Findings Citing § 200.303

FINDINGS – MAJOR FEDERAL AWARD PROGRAMS AUDIT DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT S3800-010 Finding Reference Number 2026-001 – Inadequate Documentation of Supervisory Review and Compliance Oversight of Tenant Certifications S3800-011 Title and Assistance Listing Number of Federal Program - 14-157 Supportive Housing for the Elderly S3800-015 Type of Finding - Federal Award Finding S3800-016 Finding Resolution Status – In Process S3800-017 Information on Universe Population Size – 43 rental units S3800-018 Sample Size Information – 7 rental units S3800-019 Identification of Repeat Finding and Finding Reference Number – Not Applicable S3800-020 CRITERIA: 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain effective internal control over Federal awards that provides reasonable assurance the entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the award. Internal controls should be consistent with the principles in the GAO Standards for Internal Control in the Federal Government (Green Book) or the COSO Internal Control–Integrated Framework. HUD Handbook 4350.3, REV-1, Change 4 requires owners and management agents to: • Verify household income, assets, and eligibility prior to completing certifications; • Ensure tenant certifications are accurate and compliant with HUD requirements through appropriate supervisory or compliance review; • Maintain documentation supporting eligibility determinations and certifications within each tenant file. S3800-030 STATEMENT OF CONDITION: A review of tenant certification files identified deficiencies in the design and operation of internal controls over supervisory review of tenant certifications. The population consisted of 43 tenant units, from which a sample of seven (7) tenant files was selected for testing. Four (4) of the seven (7) files reviewed lacked sufficient evidence that tenant certifications received an independent supervisory or compliance review prior to the certification effective date. Specifically, tenant files lacked documentation demonstrating review and approval of income and asset calculations, including supervisory approval signatures, review checklists, approval stamps, electronic approvals, or other evidence that an independent review was completed before certifications became effective. As a result, management could not demonstrate that key compliance controls operated as designed to detect and prevent errors before certifications were finalized. S3800-032 CAUSE: Management transitioned to a new independent compliance review provider and although the written procedures for defining supervisory review responsibilities, documentation standards or approval requirements did not change, management did not ensure site personnel consistently followed the standardized procedures for documenting supervisory reviews and approvals. As a result, supervisory review controls were inconsistently applied and documentation supporting management oversight was not consistently maintained. S3800-033 EFFECT OR POTENTIAL EFFECT: Because documented supervisory review controls were not consistently performed or retained: • Audit testing identified multiple undetected certification errors attributable to weaknesses in supervisory review. • Weaknesses in supervisory review also contributed to incomplete move-in documentation. • The deficiencies increase the risk of improper Housing Assistance Payments (HAP), tenant rent miscalculations, HUD noncompliance, repeat audit findings, and potential repayment obligations. S3800-035 Auditor Non-Compliance Code - (S) Internal Control Deficiencies S3800-040 Questioned Costs Questioned costs were not quantified during this audit. However, because supervisory review controls were not consistently documented or performed, management cannot demonstrate that tenant certifications were properly reviewed prior to certification. As a result, there is an increased risk that improper Housing Assistance Payments were made. Any repayment obligation would depend upon the results of recalculating affected tenant certifications. Property(s) and associated questioned costs this finding applies to: S3800-037 FHA/Contract Number - 127EE034 S3800-038 Questioned Costs - $0 S3800-045 REPORTING VIEWS OF RESPONSIBLE OFFICIALS: Management will endeavor to check files at the site level to ensure that the approval of each certification is retained on file. Management will work with the site managers and the compliance reviewing company to ensure accuracy of certifications, verifications and rent calculations. The deficiencies found in the files audited will be corrected by Compliance and the site manager and reviewed by the Affordable Housing Director for completion and accuracy. S3800-050 CONTEXT See statement of condition and effect. S3800-080 RECOMMENDATION We recommend management: 1. Enforce written policies and procedures requiring documented independent supervisory or compliance review of all tenant certifications prior to certification approval. 2. Require documentation of supervisory approval, electronic workflow approvals, or other verifiable documentation, to be retained in each tenant file. 3. Implement ongoing monitoring activities, including periodic quality control reviews and internal testing of tenant certifications, to verify that supervisory review controls are operating effectively and deficiencies are promptly corrected. S3800-090 Auditor's Summary of the Auditee's Comments on the Findings and Recommendations Management will endeavor to check files at the site level to ensure that the approval of each certification is retained on file. Management will work with the site managers and the compliance reviewing company to ensure accuracy of certifications, verifications and rent calculations. The deficiencies found in the files audited will be corrected by Compliance and the site manager and reviewed by the Affordable Housing Director for completion and accuracy. S3800-130 Response Indicator – Agree S3800-140 Completion Date – 6/29/2026 S3800-150 Response Management concurs with the finding and has taken appropriate corrective action as indicated previously.

Federal Agency: U.S. Department of Agriculture Federal Program: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) AL Number: 10.557 Award Period: 4/1/25 - 3/31/26 Type of Finding: Significant Deficiency in Internal Control Over Compliance and Compliance Criteria or Specific Requirement According to §200.303 Internal controls of 2 CFR Part 200, 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 statutes, regulations, and the terms and conditions of the federal award. Condition and Context During our testing of the completeness of the expenditure detail allocated to the federal award we noted Organization was unable to identify the detail/support for $12,684 of expenditures invoiced to the grant. Also, as part of our payroll testing we noted two samples where the Organization was not maintaining accurate records to support the fringe benefit payroll costs allocated to the grant. Effect Potential that incorrect costs could be allocated to the grant. Questioned Costs $13,108 Cause Management oversight in which documentation of expenditures allocated to the grant were not retained by the organization and fringe benefit allocations were not updated and reviewed. Recommendation We recommend the Organization update their grant allocation process and controls to ensure accurate documentation of expenditures allocated to the grant are retained and accurate fringe benefit costs incurred during the month are used to calculate the allocations. Views of Responsible Officials The Organization has updated the grant allocation process and controls to ensure accurate documentation of expenditures allocated to the grant are retained and accurate fringe benefit costs incurred during the month are used to calculate the allocations. As part of this update management has reassigned responsibilities for various grants to ensure the process is followed.

Criteria: 2 CFR 200.303 requires nonFederal entities to “establish and maintain effective internal control over the Federal award” to provide reasonable assurance of compliance with Federal statutes, regulations, and the terms and conditions of the award. This includes adequate controls over the accuracy, completeness, and reliability of reporting. Statement of Condition: During reporting testing for Program 14.251, it was noted that the organization does not have a documented internal review or approval process governing the preparation and submission of required Federal reports. Although the HUD grant agreement does not explicitly require a presubmission review, the Federal award is still subject to the internal control requirements of 2 CFR 200.303, which require the entity to maintain effective controls over reporting. Cause: The organization has not formally established, documented, or implemented a comprehensive internal control framework over the reporting process, including supervisory review requirements. Effect or Potential Effect: The absence of a documented and consistently applied review process increases the risk that Federal reports may contain errors, omissions, or unsupported information, which could affect compliance with Federal reporting requirements and reduce the reliability of information used for program oversight. Questioned Costs: $- Recommendation: Management should develop, implement, and document a formal, comprehensive internal review and approval process for all required reports submitted under federal awards. The process should: define supervisory review responsibilities; require documented evidence of review (e.g., signoff, checklist, or electronic approval); and be consistently applied across all reports submitted for federal programs. Management Response: See corrective action plan.

2025-001 U.S Department of Housing and Urban Development Mortgage Insurance Rental Housing CFDA #14.134 Eligibility Significant Deficiency in Internal Control over Compliance Criteria: Complete controls over internal controls require all tenant eligibility requirements to be supported by appropriate documentation. Uniform Guidance 2 CFR 200.303(a) requires non-Federal entities to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls over compliance should ensure that rental assistance is calculated accurately and in accordance with applicable program requirements. Condition: During our testing, one out of 15 tenant files tested received an assistance payment that was higher than allowed. Cause: The Organization’s internal review procedures did not identify the use of the incorrect assistance payment. Effect: The use of incorrect assistance payments increases the risk that the rental subsidy in connection with the Federal program may not be accurate. While no questioned costs were identified, the deficiency represents a breakdown in internal control over compliance. Questioned Costs: $10 Context/Sampling: A nonstatistical sample of 15 tenants out of 99 total were selected for testing. Repeat Finding from Prior Year: No. Recommendation: We recommend Christian Care management strengthen internal controls and oversight over the rental assistance calculations and tenant eligibility documentation to ensure accuracy of all assistance payments. Views of Responsible Officials: Management agrees with the finding.

Finding 2025-001: Rural Rental Housing Loans Assistance Listing Number: 10.415 U.S. Department of Agriculture (Repeat of Finding 2024-001) Compliance Requirement: Eligibility, Program Income Type of finding: Internal Control Over Compliance (significant deficiency) Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards require that the non-Federal entity 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 (2 CFR 200.303(a)). Condition: There were no reviews of the tenant eligibility determinations during the year for the Sierra Vista Alamosa Housing Complex. This complex represents 1 of 3 complexes and 27 of the 111 units included in the Rural Rental Housing Loans program. In addition, seven of the 12 monthly housing assistance payment requests submitted for the Sierra Vista Alamosa Housing Complex were not reviewed. Cause: Management has not implemented an internal control structure that provides for independent review of tenant eligibility determinations or all monthly housing assistance payment requests for the Sierra Vista Alamosa Housing Complex. Effect: Noncompliance with the Rural Rental Housing Loan requirements may exist and not be detected by the Organization. Recommendation: The Organization should strengthen its internal controls with adopted policies and procedures to ensure a review process is established through adequate segregation of duties. The Organization should consider assessing and realigning the duties and responsibilities of the Executive Director, Administrative Assistant, and Alamosa Property Manager to provide for a review process of tenant eligibility determinations and the monthly housing assistance payment requests for the Sierra Vista Alamosa Housing Complex. Grantee’s Response: See corrective action plan.

Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The loan resolution security agreement states the Hospital must set aside a capital asset replacement account which may be established as a bookkeeping account or as a separate bank account. Funds may be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Condition: The funds that represented the capital asset replacement fund were commingledwith an existing board-designated CD account. Cause: The Hospital did not maintain a separate bank account or general ledger account for the capital asset replacement fund. Effect: The capital asset replacement funds were commingled with board-designated funds within a certificate of deposit account. Questioned Costs: None reported. Context: Sampling was not used. Recommendation: We recommend that management maintain a separate bank account or general ledger account for the capital asset replacement fund. Views of Responsible Officials and Planned Corrective Action: Management agrees with the funding and will deposit the required capital asset replacement funds in either a separate bank account or general ledger account.

Assistance Listing Number, Federal Agency, and Program Name - 66.616 - U.S. Environmental Protection Agency - Environmental and Climate Justice Community Change Grants Program Federal Award Identification Number and Year - 2024-00E04015 Pass-through Entity - N/A Finding Type - Material weakness Repeat Finding - No Criteria - The Federal Funding Accountability and Transparency Act (FFATA) as mended by Section 6202 of Public Las 110-252 requires recipients of federal awards to report data using the FFATA Subaward Reporting System (FSRS) Tool (pre-March 8, 2025) or SAM.gov (post-March 8, 2025). 2 CFR 200.303 requires that recipients and subrecipients receiving federal awards establish, document, and maintain effective internal control over the federal awards that provide reasonable assurance that the recipient or subrecipient is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition - While the System had controls over accumulating the data for inputs into the portal, it did not have an adequate control in place to ensure transactions subject to FFATA reporting were reviewed for completeness and accuracy upon submission. If Questioned Costs Are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported - There were no questioned costs identified. Identification of How Questioned Costs Were Computed - There were no questioned costs identified. Context - The System's internal controls over FFATA reporting were not designed to review submissions of FFATA reports. The System did not have a formal review process to verify the completeness and accuracy of data submitted to SAM.gov, nor did it maintain a reconciliation between the accounting system's subaward records and the information entered into SAM.gov. There were no instances of noncompliance or questioned cost identified related to this lack of control. Cause and Effect - The System has not developed or implemented a review structure over the FFATA reporting process at the time of submission. As a result, the System was at increased risk of submitting inaccurate, incomplete, or untimely FFATA reports. Recommendation - The System should implement controls regarding review of prepared FFATA submissions to ensure that all required subaward data is accurately and timely reported to SAM.gov. Views of Responsible Officials and Planned Corrective Actions - Management concurs with this recommendation. MetroHealth will establish and maintain a log documenting FFATA report submission, with internal reviews of disclosures prior to submission.

Finding Number: 2025-002 Federal Program: Ending the HIV Epidemic: A Plan for America Federal Award Identification Number: UT833926 Assistance Listing Number (ALN): 93.686 Federal Awarding Agency: Department of Health & Human Services Compliance Requirement: Activities Allowed or Unallowed & Allowable Costs/Cost Principles Pass-through Entity: Direct Award Repeat Finding: No Prior Audit Finding Number: N/A Material Weakness – Payroll Approvals Criteria 2 CFR § 300.106 gives regulatory effect to U.S. Department of Health & Human Services for 2 CFR § 200.303(a), which requires non-Federal entities to establish and maintain effective internal control over Federal awards. These controls must provide reasonable assurance that awards are managed in compliance with applicable statutes, regulations, and award terms, and should align with standards issued by the Government Accountability Office or the Committee of Sponsoring Organizations of the Treadway Commission. Additionally, 2 CFR § 200.430(g)(1)(i) requires that charges to Federal awards for salaries and wages be supported by records that accurately reflect the work performed and are backed by a system of internal controls ensuring the charges are accurate, allowable, and properly allocated. The City of Columbus’ Department of Public Health policy titled, “Staff Timekeeping for Grant Funded Positions,” Part I, requires all grant funded staff to complete timesheets reflecting total hours worked and grant-related hours. Section D, specifically, requires that timesheets must be signed by and submitted for approval on the Tuesday following the end of a pay period. Timesheets submitted for approval must be approved by either the employees’ supervisor or the director of the program by the Thursday following the end of a pay period. Condition Although the City has established policies consistent with Federal requirements, supervisory review of timesheets was not performed timely in all instances. During testing of the payroll records under AL #93.686 (Ending the HIV Epidemic: A Plan for America), none of the 40 timesheets tested were reviewed within the required timeframe referenced in the Criteria section. Cause Supervisory personnel did not consistently follow established procedures for timely review and approval of timesheets. Effect Failure to follow the established internal control policy and ensuring all timesheets are appropriately reviewed and approved by a knowledgeable supervisor, within the required timeframe referenced in the Criteria section, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. Recommendation The City should reinforce its existing policies with supervisory staff and implement additional procedures, if necessary, to ensure timesheets are reviewed and approved within the required timeframe prior to charging costs to Federal programs. Officials’ Response: Refer to the Corrective Action Plan.

Condition: During our audit, we noted that the Corporation’s internal controls over billing and collections were not operating effectively. Tenant receivables increased by 46% compared to the prior year, indicating delays in the collection of tenant rent. Additionally, deposits in transit totaling $14,701 were included in the bank reconciliation, with amounts outstanding for more than 90 days. Criteria: In accordance with 2 CFR §200.303, management is responsible for establishing and maintaining effective internal controls over federal awards, including processes to ensure timely billing, collection, and safeguarding of cash receipts. This includes regular review of tenant receivable balances, prompt identification of delinquent accounts, and timely deposit of funds. Cause: The control deficiencies appear to be primarily due to frequent staff turnover within the property management side, resulting in inconsistent execution of rent collection and deposit procedures. Effect: The significant increase in tenant receivables and the presence of deposits in transit aged over 90 days indicate ongoing weaknesses in internal controls. These deficiencies impaired the effective management of tenant receivables and necessitated material audit adjustments to properly state cash receipts and reconcile bank balances. Recommendation: The Corporation should implement a formal process to reconcile tenant receivable aging schedules as part of the monthly close. Additionally, tenant rent collections should be deposited at least weekly to ensure timely recording and improved tracking of cash receipts. Management’s Response: Management is in agreement with the auditors’ findings. The managing agent has hired an accounts receivable personnel to ensure rent collections and deposits are processed in a timely and consistent manner.

Assistance Listing, Federal Agency, and Program Name 97.044, U.S. Department of Homeland Security, Assistance to Firefighters Grant Federal Award Identification Number and Year EMW 2023 FG 01225, 2023 Pass through Entity N/A Direct funded Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria In accordance with the award agreement, the Township is required to submit financial reports to the federal awarding agency semiannually. The Township elected to report the grant expenditures using the cash basis of accounting, as permitted by the federal awarding agency. Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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). Condition The Township submitted the required reports, but one of the reports submitted did not properly identify the federal expenditures paid during the reporting period. Questioned Costs None If Questioned Costs are not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could not be Reported N/A Identification of How Questioned Costs Were Computed N/A Context In the financial report submitted in January 2026 for the period July 1 through December 31, 2025, the Township reported zero expenditures. Contrary to this reporting, the Township incurred and paid $1,156,265 in federal expenditures during the period, which should have been included in the report. Cause and Effect Although the Township had an established control whereby one individual prepared the report and a second individual reviewed it, a misunderstanding of the applicable reporting requirements prevented the review from detecting the reporting error. The Township has subsequently corrected the report to include the appropriate expenditures. Recommendation We recommend that the Township enhance its review process by ensuring all reporting requirements are identified and considered to support an effective review of reported information. Views of Responsible Officials and Corrective Action Plan The Township will implement a reconciliation and review process requiring all reported federal expenditures to be verified against the general ledger and supporting documentation prior to submission. In addition, the Township will correct the identified errors and resubmit the report with accurate federal expenditure information.

Criteria and Condition: Under Uniform Guidance, to be allowable under a federal award, costs must be necessary and reasonable, conform to any limitations or exclusions in the terms and conditions of the award, be consistent with the non Federal entity’s policies, be treated consistently, be determined in accordance with GAAP as applicable, and be adequately documented. Payroll charges to federal awards must be supported by recorded evidence that accurately reflects the work performed, including documentation of hours worked and pay rates used to charge the program. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. Costs that are not properly supported, or that are unreasonable or noncompliant with award requirements, are subject to being reported as questioned costs. During testing of twenty-five payroll transactions charged to the program, Bridge House was unable to provide adequate supporting documentation for seven items. Five items in the sample lacked evidence of proper supervisory approval of the related time records or payroll charges. In addition, five items were determined to be unallowable expenses under the grant, based on the nature of the costs and/or the lack of support. Several of these exceptions overlapped, such that some sampled items were inadequately documented, lacked required approval, and/or included unallowable costs. Cause: These conditions occurred because Bridge House has not implemented or consistently enforced sufficient internal controls over payroll charges to the grant. Specifically, management did not ensure that (1) required supporting documentation for payroll costs was obtained and maintained for all employees charged to the program, (2) time records and payroll charges were reviewed and formally approved by appropriate supervisors prior to billing, and (3) staff responsible for preparing and reviewing grant payroll charges were adequately trained to identify and exclude unallowable payroll costs. As a result, multiple sampled items lacked adequate documentation, were missing required approvals, and included unallowable expenses, with overlap among these conditions. Context and Effect: Because of these control deficiencies, payroll charges to ALN 21.027 were overstated and/or inadequately supported, resulting in known questioned costs of $945 that may be disallowed by the federal awarding agency or pass through entity. These conditions increase the risk of noncompliance with the Uniform Guidance requirements for allowable costs and documentation for payroll charged to the program. Questioned Costs and Likely Questioned Costs: Based on the specific exceptions identified in our sample, known questioned costs total $954 for the period tested. Using the results of the sample and projecting the errors to the applicable population of payroll charges, we estimate likely questioned costs of $30,991 for the program. Identification of Repeat Findings: This is not a repeat finding. Recommendation: Proper control activities should be implemented to allow for a consistent, accurate, and allowable method to support distribution of personnel charges to federal programs. Management should establish procedures requiring that all hours billed to the grant be supported by approved timesheets that are compared to payroll system hours, with differences investigated and resolved before reimbursement requests are submitted. In addition, a secondary review of grant invoicing templates (by someone independent of preparation) should be performed to verify the accuracy of hours, rates, and period of performance prior to submission.

Finding Number: 2025-001 Program: Child Care and Development Fund Cluster ALN #: 93.575 and 93.596 Pass through Entity: Commonwealth of Massachusetts Department of Early Education and Care Federal Agency: U.S. Department of Health and Human Services Federal Award Year: January 1, 2025 – December 31, 2025 Compliance Requirement: Eligibility Type of finding: Significant Deficiency Criteria According to 2 CFR 200.303, 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 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). Condition The Young Men’s Christan Association (YMCA) has multiple processes to ensure that children are determined to be eligible for childcare prior to their authorization date. However, the YMCA’s control that was tested over the eligibility process, as documented in the YMCA’s narrative, did not operate as designed. It is the YMCA’s control to review and sign the Fee Agreement and Child Care Subsidy form prior to the child’s start date. Cause In certain cases, authorizations are processed after the family has already had their scheduled meeting with the YMCA staff. The parent/guardian then needs to come back in to sign the forms in person or print, sign and scan back the forms. In these cases, there is a delay and the forms get signed by the YMCA staff after the authorization date. Proper perspective During the audit, we noted that for ten of the forty samples selected, the Fee Agreement and Child Care Subsidy form did not contain the signature of the YMCA prior to the Child’s start date. However, through our compliance procedures we noted all children were eligible, and the proper rate was calculated by the YMCA. Possible asserted effect If fee agreements are not reviewed and agreed upon prior to receiving services, then controls will not operate effectively. Questioned costs None Statistical sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Not a repeat finding. Recommendation We recommend the YMCA implement additional procedures to ensure that all forms are reviewed and signed prior to the child’s placement start date. Views of responsible officials and corrective actions Management acknowledges that, in certain cases, the Fee Agreement and Child Care Subsidy forms were not signed by YMCA staff prior to the child’s start date, as required by YGB’s outlined procedures. We recognize the importance of timely and complete documentation and will reinforce expectations with staff to ensure adherence to this control. At the same time, management respectfully notes that multiple mitigating controls are in place within the eligibility determination and authorization process. These include verification of eligibility criteria, review of supporting documentation, and system-based authorization controls, all of which must be completed before services are approved. Based on these layered controls, management does not believe that this timing issue could reasonably result in federal funds being awarded to ineligible children.

Finding Number: 2025-002 Program: Coronavirus State and Local Fiscal Recovery Funds ALN #: 21.027 Pass-through Entity: City of Boston Federal Agency: U.S. Department of Treasury Federal Award Year: January 1, 2025 –December 31, 2025 Compliance Requirement: Suspension and Debarment Type of finding: Significant Deficiency and noncompliance Criteria Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR 180.215. Additionally, according to 2 CFR 200.303, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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). Condition It is the YMCA’s control to check for suspension and debarment of vendors as part of the procurement process prior to entering into a contract. Checks of suspension and debarment of vendors on SAM.GOV are retained as part of the procurement documentation. Cause The YMCA did not properly document evidence of the control operating effectively. Proper perspective During our testing, we noted that for 1 of 1 selection, the YMCA provided screenshots of the SAM.GOV website showing the vendor was not suspended or debarred. The YMCA communicated to us that they checked the SAM.GOV website prior to entering into the contract with the vendor. However, there was no evidence that the control operated prior to entering into the contract. Therefore, we were unable to determine if the vendor was checked for suspension and debarment prior to entering into the contract. Upon our review of SAM.GOV the vendor is not suspended or debarred. Possible asserted effect The YMCA could enter into contracts with vendors who are suspended or debarred from working under covered transactions. This would then result in noncompliance and unallowable costs. Questioned costs None Statistical sampling That sample was not intended to be, and was not, a statistically valid sample. Repeat finding Not a repeat finding. Recommendation We recommend the YMCA to sign/initial and date the review on the SAM.GOV website before retaining the documentation to evidence the control. Views of responsible officials and corrective actions Management acknowledges the finding of insufficient documentation evidencing that suspension and debarment checks were performed prior to contract execution. While procedures were in place to review vendors against the SAM.gov exclusion list, documentation did not consistently demonstrate the timing of the review. Management confirms that the tested vendor was verified prior to work beginning and was not suspended or debarred at the time of review.

Department of Agriculture Federal Assistance Listing #10.766 Community Facilities Loans and Grants Special Tests and Provisions Material Weakness in Internal Control Over Compliance Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – During our testing, we noted that the reserve account was not separately identified and there was no formal review separate from the preparer over the reserve fund reconciliation for the federal program. Cause – The Organization did not have an adequate internal control policy in place to ensure the reserve account was separately tracked and a documented review and approval over the reserve fund occurred. Effect – The lack of adequate policies governing the review increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs – None reported. Context – Sampling was not used. The Organization has one reserve account that was tested. Repeat Finding from Prior Years – Yes, 2024-003 Recommendation – We recommend that the Organization enhance internal control policies to ensure that the reserve fund is separately tracked and formal documentation of reviews are present. View of Responsible Officials – Management agrees with the finding.

Identification of the Federal Program Federal Agency: U.S. Department of Health and Human Services, Health Resources and Services Administration (HRSA) Program Name: R&D Cluster Assistance Listing #: 93.859 Pass Through Entity: West Virginia University, University of North Dakota Award Identification: Sanford 21-673 Award Year(s): February 24, 2024–May 23, 2026 Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR 200.303 requires that the non-Federal entity must “(a) establish, document and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During our audit, we noted that for three of sixteen milestone invoices selected for testing, Sanford did not have documented evidence of review and approval of the study activities submitted to the pass-through entity. Cause: Based on the prior year finding, Management implemented corrective actions during FY 2025; however, certain milestone invoices had already been received prior to implementation of the updated controls and therefore were not subject to the revised review and approval procedures. Effect or Potential Effect: A lack of review and approval of milestone study activities could potentially result in unallowable activities being charged to the federal program. Questioned Costs: $0 Context: The three invoices that lacked evidence of review and approval of the study activities were received during the first two months of 2025, prior to implementation of management’s corrective action plan. Total milestone payments on this grant received during these two months totaled $120,870. Total milestone grant amounts charged to the R&D Cluster were $1,141,432 in FY 2025. The total federal expenditures for the R&D Cluster for FY 2025 were $27,155,088. Identification as a Repeat Finding: This is a repeat finding of 2024-004. Recommendation: We recommend management ensure that the revised review and approval procedures that were put in place are followed. Views of Responsible Officials: As it relates to Research milestone billing for the PASC grant, procedures were revised in 2025 after the 2024 Audit. Upon receipt of invoice and payment from PASC, the Research Billing team will review and provide notification to Research Director and Research Manager via email if the invoice and payment received matches to what is shown as owed in our systems. The Corrective Action Plan from the 2024 Audit was already put into place however this is a repeat finding due to the timing of the 2024 finding.

Condition: During our testing of program eligibility for the TANF program, we tested a nonstatistical sample of 40 participant files. For two participants, eligibility determinations could not be located. Additionally, for seven participants, eligibility determinations provided were either not dated or dated after fiscal year end (December 31, 2025). As a result, we were unable to determine whether eligibility had been properly documented prior to the participant beginning the program, as required. Criteria: Under 2 CFR §200.300(b), non Federal entities must comply with federal statutes, regulations, and the terms and conditions of federal awards. Eligibility is a compliance requirement identified in the Compliance Supplement for the TANF program. Additionally, 2 CFR §200.303 requires non Federal entities to establish and maintain effective internal control over federal awards to provide reasonable assurance that the entity is administering federal awards in compliance with program requirements. Adequate documentation supporting participant eligibility must be retained in accordance with 2 CFR §200.334. Cause: The finding resulted from a lack of formal controls over the review, documentation, and retention of TANF eligibility determinations. Specifically, there were no documented procedures to ensure eligibility determinations were completed, dated timely, and retained prior to participant enrollment. Effect: Because eligibility documentation was missing or not timely for nine participants, we were unable to verify compliance with TANF eligibility requirements. This resulted in questioned costs of $4,474 related to benefits provided to participants whose eligibility could not be substantiated. Questioned Costs: $4,474 Recommendation: We recommend that management establish formal procedures to ensure TANF eligibility determinations are completed, reviewed, and dated prior to participant enrollment and that all supporting documentation is retained in accordance with federal requirements. Additionally, management should consider implementing a documented review process to verify eligibility files are complete before benefits are provided.

Condition: The auditee did not submit three out of four required quarterly Federal Financial Reports SF-425. Criteria: The grant agreement with the U.S. Department of Agriculture stipulates that the auditee is required to file quarterly Federal Financial Reports SF-425. Further, 2 CFR 200.303 requires the auditee to establish and maintain effective internal controls over compliance. Cause: Staff turnover caused certain administrative tasks to be more challenging, which hindered internal controls over compliance with the requirement to file quarterly reports. Effect: The auditee failed to submit three out of four required quarterly Federal Financial Report SF-425, resulting in potential noncompliance with the requirements of the federal award. Recommendation: We recommend the auditee establish, document, and maintain procedures and controls to ensure the required quarterly reports are submitted timely. Management’s Response: See management's response dated May 25, 2026.

2025-001 Finding – Internal controls over compliance Federal Program: Housing Voucher Cluster; Section 8 Housing Choice Voucher Program - Assistance Listing #14.155 and Mainstream Vouchers – Assistance Listing #14.879 Federal Agency: U.S. Department of Housing and Urban Development Award Period: 2025 Finding resolution status In process Information on universe and population size The issue with the Authority’s system of internal control over compliance represents a significant deficiency in internal control. The total population of all Housing Choice Voucher (HCV) files subject to testing was 448. Of these 448 tenant files, we selected 25 items to test and noted 1 exception during our testing. Sample size information A non‑statistical sample of 25 tenant files were selected for testing. One error was identified. Identification as a repeat finding This was not a repeat finding. Criteria 2 CFR §200.303 requires non-Federal entities to establish and maintain effective internal controls over Federal programs that provide reasonable assurance of compliance with applicable requirements. HUD guidance requires that income determinations, including excluded amounts such as loans, be supported by adequate documentation retained in tenant files. Statement of condition During our review of tenant files, one file included a reported lump-sum payment of $6,700 that was treated as a loan and excluded from income. However, the Authority did not obtain or retain supporting documentation, such as a loan agreement or third-party verification, to substantiate the exclusion. Cause The Authority’s internal controls over compliance did not ensure that staff obtained and retained documentation for excluded income items. Effect Without effective controls over documentation, there is an increased risk that income determinations may not be properly supported, which could result in noncompliance with HUD requirements and inaccurate housing assistance calculations. Auditor non-compliance code S – Internal control deficiencies Questioned costs $0 Views of responsible officials Management acknowledges the deficiency and plans to strengthen controls over income verification and documentation retention. Context This was an isolated instance affecting one tenant file and does not appear to be a systemic issue. Recommendation We recommend that the Authority enhance internal controls to require documentation of all excluded income amounts, including supervisory review to ensure compliance with HUD requirements. Auditor’s summary of auditee’s comments on the findings and recommendations Management agrees with the finding and recommendation. Response indicator Agree Completion date September 30, 2026 Response Management agrees with the finding.

2025-004 LACK OF WRITTEN FEDERAL POLICIES AND PROCEDURES REQUIRED BY UNIFORM GUIDANCE Type of Finding: Material noncompliance Federal Program: Coronavirus State and Local Fiscal Recovery Funds (ALN# 21.027) Compliance Requirement: All Criteria - Per 2 CFR §200.303 and related sections (including §§200.305 and 200.318-320), non-federal entities expending federal awards must establish and maintain effective internal controls and must document policies and procedures governing compliance with applicable federal statutes, regulations, and terms of award. Condition - The Village has not developed or implemented the written policies and procedures required under the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Required documentation is absent in areas such as internal controls over compliance, cash management, procurement, and allowable costs. A similar issue was noted and reported last year as 2024-005. Cause - The Village has not formally developed Uniform Guidance-compliant policies due to limited administrative resources and competing operational priorities. Effect - The absence of formal written policies and procedures increases the risk of inconsistent or noncompliant treatment of federal expenditures. Without documented controls and expectations, the Village may fail to detect or prevent noncompliance with federal requirements in key grant administration areas. Questioned Costs - None Recommendation - We recommend that the Village adopt written policies and procedures addressing the specific requirements outlined in the Uniform Guidance. These policies should include, but not be limited to, internal controls over compliance, procurement, cash management, subrecipient monitoring (if applicable), and allowable cost determinations. Management should ensure that these policies are communicated and periodically reviewed. Views of Responsible Officials: Management agrees with the finding and will take appropriate steps to remedy noted finding.

Finding 2025-001: Research and Development Cluster Cash Management Draw Approvals Federal Agency: Department of Health and Human Services Criteria: 2 CFR 200.303 requires the recipient to establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance the award is managed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The Foundation has established independent review and approval of drawdown requests by the CEO/Controller as key control over draw requests. Condition: The Foundation did not consistently follow its established controls requiring independent review and approval of drawdown reimbursement requests prior to submission. During our testing of drawdown request controls within the Research and Development Cluster, we noted that 4 of 66 drawdown reimbursement requests tested (the entire population of drawdown requests) were submitted without documentation of independent review and approval. Based on the requests tested, the amounts submitted were accurate supported, and no instances of noncompliance were identified. Cause: The exceptions appear to have resulted from oversight in the review process, which led to drawdown requests being submitted before approval was documented. Additionally, the exceptions occurred during a period in which the Foundation was transitioning finance personnel responsibilities. Effect: Certain drawdown requests were submitted before the Foundation’s key control was evidenced as having been performed. Repeat Finding: N/A Questioned Costs: None Recommendation: We recommend the Foundation strengthen procedures to ensure all drawdown requests are reviewed and approved by the appropriate independent party prior to submission and that evidence of such review is consistently maintained. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See attached corrective action plan.

Criteria or Specific Requirement According to §200.303 Internal controls of 2 CFR Part 200, 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 statutes, regulations, and the terms and conditions of the Federal award. Condition and Context During our testing, we noted 1 sample where the Organization overpaid an individual which resulted in costs being erroneously allocated to the grant. Effect Noncompliance results in potential for incorrect payroll costs allocated to federal grants. Questioned Costs Known: $2,166 Cause Management oversight and improper payroll calculation. An employee was overpaid during their final payroll at the Organization. Recommendation We recommend the Organization update their termination procedures to verify that final payrolls are being calculated correctly and update their grant allocation process to ensure accurate wage rates are used to calculate the allocations. Views of Responsible Officials Management has updated the payroll termination process to include a documented review before payroll is finalized. The finance team will review final payroll calculations for terminated employees after HR provides the termination details and payout calculation. Payroll changes and review steps are documented as part of the bi-weekly payroll update emails.

2025-001 – Eligibility Federal Agency: U.S. Department of Housing and Urban Development Federal Program: 14.195 Section 8 Project-Based Cluster Condition: As part of our testing of Warren Gardens Housing Cooperative Company, Inc.’s, (the Cooperative) internal control over compliance for eligibility, we noted that the Cooperative did not follow their internal controls regarding income recalculations for two out of thirty-seven applications reviewed. The issues did not result in disqualification of the individuals to receive benefits, however these issues did impact the participants’ amount of benefits being provided. Criteria: 2 CFR 200.303 indicates that non-Federal entities receiving Federal awards must establish and maintain effective internal controls 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. Cause: The Cooperative did not properly follow its internal controls. Effect: The Cooperative did not properly calculate the income level for two participants in accordance with its internal controls. Context: Two out of thirty-seven applications sampled. Our sample was not a statistically valid sample. This was not a repeat finding from a prior period. Questioned Costs: None. Recommendations: Management should ensure that the Cooperative’s internal controls in place are properly followed. Management Response: Management acknowledges the finding and has updated and corrected the tenant files. Moving forward, management will strengthen procedures over tenant documents and income calculations.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Project Funding (CPF) Program Assistance Listing Number: 14.251 Federal Award Identification Number and Year: B-22-CP-MN-0492, 2025 Award Period: January 1, 2025 – December 31, 2025 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: The Uniform Guidance (2 CFR §200.303) requires non‑federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance the entity is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the award. For the Community Project Funding program, reporting is a compliance requirement and includes submission of required performance and financial reports. Condition: The City did not maintain documentation demonstrating that required reports for the Community Project Funding program were reviewed by someone other than the preparer prior to submission, including the DRGR Performance Report and the DRGR Financial Report. Questioned costs: None. Context: Reporting is a compliance requirement for the Community Project Funding program and includes submission of multiple reports during the award period. The City’s internal control over compliance related to reporting consists of review of reports prior to submission. Instances were identified where evidence of such review was not documented. Cause: Due to limited staffing levels, the City Administrator/Finance Director is responsible for both preparing and reviewing required program reports. As a result, independent review and documentation of report approval is limited. Effect: Lack of documented review of required reports increases the risk that errors or noncompliance in program reporting may occur and not be identified prior to submission, which could result in noncompliance with federal reporting requirements. Repeat Finding: No. Recommendation: We recommend the City implement procedures to ensure appropriate internal controls over compliance related to reporting, including documentation of review and approval of all required reports by someone other than the preparer prior to submission. Views of responsible officials: There is no disagreement with the audit finding. City management acknowledges that limited staffing and experience constrain segregation of duties; however, the City will evaluate and implement procedures to improve documentation of review and approval of required reports for the Community Project Funding program.

Finding 2025 – 001 Subject: Apprenticeship USA Grants – internal controls Federal Agency: U.S. Department of Labor Federal Programs: Apprenticeship USA Grants Assistance Listing Number (ALN): 17.285 Direct Agency: Department of Labor Compliance Requirements: Allowable Costs/Cost Principles Audit finding: Significant Deficiency Condition and Context An effective internal control system was not designed or implemented at the Organization related to payroll and incentives/subscriptions to ensure compliance with requirements related to the grant agreements and Allowable Costs/Cost Principles compliance requirements. Payroll The Organization did not design an effective system of internal controls to ensure that actual payroll costs were charged to the grant based on each employee’s time and effort for the time period January through June 2025. The Organization charged amounts that did not reflect the actual amounts paid which created costs charged to the grant over and above those allowable. The total payroll costs found to be unallowable totaled $23,228 and were computed as the difference between the amount charged to the grant and the time and effort allocations of actual payroll costs. Incentives/Subscriptions The Organization did not design an effective system of internal controls to ensure that incentive/subscription costs for the individuals shops were charged to the grant based on amounts agreed upon with the grantor. The total incentive/subscription costs found to be unallowable totaled $7,688 and were computed as the difference between the amount charged to the grant and a capped amount of $1,500 per shop for subscriptions and $8,500 per shop for incentives. Criteria ‘The auditee shall: . . . (b) Maintain internal control over Federal programs that provides reasonable assurance that the auditee is managing Federal awards in compliance with laws, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its Federal programs. . . ." 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 200.430(i) states in part: “Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award, a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using difference allocation bases; or an unallowable activity and a direct or indirect cost activity…” Cause The Organization’s management had not developed or implemented a system of internal controls to ensure compliance with the grant agreement, internal policy and the compliance requirements listed above. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs that could result in the repayment of federal funds. Questioned Costs Known questioned costs of $30,916 were identified as detailed in Condition and Context. Recommendation We recommend that the Inter-Industry Organization’s management establish controls to ensure compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Finding #2025-005 – Material Weakness and Other Noncompliance. Applicable federal programs: U. S. Department of Health and Human Services, 93.566, Refugee and Entrant Assistance State/Replacement Designee Administered Programs, Passed through Texas Office for Refugees: 10/01/24 – 09/30/25, FFY2025-27946V-ASA RSS, 10/01/24 – 09/30/25, FFY2025-27946V-AUSAA-RSS, 10/01/24 – 09/30/25, FFY2025-27946V-CMA, 10/01/24 – 09/30/25, FFY2025-27946V-RSS, Passed through United States Conference of Catholic Bishops: 10/01/24 – 09/30/25, 25RSI13A, Passed through U. S. Committee for Refugees: 10/01/24 – 09/30/25, RHP-2025-YMCA-Houston TX-03, 93.567, Refugee and Entrant Assistance Voluntary Agency Programs, Passed through U. S. Committee for Refugees and Immigrants: 10/01/24 – 09/30/25, 2502VARVMG, 10/01/23 – 09/30/24, 2402VARVMG, 93.676, Unaccompanied Alien Children Program, Passed through U. S. Committee for Refugees and Immigrants: 01/01/25 – 12/31/25, 90ZU0630-02. Criteria: 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 requires recipients and subrecipients of federal funds to establish, document, and maintain effective internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Additionally, section 200.403 indicates that costs charged to federal awards must be necessary and reasonable for the performance of the program and be adequately documented. Condition and context: Same as finding #2025-001. Cause: Same as finding #2025-001. Effect: Same as finding #2025-001. Questioned costs: $1,275. Recommendation: Same as finding #2025-001. View of responsible officials: Management agrees with the finding. See Corrective Action Plan.

Finding: 2025-001 Cash Management (Significant Deficiency) Federal Agency: Department of Health and Human Services Federal Program: National Technical Assistance Center on Kinship and Grandfamilies (2025) Assistance Listing Number: 93.048 Criteria: According to 2 CFR §200.303, Recipients and subrecipients must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Organization did not have an internal review and approval process in place over draw downs. Cause: The Organization did not maintain an adequate review and approval process over each drawdown to ensure amounts requested, including indirect cost reimbursements, were accurate, properly supported, and in compliance with Federal grant requirements. Effect or Potential Effect: The Organization may request reimbursement for costs in excess of the allowable amount or for unallowable costs, if drawdowns are not properly reviewed and approved with appropriate oversight. Information on the Federal Program: 93.048 Questioned Costs: None noted, as this is an administrative requirement and there were no instances noted of noncompliance. Context: During our audit, we noted that none of the nine drawdown samples tested were reviewed and approved. The sample is representative of the population. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend the Organization implement a formal review and approval process for all drawdowns to ensure amounts requested are accurate, properly supported, and reviewed prior to submission for reimbursement.

2025-002 Program: Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Passed-Through: Douglas County Award No. and Year: Multiple Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, requires non-Federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance the entity is managing the award in compliance with federal statutes, regulations, and the terms and conditions of the federal award (§200.303). In addition, 2 CFR §200.328 and §200.329 require non‑Federal entities and subrecipients to submit financial and performance reports in accordance with the terms and conditions of the federal award and pass‑through entity requirements. Condition: The Town did not have documented or consistently applied internal controls to ensure compliance with the County’s subrecipient guidance requiring the submission of formal special reports for ALN 21.027. Specifically, the Town did not maintain written procedures or standardized documentation evidencing the preparation, review, approval, and submission of required special reports in the format prescribed by the pass‑through entity. Cause: Management relied on email correspondence and progress meetings rather than a formally designed and implemented reporting control process. Effect: As a result, there is a reasonable possibility that required special reporting information submitted to the County could be incomplete, inconsistent, untimely, or not retained in accordance with federal and pass‑through entity record retention requirements, without detection by management. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used as the population was too small to sample. Program reporting requirements were expenditures and amounts passed through to subrecipients were reconciled to the supporting records. Repeat Findings from Prior Years: No. Recommendation: The Town should establish and document internal controls over compliance with special reporting requirements for federal awards, including: • Formal procedures for preparing special reports in the format required by the pass‑through entity; • Management review and approval of reports prior to submission; and • Retention of complete and accurate reporting documentation in accordance with federal and pass‑through entity requirements. Views of Responsible Officials: See separately issued Corrective Action Plan.

Finding 2025-001 – Activities Allowed or Unallowed, Allowable Costs/Cost Principles Identification of the federal program: Federal Grantor: United States Department of Health and Human Services Assistance Listing No.: 93.817 Hospital Preparedness Program (HPP) Ebola Preparedness and Response Activities Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303 requires that 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: Internal controls over payroll charged to the federal program were not sufficiently precise to ensure that payroll expenses were recorded using the correct authorized pay rates. Cause: Fairview did not have controls operating effectively, to review payroll calculations at a level of precision sufficient to detect discrepancies between applied pay rates and authorized rates prior to charging costs to the federal award. Effect or potential effect: Expenses may be charged to the federal award that are not in compliance with the federal grant agreements. Questioned costs: None. Context: Of the 23 payroll transactions sampled (totaling $67,035), two payroll transactions (totaling $404) were calculated using incorrect pay rates, resulting in inaccurate payroll charges to the federal program. For Assistance Listing No. 93.817, total payroll costs for Fairview were $537,540, representing 25.4% of total federal expenditures of $2,115,184 for the year ended December 31, 2025. Identification as a repeat finding, if applicable: The finding is not a repeat finding from the prior year. Recommendation: Management should enhance controls over payroll review processes to ensure payroll charges to federal programs are based on authorized pay rates and are reviewed at a sufficient level of precision to identify and correct errors prior to being charged to the award. Views of responsible officials: Management agrees with the finding and has developed a plan to correct the finding. To prevent recurrence, Fairview will enhance controls over payroll review processes to ensure accuracy prior to submission. These enhancements include reinforcing review expectations with project directors and including detailed review procedures for validating pay rate and wage calculations prior to reimbursement submissions.

FINDING: 2025-002 Clean Water State Revolving Fund - Suspension and Debarment U.S. Environmental Protection Agency, Passed through Pennsylvania Infrastructure Investment Authority (PENNVEST) – Assistance Lising Number 66.458 Statement of Condition: The Township did not follow internal control procedures designed to ensure compliance with suspension and debarment requirements for covered contracts. During our testing of procurement transactions subject to suspension and debarment requirements, we noted that the Township did not retain documentation demonstrating that it had reviewed the System for Award Management (SAM.gov) exclusion records prior to entering into contractual agreements. Specifically, there was no evidence that a SAM.gov printout was reviewed or approved to verify that vendors were not suspended or debarred at the time of contract execution. In conjunction with the audit, we reviewed the SAM Exclusions for all transactions in our sample and we noted that no transactions were with entities that were suspended or debarred. Criteria: In accordance with 2 CFR Part 200.303, a non-Federal entity must establish and maintain effective internal control over Federal awards that provide reasonable assurance that the non-Federal entity manages the Federal award in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Cause: The Township did not follow the internal control procedures to document the review of the SAM.gov exclusion list prior to contract execution. Effect: The lack of following internal control procedures to review the verification of suspension and debarment prior to entering into contracts, agreements, and grants, could result in the Township entering into covered transactions with entities that are suspended and debarred which is not allowed under the Clean Water State Revolving Fund program. Questioned Costs: None Identification as a Repeat Finding: This is not a repeat finding. Recommendation: The Township should follow the internal control procedure of reviewing the suspension and debarment verification prior to entering into contracts, agreements and grants. The review should be documented. Views of responsible officials and planned corrective action: Management agrees with the finding. See separate corrective action plan.

2025-003 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Prior Year Finding Number: N/A Year of Finding Origination: 2025 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Programs: 93.658 Foster Care Title IV-E 93.778 Grants to States for Medicaid Award Number and Year: 2501MNFOST; 2025 2505MN5ADM; 2025 Pass-Through Agency: Minnesota Department of Human Services and Minnesota Department of Children, Youth, and Families Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Administrative program costs are submitted to the Minnesota Department of Human Services (DHS) on a quarterly basis through the DHS Income Maintenance report (DHS-2550) for the Grants to States for Medicaid program and through the DHS Social Service Fund Report (DHS-2556) for the Foster Care Title IV-E program and Grants to States for Medicaid program. DHS provides reporting instructions, including information regarding eligible and ineligible costs. Condition: The following exceptions was noted in expenditures tested for activities allowed or unallowed and allowable costs/cost principles: • Capital outlay expenditures were incorrectly coded as services and charges. In addition, the following exceptions were noted in the second and third quarter DHS reports tested: • An entry to remove ineligible expenditures was incorrectly recorded twice on the third quarter DHS-2550 report. • Amortization expense was not reported on the DHS-2550 and DHS-2556 reports. • MAXIS certified mail costs were incorrectly reported on the DHS-2550 reports. • Capital outlay expenditures were incorrectly reported on the DHS-2550 reports. Questioned Costs: $149,357 related to Grants to States for Medicaid; known questioned costs were determined by the calculation of quarterly amortization expense on subscription-based information technology arrangements not recorded of $148,944 and $413 of journal entries identified during review of the general ledger. Context: DHS relies on accurate identification and reporting of program costs to ensure grant funds paid to the County are for allowable federal program activities and costs and provide detailed information necessary for maintaining proper oversight over federal programs. Total Grants to States for Medicaid expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) are $16,891,964, consisting of 33,059 transactions. The sample of 40 transactions total $306,970. Total Foster Care Title IV-E expenditures reported on the SEFA are $1,964,642, consisting of 29,676 transactions. The sample of 41 Foster Care Title IV-E transactions total $115,349. The reporting population consisted of four quarterly DHS-2550 and DHS-2556. The sample was two quarterly DHS-2550 and DHS-2556 reports. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Errors in the identification and reporting of costs on the quarterly reports can impair DHS’ ability to provide required oversight over federal programs and result in the County receiving either more or less federal funds than justified based on the actual underlying activity. Cause: The County Human Services Division’s controls over the identification of allowable activities and costs and preparation and review of the quarterly reports were not sufficient to identify these errors. Additionally, staff were unaware of the impact of subscription-based information technology arrangements and related amortization. Recommendation: We recommend the Human Services Division implement controls to ensure activities allowed and allowable costs are appropriately identified and accurately reported to DHS in accordance with federal program guidance and DHS instructions. We also recommend the Human Services Division correct and resubmit reports submitted with unallowable activities or costs, costs allocated incorrectly, or activity reported incorrectly. View of Responsible Official: Concur

Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Special Tests and Provisions Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: The loan agreement and related federal award terms require the auditee to maintain a minimum debt service coverage ratio of 1.20:1, calculated annually based on audited financial statements. Management is responsible for designing and implementing internal controls to ensure compliance with all loan covenant requirements (2 CFR 200.303). Condition: The auditee did not maintain the required debt service coverage ratio for the year ended December 31, 2025. The calculated ratio was 0.66:1, which is below the required threshold. Additionally, the Hospital does not have a control process in place to ensure that the monitored debt service coverage ratio is accurate and non-compliance is reported timely. Cause: The Hospital does not have a control process in place to ensure that the monitored debt service coverage ratio is accurate and non-compliance is reported timely. Effect: Failure to maintain the required debt service coverage ratio resulted in noncompliance with the terms of the federal award. Without effective controls, there is an increased risk that noncompliance with loan covenants may not be prevented or detected in a timely manner. Questioned Costs: None reported Context/Sampling: The auditor recalculated the debt service coverage ratio using audited financial data for the year ended December 31, 2025 and compared the result to the covenant requirement. Repeat Finding from Prior Year(s): No Recommendation: We recommend that management implement formal controls to monitor compliance with debt covenants, including periodic calculation of the debt service coverage ratio, documentation of management review and approval, and timely communication with the lender if noncompliance is identified. Views of Responsible Officials: Management agrees with the finding.

U.S. Department of Agriculture Passed through the Alabama State Department of Education Program: Child and Adult Care Food Program CFDA: 10.558 Grant Number: AF6-0000 Noncompliance/Significant Deficiency Eligibility Criteria Under 7 CFR Part 226 and 2 CFR 200.303, institutions participating in the Child and Adult Care Program must ensure that all participants meet federal eligibility criteria. Sponsors are responsible for collecting and maintaining documentation that demonstrates participants eligibility and must conduct appropriate oversight of sites to ensure ongoing compliance. Condition During our audit, we identified two participants for which the YMCA did not provide documentation to support eligibility based on enrollment forms and Income Eligibility Forms. Cause Operating sites are separate from the YMCA. As such, all enrollment and child records are maintained by the operating sites. The YMCA failed to monitor that the operating sites were maintaining records to support the participants. Effect Sponsors without documentation for participants may result in unallowable costs and reimbursements for ineligible meals, placing the program at risk for disallowed funding. The YMCA may be required to repay federal funds for meals claimed on behalf of participants whose eligibility could not be substantiated. As a result, questioned costs projected based on a sample error rate of 7.05% applied to the total population of $422,011, resulting in projected questioned costs of $29,735. Recommendation We recommend the entity implement and enforce procedures to collect and retain all required eligibility documents for participants. Management's Response The YMCA has updated documentation and communicated that to all operating sites and will strengthen oversight procedures to ensure enrollment forms and Income Eligibility Forms are collected, retained, and reviewed timely. Management will implement periodic compliance monitoring and provide additional training to site staff to ensure all required participant documentation is properly maintained.

FINDING 2025-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Internal Controls Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): CY 2021 Compliance Requirement: Reporting Audit Finding: Significant Deficiency Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the Town in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Recipients are required to quarterly or annually submit Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates, are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The Town was classified as a metropolitan town with a population below 250,000 residents that received an allocation of less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) funding. As such, the P&E report, covering April 1, 2024 to March 31, 2025, was required to be submitted to the Treasury by April 30, 2025. The Clerk-Treasurer completed and submitted the annual P&E report during the audit period as required; however, the Town did not design and implement a review or oversight process for the report prior to submission. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The recipient and subrecipient must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient and subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should 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). . . ." Cause A proper system of internal controls was not designed or implemented by management of the Town to ensure that P&E reports were prepared by one individual and reviewed by another individual before submission to the Treasury. Effect Without the proper implementation of an effectively designed system of internal controls, errors could occur and remain undetected. As such, the Town could not ensure that the reports submitted are materially accurate and correct. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the Town establish a system of internal controls and develop policies and procedures over the preparation and review of federal reports to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the Town provides the Treasury with complete and accurate information for all reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): CY 2021, SLFRP2104 Pass-Through Entity: Allen County, Indiana Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context The Town elected to receive the standard revenue loss allowance, allowing the Town to claim its total State and Local Fiscal Recovery Funds (SLFRF) allocation of $1,546,403 as revenue loss to use for government services. As such, all SLFRF program funds were expended under the revenue loss eligible use category. The U.S. Department of the Treasury (Treasury) determined that there are no subawards under this eligible use category and that recipients' use of revenue loss funds would not give rise to subrecipient relationships given that there is no federal program or purpose to carry out in the case of the revenue loss portion of the award. Additionally, the Town received a subaward of SLFRF program funds from Allen County totaling $1,732,298 to undertake eligible water tower and water main extension projects. Prior to entering into subawards and covered transactions with SLFRF award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person or entity, or adding a clause or condition to the covered transaction with that person or entity. Due to the Treasury's determination that the revenue loss eligible use category does not give rise to subawards, the Town was only required to comply with suspension and debarment requirements related to covered transactions. Upon inquiry of the Town, five covered transactions for goods or services that equaled or exceeded $25,000 that were paid from SLFRF funds during the audit period were selected for testing. Each transaction was examined to determine whether the Town verified the suspension and debarment status of the vendor prior to payment. There was no evidence provided for audit indicating that the Town checked the EPLS, collected a certification from that person or entity, or added a clause or condition to the covered transaction with that person or entity. As such, the Town did not verify the vendor was neither suspended nor debarred, or otherwise excluded or disqualified, from participating in federal assistance programs or activities prior to payment for the following covered transactions. Under the Direct Grant through the Treasury, the following covered transactions were identified:  The first covered transaction in the amount of $171,813 was for the purchase of a street sweeper.  The second covered transaction in the amount of $240,921 was for construction of additional water treatment plant capacity.  The third covered transaction in the amount of $198,662 was for a local road and street improvement project. Under the pass-through grant through Allen County, the following covered transactions were identified:  The fourth covered transaction in the amount of $856,590 was for the construction of an extension of a water main.  The fifth covered transaction in the amount of $866,149 was for the construction of water tank and site improvements. 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). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls, including policies and procedures, was not designed or implemented by management of the Town to prevent and detect noncompliance. The Town entered into covered transactions without determining whether vendors were neither suspended nor debarred or otherwise excluded or disqualified from participating in federal assistance programs or activities. Effect Without the proper implementation of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As such, the Town could have entered into a covered transaction with a vendor that was suspended or debarred or otherwise excluded or disqualified from participating in federal assistance programs or activities. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the Town implement its system of internal controls to ensure that all contractors that are paid $25,000 or more, all or in part with federal funds, are not suspended, debarred, or otherwise excluded from participating in federal programs prior to entering into any contracts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Finding 2025-001 – Procurement and Suspension and Debarment Identification of the federal program: U.S. Department of Health and Human Services U.S. Department of Defense Research and Development Cluster Assistance Listing Number: 93.351 – Research Infrastructure Programs Federal Award Numbers Award Period Pass-Through Entity, if Applicable P51OD011133-26 5/1/2024-4/30/2025 N/A P51OD011133-27 5/1/2025-4/30/2026 N/A Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 200.318 General procurement standards. (i) Procurement records. The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. 200.319 Competition. (a) All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition and is consistent with the standards of this section and § 200.320. 200.320 Procurement Methods There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319. (a) Informal procurement methods for small purchases. These procurement methods expedite the completion of transactions, minimize administrative burdens, and reduce costs. Informal procurement methods may be used when the value of the procurement transaction under the Federal award does not exceed the simplified acquisition threshold as defined in § 200.1. Recipients and subrecipients may also establish a lower threshold. Informal procurement methods include: (1) Micro-purchases — (i) Distribution. The aggregate amount of the procurement transaction does not exceed the micro-purchase threshold defined in § 200.1. To the extent practicable, the recipient or subrecipient should distribute micro-purchases equitably among qualified suppliers. (ii) Micro-purchase awards. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the recipient or subrecipient considers the price reasonable based on research, experience, purchase history, or other information; and maintains documents to support its conclusion. Purchase cards may be used as a method of payment for micro-purchases. (iii) Micro-purchase thresholds. The recipient or subrecipient is responsible for determining and documenting an appropriate micro-purchase threshold based on internal controls, an evaluation of risk, and its documented procurement procedures. The micro-purchase threshold used by the recipient or subrecipient must be authorized or not prohibited under State, local, or tribal laws or regulations. (2) Simplified acquisitions — (i) Simplified acquisition procedures. The aggregate dollar amount of the procurement transaction is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. Unless specified by the Federal agency, the recipient or subrecipient may exercise judgment in determining what number is adequate. (ii) Simplified acquisition thresholds. The recipient or subrecipient is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk, and its documented procurement procedures, which may be lower than, but must not exceed, the threshold established in the FAR. (b) Formal procurement methods. Formal procurement methods are required when the value of the procurement transaction under a Federal award exceeds the simplified acquisition threshold of the recipient or subrecipient. Formal procurement methods are competitive and require public notice. The following formal methods of procurement are used for procurement transactions above the simplified acquisition threshold determined by the recipient or subrecipient in accordance with paragraph (a)(2)(ii) of this section: (1) Sealed bids. This is a procurement method in which bids are publicly solicited through an invitation and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid conforms with all the material terms and conditions of the invitation and is the lowest in price. The sealed bids procurement method is preferred for procuring construction services. (i) For sealed bidding to be feasible, the following conditions should be present: (A) A complete, adequate, and realistic specification or purchase description is available; (B) Two or more responsible bidders have been identified as willing and able to compete effectively for the business; and (C) The procurement lends itself to a firm-fixed-price contract, and the selection of the successful bidder can be made principally based on price. (ii) If sealed bids are used, the following requirements apply: (A) Bids must be solicited from an adequate number of qualified sources, providing them with sufficient response time prior to the date set for opening the bids. Unless specified by the Federal agency, the recipient or subrecipient may exercise judgment in determining what number is adequate. For local governments, the invitation for bids must be publicly advertised. (B) The invitation for bids must define the items or services with specific information, including any required specifications, for the bidder to properly respond; (C) All bids will be opened at the time and place prescribed in the invitation for bids. For local governments, the bids must be opened publicly. (D) A firm-fixed-price contract is awarded in writing to the lowest responsive bid and responsible bidder. When specified in the invitation for bids, factors such as discounts, transportation cost, and life-cycle costs must be considered in determining which bid is the lowest. Payment discounts must only be used to determine the low bid when the recipient or subrecipient determines they are a valid factor based on prior experience. (E) The recipient or subrecipient must document and provide a justification for all bids it rejects. (2) Proposals. This is a procurement method used when conditions are not appropriate for using sealed bids. This procurement method may result in either a fixed-price or cost-reimbursement contract. They are awarded in accordance with the following requirements: (i) Requests for proposals require public notice, and all evaluation factors and their relative importance must be identified. Proposals must be solicited from multiple qualified entities. To the maximum extent practicable, any proposals submitted in response to the public notice must be considered. (ii) The recipient or subrecipient must have written procedures for conducting technical evaluations and making selections. (iii) Contracts must be awarded to the responsible offeror whose proposal is most advantageous to the recipient or subrecipient considering price and other factors; and (iv) The recipient or subrecipient may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby the offeror’s qualifications are evaluated, and the most qualified offeror is selected, subject to negotiation of fair and reasonable compensation. The method, where the price is not used as a selection factor, can only be used to procure architectural/engineering (A/E) professional services. The method may not be used to purchase other services provided by A/E firms that are a potential source to perform the proposed effort. (c) Noncompetitive procurement. There are specific circumstances in which the recipient or subrecipient may use a noncompetitive procurement method. The noncompetitive procurement method may only be used if one of the following circumstances applies: (1) The aggregate amount of the procurement transaction does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be fulfilled by a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from providing public notice of a competitive solicitation; (4) The recipient or subrecipient requests in writing to use a noncompetitive procurement method, and the Federal agency or pass-through entity provides written approval; or (5) After soliciting several sources, competition is determined inadequate. 200.324 Contract cost and price. (a) The recipient or subrecipient must perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold. The method and degree of analysis conducted depend on the facts surrounding the particular procurement transaction. For example, the recipient or subrecipient should consider potential workforce impacts in their analysis if the procurement transaction will displace public sector employees. However, as a starting point, the recipient or subrecipient must make independent estimates before receiving bids or proposals. (b) Costs or prices based on estimated costs for contracts under the Federal award are allowable only to the extent that the costs incurred or cost estimates included in negotiated prices would be allowable for the recipient or subrecipient under subpart E of this part. The recipient or subrecipient may reference its own cost principles as long as they comply with subpart E of this part. (c) The recipient or subrecipient must not use the “cost plus a percentage of cost” and “percentage of construction costs” methods of contracting. Condition Texas Biomed did not comply with procurement requirements per the Uniform Guidance. Specifically, Texas Biomed did not comply with informal procurement methods for small purchases and noncompetitive procurement requirements. Texas Biomed also did not comply with its own procurement policy in relation to procurements of small purchases and noncompetitive procurements. Additionally, Texas Biomed did not maintain records for certain procurements sufficient to detail the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, the basis for the contract price, and the performance of a cost or price analysis, when required. Cause Texas Biomed did not have effective internal controls and procedures in place to ensure Texas Biomed complied with federal procurement requirements and Texas Biomed’s procurement policy and also maintained records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement and other required elements, including a cost or price analysis, when required. Effect or potential effect Texas Biomed did not comply with the general procurement standards, methods of procurement, and cost or price analysis requirements, according to the Uniform Guidance. Questioned costs $211,839 in total for 3 procurements as follows: $38,000 – Assistance Listing Number 93.351, Award Identification Number – P51OD011133-26 Procurement Date of January 28, 2025 $162,986 – Assistance Listing Number 93.351, Award Identification Number – P51OD011133-27, Procurement Date of May 22, 2025 $10,853 – Assistance Listing Number 93.351, Award Identification Number – P51OD011133-27, Procurement Date of May 22, 2025 Per 2 CFR 200.1, questioned cost means an amount, expended or received from a Federal award, that in the auditor’s judgment: (1) Is noncompliant or suspected noncompliant with Federal statutes, regulations, or the terms and conditions of the Federal award; (2) At the time of the audit, lacked adequate documentation to support compliance; or (3) Appeared unreasonable and did not reflect the actions a prudent person would take in the circumstances. Questioned costs were computed as the value of the individual procurements tested that were not compliant with the Uniform Guidance or that lacked adequate documentation to support compliance regarding the history of the procurement, including the rationale of the procurement and the performance of a cost or price analysis, when required. None of the questioned costs were related to procurements that appeared unreasonable. Context EY issued a material weakness for Texas Biomed related to internal control over procurement in the prior year. Based upon the implementation date for the corrective action of September 2025 through November 2025, provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding. EY tested 13 procurements over the micro-purchase threshold of $10,000, with expenditures totaling $1,383,894 from a population of 53 procurements over the micro-purchase threshold of $10,000 ($15,000 effective October 1, 2025), with expenditures totaling $4,752,988 during the year ended December 31, 2025. For 1 procurement with expenditures in the amount of $162,986, related to a purchase order dated May 22, 2025 for $660,754, for animal food, Texas Biomed did not perform a cost or price analysis prior to the procurement. Since the total purchase order for this procurement exceeded $250,000, the simplified acquisition threshold, a cost or price analysis was required. EY observed that a cost analysis was performed for this same vendor for animal food on October 22, 2025. For 1 procurement with expenditures in the amount of $38,000, related to a purchase order dated January 28, 2025 for the same amount, for lab services, Texas Biomed did not obtain quotes or document sole source justification or the history of the procurement, including the rationale for the method of procurement, at the time of the procurement. Subsequently, Texas Biomed prepared sole source documentation for the procurement during the audit. For 1 procurement with expenditures in the amount of $10,853, related to a purchase order dated May 22, 2025 for $232,000, for fuel, Texas Biomed did not document sole source justification at the time of the procurement but instead utilized outdated sole source justification prepared over a year earlier under a separate procurement. We consider the expenditures related to these procurements to be questioned costs due to Texas Biomed not adhering to federal procurement requirements per the Uniform Guidance and also Texas Biomed’s procurement policy. Identification as a repeat finding, if applicable This is a repeat finding – Finding 2023-002 and 2024-002. Recommendation Texas Biomed should comply with federal procurement requirements, as well as Texas Biomed’s procurement policy with regards to obtaining quotes for small purchases and documentation of sole source justification at the time of the procurement, as applicable. Texas Biomed should re-evaluate and document sole source justifications for vendors retained from year to year each time a new procurement is made from that vendor. Texas Biomed should retain written documentation for procurements, documenting the history of the procurement prior to the procurement of goods or services including, but not limited to, the rationale for the method of procurement, selection of contract type, contractor selection or rejection, the basis for the contract price, and the performance of a cost or price analysis, when required. Views of responsible officials Management agrees with the finding and implemented corrective action as of November 2025. The instances of noncompliance noted above occurred prior to November 2025. For the procurement with expenditures of $162,986 for animal food, a cost analysis was performed on October 22, 2025 and provided during the audit. This was a sole source procurement, but it should be noted that the cost analysis showed the supplier Texas Biomed used was 55% lower in cost than another supplier of similar, though not identical, animal food. For the procurement with expenditures of $38,000 for lab services, sole source documentation was prepared during the audit explaining that this is the only lab found to provide the services needed, accept Texas Biomed’s samples, and provide the results needed timely. For the procurement with expenditures of $10,853 for fuel, sole source documentation was updated July 1, 2025.

Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program Compliance Requirement: Special Tests and Provisions – Sliding Fee Discounts Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 5 H80CS00097-24-00, 6 H80CS00097-24-01, 6 H80CS00097-24-03, 6 H80CS00097-24-04, 6 H80CS00097-24-05, 6 H80CS00097-24-06, 6 H80CS00097-24-07, 6 H80CS00097-24-08 Finding Type: Noncompliance and Significant Deficiency in Internal Control Known Questioned Costs: $1,300 Condition: The Organization did not follow the correct processes of review and approval of the application of the sliding fee scale. - Applications for patients were approved for one slide but their charges were applied to a different slide Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Health centers must prepare and apply a sliding fee discount schedule, so that the amounts owed for health center services by eligible patients are adjusted based on the patient’s ability to pay (42 U.S.C 254b(k)(3)(G)(i)). The patient’s ability to pay is based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services (42 U.S.C 9902(2). Cause: Failure to apply the sliding fee correctly, as noted in the encounters above, was due to improper staff training or failure to properly monitor the process. Calculation of Questioned Costs: Out of the one hundred items sampled, 5 instances contained exceptions resulting in noncompliance. The total dollar value of the exceptions in the sample was $1,300 out of a total dollar amount of $30,536 sampled. Extrapolated over the population dollar value of $1,974,668, the projected error was $84,068 likely questioned costs. The sample was not statistically valid. Effect: The Organization could be incorrectly billing for services Recommendation: Staff should be consistently trained in how patients should complete the intake forms, including the sliding fee scale application, and require patients complete the form appropriately, including refusal to provide information, if applicable. Staff should also be consistently trained in what documentation is considered sufficient to support income identified as well as verify the application is consistent with the documentation and, when needed, clearly document the reasons for inconsistency. Staff should make every effort to obtain documentation of patient income in accordance with internal policies and procedures. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plan

Information on the Federal Program: Hazard Mitigation Grant, Assistance Listing Number 97.039, U.S. Department of Homeland Security, passed through Georgia Emergency Management & Homeland Security Agency. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Section 200.303 requires non-Federal entities to establish and maintain effective internal control over Federal awards, providing reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the award. Furthermore, the specific grant agreement and 2 CFR 200.328 require the timely and accurate submission of periodic financial and performance reports. Condition: During our testing of the County's reporting compliance for the Hazard Mitigation Grant in fiscal year 2025, we noted the following exceptions: • Late Submission: The 3rd Quarter report was submitted 8 days after the required grant deadline for the ALN #HMGP-440-006. • Inaccurate Interim Reporting: Project costs were not accurately reported in the quarter they were incurred. Instead of reporting costs in the appropriate quarters, the County aggregated and reported the total project costs entirely within the 4th Quarter report. Further, projects costs for November and December 2025 totaling approximately $185,000 were not included in the 4th Quarter progress report. Context/Cause: The County lacked formally documented internal procedures and adequate inter-departmental communication workflows. Consequently, the individual responsible for grant reporting did not receive the necessary invoices and financial data in a timely manner. Additionally, there was no documented secondary review process in place prior to the submission of the reports. Effects: The lack of adequate internal controls resulted in noncompliance with federal reporting requirements, specifically the late submission of a required report and the submission of inaccurate interim quarterly reports. This limits the federal granting agency's ability to accurately monitor interim project progress, financial pacing, and expenditures throughout the year. Recommendation: We recommend the County develop and implement formal, written policies and procedures to ensure all relevant financial data and invoices are routed to the reporting personnel well in advance of reporting deadlines. Management should establish a secondary review and approval process by a supervisor or separate qualified individual before any grant reports are submitted to ensure accuracy and timeliness. Finally, training should be provided to all relevant staff regarding this reporting workflow. Auditee’s Response: We concur with the finding. The County has implemented additional internal controls, including a workflow for sharing invoices during 2025 when it was discovered that the grant reporting was not done properly. The County also adopted a new grant policy in March 2026 to provide additional levels of review from the grant application process through closeout of a grant. This further ensures accurate and timely reporting going forward.

Environmental Protection Agency Direct Program: Congressionally Mandated Projects - 66.202 Award Year: 2023 Criteria or Specific Requirement - Reporting Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) should establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Per the Environmental Protection Agency Congressionally Mandated Project's Programmatic Conditions, non-Federal entities that receive the federal award are required to submit semi-annual performance reports. Condition: During our test work over the Congressionally Mandated Projects grant, we noted the Board of Public Utilities did not timely file one of the required performance reports nor was there a review of the report prior to submission. Cause: The Board of Public Utilities' controls to ensure reports are filed timely and are reviewed prior to filing were not operating effectively. Effect or Potential Effect: Required reports are not being submitted timely. Questioned Costs - None Context: One out of the two semi-annual reports selected for testing was submitted on April 27, 2026, after the Environmental Protection Agency's due date of October 30, 2025. It was also noted through discussions with the Board of Public Utilities, no review of the report was completed prior to submission. The sample was not intended to be, and was not, a statistically valid sample. Identification of Prior Year Finding: 2024-001 Recommendation: We recommend the Board of Public Utilities implement a process that includes tracking the timely submission of reports and documenting who reviewed the report prior to submission. Views of Responsible Official and Planned Corrective Action: Management agrees with finding. See corrective action plan.

Environmental Protection Agency Direct Program: Congressionally Mandated Projects - 66.202 Award Year: 2023 Criteria or Specific Requirement - Davis-Bacon Act Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) should establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Per the Environmental Protection Agency Congressionally Mandated Project's Programmatic Conditions, non-Federal entities that receive the federal award are required to maintain adequate records to demonstrate compliance with compensation requirements. Condition: During our test work over the Congressionally Mandated Projects grant, we noted the Board of Public Utilities did not obtain Statements of Compliance/Certified Payrolls from the applicable vendors in timely manner. Cause: The Board of Public Utilities' controls to ensure that the Statements of Compliance/Certified Payrolls are submitted timely were not operating effectively. Effect or Potential Effect: The Board of Public Utilities was unable to demonstrate compliance with Davis-Bacon wage rate requirements. Questioned Costs - None Context: For all weeks selected for testing, the subcontractor did not submit the required Statements of Compliance within a timely manner. The sample was not intended to be, and was not, a statistically valid sample. Identification of Prior Year Finding: 2024-002 Recommendation: We recommend that the Board of Public Utilities implement a process that includes tracking the timely submission of Statements of Compliance and documenting review of the Statements once received. Views of Responsible Official and Planned Corrective Action: Management agrees with finding. See corrective action plan.

Environmental Protection Agency Direct Program: Congressionally Mandated Projects - 66.202 Award Year: 2023 Criteria or Specific Requirement - Suspension and Debarment In accordance with 2 CFR 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. In accordance with 2 CFR Section 180.300, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Suspension and debarment checks were not completed for a vendor prior to entering into a contract. Cause: The BPU's controls to ensure suspension and debarment checks on vendors receiving federal funds did not operate effectively. Effect or Potential Effect: Federal funds could be paid to entities that are suspended or debarred. Questioned Costs - None Context: The BPU entered into a contract during the year ended December 31, 2025 that was considered a "covered transaction" and spent approximately $74,000 under this contract. This contract was selected for testing suspension and debarment and the BPU did not check the vendor's suspension and debarment status. Identification of Prior Year Finding: N/A Recommendation: Policies and procedures should be modified to ensure that suspension and debarment checks are performed on vendors prior to making purchases with federal funds. Views of Responsible Official and Planned Corrective Action: Management agrees with finding. See corrective action plan.

Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Passed-Through: Douglas County Award No. and Year: Multiple Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, requires non-Federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance the entity is managing the award in compliance with federal statutes, regulations, and the terms and conditions of the federal award (§200.303). In addition, 2 CFR §200.328 and §200.329 require non‑Federal entities and subrecipients to submit financial and performancereports in accordance with the terms and conditions of the federal award and pass‑through entityrequirements. Condition: The Town did not have documented or consistently applied internal controls to ensure compliance with the County’s subrecipient guidance requiring the submission of formal special reports for ALN 21.027. Specifically, the Town did not maintain written procedures or standardized documentation evidencing the preparation, review, approval, and submission of required special reports in the format prescribed by the pass‑through entity. Cause: Management relied on email correspondence and progress meetings rather than a formally designed and implemented reporting control process. Effect: As a result, there is a reasonable possibility that required special reporting information submitted to the County could be incomplete, inconsistent, untimely, or not retained in accordance with federal and pass‑through entity record retention requirements, without detection by management. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used as the population was too small to sample. Program reporting requirements were expenditures and amounts passed through to subrecipients were reconciled to the supporting records. Repeat Findings from Prior Years: No. Recommendation: The Town should establish and document internal controls over compliance with special reporting requirements for federal awards, including: •Formal procedures for preparing special reports in the format required by thepass‑through entity; •Management review and approval of reports prior to submission; and •Retention of complete and accurate reporting documentation in accordance with federaland pass‑through entity requirements. Views of Responsible Officials: See separately issued Corrective Action Plan.

Reporting Federal agency: U.S. Department of Health and Human Services Federal program title: Health Center Program Cluster Assistance Listing Number: 93.224/93.527 Award Period: 6/1/24-5/31/25; 6/1/25-5/31/26 Criteria: Code of federal regulation (CFR) § 200.303 requires that recipients of federal funds establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Recipients of grants from the Bureau of Primary Health Care Health Center Program are required to submit the Uniform Data System (UDS) report on an annual basis. The UDS report contains various information which has been identified as key line items with the compliance supplement for the Health Center Program Cluster. Condition: The amount reported for one of the key line items within the UDS report did not agree to the supporting documentation provided by the Organization. Questioned Costs: None Context: Within the UDS report, Table 4, which contains a breakout of patients by income as a percentage of the federal poverty guideline, contained an amount on Line 6, Column A for the total number of patients which did not agree to the supporting documentation provided by the Organization. Cause: Support was not saved in real time. The reports run after the fact do not agree to the final UDS report. Effect: Reporting of incorrect amounts within the UDS report. Repeat Finding: No. Recommendation: We recommend the Organization perform a final review of amounts entered within the UDS report, as compared to the supporting schedules, prior to submission. Views of Responsible Officials: There is no disagreement with the audit finding.

Assistance Listing: 66.957 Greenhouse Gas Reduction Fund: National Clean Investment Fund and 66.959 Greenhouse Gas Reduction Fund: Solar for All Finding No. 2025-003: Significant Deficiency in Controls over Nonpayroll Expense Approvals Condition: During testing of nonpayroll transactions for the SFA and GGRF programs, controls related to review, approval, and segregation of duties were not consistently performed or documented. For instance, under the Solar for All program, of the nine (9) transactions tested, two (2) transactions totaling $179,268 reflected inadequate segregation of duties, as the same individual responsible for contract management also approved the related invoices without evidence of an independent review. One transaction totaling $39,936 lacked documentation identifying the requestor, and five transactions totaling $233,370 did not include evidence of documented invoice approval. Under the GGRF NCIF program, four (4) of eight (8) transactions tested ($58,864.59) did not include evidence of an independent review separate from the requestor and/or individual responsible for payment processing. Criteria: In accordance with Uniform Guidance (2 CFR 200.303 and 200.403), entities are required to maintain effective internal controls over federal awards to ensure that costs charged to programs are allowable, properly authorized, and adequately supported. Transactions should be subject to appropriate review and approval, and responsibilities should be sufficiently segregated to reduce the risk of errors or irregularities. Cause: These conditions appear to result from inconsistent implementation of established internal controls, including the absence of standardized procedures for documenting approvals and insufficient enforcement of segregation of duties. Additionally, reliance on informal or manual processes contributed to incomplete documentation and audit trails supporting transaction review and authorization. Effect or Potential Effect: Weaknesses in review, approval, and segregation of duties increase the risk that improper, unsupported, or unauthorized expenditures may occur and not be identified in a timely manner. As a result, there is an elevated risk of noncompliance with applicable federal requirements and potential misstatement of program expenditures. Questioned Costs: None Perspective Information: While the exceptions identified relate primarily to documentation and consistency in the execution of control activities, they do not necessarily indicate that all review and approval procedures were absent. Management indicated that certain reviews may have been performed; however, documentation to evidence these controls was not consistently retained. Strengthening documentation practices and formalizing review and approval processes would enhance the organization’s control environment, improve transparency, and support compliance with federal requirements. Addressing these matters will also position management to more effectively demonstrate that internal controls over nonpayroll expenditures are designed and operating as intended. Identification of Repeat Finding: Not applicable since this is a new finding. Recommendation: We recommend that management strengthen controls over nonpayroll expenditures by implementing consistent and well-documented review and approval processes. This should include requiring documented approval of all invoices and payments prior to disbursement and ensuring clear segregation of duties among individuals responsible for initiating, approving, and processing transactions. Management may also consider implementing standardized, system-based approval workflows to enhance control enforcement and maintain complete audit trails. Additionally, all supporting documentation, including evidence of request, review, approval, and payment authorization, should be retained in accordance with established policies. Views of responsible Officials: Management agrees with the finding. Documentation supporting review, approval, and segregation of duties for nonpayroll transactions was not consistently maintained. Management has implemented corrective actions, including formalizing procedures that require clear separation between the requestor and approver, documented approval of all invoices prior to payment, and retention of supporting documentation. A standardized approval workflow has been implemented through Bill.com to enforce control requirements and maintain a complete audit trail. Management will incorporate these procedures into formal policies and monitor compliance to ensure controls are consistently applied across programs.

Assistance Listing: 66.957 Greenhouse Gas Reduction Fund: National Clean Investment Fund and 66.959 Greenhouse Gas Reduction Fund: Solar for All Finding No. 2025-004: Significant Deficiency in Controls over Documenting Time Sheet Reviews Condition: During testing of payroll transactions for the SFA and GGRF programs, controls related to timesheet reviews and payroll processing were not consistently performed or documented. Specifically, for the SFA program, all eleven (11) payroll transactions tested ($32,607) lacked documented evidence of timesheet review. For the GGRF program, two (2) out of nine (9) payroll transactions tested ($6,490) did not include documented evidence of timesheet review. In addition, payroll was processed without a formal secondary review after preparation by the Director of People and prior to submission through third-party service provider. While management indicated that reviews were performed, supporting documentation was not consistently retained, and a formalized process to evidence such review was not in place. Criteria: In accordance with Uniform Guidance (2 CFR 200.303 and 200.430), entities are required to maintain effective internal controls over payroll processes. This includes maintaining appropriate supporting documentation (such as timesheets), performing, and documenting supervisory review of payroll and time records, and ensuring that payroll costs charged to federal awards are accurate, allowable, and properly approved. Cause: These conditions appear to result from insufficiently formalized review control procedures and inconsistent documentation retention practices, particularly during and following system transitions. Additionally, payroll review and approval protocols were not clearly defined or consistently applied. Effect or Potential Effect: The absence of consistently documented review controls over timesheets and payroll processing limits the ability to verify the accuracy, completeness, and allowability of payroll costs. This increases the risk that errors or unsupported payroll charges could occur and not be identified in a timely manner, which may result in noncompliance with applicable federal requirements. Questioned Costs: None Perspective Information: While control deviations were noted in the areas of timesheet review and payroll processing, the exceptions identified were limited to the sample tested and were primarily related to documentation and consistency of control execution rather than evidence of pervasive or intentional noncompliance. Management indicated that reviews were performed; however, documentation to support these reviews was not consistently retained. Strengthening documentation practices and formalizing control procedures will enhance transparency, support compliance with Uniform Guidance requirements, and improve the organization’s ability to demonstrate effective internal control over payroll-related expenditures charged to federal programs. Identification of Repeat Finding: Not applicable since this is a new finding. Recommendation: We recommend that management enhance payroll controls by requiring documented supervisory review and approval of all timesheets prior to payroll processing, implementing a formal secondary review of payroll registers before submission, and formalizing payroll policies and procedures. These procedures should clearly define roles, responsibilities, and documentation requirements to support consistent application and evidence of control performance. Views of Responsible Officials: Management agrees with the finding. While timesheet and payroll reviews were performed, documentation of these reviews was not consistently retained, and a formal secondary review of payroll prior to processing was not in place. Management has implemented corrective actions, including establishing a formal, documented review process for timesheets and payroll prior to disbursement. Reviews will be performed within a centralized system or documented workflow to ensure audit evidence is retained. Additionally, a secondary review control has been implemented requiring independent approval of payroll before submission through Paylocity. Management will incorporate these procedures into standard operating practices and monitor compliance to ensure controls are consistently applied across programs.

Section III - Federal Award Findings and Questioned Costs FINDING 2025-002 Subject: Water and Waste Disposal Systems for Rural Communities - Reporting Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listings Number: 10.760 Federal Award Number and Year (or Other Identifying Number): TRSW222216 Compliance Requirement: Reporting Audit Finding: Material Weakness Condition and Context Recipients of the Water and Waste Disposal Systems for Rural Communities award funds are required to submit the RD 442-2 (Statement of Budget, Income and Equity) and the RD 442-3 (Balance Sheet); or an annual audit may be submitted in lieu of those forms. The Town did not have a documented oversight, review, or approval process in place to ensure the required RD 442-2, RD 442-3, or an annual audit, were completed and submitted timely and accurately to the United States Department of Agriculture. 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). . . ." Cause A proper system of internal controls was not designed by the management of the Town. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the Town'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 Town could not ensure that the required reports were filed with the awarding agency. As such, the awarding agency may not have accurate and current information to discern the financial status of the Town's project. Furthermore, noncompliance with the provisions of federal statutes, regulations, and the terms and conditions or the federal award could result in the loss of future federal funding to the Town. INDIANA STATE BOARD OF ACCOUNTS 16 TOWN OF WESTPORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Town's management establish a system of internal controls, including segregation of duties, related to the grant agreement and compliance requirement listed above. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Finding: Eligibility Federal Assistance Listing Number 93.558 - Temporary Assistance for Needy Families (TANF) Federal Agency - Department of Health and Human Services, Passed-Through Colorado Department of Human Services Award Number - None Provided; Award Year 2025 Criteria or Specific Requirement: The Temporary Assistance for Needy Families (TANF) program is governed by eligibility requirements established under the Social Security Act, applicable federal regulations (45 CFR Part 260-265), and corresponding State of Colorado policies. Pursuant to Uniform Guidance at 2 CFR §200.303, the County is required to establish and maintain effective internal controls over compliance to provide reasonable assurance that TANF eligibility determinations comply with all applicable federal statutes, regulations, and the terms and conditions of the federal award. All eligibility determinations must be fully supported by complete and accurate documentation and input correctly into the Colorado Benefits Management System (CBMS). Condition: We noted the following issues in the 25 cases tested: - One instance in which client income was incorrectly entered and as such, was ineligible for benefits as they were over the income limits for all of 2025. - Three instances in which, although case notes indicated general contact with the participant, the County did not retain sufficient documentation that a required meeting specifically addressed or confirmed engagement in an eligible work activity or was completed within required timeframe. Questioned Costs: $8,169 of known questioned costs were determined by isolating the benefits issued in 2025 for the client who was over income limits. Context: We tested 25 cases that received TANF assistance for the year ended December 31, 2025, and noted the issues described above. The tested sample represented approximately $145,000 in benefits issued. The total population consisted of approximately $6.3 million in benefits issued to approximately 2,013 clients. A non-statistical sampling methodology was used to select the sample. Effect: The absence of appropriate controls related to the above requirements increases the risk of incorrect benefit payments or the provision of inappropriate services to clients. Cause: There was a misunderstanding at the staff level of subsidized and unsubsidized employment income and the implications on TANF eligibility. In addition, there was inconsistent contact between the County and clients which resulted in incomplete documentation as required by State rule and County policy. Recommendation: We recommend that the County continue to strengthen internal controls related to eligibility determinations. This includes issuing training alerts related to the differences between subsidized and unsubsidized employment income and the impacts to eligibility. Additionally, we recommend continued periodic quality assurance reviews of TANF case files to ensure ongoing compliance with federal and state eligibility requirements and identification of employees with performance issues. Finally, we recommend the County develop monitoring reports to identify those clients who have not had a workforce contact in the required timeframe. Views of Responsible Officials: We agree with the finding. See separate report for planned corrective actions.

FINDING 2025-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): CY2021 Pass-Through Entity: Morgan County, Indiana Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Significant Deficiency, Other Matters INDIANA STATE BOARD OF ACCOUNTS 13 TOWN OF MOORESVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The Town spent COVID-19 Coronavirus State and Local Fiscal Recovery Fund (SLFRF) award dollars from two sources during the audit period. One source was a direct allocation from the Department of the Treasury (Treasury). The other source was a pass-through from Morgan County, Indiana. Direct Treasury funds that are spent under the revenue loss eligible use category are not subject to the federal procurement requirements set forth in 2 CFR § 200.318-200.327. Because the Town classified all its direct Treasury funds spent during the audit period as revenue loss, federal procurement rules do not apply to those expenditures. However, procurement requirements do apply to the SLFRF funds the Town spent as a subrecipient of Morgan County, Indiana. Procurement - Policy Award funds may be used to procure goods and services necessary to carry out the purpose of the award. The Town must follow its own documented procurement policies and procedures, which must reflect applicable state and federal laws and regulations. The Town did not have a procurement policy or procedures that complied with state or federal laws and regulations for the procurement of goods or services with federal funds. Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for goods or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases are typically for those purchases $50,000 or under, and small purchase procedures are for those purchases above the micro-purchase threshold but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, the price or rate quotations must be obtained from an adequate number of qualified sources. The Town had one vendor that qualified for and was tested under the small purchase procedures. The Town paid this vendor $92,463 during the audit period for a sanitation project but did not obtain the required price or rate quotations. The ineffective internal controls and noncompliance were isolated to the procurement policy and the small purchase identified above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 14 TOWN OF MOORESVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 200.318(a) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases— (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Cause Management was unaware of this grant requirement relating to the federal procurement policy and obtaining quotes for federal small purchases. Effect The failure to establish an effective system of internal controls and retain and provide appropriate supporting documentation prevented the determination of the Town's compliance with the compliance requirement listed above. The failure to design and implement an effective system of internal controls enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the Town. INDIANA STATE BOARD OF ACCOUNTS 15 TOWN OF MOORESVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Town's management establish a system of internal controls to ensure that they are in compliance with the grant agreement the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Federal Agency: Department of Labor ETA Office of Grants Management Federal Program Name: Community Projects Funding/Congressionally Directed Funding Assistance Listing Number: 17.289 Federal Award Identification Number and Year: 23A60CP000091-01-00 (2023) Award Period: 6/1/2023 - 5/31/2026 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters Criteria or specific requirement: Per 2 CFR Part 200.303(a), entities must "establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award." Additionally, per 200.414, entities that do not have a current Federal negotiated indirect cost rate may charge a de minimis rate of up to 15% of modified total direct costs. Per the award agreements, the 10% historical de minimis rate is used by the Organization. Condition: There was no documented review or approval of the reimbursement requests, including the indirect cost rate calculation and totals that were invoiced to the awarding agency. Indirect costs are calculated as part of the reimbursement request process. 5 of 5 samples tested were incorrectly calculated, resulting in discrepancies between actual indirect costs and program-attributable indirect costs. Questioned costs: $13,066 Context: A sample of five was made from a population of 14 reimbursement requests for the fiscal year ended 12/31/2025. All five samples lacked documentation supporting a key control. Of these, four totals were found to have allocated expenses not directly related to the award, resulting in overstated reimbursement requests to the awarding agency and an overstatement of expenses related to the award; the remaining sample resulted in an undercharge of indirect costs to the program. The variations were partially due to indirect costs been calculated off of full Organization direct costs rather than program-specific direct costs, and partially due to unallowable cost categories being included in the indirect cost rate calculation, per the modified total direct cost definition and requirements. CLA sighted correspondence from January of 2026 between Evergreen Rural Water of Washington staff and the awarding agency that specifically outlines the correct way to allocate indirect costs. In this same correspondence, staff state the Organization's historic treatment of the indirect costs, which shows an incorrect understanding of the underlying requirements of this award and all federal expenditures that allow for indirect cost allocations. Cause: A lack of sufficient internal controls and procedures to effectively mitigate noncompliance. Misunderstanding of compliance requirements and accounting treatment for federal awards. Staff were notified during the FY24 audit that the indirect allocations were being incorrectly calculated, CLA noted that the indirect calculations were all significantly below the applicable 10% de minimis rate at this time, as such no finding was issued as no excess federal funds were spent as a result of the prior year incorrect calculations. Effect: A misunderstanding of the allocation of costs and the costs allowable under modified total direct costs can result in a miscalculation of indirect cost; in some cases the indirect allocations were overstated or understated compared to the actual modified total direct costs that were directly attributable to the award cluster tested. Repeat Finding: No Recommendation: CLA recommends the Organization revise the indirect costs calculation process to review program-only costs, rather than entity-wide costs. Develop policies and procedures to incorporate appropriate internal controls over indirect cost calculations; ensure the performer of the internal control has the required knowledge & understanding of compliance requirements & accounting to catch errors during the review & approval process. Views of responsible officials: Management is in agreement with this finding.

Finding 2025-002 – Material Weakness: Eligibility – Control Finding ALN 93.658 - Title IV-E Foster Care Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Colorado Department of Human Services Criteria Or Specific Requirement: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), establishes requirements for internal control over compliance with Federal program requirements. 2 CFR Section 200.303 requires non-Federal entities to establish and maintain effective internal control over Federal awards that provides reasonable assurance the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the award. These requirements include the design, implementation, and operation of control activities to ensure compliance with applicable compliance requirements, including eligibility. As eligibility is a key compliance requirement identified in the OMB Compliance Supplement, the County is required to implement a review process and system of internal controls that allows management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, errors or noncompliance in eligibility determinations on a timely basis. Condition: A secondary review of eligibility determinations did not occur in a timely manner during 2025. Cause: Management of the program did not implement an internal control process that functioned in a timely manner. Effect: The possibility exists that an individual was incorrectly determined to be eligible to receive benefits and this error was not identified and corrected in a timely manner. Questioned Costs: Not applicable Context: Our audit of the control processes around eligibility determination for the program determined no timely review over initial determination. Identification As A Repeat Finding: N/A Recommendation: We recommend that the County strengthen the processes within the internal control framework surrounding the review of eligibility determinations for this program. Views Of Responsible Officials And Planned Corrective Action: The County agrees with the finding and has put together a correction action plan for the finding. See corrective action plan included in this report.

Finding 2025-003 Inadequate System of Internal Controls over Eligibility Determination Type of Finding: Material Weakness in Internal Control over Compliance Condition: The Organization uses a database to collect and store documentation related to eligibility determinations for program participants. While this tool was used consistently throughout the year, the audit identified a lack of documented review procedures to verify that eligibility criteria were appropriately assessed and that all required documentation was obtained and retained. There is no established process to review or confirm the completeness and accuracy of eligibility documentation within the database. A new system was implemented in December 2025 which improved the deficiencies identified for the remainder of the year. Criteria: According to Uniform Guidance 2 CFR §200.303(a), the Organization is required to establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Further, per the federal grant award document, the eligibility documentation files must be maintained until three years has elapsed from the las payment under the grant. Cause: The deficiency appears to stem from an underdeveloped system of internal control surrounding the eligibility determination process. Although the Organization adopted a digital solution to facilitate documentation, it did not implement corresponding review or monitoring controls to ensure compliance. In addition, the absence of documented policies or assigned responsibilities contributed to gaps in oversight and follow-through. Possible of Known Effect: In the auditor’s judgment, the Organization did not have a system of internal control in place capable of providing reasonable assurance of compliance with federal eligibility requirements, as required under 2 CFR 200.303 and the applicable program-specific provisions. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding was 2024-004. Recommendation: We recommend that the Organization enhance its internal control structure over eligibility determination by implementing a formal review process to verify that all required documentation is obtained, reviewed, and retained in the system. Responsibilities for eligibility review should be clearly assigned, and staff should be trained to ensure that documentation standards are consistently met. Periodic quality checks or file reviews may help reinforce compliance and identify any gaps before claims are submitted or services are rendered. The changes implemented in December 2025 appear to address the issues identified in this finding. Views of Responsible Officials: In September 2025, the Organization began its transition to Pantry Soft, a new CRM to centralize client records, eligibility documentation and service dates. This went live in December 2025. We included mandatory eligibility fields and document upload requirements before service can begin. We developed SOPs to include a standardized eligibility checklist to be completed for all new and returning participants. Staff were trained on Pantry Soft usage, eligibility requirements and document retention stands. The Executive Team performed spot checks on these records but will begin documenting this procedure.