Findings Citing § 200.303

FINDING 2025-003 Subject: Assistance to Firefighters Grant - Equipment and Real Property Management Federal Agency: Department of Homeland Security Federal Program: Assistance to Firefighters Grant Assistance Listings Number: 97.044 Federal Award Number and Year (or Other Identifying Number): EMW-2023-FG-06299 Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The City was awarded the Assistance to Firefighters Grant to fund Air-Paks for the City's fire department and other participating fire departments. The Air-Paks were not included in the City's detailed capital asset listing. The lack of internal controls and noncompliance was 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 200.313(d)(1) states: "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 sales price of the property." Cause The City did not design or implement internal controls to ensure the Air-Paks were included in the City's detailed capital asset listing. The City's fire department maintained an inventory of the Air-Paks; however, the Air-Paks were not included in the City's detailed capital asset listing. INDIANA STATE BOARD OF ACCOUNTS 18 CITY OF KENDALLVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the City is at risk of noncompliance with the Equipment and Real Property Management compliance requirement, including the potential for incomplete and inaccurate property records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City design and implement a proper system of internal controls, including policies and procedures, to ensure that assets being purchased with federal funds are added to the City's detailed capital asset listing and all required information is maintained. 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: Assistance to Firefighters Grant - Internal Controls Federal Agency: Department of Homeland Security Federal Program: Assistance to Firefighters Grant Assistance Listings Number: 97.044 Federal Award Number and Year (or Other Identifying Number): EMW-2023-FG-06299 Compliance Requirement: Reporting Audit Finding: Material Weakness Condition and Context The grant agreement between the City and the awarding agency required the City to submit a Federal Financial Report (SF-425) and a Performance Progress Report (PPR) on a semiannual basis. The submitted reports encompassing the audit period were tested. The reports were prepared and submitted by the grant administrator; however, there was no segregation of duties documented to ensure the reports were complete, accurate, and timely submitted. The lack of internal controls was 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 19 CITY OF KENDALLVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The City did not design or implement internal controls over the reports because the City relied on the grant administrator for complying with the Reporting requirement. Effect Without the proper implementation of an effectively designed system of internal controls, the City is at risk of noncompliance with the Reporting compliance requirement, including the potential for incomplete, inaccurate, or untimely reporting. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City design and implement a proper system of internal controls, including policies and procedures, to ensure that the City provides the awarding agency with complete, accurate, and timely reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): CY 2021 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 13 CITY OF AUBURN SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Prior to entering into subawards and covered transactions with the COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF), recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. Covered transactions include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The City did not have any policies or procedures in place related to the SLFRF suspension and debarment requirements to determine whether each required vendor was suspended or debarred. Upon inquiry of the City, it was determined that there were two covered transactions paid with SLFRF during the audit. One was a contract that started in 2024 and had payments in both 2024 and 2025 totaling $2,267,000, and one that started in 2025 for $887,844. In testing the two transactions, it was noted that the City did not verify the suspension or debarment status for the vendor that started in 2025 prior to payment. 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). . . ." 2 CFR 200.214 states: "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 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." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." INDIANA STATE BOARD OF ACCOUNTS 14 CITY OF AUBURN SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The City was unable to provide documentation for one covered transaction that it properly verified a contractor was neither suspended nor debarred or otherwise excluded or disqualified from participating in federal assistance programs or activities. Effect Without the proper implementation of an effectively designed system of internal controls, the City cannot ensure that contractors paid with federal funds are eligible to participate in federal programs. Any program funds the City used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Questioned Costs There were no questioned costs. Recommendation We recommended that management of the City design and implement a system of internal controls to ensure that all contractors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into contracts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Subject: Federal Transit Cluster – Internal Controls Federal Agency: Department of Transportation Federal Program: Federal Transit Cluster Assistance Listing Number: 20.507 Federal Award Numbers and Years (or Other Identifying Numbers): IN-2025-019 - IN-90-X850 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Significant Deficiency, Other Matters Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the BPTC to ensure compliance with requirements related to the grant agreement and the activities allowed or unallowed and allowable costs/cost principle compliance requirements. BPTC did not have adequate documentation to support expenditures. Cause: BPTC’s management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed BPTC at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: $50,000 Context: During testing, we noted for one voucher, in a sample of sixty vouchers, BPTC paid $100,000 for an option to purchase land for a capital related project. BPTC incorrectly charged a portion of the land purchase option to an operating grant and was reimbursed $50,000 for the expense. The option is a capital expense that would not qualify for reimbursement under the operating grant. Identification as a repeat finding, if applicable: No. Recommendation: We recommend BPTC review all purchases to ensure only operating related purchases are charged to the operating grants and return the funds incorrectly reimbursed. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Finding 2025-001 – Reporting Significant Deficiency Condition: During our testing of the reporting compliance requirement, we noted that the Executive Director prepares the profit and loss detail used to complete the Federal Financial Report (SF-425), completes the SF-425, and submits the report to the Economic Development Administration. An independent review of the completed SF-425 is not performed prior to submission. Questioned Costs: None. Criteria: Based on the terms and conditions of the Economic Adjustment Assistance (EDA) grant award, Federal Financial Reports (SF-425) are required to be submitted to the Economic Development Administration (EDA) on a semi-annual basis. In accordance with 2 CFR § 200.303, the entity is responsible for establishing and maintaining effective internal control over the Federal award that provides reasonable assurance the award is managed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Such controls should include an independent review of required federal reports prior to submission. Cause: The entity has not established a formal review process over the preparation and submission of the SF-425. As a result, responsibility for preparing, reviewing, and submitting the report is concentrated with one individual. Effect: Without an independent review of the SF-425 prior to submission, errors or omissions may not be identified before the report is submitted to the federal awarding agency. This increases the risk that inaccurate or incomplete financial information could be reported. Recommendation: We recommend that management strengthen internal controls over the preparation and submission of the SF-425 by assigning preparation of the report to the Program and Finance Manager. The Executive Director should independently review the completed SF-425 for accuracy, completeness, and compliance with grant reporting requirements prior to submission. The review should be documented to provide evidence that the control was performed. Views of Responsible Officials: Management agrees with the finding. Please refer to the Corrective Action Plan for management’s views and planned corrective action.

Reference Number: 2025-002 Federal Agency: U.S. Department of the Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds (American Rescue Plan Act) Assistance Listing Number: 21.027 Federal Award Identification Number Not Available Federal Award Year 2025 Pass-Through Agency: N/A Pass-Through Number: N/A Compliance Requirement: Suspension and Debarment Award Period: 1/1/2025 - 12/31/2025 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR 200.213 Suspension and Debarment restricts 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. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person (7) Distribution of work to individuals and firms or economic considerations. 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). Condition: The Township could not provide supporting documentation that suspension and debarment status was determined prior to award. Context: The suspension and debarment status for all of the vendors tested were not documented on the eight transactions tested. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: The Township relied on State policies and procedures for suspension and debarment for State piggyback contracts, rather than applying their own established controls to these contracts. Effect: The Township is not in compliance with federal suspension and debarment regulations. Repeat Finding: This finding, in part, is a repeat of a finding in the immediately prior year (finding number 2024-002). Recommendation: The Township should ensure that established policies and procedures related to suspension and debarment are applied to all contracts, even for piggyback agreements adopted from the State. Views of Responsible Officials and Planned Corrective Action: The Township has created a procedure to regularly check Sam.gov for suspension and debarment prior to issuing purchases orders or contracts.

Finding 2025-002: Inaccurate Expense Reporting on Quarterly Report Significant Deficiency ARPA, AL 21.027 Criteria: In accordance with 2 CFR §200.328(b)(1), non-Federal entities are required to submit performance and/or financial reports on a regular basis as specified in the terms and conditions of the award. Effective internal controls, as outlined in 2 CFR §200.303, require that entities establish and maintain processes to ensure reliable reporting and compliance with federal requirements. Condition: During our review of the entity’s reporting procedures, we noted that one quarterly report submitted by the entity included incorrect expense information. Cause: The entity’s review process identified notes to correct on the quarterly report, however the report was submitted without corrections made. Effect: The submission of inaccurate expense information may result in reliance on incorrect financial data by the granting agency, and may affect future funding decisions or lead to additional oversight. Identification as a Repeat Finding: This is a new finding for fiscal year 2025. Recommendation: We recommend that the entity strengthen its controls over grant reporting to ensure that reviewed reports are reconciled to supporting records and that all identified discrepancies are resolved prior to submission. Views of Responsible Officials: See the attached Corrective Action Plan.

U.S. Department of Health and Human Services Federal Financial Assistance Listing #93.600 Head Start Cluster Early Head Start Child Care Partnership Applicable Federal Award Number and Year – 07HP000640-01-00 and 07HP000640-02-00 9/1/2024 – 8/31/2025 and 9/1/2025 – 8/31/2026 Reporting Significant Deficiency in Internal Control Over Compliance Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Condition: The Organization was unable to provide adequate documentation of expenditures incurred to support the drawdown of federal awards claimed for reimbursement on an interim basis throughout the reporting period. Cause: The Organization did not properly reconcile its reimbursement claims to underlying supporting documentation for expenditures incurred. However, the total amount of drawdowns requested did not exceed the total federal expenditures incurred during the reporting period. Effect: Amounts claimed for reimbursement by the Organization throughout the year were not properly supported by its internal records. Questioned Costs: None reported. Context: Monthly drawdown requests from all months within the reporting period were tested and reviewed for adequate supporting documentation. Of the 12 monthly drawdown requests tested, supporting documentation for 8 of the 12 months tested did not match the amount of the drawdown request. Repeat Finding From Prior Years: No Recommendation: We recommend that management continue to evaluate its processes and controls over compliance to ensure that drawdown requests for reimbursement of federal expenditures incurred throughout the reporting period are properly supported and reconciled to appropriate documentation from its accounting records. Views of Responsible Officials: Management is aware of the deficiency in internal control over compliance.

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

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

FINDING 2025-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 2021 Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The County elected to receive the standard revenue loss allowance, allowing the County to claim a total COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) allocation of $8,300,967 as revenue loss to use for government services. As such, all SLFRF program funds expended from January 1, 2025 to December 31, 2025, were under the revenue loss eligible use category. The U.S. Department of the Treasury (Treasury) determined that there are no subawards under this eligible use category and that recipients' use of revenue loss funds would not give rise to subrecipient relationships, as there is no federal program or purpose to carry out in the case of the revenue loss portion of the award. Recipients are required to quarterly or annually submit Project and Expenditure (P&E) reports to the Treasury. The reporting periods, as well as the respective due dates, are based on the type of recipient and the recipient's population as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The County submitted the required annual P&E reports during the audit period, which were obtained from the County Auditor's office. Although one employee prepared the P&E report and another reviewed the entries, the system of internal controls was not effective in preventing, or detecting and correcting, errors. The data submitted included amounts which were not supported by the County's records. Errors identified included the following:  The County did not have any current obligations during calendar year 2025. However, the County reported the County's total cumulative obligations as current obligations in the County's 2025 Annual P&E report, which resulted in an overstatement of current obligations in the amount of $8,300,967. The lack of effective internal controls and noncompliance was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 16 DUBOIS 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). . . ." Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds, page 13, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds, . . ." Cause A proper system of internal controls, including policies and procedures, was not designed or implemented by management of the County to prevent, or detect and correct, errors on the P&E report prior to submission. The errors occurred due to the officials not understanding the Treasury's reporting requirements. 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. The lack of internal controls enabled noncompliance with the 2025 P&E report to remain undetected and uncorrected. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Additionally, reporting inaccurate data reduces the transparency and reliability of information available to the public and to the Treasury. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County's management establish an effective system of internal controls and develop policies and procedures over the preparation and review of federal reports to ensure appropriate reviews, approvals, and oversight take place and to ensure that submitted reports contain complete and accurate information. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 17 DUBOIS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Auditor's Response It is the County's responsibility to comply with applicable federal regulations and guidelines when accepting and managing a federal award. The County had designed and implemented a system of internal controls over the P&E report; however, these internal controls were not effective in ensuring accurate reporting of current period obligations. On November 20, 2023, the Treasury published an interim final rule to clarify the definition of "obligation." The term "obligation" continues to mean an order placed for property and services and entry into contracts, subawards, and similar transactions that require payment. 2 CFR 200.1 states in part: ". . . Financial obligations, when referencing a recipient's or subrecipient's use of funds under a Federal award, means orders placed for property and services, contracts and subawards made, and similar transactions that require payment." The County filed the required P&E report. However, the amount reported for current period obligations was the same amount as the cumulative obligations. We determined the current period for obligations was the current audit period of January 1, 2025 to December 31, 2025. The County did not incur any new obligations during that period. The cumulative obligation was $8,300,967, which covers the entire award period of the grant. The County's stated reason for disagreement is that this is how the report has been filed in the past, alluding to the fact that the program has been audited previously without a noncompliance finding over this compliance requirement in previous audits. While true, as stated in the Independent Auditor's Report on Compliance for Each Major Federal Program, audits are designed only to provide reasonable assurance, not absolute assurance, that the County materially complied with the compliance requirements, so instances of noncompliance may not always be identified. Additionally, while the County acted in good faith, this does not absolve the County of the responsibility to review and appropriately apply the stated requirements in order to file accurate reports in accordance with the terms and conditions of the federal award. We reaffirm our finding and will review the status of the finding during our next audit.

FINDING 2025-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY25 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-003. Condition and Context Suspension and Debarment Prior to entering into subawards and covered transactions with the COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF), recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. During the audit period, the County disbursed SLFRF funds to four separate contractors, totaling $472,440, that equaled or exceeded $25,000. However, no suspension and debarment verification procedures were carried out for these transactions. The County's policy only requires such verification for contracts awarded through sealed bidding. INDIANA STATE BOARD OF ACCOUNTS 15 DECATUR COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause The County worked on designing and implementing policies and procedures to verify that beneficiaries were not suspended or debarred, or otherwise excluded from participating in federal programs, but the procedures were not completed until 2025. The procedures were not in place for the covered transactions entered into prior to 2025. For covered transactions entered into in 2025, the County did not follow its procedures to verify that contractors were not suspended or debarred, or otherwise excluded from participating in federal programs, due to an oversight in adapting County procurement policies to federal grant compliance. Effect Without the proper design or implementation of internal controls, the County could not ensure that contractors paid with federal funds are eligible to participate in federal programs. Any program funds the County used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover the funds. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 16 DECATUR COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the County establish a proper system of internal controls to ensure that the current policy in place is properly implemented for all contractors that are paid $25,000 or more, all or in part with federal funds, to ensure they are not suspended, debarred, or otherwise excluded from participating in federal programs. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY25 Compliance Requirement: Reporting 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 2024-004. Condition and Context Recipients are required to submit quarterly or annual Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates, are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The County was classified as a metropolitan county with a population below 250,000 residents that received an allocation of less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF). As such, the initial P&E report, covering the period from March 3, 2021 to March 31, 2022, was required to be submitted to the Treasury by April 30, 2022. The subsequent annual reports are to cover one calendar year and must be submitted to the Treasury by April 30 each year. The County submitted the P&E report on May 1, 2025, which was one day late. The County Auditor prepared and submitted the report, and it was reviewed by another employee in the County Auditor's office. However, the internal control was not effective, and did not prevent, or detect and correct, errors. As a result, the following errors were noted:  Total current period expenditures were overstated by $135,970.  Total cumulative expenditures were overstated by $113,635.  Total current period obligations were overstated by $390,318.  Total cumulative obligations were overstated by $390,318. INDIANA STATE BOARD OF ACCOUNTS 17 DECATUR COUNTY 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). . . ." Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds, page 13, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds, . . ." Cause A proper system of internal controls, including policies and procedures, was not designed or implemented by management of the County to prevent and detect errors on the P&E report prior to submission. The County incorrectly reported projects that had been appropriated, but not yet obligated, and amounts reported did not always agree to the County's records. The reviewer did not have adequate knowledge to detect errors in the report. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As such, the County did not accurately report obligations and expenditures when filing the P&E report for the period April 1, 2024 to March 31, 2025. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 18 DECATUR COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the County 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 of federal reports are taking place. We also recommended the development of policies and procedures to ensure the County provides the Treasury with complete and accurate information for the P&E report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Department of Treasury, State of Iowa Department of Management, Federal Financial Assistance Listing 21.029, 526659, 2025 COVID-19 Coronavirus Capital Projects Fund Procurement, Suspension & Debarment Material Weakness in Internal Control over Compliance and Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.318 maintains that recipients must have and use documented procurement policies and must conform to the procurement standards in sections 200.317 through 200.327. Condition: Testing of the federal program identified the following: --One instance where the Cooperative did complete price comparisons; however, the memo documenting the procurement did not reference the price comparison. The procurement file did not obtain all required components of the procurement process including rationale for selecting the vendor or the procurement method used. --One instance where the Cooperative did not follow the procurement process as detailed in the procurement policy and no documentation was retained to support the rationale for selection of vendor. Cause: The Cooperative followed parts of the procurement policy in place, however, not all components were documented and retained within the procurement file. Effect: Ineffective controls over this area of compliance could result in a reasonable possibility the Cooperative would be noncompliant with the compliance requirements outlined above. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 3 out of 6 vendors were selected for testing. Repeat Finding from Prior Year: Yes, finding 2024-002 Recommendation: We recommend that management implement procedures and control processes related to the review of contracts to ensure the procurement methods are being followed and documentation is retained to support the method of procurement. Views of Responsible Officials: Management agrees with the finding.

Department of Treasury, State of Iowa Department of Management, Federal Financial Assistance Listing 21.029, 526659, 2025 COVID-19 Coronavirus Capital Projects Fund Cash Management Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Cooperative was unable to provide documentation to support review and approval of the Cooperative’s request for reimbursement. Cause: Discussions were held amongst the CFO and CEO prior to the submission of the request for reimbursement but no formal review or approval process was documented. Effect: Without a secondary review and approval, there is a possibility the request for reimbursement amount may be incorrect. Questioned Costs: None reported. Context/Sampling: Sampling was not used as there was only one submission during the fiscal year. Repeat Finding from Prior Year: No Recommendation: We recommend the Cooperative implement a formal control process which includes a secondary review and approval of the request for reimbursement and documentation of the review and approval is retained. Views of Responsible Officials: Management agrees with the finding.

Finding 2025-001 Internal control deficiency and noncompliance over procurement and suspension and debarment and special tests and provisions. Identification of the federal program: Assistance Listing Number 93.493: • Congressional Directives • U.S. Department of Health and Human Services • Federal award identification number – CE147096 • Federal award year – September 1, 2022 to August 31, 2025 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. The Health Resources and Services Administration (HRSA) project guidance requires the following: • Federal Interest – Real Property – For all construction projects, regardless of award amount, you are required to file a Notice of Federal Interest (NFI). The NFI requires prior written approval in order for the property owner to mortgage, sell, transfer, or use the property for a purpose inconsistent with the award. A notarized NFI must be filed against the property deed prior to construction in the appropriate public records office of the jurisdiction in which the property is located and once filed, a copy must be provided to the appropriate HRSA Grants Management Specialist. 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 small purchase 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. During our testing over suspension and debarment, we observed management did not have documented suspension and debarment procedures and did not have internal controls in place to ensure vendors were searched for suspension and debarment at the time of vendor selection. During our testing over special tests and provisions, we observed management did not file an NFI against the property deed prior to construction in the appropriate public records office of the jurisdiction in which the property is located and provide to the appropriate HRSA Grants Management Specialist. 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. Special tests and provisions were not supported by internal controls in that an NFI was not filed against the property deed prior to construction in the appropriate public records office of the jurisdiction in which the property is located. Questioned costs: $1,154,000 – Assistance Listing Number 93.493 – Congressional Directives – Federal award identification number – CE147096 Questioned costs were computed as the entire population of procurement transactions subject to small purchase, formal procurement, suspension and debarment, and special tests and provisions compliance requirements. Questioned costs means a cost that is questioned by the auditor because of an audit finding: (1) which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds or (2) where the costs, at the time of the audit, are not supported by adequate documentation. Context: During our testing over procurements, we obtained a listing of expenditures that included $1,154,000 of procurement transactions subject to small purchase, formal procurement, suspension and debarment, and special tests and provisions compliance requirements. 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. 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 small purchase 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 vendor selection. Management should review the procurements identified as questioned costs to identify if any improper payments were made to the entity. Management should develop and implement internal controls over special tests and procedures to ensure that an NFI is filed against the property deed prior to construction in the appropriate public records office of the jurisdiction in which the property is located and provide to the appropriate HRSA Grants Management Specialist. 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 implemented the procurement policy it created on September 30, 2025, in response to prior audit findings 2024-001 and 2024-003, which occurred after the end of the federal award year for this program, that addresses this finding. This procurement policy complies with the requirements of 2 CFR section 200.318 through 200.327, that includes the written standards of conduct covering conflicts of interest and governs the actions of its employees who select, award and administer procurement contracts. This policy includes procedures to ensure proper procurement for small 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 in accordance with 2 CFR section 200.318 through 200.327. While the Company did not perform a check of each vendor against the SAM Exclusions prior to selecting a vendor, the Company has procedures in place to ensure the vendors are approved by Corporate purchasing and in good standing, which limits the risk of conflict of interest between employees and vendors, and limits contracting with a vendor who is suspended or debarred from federal related contracting. Further, the Company confirmed the vendors that were contracted with related to this finding were not included on the SAM Exclusions listing. The Company has now filed the Notice of Federal Interest (“NFI”), and provided the NFI to the appropriate HRSA Grants Management Specialist. The Company also updated its procurement policy to ensure that, regardless of the award amount, it files an NFI against the property deed prior to construction of any project in the appropriate public records office of the jurisdiction in which the property is located and provides a copy to the appropriate HRSA Grants Management Specialist.

FINDING 2025-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2025 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 13 WHITLEY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-001. Condition and Context The County received a total COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) allocation of $6,597,109 and chose to calculate its own revenue loss amount, which exceeded the County's full allocation amount, thus enabling the County to use up to the full amount for government services. All of the County's SLFRF program funds expended to date have been expended under the revenue loss eligible use category. The U. S. Department of the Treasury (Treasury) determined that there are no subawards under this eligible use category and that recipients' use of revenue loss funds would not give rise to subrecipient relationships given that there is no federal program or purpose to carry out in the case of the revenue loss portion of the award. Prior to entering into subawards and covered transactions with SLFRF award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System, collecting a certification from that person or entity, or adding a clause or condition to the covered transaction with that person or entity. Due to the Treasury's determination that the revenue loss eligible use category does not give rise to subawards, the County was only required to comply with suspension and debarment requirements related to covered transactions. Upon inquiry of the County's policies and procedures related to suspension and debarment requirements, the County disclosed its process is for the County Attorney to review agreements or contracts to ensure that language related to suspension and debarment is included. To verify the suspension and debarment status of vendors that did not have written contracts in place with the County, a certification from that person or entity is to be collected. Two covered transactions for goods or services paid from the SLFRF funds during the audit period that equaled or exceeded $25,000 were selected for testing. The two covered transactions selected totaled $95,272. Each transaction was examined to determine whether the County verified the suspension and debarment status of the vendor prior to payment. Based on inquiry with the County, it was determined that neither vendor had a written contract in place. The County did not otherwise verify vendors were neither suspended nor debarred or excluded or disqualified from participating in federal assistance programs or activities prior to payment. A certification was provided for one vendor. However, it was not signed prior to entering into the transaction. 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 14 WHITLEY 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). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause After a previous Indiana State Board of Accounts audit, the County established procedures to include a suspension and debarment clause in agreements or contracts. The County established procedures to verify the suspension and debarment status of vendors without written contracts; however, the verification was not completed prior to entering into the transaction. Effect Without the proper implementation of an effectively designed system of internal controls, the County cannot ensure the contractors paid with federal funds are eligible to participate in federal programs. Any program funds the County used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County strengthen its system of internal controls to ensure that all covered transactions exceeding $25,000 or more, all or in part with federal funds, are not suspended, debarred, or otherwise excluded from participating in federal programs prior to entering into any covered transactions. 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 – Tenant Files – Eligibility – ALN 14.850 Low Rent Public Housing Program – Noncompliance and Material Weakness Condition & Cause: The Housing Authority's tenant files did not consistently contain the documentation necessary to demonstrate compliance with federal requirements for the Public Housing program. The exceptions identified indicate deficiencies in the Housing Authority's file review, documentation, and quality control processes. We reviewed 10 Public Housing participant files and identified noncompliance in nine files. Some files contained more than one exception. The following conditions were identified: • Six participants did not receive an annual unit inspection during the fiscal year; • One file lacked adequate income verification; • Two files lacked a declaration of citizenship for at least one household member; • Two files lacked a Social Security card; • One file lacked a lead-based paint disclosure for a household with a member under age six; • One file lacked the annual application for continued occupancy; and • One file did not contain the required EIV report at annual reexamination. Criteria: For the Public Housing program, 24 CFR §960.257(a) requires annual reexamination of family income and composition for families paying income-based rent and requires appropriate rent adjustments upon verification of the information. The PHA must adopt written policies governing annual and interim reexaminations and conduct reexaminations in accordance with those policies. The Housing Authority is also required to comply with applicable HUD requirements concerning inspections, lead-based paint disclosures, Social Security documentation, citizenship documentation, HAP contracts, utility allowances, EIV, and other required participant documentation. 2 CFR §200.303(a) additionally requires the Housing Authority to establish and maintain effective internal controls over Federal awards, while 2 CFR §200.303(c) requires management to evaluate and monitor compliance with applicable Federal requirements. Effect: The deficiencies increase the risk that participants may receive assistance for which they are not eligible or may receive assistance in amounts that are not properly calculated. Inadequate documentation also prevents the Housing Authority from demonstrating compliance with federal program requirements. In addition, the absence of timely inspections and required tenant documentation increases the risk that housing units may not meet program requirements and that participant eligibility and continued assistance may not be properly supported. Recommendation: We recommend that the Housing Authority complete and implement comprehensive SOPs and QC procedures for both the Housing Choice Voucher and Public Housing programs. At a minimum, the procedures should establish: 1. Required documentation for initial eligibility and annual reexaminations; 2. Required income and deduction verification procedures; 3. Procedures for reviewing EIV information; 4. Required citizenship and identity documentation; 5. Required HAP contracts and other program documents; 6. Procedures for maintaining current utility allowances; 7. Annual inspection procedures and supervisory monitoring; 8. Lead-based paint documentation requirements; 9. Required annual applications for continued occupancy; 10. Supervisory review of tenant files before completion of annual reexaminations; and 11. Periodic independent QC reviews with documented corrective action. Management should also review the files identified during the audit and correct any eligibility, rent, assistance, inspection, or documentation deficiencies. Questioned Costs: None Repeat Finding: No Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.

Finding 2025-002 – Policies and Procedures Require Review and Update – ALN 14.871 Housing Choice Voucher Program, ALN 14.850 Low Rent Public Housing, ALN 14.872 Capital Fund Program – Significant Deficiency Condition & Cause: The Housing Authority has not adequately reviewed and updated several policies and procedures necessary to provide current guidance to employees and ensure compliance with applicable federal requirements and generally accepted internal control practices. Specifically, we noted: 1. The capitalization policy establishes a $500 threshold for capitalization and tracking of nonexpendable equipment. The threshold has contributed to difficulty maintaining an accurate inventory of equipment, including appliances. 2. The investment policy was adopted in December 2009 and has not been updated to reflect current requirements and practices. 3. The Housing Authority does not have a comprehensive financial policies and procedures manual addressing the flow of financial documents, internal controls over Housing Authority assets, authorization procedures, financial reporting responsibilities, and segregation of duties. 4. The Housing Authority does not have a formal conflict-of-interest policy applicable to Board members and employees. 5. The procurement policy was last revised April 23, 2024. The policy states that Board of Commissioners approval is not required for any procurement action. The current policy also establishes informal procurement thresholds of up to $40,000, with requirements for three quotations for purchases between $10,000 and $40,000 and sealed bids for purchases exceeding $40,000. The conditions appear to have resulted from an inadequate process for periodically reviewing and updating policies to reflect changes in federal requirements, HUD guidance, and the Housing Authority's current operations. Criteria: 2 CFR §200.303(a) requires a recipient or subrecipient to establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance of compliance with Federal statutes, regulations, and the terms and conditions of Federal awards. 2 CFR §200.303(c) further requires management to evaluate and monitor compliance and §200.303(d) requires prompt action when instances of noncompliance are identified. With respect to procurement, 2 CFR §200.318(a) requires the recipient or subrecipient to maintain and use documented procurement procedures that are consistent with applicable State, local, and tribal laws and regulations and the Federal procurement standards contained in 2 CFR §§200.317–200.327. 2 CFR §200.318(c)(1) also requires written standards of conduct covering conflicts of interest for employees involved in the selection, award, and administration of contracts. HUD's Public Housing Procurement Handbook 7460.8 states that PHAs are required to establish and follow a written procurement policy consistent with 2 CFR §§200.317–200.327. The Handbook also addresses the authority and responsibility of the PHA Board for approving the procurement policy and delegating procurement authority. The Housing Authority's own Board-approved procurement policy establishes procurement thresholds and procedures that are required to be followed unless properly amended by the Board. Accordingly, the Housing Authority is required to maintain policies that are consistent with applicable Federal requirements and to administer procurements in accordance with its approved policies. Effect: Outdated or incomplete policies increase the risk that employees will not have adequate guidance to perform their responsibilities consistently and that the Housing Authority will not comply with applicable federal, HUD, state, and local requirements. In particular, the absence of comprehensive financial policies and procedures and an updated procurement policy increases the risk of unauthorized transactions, inadequate competition, unsupported procurements, conflicts of interest, inadequate segregation of duties, and inconsistent treatment of Housing Authority transactions. Recommendation: We recommend that the Housing Authority conduct a comprehensive review of all financial, procurement, investment, capitalization, conflict-of-interest, and other significant administrative policies at least annually and whenever applicable federal or HUD requirements change. Specifically, the Housing Authority should: • Revise the capitalization policy and establish a threshold that is practical to administer while maintaining adequate control over material nonexpendable equipment; • Update the investment policy to reflect current requirements and investment practices; • Develop and formally adopt a comprehensive financial policies and procedures manual; • Develop and implement a formal conflict-of-interest policy applicable to Board members, employees, and other applicable parties; • Revise the procurement policy to reflect current federal and HUD requirements, including HUD Handbook 7460.8, Rev. 3 and applicable provisions of 2 CFR Part 200; • Establish clear Board approval requirements for significant procurement contracts and other material commitments; and • Establish a formal process for management and the Board to periodically review and approve policy updates. Questioned Costs: None Repeat Finding: No Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.

2025–001 Transparency Act Reporting Identification of the federal program: Federal Agency and Program Name: U.S. Department of Health and Human Services, Health Resources and Services Administration (HRSA) Healthy Start Initiative Federal Award No: H4903591 Award Year: 2025 Assistance Listing No: 93.926 Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “The recipient and subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The internal controls should align with the guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the “Internal Control — Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, “unless the recipient is exempt as provided in paragraph d. of this award term, the recipient must report each subaward that equals or exceeds $30,000 in Federal funds for a subaward to an entity or Federal Agency. The recipient must also report a subaward if a modification increases the Federal funding to an amount that equals or exceeds $30,000. All reported subawards should reflect the total amount of the subaward”. The recipient must report each subaward no later than the end of the month following the month in which the subward was made. Condition: During our audit, we noted four instances where the required Federal Funding Accountability and Transparency Act (FFATA) reports were not submitted in SAM.gov timely in FY 2025. In addition, we noted for all six FFATA reports that were submitted in SAM.gov, there was no evidence of review and approval of the reports prior to submission. Cause: Corewell implemented corrective actions effective September 1, 2025 based on prior year audit finding. Due to the timing of the implementation of the corrective action plan, the FFATA reports that were due prior to September 1, 2025 were not submitted timely and documentation supporting the review of the FFATA reports was not maintained causing a repeat finding in the current year. Effect or potential effect: Corewell did not timely submit the necessary FFATA reports under the Healthy Start Initiative (HSI) project for each first-tier subaward agreement or modifications in SAM.gov and consequently was not in compliance with the requirements under the Transparency Act. Additionally, lack of review could potentially result in incorrect information included in the reports. Questioned costs: $0 Context: Under the HSI program, there were five subrecipients that had a total of six subawards (one new agreement and five amendments) in FY 2025. Total subrecipient’s costs are $750,822 in FY 2025. The total federal expenditures for the HSI program for FY 2025 were $1,052,118. Identification as a repeat finding, if applicable: Repeat finding – 2024-001 Recommendation: We recommend management ensure that the implemented corrective action plans are followed to ensure the required FFATA reports are submitted timely and documentation retained to support the internal control review performed prior to submission of the reports. Views of responsible officials: Management has implemented a comprehensive corrective action plan to address the FFATA reporting deficiencies identified in the prior audit. Effective September 1, 2025, Corewell Health established a formal written FFATA reporting procedure that includes detailed requirements for identifying and reporting amended subawards throughout the award lifecycle. The procedure also requires documented supervisory review and approval of all FFATA submissions prior to filing to ensure completeness, accuracy, and compliance with federal reporting requirements. The procedure has been formally communicated to and implemented by the Office of Sponsored Programs and Research Finance teams. Ongoing training, monitoring, and periodic reviews of compliance with the procedure have been incorporated into operational processes to reinforce adherence to reporting requirements and to prevent recurrence. Although these corrective actions were implemented effective September 1, 2025, certain FFATA reporting deadlines applicable to the current audit period occurred before the implementation date. As a result, reports due prior to September 1, 2025 were not submitted within the required timeframe and did not include documented evidence of review before submission. Consequently, the finding was reported as a repeat finding in the current audit period. Management believes the corrective actions now in place adequately address the underlying control deficiencies and will support timely and compliant FFATA reporting going forward.

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

Federal Agency: U.S. Department of Agriculture Federal Program Name: Rural Energy Savings Program Assistance Listing Number: 10.751 Federal Award Identification Number (FAIN) and Year: 2023; FAIN not available. Award Period: October 1, 2024 through Performance Obligations Fulfilled Compliance Requirement: Suspension and Debarment Type of Finding: Material weakness in internal control over compliance Criteria or Specific Requirement: When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR Part 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), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR Part 180.300). 2 CFR Part 200.303 indicates that non-Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The Vermont Bond Bank did not obtain evidence verifying entities were not suspended, debarred, or otherwise excluded from participating in the grant award transactions. Questioned Costs: None. Context: Three (3) of three (3) transactions tested for compliance with suspension and debarment requirements lacked evidence that required verification procedures had been performed. Cause: Procedures were not implemented to maintain documentation to support compliance with the standards of procurement, suspension and debarment contained in 2 CFR Part 180 and 2 CFR Part 200. Effect: Compliance with the requirements of the federal award could not be demonstrated. Repeat Finding: No. Recommendation: We recommend management enhance procedures and controls to ensure documentation is maintained to support all suspension and debarment verifications related to expenditures from federal award programs. Such documentation should be consolidated and maintained in a secure, accessible location. Views of Responsible Officials: Management agrees with the finding.

Department of Agriculture, Federal Financial Assistance Listing 10.720, 24-DG-11010013-052, 2025 Infrastructure Investment and Jobs Act Community Wildfire Defense Grant Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.328 requires the auditee to submit financial reports as required by the federal award. SF-425 instructions note for reports prepared on an accrual basis, expenditures reported are the sum of cash disbursements for direct charges for property and services; the amount of indirect expense incurred; and the net increase or decrease in the amounts owed by the recipient. Condition: Amounts reported on the federal share of expenditures line (Line 10e) did not agree to the cooperative’s records for the applicable reporting period. Cause: The Cooperative prepared the report as instructed by the Forest Service grants manager. Effect: Federal expenditures for the reporting period were understated by a material amount. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 2 out of 4 quarterly reports were selected for testing. Repeat Finding from Prior Year: No Recommendation: We recommend that management review the federal grant reporting requirements to ensure amounts reported are in compliance with reporting instructions and agree to the underlying accounting records. Views of Responsible Officials: Management disagrees with the finding, see corrective action plan.

Finding 2025-002 – Material Weakness in Internal Controls over Federal Award Compliance Criteria – 2 CFR 200.303 requires the recipient to establish, document, and maintain effective internal control over federal awards. Condition – The Organization has not established and documented internal control policies and procedures over compliance with federal award requirements other than procurement. It is also noted that the procurement policy that is documented does not conform to current federal limits. Context and Cause – The Organization’s current policies do not include a review of the fiscal policy for required changes on a scheduled basis. Effect of Condition – Incomplete documentation of policies regarding federal compliance could prevent management and the Board from providing adequate oversight over compliance activities of the Organization. Questioned Cost – None. Recommendation – We recommend the Organization develop and implement policies and procedures addressing the applicable federal compliance requirements for each federal program. Views of Responsible Officials and Planned Corrective Actions – Management concurs with the finding and has developed a corrective action plan. We understand that a material weakness is identified in internal controls over compliance. The material weakness is in internal controls over compliance, and not a compliance finding. We will work to increase the strength of our internal controls over compliance.

2025-001 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Prior Year Finding Number: N/A Year of Finding Origination: 2025 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Grants to States for Medicaid Award Number and Year: 2505MN5ADM; 2025 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Administrative program costs are submitted to the Minnesota Department of Human Services (DHS) on a quarterly basis through the DHS Income Maintenance report (DHS-2550) and DHS Social Service Fund Report (DHS-2556) for the Grants to States for Medicaid program. DHS provides reporting instructions, including information regarding eligible and ineligible costs. Condition: The following exceptions were noted in expenditures tested: • One timesheet tested included payroll costs that were incorrectly reported as Income Maintenance Random Moments Time Studies participants payroll expense. • One timesheet tested included payroll costs that were incorrectly reported as Social Service Time Studies (SSTS) participants payroll expense. In addition, the following exceptions were noted in the first and third quarter DHS reports tested: • Payroll expenditures of $16,135 were reported twice in the first quarter DHS-2550 report. • SSTS direct federal expenses were overstated by $14,373. Questioned Costs: $37,548. $7,040 known questioned costs were determined based on exceptions related to incorrectly reported payroll costs noted in testing, and $30,508 known questioned costs were determined based on the exceptions noted in the DHS-2550 and DHS-2556 reports tested. Context: DHS relies on accurate identification and reporting of program costs to ensure grant funds paid to the County are for allowable federal program activities and costs and provide detailed information necessary for maintaining proper oversight over federal programs. Total Grants to States for Medicaid expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) are $1,771,099, consisting of 3,945 transactions. The sample of 40 transactions totaled $176,432. The reporting population consisted of four quarterly DHS-2550 and DHS-2556 reports. The sample was two quarterly DHS-2550 and DHS-2556 reports. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Errors in the identification and reporting of costs on the quarterly reports can impair DHS’ ability to provide required oversight over federal programs and result in the County receiving either more or less federal funds than justified based on the actual underlying activity. Cause: The County’s controls over the identification of allowable activities and costs and preparation and review of quarterly reports were not sufficient to identify these errors. Recommendation: We recommend the County implement controls to ensure activities allowed or allowable costs are appropriately identified and accurately reported to DHS in accordance with federal program guidance and DHS instructions. We also recommend the County correct and resubmit reports submitted with unallowable activities or costs, costs allocated incorrectly, or activity reported incorrectly. View of Responsible Official: Acknowledge

Criteria: Under 2 CFR 200.303, non-federal entities must establish, document, and maintain effective internal control over federal awards to provide reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. In addition, the grant agreement requires semi-annual reports to be submitted no later than 30 days after the end of each reporting period. Condition: During our testing of semi-annual reporting requirements, we selected 2 of 2 reports due during the year ended December 31, 2025. Both semi-annual reports tested were submitted after the required due date. In addition, management did not maintain documentation evidencing that the reports were reviewed and approved by a secondary level prior to submission. We also noted that internal controls were not designed effectively to ensure semi-annual reports were prepared, reviewed, approved, and submitted within the required timeframe. Cause: The Organization did not have a sufficiently designed and documented control process to monitor reporting deadlines, assign responsibility for timely submission, and retain evidence of secondary-level review and approval before reports were submitted. Specifically, existing procedures did not include an effective mechanism, such as a reporting calendar, escalation process, or documented supervisory review requirement, to ensure timely filings. Effect: Failure to submit required reports by the deadline results in noncompliance with the terms and conditions of the grant agreement and may impair the federal agency’s ability to monitor program performance and compliance on a timely basis. Questioned Costs: No questioned costs were identified as a result of this finding because the matter relates to timeliness of reporting and internal control over report review rather than the allowability of expenditures. Perspective: The audit procedures covered 2 of 2 semi-annual reports required to be submitted during the year. Both reports tested were submitted late, representing 100% of the reports subject to testing for the period under audit. This testing was not based on a statistically valid sample because the entire population of reports due during the year was tested. Recommendation: We recommend that management strengthen internal controls over grant reporting to ensure compliance with reporting deadlines and review requirements including: development of a grant reporting calendar that identifies all required reports, reporting period end dates, due dates, preparer responsibilities, reviewer responsibilities, and submission requirements, retain documentation evidencing the preparer, reviewer, date of review, approval, and date of submission and establish a monitoring or escalation process to ensure reports are completed and submitted before the required deadline.

SIGNIFICANT DEFICIENCY 2025-001 ACTIVITIES ALLOWED Federal Agency: Department of Health and Human Services Federal Program: Temporary Assistance for Needy Families Assistance Listing Number: 93.558 Federal Award Numbers and Years: 46329; October 1, 2020 - September 30, 2026 Condition: Out of a sample of 40 home visit notes, 1 lacked written evidence of supervisor approval. Criteria: The grant is billed per family served based on completing various activities, including home visits. Under 2 CFR 200.303, the Organization is required to establish, document and maintain a system of effective internal control over federal awards to ensure that home visits occur and that the grant is billed only for families receiving services. Cause: Program supervisors failed to follow internal procedures to timely document review of home visits performed. Effect: The Organization could bill the grant without verification that a home visit occurred. Recommendation: We recommend that qualified personnel review the record of home visits within 30 days so that evidence of the approval is captured before lockdown occurs. Identification of repeat findings: This finding is not a repeat finding.

Finding 2025-002: Federal Funding Accountability and Transparency Act Subaward Reporting Compliance Requirement: Reporting Type: Significant Deficiency in Internal Control over Compliance and Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services AL Numbers and Titles: 93.592 - Family Violence Prevention and Services/Discretionary Federal Award Number: 90EV0531 Questioned Costs: None Repeat Finding: No Criteria: The terms and conditions prescribed by 2 CFR Part 170 require a recipient to report each applicable first-tier subaward through the Federal Subaward reporting system no later than the end of the month following the month in which the subaward was issued. Additionally, 2 CFR § 200.303 requires recipients to establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the recipient manages the Federal award in compliance with applicable Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Caminar Latino, Inc. issued a subaward on December 3, 2024, with a reporting deadline of January 31, 2025. The subaward was not reported through the applicable FFATA subaward reporting system until June 8, 2026. We tested the complete population of two applicable subawards associated with the program during the audit period and identified one instance of untimely reporting. The other subaward was reported by the applicable deadline. Context: The exception represented one of two applicable subawards associated with the program during the audit period. The late-reported subaward totaled $66,000. No questioned costs resulted from the exception. Cause: Caminar Latino, Inc. had not established a formal control to identify applicable subawards, determine the required reporting deadline, and ensure that the required subaward information was submitted timely. Effect: Caminar Latino, Inc. did not comply with the FFATA reporting requirement, which could result in a lack of transparency and accountability for the use of Federal funds. Recommendation: We recommend that Caminar Latino implement internal controls to ensure compliance with the FSRS reporting deadlines. Specifically, we recommend establishing a process that includes reminders or system alerts to ensure that subaward information is submitted on time.. Views of Responsible Officials Corrective Actions: Caminar Latino, Inc. agrees with this finding. Please refer to the Corrective Action Plan.

FINDING 2025-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): SLT-9293 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Prior to entering into subawards and covered transactions with the COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF), recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. During the audit period, the City paid a contractor $1,875,887 with the SLFRF funds for the Steury Avenue and Lincoln Avenue Reconstruction and Drainage Improvements project, which met the $25,000 threshold for suspension and debarment verification. However, the City did not believe the contract with the vendor required the Procurement and Suspension and Debarment compliance requirement. As such, the City did not verify the contractor's suspension or debarment status prior to payment to ensure contractors were not suspended, debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities. 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). . . ." 2 CFR 200.214 states: "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 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." INDIANA STATE BOARD OF ACCOUNTS 16 CITY OF GOSHEN SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause The City had not designed or implemented effective policies and procedures to verify that vendors were not suspended or debarred or otherwise excluded from participating in federal programs prior to entering into covered transactions using the SLFRF funds. While an internal control process was in place, it did not ensure that all vendors were not suspended or debarred from receipt of federal grant funds for goods and services. Effect Without the proper implementation of an effectively designed system of internal controls, the City cannot ensure contractors paid with federal funds are eligible to participate in federal programs. Any program funds the City used to pay contractors who have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Furthermore, 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 City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City establish and implement a formal system of internal controls to ensure compliance with the suspension and debarment requirements. This should include developing and strengthening written policies and procedures to verify, prior to entering into a contract or making payments of $25,000 or more with federal funds, that contractors are not suspended, debarred, or otherwise excluded from participation in federal assistance programs. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Section II – Financial Statement Findings None reported. Section III – Federal Program Audit Findings and Questioned Costs Finding Number: 2025-001 Finding: Finding Type: Material Weakness Title and Federal Assistance Listing Number of Federal Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: In accordance with 2 CFR 200.320, non-federal entities must conduct all procurement transactions in a manner providing full and open competition. For purchases exceeding the micro-purchase threshold of $10,000, the entity must obtain price or rate quotations from an adequate number of qualified sources, unless the purchase qualifies as a sole-source procurement under 2 CFR 200.320(c). Additionally, 2 CFR 200.303 requires the non-federal entity to establish and maintain effective internal control over compliance with federal statutes, regulations, and the terms and conditions of the federal award. Furthermore, 2 CFR 200.318(b) and 200.324 require that written contracts be executed with contractors, including all required Federal provisions to safeguard Federal funds. Condition: We examined 60 transactions during our testing of procurement transactions under the Coronavirus State and Local Fiscal Recovery Funds. We noted that a competitive bidding process was not used in 32 of 60 transactions tested. In all 32 instances, Historic South did not provide evidence that multiple bids or quotes were solicited. The documentation and explanation provided by Historic South was not deemed to be adequate justification to qualify for the use of sole-source procurement under 2 CFR 200.320(c). Additionally, all 60 procurement transactions tested did not have a fully executed, signed contract with the respective contractors. The award/contracting process and methods used to render and pay services did not meet the expected level of formal contractual agreements in place. Cause: In early 2024, Historic South made revisions to the procurement process in order to maximize efficiency and improve overall project outcomes. These revisions were made based on the challenges of securing bids on all potential projects, the need to expend the awarded dollars in a timely fashion and a verbal agreed-upon understanding with the Ohio Department of Health. The requirement to obtain multiple bids was replaced with a strategic invitation approach based on a preferred vendor pool. The result was that Historic South did not have a procedure in place to ensure that procurement transactions were conducted in compliance with Uniform Guidance. Specifically, the procurement policy lacked provisions to enforce competitive procurement practices for purchases above the micro-purchase threshold. Additionally, the process Historic South used to make awards to contractors did not meet the expected standards required for formal contract execution prior to project initiation or payment. - 29 - Historic South Initiative Schedule of Findings and Questioned Costs - continued Year Ended December 31, 2025 Section III – Federal Program Audit Findings and Questioned Costs - continued Effect: Failure to obtain competitive bids or quotes increases the risk of paying higher prices for goods/services, or unfair contracting practices. Additionally, the lack of competitive procurement represents noncompliance with Uniform Guidance, which may lead to questioned costs and potential disallowance by the granting agency. Furthermore, the lack of formally signed contracts increases the risk of misuse of federal funds and an inability to enforce contractual obligations or resolve disputes. While our testing did not identify any instances of misspent or improperly used federal funds, the control deficiencies represent a material weakness in internal control over compliance. Questioned Costs: $1,000,798 These costs are considered questioned due to lack of compliance with Uniform Guidance. The amount represents the total bid/contract amount of the 32 transactions tested that did not meet the competitive bidding requirements. Recommendation: We recommend that Historic South implement and enforce formal procurement procedures that comply with the requirements of 2 CFR 200.317-200.327. These procedures should include obtaining competitive bids and/or maintaining documentation for any alternative bidding process used and approval requirements. Additionally, Historic South should require that fully executed, signed contracts be obtained prior to the start of work or payment to contractors. Staff responsible for procurement should be trained on federal procurement standards to ensure compliance. Views of Responsible Official and Planned Corrective Action: Historic South acknowledges this finding is the same as reported in 2024. Although the corrective actions identified in the prior year’s audit were implemented, they were not fully in place during most of the period covered by the current audit. As a result, the transactions tested during the 2025 audit occurred before the corrective measures became effective. Corrective measures implemented include policies and procedures designed to strengthen its procurement and contracting processes. These include: 1. Requiring the solicitation of multiple bids for all construction work in excess of $10,000 2. Establishing criteria for awarding all construction work 3. Implementing formal contracting processes for all construction work Management believes these corrective actions address the deficiencies identified and expects them to be fully effective for construction activities occurring after implementation.

Finding 2025-002 Information on the federal program: Subject: Home Investment Partnerships Program – Internal Controls Federal Agency: Department of Housing and Urban Development Federal Program: Home Investment Partnerships Program Assistance Listing Number: 14.239 Pass-Through Entity: N/A - Direct Grant Compliance Requirement: Special Tests and Provisions – Maximum Per Unit Subsidy Audit Findings: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the tes or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 92.250(b) states in part: The per-unit investment of Home funds may not exceed the Federal Housing Administration (FHA) mortgage limits in Subsection 221(d)(3) of the National Housing Act, including any area-wide high cost exceptions approved by HUD. This information should be available from the grantee or the local HUD field office. In mixed-income or mixed-use projects, the average per-unit investment in HOME-assisted units may not exceed the applicable Subsection 221(d)(3) (i.e., 234) limit. Condition: The Consortium did not have a documented review control in place to ensure the per-unit subsidy calculation was prepared and calculated accurately. There was no documented proof of segregation of duties. Cause: The Consortium's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the Consortium at risk of noncompliance with the grant agreement and the per-unit compliance requirements. Questioned Costs: There were no questioned costs identified. Context: In a sample of two, the following instances were noted: • For the first selection, the per-unit subsidy information was entered into the HUD system (IDIS) during the project close out. There is no evidence of segregation of duties over the preparation and review of IDIS inputs. • For the second selection, the calculation was prepared by a former employee in 2025 and did not have sign off by the preparer or reviewer. A secondary review with evidence of sign off was performed subsequent to the audit period in 2026. Identification as a repeat finding: No. Section III – Federal Award Findings and Questioned Costs (Continued) Finding 2025-002 (Continued) Recommendation: We recommend the Consortium implement a formal process to ensure the required per-unit subsidy calculations are prepared, reviewed, and maintained by separate individuals involved in the process. Adequate documentation should be maintained to support the per-unit subsidy calculations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Finding 2025-003 Information on the federal program: Subject: Home Investment Partnerships Program – Internal Controls Federal Agency: Department of Housing and Urban Development Federal Program: Home Investment Partnerships Program Assistance Listing Number: 14.239 Pass-Through Entity: N/A - Direct Grant Compliance Requirement: Special Tests and Provisions - Underwriting Requirements Audit Findings: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 92.250(b) states in part: Participating jurisdictions must underwrite and evaluate projects to ensure that Home funds are not invested in projects with unreasonable costs, that the project is financially viable, and that the level of Home investment is not more than necessary. Additionally, the Uniform Guidance requires entities to maintain adequate documentation to demonstrate compliance with federal program requirements. Condition: The Consortium did not have a documented review control in place to ensure the underwriting calculation was prepared and calculated accurately. There was no documented proof of segregation of duties. Cause: The Consortium's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the Consortium at risk of noncompliance with the grant agreement and the underwriting compliance requirements. Questioned Costs: There were no questioned costs identified. Section III – Federal Award Findings and Questioned Costs (Continued) Finding 2025-003 (Continued) Context: In a sample of two, one selection was noted where the underwriting calculation did not have evidence of preparer or reviewer. The selected underwriting calculation was prepared in April 2025. The Consortium implemented a control process in September 2025. The second sample tested had proper review and was completed in September 2025. Identification as a repeat finding: A similar finding appears as finding 2024-002 in the prior report. Recommendation: We recommend the Consortium implement a formal process to ensure the required underwriting calculations are prepared, reviewed, and maintained. Adequate documentation should be maintained to support the underwriting calculations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

2025-003) Procurement, Suspension and Debarment U.S. Department of Transportation 20.507 Federal Transit Formula Grant Grant No(s): LA-2024-010-00, LA-2024-030-00, LA-2025-011-00 Questioned Costs: Undetermined - The questioned costs could not be determined due to the entity’s failure to maintain sufficient documentation to demonstrate compliance with Build America, Buy America (BABA) requirements. Specifically, supporting evidence was not available to identify which costs, if any, were associated with non-compliant materials, and therefore the auditor was unable to quantify the amount of questioned costs. Criteria: Section 70914 of the Infrastructure Investment and Jobs Act (IIJA), commonly referred to as the Build America, Buy America (BABA) Act, requires that all iron, steel, manufactured products, and construction materials used in federally funded infrastructure projects be produced in the United States unless a waiver is properly obtained. Federal awarding agency guidance and implementing regulations further require recipients and subrecipients to maintain sufficient documentation to demonstrate compliance with these domestic sourcing requirements. Additionally, in accordance with 2 CFR 200.303, non-federal entities are required to establish, document and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with applicable statutes, regulations, and the terms and conditions of the federal award. Condition: The entity did not maintain sufficient, contemporaneous documentation to demonstrate compliance with the BABA requirements applicable to federally funded infrastructure projects. Specifically, documentation supporting that iron, steel, manufactured products, and construction materials used in the project were produced in the United States, or that an approved waiver was obtained where applicable, was not available for inspection during the audit period. While a consultant has been engaged to support program compliance and management indicated that documentation is expected to be compiled during project closeout, the entity maintained only a listing of materials and supplies purchased. The list did not include or reference supporting evidence demonstrating compliance with BABA requirements, such as domestic sourcing certifications or approved waivers, where applicable. As of the date of audit procedures, documentation sufficient to support compliance had not been obtained, maintained, or made available for review. As a result, the auditor was unable to verify that procurementactivities and expenditures complied with BABA requirements. Universe/Population:Only one contractor was paid during the audit period and selected to test for procurement compliance testing. Effect:The lack of documentation and supporting controls increases the risk that materials used in federally funded projects may not comply with BABA requirements, resulting in potential noncompliance with federal regulations. This could lead to questioned costs, disallowances, delays in reimbursement, or potential repayment of federal funds. Additionally, the absence of documentation limits the entity’s ability to demonstrate compliance during audits or federal oversight reviews. Cause: The City-Parish did not establish, document or implement adequate internal controls and procedures to identify applicable BABA requirements and ensure retention of supporting documentation demonstrating compliance. Specifically, processes for verifying domestic sourcing requirements with vendors and contractors and maintaining related compliance documentation were not clearly defined or consistently applied. Recommendation: We recommend that management enhance its existing processes over Build America, Buy America (BABA) compliance to ensure that documentation supporting domestic sourcing requirements is obtained and maintained contemporaneously throughout the project lifecycle, rather than solely at project closeout. While management has engaged a consultant to support program compliance and has indicated that documentation will be compiled during closeout, reliance on postcompletion documentation increases the risk that sufficient and accurate support may not be available or may be difficult to validate. Management should establish formal procedures, in coordination with its consultant, to:  Clearly define responsibilities for obtaining and retaining BABA compliance documentation during procurement and construction phases;  Require contractors and vendors to submit certifications or supporting documentation at the time of purchase or installation;  Implement periodic monitoring or interim reviews of BABA compliance documentation prior to project closeout; and  Ensure that all required documentation is centralized, reviewed, and retained in accordance with federal requirements. Strengthening these processes will improve the entity’s ability to demonstrate timely compliance with BABA requirements and reduce the risk of noncompliance, questioned costs, or audit findings. Views of Responsible Officials: Although currently being enforced by the Department of Transportation and Drainage, current guidelines and procedures will be reassessed and improved upon to ensure record-keeping compliance with BABA and any other applicable federal acts moving forward. These remedies will include the following: Trimble Unity Construct (TUC) software will continue to be used as a repository for all relevant construction project documentation; Compliance certification letters must be submitted and approved through the established construction submittal workflow process, or other future processes, in TUC for applicable BABA materials; a specific field for BABA compliant documentation will now be required to ensure that a pay item or any of its components satisfy BABA requirements prior to completing a material submittal process; Guidance that certification letters must be provided for review concurrently with material submittals will be provided to Construction Document Controls staff; Continue to maintain the BABA compliance tracking document for internal record-keeping and for federal internal audits at an established interval based upon the duration or cost of the contract. This will be executed by a designated audit review team established by the Department of Transportation and Drainage through use of audit checklists based on specific grant requirements. Any deficiencies discovered during the audit will be communicated through a Grant Compliance Remediation Plan with deadline identified for corrections. In order to bring the documentation into compliance for construction materials installed on active grants, the Department of Transportation and Drainage proposes to perform the following immediate actions: Update the current BABA log to include additional information not already captured for materials, installed and expected, the status of each item’s compliance letter, if the letter contains the required five criteria and where the letter is stored; Hold an initial BABA regroup meeting with the contractor to discuss materials installed, materials expected, and status letters for all items, with subsequent bi-weekly meetings to address any identified deficiencies; and review all letters, currently stored and to be received, submitted by the Prime Contractor into TUC to ensure the letters contain the five criteria required for federal compliance and enter the conformity into the BABA log.

Documentation of Written Internal Controls Over Compliance Required by Uniform Guidance Major Programs Impacted: U.S. Department of Transportation – Federal Transit Administration (FTA): 20.507; Federal Transit Formula Grant; 20.933 National Infrastructure Investment; Federal Highway Administration (FHWA) Passed Through Louisiana Department of Transportation of Development and Highways - 20.205 Highway Planning and Construction; U.S. Federal Aviation Administration - 20.106 Airport Improvement Program; U.S. Department of Treasury - 21.027 Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Health and Human Services - 93.600 Head Start Questioned Costs: None Grant No(s): All Associated Reported on SEFA Criteria: Pursuant to 2 CFR § 200.303(a), the non-Federal entity 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. These internal controls should align with the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The City-Parish did not consistently maintain documentation to support internal controls over compliance with certain direct and material compliance areas related to Federal awards. While some documentation of control activities existed, documentation was incomplete across all applicable compliance requirements and departments responsible for administering Federal programs. Specifically, documentation demonstrating the design and operation of controls over certain compliance areas was not readily available or did not fully address all relevant requirements. As a result, sufficient evidence of the City-Parish’s internal control over compliance was not consistently maintained. Universe/Population: The population consisted of internal control activities over compliance for direct and material compliance requirements identified for the Federal programs selected for audit in accordance with Uniform Guidance (2 CFR Part 200, Subpart F). This included control processes and related documentation maintained by departments responsible for procurement, program administration, financial reporting, and other functions supporting compliance with Federal statutes, regulations, and terms and conditions of Federal awards. Effect: The lack of complete and consistent documentation of internal controls over compliance increases the risk that noncompliance with Federal statutes, regulations, and award requirements may occur and not be prevented or detected in a timely manner. In addition, the absence of sufficient documentation limits the City-Parish’s ability to demonstrate compliance during audit or oversight activities, which could result in questioned costs, audit findings, or increased scrutiny from Federal awarding agencies and pass-through entities. Cause: The City-Parish’s internal control processes over Federal award compliance were not fully formalized across departments responsible for administering Federal programs. Specifically, while certain controls were in place, management did not establish clear, organization-wide expectations for documenting the design and operating effectiveness of controls over all direct and material compliance requirements. In addition, responsibilities for maintaining control documentation were decentralized, and sufficient oversight and monitoring procedures were not in place to ensure completeness and consistency of documentation across all compliance areas. As a result, documentation practices varied by department, and not all applicable compliance requirements were adequately documented. Recommendation: We recommend that management strengthen internal control documentation processes across all departments supporting Federal programs to ensure compliance with 2 CFR § 200.303. Specifically, management should: • Establish and document formal policies and procedures that clearly define internal controls over each applicable compliance requirement for Federal programs; • Ensure that all departments responsible for Federal program administration consistently document the design and operation of key controls over compliance; • Implement a centralized or coordinated approach for maintaining internal control documentation to promote completeness and consistency across the organization; • Perform periodic reviews to verify that documentation is complete, current, and aligned with applicable Federal requirements; and • Provide training to relevant personnel to reinforce expectations for documenting internal controls in accordance with Uniform Guidance and recognized frameworks (e.g., COSO or Green Book). Strengthening documentation practices will enhance the entity’s ability to demonstrate compliance, support audit requirements, and reduce the risk of noncompliance with Federal award requirements. Views of Responsible Officials:The EBR Head Start Program follows the established financial policies, procedures, and approval processes administered through the City of Baton Rouge and Parish of East Baton Rouge. EBR Head Start does not maintain a separate set of finance procedures independent of the City-Parish. Rather, the program operates within the existing City-Parish framework. These processes include the review, approval, and monitoring of activities necessary to support compliance with applicable Federal requirements. The finding identified an opportunity for the Head Start Program to demonstrate how it applies and maintains evidence of these existing controls within the department.procedures, identifying and maintaining required compliance documentation, establishing consistent record-retention practices, periodically reviewing documentation for completeness and accuracy, providing guidance to appropriate staff, and implementing any additional controls identified as necessary to comply with 2 CFR Part 200.303.

Finding 2025-003 – Material Weakness in Internal Controls over Federal Award Compliance Criteria – 2 CFR 200.303 requires the recipient to establish, document, and maintain effective internal control over federal awards. Condition – The Organization has a documented fiscal policy; however the policy does not include procedures that cover specific compliance attributes associated with federal award requirements. Context and Cause – The Organization’s current policies do not include a review of the fiscal policy for required changes on a scheduled basis. Effect of Condition – Incomplete documentation of policies regarding federal compliance could prevent management and the Board from providing adequate oversight over compliance activities of the Organization, and could result in non-compliance with federal awards. Questioned Cost – None. Recommendation – We recommend the Organization develop, document, and implement policies and procedures that address the recent guidance regarding applicable federal compliance requirements. Views of Responsible Officials and Planned Corrective Actions – Management concurs with the finding and has developed a corrective action plan. The material weakness is in internal controls over compliance, and not a compliance finding. We will work to increase the strength of our internal controls over compliance.

2025-003 – WRITTEN POLICIES AND PROCEDURES REQUIRED BY THE UNIFORM GUIDANCE (REPEAT) Federal Agencies: U.S. Department of Treasury; Environmental Protection Agency Program Names: Coronavirus State and Local Fiscal Recovery Funds; Drinking Water State Revolving Fund Assistance Listing Numbers: 21.027; 66.468 Pass-through Entity: Michigan Department of Environment, Great Lakes, and Energy (EGLE); Michigan Department of Labor and Economic Opportunity Grant Number: A5823-01; A7708-01; E20240030, Project 7708-01 Criteria: The Uniform Guidance requires a non-federal entity that has expended federal awards to have written policies pertaining to: 1) advance payments and reimbursements; 2) determination of allowable costs; 3) compensation (personnel and benefits policies); 4) travel costs; and 5) procurement procedures. Pursuant to 2 CFR 200.303(a), an auditee must maintain effective internal controls over the federal awards that provide assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The City was not able to provide written policies and procedures related to the internal control structure over federal awards as required by 2 CFR section 200. Cause: Turnover of key employees. Effect: The City is not compliant with 2 CFR 200.303. Questioned Costs: None. Identification of How Questioned Costs were Computed: N/A Perspective: The City has processes in place to conform with the requirements of the Uniform Guidance; however, no formal written policies and procedures were able to be located during our audit. Repeat Finding: Yes. Recommendation: The City should formalize its policies and procedures related to federal awards through presenting, adopting, and implementing written policies and procedures for internal controls over federal awards. Views of Responsible Officials: Management agrees with the finding and has taken corrective action.

Department of Housing and Urban Development Passed through Governor’s Office of Economic Development and Moody County Federal Financial Assistance Listing #14.228; 2324-102, 2323-108 Community Development Block Grant Equipment & Real Property Management Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The non-Federal entity must conform with Equipment and Real Property Management procedures identified in 2 CFR 200.313. 2 CFR 200.313(d) states that the auditee must manage equipment utilizing procedures that meet the following requirements: (1) Property records must include a description of the property, a serial number or another identification number, the source of funding for the property (including the FAIN), the title holder, the acquisition date, the cost of the property, the percentage of the Federal agency contribution towards the original purchase, the location, use and condition of the property, and any disposition data including the date of disposal and sale price of the property. The recipient and subrecipient are responsible for maintaining and updating property records when there is a change in the status of the property. (2) A physical inventory of the property must be conducted, and the results must be reconciled with the property records at least once every two years. Condition: The property records listing had no formal review or approval in place. Additionally, there was no formally documented physical inventory of property that was purchased with federal award monies within the last two years. Cause: Management did not review or approve of the property record listing. Additionally, management was unaware of the requirement to incorporate an inventory observation every two years. Effect: Without established controls over Equipment and Real Property Management, this increases the risk equipment could be misappropriated, unallowable equipment purchases could be charged to the federal award and increased risk federal agency wouldn’t be reimbursed if federal-funded equipment was disposed of. Questioned Costs: None noted Context: All equipment and real property were tested under the compliance requirement. Repeat Finding from Prior Year: No Recommendation: We recommend management incorporate a formally documented review and approval process over the property record listing. Additionally, we recommend that management incorporate a property inventory observation process and document the observation when performed. Views of Responsible Officials: Management is in agreement.

Finding 2025-002: Allowability of Costs and Allocation of Vendor Credits Federal Agency: United States Department of State Federal Program: International Programs to Support Democracy, Human Rights and LaborAssistance Listing Number: 19.345 Award Identification Number and Year: All Criteria: 2 CFR 200.303 requires entities to maintain effective internal controls over Federal awards. 2 CFR 200.403 and 200.405 require costs charged to Federal awards to be allowable, reasonable, and allocable based on benefits received. Condition: Management identified that a staffing agency improperly charged VAT on salaries from mid-2024 through fall 2025. In 2026, a credit of approximately $201,000 was issued and applied to 2026 salary costs. Management performed an analysis and determined that the estimated impact to Federal awards was approximately $40,000 of improperly charged VAT. Management was unable to allocate the credits received back to originally affected awards due to the timing of payments made and credits received. Cause: The Organization did not have a sufficiently designed or operating review process to identify that VAT was being improperly charged on employee salary costs before those costs were recorded and charged to awards. In addition, the Organization did not maintain sufficient award-level tracking to determine the specific awards affected by the VAT overcharges and to allocate the related credit back to the original awards or cost objectives. Effect or Potential Effect: The Organization was able to determine the estimated VAT overcharges that were charged to Federal awards. Federal awards were charged costs that were not allowable or not properly allocable. In addition, because the related credit was applied against 2026 salary costs rather than allocated back to the awards or cost objectives that originally incurred the overcharges, the financial records may not reflect the proper allocation of costs and credits among Federal and non-Federal awards. Questioned Costs: Management identified an aggregate credit of approximately $200,000 of which approximately $40,000 is attributable to Federal awards. Context: The issue relates to VAT charges improperly applied by a staffing agency to employee salary costs from mid-2024 through fall 2025. The related credit was issued in 2026 and applied against 2026 salary costs. Management was unable to allocate the overcharged VAT and related credit back to the original affected awards. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that management strengthen controls over the review of payroll and staffing agency invoices to ensure that taxes, fees, and other charges included in salary-related costs are allowable and properly allocable before costs are charged to Federal awards. We also recommend that management develop and document a process to:  Identify and review vendor credits, refunds, and adjustments related to prior-period costs;  Determine the original awards, projects, or cost objectives affected by such credits or refunds;  Allocate credits back to the awards or cost objectives that originally incurred the related costs, when practicable;  Evaluate the impact on closed Federal awards and determine whether communication with the Federal agency or pass-through entity is necessary; and  Maintain sufficient documentation supporting management’s evaluation and allocation methodology.

Finding No. 2025-001 U.S. Department of Commerce National Oceanic and Atmospheric Administration Assistance Listing No. (ALN) 11.999 – Abandoned and Derelict Vessels (ADV) - Leveraging Strategic Partnerships for Removal, Disposal, Prevention and Education Type of finding – Material Weakness in Internal Controls and Non-Compliance over Subrecipient Monitoring Repeat Finding – No Criteria The BoatU.S. Foundation (BoatU.S.) team coordinates the subrecipient monitoring process for the ADVs - Leveraging Strategic Partnerships for Removal, Disposal, Prevention and Education. ADVs program is funded by the US Department of Commerce, passed through by National Oceanic and Atmospheric Administration (NOAA). Per 2 CFR 200.303(a), BoatU.S. must establish and maintain effective internal controls over Federal awards that provides reasonable assurance that they are managing Federal awards in compliance with Federal statues, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its Federal programs. Per 2 CFR Section 200.332, all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the certain information at the time of the subaward and if any of these data elements change, include the changes in the subsequent award modification. Required information includes: (1) 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 (ALN) at the time of disbursement, and, (2) A non-Federal entity that expends $1 million or more in Federal awards during the non-Federal entity's fiscal year must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section. Also, per 2 CFR Section 200.332, the pass-through entity is responsible for monitoring the activities of the subrecipient, as necessary, to ensure that the subaward is used for authorized purposes, in compliance with the Federal statutes, regulations, and the terms and conditions of the subaward; and that the subaward performance goals are achieved. Condition BoatU.S. Foundation did not incorporate the need for a single audit for subrecipients that expend more than $1 million of federal funding in a given fiscal year into the fiscal year 2025 contracts and the contracts and disbursements currently do not indicate ALN number at the time of each disbursement. Regarding subrecipient monitoring, no substantial documentation of onsite monitoring and validation of subrecipient costs being used for authorized purposes was performed. BoatU.S. Foundation Schedule of Findings and Questioned Costs (continued) Year Ended December 31, 2025 Cause BoatU.S.’s internal controls relating to subrecipient monitoring were not effective to properly monitor, obtain information and document the subrecipient monitoring process. Effect BoatU.S. was not in compliance with federal monitoring compliance regulations due to having insufficient documentation. Questioned Costs Unknown Recommendation: BoatU.S. should ensure that all requirements are incorporated into subrecipient contracts and disbursement information. BoatU.S. should also strengthen documentation of onsite and all monitoring procedures performed. Finally, BoatU.S. should implement stronger controls to ensure timely receipt of biannual subrecipient expense reports. Views of Responsible Officials: Management concurs with the audit finding. Corrective Action Plan: The BoatU.S. ADVs contract will be amended for fiscal year 2026 contracts to include the ALN, and the need for a Single Audit for subrecipients that expend over $1,000,000 in federal funding in their given fiscal year. BoatU.S. will implement stricter deadlines for subrecipients to submit their biannual reports in 2026. Progress monitoring will be done throughout the year and documented by BoatU.S. personnel. This should also include project cost documentation of the subrecipient is used for authorized purposes. These reports may need to include photos of the tasks completed, if necessary. BoatU.S. plans to only reimburse for progress costs as incurred by the subrecipient. Implementation date: September 2026 Responsible Person: Alison Trimble, Director, Operations

Finding # 2025-002 Type: Significant deficiency in internal controls over federal program compliance (Reporting) Assistance Listing Number: U.S. Department of Treasury 21.027 American Rescue Plan Act – Coronavirus State and Local Fiscal Recovery Plan Funds Requirement: Pursuant to 2 CFR §200.303, Macdonald Center dba Maybelle Center is required to establish and maintain effective internal controls over compliance with federal award requirements, including controls to ensure reports submitted to grantors are reviewed for accuracy and completeness and that evidence of such reviews is retained. Condition: Macdonald Center dba Maybelle Center did not maintain evidence of supervisory review for quarterly reports submitted to the grantor. Although reports were submitted timely, documentation demonstrating management's review and approval of the information prior to submission was not consistently retained. Context: During testing of reports submitted to grantors, we noted that supporting documentation did not include evidence of management review and approval. As a result, we were unable to verify that a review control had been performed prior to submission. Cause: Established procedures do not require retention of documentation demonstrating management's review and approval of reports submitted to grantors, and review activities were not consistently evidenced. Effect: Without documented review procedures, errors or omissions in reports submitted to grantors may not be identified and corrected prior to submission, which could affect the accuracy and completeness of information reported. Questioned Costs: Not applicable. Recommendation: We recommend that management implement procedures requiring documented review and approval of all reports submitted to grantors. Evidence of review, such as signatures, initials, dated approvals, or electronic workflow approvals, should be retained to demonstrate that reports have been reviewed for accuracy, completeness, and compliance with grant requirements prior to submission. Management’s Response: Management agrees with the finding and will enhance existing reporting procedures to require documented evidence of review and approval for reports submitted to grantors. Macdonald Center dba Maybelle Center will retain documentation of supervisory review and approval as part of its grant compliance files going forward.

2025-001: Activities Allowed or Unallowed and Allowable Costs/Cost Principles - Material Weakness in Internal Control and Material Noncompliance Repeat of Prior Audit Finding 2024-001 Federal Program: Trans-National Crime Federal Agency: U.S. Department of State - Bureau of International Narcotics and Law Enforcement Affairs Federal Assistance Listing Number: 19.705 Federal Award Year: December 31, 2025 Criteria: 2 CFR Section 200.303(a) of the Uniform Guidance requires all non-Federal entities to establish, document, and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. In addition, 2 CFR Sections 200.405 and 200.403(g) require federal awards be expended only for allowable activities and be adequately documented, respectively. Condition/Context: The Corporation was unable to provide a signed contract or reconciliation to evidence allowability of the expenditures or documentation of review and approval for the following: • For 3 out of 40 selections, no evidence of approval of signed contracts could be provided (control and compliance). • For 1 out of 40 selections, no evidence of approval of time sheet could be provided (control and compliance). • For 11 out of 40 selections, no evidence of approval of payroll payments could be provided (control). This was not a statistically valid sample. Questioned Costs: Questioned costs were approximately $12,016. Cause: The Corporation did not retain/could not retrieve the signed contracts due to poor document retention. Effect: The Corporation has not complied with the specific requirements for activities allowed or unallowed and allowable costs/cost principles as described in the Uniform Guidance. Unallowable costs may have been charged to the federal program. Recommendation: We recommend that the Corporation review its process and implement procedures that would allow management to properly maintain all required documentation related to its federal expenditures.

Department of Homeland Security, State of Wyoming Federal Emergency Management Agency, Federal Financial Assistance Listing 97.036, 4845-DR-WY-P1SWY500, 2025 Disaster Grants – Public Assistance Activities Allowed or Unallowed, Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: Materials were charged out of inventory in the general ledger at a later date than when the items were actually pulled from inventory for the work order. Management did not detect or correct the differences in average cost. Cause: There was a lag in timing causing the average cost used for materials to be different. Effect: Lack of identification of differences in average costs used could result in material errors. Questioned Costs: None reported. Context/Sampling: Nonstatistical sampling was used. Sample size of 60 material transactions which accounted for $48,975 out of $292,905 of federal program expenditures. Repeat Finding from Prior Year: No Recommendation: We recommend the Corporation review the process for materials expenses to ensure that charge outs are timely recorded. Views of Responsible Officials: Management agrees with the finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Continuum of Care Assistance Listing Number: 14.267 Pass-Through Agency: City of Spokane Pass-Through Number(s): OPR 2024-1137 Award Period: August 1, 2024 – July 31, 2026 Type of Finding:  Material Weakness in Internal Control Over Compliance – Eligibility and Special Tests and Provisions  Material Noncompliance (Modified Opinion) Criteria or specific requirement: Uniform Guidance (2 CFR §200.303) requires nonfederal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. HUD Continuum of Care program requirements further require that participant eligibility, intake, exit, and other program-specific documentation be complete and maintained prior to the provision of rental assistance or supportive services. Condition: Catholic Charities of Spokane identified that HUD Continuum of Care funds were expended for rental assistance and supportive services in instances where required participant intake, exit, and other program-specific documentation was incomplete or missing at the time assistance was provided. These deficiencies resulted in charges to the grant that did not fully comply with program documentation and eligibility requirements. Management’s internal audit identified 26 participant files with documentation deficiencies attributable to a single employee. The associated questioned costs totaled $186,238 for the Continuum of Care program. Although services were provided to participants and costs were incurred for allowable purposes, the lack of required documentation constitutes noncompliance with program requirements. Questioned costs: $186,238 Context: Catholic Charities of Spokane administers HUD Continuum of Care funding to provide rental assistance and supportive services to eligible program participants. Program requirements mandate that participant eligibility, intake, exit, and other program-specific documentation be completed and retained prior to the provision of assistance and prior to charging costs to the federal award. During the audit period, management conducted an internal review of participant files and identified documentation deficiencies related to these requirements. The issue was self-identified by management and determined to be isolated to a single employee. Management quantified the impact of the deficiencies and communicated the matter to both the grantor and the auditors. Cause: The documentation deficiencies resulted from inadequate execution of established procedures by a single employee, combined with insufficient supervisory review and monitoring to ensure required documentation was completed prior to the release of assistance. Effect: The failure to maintain required documentation resulted in material questioned costs under the Continuum of Care program and represents a material noncompliance with federal program requirements. Additionally, the absence of effective controls to prevent or detect these deficiencies on a timely basis constitutes a material weakness in internal control over compliance, as it resulted in noncompliance that was material to the program. Repeat finding: Not a repeat finding. Recommendation: Catholic Charities of Spokane should continue to strengthen internal controls over compliance to ensure that all required eligibility, intake, exit, and program-specific documentation is completed and reviewed prior to providing assistance and charging costs to federal awards. This should include enhanced supervisory review, documentation checklists, and ongoing monitoring to ensure compliance with HUD requirements. Views of responsible officials: There is no disagreement with the audit finding.

Section III – Major Federal Awards Programs – Findings and Questioned Costs (Cont.) Finding 2025-008: Activities Allowed or Unallowed / Allowable Costs - Lack of Segregation of Duties in Expenditure Determination and Approval (Material Weakness) Federal Program : Grants for Transportation of Veterans in Highly Rural Areas Assistance Listing Number : 64.035 Criteria: As per 2 CFR 200.303(a), entities must maintain effective internal controls, including segregation of duties, to prevent unauthorized or inaccurate transactions. Condition: The same individual was responsible for determining expenditure allowability and approving expenditures for reimbursement. Cause: Staffing limitations and the absence of written policies resulting in inadequate role separation. Effect: Insufficient segregation of duties increases the risk of errors or inappropriate expenditures. Recommendation: Management should reassign roles so that expenditure allowability reviews and expenditure approvals are performed by separate individuals. If staffing is limited, implement compensating management review controls. Repeat Finding: This is a repeat finding.

Federal Program AL 10.382 Meat and Poultry Intermediary Lending Program Criteria 2 CFR 200.303 Internal Controls, requires that recipients establish and maintain effective internal control over Federal awards that provide reasonable assurance that the recipient is managing Federal awards in compliance with Federal status, regulations and the terms and conditions of the federal award. Condition There is a lack of review and approval over grant reporting prior to submission. Cause The organization is new to receiving federal grant funding and during 2025 was in the process of putting appropriate internal controls in place. Effect Noncompliance will not be prevented or detected and corrected in a timely manner. Repeat Finding This is a repeat finding. Recommendation We recommend the Organization review their internal controls over grant reporting to determine if additional procedures can be implemented. Compensating controls that mitigate the related risks could be provided through appropriate oversight of the performance of these functions. Views of Responsible Officials and Planned Corrective Actions See corrective action plan for response.

FINDING 2025-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2025 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/ Cost Principles, Period of Performance Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-003. Condition and Context The County had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, material noncompliance related to expenditures made from the COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF). Prior to receipt of SLFRF award funds, all eligible entities were required to execute a Financial Assistance Agreement (Agreement), which included the Award Terms and Conditions that recipients must comply with in carrying out the objectives of their award. Per the Agreement, the County was responsible for the effective administration of the federal award, as well as the application of sound management practices and administration of the federal funds in a manner consistent with the program objectives and the terms and conditions of the award. Recipients may use SLFRF funds for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021. The SLFRF program provides substantial flexibility for each recipient to meet local needs within four separate eligible use categories. Recipients may use SLFRF funds to:  Respond to the COVID-19 public health emergency and its negative economic impacts;  Respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of eligible employers that have eligible workers who are performing essential work;  Provide government services, to the extent COVID-19 caused a reduction in revenues collected in the most recent full fiscal year of the recipient;  Make necessary investments in water, sewer, or broadband infrastructure;  Provide emergency relief from natural disasters or the negative economic impacts of natural disasters; INDIANA STATE BOARD OF ACCOUNTS 18 SHELBY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)  Fund projects eligible under certain programs administered by the U.S. Department of Transportation; and  Fund projects eligible under the programs established in Title I of the Housing and Community Development Act of 1974. Pursuant to the Agreement, the period of performance for the award began on the date the funds were disbursed to the County and ends on December 31, 2026. Recipients may only use funds to cover costs incurred during the period that began on March 3, 2021, and ends on December 31, 2024. Recipients must liquidate all obligations incurred by December 31, 2024, under the award no later than December 31, 2026, which is the end of the period of performance. Recipients may use payments from the SLFRF funds to replace lost public sector revenue to provide government services. Recipients may use this funding to provide government services to the extent of the reduction in revenue experienced due to the pandemic. The dollar amount of the revenue loss determines the limit for the amount of the SLFRF funds that can be used to "provide government services" (which is one of four eligible uses of the SLFRF funds). A single employee received all invoices for financial obligations made from the SLFRF award. The employee prepared and reviewed the claims to ensure all expenditures were for allowable activities, were within the period of performance, and were for allowable costs prior to issuing payment from the SLFRF fund. The SLFRF claims were then included with the regular claims docket for the Board of County Commissioner's review and subsequent approval. However, the docket did not include sufficient detail, nor was other documentation provided to the Board of County Commissioners, in order for them to complete an appropriate level of review to determine if the expenses related to the SLFRF award were for allowable activities, within the period of performance, or for allowable costs. The lack of internal controls was 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). . . ." Cause A proper system of internal controls over the SLFRF expenditures was not designed by management of the County, which would include segregation of key functions, to ensure the SLFRF funds were being used appropriately. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management of what should be done to affect internal controls, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 19 SHELBY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed 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. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County 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 prior to payment of funds from the SLFRF award. 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: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2025 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-004. Condition and Context An effective internal control system was not in place at the County to ensure compliance with the requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 20 SHELBY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Suspension and Debarment Prior to entering into subawards and covered transactions with the COVID-19 - State and Local Fiscal Recovery Funds (SLFRF), recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The County did not have internal controls in place to ensure compliance with the suspension and debarment compliance requirement. Upon inquiry of the County's policies and procedures related to suspension and debarment requirements, the County stated that they did not have policies or procedures in place for verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities. Five covered transactions for goods or services that equaled or exceeded $25,000 that were paid from the SLFRF funds during the audit period were identified. Each transaction was examined to determine whether the County verified the suspension and debarment status of the vendors prior to payment. The five covered transactions totaling $230,598 did not include the appropriate provisions in the contracts nor did the County require a certification or check the EPLS to ensure the entity was not suspended or debarred prior to making payment. 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 200.214 states: "Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 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. 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 21 SHELBY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the County. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors and subrecipients to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Any program funds the County used to pay vendors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a proper system of internal controls and develop policies and procedures to ensure contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. 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 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2025 Compliance Requirement: Reporting Audit Finding: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-005. INDIANA STATE BOARD OF ACCOUNTS 22 SHELBY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The County had not properly implemented a system of internal controls, which would include appropriate segregation of duties that would likely be effective in preventing, or detecting and correcting, noncompliance. Recipients are required to quarterly or annually submit Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates, are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The County submitted one annual P&E report during the audit period. The County's process for the completion and submission of the P&E report was that the County Auditor and a financial consultant prepared the P&E report based on reports from the County's financial system, and the County Auditor submitted the report. There was no evidence of an oversight or review process. The County submitted the P&E report by April 30, 2025, as required; however, the report was not supported by the County's records. The annual report submitted in April 2025 overstated Current Period Obligations and Current Period Expenditures by $5,255,341 and $5,481,684, respectively. Additionally, Total Cumulative Expenses were understated by $66,955.81. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary or her delegate, as applicable, periodic reports providing detailed accounting of the uses of funds, . . ." Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds, page 13, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 SHELBY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls, which would include segregation of key functions, was not designed by management of the County. The lack of review or approval process by someone other than the preparers allowed the error in the P&E report to go undetected. The error was primarily the result of expenditures and obligations from the prior period being included in the current period amounts reported. 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, noncompliance. As such the P&E report contained multiple material errors. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. In addition, not meeting the SLFRF reporting requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of federal awards. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County design and implement a proper system of internal controls, including policies and procedures to ensure that the County abstracts the correct reporting period, to provide the Treasury with complete and accurate information for the P&E reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): Account ID 20-1982-0-1-806 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 13 GIBSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that vendors or subrecipients are not suspended, debarred, or otherwise excluded from receiving federal funds. "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 can be done by checking SAM.gov Exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Upon inquiry of the County, in order to review the procedures in place verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the County disclosed that the Grant Administrator verified vendors were not suspended or debarred by reviewing the SAMs exclusions and emailing the verification to the County Auditor for review and approval. Six covered transactions exceeding $25,000 for goods or services that were paid using COVID-19 - Coronavirus State and Local Fiscal Recovery Funds award funds were identified during the audit period, and two of them were selected for testing. The County searched the federal database; however, the searches generated a "No matches found" result because the vendors did not maintain an active registration profile in the system. The County did not perform secondary follow-up procedures or obtain alternative compliance documentation to verify the suspension and debarment status prior to executing the contracts. The amount paid to both vendors totaled $745,531. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." INDIANA STATE BOARD OF ACCOUNTS 14 GIBSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The Grant Administrator performed the initial search on the SAM.gov website; however, management was not aware that a "No matches found" search screen caused by a vendor's lack of an active registration profile does not constitute a valid suspension and debarment verification. The County lacked adequate monitoring internal controls to ensure that secondary verification methods, such as collecting a direct vendor certification or adding a compliance clause to the contract, were executed when a vendor could not be located in the federal database. Effect The lack of an effective internal control system enabled material noncompliance to occur and remain undetected. Noncompliance with the Procurement and Suspension and Debarment compliance requirement could lead to contracting with vendors who are suspended or debarred from receiving federal grant funding. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a proper system of internal controls and develop policies and procedures to ensure that appropriate suspension and debarment verification procedures are performed for vendors and subrecipients prior to entering into any contracts or subawards. 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 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): Account ID 20-1982-0-1-806 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2024-001. Condition and Context The County was required to submit an annual Project and Expenditure (P&E) report to the U.S. Department of the Treasury (Treasury). The P&E report data to be submitted included, but was not limited to, current period and total cumulative obligations and current period and total cumulative expenditures. INDIANA STATE BOARD OF ACCOUNTS 15 GIBSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The County had not designed, nor implemented, a system of internal controls to ensure that the annual P&E report was complete and accurately submitted. The Grant Administrator prepared the annual P&E report based on reports provided by the County and then emailed the report to the County Auditor for review prior to submission. However, the internal control was not effective as the review of the annual P&E report was not compared to the County's ledger or accounting records. During a comprehensive review of the 2025 annual P&E report submitted to the federal portal, the annual P&E reported figures were not supported by the County's ledger and accounting records. The specific variances identified were as follows:  The 2025 annual P&E report current expenditures were understated by $167,928.  The 2025 annual P&E report cumulative expenditures were overstated by $60,845.  The 2025 annual P&E report for current period obligations lacked supporting documentation to verify the reported numbers. These variances were discussed with County management, who stated they were already aware that the numbers submitted through the federal portal did not match their local financial records. 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). . . ." Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds, page 13, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds, . . ." INDIANA STATE BOARD OF ACCOUNTS 16 GIBSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The Grant Administrator reported that, due to persistent error messages in the submission system, the financial figures were manually modified to enable successful submission without performing a formal reconciliation to the general ledger. In addition, County management failed to establish secondary review process, provide proper administrative oversight, or perform any verification of the portal entries against the County's accounting records prior to submission. Effect Without a proper system of internal controls in place that operated effectively, the County did not file an accurate annual P&E report as required under the federal award. As a result, material noncompliance occurred and remained undetected. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the management of the County establish a system of internal controls and develop policies and procedures over the preparation and review of federal reports to ensure appropriate reviews, approval, and oversight take place. Additionally, management should develop policies and procedures to ensure that the County provides the Treasury with complete and accurate information for all reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 17