Findings Citing § 200.303

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.

Subrecipient Monitoring and Special Tests: Housing Quality Standards Federal Department – U.S. Department of Housing and Urban Development Federal Award Identification Number and Year: M17-DC170213 and 2017 M18-DC170213 and 2018 M21-DC170213 and 2021 M22-DC170213 and 2022 Home Investment Partnerships Program (HOME), Federal Assistance Listing #14.239 County Department – Department of Planning and Development (DPD) Finding 2025 – 001 CRITERIA Subrecipient Monitoring 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D—Post Federal Award Requirements Standards for Financial and Program Management, Section 200.303 Internal controls states, “the recipient and subrecipient must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Section 200.332. Requirements for pass-through entities, requires that “A pass-through entity must: (c) Evaluate each subrecipient's fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring described in paragraph (f) of this section. When evaluating a subrecipient's risk, a pass-through entity should consider the following: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits. This includes considering whether or not the subrecipient receives a Single Audit in accordance with subpart F and the extent to which the same or similar subawards have been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of any Federal agency monitoring (for example, if the subrecipient also receives Federal awards directly from the Federal agency)... (e) Monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must:(1) Review financial and performance reports. (2) Ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward. Significant developments include Single Audit findings related to the subaward, other audit findings, site visits, and written notifications from a subrecipient of adverse conditions which will impact their ability to meet the milestones or the objectives of a subaward. When significant developments negatively impact the subaward, a subrecipient must provide the pass-through entity with information on their plan for corrective action and any assistance needed to resolve the situation. (3) Issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521.(4) Resolve audit findings specifically related to the subaward…. (g)Verify that a subrecipient is audited as required by subpart F of this part. (h) Consider whether the results of a subrecipient's audit, site visits, or other monitoring necessitate adjustments to the pass-through entity's records. (i) Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 and in program regulations. DPD’s HOME Program Policies and Procedures Manual (updated January 2025), Monitoring Section (pages 114 to 129), under the Annual Monitoring Plan/Schedule Update, states the plan should identify the participating jurisdiction (PJ) monitoring goals and strategies, highlighting areas to which staff should pay special attention during the monitoring year. A specific schedule detailing annual, bi-annual, and tri-annual monitoring visits as required by HUD must be developed and maintained. To assure that adequate records are kept regarding each property and its compliance status, the monitor should establish a monitoring file for each property. The basic items in the file should include written agreement, written tenant selection criteria, property and unit inspections and results, etc. Also, HOME Program Compliance should conduct a risk assessment of its portfolio of the PJ’s HOME projects so that the highest risk projects can be identified and monitored first. In addition, HOME Program Compliance must conduct a desk review of all properties in the monitoring workload each year, as well as on-site reviews periodically, ranging from annually to every 3 years based on the number of units in property (i.e. 26 or more units require an annual review). Special Tests: Housing Quality Standards Per 24 CFR Section 92.209(i), Tenant-based rental assistance: Eligible costs and requirements, Housing Standards, states “The participating jurisdiction must require the housing occupied by a family receiving tenant-based rental assistance under this section to meet the participating jurisdiction's property standards under § 92.251. Initially and annually thereafter, the participating jurisdiction must determine the housing complies with its property standards and is decent, safe, sanitary, and in good repair in accordance with § 92.251(f). During the period of affordability (i.e., the period for which the nonfederal entity must maintain subsidized housing) for HOME assisted rental housing, the PJ must perform on-site inspections to determine compliance with property standards and verify the information submitted by the owners no less than (a) every three years for projects containing one to four units, (b) every two years for projects containing five to 25 units, and (c) every year for projects containing 26 or more units. CONDITION During the current audit period, the Cook County Department of Planning and Development (DPD) did not provide sufficient evidence to document annual monitoring performed, as well as performed the required inspections to ensure property standards were met, as required by Federal regulations and its internal policies. CAUSE Based on discussions with management, the cause of the findings occurred as a result of post pandemic allocations to the County which included several housing related fundings and initiatives, including Emergency Rental Assistance I & II (ERA I& II), Homeless Sheltering, Homeless and Transitional Sheltering Physical Site Acquisition and Development, HOME ARPA (HUD Allocation), and HOME, CDBG CV development delays that challenged the Housing teams provision of services and compliance requirement. While HUD had extended post pandemic compliance moratoriums into fiscal year 2024, Housing team hiring, training and implementation of compliance activities were unable to activate fully in the subject fiscal year to meet compliance. Additionally, for subrecipient monitoring of the HOME program, costs paid to developers were misclassified as subrecipient expenditures. The HOME program does not have contracts with subrecipients. EFFECT Failure to adequately monitor the activities and performance of subrecipients (and developers) could result in Federal awards being used for unauthorized purposes and DPD’s inability to adequately perform required risk assessments. Failure to perform the required inspections to ensure property standards were met is a violation of Federal regulations. QUESTIONED COSTS None. CONTEXT Subrecipient Monitoring During the current audit period, we noted a total of thirty-seven (37) projects were included on the Program Year 2024 (Fiscal Year 2025) HOME monitoring rental portfolio schedule provided, which required annual monitoring per DPD’s internal policies. Of the 37 projects, we noted three projects had some monitoring conducted during the period, which included some review of tenant files (for income verification/eligibility) and limited physical inspections of HOME units. No additional documentation was provided to verify compliance with federal regulations and the HOME Program Policies and Procedures Manual which required annual monitoring of each project (property). In addition, we noted approximately $7.3 million was reported on the SEFA as pass-through to two subrecipients under the program for the fiscal year ended November 30, 2025. Based on further discussions, DPD noted that these subrecipients are the two title companies used to pay the developers under the HOME program in accordance with its escrow agreement(s). We also reviewed a sample of these payments noting the supporting documentation referenced the developers as subrecipients. No documentation was provided to support compliance with subrecipient monitoring as required by 2 CFR Part 200.332. Special Tests: Housing Quality Standards We were provided with the same 37 projects reviewed under subrecipient monitoring to verify that DPD performed the required inspections to ensure that property standards were met. Based on our review, we noted the list included projects with HOME assisted units ranging from one (1) to 99 units, which would have required inspections every one to three years. However, the listing provided did not identify those units on which housing quality inspections were due. In addition, of the 37 projects, we were provided with documentary evidence to support only one (1) project whereby the required unit inspection reports were completed. IDENTIFICATION OF REPEATED FINDINGS None. RECOMMENDATION We recommend DPD ensure procedures should be in place to ensure adequate documentation is maintained to support the evaluation of each subrecipient’s risk of noncompliance, as required by Federal regulations and internal policies. Also, documentation should be maintained to support that required inspections are performed to ensure that property standards are met, including identification of those units on which housing quality inspections are due, in accordance with 24 CFR 92.251(f). VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The County agrees with the finding and recommendation. The County’s corrective action plan is on pages 42-43.

2025 – 006 Suspension and Debarment Federal Agency: U.S. Department of Transportation – Federal Railroad Administration Federal Program Name: Consolidated Rail Infrastructure and Safety Improvements Program Assistance Listing Number: 20.325 Federal Award Identification Number and Year: 69A36525421690CRSIL FY2023-2024 Pass-Through Agency: City of Springfield, Illinois Pass-Through Numbers: 69A36525421690CRSIL Award Period: May 1, 2025 through January 31, 2029 Type of Finding: • Significant Deficiency in Internal Control over Compliance AND Other Matter Criteria or Specific Requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to verify vendors are not suspended or debarred by checking the SAM.gov exclusions list, obtaining a certification from the vendor, or including a clause or condition in the covered transaction with the vendor. Documentation evidencing such verification should be retained. Condition: The County did not retain documentation verifying vendors were not suspended or debarred prior to entering into covered transactions. Questioned Costs: None Context: The County lacked documentation of suspension and debarment verifications for 5 of 13 vendors tested. Cause: The County does not have a formal process in place to ensure vendors are not suspended or debarred prior to entering into covered transactions. Effect: Without documented verification of suspension and debarment status, there is an increased risk of contracting with excluded parties, which could result in noncompliance with federal requirements and potential repayment obligations. Repeat Finding: The finding is not a repeat of a finding in the prior year. Recommendation: We recommend the County design and implement internal controls to ensure proper verification and documentation of suspension and debarment status for vendors prior to entering into contracts or purchases that exceed the covered transaction threshold. Views of Responsible Officials: There is no disagreement with the audit finding.

2025 – 003 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2402LLIEA 10/1/2023 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 24-221038; 24-224038 Award Period: October 1, 2023 through August 31, 2025; June 1, 2024 through September 30, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure that costs charged to federal awards are reviewed and approved for compliance with the allowable period of performance and that documentation evidencing such review is retained. Condition: Although payroll transactions charged to the federal award were reviewed to verify they were incurred within the allowable period of performance, documentation evidencing such review was not retained. Questioned Costs: None Context: 9 of 9 payroll transactions tested lacked documentation of review and approval. Cause: The County does not have a formal process in place to ensure documentation of the review and approval of payroll transactions charged to the federal award is consistently retained. Effect: Without documentation of review and approval, there is an increased risk of unauthorized or inaccurate payroll charges being processed, which could result in noncompliance with federal requirements and potential repayment obligations. Repeat Finding: The finding is a partial repeat of a finding in the prior year. The prior year finding number was 2024-003. Recommendation: We recommend the County review and strengthen its internal controls to ensure that costs charged to federal awards are reviewed and approved for compliance with the allowable period of performance and that documentation evidencing such review is retained. Views of Responsible Officials: There is no disagreement with the audit finding.

2025 – 005 Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2402LLIEA 10/1/2023 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 24-221038; 24-224038 Award Period: October 1, 2023 through August 31, 2025; June 1, 2024 through September 30, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure grant closeout report packages are reviewed and approved by all required department personnel prior to submission. Condition: There were instances in which grant closeout report packages were not reviewed and approved by all required department personnel prior to submission to the granting agency. Questioned Costs: None Context: 2 of 2 closeout report packages tested lacked documentation of review and approval by all required department personnel prior to submission. Cause: The County's current practice is for the required department personnel to review grant closeout report packages only after the State has approved them, rather than prior to submission. Effect: Without a proper pre-submission review of grant closeout report packages, there is an increased risk of inaccurate or incomplete reporting, which could result in noncompliance with federal requirements. Repeat Finding: The finding is not a repeat of a finding in the prior year. Recommendation: We recommend the County design and implement internal controls to ensure that the grant closeout report packages are reviewed and approved by all required department personnel prior to submission and that documentation evidencing such review is retained. Views of Responsible Officials: There is no disagreement with the audit finding.

2025 – 004 Cash Management Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Low-Income Home Energy Assistance Program (LIHEAP) Assistance Listing Number: 93.568 Federal Award Identification Number and Year: G-2402LLIEA 10/1/2023; 2502ILLIEI 10/1/2024 Pass-Through Agency: Illinois Department of Commerce and Economic Opportunity Pass-Through Numbers: 24-224038; 25-224038; 24-221038 Award Period: October 1, 2023 through August 31, 2025; October 1, 2024 through August 31, 2026; June 1, 2024 through September 30, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance AND Other Matter Criteria or Specific Requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-federal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure reimbursement requests reconcile to documentation of the underlying expenditures incurred and are also reviewed and approved prior to submission. Condition: There were instances in which reimbursement requests did not reconcile to documentation of the underlying expenditures incurred. In addition, reimbursement requests were not reviewed and approved prior to submission to the granting agency. Questioned Costs: None Context: 1 of 6 reimbursement requests tested did not have supporting documentation reconciling to the amount received. 6 of 6 reimbursement requests tested lacked documentation of review and approval prior to submission. Cause: Supporting documentation for reimbursement requests was not retained, in part due to employee turnover. Additionally, the County does not have a formal process in place to ensure documentation of the review and approval of reimbursement requests is consistently retained. Effect: Without proper supporting documentation and documented review, there is an increased risk of over- or under-reimbursement of federal awards, which could result in noncompliance with federal requirements and potential repayment obligations. Repeat Finding: The finding is a partial repeat of a finding in the prior year. The prior year finding number was 2024-004. Recommendation: We recommend that the County design and implement internal controls to ensure accounting records reconcile to reimbursement requests and that supporting documentation is retained. Reimbursement requests should be reviewed and approved by an individual other than the preparer prior to submission, and documentation evidencing such review should be retained. Views of Responsible Officials: There is no disagreement with the audit finding.

2025-101 Lack of Effective Internal Controls over the Application of the Sliding Fee Discount Schedule (repeated, prior year 2024-101) (initially reported 2014) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program Compliance Requirement: Special Tests and Provisions – Sliding Fee Discounts Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2025 and 2024), H8K49674 (2024), H2E50094 (2024) and H8N53812 (2024). Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: The Organization lacks consistently applied processes and procedures related to the application of the sliding fee scale. The Organization’s current review process related to the sliding fee scale to identify errors quickly to allow for corrections to be made in a timely manner does not always detect all errors. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. We also noted: • Sliding fee scales were not used for the agreement that the Organization has in place with the local school district in which they provide services to students. The agreement specifically does not allow the Organization to obtain information related to household size and income as needed to appropriately place the family on the sliding fee scale. The agreement also indicates no amounts can be collected from the students, except when that student has insurance which allows the Organization to bill the insurance company for a portion of the fees. • Sliding fee scales are not used in the disaster recovery bus program that does not charge the patients for services. • Eleven of the sixty encounters sampled where the sliding scale was used had the wrong sliding fee scale applied based on information obtained about the patient’s family size and income. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Health centers must prepare and apply a sliding fee discount schedule, so that the amounts owed for health center services by eligible patients are adjusted based on the patient's ability to pay (42 U.S.C 254b(k)(3)(G)(i)). The patient's ability to pay is based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services (42 U.S.C 9902(2)). Cause: Failure to apply the sliding fee correctly, as noted in eleven of the 60 encounters above, was due to improper staff training or failure to properly monitor the process. Failure to apply the sliding fee scales due to the requirements of the agreement with the local school district and procedures applied to the disaster recovery bus program do not follow the written procedures of the Organization for use of the sliding fee scale. Effect: The Organization could be incorrectly billing for services and maintaining customer account balances at incorrect amounts. Recommendation: Staff should be consistently trained in how patients should complete the intake forms, including the sliding fee scale application, and require patients complete the form appropriately, including refusal to provide information, if applicable. Staff should also be consistently trained in what documentation is considered sufficient to support income identified as well as verify the application is consistent with the documentation and, when needed, clearly document the reasons for inconsistency. Staff should make every effort to obtain documentation of patient income in accordance with internal policies and procedures. Patients should be billed the usual and customary billing rates for all services until all documentation is received, or policies are adjusted to allow for self-determination by patients in certain situations. A process should be put in place to track patients to attempt further collection of the necessary data that would allow for adjustment of the bill after the fact when necessary. These exceptions should be tracked each month with the monthly review by the regional operations managers. The reviews by the regional operations managers should be documented and retained including the results and corrective action of the follow-up on deficiencies noted. The Organization should discuss with HRSA what could be done to either adjust policies and procedures used during the school visits to be compliant or obtain a waiver from HRSA to indicate their knowledge and approval of the school visits and disaster bus program visits not being compliant with the application of the sliding fee scale requirements. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer and a new Revenue Cycle Manager. Sliding fee discount program training has been incorporated into onboarding for all new front desk employees. The billing department is adding a Patient Accounts Specialist who will monitor and review individual sliding fee determinations for accuracy and completeness and will conduct ongoing training with front desk staff as needed. Additionally, management will perform quarterly random sample testing of sliding fee determinations to verify that household size, income documentation, and discount tier were applied in accordance with the Organization's sliding fee discount policy. With respect to the school district agreement and the bus program, management will contact HRSA to request written guidance or a waiver confirming that the sliding fee discount schedule is not required to be applied to these programs. Management will also amend the Organization's sliding fee discount policies and procedures accordingly and will remove the word "disaster" from references to the bus program, as the program is not limited to disaster-related services.

Federal Agency: U.S Department of Health and Human Services Federal Program Name: Health Center Program Cluster Assistance Listing Number: 93.224 and 93.527 Award Period: 03/01/24-02/28/27 Federal Program Name: Congressionally Directed Spending for Construction Projects Assistance Listing Number: 93.493 Award Period: 09/03/23-09/29/26 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR 200.303 requires that recipients and subrecipients receiving federal awards establish, document and maintain effective internal control over the federal awards that provides reasonable assurance that the recipient or subrecipient is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition: There is no formal process in place to review required reports prior to submission. Context: During our audit inquiries related to internal control, it was noted that the Organization is not practicing a key control of their internal control structure by reviewing reports prior to submission to the relevant granting authority. Cause: Following recent staff turnover, an internal policy was not maintained and/or adhered to. Effect: Potentially submitted reports may contain errors or provide misinformation. Recommendation: We recommend the organization review all required reports for accuracy prior to submission. Views of responsible officials: There is no disagreement with the audit finding.

Information of the Federal Program: Assistance Listing Number 10.565—Commodity Supplemental Food Program, U.S. Department of Agriculture Pass-Through Entity and Award Number: Minnesota Department of Health, award number 204642. Compliance Requirement: Eligibility Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR 200.303 of Subpart D, "Post Federal Award Requirements Standards for Financial and Program Management," of the Uniform Guidance requires a recipient to establish, document and maintain effective internal control over the federal award that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award, including eligibility. Condition: We requested eligibility forms for forty participants to review for the signature of site partner personnel indicating review of eligibility information on the form. One of the forty forms were unable to be located upon request. Eligibility information is input in ClientTrack software and the form should also be uploaded. Cause: Signed enrollment forms were not properly scanned into Sharepoint and had likely been disposed of. The signatures on these forms indicated the review by an agency partner that information included on the form is correct. Effect or Potential Effect: An ineligible individual could receive a CSFP box. Questioned Costs: None Context: Signed enrollment forms were not available for one of forty participants selected. Repeat Finding: yes, 2024-001 Recommendation: We recommend that Second Harvest Heartland digitalize their CSFP enrollment forms for convenient access and provide review of the electronically filed form prior to disposal of the paper form. Views of Responsible Officials: Agree.

Information on the Federal Program: Assistance Listing Number 10.565—Commodity Supplemental Food Program, U.S. Department of Agriculture Pass-Through Entities and Award Numbers: Minnesota Department of Health, award number 204642. Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs and Cost Principles Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR 200.303 of Subpart D, "Post Federal Award Requirements Standards for Financial and Program Management," of the Uniform Guidance requires a recipient to establish, document and maintain effective internal control over the federal award that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award, including Activities Allowed or Unallowed and Allowable Costs and Cost Principles. Condition: Processes and procedures in place to review and submit administrative expenditures did not include a thorough enough review process to agree information to source data. Cause: Expenditures were reviewed before submission, however the review of this information was inadequate as it did not corroborate totals with the source data. Effect or Potential Effect: The Organization could have received reimbursement in excess of incurred expenses. Questioned Costs: None Context: One of the months selected for detail testing was found to have an erroneous submission using the wrong month’s expenditures. However, because the Organization incurred significantly more expenses than for which it was reimbursed during the year, the erroneously reported expenses had not been reimbursed by the funder. Repeat Finding: No Recommendation: We recommend that Second Harvest Heartland review the source data for all future expense reports. Views of Responsible Officials: Agree.

Department of Health and Human Services Temporary Assistance for Needy Families, Passed through Ramsey County, Federal Financial Assistance Listing 93.558, FAST X award 2201MNTANF for the year ending 12/31/2024 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Goodwill-Easter Seals Minnesota’s internal control structure should be designed to properly follow the allocation policy for employees’ pay to each grant in accordance with the policy established by Goodwill-Easter Seals Minnesota. Condition: Goodwill-Easter Seals Minnesota has an internal control system designed to detect or prevent improper allocation of employees’ pay to grants in a timely manner in accordance with their established policy, however, during the year for one pay period tested, an error was identified in the process but was not fully corrected. Cause: Goodwill-Easter Seals Minnesota has a process for allocating employee wages based on hours worked. The controls in place did not operate as designed and failed to fully correct an error in the allocation of employee pay to the grant. Effect: One employee had some of their pay allocated improperly and not in accordance with the policy established. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of eight pay periods out of 26 were selected for testing which accounted for $383,866 of $2,284,613 of federal program expenditures. Repeat Finding from Prior Year: Yes Recommendation: We recommend that management develop a more extensive review over payroll allocation to ensure pay is properly allocated to each grant in accordance with the policy established by Goodwill-Easter Seals Minnesota. Views of Responsible Officials: Management agrees with this finding.

Department of Health and Human Services Temporary Assistance for Needy Families, Passed through Ramsey County, Federal Financial Assistance Listing 93.558, MFIP award 2201MNTANF for the year ending 12/31/2025 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Goodwill-Easter Seals Minnesota’s internal control structure should be designed to properly follow the allocation policy for employees’ pay to each grant in accordance with the policy established by Goodwill-Easter Seals Minnesota. Condition: Goodwill-Easter Seals Minnesota has an internal control system designed to detect or prevent improper allocation of employees’ pay to grants in a timely manner in accordance with their established policy, however, during the year for five pay periods tested, Goodwill-Easter Seals Minnesota failed to identify that one employee’s timecard had incorrectly allocated time to a grant that ended. However, the time was corrected before submission to the grant, but it was not changed on the timecard. Cause: Goodwill-Easter Seals Minnesota has a process for approving timecards which include program codes for allocation to awards. The controls in place did not operate as designed and failed to fully correct an error in five timecards of an employee’s pay to the grant. Effect: One employee had the incorrect program code listed on the approved timecard for five pay periods tested. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of eight pay periods out of 26 were selected for testing which accounted for $383,866 of $2,284,613 of federal program expenditures. Repeat Finding from Prior Year: Yes Recommendation: We recommend that management develop a more extensive review over timecards to ensure pay is properly allocated to each grant in accordance with the policy established by Goodwill-Easter Seals Minnesota. Views of Responsible Officials: Management agrees with this finding.

Item 2025-001 Eligibility/Program Eligibility Federal Pell Grant Program ALN# 84.063 U.S. Department of Education Grant period – 2025-2026 Award Year Criteria – In accordance with 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow 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 34 CFR Part 690 Pell grants are required to be calculated using a distinct set of criteria based on enrollment. Condition – 2 of 40 students tested received overpayments of Pell grants. Errors in clock-to-credit-hour conversions resulted in inaccurate enrollment intensities used in the Pell calculations for these students. Cause – The data file for the clock-to-credit hour conversion was not uploaded into the College's system prior to calculation of the students' enrollment intensity, and the results were not reviewed prior to packaging aid. Effect – Lack of controls resulted in an overpayment of Pell award to both students. The engagement team notes that for these exceptions, the College appropriately updated the file and corrected student aid. The engagement team further notes this only affected students in a current enrollment period in which all funds for the term had not been drawn from the Department of Education. Questioned Costs – The total of all overpayments was $7,821 amount was deemed not material to compliance. Recommendation – We recommend that adequate controls be put in place to review that files are updated by semester and that clock-to-credit hour conversions are reviewed prior to awarding of federal aid. Management’s Response – The College will strengthen the controls in place to ensure that all procedures have been followed prior to calculation and disbursement of financial aid.

Federal Agency: Department of Health and Human Services Federal Program Name: Special Programs for the Aging-Title III, Part C-Nutrition Services Assistance Listing Number: 93.045 Federal Award Identification Number and Year: 316-24-00C1-042, 316-24-00C2-043, 316-25-00C1-042, 316-25-00C2-043 and 316-25-00C3-042 Pass-Through Agency: MN River Agency on Aging Pass-Through Number(s): 316-24-00C1-042, 316-24-00C2-043, 316-25-00C1-042, 316-25-00C2-043 and 316-25-00C3-042 Award Period: January 1, 2024 – December 31, 2024 & January 1, 2025 – December 31, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: 2 CFR 200.306 requires that any amounts used for required cost sharing must be verifiable in the subrecipient’s records and allowable under subpart E. 2 CFR 200.303 requires that non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our audit testing, we observed discrepancies between the hours reported by volunteers and the hours submitted for the grant at two sites. There were also 3 volunteer logs that could not be located related to two sites. Additionally, there was not documentation of the signoff on the volunteer logs by the site coordinator for two sites. Context: We reviewed 40 volunteer logs for reported hours. Differences in the hours reported were between 0.25 and 0.75 hours. Cause: In 2024, funding cuts led to temporary disruptions, resulting in staff reductions and affecting documentation practices in a particular timeframe. Regarding the hours reported that did not align with the volunteer log, the site coordinator believed the volunteer had underreported their hours and adjusted them accordingly, but there was not documentation of the change. Additionally, there was one instance where a data entry error contributed to the discrepancies. Effect: Hours reported for volunteer time could be incorrect. This grant requires a cost share of 15% be provided and the required cost share of 15% was exceeded so there was not an effect of meeting the required cost share. Repeat Finding: No Recommendation: We recommend additional training to ensure documentation is kept for the volunteer logs and the review. We also recommend documentation for any discrepancies between hours reported vs. the volunteer log. Views of responsible officials: There is no disagreement with the audit finding.

Assistance Listing Number, Federal Agency, and Program Name ALN 20.106, U.S. Department of Transportation Federal Aviation Administration (FAA), Airport Improvement Program (AIP) Federal Award Identification Number and Year 3 48 0064 161 2025 Pass through Entity N/A Finding Type Significant deficiency Repeat Finding No Criteria The Code of Federal Regulations, specifically 2 CFR 200.303, requires grant recipients 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. Condition The controls in place to review the final grant packet, including the grant drawdown template and the drawdown invoice detail, prior to final processing of the drawdown were not operating as designed. Questioned Costs $21,452 If Questioned Costs Are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported N/A Identification of How Questioned Costs Were Computed The questioned costs represent the total of all nonconforming costs reduced by the Airport's 25 percent match that were charged to the grant. Context Although the two invoice packets properly identified the $28,603 of non conforming costs out of $25,412,561 incurred, the grant drawdown template that was prepared did not exclude these ineligible costs and the review of the grant drawdown template did not identify the error prior to final processing of the drawdown. Cause and Effect The ineffective control to ensure accuracy of the grant drawdown template prior to final processing of the drawdown resulted in unallowable costs. Recommendation We recommend the Airport ensure internal controls are in place to ensure accurate information is included in the final processing of the drawdown. Views of Responsible Officials and Planned Corrective Actions Treasury will work with PMM and DCC departments to out line a process to ensure accurate reporting of eligible expenses when invoices are re viewed for compliance with grant program requirements. The process will be documented and adhered to once agreed by all departments. A review process for the final drawdown submission will also be adopted to ensure costs that are identified as ineligible are appropriately excluded from the final submission.

Assistance Listing Number, Federal Agency, and Program Name - 10.727, U.S. Department of Agriculture, Inflation Reduction Act Urban & Community Forestry Program Federal Award Identification Number and Year - 24 DG 11094200 194, 2024; 24 CA 11132544 013, 2024 Pass through Entity - U.S. Department of Agriculture (Direct Funded); GreenLatinos Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303, the recipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - Management did not have controls in place to ensure documentation evidencing the organization's verification that contractors are not suspended or debarred from participating in a federally funded activity was maintained. Questioned Costs - N/A If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - While gaining an understanding of Openlands' internal controls, we noted management was unable to provide documentation to support that checks for suspension and debarment occurred before the organization entered into a covered transaction. We were able to verify in our sample testing that management did not enter into contracts with individuals or organizations suspended or debarred from participating in federal programs. Cause and Effect - A lack of controls could result in material noncompliance with federal procurement standards. Recommendation - We recommend management retain documented evidence that checks for suspension and debarment that have occurred before entering into a covered transaction with outside contractors. Views of Responsible Officials and Corrective Action Plan - Management concurs with the finding. We acknowledge that, for the awards issued under the Inflation Reduction Act Urban and Community Forestry Program (Assistance Listing Number 10.727), the required suspension and debarment verification was performed; however, the supporting documentation evidencing this verification was not retained by the responsible department. This represents a documentation lapse rather than a deficiency in internal controls, as Openlands routinely performs suspension and debarment verifications for all applicable vendors, contractors, and subrecipients receiving federal funds in accordance with 2 CFR 200.214. This requirement applies to entities and individuals awarded federally funded contracts or subawards exceeding the micropurchase threshold and excludes routine commercial vendors for indirect administrative costs or purchases under $15,000. Management believes this was an isolated documentation lapse prior to the current audit period when the contractor was selected and is currently in the process of executing an update to internal control policies to ensure these checks are maintained prior to entering into a contract by the responsible department, as well as updating a clause to all standard vendor contracts requiring a self-certification that they are not excluded, debarred, or suspended from entering into covered transactions with the federal government.

2025 001 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Beneficiary Payments U.S. Department of State: Bureau of Population and Refugees and Migration: U.S. Refugee Admissions Program: FY24 MRA Capacity Development Funds (ALN 19.510, award number SPRMCO23CA0361) FY2023 25 Year 3 Reception and Placement Program Affiliate MRA DA+Admin (ALN 19.510, award number SPRMCO24CA0356) FY2023 25 Year 3 Reception and Placement Program Affiliate ERMA DA+Admin (ALN 19.510, award number SPRMCO24CA0357) Statistically valid sample: No, and it was not intended to be. Repeat finding: Not a repeat finding. Finding Type: Significant Deficiency and noncompliance Criteria: 2 CFR section 200.303 requires that non federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non federal entity is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of federal awards. The specific requirements for activities allowed or unallowed are unique to each federal program and are found in the federal statutes, regulations, and the terms and conditions of the federal award pertaining to the program. 2 CFR Part 200 establishes cost principles for determining costs applicable to federal awards with nonprofit organizations. The Uniform Guidance (2 CFR 200.403) requires that costs charged to federal awards be necessary, reasonable, allocable, adequately documented, and in compliance with the terms and conditions of the federal award. Costs that do not provide a direct programmatic benefit, or where the benefit cannot be reasonably demonstrated or allocated, and are incurred outside the approved scope of the award are not allowable as direct charges. Condition and context: On February 13, 2025, IRC’s Ethics & Compliance Unit (ECU) received a whistleblower report alleging that an IRC Housing Coordinator located in an office in Northern California submitted unauthorized and fraudulent requests for funds, which were uploaded onto USIO bank debit cards, claiming they were expenses for newly resettled IRC clients, and instead using the funds for personal benefit. These USIO cards are intended to be used to cover expenses for newly arrived refugees during the initial 90 day period, including rent, food and other miscellaneous expenses. An internal investigation was initiated in February 2025 which found that the Housing Coordinator had loaded funds onto USIO bank debit cards between May 8, 2023 and February 11, 2025 which were for purposes other than refugees. The investigation concluded that there were unauthorized and fraudulent requests for funds in the amount of $215,639, plus the related indirect costs that were applied on these direct costs of $33,920, for a total of $249,559 related to federal funds expended in 2025 and charged to the grants identified in this finding. The total expenditures in this program included on the 2025 schedule of expenditures of federal awards amount to $42,671,438. This unauthorized and fraudulent requests for funds noted of $249,559 is not included in the total expenditures in this program on the 2025 schedule of expenditures of federal awards as the amounts were recoded to unrestricted funds. IRC communicated this matter to the federal agency in February 2025 when the investigation began and again in September 2025 when the investigation was completed. The expenditures were reallocated to IRC’s unrestricted funds so that the federal grants were not charged. Cause: The internal investigation completed by ECU concluded that the unauthorized and fraudulent requests for funds resulted from the Housing Coordinator’s ability to request the transactions and approve the transactions because he obtained his direct report’s general ledger log in credentials. Additionally, there were several control gaps in the Northern California office, including the following: • There was a lack of safekeeping of blank USIO Cards – this office was not following the established control to keep the blank cards in a locked safe. • USIO cards were not tracked or recorded properly – this office was not always following the established control to have the refugees sign a log book upon receipt of a USIO card. • A lack of oversight from the heads of programs and finance in this office regarding reconciliations between budgeted and actual amounts with irregular transactions being flagged (excessive housing expenses). Effect: The auditee charged certain costs directly to the program that did not meet the requirements noted above, and were therefore, not allowable. Questioned Costs: Questioned costs were $249,559, however, IRC reallocated these costs to IRC’s unrestricted funds, so that the grants were not charged. Recommendation: IRC should design and implement enhanced internal control procedures over the authorization and disbursement of funds to IRC refugee clients through USIO cards to ensure that funding provided is allowable. Additionally, IRC should provide training to employees about sharing their personal credentials to access IRC’s general ledger. Views of Responsible Officials: Management agrees with this finding, which was identified by IRC in February 2025 and raised to KPMG prior to the single audit. Corrective actions related to USIO portal access, office leadership and structure, training and policies, and spot checking have been implemented and will continue through June 2026.

2025 002 Reporting Federal Funding Accountability and Transparency Act U.S. Department of State: Bureau of Population and Refugees and Migration: Overseas Refugee Assistance Program for Middle East and North Africa: Provision of lifesaving protection & health response for Syrian refugees and vulnerable Lebanese (ALN 19.519, award number SPRMCO24CA0321) Overseas Refugee Assistance Program for South Asia: Comprehensive, Integrated Multi Sector Response for Rohingya Refugees and Host Communities in Cox’s Bazar (Y2) (ALN 19.523, award number SPRMCO24CA0239) U.S. Agency for International Development: USAID Foreign Assistance for Programs Oversees: Improved (Re)integration Services Activity (ALN 98.001, award number 72052224CA00004) Lifesaving Integrated Humanitarian Services in Underserved Areas of Sudan (ALN 98.001, award number 720BHA22GR00218) Statistically valid sample: No, and it was not intended to be. Repeat finding: Yes (2024 001). Finding Type: Significant deficiency and noncompliance Criteria: Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109 282), as amended by Section 6202 of Public Law 110 252, (Transparency Act) that are codified in 2 CFR Parts 25 and 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first tier subawards of $30,000 or more to System for Award Management (SAM.gov). Aspects of the Transparency Act that relate to subaward reporting (1) under grants and cooperative agreements were implemented in OMB in 2 CFR Part 170 and (2) under contracts, by the regulatory agencies responsible for the Federal Acquisition Regulation (FAR at 5 FR 39414 et seq., July 8, 2010). The requirements pertain to recipients (i.e., direct recipients) of grants or cooperative agreements who make first tier subawards and contractors (i.e., prime contractors) that award first tier subcontracts. Title 45 U.S. Code of Federal Regulations Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards for HHS Awards, section 75.2 defines Subaward as an award provided by a pass through entity to a subrecipient for the subrecipient to carry out part of a federal award received by the pass through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass through entity considers a contract. Further, 45 CFR 75.2 defines Subrecipient as a non federal entity that receives a subaward from a passthrough entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other federal awards directly from a federal awarding agency. Additionally, per 2 CFR 200.303, non federal entities must establish and maintain effective internal control over federal awards that provide 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. The following subaward data elements to be reported include the following: • Subawardee Name • Subawardee Unique Entity Identifier • Amount of Subaward • Subaward Obligation/Action Date • Date of Report Submission • Subaward Number • Subaward Project Description • Subawardee Names and Compensation of Highly Compensated Officers, if applicable The information is required to be reported in SAM.gov no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made. Condition and context: For ALN 19.519, there were 3 new or amended subawardee agreements entered into during fiscal year 2025 that required FFATA reporting. We selected 2 of these agreements for test work and noted that while all the key data elements were accurately submitted, the information for both agreements was not submitted timely. Both of the agreements were entered into on September 30, 2024 and had a submission due date of October 31, 2024. SAM.gov notes the submission date for both agreements to be August 21, 2025. During our testwork over this program, we noted IRC did not establish control procedures to submit FFATA reports for all subawards on a timely basis. We noted the following exceptions:7 Transactions Tested: 2 Subaward not reported: 0 Report not timely: 2 Subaward amount incorrect: 0 Subaward incorrect key elements: 0 Dollar amount of tested transactions: $403,678 Subaward not reported: $0 Report not timely: $403,678 Subaward amount incorrect: $0 Subaward incorrect key elements: $0 For ALN 19.523, there were 4 new or amended subawardee agreements entered into during fiscal year 2025 that required FFATA reporting. We selected 2 of these agreements for test work and noted that while all the key data elements were accurately submitted, the information for both agreements was not submitted timely. Both of the agreements were entered into on September 1, 2024 and had a submission due date of October 31, 2024. SAM.gov notes the submission dates to be December 4, 2025 and December 8, 2025. During our testwork over this program, we noted IRC did not establish control procedures to submit FFATA reports for all subawards on a timely basis. We noted the following exceptions: Transactions Tested: 2 Subaward not reported: 0 Report not timely: 2 Subaward amount incorrect: 0 Subaward incorrect key elements: 0 Dollar amount of tested transactions: $759,550 Subaward not reported: $0 Report not timely: $759,550 Subaward amount incorrect: $0 Subaward incorrect key elements: $0 For ALN 98.001, there were 23 new or amended subawardee agreements entered into during fiscal year 2025 that required FFATA reporting. We selected 5 for test work and noted that while all the key data elements were accurately submitted, the information for 4 of these agreements was not submitted timely. Two of these agreements were entered into on November 1, 2024, one was entered into on November 22, 2024 and the last was entered into on December 1, 2024. The submission due dates for these agreements were December 31, 2024 and January 31, 2025. SAM.gov notes the submission dates for three of these agreements to be December 18, 2025, and for the one agreement entered into on November 22, 2024, the submission date was noted to be January 7, 2025. During our testwork over this program, we noted IRC did not establish control procedures to submit FFATA reports for all subawards on a timely basis. We noted the following exceptions: Transactions Tested: 5 Subaward not reported: 0 Report not timely: 4 Subaward amount incorrect: 0 Subaward incorrect key elements: 0 Dollar amount of tested transactions: $302,280 Subaward not reported: $0 Report not timely: $291,135 Subaward amount incorrect: $0 Subaward incorrect key elements: $0 Cause: Following the federal system migration, the USG FFATA reporting platform within SAM.GOV no longer displayed or made readily retrievable the submission date associated with individual FFATA. Effect: Delayed reporting can lead to reduced transparency, hindering public access to information about how federal funds are being used. Questioned Costs: None. Recommendation: IRC should continue to communicate to all field office personnel responsible for FFATA submissions the importance of timely reporting and maintaining appropriate documentation to evidence timely reporting. We recommend adding another level of review from headquarters to ensure reporting is taking place once a subawardee agreement is finalized and documenting that review in writing. Additionally, we recommend that IRC take screen shots during the submission process and maintain these with the subawardee agreements. This will evidence the submission in SAM.gov, specifically evidencing the submission date. Views of Responsible Officials: While Management maintains it acted in good faith to ensure all FFATA submissions are provided timely, the new FFATA reporting platform issues made it difficult for IRC to substantiate the dates of submission. IRC did contact FSD.gov to confirm what form of evidence would be considered sufficient in the absence of visible system date stamps. FSD.gov was unable to provide specific confirmation and instead directed IRC to published guidance https://www.fsd.gov/gsafsd_sp/en/under the federal funding accountability and transparency act how acknowledging existing “implementation challenges”. This guidance shifts the focus of compliance validation from system generated timestamps to whether the recipient acted in good faith to comply with reporting obligations. Relying on this, IRC’s internal control framework did not include a secondary documentation mechanism to independently evidence submission dates in the event that system functionality limited visibility. However, IRC remains committed to full FFATA compliance and will incorporate additional steps to strengthen the compliance documentation trail.

REFERENCE: 2025-101 CFDA NUMBER: 10.558 – CHILD AND ADULT CARE FOOD PROGRAM U.S. DEPARTMENT OF AGRICULTURE - FOOD AND NUTRITION - 2025 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER 6AZ300003 QUESTIONED COSTS N/A CONDITION The following errors were noted during testing of FDCH Site Claims and 18 Day Care Home provider files for the months of May 2025 and September 2025: 1. For 1 of 18 provider files tested, menus were clerically inaccurate and did not support the meals claimed in September 2025. 2. For 1 of 18 provider files tested, meals were claimed for the incorrect meal type. Afternoon Snacks were claimed rather than Evening Snacks. This error occurred during September 2025. 3. For 1 of 18 provider files tested, meals were incorrectly disallowed when a credible meal component was provided. This error occurred in May 2025. 4. For 1 of 18 provider files tested, meals were claimed when a child was not in attendance. This error occurred in May 2025. 5. For 2 of 18 provider files tested, although 3 monitoring visits were completed, documentation was not available to demonstrate that 2 of the visits were unannounced. 6. For 2 of 18 provider files tested, the five-day reconciliation on a sponsor monitoring visit was not completed. For 1 provider's visit the reconciliation was only completed for 4 days, and for the other provider there was no indication of the number of children signed in for any of the 5 days tested. These errors resulted in the following revised meal counts: These variances resulted in an under payment (known questioned costs) of $100. However, after projecting the various types of errors over six meal categories for the entire year, likely under reported costs totaled $5,531. CRITERIA In accordance with the Arizona Department of Education, Day Care Home Compliance Manual, Revised June 2019, Chapter 10, Meal Requirements, Section 10.7 Other Meal Requirements, in order to claim a meal, the provider must abide by the following criteria: • The provider must serve a fully reimbursable meal that meets the meal pattern requirements and are supported by complete and up to date attendance, meal count, and menu records; • The child must be present and participate in the meal service; • All meal components must be served together; • The meal must be fully consumed on the premises in a congregate setting. Meals sent home with a child due to the parent picking up the child during meal service cannot be claimed; • Meal must be served during approved meal service time; • The provider can be reimbursed for a maximum of two meals and one snack or two snacks and one meal per child, per day; • Only children who are enrolled can be claimed and the number of children cannot exceed the allowable ratio; • Payment may be made for meals served to provider’s own child(ren) or foster children only when:  Their child(ren) are enrolled and participating in the child care program during the time of the meal service;  At least one enrolled, non-resident child is present and participating in the child care program;  The provider meets the family size income standards for free or reduced price meals; • Seconds may be served but are not reimbursable; and • If a school age child receives a breakfast, lunch or afterschool snack at school, a provider may not claim the same meal. In accordance with 7 CFR, Subtitle B, Chapter II, Subchapter A, Part 226, Subpart E Operational Provisions, §226.16 (d)(4)(ii) Reconciliation of meal counts. Reviews must examine the meal counts recorded by the facility for five consecutive days during the current and/or prior claiming period. For each day examined, reviewers must use enrollment and attendance records (except in those outside-school-hours care centers, at-risk afterschool care centers, and emergency shelters where enrollment records are not required) to determine the number of participants in care during each meal service and attempt to reconcile those numbers to the numbers of breakfasts, lunches, suppers, and/or snacks recorded in the facility's meal count for that day. Based on that comparison, reviewers must determine whether the meal counts were accurate. If there is a discrepancy between the number of participants enrolled or in attendance on the day of review and prior meal counting patterns, the reviewer must attempt to reconcile the difference and determine whether the establishment of an overclaim is necessary. In accordance with 7 CFR, Subtitle B, Chapter II, Subchapter A, Part 226, Subpart E Operational Provisions, §226.16 (d)(4)(iii), Frequency and type of required facility reviews. Sponsoring organizations must review each facility three times each year, except as described in paragraph (d)(4)(iv) of this section. In addition: (A) At least two of the three reviews must be unannounced; (B) At least one unannounced review must include observation of a meal service; (C) At least one review must be made during each new facility's first four weeks of Program operations; (D) Not more than six months may elapse between reviews; (E) The timing of unannounced reviews must be varied so that they are unpredictable to the facility; and (F) All types of meal service must be subject to review and sponsoring organizations must vary the meal service reviewed. In accordance with the Uniform Guidance, Compliance Supplement, Part 6 – Internal Control, 2 CFR section 200.303 requires that recipients and subrecipients receiving federal awards establish, document and maintain effective internal control over the federal awards that provides reasonable assurance that the recipient or subrecipient is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. EFFECT Program requirements were not complied with. Additionally, meal reimbursements were clerically inaccurate and the providers were incorrectly reimbursed. CAUSE Although the internal controls were adequately designed, there were deficiencies in the execution of the controls. Most menu errors occurred on paper menus, which have a higher risk of errors. RECOMMENDATION AND BENEFIT Menus should be reviewed to ensure all eligible meals are claimed, and provider meal count sheets should be reviewed for clerical accuracy and completion prior to the preparation of the reimbursement claim. Additionally, monitoring visits should be reviewed to ensure that all required information is properly included, including completion f the five day reconciliations and indication if the review is unannounced and . These reviews should be documented. This will help ensure that program requirements are complied with and only eligible meals served to eligible participants are claimed for reimbursement. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

2025-001 Internal Control over Compliance and Compliance with the Reporting Compliance Requirement (Significant Deficiency) Information on the Federal Program: United States Agency for International Development Assistance Listing Number: 98.001 Assistance Listing Name: USAID Foreign Assistance for Programs Overseas Direct Award Numbers Award Period 720BHA23GR00031 February 1, 2023 through January 31, 2026 72068324GR00002 September 7, 2024 through December 31, 2024 Criteria or Specific Requirement: In accordance with §200.303(a), Internal Controls, 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. In accordance with the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Subaward Reporting in SAM.gov. The prime awardee is required to file a FFATA sub-award report by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. Condition: We performed testing over CRS’s compliance with specific FFATA reporting requirements. Of the eight sub-award reports selected for testing, two of the reports with sub-award amounts totaling $313,190 were not submitted within the required timeframe. Specifically, the two FFATA reports were filed between 64 and 66 days later than the required filing date. Questioned Costs: There are no known or likely questioned costs. Context: This is a condition based on testing of CRS’s compliance with specified requirements. The samples were selected using a non-statistical sampling method. Cause: Although CRS has existing internal control policies and procedures ensuring appropriate filing of sub-award information in SAM.gov, the country offices failed to file the FFATA reports on time. Effect: Failure to report subrecipient information in a timely manner can result in lack of transparency and accountability, which is contrary to the intent of FFATA. Such non-compliance also increases the risk of loss of future awards if compliance with award terms is not met. Repeat Finding: No. Recommendation: We recommend that management ensure that all FFATA reports are filed in a timely manner. In addition, management should strengthen the existing internal controls and conduct refresher training to CRS country office personnel emphasizing timely submission of FFATA reports. Views of Responsible Officials: CRS management agrees with the finding and recommendations and will enhance the processes around timely submission of FFATA reports.