Findings Citing § 200.303

Finding No: 2025-001 Cash Management Federal Agency: U.S. Department of Health and Human Services Pass-Through Entities: N/A Assistance Listing Number: 93.493 Federal Program: Congressional Directives Federal Award Year: September 30, 2023 – September 29, 2026 Per section 2 CFR 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury and disbursement by the non-federal entity for direct program or project costs. Interest earned on Federal funds must be returned annually to the Department of Health and Human Services Payment Management System (PMS). Expenditures must be incurred prior to the date of the reimbursement request. Per section 2 CFR 200.303, non-Federal entities must establish, document and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Found The System entity did not minimize the time elapsing between the transfer of funds and disbursement and did not remit interest earned on advances to the designated federal agency. The System requested reimbursement of federal grant funds of $1,042,278 over 350 days in advance of incurring the related expenditures for the St. Francis Medical Center Community Project Funding Congressionally Directed Spending – Construction award (ALN 93.493) and did not perform the required interest calculation or remit interest timely, representing a departure from the Uniform Guidance cash management requirements. We tested 100% of the expenditures and related cash draw activity for this award during the audit period; therefore, no sampling was used and no extrapolation was necessary. Possible Cause and Asserted Effect The System's internal controls did not ensure the federal funds requested for the program were either already expended or encumbered to be expended timely and did not implement the process steps and control to periodically identify and calculate the resulting accumulated interest earned on federal cash balances drawn in advance related to this program. Failing to minimize the time between the transfer and disbursement of funds, as well as failing to remit interest earned on advances, constitutes noncompliance with the Uniform Guidance.Questioned Cost Interest earned of $44,750 Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding is a Repeat of a Finding in the Immediately Prior Audit No. Recommendation We recommend that the System strengthen its internal controls over cash management controls to ensure that all federal fund drawdowns are based on incurred expenditures and documented immediate cash needs, and that a process is implemented to periodically calculate and remit any interest earned on advance balances as required by the Uniform Guidance. View of Responsible Officials Management concurs with this finding. The System is implementing a management review control through periodic inquiry and review of advance fundings to ensure drawdowns are supported by incurred expenditures or are for immediate cash needs and any interest calculations to ensure timely compliance with the Uniform Guidance. Corrective Action Plan In the event that the System receives federal cash advances prior to the cash expenditures, the System will perform an additional financial review of any advanced payments compared to the related expenditures. Should accounting identify advances not yet spent, they will inquire with the grant administrator responsible for the grant to review their advance fundings, any potential resulting interest calculations. Anticipated Completion Date June 30, 2026 Name of Contact Person for Corrective Action Amanda Hymel, Corporate Controller

Federal Assistance Listing Number: 20.205, 20.513 Federal Program Name: Highway Planning and Construction, Transit Services Programs Cluster Federal Agency: U.S. Department of Transportation Pass-through Agency: State of California Department of Transportation, Los Angeles County Metropolitan Transportation Authority (LACMTA) Federal Award Number: N/A for ALN 20.205, CA-2023-236-00 for ALN 20.513 Criteria: Per 2 CFR 200.510(b), Financial statements, the auditee is required to prepare a complete and accurate SEFA that reflects actual federal expenditures incurred during the reporting period. In addition, 2 CFR 200.303, Internal controls, requires the auditee to establish and maintain effective internal control over compliance to provide reasonable assurance that federal program information, including SEFA reporting, is accurate, reliable, and free from material misstatement. Condition: During our audit, we identified that the expenditures reported for the Highway Planning and Construction Program in the SEFA included $431,605 in state-funded expenditures that were incorrectly reported as federal expenditures. This resulted in a material overstatement of federal expenditures for the program. A correction was subsequently made to remove the state-funded portion, materially reducing the total federal expenditures reported on the SEFA. We also identified an error within the Transit Services Programs Cluster involving an incorrect federal award identification number. One program was initially reported under federal award number CA-2020-167, which did not correspond to the related federal grant. The correct federal award number is CA-2023-236-00. The City has since updated the SEFA to reflect the accurate award number. Cause: The overstatement and incorrect reporting occurred because internal controls over the SEFA preparation and review process did not provide adequate assurance that expenditures and award information were accurately classified and reported. Review procedures were not designed or executed at a level sufficient to detect that state-funded costs had been commingled with federally reimbursable expenditures prior to SEFA compilation. The controls also did not ensure that grant identification details were verified against current federal award agreements, which allowed one program to be reported with an incorrect federal award identification number. Effect: Because non-federal expenditures were included in the SEFA, the federal expenditures reported for the Highway Planning and Construction Program were materially overstated. The incorrect federal award identification number in the Transit Services Programs Cluster also reduced the accuracy and clarity of the SEFA and created a risk of misidentifying the applicable federal grant award, which could affect federal monitoring or audit oversight. Taken together, these issues increase the likelihood of inaccurate reporting to federal and pass-through agencies, may influence the determination of major programs, and could affect the City’s compliance with federal reporting requirements. Questioned Costs: None. Recommendation: The City should strengthen its internal review procedures for preparing the SEFA to ensure that only federally eligible expenditures are reported and that all program information aligns with current federal award documents. This should include a more detailed reconciliation of project expenditures and award data to their underlying funding sources before amounts are compiled, along with a documented supervisory review to confirm accuracy. Staff responsible for SEFA preparation should receive additional guidance on distinguishing federal from non-federal costs and on verifying federal award identification numbers. Implementing a standardized SEFA preparation checklist and requiring formal sign-off at key review stages would help ensure that errors are identified and corrected before the SEFA is finalized. Views of Responsible Officials and Planned Corrective Action: The City is taking corrective action in response to this finding by strengthening its grant management procedures. The Director of Community Development and Public Works is responsible for overseeing these improvements, which include enhancing coordination among the Public Works Analyst, Grants Coordinator, and the City's contracted engineering firm to clearly distinguish between federally and state-funded Highway Safety Improvement Program (HSIP) activities and ensure that program information aligns with current federal award documents. Key measures include requiring identification of funding sources in Staff Reports submitted to City Council prior to grant application submission, assigning unique project numbers and classifications within the City's financial system (Incode), implementing a reconciliation process to accurately align project expenditures with their funding sources before inclusion in the Schedule of Expenditures of Federal Awards (SEFA), and providing targeted staff training along with a standardized SEFA preparation checklist. All corrective actions are set for implementation effective March 18, 2026. Personnel responsible for implementation: Gerardo Marquez Position of personnel responsible: Director of Community Development and Public Works Expected date of implementation: March 18, 2026

Finding #SA2025-001 Cash Management and Accuracy of Federal Financial Reports Assistance Listing Number: 20.507, 20.526 Assistance Listing Title: COVID-19 – Federal Transit Cluster Name of Federal Agency: Department of Transportation Federal Award Identification Number: CA-2022-083-00, 2020-206, 2020-212 Criteria: The 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Related to these requirements, the City should submit drawdown requests to the Department of Transportation throughout the fiscal year as costs are incurred and Federal Financial Reports should agree with those drawdown requests and supporting accounting records. Drawdown requests should be completed at least quarterly, depending on the volume of program activity, to improve the cash management for the program and to match expenditures with associated revenues throughout the fiscal year. In addition, since the grant is on a reimbursement basis, expenditures should generally be incurred prior to requesting reimbursement from the Department of Transportation unless specifically authorized by the grantor, and costs included in the Federal Financial Reports should be the same as those included in requests for reimbursement. Condition: During our review of the Federal Financial Reports related to grant CA-2022-083-00, we noted that for the first quarter of fiscal year 2025, the report included expenditures in the amount of $515,988, but the City requested reimbursement in the amount of $110,408, during that same time period. In addition, the reports for the third and fourth quarters of fiscal year 2025 included expenditures of $430,210 and $1,944,112, but the City requested reimbursement in the amounts of $1,898,135 and $744,817, respectively during that same time period. In addition to our review of the Federal Financial Reports, we also reviewed the timing of expenditures in relation to the associated reimbursement requests and noted that for the grants listed above, the City did not file for and receive reimbursement for the associated grant expenditures until four months after the activity took place for the first and third quarters. The grant drawdowns took place as follows: Cause: We understand that the City fell behind on drawing down grant funds on a timely basis due to employee turnover and this in turn caused the inaccuracies in the Federal Financial Reports. Effect: The City is not in compliance with the internal control requirements of 2 CFR Section 200.303. The City is not matching expenditures with associated grant revenues throughout the fiscal year by filing timely reimbursement requests as expenditures are incurred and is at risk of filing a reimbursement request after the filing deadlines of the grant. In addition, the late filing of reimbursement requests resulted in inaccurate Federal Financial Reporting to the grantor. Identification as a Repeat Finding: Yes, see prior year finding 2024-001. Recommendation: The City must develop procedures to ensure grant reports are accurate and agree with supporting accounting records prior to being submitted to the grantor. The City must also develop procedures to ensure that all grant-funded expenditures are included on drawdown requests and those requests should be prepared at least quarterly throughout the fiscal year. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.

Finding No: 2025-003– Internal control deficiencies over accounting and identification of federal funds received from the Federal Emergency Management Agency (FEMA) that should be included on SEFA Federal Programs ALN 97.036, Disaster Grants - Public Assistance (Presidentially Declared Disasters) Name of Federal Agency U.S. Department of Homeland Security (Pass-through program from The Central Office of Recovery, Reconstruction and Resiliency) Category Internal Control; Compliance. Compliance Requirement Activities Allowed/Unallowed, Allowable Costs/Cost Principles, Period of Performance, Project Accounting. Criteria 2 CFR Part 200 Subpart D Subsection 200.302 states the following: The recipient's and subrecipient's financial management system must provide for the following: 1. Identification of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number, year the Federal award was issued, and name of the Federal agency or pass-through entity. 2. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. When a federal agency or pass-through entity requires reporting on an accrual basis from a recipient or subrecipient that maintains its records other than on an accrual basis, the recipient or subrecipient must not be required to establish an accrual accounting system. This recipient or subrecipient may develop accrual data for its reports based on an analysis of the documentation on hand. 3. Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. 4. Effective control over and accountability for all funds, property, and assets. The recipient or subrecipient must safeguard all assets and ensure they are used solely for authorized purposes. See § 200.303. 5. Comparison of expenditures with budget amounts for each Federal award. 6. Written procedures to implement the requirements of § 200.305. 7. Written procedures for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. Condition During our procedures concerning the Administration’s funds received from FEMA we noticed that the reimbursement funds received from FEMA were not recognized as income during the year ended June 30, 2025. Cause The Administration recognized the reimbursement as an accrual and not as income during the year ended June 30, 2025. They have recognized only the amount that they disbursed during the year at their discretion. This accounting is correct when the funds received are capital advances. Effect This can result in amounts not to be included in the Schedule of Expenditures and Federal Awards in the correct period and understate SEFA. Also, the Administration could be subject to penalties or sanctions from the Federal Grantor. Context The Administration identified $6,543 as federal expenditures from prior years capital advances of FEMA awards but did not identify as expended the amount of $11,063 from advances. In addition, the Administration received reimbursements of $1,413,451 in the fiscal year, however management did not identify this amount as federal expenditures until the audit procedures was performed. Identification of repeat finding None. Questioned costs None, as adjustments were made during the audit to correct the misstatement. Recommendation We recommend validating, with the staff in charge of Engineering, the type of funds received from FEMA, if they are reimbursements or capital advances. When the funds received are reimbursements they should be recognized as income in the year received. If the funds are capital advances they should be recognized as unearned revenue and as income in the year in which they are disbursed. Views of responsible officials and planned corrective actions We agreed with the auditors’ finding and recommendation. See further details regarding this matter within the Corrective Action Plan.

Finding 2025-001 Internal control deficiency and noncompliance over procurement and suspension and debarment. Identification of the federal program: Assistance Listing Number 93.493: • Congressional Directives • U.S. Department of Health and Human Services • Federal award identification number – CE146487 • Federal award year – 7/1/2024 – 6/30/2025 • Pass-through entity – The Board of Regents of the University of Oklahoma Health Sciences Center • Pass-through entity identifying numbers: H79FG000747 and H79FG001034 Criteria or specific requirement (including statutory, regulatory, or other citation): Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.303, Internal controls: The non-Federal entity must (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government,” issued by the Comptroller General of the United States, or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.318, General procurement standards: (a) the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity’s documented procurement procedures must conform to the procurement standards identified in 200.317 through 200.327; (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders; (c) (1) the non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.318, General procurement standards: (i) the non-Federal 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. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.319, Competition: (a) All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and 200.320. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.320, Methods of procurement to be followed: The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award: (a) (2) Small purchases – (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity; (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate –(1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price; (2) Proposals. A procurement method in which either a fixed price or cost-reimbursement type contract is awarded. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.320, Methods of procurement to be followed: (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.324, Contract cost and price: (a) The non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold, including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but, as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Title 2, Subtitle A, Chapter II, Part 200, Subpart C 200.214, Suspension and debarment: Non-Federal entities are subject to the non-procurement debarment and suspension regulations that restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Title 2, Subtitle A, Chapter I, Part 180, Subpart C 180.300: What must I do before I enter into a covered transaction with another person at the next lower tier? When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by (a) checking SAM Exclusions; (b) Collecting a certification from that person; or (c) adding a clause or condition to the covered transaction with that person. Condition: During our testing over procurement, we observed management did not have documented procurement procedures that conformed to the procurement standards identified in 2 CFR section 200.318 to 200.327 and written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts. Management did not have internal controls in place over procurements to ensure price or rate quotations were obtained from an adequate number of qualified sources, formal procurements to ensure sealed bids or proposals were obtained through public advertising, and completion of a cost or price analysis in connection with all procurement actions exceeding the simplified acquisition threshold. Management did not maintain records for procurements to document the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, during our testing over suspension and debarment, we observed management did not retain support for internal control documentation for all vendors, evidencing that the vendors were searched for suspension and debarment upon entering into a contract supported with federal funds. Cause: Management did not have internal controls in place over the compliance requirements as stated in the criteria or specific requirement section above. Effect or potential effect: Procurements were not supported by internal controls and could potentially include unreasonable prices or rates. In addition, if a search for suspension and debarment is not conducted, the entity could contract with vendors that are suspended or debarred. Questioned costs: $1,385,165 – Assistance Listing Number 93.493 Federal award identification number – CE146487 Pass-through entity identifying numbers: H79FG000747 and H79FG001034 Questioned costs were computed as all procurements selected for testing. Questioned costs for each award are as follows: • CE146487: $60,874 • H79FG000747: $119,479 • H79FG001034: $1,204,812 Questioned costs means an amount, expended or received from a Federal award, that (1) is noncompliant or suspected noncompliant with Federal statutes, regulations, or the terms and conditions of the Federal award or (2) at the time of the audit, lacked adequate documentation to support compliance. Context: During our testing over procurements, we selected five vendors for testing with total expenditures of $1,385,165 from a population of procurements totaling $1,425,361, subject to formal procurement procedures. We observed management did not have internal controls in place to ensure the compliance requirements as stated in the criteria or specific requirement section above were performed for any of the five procurements selected for testing. For suspension and debarment, we selected five vendors for testing totaling $1,385,165. Management was unable to provide documentation that internal controls were executed for any of the vendors selected for testing. Identification as a repeat finding, if applicable: No. Recommendation: Management should create documented procurement procedures that conform to the procurement standards identified in 2 CFR section 200.318 through 200.327 and written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts. Management should develop and implement internal controls over procurements to ensure price or rate quotations are obtained from an adequate number of qualified sources, formal procurements to ensure sealed bids or proposals are obtained through public advertising, and completion of a cost or price analysis in connection with all procurement actions exceeding the simplified acquisition threshold. Management should maintain records for procurements to document the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Management should create documented suspension and debarment procedures and develop and implement internal controls to ensure vendors were searched for suspension and debarment at the time of awarding a contract supported by federal funding and retain evidence supporting such procedures. Management should review the procurements identified as questioned costs to identify if any improper payments were made to the entity. Views of responsible officials: We agree with the finding that internal controls were not sufficient to maintain compliance with federal procurement standards under Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.318 to 200.327 for a non-federal entity. However, the funds were expended for the intended purpose of the federal award. The Company is committed to implementing internal controls to ensure procurement related to federal awards follow 2 CFR section 200.318 to 200.327. The Company will update the procurement policy to ensure it complies with the requirements of 2 CFR section 200.318 through 200.327, which includes the written standards of conduct covering conflicts of interest, governing the actions of its employees who select, award, and administer procurement contracts. This policy will include procedures to ensure proper procurement for purchases to ensure sufficient price quotations are obtained from the required number of qualified sources, proper sealed bids or proposals are obtained through public advertising, an appropriate cost or price analysis is performed for procurement actions exceeding the simplified acquisition threshold, documentation is retained, and proper oversight is exercised to demonstrate compliance with 2 CFR section 200.318 through 200.327.

2025-001 - Reporting (Special Reporting under FFATA) Significant Deficiency in Internal Controls Over Compliance and Instance of Noncompliance Assistance Listing Number: 93.591 Federal Agency/Pass-through Entity - Program Name: Department of Health and Human Services - COVID-19 Family Violence Prevention Services/State Domestic Violence Coalitions Award Number(s):2201WYSTC6 & 2101WYSDC6 Award Year(s): 2020-2025 Criteria or specific requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The Federal Funding Accountability and Transparency Act (FFATA) and 2 CFR Part 170 require prime recipients of federal awards to report certain information for subawards. Specifically, 2 CFR 170.220(a) requires prime recipients to report information on subawards equal to or greater than $30,000 in the Subaward Reporting System available through SAM.gov (formerly the Federal Subaward Reporting System - FSRS). The information must generally be reported by the end of the month following the month in which the subaward obligation was made. Condition: During our testing of FFATA subaward reporting requirements, we noted that the Coalition issued one subaward during the audit period to the Eastern Shoshone Business Council totaling $115,993. The subaward exceeded the $30,000 FFATA reporting threshold and therefore required reporting in the Subaward Reporting System within SAM.gov. However, the Coalition did not report the subaward in SAM.gov as required. Questioned costs: None. The issue relates to reporting compliance, and no questioned costs were identified. Context: The population consisted of one subaward, which was tested in its entirety. Cause: The Coalition did not have formal procedures or controls in place to identify subawards subject to FFATA reporting requirements and ensure they were reported in the Subaward Reporting System within SAM.gov. Management indicated they were unaware that the agreement met the definition of a reportable subaward under FFATA. As a result, the subaward was not evaluated for reporting requirements at the time the agreement was executed. Effect or potential effect: Failure to report required subaward information results in noncompliance with FFATA transparency reporting requirements and reduces the availability of public information regarding the use of federal funds. Additionally, the absence of established controls increases the risk that future reportable subawards may not be properly reported. Repeat finding: No Recommendation: We recommend the Coalition strengthen internal controls over federal award reporting by: • Implementing procedures to identify subawards subject to FFATA reporting requirements when agreements are executed. • Assigning responsibility for timely submission of required subaward reports through the Subaward Reporting System within SAM.gov. • Providing training to grant management and finance personnel on FFATA reporting requirements. • Implementing a monitoring or review control to ensure required reports are submitted timely. Views of responsible officials: Management agrees with the finding and will implement procedures to ensure compliance with FFATA reporting requirements, including timely filing of all subgrant awards exceeding $30,000 with SAM.gov within one week of the finalized award agreement.

Finding Type: Immaterial noncompliance with major program requirements Title and ALN of Federal Program: 10.870 – United States Department of Agriculture Rural Microentrepreneur Assistance Program (USDA RMAP) Finding Resolution Status: In review. Information on Universe and Population Size: Loans disbursed during the period July 1, 2024 to June 30, 2025 from USDA RMAP loan fund. There were 8 unique loans disbursed totaling $227,000. Sample Size Information: All 8 loans were selected for testing eligibility compliance. Identification of Repeat Finding and Finding Reference Number: N/A Criteria: USDA RMAP is governed by 7 CFR part 4280, subpart D, which requires that loans made from the RMAP revolving loan fund be provided to eligible microentrepreneurs located in rural areas as defined in the regulations and the approved work plan for the award. These regulations, together with the Organization’s USDA RMAP agreement and approved work plan, require that loans be made only within the approved rural service area. In addition, 2 CFR 200.303 requires the auditee to establish and maintain effective internal control over compliance with federal statutes, regulations, and the terms and conditions of federal awards, including eligibility requirements for RMAP loan recipients. Statement of Condition: During eligibility testing of loan disbursements under the RMAP program, one of eight disbursements tested was made to a borrower located outside of the eligible area. The loan was disbursed in fiscal year 2025 for $10,000. Cause: Management did not verify the borrower’s business address against the approved rural service area map prior to disbursement. Effect or Potential Effect: Disbursement of RMAP loan funds to an ineligible borrower constitutes noncompliance with program eligibility requirements and may result in questioned costs of $10,000. Auditor Noncompliance Code: E – Eligibility Reporting Views of Responsible Officials: Management agrees with the noncompliance with no sanctions imposed conclusion. Context: No additional context identified by the Organization which is not otherwise presented herein. Recommendation: The Organization should strengthen eligibility review controls over RMAP loan disbursements by implementing procedures to verify and document that each borrower’s business location is within the approved service area prior to loan approval and disbursement. Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations: The Organization concurs with the finding and states that it will enhance its RMAP loan review procedures to ensure borrower locations are verified and documented as being within the approved rural service area prior to loan approval and disbursement. Response Indicator: Agree Completion Date: In process. Response: Management acknowledges noncompliance in the current fiscal year and is reviewing its internal controls over loan disbursements. Questioned Costs: $10,000

Finding 2025-001 – Special Tests— NSLDS Reporting (Significant Deficiency) Department of Education Student Financial Assistance Cluster Assistance Listing No. 84.268 (Federal Direct Student Loans) and No. 84.063 (Federal Pell Grant Program) Federal award year 2024-2025 Criteria: CFR Section 685.309 and 690.83(b)(2) requires the University to notify the National Student Loan Data System (NSLDS) within 30 days of a change in student status or include the change in status in a response to an enrollment reporting rosters 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 to 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. Condition: For sixteen out of forty students tested who had enrollment changes at the University, the student’s status effective dates at the campus level and program level were not reported to the NSLDS timely. Cause: The University had turnover in the registrar’s office during the Fall of 2024 resulting in delays in submitting information to NSLDS. Effect or potential effect: The effect of the noncompliance is that NSLDS does not have timely and accurate enrollment information. Questioned costs: None Context: We selected forty students to evaluate reporting of status changes to NSLDS. Out of forty students selected, sixteen student status changes were not reported timely. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: RSM recommends that the University implement a process to review information provided to NSLDS for accuracy in a timely manner such that the NSLDS receives timely information within 60 days of status changes. View of responsible officials: Management agrees with this finding. See corrective action plan.

Finding Number - 2025-003 Cash Management; Allowable Costs Federal Agency Department of Health & Human Services Federal Program Epidemiology and Laboratory Capacity for Infectious Diseases ALN 93.323 Grant Number Various Compliance Requirement Cash Management / Unallowable Costs Type of Findings Internal Control over Compliance / Compliance Category Significant Deficiency Criteria 2 CFR 200.302 states that each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In accordance with 2 CFR §200.303, non-federal entities are required to establish and maintain effective internal control over federal awards to ensure compliance with federal statutes, regulations, and the terms and conditions of the award. Such controls should include procedures to ensure expenditures are timely identified and included in reimbursement requests. Section III- Findings and Questioned Costs Relating to Federal Awards – (continued) Finding Number - 2025-003 Cash Management; Allowable Costs – (continued) Condition During our testing of expenditures charged to the Epidemiology and Laboratory Capacity (ELC) program, we identified instances in which expenditures incurred and paid during fiscal year 2022 were included in reimbursement requests submitted during 2025. Although the expenditures appear to relate to allowable program activities, the significant lapse of time between the payment date and the reimbursement request indicates weaknesses in the monitoring and tracking of expenditures pending reimbursement. Also, because the expenditures were originally incurred and paid in 2022, and supporting documentation for prior reimbursement requests was not readily available for the period under audit, we were unable to determine whether these costs had been previously requested for reimbursement. Drawdown No. Type Receipt Date Document No. Check Issuance Date Amount 1525250884 Reimbursement 11-Apr-25 426878 7/21/2022 $ 491,400 428005 8/25/2022 249,960 428049 8/25/2022 558,600 433231 10/11/2022 525,000 440140 11/7/2022 211,803 440145 11/7/2022 248,660 440156 11/7/2022 204,941 429703 6/24/2022 767,102 435438 8/12/2022 745,039 447617 12/8/2022 211,312 $ 4,213,817 Cause Management explained that, in prior periods, drawdown requests were processed manually and on an advanced basis. Subsequently, the Department implemented an electronic system to submit drawdown requests and transitioned the process to a reimbursement method. As part of this transition, certain advance requests that had been processed manually were not properly cleared in the new system and remained recorded as if they had not been requested. Because these requests appeared as pending in the system, they were later submitted again through the new reimbursement process, resulting in duplicate requests in the system records. Section III- Findings and Questioned Costs Relating to Federal Awards – (continued) Finding Number - 2025-003 Cash Management; Allowable Costs – (continued) Effect As a result, these requests appeared as outstanding in the electronic system and were later submitted again through the reimbursement process. This situation created duplicate drawdown requests in the system records and increased the risk of misstated drawdown activity and potential over-requesting of federal funds if not properly identified and reconciled. Questioned Costs None Perspective Information During our procedures, management explained that prior to the implementation of the current electronic drawdown system, requests for federal funds were submitted manually on an advanced basis. Subsequently, the Department implemented an electronic system to process drawdown requests and transitioned the funding methodology from advances to a reimbursement basis. As part of this transition, certain drawdown requests that had already been submitted manually were not properly cleared or recorded in the new system and remained reflected as pending. Prior Year Audit Finding This is not a repeat finding. Recommendation We recommend that management implement procedures to reconcile manual drawdown requests processed prior to the implementation of the electronic system with the transactions recorded in the system. In addition, management should conduct a comprehensive and detailed review of all legacy transactions that originated before the system transition to ensure that any requests previously processed manually are properly identified, cleared, and supported by adequate documentation. This review should be performed with heightened scrutiny to detect any duplicate or unreconciled drawdown requests. Furthermore, management should establish ongoing controls to periodically review outstanding balances in the system and ensure that all drawdown records are accurate, complete, and appropriately supported. Section III- Findings and Questioned Costs Relating to Federal Awards – (continued) Finding Number - 2025-003 Cash Management; Allowable Costs – (continued) Views of Responsible Officials and Planned Corrective Actions The PRDH’s management agrees with this finding. Please refer to the corrective action on pages 57-60.

Finding Number: 2025-005 State/Educational Agency(s): Arkansas Department of Human Services Pass-Through Entity: Not Applicable AL Number(s) and Program Title(s): 10.646 - Summer Electronic Benefit Transfer Program for Children Federal Awarding Agency: U.S. Department of Agriculture Federal Award Number(s): 246AR303N1175 Federal Award Year(s): 2024 Compliance Requirement(s) Affected: Reporting Type of Finding: Material Noncompliance and Material Weakness Repeat Finding: Not applicable Criteria: In accordance with 2 CFR § 200.303, a non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the award. Per U.S. Department of Agriculture, Food and Nutrition Service (FNS) guidance for the Summer Electronic Benefit Transfer Program for Children (Summer EBT/S-EBT), issued on June 13, 2024, in Memo SEBT 04-2024, the Form SF-425 S-EBT report will provide FNS with the financial data necessary to monitor and closeout the Summer EBT benefit grant. The overarching concept of this financial status report is to document the approved total grant level and the value of Summer EBT benefit issuances as they move from issuances (unliquidated obligations) to redemptions (outlays), net of expungements and other de-obligations. Summer EBT benefit expungements should be reported within the bounds of the fiscal year of the summer operational period for which the benefits were intended. If S-EBT benefits are expunged after September 2024, the benefit expungement should be reported as a reduction of the federal share of expenditures on the September 2024 SF-425 S-EBT report. Condition and Context: The Agency’s Division of Managerial Accounting staff prepare the required federal financial reports for the Summer EBT program. ALA reviewed the annual SF-425 S-EBT report for federal fiscal year 2024 to ensure the Agency completed the form based on the federal awarding agency instructions and that the annual report included cumulative expenditures through September 30, 2024. The amount reported on row 10e of the annual report should represent the sum of cash disbursements for direct charges, net any decreases due to Summer EBT benefit expungements and de-obligations. The Agency failed to reduce the report amount by Summer EBT benefit expungements. As a result, the total federal share of expenditures was overstated by $5,006,175. Statistically Valid Sample: Not applicable Questioned Costs: None Cause: Agency staff did not adequately review instructions published by the federal awarding agency detailing reporting requirements or receive proper training on how to complete the required federal financial reports. Effect: Inaccurate data was submitted on the FNS-425 S-EBT annual financial report. Recommendation: ALA staff recommend the Agency adequately train staff completing the federal reports to ensure correct information is reported. ALA staff also recommend the Agency strengthen controls over reporting to ensure that amounts reported are accurate, complete, and in compliance with federal reporting requirements. Views of Responsible Officials and Planned Corrective Action: DHS concurs with this finding. The agency has updated its internal procedures to comply with FNS guidance on completion of the FNS-425 S-EBT annual financial report. Staff have been trained on the updated procedures. Anticipated Completion Date: Complete Contact Person: Renee Ikard Chief Financial Officer Department of Human Services 700 Main Street Little Rock, AR 72201 (501) 681-8985 Renee.Ikard@dhs.arkansas.gov

Finding Number: 2025-006 State/Educational Agency(s): Arkansas Department of Human Services Pass-Through Entity: Not Applicable AL Number(s) and Program Title(s): 10.646 - Summer Electronic Benefit Transfer Program for Children Federal Awarding Agency: U.S. Department of Agriculture Federal Award Number(s): 246AR303N1175 Federal Award Year(s): 2024 Compliance Requirement(s) Affected: Reporting Type of Finding: Noncompliance and Material Weakness Repeat Finding: Not applicable Criteria: In accordance with 2 CFR § 200.303, a non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the award. Additionally, in accordance with 7 CFR § 292.23, Summer Electronic Benefit Transfer Program for Children (Summer EBT/S-EBT) agencies must report participation and issuance monthly. These reports include the FNS-46 S-EBT Issuance Reconciliation Report and the FNS-388 S-EBT State Issuance and Participation Estimates Report. Per the U.S. Department of Agriculture (USDA) Food and Nutrition Service (FNS), the Form FNS-46 S-EBT report is an issuance reconciliation report used to account for benefits issued during a report month. The report is also used to identify and report card expungements. An expungement is defined as the removal of Summer-EBT benefits from the EBT account to which they were issued. The funds loaded on the EBT card for the Summer EBT program are available for 122 days, as allowed by 7 CFR § 292.15(h). Per FNS guidance issued June 13, 2024, in Memo SEBT 04-2024, to ensure the fiscal year integrity of the FY 2024 S-EBT benefit grant, Summer EBT benefits intended for the FY 2024 summer operational period, but issued after September 30, 2024, should be reported as September data on the FNS-46 S-EBT. In addition, Summer EBT benefit expungements should be reported within the bounds of the fiscal year of the summer operational period for which the benefits were intended. The S-EBT Agency should provide the final amount of federal fiscal year 2024 benefits issued (including benefit expungements) in September and any month after September within the September 2024 FNS-46 S-EBT Report. This approach will allow FNS to capture all financial activity related to FY 2024 S-EBT benefits within FY 2024 reports. Condition and Context: The Agency’s Division of Managerial Accounting staff prepare the required federal financial reports for Summer EBT. The FNS-46 S-EBT Issuance Reconciliation Report is used to account for benefits issued during a report month. ALA completed a reconciliation between the monthly FNS-46 S-EBT Financial Reports submitted for June 2024 – November 2024 and the benefit data obtained from DHS ARIES (Arkansas Integrated Eligibility System) relating to the 2024 Summer EBT program. Testing revealed the following discrepancies: • The Agency failed to report correct monthly issuance totals for Summer 2024 issuances. Amounts reported on the FNS-46 S-EBT for June, July, August, September, October, and November 2024 do not trace to the ARIES Issuance file submitted to the third-party vendor for card upload. Additionally, the Agency failed to accurately identify and report card expungements on FNS-46 S-EBT reports submitted to the federal awarding agency for Summer 2024. • Before the ARIES Issuance file was generated, the Agency manually accumulated information to complete the FNS-46 report. Total issuances reflected on the FNS-46 reports do not match the Agency’s supporting documentation for five months (June, July, August, October, and November 2004). • The Agency failed to combine activity after September 2024 in the September 2024 report, as instructed by USDA FNS. Instead, separate FNS-46 S-EBT reports were completed by the Agency for October and November 2024. The total Summer EBT issuances reported on the form FNS-46 S-EBT report for Summer 2024 were overstated by $1,848,000, and the total Summer EBT expungements reported on the form FNS-46 S-EBT report for Summer 2024 were understated by $5,003,859. ALA reviewed documentation to determine that the FNS-46 S-EBT and FNS-388 reports were properly reviewed and approved prior to submission to the federal awarding agency for the six monthly reports submitted during state fiscal year 2025. In two instances (August 2024 and September 2024), the FNS-46 S-EBT report was completed, reviewed, and submitted by the same individual. Additionally, in one instance (June 2024), the Agency was not able to provide evidence of review of the FNS-388 report prior to submission. Statistically Valid Sample: Not Applicable Questioned Costs: None Cause: Agency staff did not receive proper training on how to complete the required federal financial reports. Additionally, the Agency failed to properly review the federal financial reports prior to submission. Effect: Inaccurate data was submitted on the FNS-46 S-EBT monthly federal financial reports for Summer 2024 issuances and Summer 2024 expungements. Recommendation: ALA staff recommend the Agency strengthen controls over reporting to ensure that amounts reported are accurate, complete, and properly supported by appropriate records to ensure compliance with federal laws and regulations. ALA staff also recommend the Agency continue to strengthen controls to ensure the monthly FNS-46 S-EBT and FNS-388 S-EBT reports are properly completed and reviewed prior to submission. Views of Responsible Officials and Planned Corrective Action: DHS concurs with this finding. The agency has updated its internal procedures to comply with FNS guidance on completion of the FNS-46 S-EBT and FNS-388 S-EBT reports. All noted reports have been revised, if necessary, reviewed, and certified. Staff have been trained on the updated procedures. Anticipated Completion Date: Complete Contact Person: Renee Ikard Chief Financial Officer Department of Human Services 700 Main Street Little Rock, AR 72201 (501) 681-8985 Renee.Ikard@dhs.arkansas.gov

Finding Number: 2025-007 State/Educational Agency(s): Arkansas Department of Commerce – Arkansas Economic Development Commission Pass-Through Entity: N/A AL Number(s) and Program Title(s): 14.228 – Community Development Block Grants Federal Awarding Agency: Department of Housing and Urban Development Federal Award Number(s): B18DC050001, B20DC050001, BC21DC050001, B22DC050001, and B23DC050001 Federal Award Year(s): 2018, 2020, 2021, 2022, and 2023 Compliance Requirement(s) Affected: Reporting Type of Finding: Noncompliance and Significant Deficiency Repeat Finding: Not applicable Criteria: In accordance with Appendix A of 2 CFR Part 170, direct recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System. In addition, 2 CFR § 200.303 requires that a 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 award. Condition and Context: During state fiscal year 2025, reimbursements were made to subrecipients represented by approximately 125 subaward agreements. ALA staff performed testing of 28 subawards, made by the Arkansas Economic Development Commission (AEDC), to confirm submission of subawards in accordance with FFATA. ALA’s review revealed nine subawards were not reported to SAM.gov (previously the Federal Subaward Reporting System) at the beginning of audit field work. Additionally, the Agency records the date subawards are submitted on internal data collection sheets. Submission dates were not recorded on the data collection sheets for seven subawards even though four had been reported timely. Conversely, submission dates were inaccurately recorded for six subawards that were not reported, as required by FFATA, at the beginning of audit field work. Statistically Valid Sample: Not a statistically valid sample Questioned Costs: None Cause: The failure of Agency controls was caused by employee turnover. Effect: The Agency was not in compliance with Appendix A of 2 CFR § 170. Failure to file Federal Funding Accountability and Transparency Act Subaward reports could result in the reduction or termination of future funding. Recommendation: ALA staff recommend the Agency strengthen controls over financial reporting compliance to ensure reports are submitted timely and in accordance with federal laws and regulations. Views of Responsible Officials and Planned Corrective Action: The AEDC Grants Division has established internal controls and procedures to ensure compliance with the Federal Funding Accountability and Transparency Act (FFATA), primarily focused on AEDC’s responsibility for accurate and timely reporting of CDBG subawards of $30,000 or more. AEDC’s established compliance controls for FFATA include, as reported to ALA staff at the beginning of their field work in this area, are: • Grants Coordinator and/or Division Director checks SAM.gov at the beginning of the grant funding year (after HUD Grant Awards have been signed) or upon the need to report on the first subaward to ensure HUD’s award to the State of Arkansas is entered as a Prime Contract. • All CDBG applicants are required to submit application Exhibit K, FFATA (Federal Funding Accountability & Transparency Act) Reporting Form. This form and ACEDP Policies & Procedures require subrecipients to have an active registration in the System for Award Management (SAM.gov) and obtain a Unique Entity Identifier and AEDC verifying the accuracy of this information before issuing a subaward. • If funding is awarded, completed FFATA Reporting Form is included in the grant agreement packet, prepared by the Grants Manager and approved by the Division Director. A Grant Review Form checklist includes a check that this form is included. • Once a Grant Agreement is executed and the packet returned to the Grants Coordinator for processing, the Grants Coordinator will use the FFATA Reporting Form and information from the Grant Agreement to enter the subaward in SAM.gov, as a subaward associated with the applicable Prime Award (annual allocation). Also included in the packet is a copy of the subawardee’s active Registration and UEI, as well as a Data Collection Sheet which includes a space for the Grants Coordinator to write the date the subaward was entered in SAM.gov. • A timely submission procedure ensures that subaward information is entered into the FSRS at SAM.gov no later than the end of the month following the month in which the subaward obligation was made. To ensure AEDC meets this timely submission requirement, subawards are entered upon return of the AEDC executed grant agreement from the Deputy Director to the Grants Coordinator, who enters the date of the Deputy Director’s signature as the Award Date. • In the ACEDP Grant Agreement the subawardee agrees to comply with The Federal Funding Accountability and Transparency Act, and related federal requirements. • Project closeout procedures include a File Composition Checklist which lists the FFATA Form and the Data Collection Sheet (with subaward reporting date). By the Anticipated Completion Date, the Grants Coordinator and/or the Division Director will ensure each previously awarded subaward has been reported to SAM.gov, and will follow the above controls going forward to ensure compliance. Anticipated Completion Date: 06/30/2026 Contact Person: Jean Noble Director, Grants Division Arkansas Economic Development Commission 1 Commerce Way, Ste. 601 Little Rock, AR 72201 (501) 682-7389 jnoble@arkansasedc.com

Finding Number: 2025-033 State/Educational Agency(s): Arkansas Department of Public Safety – Division of Emergency Management Pass-Through Entity: Not Applicable AL Number(s) and Program Title(s): 97.036 – Disaster Grants (Public Assistance) Federal Awarding Agency: U.S. Department of Homeland Security – Federal Emergency Management Agency Federal Award Number(s): Various Federal Award Year(s): 2025 Compliance Requirement(s) Affected: Reporting Type of Finding: Noncompliance and Significant Deficiency Repeat Finding: Not applicable Criteria: In accordance with Appendix A of 2 CFR § 170, direct recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System. In addition, 2 CFR § 200.303 requires that a 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 award. Condition and Context: ALA staff searched information on the USAspending.gov website to determine whether the Agency is reporting subawards as required and discovered no subaward/contractor information is reported for Disaster Grants (Public Assistance) by the Arkansas Division of Emergency Management (ADEM). ADEM staff confirmed that no awards had been reported to FFATA system. Statistically Valid Sample: Not applicable Questioned Costs: None Cause: The Agency did not follow internal policies and procedures to ensure that first-tier subawards of $30,000 or more are reported to the FSRS or the System for Award Management (SAM). Effect: The Agency is not in compliance with Appendix A of 2 CFR § 170 and did not report first-tier subawards. Failure to file Federal Funding Accountability and Transparency Act (FFATA) subaward reports could result in the reduction or termination of future funding. Recommendation: ALA staff recommend the Agency strengthen controls by providing training on FFATA reporting requirements to ensure first-tier subawards are reported as required. Views of Responsible Officials and Planned Corrective Action: Arkansas Division of Emergency Management (ADEM) Public Assistance (PA) staff will receive training on FFATA reporting requirements and will follow established Department of Public Safety guidelines to ensure first-tier subawards are reported as required. ADEM PA staff will also establish internal Standard Operating Procedures to ensure that consistent FFATA reporting is accomplished as required. Anticipated Completion Date: 4/30/26 Contact Person: Jodi Lee Deputy Director, Recovery and Mitigation Arkansas Division of Emergency Management Building 9501 Camp Joseph T Robinson North Little Rock, AR 72199 (501) 683-6700 Jodi.Lee@adem.arkansas.gov

Federal Agency: U.S. Department of the Treasury; U.S. Department of Homeland Security Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds; Assistance to Firefighters Grant Assistance Listing Number: 21.027; 97.044 Federal Award Identification Number and Year: SLFRP0136-2021, EMW-2021-FG-00409 Pass-through Agency: State of Rhode Island's Pandemic Recovery Office (CSLFRF) Award Period: 3/3/21- 12/31/26, 2/28/23 - 2/27/25 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Repeat Finding: No Criteria or specific requirement The Town must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Condition The Town's purchasing policies do not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs None Context Although the Town's purchasing policies do not include all elements as outlined in 2CFR sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 7 of 7 procurement transactions tested. Cause The Town's has not updated its purchasing policy to fully incorporate all procurement requirements under Uniform Guidance. Effect The Town is at risk for noncompliance with Federal grants as it relates to procurement. Recommendation We recommend that the Town updates its procurement policy to include all elements identified in 2 CFR sections 200.303 and 200.318 through 200.326. Views of Responsible Officials Management agrees with this finding.

2025 001 Eligibility, Reporting (Financial) and Special Tests (Disbursements to or on Behalf of Students) Student Financial Assistance Cluster: U.S. Department of Education Federal Supplemental Educational Opportunity Grants (ALN 84.007) Federal Work Study Program (ALN 84.033) Federal Perkins Loans (ALN 84.038) Federal Pell Grant Program (ALN 84.063) Federal Direct Student Loans (ALN 84.268) U.S. Department of Health and Human Services (DHHS) Nurse Faculty Loan Program (ALN 93.264) Health Professions Student Loans, Including Primary Care Loans and Loans for Disadvantaged Students (ALN 93.342) Nursing Student Loans (ALN 93.364) DHHS Health Resources and Services Administration Scholarships for Health Professions Students from Disadvantaged Backgrounds (ALN 93.925) Federal Grant Numbers: E P007A252602 (7/1/2024 – 6/30/2025), E P033A252602 (7/1/2024 – 6/30/2025), E P038A132602 (7/1/2024 – 6/30/2025), E P063P250272 (7/1/2024 – 6/30/2025), P268K260272 (7/1/2024 – 6/30/2025), E-01HP28821-02-02, E-01HP31830-01-00,(7/1/2024 – 6/30/2025), E4CHP42498-01-00 (7/1/2024 – 6/30/2025), E26HP25750, E36HP25751, E11HP27284, E36HP26092, E36HP25751, E26HP25748 (7/1/2024 – 6/30/2025) Statistically valid sample: The sample was not intended to be, and was not, a statistically valid sample. Repeat finding: Yes (2023-001 and 2024-001) Finding Type: Material weakness Criteria: 2 CFR section 200.303 requires that non-federal entities receiving federal awards to 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 federal expenditures are accurately reported on the Schedule and information provided for audit purposes is complete and accurate. Condition and Context: During fiscal year 2023, the University implemented a new system called Oracle Student Financial Planning (OSFP) which is used to package the students’ financial aid. The system performs the following functions: • Determines eligibility of students using various inputs, including information obtained from the Federal Student Aid Record and student enrollment and demographic information. This information is also used to calculate the cost of attendance, calculated need and the federal award amounts. • Disburses student financial assistance to students. • Reports disbursement information to the Common Origination and Disbursement system. The internal controls over these functions are considered automated controls for the applicable compliance requirements. In order to gain comfort over the automated application controls, we tested the design of the applicable information technology general controls particularly in the areas of logical access and program changes. During our testwork, it was noted that the University’s standard policies and procedures to monitor appropriate user access and program changes were not followed. Related to user access, in fiscal year 2025, the University created a provisioning and deprovisioning process for all access changes to OSFP during fiscal year 2025. The University also implemented a policy to perform an access review and certification for the OSFP system annually. Evidence of the review was documented, however the review did not include all individuals with access to OSFP, certain roles within the system were not recertified and certain users were recertifying their own access. In addition, there was no user log to document that a person who should be removed from the system, was removed. Related to program changes, certain individuals have privileged access to OSFP, however, the roles were not defined. A review was not performed to determine if the access is necessary, access is commensurate with the individual’s job responsibilities and to ensure that a user does not hold multiple roles within the system. In addition, the change management process was not consistently followed for all changes to the OSFP system. Cause: The system was new in fiscal year 2023 and the University’s standard policies and procedures were not followed for the system upon implementation. In fiscal year 2024 and continuing through fiscal year 2025, the University began to implement the standard policies and procedures, however, they were not in effect for the entire current fiscal year. Effect: As the general information technology controls over the OSFP system were determined to be ineffective, the related downstream key application controls could not be relied upon or tested. Such key application controls include: calculation of a student’s need, calculation and application of cost of attendance, determination of a student’s eligibility to receive federal and state awards and calculation of awards based on a student’s need and cost of attendance. Additionally, there were no manual controls over these key compliance areas to mitigate the inability to rely upon the application controls. Questioned Costs: No questioned costs were noted as a result of the audit procedures performed as the finding was related only to internal controls and not to noncompliance. Recommendation: We recommend that the University continue to implement all standard policies and procedures for general information technology controls for this system, including those related to logical access and program changes. Related to user access, we recommend that the University enhance the user access review policy to ensure that all individuals and roles are recertified, users are not recertifying their own access, and to create a user log to document that a person who should be removed from the system was removed. Related to change management, we recommend that the University review these roles and their related definitions to determine if they are necessary, if the related user’s access is commensurate with the user’s job responsibilities and ensure that a user does not hold multiple roles within the system. The University should also ensure that the change management process is consistently followed for all changes to the OSFP system and that users cannot create, approve, and close tickets related to OSFP. Views of Responsible Official: Management agrees with the finding. Since the audit period, the University has strengthened governance and oversight over OSFP by formalizing access controls and reinforcing monitoring practices. Management has established and documented OSFP system roles and responsibilities. A review of user access was performed to ensure alignment with job responsibilities, and users holding multiple or incompatible roles were corrected. In addition, the University implemented an audit log to track user provisioning and deprovisioning activity, providing documented evidence of access changes and removals. The University has also enhanced its change management process to ensure that all updates to OSFP follow the documented change management procedures. These measures collectively strengthen logical access and change management controls and support effective internal control over system operations. Management will continue to monitor the effectiveness of these controls.

FINDING 2025-002 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY24, FY25 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Eligibility, Procurement and Suspension and Debarment Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the prior audit report for Eligibility, finding number 2023-005, and a partial repeat finding from the prior audit report for Procurement and Suspension and Debarment, finding number 2023-006. Condition and Context The School Corporation had not properly designed or implemented an effective system of internal controls, which would include segregation of duties, that would likely be effective in preventing, or detecting and correcting, material noncompliance. Eligibility Any child enrolled in a participating school or summer camp, who meets the applicable program's definition of "child," may receive meals under applicable programs. A child belonging to households meeting nationwide income eligibility requirements may receive meals at no charge or at a reduced price. Children that have been determined ineligible for free or reduced-price meals pay the full price for their meals. A child's eligibility for free and reducedpriced meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnished such information as family income and family size. The School Corporation determines eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Annual eligibility determinations may also be based on the child's household receiving benefits under SNAP, FDPIR, the Head Start Program, or, under most circumstances, the TANF program. A household may furnish documentation of its participation in one of those programs, or the School Corporation may obtain the information directly from the state or local agency that administers those programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application. INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF SOUTHWEST ALLEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) One employee uploaded the Direct Certification reports from the state into the software system without a documented oversight or review process in place to ensure directly certified students were properly processed. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. The School Corporation did not have internal controls in place over suspension and debarment. The Food Service Director verified that vendors were not suspended or debarred, but there was no evidence of a second review. The lack of internal controls over eligibility and suspension and debarment were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls was not designed or implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. INDIANA STATE BOARD OF ACCOUNTS 19 METROPOLITAN SCHOOL DISTRICT OF SOUTHWEST ALLEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-003 Subject: Title I Grants to Local Educational Agencies - Earmarking Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014, S010A240014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context A portion of the School Corporation's Title I allocation was required to be set aside for homeless reservation. The required amount to be set aside is indicated in the Title I grant application. The School Corporation is responsible for monitoring each required set-aside throughout the life of the grant to ensure the obligation is met. There was no oversight or review process in place to ensure the monitoring of each required setaside. The School Corporation did not provide documentation to show that the obligation was met or not met to service all the homeless students in the School Corporation, and we could not verify the unused funds were transferred to the next grant award. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 20 METROPOLITAN SCHOOL DISTRICT OF SOUTHWEST ALLEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 20 USC 6313(c)(3)(A) states: "A local educational agency shall reserve such funds as are necessary under this part, determined in accordance with subparagraphs (B) and (C), to provide services comparable to those provided to children in schools funded under this part to serve - (i) homeless children and youths, including providing educationally related support services to children in shelters and other locations where children may live; (ii) children in local institutions for neglected children; and (iii) if appropriate, children in local institutions for delinquent children, and neglected or delinquent children in community day programs." Cause The School Corporation was unable to provide proper documentation that the obligated funds were spent or that unspent obligated funds were carried over to a subsequent grant award. The School Corporation was unable to provide other records supporting that the Earmarking compliance requirement was met. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, homeless set-asides could not be verified. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure homeless set asides are spent as required. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-004 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Participation of Private School Children Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014, S010A240014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Test and Provisions - Participation of Private School Children Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation did not provide supporting documentation for the amounts disbursed for Participation of Private School Children. No time sheets or logs were provided to support the hours paid to employees for working with the private school children. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . INDIANA STATE BOARD OF ACCOUNTS 22 METROPOLITAN SCHOOL DISTRICT OF SOUTHWEST ALLEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." Cause The School Corporation had not developed a system of internal controls that would have ensured that records were maintained and made available for audit related to the Special Tests and Provisions - Participation of Private School Children compliance requirement. Effect The lack of appropriate documentation prevented the determination of the School Corporation's compliance with the Special Tests and Provisions - Participation of Private School Children compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the Special Test and Provisions - Participation of Private School Children compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Finding 2025-002 – Internal Controls over Compliance and Compliance with Reporting Requirement (Current and Prior Period Finding) Federal Agency: U.S. Department of Health and Human Services Federal program title: Healthy Marriage and Responsible Fatherhood Assistance Listing Number: 93.086 Type of Finding: Significant Deficiency over Internal Control over Compliance and Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controls over the federal awards that provides assurance that the entity is managing the federal awards in compliance with federal statues, regulation and conditions of the federal awards. Condition and Context: During the audit, it was noted the Organization submitted required SF-425 reports past their due date according to the grant agreements. The Organization also does not have a process of reviewing the required reporting before submitting to the grantor. Questioned Costs: None noted Effect: Without adequate internal controls in place to ensure reports are submitted and reviewed timely, the Organization could be noncompliant with the reporting requirement. Cause: The delays and absence of a review process were attributed to a lack of adequate staffing within the Organization’s finance function that caused delays in compiling and submitting the required reporting as well as the lack of review over the reporting. Recommendation: We recommend that the Organization implement a procedure to track reporting due dates and implement a process in place to ensure reporting is reviewed and submitted within the due dates prescribed by the grants. Grantee Comment: Management agrees with the finding and has prepared a corrective action plan.

Material Weakness Finding Number: 2025-001 ALN # 84.063: Federal Program: Federal Pell Grant Program Federal Agency: U.S. Department of Education Contract Number and Year: P063P245378 and P063P242749, 2025 Compliance Requirement: Special Tests and Provisions – NSLDS Reporting Questioned Costs: N/A Criteria: Pursuant to 34 CFR §§ 685.309 and 690.83(b)(2), institutions are required to report student enrollment status changes to the National Student Loan Data System (NSLDS) within 30 days of the change or, alternatively, within 60 days through the submission of an enrollment reporting roster. At a minimum, institutions must certify enrollment data at least every 60 days. Reportable changes include, but are not limited to, adjustments in enrollment status, graduation, withdrawal, dropout, or failure to attend. In addition, institutions are required to review, correct, and return enrollment reporting rosters, including any necessary updates, within 15 days of receipt. Further, 2 CFR § 200.303 requires entities receiving federal awards to establish and maintain effective internal controls to ensure compliance with applicable laws and regulations. Condition: Testing of 80 Pell Grant recipients with enrollment status changes identified that the District did not accurately report 13 status changes (7 withdrawals and 6 graduations) to NSLDS. Additionally, for two of the four reporting periods tested, the District did not review, correct, and submit enrollment reporting rosters within the required 15-day timeframe. The District also did not consistently certify enrollment data at least every 60 days. These deficiencies occurred across multiple reporting periods. Cause: The deficiencies were attributable to staff turnover and training gaps, data transmission issues between the District’s third-party servicer (FAME) and NSLDS, and inconsistent processes for updating and certifying enrollment changes. As a result, controls over enrollment reporting were not consistently implemented or operating effectively. Effect: Failure to accurately and timely report enrollment status changes resulted in noncompliance with NSLDS reporting requirements and may impact the accuracy of student aid records maintained by the U.S. Department of Education. Recommendation: The District should strengthen internal controls over enrollment reporting by implementing procedures to ensure all enrollment status changes are accurately recorded, reconciled between internal systems and third-party servicer reports, and submitted to NSLDS within required timeframes. Additionally, the District should provide training to staff and establish monitoring controls to ensure timely review, correction, and certification of enrollment reporting rosters. Response: See attached Corrective Action Plan.

2025 – 002: Internal Controls and Segregation of Duties Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Cluster ALN Number: 84.063, 84.007, 84.033, 84.038, 84.268, 93.364 Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Internal controls are not designed and operating effectively with no appropriate segregation of duties in the following areas: 1. Drawdowns for All Federal Awards – There was no control in place specifically designating the appropriate personnel who is responsible to perform the review of all drawdowns to ensure the information and amount are accurate. 2. Reconciliations of Pell Grants, Supplemental Educational Opportunity Grants (SEOG), Federal Work-Study, and Direct Loans between COD, Bank Accounts, and G5 – Reconciliations are prepared by the Associate Director of Financial Aid and reviewed by the Director of Financial Aid. There was no documentation of the review to verify that these controls are operating effectively. 3. Federal Aid Packages – The Director of Financial Aid prepares and reviews all Federal aid packages. There was no adequate and proper segregation of duties. 4. Professional Judgement Determinations – There was not proper documentation of review or approval. 5. R2T4 Calculations - The Director of Financial Aid prepares and reviews the R2T4 calculations. There was no adequate and proper segregation of duties. 6. Credit Balances - There is no control in place over the review of payment of credit balances to the student within 14 days. 7. Incentive Compensation – We were unable to verify whether the control to ensure that no incentive compensation is made to employees in the student recruiting and admission, and financial aid departments, is designed and operating effectively. 8. Eligibility – We identified instances in which the Cost of Attendance (COA) used to calculate financial need was inaccurate due to insufficient review and oversight over COA calculations. Questioned costs: None Context: This condition occurred in our various testing all throughout the audit of the Student Financial Aid cluster. Cause: Internal controls are not adequately and properly designed to address the risks. Additionally, some controls in place are not operating effectively. Effect: 1. Internal Control deficiencies can lead to non-compliance with laws and regulations, operational inefficiencies and inaccuracies in financial reporting. 2. Improper or lack of segregation of duties can lead to increased risk of errors, fraud, and inefficiencies, as there is insufficient oversight and control. Repeat Finding: Yes Recommendation: We recommend the University review its internal controls over compliance as these are crucial in protecting the University’s assets, ensuring the accuracy of financial reporting, promoting operational efficiency, and ensuring compliance with laws and regulations. Views of responsible officials: There is no disagreement with the audit finding.

2025 – 004: Enrollment Reporting Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Cluster ALN Numbers: 84.063, 84.268 Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should 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). Compliance – The Code of Federal Regulations, 34 CFR 685.309 requires that enrollment status changes for students be reported to NSLDS within 30 days or within 60 days if the student with the status change will be reported on a scheduled transmission within 60 days of the change in status. Condition: During testing of NSLDS enrollment reporting, we identified multiple instances of noncompliance related to timely and accurate enrollment reporting and certification. Specifically, the following issues were noted: 1. Enrollment date discrepancies The enrollment date per campus level institutional records does not match the enrollment date per NSLDS. 2. Program start date discrepancies The program start date per institutional records does not match program start date per NSLDS. 3. Untimely reporting of enrollment status changes The enrollment status change was not timely reported to NSLDS. 4. Missed enrollment certification One student was not certified within the required 60‑day period. 5. Enrollment status discrepancies The enrollment status change per institutional records does not match the status per NSLDS. Section III –Findings and Questions Costs – Major Federal Programs (Continued) 2025 – 004: Enrollment Reporting (Continued) 6. Inaccurate institutional records Institutional records did not accurately reflect the student’s enrollment status, despite NSLDS and email communication reflecting the withdrawal. Questioned costs: None Context: 1. This condition occurred in 4 out of 26 students tested. 2. This condition occurred in 9 out of 26 students tested. 3. This condition occurred in 2 out of 26 students tested. 4-6 This condition occurred in 1 out of 26 students tested. Cause: The University did not have sufficient controls in place to ensure enrollment information submitted to NSLDS was complete, accurate, and reviewed for consistency with institutional records, nor adequate monitoring procedures to ensure enrollment status changes and required certifications were submitted timely. Effect: Failure to accurately and timely report enrollment information to NSLDS may result in inaccurate federal student aid records, which could impact student loan repayment status, deferment eligibility, and other Title IV determinations made by the Department of Education. Repeat Finding: Yes Recommendation: We recommend the institution strengthen internal controls over NSLDS enrollment reporting by implementing formal review and reconciliation procedures to ensure: 1. Enrollment dates, program start dates, and enrollment statuses reported to NSLDS agree with institutional records; 2. Enrollment status changes are identified and reported timely; and 3. Enrollment certifications are completed at least every 60 days in accordance with federal requirements. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: Department of Health and Human Services Federal Program Name: HeadStart Assistance Listing Number: 93.600 Federal Award Identification Number and Year: 03CH011220-05-00, 2024 03CH012856-01-00, 2025 Award Period: 9/1/2023 to 8/31/2024 9/1/2024 to 8/31/2025 Compliance Requirement: Reporting: Federal Funding Accountability and Transparency Act Type of Finding: Significant Deficiency in Internal Control, Other Matter Criteria or Specific Requirement: Internal Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Condition: The Department of Community and Human Services (DCHS) did not report subaward information to the FFATA Subaward Reporting System (FSRS) in accordance with the Federal Funding Accountability and Transparency Act (FFATA) requirements. As the prime award recipient DCHS is responsible for ensuring that all reporting requirements are met within the required timeframe. Questioned costs: None. Context: The fiscal year 2025 subaward issued by DCHS was not reported within the required time period. The subaward was dated 9/1/2024 which would require the department to submit for FFATA requirements by 10/30/2024. The award was not submitted until 2/26/2025. Transactions Subaward Report not Subaward Subaward Tested not reported timely amount missing key incorrect elements 1 0 1 0 0 Dollar Amount Subaward Report not Subaward Subaward of Tested not reported timely amount missing key incorrect elements $2,918,630 $0 $2,918,630 $0 $0 Cause: DCHS’ procedures and internal controls were not sufficient to ensure that the subaward reporting requirement was performed within the required time frame. Effect: DCHS is not in compliance with the FFATA reporting requirement. Repeat Finding: Yes, 2024-004 Recommendation: We recommend that DCHS review procedures and internal controls to ensure that the required subawards are reported timely and accurately to FSRS no later than the end of the month following the month of issuance of each subaward. Documentation of supporting compliance should be readily available for review. Views of Responsible Officials: There is no disagreement with this finding. The reporting has been completed. New employees will be trained in the procedures and internal controls to ensure that the required subawards are reported timely and accurately to FSRS no later than the end of the month following the month of issuance of each subaward. Documentation will be available for review during the audit period.

Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Planning and Construction Assistance Listing Number: 20.205 Pass-through Agency: Virigina Department of Transportation Pass-through Entity Number: State Allocation Federal Award Identification Number and Year: UPC 106807, 2020 UPC 106474, 2024 Award Period: 7/1/2024 to 6/30/2025 Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Internal Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: Recipients and subrecipients are prohibited from contracting with or making subawards under covered transactions to parties that are suspended, or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a recipient or subrecipient enters into a covered transaction with an entity at a lower tier, the recipient or subrecipient must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by: (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: The City was unable to provide documentation that the suspension and debarment verification was performed. Questioned Costs: None Context: One of the five vendors selected for testing did not have evidence of the vendor’s suspension and debarment status prior to the contract date. Cause: The City did not maintain documentation. Effect: The City is unable to document compliance with suspension and debarment status prior to contracting with the vendor. Repeat Finding: No Recommendation: We recommend that the City review and enhance current procedures to ensure that the vendor’s suspension and debarment status is documented prior to contracting with the vendor. Views of Responsible Officials: There is no disagreement with the audit finding and the City will conduct additional training in this area for prime award recipients and for Purchasing staff. The City will also check for suspensions and debarment even if riding contracts from other jurisdictions.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Home Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: M24-MC-51-0001, 2024 Award Period: 10/1/2023 to 9/30/2033 Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control, Other Matter Criteria or Specific Requirement: Internal Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintaineffective 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 theterms and conditions of the Federal award. These internal controls should comply with guidance in“Standards for Internal Control in the Federal Government” issued by the Comptroller General of theUnited States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: 2 CFR §200.332(a) - Requirements for Pass-Through Entities states, in part, that all passthrough entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward: (i) Subrecipient's name (must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated in the subaward; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity, including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity; (xii) Assistance Listings title and number; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at the time of disbursement; (xiii) Identification of whether the Federal award is for research and development; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is used in accordance with § 200.414). Condition: The City did not furnish the information below to subrecipients at the time the subawards were issued: a. Federal Award Identification Number (FAIN) b. Subaward Budget Period Start and End Date c. Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA) d. Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity e. Assistance Listings title and number f. the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at the time of disbursement g. Identification of whether the Federal award is for research and development. Questioned Costs: None Context: The City failed to include the required information as noted above in the subrecipient agreements. Cause: The City failed to include all required information in the subrecipient agreements. Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about program-specific regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in subrecipients’ Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Repeat Finding: No Recommendation: The City should review and enhance its internal controls and procedures to ensure that all required information is included in subawards at the time of issuance and maintained in subsequent modifications. Views of Responsible Officials: There is no disagreement with the audit finding and the City will undertake additional training for departments in FY 2026, to include providing departments with a grants responsibility checklist.

The County did not perform eligibility certification requirements, resulting in an increased risk of program participants receiving benefits they are not eligible to receive Assistance Listings number(s) and name(s): 10.557 WIC Special Supplemental Nutrition Program for Women, Infants, and Children Award number(s) and year(s): CTR067930 October 1, 2023 through September 30, 2028 Federal agency: U.S. Department of Agriculture Pass-through grantor(s): Arizona Department of Health Services Compliance requirement(s): Eligibility Questioned costs: Unknown Condition Contrary to federal regulations and State policies, the County’s Health and Social Services Department (Department) issued program benefits without requiring each program participant to complete and sign a rights and obligations form during the eligibility certification process agreeing to provide current and truthful information, abide by program rules, and not share WIC benefits cards or other benefits. Specifically, for 17 of 60 participants tested, the Department did not require the participants to complete and sign a rights and obligations form for 9 participants’ initial certifications and 8 participants’ recertification for ongoing benefits. In addition, for 5 of 60 participants tested, the Department did not properly separate duties and allowed the same employee to determine eligibility and issue benefits to participants. Further, we found that 2 of 13 WIC employees responsible for determining a participant’s eligibility did not complete mandatory annual training. Effect The Department’s not requiring program participants to acknowledge their rights and obligations increases the risk of participants providing inaccurate information required for eligibility determinations, such as erroneous residency and income data that could allow program participants to receive benefits they are not eligible to receive. Further, there is an increased risk of misuse of program benefits received as the participants may not be aware of the program’s rules and could allow others to use their WIC benefits cards or inappropriately sell, trade, or give away benefits received, such as food, formula, or breast pumps. Finally, the Department’s not properly separating duties or providing mandatory annual training increases the risk of fraud and awarding benefits to ineligible participants. Cause Department management reported that there was misdirection by the previous WIC director who communicated to staff that only the participation consent form, not the rights and obligations form, was required to be signed. In addition, Department management reported that for part of the fiscal year when 2 employees were updating a participant’s information at the same time, the employees did not properly save who completed a participant’s eligibility determination and who approved it in the State’s eligibility system. Further, the Department did not perform periodic monitoring to ensure (1) Department clinic site staff required participants to sign the rights and obligations form prior to issuing benefits and that the forms were maintained in the State’s eligibility system, (2) separation of duties was properly documented in the State’s eligibility system, or (3) WIC employees responsible for determining a participant’s eligibility completed mandatory annual training. Criteria Federal regulation and State policies require participants to sign a rights and obligations statement as part of the eligibility-certification process (7 CFR §246.7[i][10]). Specifically, State eligibility-certification policies require the Department’s staff who are responsible for the eligibility-certification process to inform participants of their rights and obligations prior to issuing benefits during the participant’s initial certification and recertifications for ongoing benefits. Also, the participants must complete and sign the form acknowledging their rights and obligations, including: Providing the most current and truthful information that WIC staff may verify. Following the WIC program’s rules to avoid being prosecuted, disqualified, and/or asked to repay the program. Allowing only the approved authorized recipient or proxy to use the WIC benefits card and reporting lost or stolen WIC benefits cards. Being honest and not selling, trading, or giving away WIC benefits cards, food, formula, or breast pumps, and acknowledging that doing so will disqualify the recipient from benefits. In addition, policies and procedures over WIC certifications completed at a local agency should prohibit 1 employee from determining eligibility for all certification criteria and issuing benefits to participants or provide effective alternative policies and procedures when separation of duties is not possible (7 CFR §246.4[a][27][iii]). Further, State pass-through entity grant award requires the Department to provide training to all WIC employees responsible for determining a participant’s eligibility. Finally, federal guidelines require establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations to the Department Follow the State’s eligibility certification policies that require program participants to complete and sign a rights and obligations form prior to the Department issuing benefits during initial certifications and recertifications for ongoing benefits. Train Department staff, who are responsible for the eligibility certification process, as required by the State pass-through, regarding the following requirements: Participants must be informed of their rights and obligations prior to issuing benefits during the participant’s initial certification and recertifications for ongoing benefits. Participants must sign the rights and obligations form during the eligibility certification process agreeing to provide current and truthful information, abide by program rules, and not share WIC benefits cards or other benefits. Department staff must maintain the forms in its eligibility system. Separate job responsibilities in policies and procedures to prohibit 1 employee from determining eligibility for all certification criteria and issuing benefits to participants or provide effective alternative policies and procedures when separation of duties is not possible. Perform periodic monitoring at its clinic sites to ensure: Department clinic site staff require participants to sign the rights and obligations form prior to issuing benefits and that the forms are maintained in the State’s eligibility system. Separation of duties is properly documented in the State’s eligibility system. WIC employees responsible for determining a participant’s eligibility complete mandatory training. This finding is similar to prior-year finding 2024-101 and was initially reported in fiscal year 2024. Views of responsible officials County management concurs with this finding. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials regarding these recommendations. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.

Finding 2025-003 – L. Reporting – Special Reports for Federal Funding Accountability and Transparency Act (“FFATA”) Information on Federal Program(s) – From Learning to Leading: Cultivating the Next Generation of Diverse Food and Agriculture Professionals (ALN 10.237) Criteria or Specific Requirement – Under the requirements of the Federal Funding Accountability and Transparency Act recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to System for Award Management (SAM.gov). The subaward/subcontract was subject to reporting under the Transparency Act and therefore any related subaward agreements/amendments/modifications were to be reported in SAM.gov no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – The subaward agreement/amendment/modification was not submitted within the required time frame. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect – The subaward agreement was not submitted within the required time frames resulting in the University not being in compliance with special reporting requirements. Questioned Costs – None. Context – We tested the one subaward subject to FFATA requirements during the year. The University did not submit the subaward agreement within the required time frame on SAM.gov. Indication of Repeat Finding – No similar finding noted in the prior year. Recommendation – We recommend that the University enhance its procedures and internal controls related to subrecipient reporting. Views of Responsible Officials – The University acknowledges Finding 2025-003 regarding noncompliance with reporting requirements under the Federal Funding Accountability and Transparency Act. Specifically, the University did not submit a first-tier subaward agreement/amendment/modification within the required timeframe to the System for Award Management (SAM.gov). The University will implement the following corrective actions to address the identified deficiencies: • Internal audit oversight and governance • Enhanced tracking and monitoring systems • Strengthening policies and procedures • Improved interdepartmental coordination • Training and capacity building • Pre-submission review and quality assurance By implementing these measures, the University aims to rectify the identified deficiency and prevent similar occurrences in the future, thereby upholding the integrity of its financial aid programs and maintaining compliance with federal requirements.

Finding 2025-001 – N. Special Tests and Provisions – Enrollment Reporting – Program Level Information on Federal Program(s) – Student Financial Assistance Cluster (ALN’s 84.007, 84.033 84.063, 84.268) Criteria or Specific Requirement – Institutions are required to report enrollment information under the Pell grant and the Direct and Federal Family Education Loan (“FFEL”) loan programs via the National Student Loan Data System (“NSLDS”) (OMB No. 1845-0035), although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309; Perkins 34 CFR 674.19(f)). 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 which the financial aid administrator can access for the auditor. 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. The NSLDS Enrollment Reporting Guide provides the requirements and guidance for reporting enrollment details using the NSLDS Enrollment Reporting Process. Campus Level: Institutions are responsible for accurately and timely reporting certain significant data elements under the Campus-Level Record that the U.S. Department of Education considers high risk, including enrollment status, which is the student’s enrollment status as of the reporting date; full-time (F), three-quarter time (Q), half-time (H), less than half-time (L), leave of absence (A), graduated (G), withdrawn (W), deceased (D), never attended (X) and record not found (Z). At a minimum, institutions are required to certify enrollment every 60 days or every other month. Program Level: Institutions are responsible for accurately and timely reporting certain significant data elements under the Program Level Record that the U.S. Department of Education considers high risk, including OPEID number, CIP code, CIP year, credit level, program enrollment status, program enrollment effective date, program length, and program begin date. Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – The condition was as follows: Program Level: For certain students that had enrollment status changes, the University incorrectly reported enrollment status, the program begin date, and/or the program enrollment effective date. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect – The University is not in compliance with campus level enrollment reporting requirements. Failure to promptly report accurate and timely changes in enrollment status may adversely impact the repayment status for student loan borrowers. Questioned Costs – None. Context – The context is as follows: Program Level: • For 2 of 25 students selected for testing, the program enrollment effective date was incorrectly reported. Indication of Repeat Finding – This is a partial repeat of prior year finding 2024-001. Recommendation – We recommend that the University enhance its procedures and internal controls over the applicable compliance requirements of the enrollment reporting requirement to ensure that all status changes are accurate and submitted to the NSLDS website within the required timeframe. Views of Responsible Officials – The University acknowledges Finding 2025-001 related to deficiencies in enrollment reporting at the program level under the Pell Grant, Direct Loan, and Federal Family Education Loan (“FFEL”) programs. The University concurs with the finding and recognizes the importance of accurate and timely reporting to the National Student Loan Data System (“NSLDS”) in accordance with federal requirements (OMB No. 1845-0035). The University will implement the following corrective actions to address the identified deficiencies: • Establishment of an internal audit function • Process review and cross-functional collaboration • Staffing and resource enhancements • Implementation of monitoring and control systems • Strengthening reporting protocols • Training and accountability measures By implementing these measures, the University aims to rectify the identified deficiency and prevent similar occurrences in the future, thereby upholding the integrity of its financial aid programs and maintaining compliance with federal requirements.

Finding 2025-002 – N. Special Tests and Provisions – Return of Title IV Funds Information on Federal Program(s) – Student Financial Assistance Cluster (ALN’s 84.007, 84.033, 84.063 and 84.268) Criteria or Specific Requirement – Returns of Title IV funds are required to be deposited or transferred into the student financial assistance account or electronic fund transfers initiated to U.S. Department of Education as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew (34 CFR 668.173(b)). Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – A return of Title IV funds for a student was not completed within the required time frames. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect – A return of Title IV funds was not completed within the required time frames resulting in the University not being in compliance with return of Title IV funds requirements. Questioned Costs – None. Context – For 2 of 6 students selected for return of Title IV funds testing. Indication of Repeat Finding - This is a repeat of prior year finding 2024-003. Recommendation – We recommend that the University enhance its procedures and internal controls related to the return of Title IV funds within the required time frames. Views of Responsible Officials – The University acknowledges Finding 2025-002 regarding noncompliance with federal requirements governing the timely return of Title IV funds. This finding, which represents a repeat of prior year Finding 2024-003, is taken with the utmost seriousness. The University is committed to implementing immediate and sustainable corrective actions to ensure full compliance with all applicable federal regulations. The University will implement the following corrective actions to address the identified deficiencies: • Establishment of an internal audit function • Strengthening interdepartmental communication • Implementation of technological solutions • Process standardization and internal controls • Staffing, training and accountability By implementing these measures, the University aims to rectify the identified deficiency and prevent similar occurrences in the future, thereby upholding the integrity of its financial aid programs and maintaining compliance with federal requirements.

FEDERAL AWARD FINDING: 2025-101 The County did not develop internal control procedures over program reporting and cash management requirements, increasing risk of report errors to awarding agencies and wrongly receiving monies Cluster name: Workforce Innovation and Opportunity Act (WIOA) Cluster Assistance Listings number(s) and name(s): 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Worker Formula Grants Award number(s) and year(s): IGA DI23-002389 July 1, 2023 through June 28, 2028 IGA DI21-002286 July 1, 2024 through June 30, 2025 Federal agency: U.S. Department of Labor Pass-through grantor(s): Arizona Department of Economic Security Compliance requirement(s): Reporting Questioned costs: Not applicable Assistance Listings number(s) and name(s): 21.027 COVID-19—Coronavirus State and Local Fiscal Recovery Funds Award number(s) and year(s): 1505-0271 March 3, 2021 through December 31, 2024 CT-FM-22-149 October 1, 2024 through September 30, 2025 SLFRFP1962 January 5, 2023 through December 31, 2026 CTR069300 January 1, 2024 through December 30, 2026 GTAW-FM-23*123 October 3, 2022 through July 3, 2026 ACJC-VC-25-001A July 1, 2024 through December 31, 2024 Federal agency: U.S. Department of the Treasury Pass-through grantor(s): Stratford Art Works; Arizona Supreme Court; Arizona Housing Coalition, Inc.; Arizona Criminal Justice Commission Compliance requirement(s): Reporting Questioned costs: Not applicable Assistance Listings number(s) and name(s): 93.268 Immunization Cooperative Agreements Award number(s) and year(s): CTR062571 July 1, 2022 through June 30, 2025 CTR059891 July 1, 2022 through June 30, 2027 Federal agency: U.S. Department of Health & Human Services Pass-through grantor(s): Arizona Department of Health Services Compliance requirement(s): Cash management and reporting Questioned costs: Not applicable Condition Contrary to federal regulation, the County’s Grants Management and Innovation Department (Department) did not develop, document, or implement internal control procedures to monitor compliance with the programs’ reporting and/or cash management requirements for the Workforce Innovation and Opportunity Act (WIOA) Cluster, Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program, and Immunization Cooperative Agreements (ICA) programs. Specifically, for 13 of 17 reports we tested, we found the Department did not perform an independent review and approval of reports prior to submitting them to the federal agency or pass-through grantor to ensure the reported expenditures were accurate, agreed to the County’s records, and contained only allowable expenditures for: • 9 of 9 WIOA monthly reconciliation reports we tested. • 3 of 4 SLFRF quarterly project and expenditure reports we tested. • 1 of 4 ICA quarterly contract expenditure reports (CER) we tested. These reports are also used to request reimbursement from the federal agency. For the same 3 SLFRF reports identified above and submitted during fiscal year 2025, we found the Department did not retain documentation, such as system reports, screenshots, or queries, to support the information it reported. Despite lacking internal control procedures, we did not identify inaccurate program information for WIOA and ICA reported to the federal agency or pass-through grantor, and we did not identify any ICA costs incurred prior to requesting reimbursement. In addition, the Department did not prepare and submit timely ICA program information to the federal agency for monitoring. Specifically, for award CTR062571—the Immunization Bridge Access program, the Department failed to submit 3 quarterly CERs by their required due dates in fiscal year 2025 and instead, on August 2, 2025, submitted 1 report that contained information covering all quarterly information for fiscal year 2025. Effect Without effective internal control procedures in place, there is an increased risk that the Department may not prevent or detect and correct errors on reports it submits to federal agency and pass-through agencies, which rely on them to effectively monitor the program administration, including its compliance with program requirements, ability to prevent and detect fraud, and to evaluate the programs’ success. There is also an increased risk that the Department could receive federal monies to which it is not entitled. Further, the Department is at risk that this finding applies to other federal programs it administers. Cause The Department’s management reported that it had sometimes performed independent reviews and approvals of reports but did not maintain documentation of these independent reviews because the Department did not have a formal policy requiring a documented review and approval of its reports. In addition, the Department’s management reported that policies and procedures were not followed to retain documentation for the SLFRF reports. Further, the Department’s management reported it did not have a process to track when each ICA report was required to be completed and did not verify that reports were submitted by the designated due dates. Criteria Federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). This would include developing, documenting, and implementing internal control procedures to monitor compliance with federal agency guidelines requiring the Department to report accurate and complete information for the WIOA monthly reconciliation reports, SLFRF quarterly financial reports, and ICA quarterly contract expenditure reports. Also, federal regulation and Department retention policies require the Department to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report (2 CFR §200.334). Further, federal regulation requires the Department to submit financial reports as required by the federal award. Reports submitted quarterly are due no later than 30 calendar days after the reporting period (2 CFR §200.328). Recommendations to the Department 1. Perform and document an independent review and approval of federal program reports before submitting the reports to the federal agency to ensure the reported expenditures were accurate, agreed to the County’s records, and contained only allowable expenditures. 2. Retain detailed documentation, such as system reports, screenshots, or queries related to submitted reports to ensure accurate and complete program information is reported to the federal agency or pass-through grantor for each federal program. 3. Submit ICA reports by their quarterly due dates. 4. Follow its retention policies and procedures and federal regulation requirements to retain all records relating to a federal award for a period of 3 years from the date of its submission of the reports. Develop, document, and implement policies and procedures to monitor compliance with the programs’ reporting requirements to: 5. Perform and document an independent review and approval of federal program reports before submitting the reports to the federal agency or pass-through grantor to ensure reports are accurate, agree to County records, and contain only allowable expenditures for the applicable fiscal year. 6. Create a tracking mechanism to ensure reports are completed and submitted by their due dates. This finding is similar to prior-year finding 2024-104 that was initially reported in fiscal year 2024. Views of responsible officials County management concurs with this finding. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials regarding these recommendations. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.

Finding Reference: 2025-003 – I. Procurement, Suspension and Debarment Federal Program Information Federal Agencies: Department of Health and Human Services Department of Justice Awards: Assistance Listing 93.078 – Strengthening Emergency Care Delivery in the United States Healthcare System through Health Information and Promotion Assistance Listing 16.753 – Congressionally Recommended Awards Award Periods: September 30, 2023 – September 29, 2025 July 1, 2024 – September 30, 2026 Description: Incomplete Federal Requirements within Procurement Policies Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Part 200.320 Methods of procurement to be followed states the following: “The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319” regarding the methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Condition As part of our testing over the operating effectiveness of internal controls over the Procurement, Suspension and Debarment assertion for our major programs, we noted that the Corporation did not have a procurement policy that conforms to all applicable standards contained in the Uniform Guidance, when purchasing goods or services with the federal funds. Cause The Corporation did not comply and maintain a procurement policy that conforms to the provisions required by the Uniform Guidance upon receiving such federal funds related to their federal programs. Effect or potential effect Purchasing of goods and/or servicing with the major federal programs may not be in compliance with the Uniform Guidance. Questioned costs None. Identification of a repeat finding This is a repeat finding of Finding 2024-006. Context Management has not established a procurement policy in line with the applicable standards contained in the Uniform Guidance based on review of the existing policy and discussions with management, however, no other instances of noncompliance with procurement standards identified in 2 CFR part 200 were noted as the amount of purchases exceeding the micro-purchase threshold was not direct and material to these programs and therefore no further testing over procurement was performed. Recommendation The Corporation should update its procurement policy to include the provisions required by the Uniform Guidance for purchasing goods and/or services with federal funds. View of responsible officials There is no disagreement with the audit finding.

Department of Treasury Passed through South Dakota Department of Social Services and South Dakota Department of Health Federal Financial Assistance Listing #21.027 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension & Debarment Significant Deficiency in Internal Control over Compliance and Compliance Department of Health and Human Services Federal Financial Assistance Listing #93.493 Congressional Directives Procurement, Suspension & Debarment Significant Deficiency in Internal Control over Compliance and 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. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are applicable. Condition: Our testing over procurement suspension and debarment identified two contracts over $25,000 where some contract provisions required by Uniform Guidance were not included. Cause: There was a lapse in the internal control process in which contract provisions were not evaluated compared to Uniform Guidance contract requirements. Effect: Ineffective controls over this area of compliance resulted in contracts that did not include all contract provisions required by Uniform Guidance. Questioned Costs: None reported. Context: One contract was selected for testing for program 21.027 and one contract was selected for testing for program 93.493. Both contracts were missing some contract provisions required by Uniform Guidance. Repeat Finding from Prior Year: No Recommendation: We recommend the Organization review and strengthen the controls related to the review of contracts to ensure the contracts include the required Uniform Guidance provisions. Views of Responsible Officials: Management agrees with the finding.

Finding 2025-001 – NSLDS Reporting Federal Program: Student Financial Assistance Cluster Listing Number: 84.063 Federal Pell Grant Program 84.268 Federal Direct Student Loans Program Federal Agency: U.S. Department of Education Award Year: July 1, 2024 – June 30, 2025 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 transmissions of its enrollment reporting changes to the National Student Loan Data System (NSLDS). The University receives the NSLDS Reporting Roster and updates it for changes in student status. The file is sent to the Clearinghouse who transmits the updated information to NSLDS. Of the 25 students with enrollment changes we selected for test work, we noted that for one student, the University did not report the student’s status or enrollment change accurately to NSLDS within the required 60 days period. The student identified was reported 110 days late. After further analysis provided by the University, there were a total of 21 students who were impacted by this issue. Cause: For the aforementioned 21 students, the University’s internal control processes did not operate consistently to ensure that all enrollment information were submitted timely to NSLDS. Effect: Untimely submission of student enrollment status information affects the determinations that lenders and servicers of students’ loans make related to in-school status, deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies. Questioned Costs: None noted. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Identification of whether the Audit Finding was a Repeat Finding: This is not a repeat finding. Recommendation: We recommend the University review and revise its processes and internal controls to ensure that all enrollment information and status changes are reported to the NSLDS in a timely manner. View of Responsible Officials Management of the University agrees with the recommendation. The corrective action by Corry Unis, Vice President for Enrollment Management and Diana Draper, Executive Director of Financial Aid is as follows: The University has subsequently reported 12 of the 21 students to NSLDS. The University will update the enrollment reporting to NSLDS for the remaining 9 students impacted. The University will determine the principal cause of the discrepancy and implement a combination of controls, monitoring, and training to ensure accuracy and timeliness of future reporting.

2025-007 CHILD NUTRITION PROGRAM: INADEQUATE CONTROLS OVER STUDENT COUNTS AND FOOD INVENTORY MANAGEMENT Federal Agency: U.S. Department of Agriculture Federal Program Title & ALN: Child Nutrition Cluster - 10.553, 10.555, 10.582 Award Period: 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Compliance Area: Other - Reporting and Inadequate Controls Questioned Costs: Unknown Condition During our walkthrough of the Child Nutrition Program, we identified inadequate internal controls over both student meal counts and food inventory management. The District does not perform the federally required edit checks that compare daily meal counts to attendance or enrollment records, and meal counts are submitted without an independent review to identify discrepancies or anomalies. This lack of oversight increases the risk of inaccurate reimbursement claims. We also observed that the District does not maintain a formal inventory system for food service operations. Approximately 200 lunch trays are served daily, and ingredients are received every two weeks, with milk delivered weekly. However, canned goods, dry goods, and items stored in freezers are not tracked through any formal inventory procedures, and no regular physical inventory counts are performed. As a result, the District cannot demonstrate that USDA‑funded commodities and purchased food supplies are properly safeguarded, accounted for, or monitored. Criteria 7 CFR 210.8(a)(3) requires School Food Authorities to perform daily edit checks, comparing meal counts to attendance records to prevent claiming more meals than eligible. 2 CFR 200.303 requires entities to establish effective internal controls over federal programs, including accurate reporting and safeguarding of assets. USDA guidance and best practices require schools to maintain ongoing inventory records, conduct regular physical inventory counts, and maintain documentation supporting the use and safeguarding of food commodities. Effect The lack of edit checks increases the risk of inaccurate meal claims, potential overclaims, and questioned costs. The absence of inventory controls increases the risk of waste, loss, theft, spoilage, or misuse of USDA‑funded commodities, and prevents the District from demonstrating compliance with federal requirements. Cause The District has not implemented formal written procedures for meal count edit checks or for maintaining inventory records for food service operations. Staff rely on informal practices and have not been trained or directed to conduct federally required reconciliations or inventory counts.

Criteria In accordance with 2 CFR 200.313(c)(1), non-Federal entities must maintain accurate equipment records for all federally acquired equipment. At a minimum, the equipment records must include: • A description of the equipment • A serial number or other identification number • The source of funding for the equipment, including the Federal Award Identification Number (FAIN) • Who holds title • The acquisition date and cost • The location, use, and condition of the equipment • Any ultimate disposition data, including date of disposal and sales price, if applicable In accordance with 2 CFR 200.313(d)(2) requires entities to verify the existence, current utilization, and continued need for federally funded equipment through physical inventories conducted at least once every two years and to reconcile those results with the equipment records. In accordance with 2 CFR 200.303, it is emphasized that entities maintain complete and accurate equipment listings to demonstrate proper safeguarding, tracking, and continued use of equipment acquired under Federal awards Furthermore, in accordance with 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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). Conditions Found We noted that the College does not maintain a complete and accurate equipment listing for federally acquired equipment. Specifically, the equipment listing did not consistently or correctly include all required data elements outlined in 2 CFR 200.313(c). Data elements that were missing from the listing included serial number, the source of funding for the equipment, including the FAIN, and the location. The data element that was incorrectly maintained on the equipment listing was acquisition date and cost as one instance was identified where the cost of acquiring an item on the equipment listing did not agree to the College’s system of record. Additionally, we noted the College does not have a process in place to reconcile the results of the bi-annual inventory count to the property record listing in order to reflect any changes or discrepancies resulting from the count. Cause The condition resulted from the absence of formally documented policies and procedures governing the maintenance and periodic review of the federally acquired equipment listing and the requirement of reconciling the federally acquired equipment to the property record listing after conducting a bi-annual physical inventory count. Also, the College has not implemented controls to ensure that required equipment information is consistently recorded, updated, and reviewed in accordance with Federal regulations. Possible Asserted Effect Failure to maintain a complete and accurate equipment listing can result in federally acquired equipment not being properly tracked, safeguarded, or used in accordance with Federal award requirements. The lack of accurate equipment records increases the risk of noncompliance with Federal statutes, regulations, and the terms and conditions of Federal awards. Additionally, the inability to locate equipment, inaccurate equipment records and undetected loss or misuse of federally funded equipment. Moreover, the absence of formal policies could result in federal noncompliance. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be and was not a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Recommendation We recommend that the College establish and implement formal policies and procedures to ensure that a complete and accurate equipment listing for federally acquired equipment is maintained in accordance with 2 CFR 200.303 and 313. This should include ensuring that all required data elements are recorded, that the listing is periodically reviewed and updated, and that results of physical inventories are reconciled to the equipment records to support compliance with Federal award requirements. Views of Responsible Officials The College acknowledges that the federally acquired equipment listing did not include all required data elements outlined in 2 CFR 200.313(c) and did not reconcile it against the bi-annual physical inventory completed. To mitigate the risk of incomplete equipment records for federally acquired equipment, the College is formalizing policies and procedures to ensure required data elements are recorded and maintained, implementing a periodic review process to update the equipment listing, and establishing a reconciliation process to compare bi-annual physical inventory results to the property records and promptly resolve any discrepancies. These corrective actions are being implemented in fiscal year 2026.

FINDING 2025-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, Fresh Fruit and Vegetable Program Assistance Listings Numbers: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY2024, FY2025 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with the Allowable Costs/Cost Principles compliance requirement. Form 9 Expenditures The School Corporation submits a Form 9 to the Indiana Department of Education (IDOE) every six months. The expenditures reported on the Form 9 are used by the IDOE to calculate the School Corporation's indirect cost rate. The rate represents the percentage of indirect costs (overhead, administration) that can be recovered from federal grant funds, derived from the cost incurred in a previous fiscal year. As such, the amounts submitted to the IDOE in fiscal year 2022-2023 are to be used in the indirect costs computation for 2024-2025 and are tested to ensure they were recorded properly in the School Corporation's records as to the account or object codes. A test of 53 disbursement line items were sampled from the IDOE Form 9 submitted for 2022-2023 totaling $935,432 and 3 line items were not properly supported by the School Corporation's records. The School Corporation's ledger was filtered for the fund, account, and object code reported on the Form 9, and we determined 3 line item expense variances as follows: INDIANA STATE BOARD OF ACCOUNTS 17 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)  There were 2 expense line items under reported on the Form 9 by a total of $1,604.  There was 1 expense line item over reported on the Form 9 by $8. The lack of internal controls and noncompliance over the Form 9 expenditures was isolated to 2024-2025. School Corporation Expenditures - Indirect Cost Rate In a test of 50 School Corporation expenditures, we were unable to determine if 9 expenditures totaling $29,948.32 were posted to the proper account and object codes within the accounting records to ensure the underlying data used by the IDOE to calculate the indirect cost rate was accurate. Records to support these 9 expenditures could not be located for audit. The lack of internal controls and noncompliance over the School Corporation expenditures were a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (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 . . ." Cause The School Corporation's management had not developed a system of internal controls that would have ensured compliance. The School Corporation did not ensure that supporting documentation was maintained and made available for audit, as related to the Allowable Costs/Cost Principles compliance requirement. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation cannot ensure compliance with the Allowable Costs/Cost Principles compliance requirement. As a result, amounts reported to the oversight agency were not accurately reported. INDIANA STATE BOARD OF ACCOUNTS 18 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure the data submitted on the Form 9's and underlying expenditures are properly documented and retained for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-003 Subject: Special Education Cluster (IDEA) - Level of Effort/Maintenance of Effort Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Number and Year (or Other Identifying Number): 24611-036-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Matching, Level of Effort, Earmarking compliance requirement. Level of Effort - Maintenance of Effort Maintenance of Effort (MOE) is a district-level test that determines whether the School Corporation is providing a consistent level of financial support to public schools from year to year. This rule ensures that the School Corporation does not use special education funds to shore up reductions in state and local support for public education. The Indiana Department of Education (IDOE) performs the maintenance of effort calculation utilizing Form 9 information provided by the School Corporation from the prior year. As such, the amounts submitted to the IDOE in the prior year to be used in the computation are tested to ensure they were recorded properly in the School Corporation's records as to the account or object code. A test of 53 disbursement line items were sampled from the IDOE Form 9 submitted for fiscal year 2022-2023 totaling $935,432, and 3 line items were not properly supported by the School Corporation's records. The School Corporation's ledger was filtered for the fund, account, and object code reported on the Form 9, and we determined the 3 line item expense variances as follows:  There were 2 expense line items under reported on the Form 9 by a total of $1,604.  There was 1 expense line item over reported on the Form 9 by $8. INDIANA STATE BOARD OF ACCOUNTS 19 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The ineffective internal controls and noncompliance were isolated to the 2022-2023 Form 9 information used to calculate the MOE for the 2023-2024 grant award. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (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 . . ." Cause The School Corporation's management had not developed a system of internal controls that would have ensured compliance. The School Corporation did not ensure that supporting documentation was maintained and made available for audit, as related to the Matching, Level of Effort, Earmarking compliance requirement. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation cannot ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. As a result, amounts reported to the oversight agency were not accurately reported. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure the data submitted on the Form 9's and underlying expenditures are properly documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-004 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Annual Report Card, High School Graduation Rate Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014, S010A240014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Annual Report Card, High School Graduation Rate Audit Findings: Material Weakness, Other Matters Condition and Context 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 Special Tests and Provisions - Annual Report Card, High School Graduation Rate compliance requirement. The School Corporation must report graduation rate data for all public high schools within the School Corporation using the four-year adjusted cohort rate. To remove a student from the cohort, the School Corporation must confirm the reason for removal in writing. Additionally, required documentation for each removal type must be retained by the School Corporation. The School Corporation did not ensure that there was written documentation retained from the receiving school for students removed from the cohort for mobility reasons. Of the 20 students tested, 3 did not have the required supporting documentation to substantiate removal from the cohort for mobility reasons. Of those, 2 students were foreign exchange students, and the School Corporation did not retain a school acceptance form or formal agreement with the exchange organization. Another student was incarcerated, and the School Corporation did not have a court order or documentation from the Indiana Department of Corrections. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 21 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 20 USC 7801(23)(B) states: "To remove a student from a cohort, a school or local educational agency shall require documentation, or obtain documentation from the State educational agency, to confirm that the student has transferred out, emigrated to another country, or transferred to a prison or juvenile facility, or is deceased." Cause The School Corporation did not have effective internal controls to ensure required documentation to support the reason for a student's removal from the high school graduation cohort for mobility reasons was prepared and retained. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management evaluate the internal control policies and procedures to ensure the proper documentation is maintained for students that are removed from the cohort. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-005 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-005. INDIANA STATE BOARD OF ACCOUNTS 22 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The COVID-19 - Education Stabilization Fund (ESF) grant was established by the Coronavirus Aid, Relief and Economic Security (CARES) Act to respond to the Coronavirus outbreak and assist schools in creating healthy learning environments, return students to classrooms, and address local needs. The ESF grant was further funded by the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and the American Rescue Plan (ARP) Act. The School Corporation did not have effective internal controls in place over the Allowable Costs/Cost Principles compliance requirement. A sample of 13 payroll claims paid from the School Corporation's ESF grant were selected for testing. Of the sample, 6 employee pay rates could not be verified to a School Board-approved, allowable hourly pay rate for a high dosage tutor position. High dosage tutors were paid anywhere from $20 to $77 an hour. The School Corporation was unable to provide documentation that the School Board approved a pay rate for the high dosage tutor positions during the audit period. The total amount paid to high dosage tutors during the audit period was $472,354, which were considered questioned costs. In addition, the School Corporation paid a consulting firm to provide general support to the finance department. The expenditures were deemed unallowable as there was no documentation available that the consultants were assisting the School Corporation in preventing, preparing for, and responding to COVID-19. The total amount expended to the consultant during the audit period was $514,156, which were considered questioned costs. The lack of internal controls and noncompliance were isolated to the costs noted above for the ESSER II and ESSER III grants. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the recipient or subrecipient. (d) Be accorded consistent treatment. For example, a cost must not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for State and local governments and Indian Tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing requirements of any other federally-financed program in either the current or a prior period. See § 200.306(b). (g) Be adequately documented. See §§ 200.300 through 200.309. (h) Administrative closeout costs may be incurred until the due date of the final report(s). If incurred, these costs must be liquidated prior to the due date of the final report(s) and charged to the final budget period of the award unless otherwise specified by the Federal agency. All other costs must be incurred during the approved budget period. At its discretion, the Federal agency is authorized to waive prior written approvals to carry forward unobligated balances to subsequent budget periods. See § 200.308(g)(3). 2 CFR 200.430(i)(1) states in part: "Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (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. . . ." INDIANA STATE BOARD OF ACCOUNTS 24 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.404 states: "A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non- Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm's-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award. (c) Market prices for comparable goods or services for the geographic area. (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, 134 Stat. 1924 (2020) states in part: "For an additional amount for "Education Stabilization Fund".to remain available through September 30, 2022, to prevent, prepare for, and respond to coronavirus, domestically, or internationally . . ." Cause Payroll records were incomplete as the School Corporation was unable to provide documentation that all rates of pay were approved by the School Board. The School Corporation did not include the consultants above in the budget submitted as part of the grant application, and so the School Corporation did not get the required prior approval for the purchases. Effect Without proper documentation, the allowability of the ESF grant expenditures cannot be substantiated, creating a risk that unallowable costs may be charged to the federal grant. Additionally, we could not determine how the expenditures met the purpose of the program. Questioned Costs We identified $986,510 in known questioned costs as described above in the Condition and Context. INDIANA STATE BOARD OF ACCOUNTS 25 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommend that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure rates of pay are approved by the School Board and adequately documented and that costs are allowable. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-006 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-006. Condition and Context The School Corporation had not properly designed a system of internal controls to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation did not have any policies or procedures in place to ensure a detailed capital asset listing was completed for the audit period and that the listing contained all the required information. During the audit period, the School Corporation purchased equipment totaling $11,495,065 with COVID-19 - Education Stabilization Fund funds. However, the purchased equipment was not included on a capital asset listing or physical inventory. Due to the lack of a detailed capital asset listing, the equipment was not adequately safeguarded or maintained. The School Corporation should include the following required information in the detailed capital asset listing for each capital asset purchased with federal funds: a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property. A capital asset listing is to be maintained for assets purchased that exceed the School Corporation's capitalization threshold. The lack of internal controls and noncompliance were systemic issues throughout the audit period for the ESSER II and ESSER III grants. INDIANA STATE BOARD OF ACCOUNTS 26 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause The School Corporation did not have policies or procedures in place to complete an inventory or maintain a fixed asset detail report. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, not all assets purchased with federal dollars were added to a capital asset listing. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 27 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure asset records include all the necessary information, new assets are properly added, and any discrepancies are reconciled. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

2025-101 Funds to be Returned Worksheets Not Documented as Being Independently Reviewed Assistance Listing Number: 84.063 Program Title: Federal Pell Grant Program Compliance Requirement: Special Tests and Provisions – Return of Title IV Funds Federal Agency: United States Department of Education FAIN and year: P063P203385, 2024-2025 Finding Type: Material Weakness in Internal Control Known Questioned Costs: $0 Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition: Return of Funds R2T4 and Pell Grant Early Completer Re-Proration worksheets were calculated and funds properly returned, however the worksheets to determine the return of the funds were not signed off as having been independently reviewed and approved. While calculations are reviewed by someone other than the preparer, no documentation of the review is evident. Cause: Haney Technical School (School) staff review the worksheets but have not set up a formal policy where the independent reviewer signs off and dates the review of the worksheet. Effect: Incorrect amounts could be returned in error. Recommendation: The School should set up a formal policy where worksheets for the return of Title IV funds should include a signature and date of both the preparer and the reviewer. Management Response: See attached Corrective Action Plan.

2025-102 Return of Title IV Funds Not Made Within the Required Timeline Assistance Listing Number: 84.063 Program Title: Federal Pell Grant Program Compliance Requirement: Special Tests and Provisions – Return of Title IV Funds Federal Agency: United States Department of Education FAIN and year: P063P203385, 2024-2025 Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Awards. Institutions are responsible for returning funds to students and Title IV programs as appropriate if students withdraw, drop out or are expelled from their program of study within a 45-day period from the date of withdrawal. Condition: Title IV funds for two of the nine students selected for testing for the return of Title IV funds were returned to the Department of Education after the 45-day time period. Cause: Human error resulted in delays in returning funds to the Department of Education. The controls in place are manual only and did not operate to prevent the late returns. Effect: Noncompliance with the return of funds could result in future loss of Pell Award funding. Recommendation: The School should implement a process possibly with the use of a software program that would identify when funds are due back based on the student’s withdrawal date. Management Response: See attached Corrective Action Plan.

2025-103 Multi-factor Authentication Not Required When Accessing Student Information Assistance Listing Number: 84.063 Program Title: Federal Pell Grant Program Compliance Requirement: Special Tests and Provisions – Gramm-Leach Bliley Act- Student Information Security Federal Agency: United States Department of Education FAIN and year: P063P203385, 2024-2025 Finding Type: Material Weakness in Internal Control Known Questioned Costs: $0 Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. The institution’s written information security policy must address the implementation of safeguards identified in 16 CFR 314.4(c) which includes the implementation of multi-factor authentication for anyone accessing student information on the institution’s system. Condition: Multi-factor authentication has not been implemented on the District’s system in regards to access of student information. Cause: The security parameters for accessing student information do not include multi-factor authentication in conjunction with passwords when accessing student information from the District’s information system. Effect: Student information could be inappropriately accessed. Recommendation: The requirement for multi-factor authentication policy should be put in place. Management Response: See attached Corrective Action Plan.

Prior Year Finding: N/A Federal Agency: U.S. Environmental Protection Agency Pass-Through Agency: Maryland Department of Environment Federal Program Name: Clean Water State Revolving Fund Assistance Listing Number: 66.458 Award Number and Year: Urban Storm Water Retrofit (7/1/2024-6/30/2025) Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Recipients and subrecipients are prohibited from contracting with or making subawards under covered transactions to parties that are suspended, or debarred. “"Covered transactions" include contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a recipient or subrecipient enters into a covered transaction with an entity at a lower tier, the recipient or subrecipient must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by: (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Control: Per 2 CFR section 200.303(a), a nonfederal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The suspension and debarment status of vendors with expenditures exceeding $25,000 was not verified as required by federal regulations. Context: For five of five transactions selected for testing, the County did not verify the suspension and debarment status before entering into covered transactions with the vendors. Cause: County's procedures and internal controls over suspension and debarment are not sufficient to ensure that all vendors’ suspension and debarment status was verified timely. Effect: Failure to verify the suspension and debarment status of vendors may result in the procurement of goods or services from vendors that are suspended or debarred and result in unallowable expenditures charged to the program. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Recommendation: The County should ensure policies and procedures include the three options for determining suspension and debarment status listed in 2 CFR 180.300 and that controls are sufficient to ensure that the suspension and debarment status is verified for all vendors prior to entering into covered transactions. Views of responsible officials: There is no disagreement with the audit finding.

Prior Year Finding: 2024-001 Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: Maryland Department of Aging Federal Program Name: Aging Cluster Assistance Listing Number: 93.044, 93.045 Award Number and Year: 650123/15, 650223/15 (10/1/2022-9/30/2024); 650124/15, 650224/15 (10/1/2023-9/30/2025); 650125/15, 650225/15 (10/1/2024-9/30/2026) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per Maryland Department of Aging guidance, the County is required to submit quarterly financials forms outlining grant spending progress, matching requirements, budget categories, and any other revenue sources for all open grants. Control: Per 2 CFR section 200.303(a), a nonfederal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County, Maryland (the County) did not submit required information on its quarterly reports to the Maryland Department of Aging during FY25. Context: For eight of eight quarterly reports selected for testing, the County did not report required information in the section related to matching funds. The County omitted reporting matching expenditures even though local funds were incurred to meet the required match. Cause: The County’s policies and procedures were not sufficient to ensure that all required information was included in the reports submitted to the Maryland Department of Aging. Internal controls did not prevent or detect the omission. Effect: The County was not in compliance with reporting requirements. Questioned costs: None noted. Recommendation: We recommend that the County develop internal controls and procedures to ensure that all required information is submitted with the quarterly reports to the Maryland Department of Aging. Views of responsible officials: There is no disagreement with the audit finding.

2025-001: Department of Health and Human Services - Temporary Assistance for Needy Families (TANF), Federal Assistance Listing #93.558; Pass Through Virginia Department of Social Services, Pass Through Entity Identifying Number BEN-21-054. Criteria: The Organization should have processes and procedures in place to keep and maintain client eligibility records, per 2 CFR 200.303 and 2 CFR 200.334. Condition: During our audit, we noted that the Organization was unable to locate records substantiating the eligibility of clients served. Context: During testing, the Organization was unable to find supporting eligibility records for 35 out of the 53 samples that received services as part of a federal program. The sample was not intended to be, and was not, a statistically valid sample. Cause/Effect: Internal control processes over proper maintenance of clients’ records were not operating effectively, causing documentation to not be located. Questioned Costs: $40,400 calculated based on the dollar amount submitted for reimbursement for each item tested without proper eligibility records. Identification of Repeat Finding: Repeat Finding 2024-001. Recommendation: We recommend procedures are implemented to ensure proper maintenance of client records. Views of Responsible Officials: Management agrees with the recommendation and has implemented corrective action as outlined in the corrective action plan.

2025-002: Department of Health and Human Services - Temporary Assistance for Needy Families (TANF), Federal Assistance Listing # 93.558; Pass Through Virginia Department of Social Services, Pass Through Entity Identifying Number BEN-21-054. Criteria: The Organization should have effective policies and procedures in place to ensure there is proper documentation supporting funds were used in compliance with the federal award, per 2 CFR 200.303 and 2 CFR 200.334. Condition: During our audit, it was noted that there was not an effective process in place to keep and maintain the required records to support pay-for-performance outputs and outcomes. Context: The Organization was unable to provide documentation supporting the allowability of 7 of the 52 samples selected for testing. Cause/Effect: Internal control processes over maintenance of records supporting pay-for-performance outcomes and outputs were not operating effectively from July 2024 through June 2025. Questioned Costs: $7,200 calculated based on the dollar amount submitted for reimbursement for each item tested without proper records supporting the required outcome or output was met. Identification of Repeat Finding: 2024-002 Recommendation: We recommend that the Organization implements a review process to ensure that documentation is retained to support pay-for-performance outputs and outcomes submitted to the grantor. Views of Responsible Officials: Management agrees with the recommendation and has implemented corrective action as outlined in the corrective action plan.

2025-003: Department of Health and Human Services - Temporary Assistance for Needy Families (TANF), Federal Assistance Listing #93.558; Pass Through Fairfax County, Pass Through Entity Identifying Number 4400012652. Criteria: The Organization should have processes and procedures in place to keep and maintain client eligibility records, per 2 CFR 200.303 and 2 CFR 200.334. Condition: During our audit, we noted that the Organization was not performing procedures to ensure eligibility of clients participating in the program and thus were unable to locate records substantiating the eligibility of clients served. Context: During testing, the Organization was unable to support eligibility for 7 out of the 7 samples that received services as part of a federal program. The sample was not intended to be, and was not, a statistically valid sample. Cause/Effect: Internal control processes over proper processes for eligibility and maintenance of clients’ records were not operating effectively, causing documentation to not be located. Questioned Costs: Unknown. Identification of Repeat Finding: N/A Recommendation: We recommend procedures are implemented to ensure only eligible clients participate in the federal program and client records are maintained. Views of Responsible Officials: Management agrees with the recommendation and has implemented corrective action as outlined in the corrective action plan.

Finding 2025-002 – U.S. Department of Education (ED), TRIO Programs (material weakness): Information on Federal Programs – TRIO Upward Bound Assistance Listing, FAL No. 84.047, June 30, 2025 Criteria – Federal regulations require that at least two-thirds (67%) of participants served by the TRIO Upward Bound Program be low-income and first-generation college students. 20 U.S.C. § 1070a-11 34 CFR § 645.3 (Definitions); 34 CFR § 645.11 (Participant eligibility and selection). In addition, recipients are required to maintain accurate eligibility documentation and report complete and reliable participant data in the annual performance report in accordance with 2 CFR § 200.303 and 2 CFR § 200.328. Condition – The TRIO Upward Bound Program did not meet the federally required two-thirds first-generation/low-income participant threshold. The annual performance report reflected that only 51% of participants were identified as first-generation and/or low-income. During testing of participant eligibility documentation, the participant roster reflected that only 58% of participants met the first-generation and/or low-income eligibility requirement. Cause – The condition appears to be the result of insufficient internal controls over participant eligibility determination and monitoring, including: a) inadequate review procedures to ensure eligibility requirements were met prior to participant enrollment; b) lack of ongoing monitoring to ensure continued compliance with the two-thirds eligibility requirement throughout the program year and c) insufficient reconciliation between eligibility documentation and performance reporting data. Effect – Failure to meet the statutory eligibility threshold places the program out of compliance with federal requirements and may result in: a) questioned eligibility of program participants, b) increased risk of enforcement actions, including corrective action plans or repayment of federal funds.; c) possible loss or reduction of future funding and d) risk of program eligibility. Repeat Finding – Yes. Although this is a repeat finding for Upward Bound, Student Support Services was resolved in the current year. Questioned Costs – Questioned costs could not be reasonably determined for this finding due to the inability to directly associate program expenditures with individual ineligible participants. Auditor’s Perspective – From the auditor’s perspective, this finding represents material noncompliance with federal eligibility and reporting requirements for the TRIO Upward Bound Program. Federal statutes and regulations require that at least two-thirds (67%) of program participants be low-income and first-generation college students. The program’s failure to meet this threshold both in reported data (51%) and in tested eligibility documentation (58%) demonstrates a systemic breakdown in compliance, rather than an isolated or clerical error. The discrepancy between eligibility documentation and the annual performance report further indicates weaknesses in internal controls over compliance, as required by 2 CFR § 200.303. Accurate eligibility determination is a core program requirement, directly tied to the program’s statutory purpose and funding authorization. Noncompliance with this requirement undermines assurance that federal funds were used to serve the intended population. Auditor’s Perspective – (continued) Because eligibility compliance affects the allowability of participant-related costs, the inability to demonstrate that the required proportion of participants met eligibility criteria creates an elevated risk of questioned or disallowed costs. While questioned costs could not be reasonably quantified, the scope and pervasiveness of the condition support classification of this finding as material. Absent corrective action, the program remains exposed to continued noncompliance, increased federal oversight, and potential enforcement actions by the U.S. Department of Education. Strengthening eligibility controls, monitoring, and reporting reconciliation is necessary to restore compliance and reduce future audit risk. Auditor’s Recommendation – We recommend that management: a) strengthen internal controls over participant eligibility determination, including documented review and approval procedures; b) implement periodic monitoring to ensure the two-thirds first-generation/low-income require-ment is met throughout the program year; c) Ensure accurate and consistent reporting between eligibility records and annual performance reports and d) provide staff training on federal eligibility requirements for the TRIO Upward Bound Program. View of Responsible Officials – The correct 2/3 requirement percentage from the 2024-2025 TRIO Upward Bound APR is 63%; the referenced 51% was from the 2023-2024 APR. The TRIO Upward Bound Program’s fiscal year for 2024-2025 was September 1, 2024, to August 31, 2025, which is different from the College’s fiscal year. A roster was requested and submitted reflecting TRIO Upward Bound participants during the College’s fiscal year, July 1, 2024 -June 30, 2025. The submitted roster did not reflect the participants for the Program’s 2024-2025 fiscal year. Failure to meet the 2/3 requirement stems from ongoing challenges in recruiting Program participants. Recruitment has been and continues to be a challenge for TRIO Programs nationwide since the pandemic. The TRIO Upward Bound Staff are very knowledgeable about Program eligibility and documentation requirements. A thorough review of eligibility is completed to ensure applicants meet at least one (and preferably both) eligibility criteria PRIOR TO acceptance. The TRIO Upward Bound Program received funding for FY2025 (September 1, 2025, - August 31, 2026) in the full amount of $550,864.00. The receipt of a Non-Competing Continuation (NCC) Grant Award Notice means the U.S. Department of Education is giving approval to allow the Paine College TRIO Upward Bound Program to continue serving students without any stipulations to the Program or College. The Program is operating under normal terms and conditions. Program Staff is working diligently to recruit more students to ensure compliance with the 2/3 eligibility requirement for the 2025-2026 program/fiscal year.

2025-004: U.S. Department of Education Passed through State of Nevada Department of Education Title I Grants to Local Educational Agencies, 84.010 Eligibility Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing number 84.010 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control 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. Local educational agencies are required to equitably allocate Part A funds to each participating school, in rank order, on the basis of the number of public-school children from low-income families residing in the area or attending the school (20 USC 6313). Condition: In certain instances, the amounts disbursed to each school was not in accordance with the allocation. In addition, an amendment was made to the original allocation and was not equitably distributed. Cause: Elko County School District did not have sufficient internal controls to ensure eligibility determinations of the amounts disbursed were being appropriately followed. Effect: Noncompliance with eligibility requirements may not be detected. Questioned Costs: None Context/Sampling: Eligibility requirements were tested as a whole for the District. It was noted that there was an amended allocation of $6,228.22 that was not equitably distributed across the eleven eligible schools. In addition, $32,657.07 of the funds were not properly disbursed to the schools in accordance with the allocation or carried forward into the following year’s budget. Repeat Finding from Prior Year(s): No Recommendation: We recommend Elko County School District enhance internal controls to ensure eligibility requirements are being followed, specifically regarding allocations and disbursement of funds. Views of Responsible Officials: Management agrees with the finding.