Findings Citing § 200.302

Finding 2022-003: Reconciliation of Accounts Material Weakness Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, and for net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2022. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2022, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $115,244. Identification as a Repeat Finding, if Applicable: 2021-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $115,244 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 05/01/2024 Responsible Official: Michael Brosnan, CFO

FINDING 2022-002 Subject: Child Support Enforcement - Allowable Costs/Cost Principles Federal Agency: Department of Health and Human Services Federal Program: Child Support Enforcement Assistance Listings Number: 93.563 Federal Award Number and Year (or Other Identifying Number): FY2022 Pass-Through Entity: Indiana Department of Child Services Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Noncompliance Condition and Context Indirect costs are expenses that are incurred by other County offices, which indirectly benefit the County Title IV-D offices. Indirect expenses are allocated to the County Title IV-D offices through an indirect Cost Allocation Plan (CAP) which is submitted to the Department of Child Services' Child Support Bureau. Indirect costs charged are based on two-year prior expenditures; therefore, indirect costs charged in 2022 were based on expenditures from 2020. A sample of 25 expenditures, totaling $27,077, from the department cost pools from the CAP were selected for testing. For 1 of the 25 expenditures examined, the County was unable to provide the contract; therefore, we were unable to verify if the correct rate for the contract payment was charged. For an additional 2 contracts requested, the contract could not be provided at the initial time of request. The contracts were provided nine months later at which time we verified the contract payment charged. In addition, the County did not have written procedures for determining the allowability of costs in accordance with Subpart E of 2 CFR 200. The lack of effective 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). . . ." 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. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items . . . (g) Be adequately documented. . . ." 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." Cause A proper system of internal controls over child support enforcement expenditures was not designed by management of the County. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, expenses within the cost application plan could not be verified as accurate. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a proper system of internal controls and develop policies and procedures to ensure that costs included within the cost allocation plan have adequate supporting documentation to support the amount paid. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. Auditor's Response Sufficient, appropriate audit evidence in regard to supplement not supplant was determined to not have been obtained at the initial time of audit. As such, additional audit procedures were performed after the report date of September 29, 2023. The missing contracts were a part of the original report which was discussed and communicated to management on September 29, 2023. Contracts were not provided in September, nor was there a disagreement with this portion of the finding in the original corrective action plan provided by management. Documentation provided in June 2024 was unsolicited but was reviewed, and the issue noted in the finding was updated accordingly. While we agree two of the three contracts could be reviewed and verified once provided in June 2024, the third contract is still in question as noted in the finding.

Finding 2022-003: Reconciliation of Accounts Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1500529 (9/1/2015 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Material Weakness in Internal Control over Compliance, Material Noncompliance Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2022. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2022, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $115,244 in total. Assistance listing number 47.076. Of this amount, $62,403 applies to award ID 1505278, which was closed before 1/1/2022 and did not have expenses or drawdowns in 2022 but by the end of 2018 had $138,034 in federal funding provided to AAPT and $75,631 of reimbursable expenses. AAPT had not refunded the overpayment, such as by applying this $62,403 as a reduction in federal reimbursements drawn during 2022. The remaining amounts of $10,112, $8,307, $33,615, and $807 relate to award IDs 1812860, 1524963, 1500529, and 1640791, respectively, and were calculated in the same manner. The period of performance for award IDs 1812860 and 1524963 ended prior to 1/1/2022. The period of performance for award IDs 1500529 and 1640791 ended on 8/31/2022. Identification as a Repeat Finding, if Applicable: 2021-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $115,244 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 10/15/2024 Responsible Official: Michael Brosnan, CFO

Finding 2022-003: Reconciliation of Accounts Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1500529 (9/1/2015 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Material Weakness in Internal Control over Compliance, Material Noncompliance Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2022. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2022, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $115,244 in total. Assistance listing number 47.076. Of this amount, $62,403 applies to award ID 1505278, which was closed before 1/1/2022 and did not have expenses or drawdowns in 2022 but by the end of 2018 had $138,034 in federal funding provided to AAPT and $75,631 of reimbursable expenses. AAPT had not refunded the overpayment, such as by applying this $62,403 as a reduction in federal reimbursements drawn during 2022. The remaining amounts of $10,112, $8,307, $33,615, and $807 relate to award IDs 1812860, 1524963, 1500529, and 1640791, respectively, and were calculated in the same manner. The period of performance for award IDs 1812860 and 1524963 ended prior to 1/1/2022. The period of performance for award IDs 1500529 and 1640791 ended on 8/31/2022. Identification as a Repeat Finding, if Applicable: 2021-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $115,244 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 10/15/2024 Responsible Official: Michael Brosnan, CFO

FINDING 2022-003 Subject: CDBG - Entitlement Grants Cluster - Program Income Federal Agency: Department of Housing and Urban Development Federal Program: Community Development Block Grants/Entitlement Grants Assistance Listings Number: 14.218 Federal Award Numbers and Years (or Other Identifying Numbers): B-11-UN-18-0002, B-17-UC-18-0016, B-18-UC-18-0016, B-19-UC-18-0016, B-20-UC-18-0016, B-21-UC-18-0016 Compliance Requirement: Program Income Audit Findings: Material Weakness, Modified Opinion Condition and Context The County received program income through various loan programs it offered to qualifying individuals. Once the County received a loan payment, the receipt was posted into the financial accounting system of the County and recorded in a grant fund. The amount received was also to be recorded in the Department of Housing and Urban Development's (HUD) Integrated Disbursement and Information System (IDIS) website. The recorded program income in the IDIS would then appear on the Drawdown Report by Voucher Number report (PR07). One individual was responsible for notifying the County Auditor's office when program income money was received, so it could be receipted in the County's financial accounting system. The same individual was also responsible for reporting the information on the IDIS site. No internal controls were established to ensure the program income that was recorded in the financial accounting system was also reported on the IDIS site and the PR07 report. Four receipts totaling $38,960 were selected for testing from the County's receipt ledger. The four receipts were unable to be located on the PR07 report provided for audit. However, one of the four receipts was recorded in the IDIS system after information regarding the receipt was requested. In addition, we were unable to verify the total amount recorded in the receipt ledger to the total reported on the PR07 report. The County's ledger was greater than the PR07 report by $30,324 and is primarily attributed to under reporting of program income in the IDIS as identified above. 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 21 LAKE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.1 states in part: ". . . Internal controls for non-Federal entities means: (1) Processes designed and implemented by non-Federal entities to provide reasonable assurance regarding the achievement of objectives in the following categories: (i) Effectiveness and efficiency of operations; (ii) Reliability of reporting for internal and external use; . . ." 2 CFR 200.302 states in part: "(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: . . . (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. . . ." 24 CFR 570.504 states in part: "(a) Recording program income. The receipt and expenditure of program income as defined in § 570.500(a) shall be recorded as part of the financial transactions of the grant program. (b) Disposition of program income received by recipients. (1) Program income received before grant closeout may be retained by the recipient if the income is treated as additional CDBG funds subject to all applicable requirements governing the use of CDBG funds. (2) If the recipient chooses to retain program income, that program income shall be disposed of as follows: (i) Program income in the form of repayments to, or interest earned on, a revolving fund as defined in § 570.500(b) shall be substantially disbursed from the fund before additional cash withdrawals are made from the U.S. Treasury for the same activity. (This rule does not prevent a lump sum disbursement to finance the rehabilitation of privately owned properties as provided for in § 570.513.) (ii) Substantially all other program income shall be disbursed for eligible activities before additional cash withdrawals are made from the U.S. Treasury. . . ." INDIANA STATE BOARD OF ACCOUNTS 22 LAKE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A turnover of staff in the County's Community Development office, and management not ensuring that a system of internal controls that segregated key functions was designed, implemented, and operating effectively, contributed to the program income issue identified above. Effect Without the proper implementation of an effectively designed system of internal controls, the County could not ensure that program income was properly reported and used before the drawdown of federal funds as required. The County could be at risk of losing federal funds by the federal awarding agency due to noncompliance with federal regulations. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the management of the County establish a system of internal controls to ensure that all program income received is properly reported in the IDIS system and expended prior to drawing down federal awards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Finding 2022-003 Inaccurate SEFA – Reporting – Material Weakness Name of Federal Agency: U.S Department of Housing and Urban Development Federal Program Name: HOME Investments Partnership Program and CDBG Entitlement Grants Cluster Assistance Listing Number: 14.239 and 14.218 Federal Award Identification Number and Year: Identification number unavailable. Program years 2010, 2012, 2015, 2019, 2020, 2022. Name of Pass-through Entity (if applicable): Rhode Island Housing and Mortgage Finance Corporation and the City of Providence, Rhode Island. Criteria: In accordance with 2 CFR 200.302 (Financial Management), a grant recipient’s financial management system must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; 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. In addition, 2 CFR 200.510 (Financial Statements), states in part that the auditee must prepare a schedule of expenditures of Federal awards (“SEFA”) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with 2CFR 200.502. At a minimum, the schedule must include: -All individual Federal programs by Federal agency. -For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. -Provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. -Include the total amount provided to subrecipients from each Federal program. Condition / Context: The Organization management’s review and approval process did not detect the errors that were identified during the audit procedures performed. The errors detected consisted of the understatement of Federal Assistance Listing Numbers 14.239 and 14.218 in the amounts of $1,260,748 and $295,000, respectively, for a total understatement of $1,555,748. Cause: The Organization’s internal controls over the preparation and review of the SEFA were not operating effectively. Material audit adjustments were proposed during the course of the audit that lead to material changes to the SEFA. Effect or Potential Effect: Inadequate controls over the preparation of the SEFA could result in financial misstatements or potential noncompliance. Questioned Costs: None Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Organization strengthen its policies, procedures, and controls for the identification of federal awards to ensure a complete and accurate SEFA is prepared in a timely manner. Views of Responsible Officials: Management agrees with the finding and is in the process of revising internal controls to address SEFA preparation.

Finding 2022-003 Inaccurate SEFA – Reporting – Material Weakness Name of Federal Agency: U.S Department of Housing and Urban Development Federal Program Name: HOME Investments Partnership Program and CDBG Entitlement Grants Cluster Assistance Listing Number: 14.239 and 14.218 Federal Award Identification Number and Year: Identification number unavailable. Program years 2010, 2012, 2015, 2019, 2020, 2022. Name of Pass-through Entity (if applicable): Rhode Island Housing and Mortgage Finance Corporation and the City of Providence, Rhode Island. Criteria: In accordance with 2 CFR 200.302 (Financial Management), a grant recipient’s financial management system must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; 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. In addition, 2 CFR 200.510 (Financial Statements), states in part that the auditee must prepare a schedule of expenditures of Federal awards (“SEFA”) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with 2CFR 200.502. At a minimum, the schedule must include: -All individual Federal programs by Federal agency. -For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. -Provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. -Include the total amount provided to subrecipients from each Federal program. Condition / Context: The Organization management’s review and approval process did not detect the errors that were identified during the audit procedures performed. The errors detected consisted of the understatement of Federal Assistance Listing Numbers 14.239 and 14.218 in the amounts of $1,260,748 and $295,000, respectively, for a total understatement of $1,555,748. Cause: The Organization’s internal controls over the preparation and review of the SEFA were not operating effectively. Material audit adjustments were proposed during the course of the audit that lead to material changes to the SEFA. Effect or Potential Effect: Inadequate controls over the preparation of the SEFA could result in financial misstatements or potential noncompliance. Questioned Costs: None Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Organization strengthen its policies, procedures, and controls for the identification of federal awards to ensure a complete and accurate SEFA is prepared in a timely manner. Views of Responsible Officials: Management agrees with the finding and is in the process of revising internal controls to address SEFA preparation.

Finding 2022-003 Inaccurate SEFA – Reporting – Material Weakness Name of Federal Agency: U.S Department of Housing and Urban Development Federal Program Name: HOME Investments Partnership Program and CDBG Entitlement Grants Cluster Assistance Listing Number: 14.239 and 14.218 Federal Award Identification Number and Year: Identification number unavailable. Program years 2010, 2012, 2015, 2019, 2020, 2022. Name of Pass-through Entity (if applicable): Rhode Island Housing and Mortgage Finance Corporation and the City of Providence, Rhode Island. Criteria: In accordance with 2 CFR 200.302 (Financial Management), a grant recipient’s financial management system must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; 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. In addition, 2 CFR 200.510 (Financial Statements), states in part that the auditee must prepare a schedule of expenditures of Federal awards (“SEFA”) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with 2CFR 200.502. At a minimum, the schedule must include: -All individual Federal programs by Federal agency. -For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. -Provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. -Include the total amount provided to subrecipients from each Federal program. Condition / Context: The Organization management’s review and approval process did not detect the errors that were identified during the audit procedures performed. The errors detected consisted of the understatement of Federal Assistance Listing Numbers 14.239 and 14.218 in the amounts of $1,260,748 and $295,000, respectively, for a total understatement of $1,555,748. Cause: The Organization’s internal controls over the preparation and review of the SEFA were not operating effectively. Material audit adjustments were proposed during the course of the audit that lead to material changes to the SEFA. Effect or Potential Effect: Inadequate controls over the preparation of the SEFA could result in financial misstatements or potential noncompliance. Questioned Costs: None Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Organization strengthen its policies, procedures, and controls for the identification of federal awards to ensure a complete and accurate SEFA is prepared in a timely manner. Views of Responsible Officials: Management agrees with the finding and is in the process of revising internal controls to address SEFA preparation.

Finding 2022-003 Inaccurate SEFA – Reporting – Material Weakness Name of Federal Agency: U.S Department of Housing and Urban Development Federal Program Name: HOME Investments Partnership Program and CDBG Entitlement Grants Cluster Assistance Listing Number: 14.239 and 14.218 Federal Award Identification Number and Year: Identification number unavailable. Program years 2010, 2012, 2015, 2019, 2020, 2022. Name of Pass-through Entity (if applicable): Rhode Island Housing and Mortgage Finance Corporation and the City of Providence, Rhode Island. Criteria: In accordance with 2 CFR 200.302 (Financial Management), a grant recipient’s financial management system must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; 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. In addition, 2 CFR 200.510 (Financial Statements), states in part that the auditee must prepare a schedule of expenditures of Federal awards (“SEFA”) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with 2CFR 200.502. At a minimum, the schedule must include: -All individual Federal programs by Federal agency. -For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. -Provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. -Include the total amount provided to subrecipients from each Federal program. Condition / Context: The Organization management’s review and approval process did not detect the errors that were identified during the audit procedures performed. The errors detected consisted of the understatement of Federal Assistance Listing Numbers 14.239 and 14.218 in the amounts of $1,260,748 and $295,000, respectively, for a total understatement of $1,555,748. Cause: The Organization’s internal controls over the preparation and review of the SEFA were not operating effectively. Material audit adjustments were proposed during the course of the audit that lead to material changes to the SEFA. Effect or Potential Effect: Inadequate controls over the preparation of the SEFA could result in financial misstatements or potential noncompliance. Questioned Costs: None Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Organization strengthen its policies, procedures, and controls for the identification of federal awards to ensure a complete and accurate SEFA is prepared in a timely manner. Views of Responsible Officials: Management agrees with the finding and is in the process of revising internal controls to address SEFA preparation.

Condition: The organization does not have documented policies and procedures for several critical federal grant requirements, including:  Allowable, reasonable, and allocable costs  Tracking the period of performance  Financial and performance reporting  Key financial processes, such as disbursements, payroll, and grants management Criteria: 2 CFR 200.302 requires organizations to maintain written policies and procedures for financial management and compliance with federal regulations. Cause: The organization, being relatively new, has not prioritized developing these policies and procedures. Effect: The absence of formal guidance increases the risk of noncompliance and unallowable costs being charged to the federal grant. Recommendation: The organization should prioritize developing and implementing formal written policies and procedures for compliance with federal grant requirements. Questioned Costs: None Management’s Response: The organization has established financial policies and procedures. However, we recognize that these policies did not fully address all areas specific to federal grant requirements. As a relatively new organization, we understand the importance of enhancing these frameworks to ensure full compliance with federal guidelines and to properly manage federal funds. We are committed to addressing this gap and will take immediate action to develop and implement comprehensive policies and procedures that fully comply with all applicable federal grant requirements. We anticipate that this process will be completed within three months, with oversight from senior management to ensure its thoroughness and effectiveness. In addition, key financial processes, including disbursements, payroll, and grants management, will be updated and aligned with these new policies to ensure sound fiscal management and maintain ongoing compliance with federal standards.

Condition: The organization lacked documentation of processes for reconciling ERA program reports with the general ledger and trial balance, as well as management’s review and approval of these reconciliations. Criteria: 2 CFR 200.302(b)(5) requires entities to establish controls for ensuring accurate and complete financial reporting. Cause: The organization did not have processes in place for reconciling financial reports during the audit period. Effect: Without reconciliation, there is an increased risk of errors or discrepancies in financial reporting. Recommendation: Develop reconciliation procedures for program reports and ensure they are reviewed and approved by management. Questioned Costs: None Management’s Response: Management acknowledges the issue and will establish and document reconciliation procedures to ensure reports are consistent with the general ledger and trial balance for all future Federal programs. This includes periodic review and approval by management.

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development Compliance Requirements: Cash Management. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.302(b)(6) requires that each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 Payment. Condition: We noted that the City did not have written procedures to implement the requirements of 2 CFR § 200.305 Payment during fiscal year 2022. Cause: The City was not aware of the requirement to have written procedures to implement the requirements of 2 CFR § 200.305 Payment. Effect: Failure to have written procedures to ensure the compliance with the 2 CFR § 200.305 Payment could result in federal award drawdown requests by the City to be overstated as to immediate cash flow needs, noncompliance with Uniform Guidance requirements, and terms and conditions of the Federal award. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to the Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop written procedures where required. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written procedures to implement the requirements of 2 CFR § 200.305 Payment.

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development Compliance Requirements: Allowable Costs and Costs Principles. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.302(b)(7) requires that each non-Federal entity must provide for written procedures for determining the allowability of costs in accordance with 2 CFR 200 Subpart E – Cost Principles and the terms and conditions of the Federal award. Condition: We noted that the City did not have written procedures for determining the allowability of costs and the terms and conditions of the Federal award during fiscal year 2022. Cause: The City was not aware of the requirement to have written procedures for determining the allowability of costs and the terms and conditions of the Federal award. Effect: Failure to have written procedures for determining allowability of costs and the terms and conditions of the Federal award could result in costs charged to the program that are not allowable costs as defined by the appropriate cost principles circular and noncompliance with Uniform Guidance requirements and terms and conditions of the Federal award. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop written procedures where required. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written procedures for determining the allowability of costs in accordance with 2 CFR 200, Subpart E—Cost Principles and the terms and conditions of the Federal award.

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development Compliance Requirements: Cash Management. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.302(b)(6) requires that each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 Payment. Condition: We noted that the City did not have written procedures to implement the requirements of 2 CFR § 200.305 Payment during fiscal year 2022. Cause: The City was not aware of the requirement to have written procedures to implement the requirements of 2 CFR § 200.305 Payment. Effect: Failure to have written procedures to ensure the compliance with the 2 CFR § 200.305 Payment could result in federal award drawdown requests by the City to be overstated as to immediate cash flow needs, noncompliance with Uniform Guidance requirements, and terms and conditions of the Federal award. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to the Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop written procedures where required. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written procedures to implement the requirements of 2 CFR § 200.305 Payment.

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development Compliance Requirements: Allowable Costs and Costs Principles. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.302(b)(7) requires that each non-Federal entity must provide for written procedures for determining the allowability of costs in accordance with 2 CFR 200 Subpart E – Cost Principles and the terms and conditions of the Federal award. Condition: We noted that the City did not have written procedures for determining the allowability of costs and the terms and conditions of the Federal award during fiscal year 2022. Cause: The City was not aware of the requirement to have written procedures for determining the allowability of costs and the terms and conditions of the Federal award. Effect: Failure to have written procedures for determining allowability of costs and the terms and conditions of the Federal award could result in costs charged to the program that are not allowable costs as defined by the appropriate cost principles circular and noncompliance with Uniform Guidance requirements and terms and conditions of the Federal award. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop written procedures where required. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written procedures for determining the allowability of costs in accordance with 2 CFR 200, Subpart E—Cost Principles and the terms and conditions of the Federal award.

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development Compliance Requirements: Cash Management. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.302(b)(6) requires that each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 Payment. Condition: We noted that the City did not have written procedures to implement the requirements of 2 CFR § 200.305 Payment during fiscal year 2022. Cause: The City was not aware of the requirement to have written procedures to implement the requirements of 2 CFR § 200.305 Payment. Effect: Failure to have written procedures to ensure the compliance with the 2 CFR § 200.305 Payment could result in federal award drawdown requests by the City to be overstated as to immediate cash flow needs, noncompliance with Uniform Guidance requirements, and terms and conditions of the Federal award. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to the Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop written procedures where required. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written procedures to implement the requirements of 2 CFR § 200.305 Payment.

Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture 14.228 Community Development Block Grants/State’s Program, Department of Housing and Urban Development Compliance Requirements: Allowable Costs and Costs Principles. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.302(b)(7) requires that each non-Federal entity must provide for written procedures for determining the allowability of costs in accordance with 2 CFR 200 Subpart E – Cost Principles and the terms and conditions of the Federal award. Condition: We noted that the City did not have written procedures for determining the allowability of costs and the terms and conditions of the Federal award during fiscal year 2022. Cause: The City was not aware of the requirement to have written procedures for determining the allowability of costs and the terms and conditions of the Federal award. Effect: Failure to have written procedures for determining allowability of costs and the terms and conditions of the Federal award could result in costs charged to the program that are not allowable costs as defined by the appropriate cost principles circular and noncompliance with Uniform Guidance requirements and terms and conditions of the Federal award. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop written procedures where required. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written procedures for determining the allowability of costs in accordance with 2 CFR 200, Subpart E—Cost Principles and the terms and conditions of the Federal award.

Federal Agency: United States Department of Commerce Federal Program Name: Office for Coastal Management Assistance Listing Number: 11.473 Federal Award Identification Year: 2020 Pass-Through Agency: National Fish and Wildlife Grant Agreement Award Period: 9/1/20-08/31/23 Type of Finding: Other Matters – Material Weakness in Internal Control Criteria: 2 CFR 200.414(c) - Federal award recipients must negotiate an indirect cost rate with the cognizant agency for indirect costs, which is typically the federal agency that provides the most funding to the recipient.2 CFR 200.403(d) - The negotiated rate must be applied consistently across all federal awards to ensure uniformity in cost allocation. 2 CFR 200.302(b)(3) - Recipients must maintain adequate documentation to support the indirect costs charged to federal awards, ensuring compliance with the cost principles outlined in the regulation. Condition: For two reimbursement requests from the grantor, an indirect cost rate was used, for which CSFC did not have a provisional or final rate agreement from the USDA. Context: Of the 2 reimbursements invoiced, 2 were selected for testing for the Office for Coastal Management program. The condition noted above was identified during our procedures over CFSC’s subrecipients. Effect: CFSC did not identify the error to be able to make the appropriate corrections before receiving reimbursement for incorrect indirect cost rate invoiced. Cause: CFSC’s procedures did not ensure that the negotiated provisional rate was invoiced properly. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that CFSC modify and strengthen its current policies and procedures to perform review over the indirect cost rate utilized when submitting invoices to the grantor. Management’s Views: See separate corrective action plan.

Finding Number: 2022-003 Finding Type: Federal award finding and financial statement finding Federal Assistance Listing No.: 14.239 Program Name: HOME investment Partnership Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: Portland Housing Bureau Grant Numbers: 311020 Federal Award Year: 2022 Control Deficiency Type: Significant deficiency in internal controls over compliance Instance of Noncompliance: Yes Compliance Requirement: Reporting Questioned Costs: None Repeat Finding: No Criteria: 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Awards Requirements, Standards for Financial and Program Management, and §200.302 (b), Financial Management. Identification, in its accounts, of all federal awards received and expended and the federal program under which they were received. Federal program and federal award identification must include, as applicable, the CFDA title and number, federal award identification number, name of the federal agency, and name of the pass-through entity, if any. Additional criteria: 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart F – Audit Requirements, §200.510, Financial Statements. Schedule of Expenditures of Federal Awards – The auditee also must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements, which must include the total federal awards expended, as determined in accordance with §200.502, Basis for Determining Federal Awards Expended. At a minimum, the schedule must provide total federal awards expended for each individual federal program and the CFDA number or other identifying number when the CFDA information is not available. For a cluster of programs, also provide the total for the cluster. Condition: During the audit, we noted that the organization did not maintain a complete schedule of expenditures of federal awards. Cause: The organization did not adequately track federal expenditures and the required information needed to prepare a schedule of expenditures of federal awards. Effect: Failure to prepare an accurate and complete schedule of expenditures of federal awards results in noncompliance with 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Awards Requirements, Standards for Financial and Program Management, §200.302, Financial Management, and Subpart F – Audit Requirements, §200.510, Financial Statements. Audit Recommendation: We recommend that the organization document and implement policies and procedures to ensure the schedule of expenditures of federal awards is accurate and complete in accordance with 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Awards Requirements, Standards for Financial and Program Management, §200.302, Financial Management and Subpart F – Audit Requirements, §200.510, Financial Statements, in order to obtain accurate calculations of major federal programs for the single audit and to ensure the organization is in compliance with all of the reporting requirements as to identify the source and application of funds for federally-funded activities. Management’s Response: The SEFA was assigned to be prepared internally, but unfortunately was not submitted due to staff turnover during the course of the audit. This oversight will be corrected by improving procedures around internal task assignments when employee turnover is experienced in the Fiscal department during the course of the audit.

FINDING 2022-003 Information on the federal program: Subject: Water and Waste Disposal Systems for Rural Communities – Reporting Federal Agency: U.S. Department of Agriculture Assistance Listing Number: 10.760 Federal Award Number: 92-02 92-03 Pass-Through Entity: N/A Compliance Requirements: Reporting Audit Findings: Significant Deficiency Criteria: 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 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: The City did not have proper controls in place to ensure that the annual report was accurately filled out and agreed to underlying detail. Cause: There were not sufficient internal controls in place to ensure the accuracy of the annual report prior to its submission. Effect: The failure to establish an effective internal control system placed the City at risk of noncompliance with the grant agreement and the Reporting compliance requirements. Questioned Costs: There were no questioned costs identified. Context: Variances to key line items were noted when comparing the Form RD442-2 and Form RD442-3 to supporting documents. Identification as a repeat finding, if applicable: No Recommendation: We recommend someone other than the preparer thoroughly review and document the review of the report prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Management did not have written internal control procedures for determining allowable costs and other requirements over federal awards specifically relating to the Uniform Guidance. 2 CFR 200, Subpart D, Section 200.302(b)(7) requires “written procedures for determining the allowability of costs in accordance with Subpart E – Cost Principles of this part and the terms and conditions of the Federal Award. no questioned costs. Lack of written controls to identify allowable costs and special tests and provisions. Costs may be disallowed and required to be repaid to the granting agency. Compliance requirements set forth in the grant agreements were not followed. Management should develop written internal control procedures in accordance with the Uniform Guidance. This was a repeat finding as Finding 2021-003.

Management did not have written internal control procedures for determining allowable costs and other requirements over federal awards specifically relating to the Uniform Guidance. 2 CFR 200, Subpart D, Section 200.302(b)(7) requires “written procedures for determining the allowability of costs in accordance with Subpart E – Cost Principles of this part and the terms and conditions of the Federal Award. no questioned costs. Lack of written controls to identify allowable costs and special tests and provisions. Costs may be disallowed and required to be repaid to the granting agency. Compliance requirements set forth in the grant agreements were not followed. Management should develop written internal control procedures in accordance with the Uniform Guidance. This was a repeat finding as Finding 2021-003.

2 CFR 200.302(b)(6) requires that non-Federal entities establish written procedures to implement the requirements of 2 CFR 200.305. The FAR clause at 48 CFR section 52.216-7 applies to reimbursement payment. Paragraph (b)(1) of that clause requires that the non-federal entity request reimbursement for (a) only allocable, allowable, and reasonable contract costs that have already been paid, or (b) if the non-federal entity is not delinquent in paying costs of contract performance in the ordinary course of business, costs incurred, but not necessarily paid. Article V, Section B states: 1. Periodically, but not more frequently than once every 30 calendar days, the Non-Federal Sponsor shall provide the Government with a sufficient invoice for costs the Non-Federal Sponsor has incurred for the Project. 2. Upon receipt of such sufficient invoice, the Government shall review the costs identified therein and shall determine: (a) the amount to be included in total project costs, subject to the limitations in Article II.C. of this Agreement; (b) the total costs incurred by the parties to date (including the value of lands, easements, rights-of-way, and relocations, and the costs of permits determined in accordance with Article V of this Agreement); (c) each party’s share of total project costs and the costs of data recovery activities associated with historic preservation in accordance with Article II.P. of this Agreement incurred by the parties to date; (d) the costs incurred by each party to date; (e) the total amount of reimbursements the Government has made to date in accordance with this paragraph; (f) the balance of Federal funds available for the Project, as of the date of such review; (g) the amount of reimbursement, if any, due to the Non-Federal Sponsor; and (h) the amount that actually will be paid to the Non-Federal Sponsor (hereinafter the “payment amount”) if the amount of reimbursement determined above cannot be fully paid due to an insufficiency of Federal funds or the limitations of the Section 594 Program Limit for Ohio or the Section 102 Limit. Article I, Section K state the term “sufficient invoice” shall mean documentation provided by the Non-Federal Sponsor containing the following: (1) a written certification by the Non-Federal Sponsor to the Government that it has made specified payments to contractors, suppliers, or employees for performance of work in accordance with this Agreement, or a written certification by the Non-Federal Sponsor to the Government that it has received bills from contractors, suppliers, or employees for performance of work in accordance with this Agreement; (2) copies of all relevant invoices and evidence of such payments or bills received; (3) written identification of such costs that have been paid with Federal program funds and a copy of the written verification from the Federal agency that provided the funds; and (4) a written request for reimbursement for the amount of such specified payments or bills received. The Village received funding from various sources for the project. Due to cash flow issues, the Village often used alternate funding to meet federal obligations, leaving an accumulation of federal funds on hand during the year. The Village also does not have any formal policies in place regarding cash management requirements. We recommend that the Village more closely monitor its reimbursement requests in relation to actual expenditures paid to ensure that the Village does not accumulate federal funds. Additionally, the Village should adopt formal policies and procedures that address cash management requirements.

2022-008 Grant Expenditures (Material Weakness) Criteria: Title 2 CFR Part 200 §200.400. Accounting practices must support the accumulation costs including maintaining adequate documentation to support costs charged to the Federal award. Title 2 CFR Part 200 §200.302 requires that the financial management system must maintain records that sufficiently identify the amount, source, and expenditure of Federal funds. Condition: Actual grant expenses were not accumulated in the Organization’s accounting system by individual grant and indirect costs were not appropriately applied. As discussed at 2022-006, the Organization prepared grant submissions based on estimates of monthly average expenses to be incurred over the life of the grant as opposed to expenses actually incurred. This led to noncompliance of the grant provisions for reimbursement. Cause: The Organization’s accounting system is not properly designed to accumulate expenses by grant. Policies and procedures were not adequately designed for the appropriate level of oversight to ensure that grant submissions complied with grant agreements. Effect: Submissions for grants reimbursement exceeded actual expenses incurred. In addition, because of the failure to assign expenses to individual grants, there is an increased risk that expenditures could be inappropriately charged to government programs. Questioned Costs: Not determinable at the major program level. Perspective: Pervasive, this was not an isolated incident. Repeat Finding: Yes Recommendation: The Organization’s accounting system should be modified to accommodate expense tracking by individual grant and policies and procedures should be implemented to require direct expenses be assigned to specific grants. A method should be established to allocate indirect costs in accordance with federal regulations. Policies and procedures are also needed to provide appropriate oversight of all grant accounting including reporting. Views of Responsible Officials: Management acknowledges the control weaknesses related to the accumulation of grant expenses and accurate completion of grant reimbursement requests. The Organization has undertaken a review of its policies and procedures, including consultation of an outside accounting firm to implement policies and procedures to properly account for grant expenses and accurately prepared requests for reimbursement.

2022-009 Cash Disbursements (Material Weakness) Criteria: CFR 200 §200.403. Allowable costs under Federal awards must be necessary and reasonable for the performance of the Federal award and be allocable thereto. CFR 200 §200.302. Effective control and accountability must be maintained, all assets must be safeguarded and used solely for authorized purposes. Condition: In June 2022, the former Executive Director authorized bonuses for himself and two other senior management members without the knowledge of the board of directors and accounting staff. In December 2022, holiday bonuses were paid without documentation to ensure the expenditure was reasonable and necessary. In addition, approval was not documented on invoices selected for testing. Cause: As discussed at Finding 2022-003, the Organization’s policies and procedures were not adequately designed for the proper segregation of accounting and banking functions. As discussed at Finding 2022-004, the Organization’s policy requiring two signatures on all checks over $1,000 was not followed and no policy existed to ensure all invoices are approved and evidence of approval retained. Effect: Disbursements were made that were not in compliance with applicable regulations and grant agreement. Allowing these functions to be performed without separating incompatible duties and requiring appropriate documentation and review increases the risk that errors or misappropriation could occur. Questioned Costs: Unauthorized bonuses $39,342. Perspective: The unauthorized bonuses are a known amount (not projected). As noted at 2022-004, none of the transactions selected for testing contained evidence of approval. Repeat Finding: Yes Recommendation: We recommend policies and procedures over the segregation of duties between the accounting and banking functions be strengthened. In addition, policies and procedures should be implemented to ensure support for expenditures is retained and includes evidence of approval. Additional oversight should be provided by those charged with governance. Views of Responsible Officials: Management acknowledges the control weaknesses as described above as there was not a proper segregation of duties in place. The Organization has undertaken a review of its policies and procedures, including consultation of an outside accounting firm to ensure proper control procedures are in place including appropriate segregation of duties.

2 CFR § 200.303 (a) states, in part, the 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 statues, regulations, and the terms and conditions of the federal award. 2 CFR 200.302(b)(7) requires written procedures for determining the allowability of costs in accordance with Subpart E-Cost Principles of this part and the terms and conditions of the Federal award. In addition, maintaining organized documentation and support for federal transactions is essential in assuring the Townships Schedule of Federal Awards is complete and accurate and that costs and activities are allowable. We noted that the Township did not maintain underlying documentation and support for 4 of 7 nonpayroll FEMA expenditures. However, we were able to obtain such invoices directly from the Ohio Emergency Management Agency to determine allowability. For the remaining 3 invoices that the Township did maintain support for, there was no indication that management reviewed these expenditures for allowability. This weakness could result in unallowable expenditures being charged to the FEMA grant. Formal written procedures should be developed, implemented, and consistently applied to the approval of federal grant expenditures prior to payment. Procedures should include how approvals by management or administrators are documented for each expenditure and the approvals should be done by personnel knowledgeable about the federal program. Implementing a formal control process with help ensure only allowable expenditures are made using federal grant funds. The Township should also maintain all invoices for transaction to ensure allowability.

2022-005 — Activities Allowed and Unallowed and Allowable Costs/Cost Principles (Significant Deficiency) Federal Program Information: Funding agency: U.S. Department of Health and Human Services Title: Provider Relief Fund and American Rescue Plan Rural Distribution Assistance listing number: 93.498 Award year: 2022 Award period: 2022 Criteria: The Uniform Guidance 2 CFR 200.302 requires that organizations maintain complete and detailed records that document the source and application of federal funds. Adequate recordkeeping is essential for financial accountability and compliance with accounting standards. Condition/Context: Of a sample of 25 transactions charged to the major program, 5 of the sampled transactions lacked itemized source documentation (such as receipts or invoices), 10 transactions lacked reconciliations tying expense to source documentation, and 3 transactions lacked evidence of review and approval by appropriate personnel. Cause: The Hospital experienced turnover and extended vacancies in key finance department positions. This contributed to insufficient oversight and a lack of adherence to internal controls over recordkeeping and expenditure approvals. Effect: The absence of itemized receipts and evidence of review and approval hinders the ability to verify the legitimacy and appropriateness of these transactions. This raises concerns about the accuracy of financial reporting and compliance with accounting standards and the Uniform Guidance and may increase the risk of questioned costs or ineligible expenditures going undetected. Questioned Costs: None. Recommendation: Management should enforce existing internal control procedures to ensure that all transactions are adequately documented with itemized receipts and properly reviewed and approved. Training should also be provided to staff responsible for recordkeeping to emphasize requirements for maintaining detailed documentation in accordance with Uniform Guidance. Views of Responsible Officials: Management will enforce existing internal control procedures and train staff to maintain appropriate documentation.

AL number: 14.231, AL title: Emergency Solutions Grant Program Federal award identification number and year: LAHSA agreements: GT-BH-ABH-021, GT-BH-RTV-001, GT-BH-RTV-002, GT-BH-RTV-003, GT-BH-RTV-004, GT-BH-RTV-009, GT-TLS-N-013, GTRRH- RR-02, GT-CH-WS-001, GT-1878-2102-001 Name of federal agency: U.S. Department of Housing and Urban Development Name of pass-through entity: Los Angeles Homeless Services Authority Repeat finding: No Criteria: Per 2 CFR §200.403, allowable costs must be "necessary, reasonable, and adequately documented." Additionally, 2 CFR §200.302(b)(3) requires non- Federal entities to maintain records that sufficiently detail financial transactions to support Federal expenditures. Condition: During our testing of 40 payments charged to Federal grants, we noted that 9 payments (22.5%) lacked evidence of invoice review and approval before payment. 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 lack of documentation appears to be due to inadequate enforcement of the Organization’s invoice approval process, which may stem from insufficient training, oversight, or procedural weaknesses. Questioned cost: N/A Recommendation: We recommend that management: - Reinforce policies requiring documented approval of invoices before payment. - Conduct training for staff responsible for invoice processing to ensure awareness of Federal documentation requirements. - Implement regular monitoring to ensure compliance with invoice review procedures. Views of responsible officials: Management acknowledges this finding and agrees that during the period under audit—while the organization was experiencing rapid growth and increased program activity—our documentation and approval processes did not consistently keep pace with operational demands. Since that time, we have taken significant steps to strengthen accounting procedures and internal controls, reinforce our invoice approval policies, and ensure all expenditures charged to Federal awards are properly reviewed and authorized prior to processing. We have enhanced our Accounts Payable workflow by implementing standardized process approval requirements, added additional leadership staffing and oversight within the Finance and Accounting team and provided targeted training to all personnel involved in invoice processing to ensure understanding of Federal cost principles and documentation standards. These corrective actions have improved our control environment since the audit period, and management is committed to continuing to develop and maintain strong financial controls and to prevent recurrence of this issue.

Finding 2022-02 – Inability to Support Allowable Activities Program Number: 93.224, 93.225, 93.493, 93.527 Type of Finding: Internal Control, Compliance and Material Weakness Condition During our audit of compliance with federal requirements, we were unable to perform sufficient testing of allowable activities due to a significant lack of supporting documentation. Management was unable to provide adequate evidence demonstrating that expenditures and program activities were conducted in accordance with the terms and conditions of the federal award. Specifically: ▪ Documentation supporting program activities was not maintained or not provided upon request ▪ Only general ledger entries and limited journal supports were made available ▪ Supporting evidence of programmatic execution (e.g., participant records, activity reports, eligibility documentation, or service delivery evidence) was largely absent ▪ As a result, we could not determine whether expenditures were incurred for authorized program purposes This lack of documentation prevented us from verifying that funds were used for allowable activities under the federal program. Criteria Under 2 CFR 200.303 (Internal Controls) and 2 CFR 200.302 (Financial Management), nonfederal entities must maintain effective internal control over federal awards and provide accurate, current, and complete disclosure of financial results, supported by records that adequately demonstrate compliance. Additionally, program-specific requirements require that expenditures be incurred only for activities that are allowable and aligned with the objectives of the federal award. Cause These deficiencies appear to result from inadequate recordkeeping practices, lack of formal documentation requirements, and insufficient oversight of program-level activities. Management did not implement procedures to ensure that programmatic and financial documentation was retained and accessible for audit purposes. Effect Due to the absence of adequate documentation: ▪ We were unable to determine whether expenditures were used for allowable program activities

Finding 2022-03 – Inability to Support Allowable Costs and Cost Principles Federal Program Information Program Number: 93.224, 93.225, 93.493, 93.527 Type of Finding: Internal Control, Compliance and Material Weakness Condition During our audit, we were unable to perform sufficient testing of allowable costs and allocability due to inadequate and inconsistent supporting documentation. Management primarily provided journal entries and limited supporting invoices, with significant gaps in documentation necessary to support cost allowability, reasonableness, and allocability under federal requirements. Specifically: ▪ Supporting invoices and contracts were missing or incomplete for a significant portion of transactions ▪ Documentation supporting the nature, purpose, and benefit of costs to the federal program was not provided ▪ There was no evidence of cost allocation methodologies for shared or indirect costs ▪ Journal entries were recorded without adequate supporting detail or justification As a result, we were unable to determine whether costs charged to the federal program were allowable, reasonable, or allocable. Criteria Under 2 CFR 200.403 (Factors Affecting Allowability of Costs), costs must be: ▪ Necessary and reasonable ▪ Allocable to the federal award ▪ Adequately documented Further, 2 CFR 200.302(b)(3) requires that financial management systems provide records that identify adequately the source and application of funds, including supporting documentation for expenditures. Cause These deficiencies appear to result from weak internal controls over financial reporting and cost documentation, lack of formal procedures for maintaining supporting documentation, and insufficient understanding of Uniform Guidance cost principles. CARESTL HEALTH SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 40 SECTION III – FEDERAL AWARD FINDINGS AND QUESTION COSTS (Continued) Effect As a result: ▪ We were unable to verify the allowability and allocability of costs charged to the federal program ▪ There is a significant risk that unallowable or unsupported costs were charged to the award ▪ The organization is exposed to potential disallowance of costs, repayment obligations, and increased regulatory scrutiny The lack of documentation significantly impairs auditability and financial transparency Questioned Costs Likely Questioned Costs: Undeterminable due to insufficient documentation The inability to support costs charged to federal awards with adequate documentation constitutes a material weakness in internal control over compliance and results in noncompliance with Uniform Guidance cost principles. Recommendation We recommend that management: ▪ Implement procedures requiring complete supporting documentation for all costs charged to federal awards ▪ Ensure costs are reviewed for allowability, reasonableness, and allocability prior to recording ▪ Establish and document formal cost allocation methodologies ▪ Require approval and documentation of all journal entries affecting federal programs ▪ Provide training to staff on Uniform Guidance cost principles (2 CFR 200 Subpart E) ▪ Conduct periodic internal reviews to ensure compliance Management Response Management respectfully disagrees with the characterization of a material weakness related to the inability to support allowable costs and cost principles. The four cited conditions do not reflect a lack of documentation or internal controls, but rather the limited time afforded to the health center to compile and submit the requested materials. The HRSA mandated April 30, 2026 deadline, during a period of significant operational strain. As a result, the health center was not provided a reasonable opportunity to gather and produce the full set of supporting documentation. CARESTL HEALTH SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2022 41 SECTION III – FEDERAL AWARD FINDINGS AND QUESTION COSTS (Continued) Specifically, we disagree with the following statements: • “Supporting invoices and contracts were missing or incomplete for a significant portion of transactions.” The health center maintains invoices, contracts, and supporting documentation; however, due to the compressed audit timeline and competing federal deadlines, staff were unable to assemble and transmit the full set of documents before the cutoff. • “Documentation supporting the nature, purpose, and benefit of costs to the federal program was not provided.” Documentation exists within our financial management system and program files. The inability to provide it during fieldwork was due to time constraints, not the absence of records. • “There was no evidence of cost allocation methodologies for shared or indirect costs.” Cost allocation methodologies are in place and were included in the financial management response submitted to HRSA. The audit team did not receive these materials because the request coincided with overlapping federal reporting requirements and limited staffing capacity. • “Journal entries were recorded without adequate supporting detail or justification.” Supporting detail for journal entries is maintained internally. The challenge was not lack of documentation but insufficient time to compile and submit the supporting files during the abbreviated fieldwork window. • While we disagree with the stated conditions, we fully agree with all recommendations and view them as aligned with the improvements already underway as part of our financial management corrective actions submitted to HRSA. Management is committed to strengthening documentation practices, enhancing internal controls, and ensuring full compliance with Uniform Guidance. • Accordingly, the health center will: o Implement procedures requiring complete supporting documentation for all costs charged to federal awards o Ensure costs are reviewed for allowability, reasonableness, and allocability prior to recording o Establish and document formal cost allocation methodologies o Require approval and documentation of all journal entries affecting federal programs o Provide staff training on Uniform Guidance cost principles (2 CFR 200 Subpart E) o Conduct periodic internal reviews to ensure compliance These actions are already in progress and will be fully integrated into the organization’s financial management and internal control framework.

Name of Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants Assistance Listing Number: CFDA 14.228 Federal Award Identification Number and Year: Identification number unavailable. Program year 2021. Name of Pass-through Entity: City of Houston, Texas Criteria: In accordance with 2 CFR 200.302 (Financial Management), a grant recipient's financial management system must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; 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. In addition, 2 CFR 200.510 (Financial Statements), states in part that the auditee must prepare a schedule of expenditures of Federal awards ("SEFA") for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with 2CFR 200.502. At a minimum, the Schedule must include: - All individual Federal programs by Federal agency. - For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. - Provide total Federal awards expended for each individual Federal program and the Assistance Listing Number or other identifying number when the Assistance Listing Number is not available. - Include the total amount provided to subrecipients from each Federal program. Condition/Context: The Organization management's review and approval process did not detect the error in a timely manner. The error consisted of the understatement of Federal Assistance Listing Number 14.228 in the amount of $16,244,258. Cause: The Organization's internal controls over the preparation and review of the SEFA were not operating effectively. Effect or Potential Effect: The Schedule as presented in the original issuance of the financial statements was not properly presented in accordance with the Uniform Guidance. Questioned Costs: None Identification as a Repeat Finding: This is not a repeat finding Recommendation: We recommend the Organization strengthen its policies, procedures, and controls for the identification of federal awards to ensure a complete and accurate SEFA is prepared in a timely manner. View of Responsible Officials: Management agrees with the finding and is in the process of revising internal controls to address SEFA preparation.

Criteria: 2 CFR §200.302 requires recipients to maintain accurate, complete, and timely accounting records for federal awards. Additionally, 2 CFR §200.303 requires recipients to establish and maintain effective internal controls over federal awards to ensure proper recording, reconciliation, and reporting. The U.S. Treasury’s SLFRF Compliance and Reporting Guidance also requires recipients to submit accurate and timely Project and Expenditure Reports. Condition: Audit procedures identified multiple errors and deficiencies in the City’s accounting records and SLFRF reporting, including: 1. The SEFA reported ARPA expenditures of $11,695,336.46 for the year ended December 31, 2022; however, included in this amount were expenditures totaling $1,728,205.96 that were incurred in fiscal year 2023 and should not have been reported as 2022 expenditures. 2. A discrepancy of $131,898.82 was noted between the general ledger and the expenditure audit trail. 3. The City received the second tranche of ARPA funds on July 18, 2022 amounted to $18,189,922; however, due to a system interface error, the transaction was not recorded in the general ledger. The City did not identify or correct this error in a timely manner through its reconciliation process. 4. Differences were noted between amounts reported in the SLFRF Project and Expenditure Reports and the City’s general ledger. Public Health expenditures differed by $23,349, and administrative expenditures differed by $10,000. In addition, salary expenditures for police and fire personnel totaling $1,588,887.57 were not reported. These variances indicate that amounts reported to the U.S. Treasury were not fully reconciled to the City’s accounting records. 5. Based on our review, the City did not submit certain required SLFRF quarterly reports by the established deadlines. The 2nd quarter 2022 report, due July 31, 2022, was submitted on August 15, 2022, and the 3rd quarter 2022 report, due October 31, 2022, was submitted on December 1, 2022. 6. In addition, a duplicate payment totaling $675 was identified during our review of SLFRF expenditures. Cause: These conditions occurred because the City did not have adequate internal controls over federal grant accounting and reporting. Specifically, the City did not ensure federal revenues and expenditures were properly and completely recorded in the general ledger, amounts reported in the SLFRF reports and SEFA were reconciled to the accounting records prior to submission, or expenditures were reported in the proper fiscal year. In addition, reconciliation procedures were not performed timely to identify and correct errors, including system posting issues affecting the recording of federal grant activity. Effect: As a result, federal expenditures were inaccurately reported, accounting records were incomplete or not properly reconciled, required reports were submitted late, and errors such as unrecorded transactions and duplicate payments were not timely identified or corrected. This resulted in noncompliance with federal requirements and increases the risk of material misstatement and improper use or reporting of federal funds. Recommendation: We recommend the City strengthen internal controls over federal awards by ensuring all transactions are properly recorded in the general ledger, performing regular reconciliations between accounting records and federal reports, ensuring SEFA accuracy, implementing procedures to prevent and detect duplicate payments, and establishing procedures to ensure timely submission of required federal reports. Questioned Cost: -0- View of Responsible Official: The City agrees with the first 3 bullet points but does not agree with the points 4 and 5. The ARPA reports contain categories of expenditures for public health as well as well public safety salaries. Those items are specifically identified in the report as well as the City kept a separate schedule that reconciled to the spending of the ARPA funds that was provided to the auditors. Also, the City provided communications to the ARPA technical assistance that indicated issues related to their software. This software was newly created and under their own admission they knew there would be possible issues in reporting. The City made sure to send those communications to the auditor.

Criteria: Under 2 CFR §200.303, non-Federal entities are required to establish and maintain effective internal controls over Federal awards to ensure compliance with federal statutes, regulations, and the terms and conditions of the award. In addition, 2 CFR §200.318–200.320 require entities to maintain records sufficient to detail the history of procurement transactions, including the rationale for contractor selection and the basis for contract price, and to ensure vendors are not suspended or debarred. Further, 2 CFR §200.302 requires recipients to maintain accurate and complete financial records that properly support and record federal expenditures. Condition: During our testing of expenditures charged to the Coronavirus State and Local Fiscal Recovery Fund under the American Rescue Plan Act (ARPA), we identified several instances where the City did not maintain adequate documentation and supporting records for program expenditures. Specifically: a. The City did not consistently maintain documentation supporting procurement decisions. Documentation for competitive bidding, vendor selection rationale, and price reasonableness was not consistently available. The City also did not provide evidence that vendors were verified against SAM.gov for suspension and debarment. Management indicated certain procurements were made under COVID-19 emergency conditions; however, written justification and required approvals were not consistently maintained. b. Expenditures totaling $1,070,694.56, out of $6,305,879.54 tested, were recorded in fiscal year 2022 instead of 2023. c. One disbursement had an invoice dated October 1, 2021, but was not paid until April 26, 2022, resulting in a delay of approximately seven months. d. For certain expenditures, purchase orders totaling $1,018,000 did not agree with related invoices totaling $1,410,483.81, indicating discrepancies between approved purchase amounts and billed amounts. Cause: These issues appear to be due to inadequate internal controls over procurement documentation, expenditure processing, and financial recordkeeping. The City did not consistently maintain documentation supporting procurement decisions, review supporting documentation for completeness, or ensure that expenditures were recorded in the appropriate accounting period. In addition, review procedures were not consistently performed to verify that supporting documents, purchase orders, and invoices were complete and consistent prior to processing payments. Effect: These deficiencies indicate significant weaknesses in the City’s internal controls over procurement documentation, expenditure review, and financial recordkeeping. As a result, the City cannot ensure that expenditures were properly authorized, supported by adequate documentation, recorded in the appropriate accounting period, or consistent with approved purchase amounts. These conditions increase the risk of unsupported or improperly recorded expenditures and limit the City’s ability to demonstrate compliance with federal requirements. Recommendation: The City should strengthen internal controls over procurement and expenditure processing by maintaining complete procurement documentation, including evidence of competitive bidding, vendor selection rationale, price reasonableness, and suspension and debarment verification. Management should also implement procedures to ensure expenditures are recorded in the correct fiscal period and that purchase orders, invoices, and supporting documentation are reviewed for completeness and consistency prior to payment. Questioned Cost: -0- View of Responsible Official: The City agrees with this finding. ARPA rules again were still developing during this time frame and some items were not a requirement during reporting. However, the City did require vendors to start registering with Sams.gov as well perform checking vendors for suspension and debarment after the rules changed.

Finding #2022-002 Type: Significant Deficiency over Schedule of Expenditures of Federal Awards (SEFA) Criteria/Requirement The Organization is required to clearly identify and track federal expenditures in accordance with 2 CFR 200.302. Condition/Context During the year, the Organization experienced significant turnover in their Finance Department. The Organization did not identify all federal awards accurately and timely to include in the SEFA. Effect Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs None. Recommendation The Organization should implement procedures and controls to accurately capture all activity under federal awards during the year to be able to prepare a complete and accurate the SEFA. Management?s Response We concur with the audit findings and recommendations for the defined period and have pre-emptively been on a path to remedy these problems. OSF is currently redesigning key components of its accounting system to clearly identify federal expenditures with minimal adjustments. Implementation of these changes will occur before the end of the current fiscal year.

Finding #2022-002 Type: Significant Deficiency over Schedule of Expenditures of Federal Awards (SEFA) Criteria/Requirement The Organization is required to clearly identify and track federal expenditures in accordance with 2 CFR 200.302. Condition/Context During the year, the Organization experienced significant turnover in their Finance Department. The Organization did not identify all federal awards accurately and timely to include in the SEFA. Effect Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs None. Recommendation The Organization should implement procedures and controls to accurately capture all activity under federal awards during the year to be able to prepare a complete and accurate the SEFA. Management?s Response We concur with the audit findings and recommendations for the defined period and have pre-emptively been on a path to remedy these problems. OSF is currently redesigning key components of its accounting system to clearly identify federal expenditures with minimal adjustments. Implementation of these changes will occur before the end of the current fiscal year.

All federal programs. 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. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.

All federal programs. 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. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.

All federal programs. 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. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.

All federal programs. 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. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.

All federal programs. 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. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.

All federal programs. 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. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.

All federal programs. 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. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.

All federal programs. 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. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.

All federal programs. 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. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.

All federal programs. 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. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.

All federal programs. 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. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.

All federal programs. 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. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.

All federal programs. 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. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.

All federal programs. 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. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.

All federal programs. 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. Condition: The City of Cullman, Alabama does not have a written grant manual or other written accounting procedures that meet the financial management system requirements established in the regulations. Cause: The City of Cullman, Alabama has processes and procedures in place to administer grant funds but no written policies. Effect: The City of Cullman, Alabama is not in compliance with financial management system requirements. Recommendation: The City of Cullman, Alabama should develop a grants manual or additional written policies to incorporate all the requirements of 2 CFR 200 and ensure compliances.