remedies for noncompliance under 2 CFR § 200.339, potentially jeopardizing future funding Cause: The Institution does not have adequate policies and procedures to monitor federal cash advances against actual expenditures, nor to identify and return excess advanced funds on a timely basis. In addition, there was no review process to reconcile drawdowns to the actual cost of the items purchased once the transaction was completed. Recommendations: We recommend that the Institution take the following actions: 1. Return of Excess Funds: Promptly return the undisbursed $15,000 to HRSA through the Payment Management System (PMS) in accordance with the agency’s refund procedures, and determine whether any interest earned on the advance must be remitted under 2 CFR § 200.305(b)(9). 2. Drawdown Procedures: Develop and implement written cash management procedures to ensure that advance requests are limited to immediate cash needs and are supported by current quotes, purchase orders or invoices. 3. Reconciliation and Review: Establish a periodic reconciliation, at least monthly, of federal drawdowns against actual disbursements for each award, so that any excess cash is identified and either applied to allowable costs within the required time frame or returned to the awarding agency. 4. Monitoring and Oversight: Assign responsibility for monitoring federal cash balances to a designated officer, with review by senior management, to ensure timely compliance.

Finding number: 2025-001 Federal Agency: U.S. Department of Agriculture Federal program: 10.727 – Inflation Reduction Act Urban & Community Forestry Program Compliance requirements: C. Cash Management; L. Reporting Type of finding: Cash Management - Instance of Noncompliance; Reporting - Significant deficiency Criteria: Cash Management: 2 CFR 200.305(b) requires that advance payments to a non-Federal entity be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. Section E of the award agreement (Advance and Reimbursable Payments) states: "Advance payments must not exceed the minimum amount needed or no more than is needed for a 30-day period, whichever is less. If the Recipient receives an advance payment and subsequently requests an advance or reimbursement payment, then the request must clearly demonstrate that the previously advanced funds have been fully expended…" Reporting: 2 CFR 200.328 and the terms of the award require the submission of periodic financial reports. 2 CFR 200.302(b) requires the non-Federal Organization financial management system to provide for accurate, current, and complete disclosure of the financial results of each Federal award in accordance with the reporting requirements. Condition: Cash Management: The Entity submitted a Request for Advance or Reimbursement (SF-270) for $91,453, the total remaining balance of certain lease agreements charged to the award. Lease payments to the lessors continued on a monthly basis. Of the amount received: • $5,175, three monthly payments, fell within the 30-day cash needs allowed under the award. • $86,278 exceeded the Organization immediate cash needs. • During the year, $34,635 of the excess was used to cover eight monthly lease payments made after the 30-day period. • As of December 31, 2025, $51,643 remained unexpended and was recorded as deferred revenues. Reporting: The semiannual financial reports submitted to the Federal agency for the periods ended December 31, 2025 reported the $91,453 received as cash disbursed, rather than the actual disbursements. As a result, reported cash disbursements were overstated by $51,643. Context: During the year ended December 31, 2025, the Entity submitted 18 payment requests totaling $1,347,437. We selected a nonstatistical sample of 4 payment requests (2 reimbursements and 2 advances) totaling $458,699. The sample was not intended to be, and was not, a statistically valid sample. Cash Management: The condition was noted in 1 of the 4 payment requests tested. The exception was in 1 of the 2 reimbursement requests tested, which included $91,453 for lease payments that had not been made at the time of the request. After receiving these funds, the Entity did not request additional funds for the vehicle leases and has applied the advanced funds to the monthly lease payments. Reporting: We examined the 2 semiannual financial reports submitted during the year. The condition was noted in 2 of the 2 reports examined. Cause: The Organization requested the full amount of a valid lease obligation in advance due to uncertainty surrounding the potential termination or interruption of the federally funded program. The advance exceeded the Organization's immediate cash requirements. Additionally, in its semiannual expenditure report, the Organization reported the full lease amount as cash disbursed although only the periodic lease payments had actually been made. The reporting process did not include an adequate reconciliation of reported cash disbursements to actual payments. Cash Management: The Organization payment request process does not include a review to verify that costs included in reimbursement requests have been paid, that advances are limited to 30-day cash needs, and that prior advances have been fully expended before additional funds are requested. Reporting: The Organization's financial reporting process relies on drawdown records rather than on actual disbursements recorded in the accounting records, and reports are not reconciled to the general ledger before submission. Effect: The Organization held Federal funds in excess of its immediate cash needs for most of the year, contrary to 2 CFR 200.305(b) and the terms of the award, which limited the Federal government's use of those funds. The semiannual financial reports provided the Federal agency with inaccurate information on award disbursements, affecting its ability to monitor the award. Questioned cost: None Identification as a repeat finding: Not applicable Recommendation: We recommend that the Organization: 1. Contact the Forest Service to determine whether the unexpended advanced funds may be returned or may be applied to future cash needs and document the determination. 2. Establish a review and approval procedure, performed before each SF-270 is submitted, to verify that the amount requested does not exceed 30-day cash needs and that previously advanced funds have been fully expended. 3. Correct the affected semiannual financial reports and prepare future reports based on actual disbursements recorded in the accounting records, with an independent review before submission. Views of responsible officials and planned corrective action: Management concurs with the findings. See Corrective Action Plan.

Federal Program: U.S. Department of Commerce, Regional Fishery Management Councils CFDA 11.441 Criteria: WPRFMC is required to submit Form SF-425 (Federal Financial Report) for each of its federal awards on a semi-annual basis for the periods ending March 31 and September 30. These reports are due no later than 30 calendar days following the end of each reporting period. Internal controls should provide for these reports to contain accurate, current, and complete financial results (2 CFR §200.302(b)(2)). Condition: For 8 of 18 semiannual Federal Financial Reports tested, the reported cash disbursements understated expenditures recorded in the general ledger. The discrepancies range from understatements of $70 to $45,496. Cause: Internal controls over the recording and classification of expenditures in the general ledger were inadequate to permit the accurate reporting of expenditures within the required 30-day period. Effect or Potential Effect: Financial reports provided to the Department of Commerce could be materially misstated. Identification as a Repeat Finding: None. Recommendation: We recommend WPRFMC improve the necessary internal controls to ensure expenditures are timely and accurately recorded and classified in the general ledger. These controls should provide for the timely reconciliation of cash disbursements reported on the Federal Financial Reports to expenditures recorded for each federal award in the general ledger.

2 CFR § 1000.10 gives regulatory effect to Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, set forth at 2 CFR part 200 for the Department of Treasury. 2 CFR § 200.302 requires, in part, recipients’ records documenting compliance to be sufficient to permit the preparation of reports required by the terms and conditions of the Federal award and Federal statutes. § 200.302 also requires recipients, in part, to provide accurate, current, and complete disclosure of financial results of each Federal award in accordance with the reporting requirements in § 200.329. 2 CFR § 200.329(c)(1) states that non-Federal entities must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Reports submitted quarterly must be due no later than 30 calendar days after the reporting period. 31 CFR § 35.4(c) requires recipients, in part, during the period of performance, to provide the Secretary of the U.S. Department of Treasury periodic reports providing detailed accounting of the uses of funds, modifications to a State or Territory's tax revenue sources, and such other information as the Secretary may require for the administration of this section. The U.S. Department of Treasury provided supplementary information on reporting requirements in its interim final rule for State and Local Fiscal Recovery Funds for 31 CFR Part 35 and provided further guidance in its Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guide. The County submitted the required SLFRF Project and Expenditure Reports; however possibly due to the failure of an existing control(s), the expenditures reported on four out of the four (one hundred percent) did not agree with the accounting records with differences ranging from ($72,289) to $2,822,608. Reporting errors could adversely affect future grant awards. An additional control(s) and/or additional procedure(s) should be implemented to help ensure accuracy of the reports.

Finding 2025-003: Allowable Costs and Internal Controls Identification of the Federal Program - US Department of Health and Human Services 93.778 Grants to States for Medicaid Criteria - In accordance with 2 CFR 200.302(a) all recipient and subrecipient financial management systems must be sufficient to permit tracking expenditures to establish that funds have been used in accordance with Federal statues, regulations, and the terms and conditions of the Federal award. 2 CFR 200.302(b)(3) further clarifies that records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. Condition - We noted during our testing of non-payroll direct cost that 8 out of 16 expenditures, totaling $4,907, did not have adequate supporting documentation, and were charged to the respective grants based on budgeted costs and allocations. These exceptions included 2 sample selections, totaling $4,345, that were submitted for reimbursement under another federal grant. The total federal portion of the invoice charged under another grant in 2025 was $20,908. Cause - Due to a lack of formal internal control policies and procedures, the Organization did not maintain sufficient and appropriate evidence of non-payroll expenditures incurred and applied to the program. Effect - Charges to Federal awards for non-payroll related costs may not reflect actual expenditures incurred and allocated to specific programs, even though the charges are not in excess of amounts approved for the grant period. Questioned Costs Known questioned costs: $21,371 Likely questioned costs: $25,753 Context - We selected 16 non-payroll transactions charged to the federal program to test controls over allowable costs. Total federal non-payroll costs under these awards total $47,124. We noted during our testing of non-payroll direct cost that 8 out of 16 expenditures, totaling $4,807, did not have adequate supporting documentation, and were charged to the respective grants based on budgeted costs and allocations. For 4 of the 8 exceptions noted, totaling $150, we noted the Organization was unable to demonstrate that the invoice provided related to the sample selection. For 2 out of the 8 exceptions noted, totaling $313, we noted the Organization was unable to provide documentation supporting the expenditure was incurred. For 2 out of the 8 exceptions noted, totaling $4,345, the Organization provided an invoice that was reimbursed by another federal grant. The total federal portion of the invoice charged under another grant in 2025 was $20,908. Repeat Finding – No Recommendation - We recommend the Organization implement internal controls and policies to ensure actual non-payroll expenditures charged to each federal award are properly tracked and supported. This may include maintaining a detailed listing of invoices and other supporting documentation that substantiates the actual allowable costs charged to each award. Management should review and verify this documentation for accuracy and completeness on a timely basis. View of Responsible Officials - Management will strengthen controls over non-payroll expenditures charged to federal awards to ensure costs are based on actual expenditures, adequate support, allowability under the applicable award, and not charged to or reimbursed by another federal award.

Program Income Federal Department – U.S. Department of Health and Human Services Pass-through Chicago Department of Public Health and AIDS Foundation of Chicago Federal Award Identification Number(s) and Year(s): H8900008 and 2025 H89HA00008 and 2023 HIV Emergency Relief Program Grants, Federal Assistance Listing #93.914 County Department –Cook County Health (CCH) Finding 2025 – 003 CRITERIA Per the U.S Department of Health and Human Services, Health Resources & Services Administration (HRSA) Policy Clarification Notice # 15-03, Clarification Regarding the Ryan White HIV/AIDS Program (RWHAP) and Program Income, Grant Policy Update 9/15/2025, states that in the context of the RWHAP, program income is most commonly generated by recipients and subrecipients as a result of charging for services and receiving payment from third-party reimbursement. Under the uniform administrative requirements, to the extent available, recipients and subrecipients must disburse funds available from program income, rebates, refunds, contract settlements, audit recoveries and interest earned on such funds before requesting additional cash payments. Also, recipients are required to track and account for all program income in accordance with 2 CFR § 200.302(b)(3). Additionally, it is the responsibility of the recipient to monitor and track program income earned by subrecipients. Subrecipients should retain program income for “additive” use within their own programs. 2 CFR Part 200.307, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Program income. (a) General. The recipient or subrecipient is encouraged to earn income to defray program costs when appropriate. Program income must be used for the original purpose of the Federal award. Program income earned during the period of performance may only be used for costs incurred during the period of performance or allowable closeout costs. See § 200.472(b). Program income must be expended prior to requesting additional Federal funds. Program income exceeding amounts specified in the Federal award may be added to or deducted from the total allowable costs in accordance with the terms and conditions of the Federal award. CONDITION During the current audit period, Cook County Health (CCH) did not comply with federal regulations regarding the use and reporting of program income as it relates to funds awarded through the RWHAP. CAUSE Based on discussions with management, the HIV grants transitioned to CCH from an external organization in July 2025. Award amounts were granted in multiple phases, requiring four budget revisions, with the final revision approved in December 2025. The contractual period covered March 2025 through December 2025. During the transition period, CCH lacked formal operational procedures to identify, record, and track program income, as well as several operational and administrative challenges which contributed to this issue. EFFECT Failure to adequately track and report program income is a violation of Federal regulations and could result in the return of funds to the Federal government. QUESTIONED COSTS None. CONTEXT Based on initial discussions with CCH management, the RWHAP did not generate any program income during the period from December 1, 2024 to November 30, 2025. However, during our review of patient’s eligibility documentation, we noted certain participants insurance were billed for services performed under the federal program, thereby representing payments received from third-party reimbursements. Consequently, CCH was able to provide a patient payment report showing HIV diagnosis via its Invision and CPA Cerner systems which included $2,937,999 in total payments and $47,784 in total patient payments received during the period. We noted this information was not reported as program income to the two grantor agencies during the period ended November 30, 2025. IDENTIFICATION OF REPEATED FINDINGS None. RECOMMENDATION We recommend that CCH implement written policies and procedures to ensure that program income is tracked and monitored to ensure accurate reporting to its grantor agencies. Also, procedures should be in place to properly allocate all program income to the RWHAP and to ensure that future funds disbursed from available program income are utilized for eligible program activities prior to requesting any additional reimbursement (cash payments) from the grantor agencies as required by 2 CFR Part 200.307. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The County agrees with the finding and recommendation. The County’s corrective action plan is on pages 46-47.

Condition: The Board has written fiscal policies but they do not meet the financial management system requirements established in the regulations. Criteria: 2 CFR 200.302 establishes the requirements of a financial management system adequate to ensure compliance with federal regulations. This system must include written procedures to implement requirements for payment methods and determine the allowability of costs in accordance with subpart E. Cause and Effect: The Board has processes and procedures in place to administer grant funds but written policies do not contain compliance requirements. The Board is not in compliance with financial management system requirements. Recommendation: The Board should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliance. Views of Management and Planned Corrective Action: See Corrective Action Plan included at the end of the report.

Condition: The City has not adopted written policies or procedures regarding the determination of allowable costs in accordance with Uniform Guidance. Criteria: CFR 200.302(b)(7) Cause of Condition: Unfamiliarity with requirements stated in 2 CFR 200 of Uniform Guidance. Effect of Condition: Effect is a state of non-compliance which may impact future grant awards or failure to identify and reject un-allowed costs charged to grant programs. Recommendation: Adopt policies and procedures to become compliant with Uniform Guidance.

2025-003 – Written Policies Year Initially Occurring: 2025 CONDITION: The Town does not have certain written policies required by the Uniform Guidance. CRITERIA: 2 CFR 200.302 (b) (6) states, in part, “written procedures to implement the requirements of section 200.305” and (7) states, in part, "Written procedures for determining the allowability of costs…” CAUSE: The condition results from the failure to design and implement policies and procedures which are in accordance with the Uniform Administrative Requirements. EFFECT: The Town is not in compliance with the Uniform Administrative Requirements. RECOMMENDATION: We recommend that the Town adopt written policies required under the Uniform Guidance.

Payroll Federal Agency: Department of Housing and Urban Development Federal Program Name: Community Development Block Grants Cluster Entitlements/Special Purpose Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-23-UN-12-0002 and B-25-UU-12-0003 Award Period: November 11, 2023 – November 20, 2029 and January 16, 2025 – June 6, 2031 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria: 2 CFR 200.302(b)(3) states that the recipient must maintain records that sufficiently identify the amount, source, and expenditure of funds for federally-funded activities. These records must contain information pertaining to federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. 2CFR 200.403 states that costs must be adequately documented. 2 CFR section 200.303(a) states a non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: There were two conditions present: • One employee had duplicate hours for three pay periods. • Two employees had incorrect pay rates used for the calculation of allowable payroll costs for seven pay periods. Questioned costs: • $3,974 - B-23-UN-12-0002 • $81 - B-25-UU-12-0003 Context: Forty employee pay periods were selected for testing. • One employee had a total of twenty-four hours duplicated over four pay periods. • Two employees had incorrect pay rates across seven pay periods. Cause: Allowable payroll costs are performed using a manual process. While the calculation was reviewed and approved, a cross check between the KRONOS report and the allowable cost calculation was not performed. Allowable payroll costs are calculated using pay rates at end of the quarter. When there are no changes during the quarter, this methodology results in an accurate calculation. However, if a pay rate changes during the quarter, this methodology results in a misstatement for the calculation of allowable payroll costs. Effect: Using incorrect hours or pay rates to calculate wages recorded quarterly can result in overcharging grant and submitting inaccurate expenditures to the grant which may lead to non-compliance with grant requirements. Repeat Finding: No Recommendation: It is recommended the County modify its procedure to include: • Improve reconciliation procedures to verify hours per pay period recorded in quarterly spreadsheet agrees to hours recorded in the KRONOS system. • Record grant wages using the pay rate at the beginning of the quarter if recorded on a quarterly basis or use pay rates for each pay period if recorded on a pay period basis. Views of responsible official and planned corrective actions: Management concurs with the auditor’s recommendations. Action taken in response to finding: • Document the audit process in a formalized SOP and cross train all reviewers from SRGA Admin, Budget, and Fiscal. • Create a checklist to accompany each personnel draw to ensure that after rates are verified that SRGA Admin certifies that no RPAs or pay adjustments were approved during the pay periods reported and if there were, a second pay rate is entered for that draw and hours are split according to accurate rates/dates. • Document the cure process in the SOP to ensure that any errors found after the fact will be corrected with HUD to remain compliant and to ensure that no funds drawn in error are retained. • Include a date verification process prior to submission of the draw to ensure that staff did not duplicate any dates. This verification will be an audit of the Time Tracking Review completed by Admin staff. Ongoing training and coaching will be administered should duplicate entries be found on final draw reports. • Audit of all personnel draws for both allocations of CDBG-DR grants will be completed using the new SOP and verification tools before the end of fiscal year 2026.

Finding 2025-001: Review of Compliance Matrices and Narratives - Special Tests and Provisions Federal Program Name: National Railroad Passenger Corporation Grants Assistance Listing No. 20.315 Federal Award Nos.: 69A36525520030AMTDC 69A36525520040AMTDC 69A36524520000AMTDC 69A36523504100AMTDC 69A36523504110AMTDC FR-AMT-0025-22 FR-AMT-0026-22 FR-AMT-0028-22 FR-AMT-0027-22 Federal Agency: Department of Transportation, Federal Railroad Administration Criteria 1. The code of federal regulations – 2 CFR 200.302 Financial management requires that: (a) Each state must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State’s funds. All recipient and subrecipient financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms of the conditions of the federal award, must be sufficient to permit the preparation of reports required by the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2. The code of federal regulations – 2 CFR 200.303 Internal controls requires that recipients and subrecipients must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award. (c) Evaluate and monitor the recipient’s or subrecipient’s compliance with statutes, regulations, and the terms and conditions of Federal awards. Condition The following exceptions to the criteria were observed during the performance of the audit procedures: 1. For the compliance matrix that is maintained for the annual grants under Assistance Listing No. 20.315, Ernst & Young (EY) identified that for two provisions, the wording contained within the matrix did not match in its entirety to the respective grant agreement. Additionally, EY noted that two provisions that were present in the grant agreements were not included in the matrix. 2. For the compliance matrix that is maintained for Infrastructure Investment and Jobs Act (IIJA) grants under Assistance Listing No. 20.315, EY identified that two provisions present in the grant agreements were not included in the matrix. 3. For the compliance matrices maintained for both the annual grants and IIJA grants under Assistance Listing No. 20.315, EY identified a lack of evidence to support management's assessment of certain provisions as not applicable. Cause In reviewing management’s internal controls, the key internal control identified by management is not designed such that consistent, proactive monitoring and/or review occurs to ensure all compliance requirements and any changes to the wording of specific provisions are updated and reviewed within the compliance matrices and narratives. Effect or Potential Effect Amtrak is not in compliance with the 2 CFR 200.302 (a) and 2 CFR 200.303. This may also put Amtrak at greater risk of non-compliance with specific provisions in accordance with the federal awards. Questioned Costs None identified. Context EY reviewed the federal awards in scope and compared them to the compliance matrices and compliance narrative maintained by the company as part of the audit procedures in connection with the testing of the special tests and provisions compliance requirement. Per review of the grant agreements, a total of 159 provisions exist of which EY identified six provisions as missing or inaccurate as described in the condition section above. As such, this finding relates to 3.77% of the total population of provisions. Identification as a Repeat Finding This is a repeat finding of 2024-002. Recommendation EY recommends that Amtrak update the control design with enough precision to ensure that reviews and updates to the compliance matrices are made on a regular cadence to ensure that any updates, amendments or changes are monitored and updated timely. Views of Responsible Officials Amtrak recognizes the need to improve our controls over the updates of the compliance matrices and will review its control processes by the end of FY2026.

Finding No.: 2025-002 Federal Agency: Environmental Protection Agency AL No. and Title: 66.039 Diesel Emission Reduction Act (DERA) National Grants 98T31601 Federal Award No.: Area: Reporting Criteria: 2 CFR 200.302(a) states that each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State’s funds. All recipient financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.328(c) states that recipient must submit financial reports as required by the Federal award. Condition: For one grant award during fiscal year 2025, the Authority did not submit the required federal financial report (SF-425) due on December 30, 2024. Cause: The Authority did not maintain an internal monitoring of financial reports required to be submitted during the fiscal year. Effect or potential effect: The Authority failed to submit the required federal financial report during the year and was not in compliance with applicable reporting requirements. Questioned costs: None Finding No.: 2025-002, continued Federal Agency: Environmental Protection Agency AL No. and Title: 66.039 Diesel Emission Reduction Act (DERA) National Grants 98T31601 Federal Award No.: Area: Reporting Context: The Authority did not submit one of the two required SF-425 during the year ended September 30, 2025. The Authority has not incurred any expenditure as of the report submission due date. Recommendation: The Authority should enforce monitoring controls over compliance with applicable reporting requirements. Responsible personnel should maintain a monitoring of financial reports required to be submitted for each grant award. Views of responsible officials: The Authority agrees to the finding. Refer to the corrective action plan.

Finding 2025.003: Cash Management - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program Grants for New and Expanded Services under the Health Center Program COVID-19 - Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS11299 - 2024 and 2025, Q8MCS49109 - 2024, H2ECS45512 - 2024 and H8LCS51634 - 2024 Criteria In accordance with §200.305, Federal Payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Organization's drawdowns did not illustrate review and approval by management. Cause The Organization did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect or Potential Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected 7 drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for all 7 drawdowns. Identification of Repeat Finding Not a repeat finding. Recommendation The Organization should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.

Cash Management Moving to Work Demonstration Program AL No. 14.881 Other matter required to be reported in accordance with 2 CFR 200.516(a) Repeated from 2024 audit (see prior year finding 2024-003) Condition: Out of the 66 grant drawdowns during the year, 19 drawdowns were tested and it was noted that one of the drawdowns was made in advance of the supporting invoices being paid to the vendors and subsequently the invoices were not paid within three business days, as required. Context: The auditor haphazardly selected 19 grant drawdowns from the population, which we consider to be a statistically valid sample size. The auditor reviewed the drawdowns and supporting documentation to ensure proper procedures are being followed and that the Agency is in compliance with HUD requirements. Criteria: The U.S. Treasury per 2 CFR section 200.305 (2 CFR section 200.302(b)(6)) requires grant funds received by the Agency to be properly spent within three business days of receipt. HUD regulations require that proper documentation be maintained for all Capital Fund Program per 24 CFR 905.326. Cause: The Agency experienced staff turnover in the finance department as well as difficulty replacing personnel that were knowledgeable with HUD and grant reporting requirements. Effect: The Agency did not disburse the capital funds in a timely manner for one of the draws made during the year. Questioned Costs: $19,232 Auditor’s Recommendations: The Agency should continue to develop and implement internal controls over grant management to coordinate capital fund draws with the timing of invoice payments. View of Responsible Officials: See Corrective Action Plan.