Findings Citing § 200.303

Special Provisions- Fraud Detection and Repayment Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Child Care and Development Cluster (CCDF) ALN: 93.489, 93.575, 93.596 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2101TXCDC6, 2201TXCCDD, 2201TXCCDF, 2301TXCCDF, 2301TXCCDD, 2501TXCCDF, 2401TXCCDM, 2401TXCCDF, 2401TXCCDD, 2501TXCCDD, 2501TXCCDM, 2501TXCCDY October 1, 2020 – September 30, 2024, October 1, 2021 – September 30, 2024, October 1, 2022 – September 30, 2025, October 1, 2023 – September 30, 2025, October 1, 2023 – September 30, 2026, October 1, 2024 – September 30, 2026, October 1, 2024 – September 30, 2027, and December 21, 2024 – September 30, 2028. Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR §200.303(a), Texas Workforce Commission (TWC) must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that it 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). Per 45 CFR §98.60(i), Lead Agencies shall recover childcare payments that are the result of fraud. These payments shall be recovered from the party responsible for committing fraud. In order to identify and recover payments, pursuant to TWC’s Childcare Services Guide (November 2024), section G.600: Recovery of Improper Payments, Local Workforce Development Boards (Boards) must attempt recovery of all improper payments. TWC must not pay for improper payments. Board recovery of improper payments must be managed in accordance with TWC policies and procedures. Condition: According to the TWC Division of Fraud Deterrence and Compliance Monitoring’s Standard Operating Procedures for Workforce Board PIRTS Audits, when a Workforce Development Board identifies an improper payment, the Board is required to issue a Notice of Determination informing the participant of their ineligibility, the amount and time period of the improper payment, and the reason for the determination. If the improper payment results from fraud, the Board must issue a first collection letter within 30 days of sending the determination notice to initiate recoupment of the ineligible amount. If repayment is not received or an active payment plan is not established, the Board must issue a final collection letter and refer the participant to TWC for a warrant hold, which restricts the individual from receiving future services until the outstanding amount is recovered. All correspondence is to be documented and maintained in the Program Integrity Reporting Tracking System (PIRTS), the system used by Boards to report and track childcare fact‑finding, fraud determinations, and recoupment activities. As part of our audit procedures, we tested 40 of the 297 closed cases reported to TWC in fiscal year 2025 to verify that TWC followed its procedures related to authenticating that a payment was fraudulent and subsequently recovered payment, if applicable. Of the 40 cases tested, 12 cases did not follow the prescribed procedures and lacked evidence that the Workforce Boards issued the required 1st collection letter within the 30‑day timeframe. Questioned costs: None. Context: See “Condition.” Cause: The exceptions identified occurred because TWC did not provide adequate oversight or monitoring of Workforce Board compliance with established PIRTS procedures. Without routine monitoring, follow‑up, or enforcement mechanisms to ensure Boards issued collection letters within required timeframes, lapses in adherence to the 30‑day requirement went undetected. This lack of oversight contributed to inconsistent application of required fraud‑recovery processes across Boards. Effect: Failure to ensure that Workforce Development Boards issued required first collection letters within the prescribed 30‑day timeframe impeded timely initiation of recoupment efforts for fraudulent childcare payments. This condition increases the risk that improper payments resulting from fraud may not be recovered in a timely manner and that individuals with outstanding fraudulent overpayments may continue to seek or receive services. Repeat Finding: No Recommendation: TWC should strengthen its oversight of Workforce Board compliance with PIRTS requirements by implementing routine monitoring procedures to verify that Boards issue first collection letters within the required 30‑day timeframe. This may include periodic reviews of PIRTS documentation, automated tracking or alerts for timeliness, and follow‑up with Boards when deadlines are missed. Additionally, TWC should provide guidance or refresher training to reinforce expectations and ensure consistent application of improper payment recovery procedures across all Boards. Strengthening these oversight mechanisms will help reduce the risk of delayed collection efforts and improve adherence to established fraud‑deterrence processes. Views of responsible officials: The Texas Workforce Commission (TWC) acknowledges and agrees with the finding and concurs with the recommendation. TWC’s Division of Fraud Deterrence and Compliance Monitoring’s Office of Investigations (FDCM/OI) oversees all matters related to fraud, waste, and abuse with respect to Federal programs TWC passes to its subrecipients, primarily the 28 local workforce development boards (Board). This includes the subsidized childcare program provided for in the above-cited Federal awards. FDCM/OI has historically maintained rigorous internal controls to address fraud in all programs. Additionally, TWC’s Subrecipient Monitoring Department (SRM) tests Board compliance with respect to childcare improper payment reporting and recoupment. TWC currently conducts routine monitoring and follow-up to ensure Boards issue collections letters in a timely fashion. That being said, TWC does agree that our objectives would be better served with more robust measures. Currently, FDCM/OI investigators review a sample of PIRTS reports on a monthly basis to ensure that Boards are uploading all required documentation related to childcare improper payments and undertaking collection efforts. Investigators review two randomly selected cases for each Board per month on a rolling basis for the prior three months. FDCM/OI also conducts periodic PIRTS training and retraining with Board staff. Additionally, the PIRTS system sends automated reminder notifications for Board staff to issue collection letters. FDCM/OI realizes the importance of issuing collection letters in a timely matter. Doing so not only increases the likelihood that important child care funds are remitted, but also assists with additional enforcement activities including prosecution of substantiated fraud. FDCM/OI takes the integrity of child care funds very seriously and will aid prosecution where appropriate.

Special Tests and Provisions – ADP Risk Analysis and System Security Review Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Medicaid Cluster CFDA Number: 93.775, 93.777, 93.778 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2405TXIMPL, 2405TX5000, 2505TXPACT, 2505TX5000, 2405TX5001, 2505TX5021, 2505TX5MAP, 2505TX5ADM October 1, 2023 – September 30, 2024, October 1, 2023 – September 30, 2024, October 1, 2024 – September 30, 2024, October 1, 2024 – September 30, 2025, July 1, 2024 – September 30, 2024, October 1, 2023 – September 30, 2025, October 1, 2024 – December 31, 2024, October 1, 2024 – December 31, 2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR §200.303(a), Health and Human Services Commission (HHSC) must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that it 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). Per 45 CFR §95.621, State agencies must establish and maintain a program for conducting periodic risk analyses to ensure that appropriate, cost-effective safeguards are incorporated into new and existing systems. State agencies must perform risk analyses whenever significant system changes occur. State agencies shall review the ADP system security installations involved in the administration of Health and Human Services (HHS) programs on a biennial basis. At a minimum, the reviews shall include an evaluation of physical and data security operating procedures and personnel practices. The State agency shall maintain reports on its biennial ADP system security reviews, together with pertinent supporting documentation, for HHS on-site reviews. Condition: HHSC maintains a total of 35 in-house and third-party systems that are used in the administration of Medicaid, which are required to be reviewed each biennial period. During the fiscal year 2024-2025 biennial, only 15 risk assessments were executed based on internal methodology or third-party assessments. HHSC did not perform risk assessments over the remaining 20 systems during the two-year period. Questioned costs: None Context: See “Condition.” Cause: HHSC is not adhering to it’s current policies and procedures regarding completion of the biennial ADP system security reviews. Effect: Failure to perform risk analyses increases the risk that safeguards will not be in place over physical and data security. Repeat finding: 2024-012, 2023-017 Recommendation: HHSC should ensure all systems are reviewed in a two-year period. HHSC should also implement oversight controls to ensure progress toward the plan is executed during the two-year period, including resolution of remediation items. Views of responsible officials: HHSC concurs with the recommendation.

Special Tests and Provisions – Provider Health and Safety Standards Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Medicaid Cluster ALN: 93.775, 93.777, 93.778 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2405TXIMPL, 2405TX5000, 2505TXPACT, 2505TX5000, 2405TX5001, 2505TX5021, 2505TX5MAP, 2505TX5ADM October 1, 2023 – September 30, 2024, October 1, 2023 – September 30, 2024, October 1, 2024 – September 30, 2024, October 1, 2024 – September 30, 2025, July 1, 2024 – September 30, 2024, October 1, 2023 – September 30, 2025, October 1, 2024 – December 31, 2024, October 1, 2024 – December 31, 2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR §200.303(a), Health and Human Services Commission (HHSC) must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that it 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: HHSC policies require the completion of Form 2567 Statement of Deficiencies and Plan of Correction to include the prefix tag, the deficiency that contains the code of federal regulations (CFR) or life safety code (LSC) reference for each health and safety survey conducted. HHSC is required to mail a copy of the completed form to the provider within ten business days after the exit date of the survey to ensure any deficiencies noted are addressed timely. For one of 40 health surveys conducted during the fiscal year, Form 2567 was mailed out to the provider 162 business days after the exit date of the survey. While the form was mailed after the required timeline per HHSC policy, it did not include any cited deficiencies. Questioned costs: None. Context: See “Condition.” Cause: After the provider's exit date, HHSC regional staff subsequently determined, several months later, that the required notice had not been issued to the facility. This oversight occurred during a period of transition within the ICF team. Effect: Failure to notify a provider of identified deficiencies in a timely manner may prevent the provider from implementing corrective actions within the required timeframe to meet compliance deadlines. Such delays increase the risk of continued noncompliance and may result in inappropriate payments for new admissions before the provider agreement is terminated. Repeat Finding: No. Recommendation: HHSC should enhance and/or reinforce existing internal controls to ensure timely completion and mailing of Form 2567 to meet standards in 42 CFR Part 442 and related policy requirements. This could include developing automated tracking systems or checklists to monitor survey deadlines and/or providing refresher training for all regional staff involved in the survey and notification process. Views of responsible officials: HHSC concurs with the recommendation.

Activities Allowed or Unallowed, Allowable Costs/ Cost Principles, Cash Management, Eligibility, Equipment and Real Property Management, Matching, Level of Effort and Earmarking, Period of Performance, Procurement and Suspension and Debarment, Reporting, Subrecipient Monitoring, Special Tests and Provisions – Information Technology – User Access Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Education (USDE) U.S. Department of Health and Human Services Social Security Administration Federal Program Title: SNAP Cluster Special Education Grants for Infants and Families Temporary Assistance for Needy Families Social Services Block Grant Block Grants Community Mental Health Services Block Grants for Prevention and Treatment of Substance Abuse Aging Cluster Medicaid Cluster Disability Insurance/ SSI Cluster ALN: 10.551, 10.561 84.181 93.558 93.667 93.958 93.959 93.044, 93.045, 93.053 93.775, 93.777, 93.778 96.001, 96.006 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SNAP Cluster 6TX400105, 6TX400106, USDA-FNS-SNAP-24-EVS-TX October 1, 2023 - September 30, 2024, October 1, 2024 - September 30, 2025, September 25, 2024 - September 30, 2025 Special Education Grants for Infants and Families H181A220171, H181A230171, H181A240171, H181A250171 July 1, 2022 - September 30, 2023, July 1, 2023 - September 30, 2024, July 1, 2024 - September 30, 2025, July 1, 2025 - September 30, 2025 Temporary Assistance for Needy Families 1601TXTANF, 1801TXTANF, 2101TXTANF, 2201TXTANF, 2301TXTANF, 2401TXTANF, 2501TXTANF October 1, 2015 - September 30, 2016, October 1, 2017 - September 30, 2018, October 1, 2020 - September 30, 2022, October 1, 2021 – September 30, 2022, October 1, 2022 - September 30, 2023, October 1, 2023 - September 30, 2024, October 1, 2024 - September 30, 2025 Social Services Block Grant 2301TXSOSR, 2401TXSOSR, 2501TXSOSR October 1, 2022 - September 30, 2024, October 1, 2023 - September 30, 2025, October 1, 2025 - September 30, 2026 Block Grants Community Mental Health Services B09SM089610, B09SM087322, B09SM087345, B09SM085385, B09SM089380, B09SM089984, B09SM085913 October 1, 2023 - September 30, 2025, October 17, 2022 - October 16, 2024, October 1, 2022 - September 30, 2024, September 1, 2021 - March 24, 2025, September 30, 2023 - September 29, 2025, September 30, 2024 - September 29, 2026, September 1, 2021 - March 24, 2025 Block Grants For Prevention and Treatment of Substance Abuse B08TI087067, B08TI085835, B08TI084609, B08TI088134, B08TI083969 October 1, 2023 - September 30, 2025, October 1, 2022 - September 30, 2024, September 1, 2021 - March 24, 2025, October 1, 2024 - September 30, 2026, September 1, 2021 - March 24, 2025 Aging Cluster 2101TXSSC6, 2101TXCMC6, 2101TXHDC6, 2201TXOASS, 2201TXOANS, 2201TXOACM, 2201TXOAHD, 2201TXSTPH, 2301TXOAHD, 2301TXOACM, 2301TXOASS, 2301TXOANS, 2401TXOASS, 2401TXOACM, 2401TXOAHD, 2401TXOANS, 2501TXOASS, 2501TXOAHD, 2501TXOAHD, 2501TXOANS April 1, 2021 - September 30, 2025, October 1, 2021 - September 30, 2024, January 1, 2022 - September 30, 2024, October 1, 2022 – September 30, 2025, October 1, 2023 - September 30, 2025, October 1, 2024 - September 30, 2026 Medicaid Cluster 2405TXIMPL, 2405TX5000, 2505TXPACT, 2505TX5000, 2405TX5021, 2505TX5MAP, 2505TX5ADM October 1, 2023 - September 30, 2024, October 1, 2024 - September 30, 2024, October 1, 2024 - September 30, 2024, October 1, 2024 – September 30, 2025, October 1, 2023 - September 30, 2025, October 1, 2024 - December 31, 2024 Disability Insurance/ SSI Cluster 2304TXDI00, 2404TXDI00, 2504TXDI00 October 1, 2023 - February 2, 2024, October 1, 2023 - September 30, 2024, October 1, 2024 - September 30, 2025 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR §200.303(a), Health and Human Services Commission must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that it 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). Additionally, 2 CFR §200.303(e) requires taking reasonable cybersecurity and other measures to safeguard information including protected personally identifiable information (PII) and other types of information. Condition: During testing of user access within the CAPPS FIN (PeopleSoft Financials) system, we identified two user accounts, out of 17 tested, that had been granted inappropriate access to the PeopleSoft Administrator role. This role provides elevated privileges beyond those required for their job duties and should be limited to authorized system administrators. Management remediated the inappropriate access on November 10, 2025. Questioned costs: None. Context: See “Condition.” Cause: The inappropriate access assignments appear to result from gaps in privileged access provisioning and periodic re‑certification controls within the CAPPS FIN environment. Effect: Improper assignment of elevated PeopleSoft Administrator access in CAPPS FIN increases the risk of: • Unauthorized changes to system configuration, accounting rules, or financial data; • Data modification or exposure, including information related to federal program expenditures; • Bypassing of compensating controls intended to maintain data integrity and separation of duties; Although management removed access on 11/10/2025, the presence of improper administrator‑level access before remediation represents a significant control deficiency. Repeat Finding: No Recommendation: We recommend HHSC: • Strengthen privileged access provisioning by requiring documented approval, business justification, and periodic revalidation for all elevated roles in CAPPS FIN. • Implement a formal, recurring privileged access review across all CAPPS FIN modules, with documented results and timely remediation of exceptions. • Utilize identity governance tools or CAPPS FIN security reporting to automatically flag unauthorized assignments of administrator roles. Views of responsible officials: HHSC concurs with the recommendation.

Assistance Listing, Federal Agency, and Program Name - 93.088, U.S. Department of Health and Human Services, Advancing System Improvements for Key Issues in Women's Health 93.323, U.S. Department of Health and Human Services, Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) 93.592, U.S. Department of Health and Human Services, Family Violence Prevention and Services/Discretionary and COVID - 19 Family Violence Prevention and Services/Discretionary 93.837, U.S. Department of Health and Human Services, Cardiovascular Disease Research (Research and Development Cluster) Federal Award Identification Number and Year - 93.088 ASTWH220110 (2023 and 2024) 93.323 - 32680012K (2024) 93.592 - 90EV0516 (2021); 90EV0530 (2023); ; 90EV0544 (2024) 93.837 - U01HL146245 (2024) Pass through Entity - 93.088 N/A 93.323 - Illinois Department of Public Health 93.592 - N/A 93.837 - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2024-001 Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls 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 the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(a), the nonfederal entity must have and use documented 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 nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§200.317 through 200.327. The LLC has established in its internal procurement policies and procedures that a minimum of 3 quotes must be obtained for purchases made under informal, simplified acquisition procedures. Per 2 CFR 200.318(i), the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition - Controls were not sufficient to ensure that the history of procurement decisions was documented, as required by 2 CFR 200. Additionally, controls were not sufficient to ensure checks for suspension and debarment were documented before entering into covered transactions with third parties. Questioned Costs - unknown If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported We are unable to predictably quantify, had federal procurement standards been followed, which portion of activity presented on the SEFA under these contracts would be in question. Identification of How Questioned Costs Were Computed N/A Context - 93.088 - Management was unable to provide evidence that three out of three contractors tested was checked for suspension and debarment in advance of entering into a covered transaction. 93.323 - Management was unable to provide evidence that three out of three contractors tested was checked for suspension and debarment in advance of entering into a covered transaction. 93.592 - Management was unable to provide evidence that four out of four contractors tested was checked for suspension and debarment in advance of entering into a covered transaction. 93.837 - Of the four contracts tested, management was unable to produce records sufficient to detail the history of procurement for one contract. Additionally, for that same contractor, management was unable to provide evidence that the third party was checked for suspension and debarment in advance of entering into a covered transaction. Because we were able to confirm via a check of the Excluded Parties Listing that the contractors noted above were not suspended or debarred, no questioned costs related to this noncompliance were identified. Cause and Effect - Newly revised procurement policies and procedures implemented during the last month of the fiscal period under audit were not in place during the time of the contract acquisitions noted above, and therefore a lack of internally established procurement documentation practices resulted in material noncompliance with federal procurement standards. Recommendation - We recommend that management continue to follow and formalize its procurement policies and procedures to demonstrate how the LLC will achieve compliance with federal procurement standards identified in §§200.317 through 200.327. Additionally, we recommend management retain documented evidence that its policies and procedures were followed to ensure compliance with federal procurement standards. Views of Responsible Officials and Corrective Action Plan - Management will continue to strengthen internal controls through the revised Procurement Policy, enhanced documentation requirements, and clarified approval procedures. A centralized tracking database has been implemented to document sanctions, suspension, and debarment checks, as well as other required verifications based on the nature of each purchase or service. These procedures are required prior to entering into covered transactions and are monitored through dual staff reviews. Management believes that ongoing monitoring and consistent enforcement of these procedures will ensure compliance and prevent recurrence.

Assistance Listing, Federal Agency, and Program Name - 93.837, U.S. Department of Health and Human Services, Cardiovascular Disease Research (Research and Development Cluster) Federal Award Identification Number and Year - 93.837 - U01HL146245 (2024) Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls 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 the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.305(b)(3), when the reimbursement method is used, the Federal agency or pass through entity must make payment within 30 calendar days after receipt of the payment request unless the Federal agency or pass through entity reasonably believes the request to be improper. Condition - Controls in place were not sufficient to ensure subrecipients were paid consistently within 30 days of a request for reimbursement. Questioned Costs - N/A 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 - Out of a sample of 29 subrecipient disbursements tested, we noted 6 were not paid within 30 days of the LLC receiving the request for reimbursement. Cause and Effect - A lack of effective internal controls resulted in material noncompliance with this requirement. Recommendation - We recommend management establish robust controls over subrecipient activity to ensure the 30 day requirement is met. Views of Responsible Officials and Planned Corrective Actions - Management acknowledges the finding. Delays in approvals may occur due to multiple internal and external parties involved. To prevent recurrence, management will monitor all parties, issue email reminders with clear deadlines, and enforce timely processing to ensure compliance with the 30 day requirement.

Finding No. 2025-001 Special Tests and Provisions – NSLDS Reporting U.S. Department of Education: Student Financial Assistance Cluster: Federal Pell Grant (ALN 84.063) Federal Grant Number: P063P241851 Statistically Valid Sample: No and it was intended to be. Prior Year Finding: Not a repeat finding. Finding Type: Significant Deficiency and Noncompliance Criteria: Institutions are required to report enrollment information under the Pell Grant and the Direct Loan programs via the National Student Loan Data System (NSLDS) (OMB No. 1845-0035). The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and certify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. The data on the institution’s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment. There are two categories of enrollment information, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. Institutions are responsible for accurately reporting all Campus-Level Record data elements. ED considers the following data elements to be high risk: • OPEID Number, Enrollment Effective Date, Enrollment Status, Certification Date Institutions are responsible for accurately reporting all Program-Level Record data elements. ED considers the following data elements to be high risk: • OPEID Number, CIP Code, CIP Year, Credential Level, Published Program Length Measurement, Published Program Length, Program Begin Date, Program Enrollment Effective Date Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. Institutions must complete and return within 15 days the Enrollment Reporting roster file placed in their Student Aid Internet Gateway (SAIG) (OMB No. 1845-0002) mailboxes sent by ED via NSLDS. An institution determines how often it receives the Enrollment Reporting roster file with the default set at a minimum of every 60 days. Once received, the institution must update for changes in the data elements for the Campus Record and the Program Record identified above, and submit the changes electronically through the batch method, spreadsheet submittal, or the NSLDS website (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309: Perkins 34 CFR 674.19(f)). Additionally, in accordance with 2 CFR 200.303, the University shall maintain internal controls over federal programs designed to provide reasonable assurance that transactions are executed in compliance with federal statutes, regulations, and the terms and conditions of the federal award that could have a direct and material effect on a federal program. Condition and Context: The University utilizes the National Student Clearinghouse (the Clearinghouse) as a service provider for transmission of its enrollment reporting changes including, but not limited to withdrawals and graduate status to the NSLDS. The University receives the Enrollment Reporting Roster and makes necessary updates for changes in student status. A final file is then sent to the Clearinghouse who transmits information or corrections to NSLDS. For 1 student in our sample of 40, the effective status of graduation was not accurately reported to NSLDS within 60 days of the status change. The status change was submitted and certified by NSLDS 228 days late. This student received an error code of 253 or 290, which represents an error in the student’s social security number (SSN). Upon further review, the University identified 10 other students that had this same error code during fiscal year 2025. One of these students had a status change which was not reported to NSLDS timely, and it was submitted and certified by NSLDS 494 days late. Cause: This error was caused by an incorrect assumption in the Registrar’s procedures that students who returned this error from the Clearinghouse were non-Title IV aid students. While the Registrar worked to rectify these errors with the Clearinghouse, the Registrar’s Office did not update the student’s status in NSLDS independently because management believed these students did not receive Title IV aid. Effect: Student status changes not reported in a timely or accurate manner may cause the student to not enter repayment status for Federal Direct Student Loans on a timely basis. A change in status for a student receiving a Pell Grant will impact the amount they are eligible to receive Question Costs: None. Recommendation: We recommend that management incorporate procedures in their process to review the error reports received from the Clearinghouse specifically for this error code, which should include the determination of whether these students had received Title IV aid. View of Responsible Officials: Management agrees with the finding. Students on the reject detail from the Clearinghouse enrollment submission who receive a 253 or 290 error will be reviewed using a Financial Aid provided report to determine if any have been awarded aid. Financial Aid will provide the FAFSA support to correct the Clearinghouse error for students who have received aid. We will also manually report those student statuses to the NSLDS while the errors are being corrected by the Clearinghouse for anyone receiving aid so status changes are reported timely. For students that do not have FAFSA information with Financial Aid, we will contact those students directly for documentation to correct or affirm their SSN information to try and resolve any future 253 or 290 errors.

Reference Number: 2025-004 No secondary review of meal claim reimbursements prior to submission Child Nutrition Cluster ALN’s: 10.553, 10.555, and 10.582 Pass through identifying number: NT4XL1YGLGC5 Award Year: 2024-2025 Federal Agency: U.S. Department of Agriculture Passed through State Department of Agriculture Criteria: 2 CFR §200.303 requires non-Federal entities to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the award. Program regulations for the Child Nutrition Cluster require reimbursement claims to be accurate and supported by appropriate documentation prior to submission. Effective internal controls over reporting include supervisory review of reimbursement claims to ensure accuracy and completeness before submission. Condition Found: During testing of reimbursement claims submitted under the Child Nutrition Cluster, we noted the School District did not perform a documented secondary review of monthly meal reimbursement claims prior to submission to the pass-through agency. Claims were prepared and submitted by the same individual without evidence of supervisory review or approval. Cause: Management indicated the control requiring a second review was informal and not consistently performed due to staffing limitations and turnover within the food service department. Additionally, the control was not formally documented in written procedures. Effect: Without a secondary review, there is an increased risk that reimbursement claims may contain errors, including inaccurate meal counts or calculation errors, which could result in over- or underreimbursement and potential noncompliance with Federal reporting requirements. Questioned Cost: $0. The District’s claims tested were mathematically accurate and supported, however, the control was not properly documented. Recommendation: We recommend the District implement and document a formal secondary review control over all Child Nutrition reimbursement claims prior to submission. Views of Responsible Officials: Management agrees with the findings. See corrective action plan

Finding: 2025-001 – Special Tests and Provisions – Student Awards Information of Federal Program: Student Financial Aid Cluster Federal Pell Grant Program – CFDA No. 84.063 Federal Family Education Loans – CFDA No. 84.032 Federal Supplemental Educational Opportunity Grant – CFDA No. 84.007 Federal Work-Study Program – CFDA No. 84.033 Criteria: In accordance with 2 CFR § 668.32 and the program regulations of the Federal Pell Grant Program, institutions must determine student eligibility and award amounts based on the student’s expected family contribution (EFC), enrollment status, and cost of attendance, as calculated using the U.S. Department of Education’s payment schedules. Under 2 CFR § 200.303 and § 200.62, the College must maintain effective internal controls to ensure accurate and complete award determinations for all Pell recipients. Condition: During testing of 40 Pell Grant recipients, we noted two students whose awards were not correctly calculated:  One student was over-awarded due to use of an incorrect enrollment status when determining the payment amount.  One student was under-awarded because the EFC used in the calculation did not agree to the value reported on the student’s Institutional Student Information Record (ISIR). These errors resulted in one Pell Grant being overstated and one being understated. Questioned Costs: The net questioned costs totaled $315.00 (consisting of an over-award of $428.00 and an under-award of $743.00). Because both occurred within the same program and offset in amount, the total questioned costs are not considered material to the program. Cause: The errors resulted from insufficient review controls over manual data entry of Pell calculations and failure to perform a secondary reconciliation between ISIR data and the financialaid management system prior to disbursement. Effect or Potential Effect: Improper Pell disbursements were made to two students, resulting in non-compliance with program regulations and the potential for repayment or future adjustment in federal funding. Context: We tested a nonstatistical sample of 40 Pell Grant recipients for compliance with federal eligibility and disbursement requirements. The two exceptions noted represent 5% of the sample and were isolated control errors rather than evidence of a systemic issue. No additional exceptions were identified in the remainder of the population tested. Repeat Finding: This is not a repeat finding from the prior year.Recommendation: We recommend that the College implement procedures to:  Require a secondary review and approval of all Pell award calculations prior to disbursement.  Periodically reconcile ISIR data to the financial aid management system.  Provide annual staff training on Pell Grant payment schedules and data entry accuracy. Views of responsible officials and planned corrective action: Management concurs with the finding, See the Corrective Action Plan (CAP) on pages 64 for detailed information regarding specific corrective steps and implementation timelines.

FINDING 2025-001 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2025 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Significant Deficiency, Other Matters Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 200.430 states in part: (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, (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and vii) 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 different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the activities allowed or unallowed and allowable costs/cost principle compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: $5,476 (Known questioned costs) Context: During testing of allowable activities and costs, it was observed that the School Corporation allocated payroll and benefit expenses to the school lunch fund for the employee overseeing the food service management company. Five payroll transactions totaling $5,476 were selected for testing. For each transaction tested, the School Corporation allocated 18% of the employee’s time to the school lunch fund. Although the employee completed an annual self-certification estimating time spent on food service duties, there was no detailed time and effort log to support actual hours worked. Additionally, no internal control existed to provide a documented secondary review of the self-certification for accuracy and completeness. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2024-003. Recommendation: We recommend management ensure that time and effort logs are maintained for all employees not charged at 100% to support work performed and charged to the grant awards. We recommend management establish a documented review by management of time and effort logs to ensure time charged to grant awards is allowable and allocable based on work performed in accordance with grant requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Finding 2025-001 – NSLDS Reporting Repeat Finding: Yes Federal Program Title – U.S. Department of Education Student Financial Assistance Cluster Federal Pell Grant Program: 84.063 Federal Direct Student Loans: 84.268 Federal Work Study Program: 84.033 Federal Supplemental Educational Opportunity Grants 84.007 Federal Award Year 2024-2025 Award Numbers: P063P242988, P063P232988, P007A241227, P007A231227, P033A241227, P268K252988, P268K242988 Condition For eighteen out of sixty students tested (30%) who had enrollment changes at the College, the students' status effective dates at the campus level and program level were not reported to the National Student Loan Data System (NSLDS) timely. For three out of sixty students tested (5%) who had enrollment changes at the College, the students' status at the campus level and program level were not reported to the NSLDS accurately. Criteria CFR section 685.309 and 690.83(b)(2) requires the College to notify the NSLDS within 30 days of a change in student status or include the change in status in a response to an enrollment reporting roster within 60 days of the student’s date of determination of withdrawal. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure that enrollment status changes are reported timely. Questioned Costs There were no questioned costs related to testing of enrollment reporting. Cause During the reporting period, the processing of the spring subsequent term file was delayed due to program mismatches reported to National Student Clearinghouse (NSC), which resulted in a significant volume of ER1568 errors. The resolution required extensive troubleshooting and the implementation of corrective measures, which extended the time needed to complete processing. Reporting of the College’s spring graduates was also delayed due to a missing reporting date within NSC. An alternative date was provided, and the Grads Only file was submitted on September 2, 2025. Context Frequent. Twenty-one out of sixty students selected for testing. Effect Failure to report status changes accurately and timely is noncompliance with Federal regulation and could result in loss of future funding. Recommendation We recommend the College implement review procedures to ensure that the proper effective date is reported timely to the NSLDS when a student withdraws or has an enrollment status change. A system of review procedures and/or controls will ensure the College is reporting status changes accurately. Views of responsible officials We agree with this finding. See corrective action plan.

Finding 2025-002 – Direct Loan Disbursement Notification Repeat Finding: No Federal Program Title – U.S. Department of Education Student Financial Assistance Cluster Federal Direct Student Loans: 84.268 Federal Award Year 2024-2025 Award Numbers: P268K252988 Condition For eight out of eight students tested, the student did not receive the required notification that a direct loan had been credited to their account for nine out of the eighteen disbursements. Criteria 34 CFR 668.165 requires institutions who credit a student's account with a direct loan disbursement must notify the student, or parent, in writing of the (1) the date and amount of the disbursement; (2) the student's right, or parent's right, to cancel all or a portion of that loan or loan disbursement and have the proceeds returned; and (3) the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure that direct loan notifications are sent timely. Questioned Costs There were no questioned costs related to testing of direct loan disbursement notifications. Cause During the first disbursement of the fall semester, the College provided the IT department with an incorrect disbursement date, which prevented disbursement notifications from being sent to students. Similarly, during the spring semester, the College failed to send the disbursement files to the IT department on several occasions, resulting in students not receiving disbursement notifications. Context Frequent. Eight out of eight students selected for testing. Effect Failure to notify students of their direct loan disbursement can result in students missing the period in which they can cancel their award and is noncompliance with Federal regulation and could result in loss of future funding. Recommendation We recommend the College implement review procedures to ensure that direct loan disbursement notifications are being sent each time a direct loan is credited to a student’s account. A system of review procedures and/or controls will ensure the College is properly sending notifications. View of Responsible Officials We agree with this finding. See corrective action plan.

Assistance to Firefighters Grant – Assistance Listing No. 97-044 Material Weakness. The District does not have written policies and procedures over major federal award programs as required under 2 CFR 200.303.Recommendation: The District should develop formal written policies and procedures covering at a minimum allowable costs and cost principles, procurement standards, eligibility determinations and reporting and recordkeeping for federal awards. These policies should align with GAO Green Book and COSO Internal Control Framework. Staff should be trained to implement monitoring and ensure consistent application.Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding and will develop written policies and procedures over federal awards

Finding Number: 2025-001 Finding Type: Federal award finding Federal Assistance Listing No.: 14.267 Program Name: Continuum of Care Program Federal Agency: U.S. Department of Housing and Urban Development Grant Number: WA0361L0T082308 Federal Award Period: October 1, 2024 through September 30, 2025 Pass-Through Entity: Multnomah County Grant Number: JOHS-SVCSGEN-15516-2023 Federal Award Period: July 1, 2023 through June 30, 2025 Control Deficiency Type: Significant deficiency over compliance Compliance Requirement: Special Tests and Provisions Repeat Finding: Yes. Prior audit finding no. 2024-001 Criteria: The Uniform Guidance in 2 CFR 200.303 requires that non-Federal entities receiving federal awards establish and maintain internal controls that provide reasonable assurance that the subrecipient is managing the federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Per 24 CFR 578.51(g), “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or sub-recipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for a comparable unassisted unit, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.” Condition: Some of the rent reasonableness determinations were incorrectly performed. Cause: Internal controls are insufficient to ensure the rent reasonableness test is consistently calculated accurately and that appropriate supporting documentation is properly maintained. Effect: The organization may accidently provide rental assistance that is not in compliance with HUD guidelines. Questioned costs: Known and likely questioned costs are under $25,000. Audit Recommendation: We recommend the organization review and strengthen its written policies and procedures for rent reasonableness determinations. This should include ensuring consistent application of the methodology and maintaining complete supporting documentation for all rental assistance provided, in compliance with federal program requirements. In addition, we recommend that someone independent of the preparer perform periodic reviews of the rent reasonableness tests. Management’s Response: When placing a new participant in a HUD funded housing program, or upon relocation of an existing participant, Program Management will conduct a review of the staff prepared Utility Allowance and Rent Reasonable documentation to confirm calculations have been completed accurately and all supporting documentation is present. Program Management will indicate by signature on the File Checklist that they have confirmed all Utility Allowance and Rent Reasonable documentation is present and accurate. The File Checklist is submitted to fiscal prior to first payment for a new participant and upon relocation of an existing participant. Program Management will conduct a retrospective review of all current files to ensure Utility Allowance and Rent Reasonable documentation is completed accurately and all supporting documentation is present.

8. Criteria or specific requirement :Per Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200) Subpart D, Post Federal Award Requirements Section 200.303, Internal controls, the recipient must 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. Per 2 CFR Part 200, Subpart E, Cost Principles, the accounting practices of the recipient must be consistent with the cost principles and support the accumulation of costs as required by the cost principles, including maintaining adequate documentation to support costs charged to the Federal award. '9. Condition: The District's accounting records did not support reported program expenditures totaling $32,734 due to the following: 1. Expenditures of $15,589 incurred and claimed for reimbursement in the prior year were claimed again in the current year. 2. Current year expenditures of $12,854 were claimed twice. 3. Payroll expenditures were claimed based on budget rather than actual amounts, resulting in claimed expenditures of $4,291 which were not supported. 10. Cause :The District's internal controls over compliance were not functioning effectively to ensure reimbursements were claimed for only actual expenditures incurred and supported by adequate documentation. 11. Effect: The District was not in compliance with the allowable costs/cost principles compliance requirement. 12. Questioned Costs: The following questioned costs were computed based on differences between the amounts claimed for reimbursement by the District and its expenditure accounting records: $15,589 (Project No. 24-4300-00) $12,854 (Project No. 25-4300-00) $4,291 (Project No. 25-4300-00) 13. Context: The condition noted was identified upon reconciling reimbursements claimed by the District to the general ledger accounts in which related expenditures were recorded and investigation of differences identified. 14. Reconmmendation : We recommend that management review its policies and procedures and implement changes to strengthen internal control over compliance. 15. Management's response: The District agrees with the auditor's finding and recommendation.

National Endowment for the Arts Federal Financial Assistance Listing 45.025, Affects all grant awards included under Federal Financial Assistance Listing 45.025 on the Schedule Promotion of the Arts Partnership Agreements Procurement, Suspension, and Debarment Significant Deficiency 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 the terms and conditions of the federal award. 2 CFR 200.318 maintains that recipients must have and use documented procurement policies and must conform to procurement standards in sections 200.317 through 200.327. Condition: The Organization has documented procurement procedures that conform to applicable federal standards regarding testing vendors for suspension and debarment; however, the procedures were not followed for two vendors selected for testing. Cause: The Organization's internal control process did not identify the two vendors for whom the suspension and debarment verification was not performed. Effect: Payments could be made to recipients who were suspended or debarred. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 4 transactions out of 14 total transactions were selected for testing. Two vendors did not have support showing the search for suspension and debarment was performed which accounted for $155,100 of $716,818 of federal awards. Repeat Finding from Prior Year(s): No Recommendation: We recommend the Organization enhance internal control procedures to ensure all suspension and debarment verification procedures are performed prior to entering into the transactions. Views of Responsible Officials: Management agrees with the finding. The Organization takes compliance with federal procurement requirements seriously and has already implemented additional internal controls to address this.

2025 – 001 Allowable Costs Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Housing Opportunities for Persons with AIDS (HOPWA) AL Number: 14.241 Award Period: 7/1/24 - 6/30/25 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 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. Condition and Context During our testing, we noted four samples where the Organization was not maintaining accurate records to support the payroll costs allocated to the grant. Based on the actual payroll costs of the employees charged to the grant the Organization could have charged additional costs to the grant. Effect Noncompliance results in potential for incorrect payroll costs allocated to federal grants. Questioned Costs None identified. Cause The issuance was caused by management oversight resulting in wage allocations not being updated and reviewed. Recommendation We recommend the Organization update their grant allocation process to ensure accurate wage rates are used to calculate the allocations. Views of Responsible Officials Beginning with July 2025, the Organization will ensure that current month costs are a direct reflection of that month's costs of the allocated employees using a labor rate equal to ((total allowable salaries and wages + total allowable employee benefits and taxes) / total allowable hours worked) * applicable HOPWA-related hours worked.

8. Criteria or specific requirement: Per Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200) Subpart D, Post Federal Award Requirements Section 200.303, Internal controls, the recipient must 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. Per 7 CFR Section 210.8(a), the school food authority shall establish internal controls which ensure the accuracy of meal counts prior to the submission of the monthly claim for reimbursement. 9. Condition: Two (2) monthly claims for reimbursement reported meal counts in excess of those supported by records of the District. 10. Cause: The District's internal controls over compliance were not functioning effectively to ensure claims for reimbursement were accurately prepared. 11. Effect: The District was not in compliance with the reporting compliance requirement. 12. Questioned Costs: The following questioned costs were computed based on the excess meals claimed for reimbursement times the applicable reimbursement rate: $6 (Project No. 25-4220-00) $91 (Project No. 25-4210-00) 13. Context: From the population of eleven (11) monthly claims for reimbursement, a sample of four (4) claims were selected for testing. We noted two (2) months in which the claims for reimbursement reported meal counts in excess of those supported by records of the District as follows: November 2024: Actual meals served: 14,145; Meals claimed for reimbursement: 14,165 April 2025: Actual meals served: 17,200; Meals claimed for reimbursement: 17,202 A statistically valid sample was not utilized. 14. Recommendation: We recommend that management review its policies and procedures and implement changes to strengthen internal control over compliance. 15. Management's response: The District agrees with the auditor's finding and recommendation.

2025-002: Academic Programs - Suspension and Debarment (Significant Deficiency) Assistance Listing Number/Title: #81.252, Academic Programs Federal Agency Name: U.S. Department of Energy Award Number: DE-LM0000497 Award Year: October 1, 2023 - March 31, 2025 Criteria: Per 2 CFR 200.303(a), a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the Federal award is managed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per review of 2 CFR 200.213, non-Federal entities are prohibited from contracting with, or making sub-awards under covered transactions to, parties that are suspended or debarred or whose principals are suspended or debarred. Covered transactions include contracts for goods and services awarded under a non-procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., sub-awards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. Condition/context: Of the two vendors selected and tested, we determined that: • One vendor did not have a suspension and debarment clause in the contract and the College did not perform other verification procedures to ensure that the contractor was not suspended or debarred. However, we independently verified that the contractor was not suspended or debarred per review of sam.gov. • One vendor did not have a suspension and debarment clause in the contract, and while the College provided documentation of its review of sam.gov to verify that the contractor was not suspended or debarred, that documentation did not contain evidence that the verification was performed timely (i.e., before entering into the contract with the vendor). Cause: The College’s preferred verification for suspension and debarment is checking sam.gov. The program’s backup method of verification is a standard suspension and debarment clause within the formal contract. However, the program’s control system did not function as designed. Effect: If the College is not verifying that vendors with which it contracts are neither suspended nor debarred or keeping record of such verification, it is possible that the College could contract with a vendor that is suspended or debarred, in which case the College may be required to return the funds expensed to that vendor to the Federal oversight agency. Questioned costs: None. Identification as a repeat finding: No. Recommendation: We recommend that the College review and revise its current control system to require that all contracts be initiated through a procurement process that includes the suspension and debarment certification process. If this is not feasible, we recommend that a secondary control system be established to ensure that all contracts entered into outside of the procurement process be reviewed to ensure compliance with all of the necessary Federal requirements, including suspension and debarment. This could include documenting and keeping records of the sam.gov checks being completed for each vendor and showing proof that each was reviewed by appropriate personnel in a timely manner. Views of responsible officials: Management concurs with the finding. See Exhibit I for corrective action plan.

CONDITION: During testing of disbursements charged to the Head Start program, two instances were identified where duplicate payments were made to the same vendor for the same invoice. The payments were charged to the Head Start program. CONTEXT: A sample of 40 disbursements totaling $124,950 was selected from a population of 1,385 disbursements totaling $811,622. The test found two disbursements that were not in compliance with questioned costs totaling $2,824. CRITERIA: 2 CFR § 200.303(a) requires that the School Board 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. Additionally 2 CFR§200.403(a) states that costs must “be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles.” CAUSE: The School Board relies on its accounting software’s automated controls to prevent the processing of duplicate invoices. However, the duplicate payments occurred because slightly different invoice numbers were entered into the system, allowing the software to recognize the transactions as unique and process both payments. EFFECT: The federal program may have been overcharged. RECOMMENDATION: The School Board should evaluate their internal controls and review expenses being charged to the Head Start program to ensure they are allowable.

Strengthening Institutions Program – Department of Education Federal Financial Assistance Listing #84.031 P031A080196 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance 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. 2 CFR 200.328 and 2 CFR 200.329 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with the program requirements. Condition: Section 3 of the Title III Endowment Report for the year ending June 30, 2024, was completed materially incorrect for Type of Savings Account Security line items and Total Invested line item. Cause: There was a lapse within the internal control process ensuring the report was completed materially correct. Effect: The annual report was completed materially incorrect and filed with the Department of Education. Questioned Costs: None. Context/Sampling: No sampling was utilized. The only report required to be filed in the fiscal year was tested. Repeat Finding from Prior Years: Yes. Recommendation: The University should review their current internal control process to ensure required reports are completed materially correct. Views of Responsible Officials: Management agrees with the finding.

Finding 2025-005 Lack of Internal Controls over Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: U.S. Department of Agriculture, passed through the State of Alaska, Department of Education and Early Development Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553 and 10.555 Award Year: 2025 Type of Finding: Significant deficiency in internal control over compliance and noncompliance. Criteria: Internal controls and financial policies must be adhered to, to ensure charges to grants are adequately supported. All cash and payroll disbursements must be accompanied by supporting documentation, including invoices, proper approval, and approved PAF’s. 2 CFR Section 200.303 requires entities establish and maintain internal controls over federal awards. Condition and Context: Multiple transactions tested lacked the necessary supporting documentation, including invoices and evidence of approval. During our testing of internal controls over the cash disbursement system, we tested a sample of twenty-five (25) transactions and noted the following errors: six (6) transactions did not have supporting documentation such as bills or invoices. Twenty-three (23) transactions did not have purchase orders or approval. During our testing of internal controls over payroll transactions, we tested a sample of eight (8) payroll transactions and noted that two (2) did not have approved personnel action forms. Cause: Lack of internal controls over cash and payroll disbursements and maintaining related supporting documentation. Effect: This could lead to a material misstatement for cash disbursement and payroll related items in the financial statements. Failure to follow compliance requirements could result in loss of federal funding. Questioned Costs: None noted. Repeat Finding: This is not a repeat finding, therefore we believe it to be an isolated instance. Recommendation: Policies and procedures regarding internal controls over cash and payroll disbursements must be strengthened to ensure disbursements charged to grants are properly approved and accompanied by adequate supporting documentation.

2025-002 – Eligibility Determination Not in Place or Consistently Applied Across all Programs U.S. Department of Human Services Temporary Assistance for Needy Families – AL #93.558 TN Department of Human Services Compliance Requirement – Eligibility Condition: Controls over participant eligibility documentation were not in place or inconsistently applied. Required eligibility documentation was incomplete, missing, or inconsistent with program requirements. Additionally, some eligibility forms were signed by the applicant after year-end, indicating that eligibility was not properly established prior to the period of service. In some cases, limited or no documentation was provided. Criteria: Under 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal programs to provide reasonable assurance of compliance with Federal statutes, regulations, and the terms and conditions of the award. The OMB Compliance Supplement for TANF requires recipients to obtain, review, and retain sufficient documentation to verify participant eligibility at the time eligibility is determined. Cause: The Organization does not have formalized, consistently applied procedures in place to ensure that eligibility documentation is collected, verified, and reviewed prior to approving participants for TANF services. The Organization relied on informal practices rather than a formally defined process. Effect: Failure to properly document and verify eligibility increases risk that ineligible individuals may receive TANF-funded services, which could result in questioned costs or return of federal funds to the State. Context: A sample of twenty-five (25) participants were selected for eligibility testing. Exceptions included eight (8) eligibility forms were not signed by program personnel, eleven (11) eligibility forms that were signed by the applicant after year-end, no information was provided for two (2) participants selected, and limited information was provided for one (1) participant selected. Therefore, eligibility could not be determined due to insufficient documentation. Recommendation: We recommend the Organization establish and implement written eligibility determination procedures uniformly across all TANF programs to verify proof of residency, citizenship of the child or expectant mother within the home, income, resources, and, if applicable, work participation. This process should include eligibility documents to be completed, signed, and dated prior to services being provided. A level of review and approval should be performed to verify the above information and eligibility status. All supporting documentation required by Tennessee Department of Human Services should be maintained within the participant eligibility file. Management’s Response: See accompanying management’s corrective action plan.

2025-003 – Inaccurate Eligibility Classification and System Entry U.S. Department of Agriculture Child and Adult Care Food Program (CACFP) – AL #10.558 TN Department of Human Services Condition: We noted multiple instances in which eligibility determinations based on income levels, specifically related to rates at which student meals are reimbursed (paid, reduced, or free), lacked sufficient controls in place to categorize the student accurately. Criteria: Under 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal programs to provide reasonable assurance of compliance with Federal statutes, regulations, and the terms and conditions of the award. The OMB Compliance Supplement for CACFP requires recipients to obtain, review, and retain sufficient documentation to verify participant eligilbility at the time eligibility is determined. Cause: Due to the process being heavily manual in nature, the deficiencies ultimately resulted from human error. Despite multiple levels of documented approvals of the application, the control failed as the different levels of review did not catch the participant being classified incorrectly based on income levels. Additionally, there is a lack of defined procedures to ensure that the approved documentation is reconciled with the eligibility category entered into the system, as there were instances where the student was classified correctly on the application form but not within the system. The errors affected both manual documentation review and data-entry classification, indicating a disconnect between approval and system processing. Effect: Due to the eligibility classifications being incorrect, the Organization was reimbursed at lower rates than supported by the documentation. As a result, the errors did not lead to overcharging the federal program, but instead, caused the Organization to claim less reimbursement than that for which it was eligible. Although this reduces the risk of questioned costs for overbillings, the conditions represent a control failure. Such control failures could lead to future noncompliance or incorrect claims in either direction if not addressed. Context: A sample of forty (40) students were selected for eligibility testing. Three (3) CACFP application forms were classified incorrectly as free, reduced, or paid based on income levels. Two (2) participants were entered into the system under the incorrect eligibility category, resulting in a discrepancy between the supporting documentation and the recorded classification. Recommendation: We recommend that management strengthen internal controls over the eligibility process. Management should retain the multi-level review structure; however, each level of review should include a documented verification of income information and eligibility categorization. In addition, management should implement a formal reconciliation process that confirms the eligibility classification approved on the application form matches the classification entered into the system prior to finalization or claim submission. Management’s Response: See accompanying management’s corrective action plan.

2025-004 – Lack of Controls over Reporting Corporation for National and Community Service Americorps Seniors Foster Grandparent Program – AL #94.011 TN Commission of National & Community Service/Americorps State and National Condition: The Organization does not have adequate internal controls in place over the preparation and submission of required program reports. Program reporting is prepared and submitted solely by the grant accountant, with no supervisory review and approval process to ensure accuracy prior to submission. Criteria: Uniform Guidance 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal control over compliance, including controls that provide reasonable assurance that reporting is accurate, complete, and properly supported. Cause: Management has not implemented a control structure to ensure program reports are independently verified for accuracy and compliance. Effect: Although reports were ultimately submitted timely and included the necessary information, there is an increased risk that errors, omissions, or inconsistencies in program reporting may go undetected. The lack of a functioning review control increases the likelihood of future noncompliance or reporting inaccuracies. Context: During testing of reporting, it was noted that program reports were prepared and submitted by a single individual. Management confirmed that no secondary review and approval was performed prior to submitting required reports.

AL# 11.307: COVID-19 Economic Adjustment Assistance, Economic Development Cluster, U.S. Department of Commerce, Federal Award # 05-79-06082 - 2021 Condition: The required performance reports ED-916 and ED-917 were not completed or submitted during the fiscal year. Criteria: 2 CFR 200.303(a) states that the Center is required to 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. Questioned Costs: None noted. Context: The Center transitioned to the revolving stage of the program and there was a misunderstanding that the ED-916 and ED-917 had to be filed during the revolving stage. The sample size was determined based upon the guidelines provided by the AICPA which is not a statistically valid sample. Cause: The Center misunderstood that the performance reports were applicable during the revolving stage. Effect: Not reporting performance reports may impact the federal agency’s ability to assess the effectiveness of the federal program. Recommendation: We recommend that the Center work with the EDA to understand when reporting requirements will change during the revolving process and complete and submit the ED-916 and ED- 917 reports as soon as possible. Views of Responsible Officials (Unaudited): All EDA reporting will be completed and submitted to ensure the Center is up to date on required filings. In addition, the Center will work with the EDA to understand when reporting requirements will change during the revolving process.

Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants – Guaranteed Loan Special Test and Provisions Significant Deficiency 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. The commitment letter for the term loan with the bank requires debt service coverage ratio and working capital to be calculated yearly using audited financial statements. Condition: As of June 30, 2025, management did not perform the proper calculations for the debt service coverage ratio in accordance with the commitment letter. Additionally, the required debt service coverage ratio and required working capital amount were not presented to the board to ensure compliance is obtained. Cause: The Health Center did not have the proper understanding of the calculation for the annual debt service coverage ratio as of year‐end. Additionally, the covenant requirements were not presented to the board to ensure compliance is obtained. The board may be unaware of the covenant requirements identified within the commitment letter. Effect: The Health Center had errors in the calculation and may be in violation of the debt service coverage ratio and working capital requirements if calculations are not performed properly and the covenant requirements are not presented alongside the calculations to ensure compliance. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: Yes, similar Finding 2024‐003 Recommendation: We recommend management use the formulas prescribed by the commitment letter to calculate the debt service coverage ratio and working capital amount and present these alongside the covenant requirements as a part of their year‐end close process to ensure all covenants of the loan are met. Views of Responsible Officials: Management agrees with the finding.

FINDING 2025-001 Information on the federal program: Subject: Special Education Cluster (IDEA) – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-046-PN01, 22611-046-ARP, 22619-046-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Earmarking Audit Findings: Significant Deficiency Criteria: 2 CFR section 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 awards 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:… (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and earmarking compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the earmarking requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of the Porter County Education Services (Cooperative). During fiscal year 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for the 22611-046-PN01, 22611-046-ARP, and 22619- 046-ARP grant awards could not be verified for the individual member schools. Total grant expenditures were posted as expended. The non-public proportionate share expenditures were determined by applying a percentage to the non-public school budgeted expenditures. As such, we were unable to identify if the minimum amount per each applicable member schools’ grant award was expended and properly reported to IDOE, as required. The lack of internal controls was isolated to the 22611-046-PN01, 22611-046-ARP, and 22619-046-ARP grant awards which were fully expended during fiscal year 2024. These three grant awards had minimum earmarking requirements for the Non-Public Proportionate Share of $39,016, $9,471, and $533, respectively. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to monitor the Cooperative and ensure non-public proportionate share funds are appropriately allocated to the member school based on expenditures charged directly on behalf of the member school. Supporting documentation for these expenditures should be retained for audit. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Assistance Listing, Federal Agency, and Program Name - 84.424, U.S. Department of Education, Student Support and Academic Enrichment Program Federal Award Identification Number and Year - 250750; 2025 Pass through Entity - Michigan Department of Education Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR § 200.303(a), nonfederal 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 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 School District's controls did not prevent, or detect and correct in a timely manner, duplicative costs charged to the grant. 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 - Within a sample of 40 special pay home visit payroll transactions, there was one transaction identified that consisted of duplicative costs where the same payroll costs were charged to the grant twice. The School District determined that duplicative costs were submitted for pay during a time of staffing transition in the department that is responsible for tracking home visits. The costs were submitted to payroll by the former employee responsible for tracking the time, as well as submitted by the new employee within that role. Special pay for home visits does not follow the standard payroll procedures; instead, it is processed and approved manually. The costs submitted did go through a manual review process prior to being charged to the grant, but the review in place did not operate effectively to identify the duplicative costs. The School Districted identified a total of five transactions in total that amounted to $3,023 in duplicative costs. Cause and Effect - Controls in place did not prevent or detect and correct duplicative costs charged to the program. As a result, the School District received reimbursement in excess of the actual amount spent on the grant and the initial SEFA provided to the auditors was overstated by $3,023. The schedule of expenditures of federal awards for the year ended June, 30, 2025 was corrected. Recommendation - We recommend that the School District review the controls in place to ensure that the review control is at a sufficient level to address the risk of duplicative expenses being charged to the grant. Views of Responsible Officials and Planned Corrective Actions - The School District annually processes thousands of supplemental payments for home visits. The audit found only five individual payments were duplicated. The duplication was caused by human error during an internal staff transition within the Family and Community Engagement (FACE) department. This led the new manager to incorrectly report employee home visit logs twice. The FACE team will add internal controls during staff transitions to ensure documentation is not duplicated.

Finding 2025-001 Student Financial Aid Cluster Eligibility Federal Agency: U.S. Department of Education Program: Student Financial Assistance Cluster (ALN #’s - 84.063, 84.033, 84.007, 84.268) Criteria: Uniform Guidance (2 CFR 200.303) requires institutions administering federal programs to establish and maintain effective internal controls to provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of awards. Additionally, Title IV regulations further require institutions to accurately calculate and disburse financial aid based on student eligibility These controls should include maintaining documentation on file of the calculations performed to determine eligibility and award amounts. Condition: Our financial aid sample of 40 items tested yielded 33 students who received Pell Grant Funding, 27 students who received Subsidized Direct Loans and 24 students who received Unsubsidized Direct Loans. Of the students tested, we noted five instances where students did not receive the correct amount of aid, per our independent calculations and those performed by WCCC. Please refer to page 80 of the June 30, 2025 audit report for details. Additionally, Of the 40 students selected for testing, the cost of attendance within the student financial aid module maintained within WCCC’s enterprise-wide software, did not agree with calculations done by the auditors and/or financial aid staff and could not be relied upon to reperform calculations to determine proper award amounts. Cause: As a result of calculation errors brought about by the issues with the student financial aid module, aid was not calculated and disbursed correctly. Documented controls were not in place to ensure students received the proper amount of Student Financial Assistance they were entitled to receive. Effect: WCCC is not in compliance with required calculations for student financial assistance funding. WCCC may be liable to return funds to the Department of Education related to overpayments to students or students may not have received the total amount of funding that they were eligible for. Repeat Finding: This is a repeat finding of 2024-002, 2023-003. Questioned costs: Known: $7,045, Likely : $378,420 Based on our testing of student financial aid disbursements, we identified five instances in which students did not receive the correct amount of aid. The differences associated with these items total $7,045 and are reported as known questioned costs. In addition, by projecting known questioned costs identified in the eligibility audit sample to the entire population from which the sample was drawn results in likely questioned costs of $378,420. Recommendation: We recommend that WCCC review policies and procedures to ensure that proper procedures are in place verifying the accuracy of student eligibility for grant funding and that the proper amount is paid to the student based on financial need. Additionally, the calculations prepared to determine award amounts should be maintained on file. Ideally, the enterprise-wide student financial aid module should contain the appropriate information and demonstrate the appropriate calculations. View of Responsible Officials and Planned Corrective Action: Management agrees. See separate Corrective Action Plan.

Finding 2025-001: Allowable Costs/Cost Principles – Improper expenditure recognition Federal Program Name: Title II, Part A, Teacher & Principal Training and Recruiting Assistance Listing Number: 84.367A Federal Agency Name: U.S. Department of Education Passed-Through Agency Name: Texas Department of Education Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement Per 2 CFR 200.302 and 200.303, management is responsible for ensuring the accuracy and completeness of all financial records and related information, as well as for establishing and maintaining effective internal controls over grant reporting and compliance. Condition During the current fiscal year, grant expenditures initially included $291,666 for services scheduled to be provided in the subsequent fiscal year. Cause In preparing its financial records for the year ended June 30, 2025, the District did not identify expenditures recorded in the incorrect fiscal year. The failure to detect these errors in a timely manner indicates that closing procedures— specifically the monitoring and review of financial information—were not performed effectively. Effect or Potential Effect The District’s internal control system did not prevent, or timely detect and correct, misstatements in its financial records. Ineffective monitoring and closing procedures increase the risk that errors or irregularities may occur and remain undetected. Questioned Costs None Context or Perspective Information Improper recognition of expenditures could result in misstatements reported to awarding agencies and inaccuracies in the Schedule of Expenditures of Federal Awards, potentially affecting the determination of major programs subject to single audit testing. The expenditures identified above were ultimately removed from current year activity and were excluded from the year-end reimbursement request. Recommendation We recommend that the District provide additional training to staff responsible for preparing year-end grant expenditure reports to strengthen accuracy. Views of Responsible Officials and Planned Corrective Actions See corrective action plan

Finding 2025-001: Child Nutrition Cluster Listing #10.553 & #10.555 Federal Agency: U.S. Department of Agriculture Grant Period: Year ended June 30, 2025 Condition/Criteria: The District bases its monthly meal counts submitted to NYSED on internally kept records. We noted instances in which the NYSED meal count submission did not match the internal reports as required by 2 CFR Section 200.303. Cause: The District did not submit complete meal counts to NYSED for all of the District’s buildings for breakfast and/or lunch. Context: Of the 3 months haphazardly selected (not a statistically valid sample), 1 month had differences between the meal counts that were submitted to NYSED and the internally kept meal count records. While not part of our sample, we did note another instance whereby the submitted meal counts were inaccurate. Proper review was not completed to confirm that the submission was complete and accurate. Effect and Questioned Costs: Based on the current NYSED reimbursement rates, $17,227 and $13,241 of federal reimbursable costs from the month selected and additional month identified, respectively, of federal reimbursable costs were not submitted due to this error. This is considered material to the Child Nutrition Cluster program. Additionally, $30,468 was accrued as part of an audit adjustment to record this federal revenue. Recommendation: We recommend the District implement a process to ensure that the meal count submission to NYSED matches the internally kept records. Management Response: The District agrees with this finding and will be implementing a new policy which includes a Finance Office verification of the meal counts submitted when the deposits come in through Child Nutrition to ensure that the reports match the deposit and the reports match the internal reports for meal counts The District was able to recoup the funds from the missing months by submitting corrected claims.

Finding Number: 2025‐001 Repeat Finding: No Program Name/Assistance Listing Title: Temporary Assistance for Needy Families (TANF) Assistance Listing Number: 93.558 Federal Agency: U.S. Department of Health and Human Services Federal Award Number: CTR066206, CTR064289 Pass‐Through Agency: Arizona Department of Economic Security, Arizona Foundation for Legal Services Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Eligibility Criteria Under eligibility guidelines for the Temporary Assistance for Needy Families (TANF) program, only financially needy families that consist of a minor child living with a parent or a pregnant woman may receive TANF assistance. In accordance with 2 CFR 200.303, management is responsible for establishing and maintaining internal controls over federal programs, which includes developing a system to ensure documentation is maintained to support that program participants meet the TANF eligibility requirements. Condition The documentation Emerge maintained for participants reported as TANF eligible did not always include information on whether the participant was pregnant or had children or dependents under the age of 19. Cause Emerge’s internal controls over documenting client information in the client management software were not adequate. Effect Two participants were incorrectly designated as TANF eligible. Context During our review of files for TANF eligible participants, we noted that for two of 21 participants reviewed, Emerge did not maintain documentation that indicated whether the participant was pregnant or had children or dependents under the age of 19. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should ensure that intake staff not only inquire whether participants meet TANF eligibility requirements, but also document such information prior to classifying the individual as TANF eligible. Views of Responsible Officials See Corrective Action Plan.

Finding 2025-002 – Return of Title IV Funds Repeat Finding: No Federal Program Title – U.S. Department of Education Student Financial Assistance Cluster Federal Pell Grant: 84.063 Federal Award Year 2024-2025 Award Number: P063P Condition For one out of forty students tested, City Colleges properly recalculated a return of Title IV funds for a student but did not subsequently adjust the student's account to perform the return or notify the student of the adjusted award amount. Criteria Per 34 CFR 668.22, the institution must return, the lesser of—(i) The total amount of unearned title IV assistance to be returned as calculated or an amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of title IV grant or loan assistance that has not been earned by the student. An institution must return the amount of title IV funds for which it is responsible as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure that returns are properly adjusted to students' accounts to ensure funds are returned to the Department of Education timely. Questioned Costs Actual questioned costs total $1,192. Based on our sample results, estimated likely questioned costs total $123,879. Cause The lack of return of Title IV funds was an oversight due to human error. Context Infrequent. One out of forty students (2.5%) selected for testing. Effect Failure to return funds to the Department of Education can result in excess cash or loss of future funding. Recommendation We recommend City Colleges enhance monitoring procedures to ensure that returns of federal funds are completed after return of Title IV calculations are performed. Views of responsible officials We agree with this finding. See corrective action plan.

Finding 2025-001 – Direct Loan Disbursement Notifications Repeat Finding: No Federal Program Title – U.S. Department of Education Student Financial Assistance Cluster Federal Direct Student Loans: 84.268 Federal Award Year 2024-2025 Award Number: P268K Condition During our testing over direct loan disbursement notifications, we found that for twenty out of twenty students tested, City Colleges could not provide evidence that notifications were sent within the required timeframe informing the student, or parent, that a credit will be made to the student’s account for a direct loan disbursement. While City Colleges demonstrated that its system was configured to automatically send notification letters and confirmed that notifications were issued, City Colleges could not provide documentation showing the specific date each notification was sent in relation to the loan disbursement. Criteria 34 CFR 668.165 requires institutions who credit a student's account with a direct loan disbursement must notify the student, or parent, in writing of the (1) the date and amount of the disbursement; (2) the student's right, or parent's right, to cancel all or a portion of that loan or loan disbursement and have the proceeds returned..; and (3) the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan. 2 CFR Section 200.303 requires entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures in place to ensure there is a sufficient audit trail of direct loan disbursement notifications. Questioned Costs None. Cause City Colleges’ system is designed to record the date notifications are sent to students; however, it does not retain a copy of the actual notification content that was transmitted. Context Frequent. Twenty out of twenty students (100%) selected for testing. Effect Failure to maintain documentation of the notifications sent to students regarding their direct loan disbursements may prevent students from exercising their right to cancel awards within the allowable timeframe. This constitutes noncompliance with federal regulations and could jeopardize City Colleges’ eligibility for future funding. Recommendation We recommend City Colleges enhance its system to retain both the date of the notification and a copy of the actual notification sent to students. Views of responsible officials We agree with this finding. See corrective action plan.

Finding 2025-003 – Reporting Repeat Finding: No Federal Program Title – U.S. Department of Education Higher Education Institutional Aid 84.031C Federal Award Year 2024-2025 Award Number: 21061-210822-1-HWC Pass-Through Entity: Northeastern Illinois University Condition For one of the four reports tested for the Higher Education Institutional Aid Program, City Colleges did not timely submit a quarterly report to the Pass-Through Entity (PTE). A quarterly performance report was due on May 1, 2025 and submitted 14 days late on May 15, 2025. Criteria Per the terms of the PTE's annual Subaward Agreement, City Colleges is required to submit quarterly reports along with annual performance reports. Quarterly reports are required to be submitted within 30 days of the period end. 2 CFR Section 200.303 requires entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures in place to ensure timely reporting of required performance reports. Questioned Costs There were no questioned costs related to testing of reporting. Cause Submission delay was the result of poor time management and breakdowns in communication between PIs and the grantor. Context Frequent. One out of four reports (25%) selected for testing. Effect Failure to submit reports timely is noncompliance with the requirements of the grant award and could result in loss of funding or other penalties. Recommendation We recommend City Colleges implement monitoring procedures to ensure that reports are submitted in a timely manner. Views of responsible officials We agree with this finding. See corrective action plan.

2025-001 Improve Internal Controls Over Matching Federal Program(s) Information Federal Agency: U.S. Department of Health and Human Services Cluster/Program: Aging Cluster Assistance Listing Number: 93.043, 93.044, 93.053 Award Year: 2025 Compliance Requirement: Matching Type of Finding Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Per 45 CFR 1321.9(c)(2)(ii), recipients are required to contribute a nonfederal match toward allowable program costs. Match requirements for direct service providers are determined by the State and/or area agency. Per 2 CFR § 200.303, recipients must establish and maintain effective internal controls over federal awards to ensure compliance with applicable requirements. Condition and Context During our audit, we noted that the Organization does not have formal internal controls or documented procedures in place to ensure that the nonfederal match requirement for Aging Cluster programs is adequately monitored and met throughout the fiscal year. Additionally, management was not aware of the specific nonfederal match requirement applicable to the program. Although the Organization provided sufficient nonfederal matching funds for fiscal year 2025, the lack of awareness regarding the required match and the absence of controls represent a significant deficiency in the internal control system over compliance for the matching requirement. Cause Management did not develop or implement written policies and control activities specifically designed to track, review, and verify the matching requirement for Aging Cluster programs. Effect of Potential Effect The absence of controls increases the risk that the required nonfederal match may not be met in future periods, which could result in noncompliance with program requirements. Recommendation We recommend that the Organization establish and implement formal policies and control activities to ensure that the nonfederal match for Aging Cluster programs is adequately tracked, reviewed, and documented on an ongoing basis. This should include periodic reconciliation and management review to ensure compliance with matching requirements. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.

SIGNIFICANT DEFICIENCY 2025-001 - Allowable Activities/Allowable Costs Federal Program Information: Department of Education: CFDA - 84.010 - Title I Criteria: The following CFR(s) apply to this finding: 2 CFR 200.303), 2 CFR section 200.430(g). Condition: During audit procedures, it was identified that the Unit’s controls over allowable Activities/Allowable Costs were not working adequately for the payroll process. Cause: The Unit does not have the necessary internal controls over compliance. Effect: The Unit’s inadequate controls over coding enables an inherent risk of noncompliance of allowable activities/allowable costs by allowing employees to be incorrectly paid from the wrong account. Lack of contracts from private school employees creates a risk of supplanting funding rather than supplementing. Identification of Questioned Costs: None identified. Context: Eighty payroll charges were tested, results are as follows: timesheets do not include the program code or program name the time should be charged to. Unit has to rely on correct input of coding when the employee is set up in the system and external notes for employees who work in more than one program. No additional check and balance was noted and one non Title I employee was incorrectly paid out of the program, which was corrected during audit. Timesheet program did not have the same employment position as the contracted position for two of the employees reviewed, eight of the employees positions were inconsistent on the timesheets. Contracts or form of employment and wage documentation was not required from the private school for the Title I employees which could result in unallowable costs or supplanting private funds with federal funding. Eighty payroll charges were tested. This is not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit implement internal control processes and procedures to ensure that only Allowable Activities/Allowable Costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Maine School Administrative District No. 1.

Finding 2025-001 Payroll Allocation Documentation – Significant Deficiency in Internal Control over Allowable Costs/Cost Principles Identification of the Federal Program Assistance Listing Number 87.371 - US Department of Education Passed through the State of Alaska Department of Education and Early Development -Comprehensive Literacy Development Year – 2024/2025 Criteria or Specific Requirement The Uniform Guidance in 2 CFR Section 200.303, Internal Controls requires that nonfederal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testing of disbursements, we noted the following exceptions: • 6 of the 6 payroll expenditures sampled did not have adequate support for the expense that was recorded to the special revenue fund. The total expense was supported by timesheets and personnel action forms, but the percentage of the total expense charged to the grant did not have adequate documentation that was reviewed and approved. Cause Internal control process for retaining documentation of review and approval over payroll expenditure allocation was not followed. Effect or potential effect Payroll expenses may not be properly supported by reviewed and approved documentation. Questioned Costs None noted. Context For the testwork for allowable activities over the Comprehensive Literacy Development program, we noted 6 out of 6 payroll expenditures selected for testwork did not have documentation that was reviewed supporting the allocation of the time charged to the program. Repeat finding Not a repeat finding. Recommendation We recommend that the District comply with the requirements of 2 CFR section 200.303 and establish proper retention of the review and approval of the payroll allocation between each fund. Views of responsible officials To ensure payroll costs charged to multiple federal funds are properly reviewed, approved, and documented in compliance with federal, state, and institutional regulations. This procedure ensures transparency, accuracy, and appropriate record retention. Reviews allocation documents; ensures proper coding.

Finding 2025-001 U.S. Department of Education Student Financial Aid Cluster (Federal Assistance Listing Numbers 84.007, 84.033, 84.038, 84.063, 84.268 and 84.379) Federal Award Year 2024-2025 Criteria: CFR section 685.309 and 690.83(b)(2) requires the University to notify the NSLDS within 30 days of a change in student status or include the change in status in a response to an enrollment reporting roster within 60 days of the student’s date of determination of withdrawal. Condition: For two out of 25 students tested (8%) for properly reported enrollment changes at the University, the students' status change at the campus level and program level were not accurately reported to the National Student Loan Data System (NSLDS). Of these two students identified with noncompliance (both of which were unofficial withdrawals) one student's status change was not reported to the NSLDS, and one student was reported timely but with improper effective status change dates. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure that enrollment status changes are reported timely. Cause: The University’s controls over unofficial withdrawals failed to either timely identify or identify at all unofficial withdrawals where students don’t go through the formal withdrawal process. This is a manual process primarily related to students that stop attending classes without official notice and the University is dependent on professors providing final date of attendance. Effect: Failure to report status changes accurately is noncompliance with Federal regulation and could result in loss of future funding. Questioned Costs: There were no questioned costs related to testing of enrollment reporting. Context: Two out of 25 students originally selected for testing. The University then reviewed all unofficial withdrawals and identified five additional students with reporting errors. Based on identified errors, an additional seven students were selected for testing and no errors were identified that weren’t already identified by the University. Recommendation: We recommend the University implement review procedures to ensure that the proper effective date is being reported to the NSLDS when a student withdraws or has an enrollment status change. A system of review procedures and/or controls will ensure the University is reporting status changes accurately. Views of responsible officials: We agree with this finding. See corrective action plan.

Noncompliance with Documentation, Approval, and Time Reporting Requirements for Grant Expenditures Finding Type. Material Noncompliance; Material Weakness in Internal Control over Compliance (Activities Allowed and Unallowed, and Allowable Costs/Cost Principles) Federal program(s). U.S. Department of Education - Title I, Part A - Improving Basic Programs (ALN 84.010); passed through the Michigan Department of Education; All project numbers. Criteria. Per 2 CFR §200.303, the recipient must establish, document, and maintain effective internal controls 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 award. Per 2 CFR §200, Subpart E, the District is required to ensure that grant funds are used in compliance with regulatory provisions and spent only for the reasonable and necessary costs of the program. Expenditures charged to grants for purchased services should be supported by documents that demonstrate that services were received for the benefit of the program, in accordance with approved agreements with those vendors providing the services. The District should ensure that payment is supported by details of services provided (by whom, when, and how much). Per 2 CFR §200.430, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition. During testing, we identified 1 instance out of 40 disbursement selections tested in which the District was unable to provide supporting documentation for charges incurred under the grant. Additionally, we noted 15 instances out of 40 samples tested where the District could not provide evidence of review and approval for grant expenditures. Finally, we identified 3 instances out of 40 samples tested where the hours reported on timesheets did not agree with the hours charged to the grant. Cause. The District did not have the proper controls in place to ensure that documentation of services provided were being reviewed prior to payment of related invoices. The District also did not maintain a strong system of financial record-keeping during the year which made it difficult for the District to provide invoices in a timely fashion when requested. Finally, the District did not have a system in place to properly review time sheet entry against hours actually charged to the grant. This condition was the result of a lack of internal controls for both payroll and disbursements in place to ensure that expenditures under the grant are independently approved before expenditures are incurred, proper records are maintained and grants are properly charged. Effect. The District’s failure to maintain supporting documentation for certain grant expenditures, provide evidence of review and approval, and accurately report time charged to the grant increases the risk of noncompliance with federal requirements under 2 CFR Part 200. These deficiencies create an increased risk of questioned costs which could ultimately lead to disallowed costs and the potential repayment of grant funds to the granting agency. Additionally, inaccurate reporting and weak internal controls diminish the reliability of financial information submitted to the grantor, reduce accountability, and heighten the risk of errors or fraudulent activity. Questioned Costs: None reported insofar as questioned costs are only required to be disclosed when known or likely questioned costs exceed the threshold of $25,000 established by the Uniform Guidance. Recommendation. We recommend that the District review its written policies and procedures over federal awards to ensure that controls are in place that will require that all expenditures for either payroll or disbursements have the appropriate documentation and evidence of review and approval prior to payment. View of Responsible Officials. The District will review its written policies and procedures over federal awards to ensure that all expenditures have the appropriate documentation and evidence of review and approval prior to payment.

Assistance Listing, Federal Agency, and Program Name 93.778, U.S Department of Health and Human Services, Medical Assistance Program (Medicaid) Federal Award Identification Number and Year N/A Pass through Entity Michigan Department of Community Health Finding Type Material weakness Repeat Finding No Criteria 2 CFR 200.303 requires that recipients and subrecipients receiving federal awards establish, document and maintain effective internal control over the federal awards that provides 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 including internal controls relevant to the allowability compliance category as defined in 2 CFR 200, Subpart E (Cost Principles). Condition The Intermediate School District (ISD) did not have internal controls in place to ensure that all the expenditures included in the quarterly claims for reimbursement were allowable. 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 The Medicaid Administrative Outreach Program (AOP) allows the Intermediate School District (ISD) to include its eligible expenditures and eligible expenditures from all of the Local Educational Authorities (LEAs) in Macomb County in its quarterly cost pool report that is submitted to a state contractor for their calculation of the AOP reimbursement. While the ISD has internal controls to ensure that the expenditures included in the quarterly cost reports that pertain to the ISD, are allowable, the ISD did not have an internal control to ensure that expenditures reported by the LEAs were allowable. For the year ended June 30, 2025, approximately 77 percent of total expenditures included in the quarterly cost pool reports, were incurred by the LEAs. Our compliance sample size was 60 of which 38 were from LEAs. No instances of noncompliance were noted. Cause and Effect The ISD relied on the LEAs and state contractor to ensure that LEA costs were allowable. The ISD did not establish internal controls to ensure that all LEA expenditures included in the quarterly AOP claim calculations were allowable, which is required as the ISD is the recipient of the grant funds. Recommendation We recommend that the ISD develop and implement internal controls to ensure expenditures from LEAs are allowable. Views of Responsible Officials and Corrective Action Plan Management agrees with the finding. The ISD will review the process used by the local districts to report quarterly expenditures for the Administrative Outreach program. We will then create a process that ensures that the local districts provide supporting documentation that allows us to monitor the quarterly submission amounts for accuracy.

Finding 2025-001 Program Name – Capitalization Grants for State Revolving Funds (Assistance Listing #66.468) Federal Award Agency – Environmental Protection Agency (EPA) Criteria Title 31 U.S. Code of Federal Regulations (CFR) Part 205.11(a) provides that a state must minimize the time elapsing between the transfer of funds from the United States Treasury and the state's payout of funds for federal assistance program purposes, whether the transfer occurs before or after the payout of funds. Title 2 CFR Part 200.303 requires the non-federal entity to establish and maintain effective internal control over federal awards that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition The Connecticut Department of Public Health (DPH) has not drawn down approximately $13,600,000 of federal assistance for set-aside expenditures incurred during the last two fiscal years. Context DPH incurred expenditures related to the Drinking Water Fund program for set-aside activity during the year. Cause There were delays in establishing award-specific State Identification Numbers (SIDs) to track new EPA grants awarded under the Infrastructure Investment and Jobs Act (IIJA). Upon subsequent review, reclassification of expenditures to proper SIDs were required. A pause was taken to ensure that drawdown requests and payments reflect properly reconciled and allowable charges and to avoid the risk of requesting reimbursement (improper payment) for incorrectly coded expenditures. Effect Federal drawdowns have not occurred in accordance with DPH’s immediate cash requirements to administer the program. Recommendation DPH should continue its efforts to timely review transactions initially recorded to base grant SIDs, reclassify those expenditures and initiate the drawdown request. DPH should ensure that federal drawdowns align with the immediate cash needs to administer the program. Views of Responsible Officials The Department agrees with the finding. Upon notification of the significant Bipartisan Infrastructure Law (BIL)/Infrastructure Investment and Jobs Act (IIJA) funds to be awarded, the Department proactively established positions necessary to support the implementation of the Drinking Water State Revolving Fund (DWSRF). These newly proposed positions were created under the existing Base Set-Aside chart of accounts to ensure staffing was in place at the onset of the grant period and to allow timely utilization of the anticipated funding. A delay in establishing these positions would have hindered the State’s ability to meet program obligations under the funding agreements. Once the positions were filled and staff began charging time and effort, expenditures were temporarily recorded under the existing chart of accounts with the intent to reallocate them to the appropriate BIL/IIJA accounts once the Notices of Award and corresponding accounts were formally established. Because many of these reallocations affect set-aside and program accounting, the Department placed a temporary hold on drawdowns of set-aside funds. This measure was taken to ensure that drawdown requests reflect properly reconciled and allowable charges and to prevent the risk of requesting reimbursement for incorrectly coded expenditures (improper payment). The Department has since initiated reconciliation of the accounts to ensure that all expenditures are aligned with their proper set-aside awards as well as beginning to drawdown from respective set-aside accounts. Completion of this reconciliation, along with the processing of all d eligible drawdowns, is anticipated on or before June 30, 2026.

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 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. Section 4 of the loan resolution security agreement dated December 1, 2016 states the Center must set aside a reserve amount each month until the specified account balance is reached. Condition: The Center’s reserve account is fully funded per the requirements of the loan resolution security agreement. However, there is no documented secondary monitoring of the reserve balance as compared to the required minimum reserve balance. Cause: The reserve balance is maintained within a separate certificate of deposit account with a bank; therefore, there are no monthly reconciliations, and the reserve balance and reserve requirement are not communicated with the board of directors. Effect: The lack of formal review or approval increases the risk of employees participating in the federal award administration not detecting and correcting noncompliance in a timely manner. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend management implement procedures to ensure individuals in management review and approve the reserve balance when the certificate of deposit is renewed or present the reserve balance and the reserve requirement to the board during board meetings. Views of Responsible Officials: Management agrees with the finding.

U.S. Department of Treasury Federal Assistance Listing #21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension, & Debarment Material Weakness in Internal Control Over Compliance and Noncompliance 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. 2 CFR 200.318 requires the auditee to use its own documented procurement procedures which reflect State, local and tribal laws and regulations, provided that the procurements conform to applicable Federal law and standards. 2 CFR 200.214 restricts making federal awards with certain parties that are debarred, suspended, or otherwise excluded from participating in Federal awards. Condition: The Hospital did not have a written procurement policy in place that aligned with all federal regulations. The Hospital also did not review vendors to ensure that they were not debarred, suspended, or otherwise excluded from participating in federal awards. Cause: While the Hospital did have a policy in place, the policy did not follow all federal regulations, or include policies of determining if vendors are debarred, suspended, or otherwise excluded from participating in Federal awards. Effect: Noncompliance with the Uniform Guidance could jeopardize future federal funding. Questioned Costs: None reported Context: A nonstatistical sample of 3 vendors out of 9 vendors with actual or anticipated expenditures greater than the federal micro purchase threshold were tested for procurement testing. Repeat Finding from Prior Years: No. Recommendation: The Hospital should update their procurement policy to align with all federal requirements outlined in 2 CFR 200.318. We also recommend that the Hospital reviews vendors that are used for federal awards to ensure that they are not debarred, suspended, or otherwise excluded from participating in Federal awards in accordance with 2 CFR 200.214. Views of Responsible Officials: Management agrees with the finding.

2025-002: Supportive Housing for Persons with Disabilities – AL #14.181 – Eligibility Criteria or Specific Requirement (including statutory, regulatory, or other citation) Per Uniform Guidance (2 CFR 200.303), non-federal entities are required to establish and maintain effective internal controls over federal awards. HUD program guidelines also require documentation and supervisory review of tenant eligibility, rent determinations, and related compliance activities. Condition During our audit, we noted that tenant files, which included eligibility determinations, income verifications, and rent calculations, were not consistently reviewed or approved by management. Cause This was the result of an administrative oversight, in which, the property management personnel did not consistently follow the Corporation’s policies and procedures. Effect or Potential Effect The absence of management review increases the risk of noncompliance with federal regulations, incorrect eligibility determinations, and inaccurate rent calculations, which could result in questioned costs or adverse impact on program participants. Questioned Costs - None Identification as a Repeat Finding, if applicable – No Recommendation We recommend that the Corporation comply with established policies and procedures that require the review and approval of all tenant files by a designated supervisor. Views of Responsible Officials See attached response for view of responsible officials and planned corrective actions.

025-003: Supportive Housing for Persons with Disabilities – AL #14.181 – Cash Management Criteria or Specific Requirement (including statutory, regulatory, or other citation) Uniform Guidance (2 CFR 200.303) requires organizations to establish effective internal controls over federal awards. Proper review and approval are key controls to prevent errors and misstatements. Condition Monthly HUD-52670 forms were submitted to HUD for housing assistance payment requests without evidence of review or approval by management. Cause The Corporation didn’t have adequate controls in place to ensure that monthly HUD-52670 forms were reviewed and approved by management. Effect or Potential Effect There is a risk of potential noncompliance with HUD and federal cash management requirements. Questioned Costs - None Identification as a Repeat Finding, if applicable – No Recommendation We recommend that management implement a process for review and approval of all HUD-52670 forms before submission to HUD. Views of Responsible Officials See attached response for view of responsible officials and planned corrective actions.

2025-002: Supportive Housing for Persons with Disabilities – AL #14.181 – Eligibility Criteria or Specific Requirement (including statutory, regulatory, or other citation) Per Uniform Guidance (2 CFR 200.303), non-federal entities are required to establish and maintain effective internal controls over federal awards. HUD program guidelines also require documentation and supervisory review of tenant eligibility, rent determinations, and related compliance activities. Condition During our audit, we noted that tenant files, which included eligibility determinations, income verifications, and rent calculations, were not consistently reviewed or approved by management. Cause This was the result of an administrative oversight, in which, the property management personnel did not consistently follow the Corporation’s policies and procedures. Effect or Potential Effect The absence of management review increases the risk of noncompliance with federal regulations, incorrect eligibility determinations, and inaccurate rent calculations, which could result in questioned costs or adverse impact on program participants. Questioned Costs - None Identification as a Repeat Finding, if applicable – No Recommendation We recommend that the Corporation comply with established policies and procedures that require the review and approval of all tenant files by a designated supervisor. Views of Responsible Officials See attached response for view of responsible officials and planned corrective actions.

2025-003: Supportive Housing for Persons with Disabilities – AL #14.181 – Cash Management Criteria or Specific Requirement (including statutory, regulatory, or other citation) Uniform Guidance (2 CFR 200.303) requires organizations to establish effective internal controls over federal awards. Proper review and approval are key controls to prevent errors and misstatements. Condition Monthly HUD-52670 forms were submitted to HUD for housing assistance payment requests without evidence of review or approval by management. Cause The Corporation didn’t have adequate controls in place to ensure that monthly HUD-52670 forms were reviewed and approved by management. Effect or Potential Effect There is a risk of potential noncompliance with HUD and federal cash management requirements. Questioned Costs - None Identification as a Repeat Finding, if applicable – No Recommendation We recommend that management implement a process for review and approval of all HUD-52670 forms before submission to HUD. Views of Responsible Officials See attached response for view of responsible officials and planned corrective actions.

2025-002: Supportive Housing for Persons with Disabilities – AL #14.181 – Eligibility Criteria or Specific Requirement (including statutory, regulatory, or other citation) Per Uniform Guidance (2 CFR 200.303), non-federal entities are required to establish and maintain effective internal controls over federal awards. HUD program guidelines also require documentation and supervisory review of tenant eligibility, rent determinations, and related compliance activities. Condition During our audit, we noted that tenant files, which included eligibility determinations, income verifications, and rent calculations, were not consistently reviewed or approved by management. Cause This was the result of an administrative oversight, in which, the property management personnel did not consistently follow the Corporation’s policies and procedures. Effect or Potential Effect The absence of management review increases the risk of noncompliance with federal regulations, incorrect eligibility determinations, and inaccurate rent calculations, which could result in questioned costs or adverse impact on program participants. Questioned Costs - None Identification as a Repeat Finding, if applicable – No Recommendation We recommend that the Corporation comply with established policies and procedures that require the review and approval of all tenant files by a designated supervisor. Views of Responsible Officials See attached response for view of responsible officials and planned corrective actions.