Findings Citing § 200.303

2024-007 Allowable Costs/Cost Principles – Cost Allocation Plan Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Programs: 93.563 Child Support Services, 93.778 Medicaid Cluster Award Number and Year: 2301MNCSES; 2024, 2405MN5ADM; 2024 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. Title 2 U.S. Code of Federal Regulations § 2 CFR 200.403(a) and § 2 CFR 200.403(g) require costs to be necessary and reasonable and be adequately documented. Condition: For two of the five departments tested, incorrect expenditure amounts were used in the cost allocation plan. In addition, for one of the five departments tested, the County did not have support for the basis of allocating the costs to benefiting departments. Questioned Costs: $2,968,953, which is calculated as $1,299,253 of department costs tested within the cost allocation plan that were derived from incorrect information and $1,669,700 in department costs without a documented basis for allocating costs. Not all questioned costs were allocated to the department reporting grant expenditures or to the grant tested as a major program. Additionally, the rate of reimbursement of allocated costs to the grant is not known to the auditor. Context: The 2024 cost allocation plan is prepared using activity and expenditures from 2022. The cost allocation plan is prepared annually by a contractor and submitted to the Minnesota Department of Human Services (DHS) for reimbursement of county-wide indirect cost reimbursement. For one department, the cost allocation plan included expenditure accounts with credit balances as debit balances and, for another department, the 2023 general ledger expenditures were used rather than 2022. Furthermore, the basis for one department was determined in direct conversation between the cost allocation plan preparer and the County, with no documented support retained. Effect: Errors in reporting expenditures and the basis of the allocations used in the cost allocation plan calculation could result in incorrect county-wide indirect cost reimbursements from DHS. Cause: The cost allocation plan preparer’s work contained errors or lacked proper support, and the County did not identify the errors or lack of support. Recommendation: We recommend the County provide accurate and supported information to the cost allocation plan preparer and appropriate staff review the cost allocation plan to ensure the data, basis, and calculation are accurate, complete, and supported. View of Responsible Official: Concur

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 42 of 60 transactions tested. In all 42 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, 2024 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: $1,555,114 These costs are considered questioned due to lack of compliance with Uniform Guidance. The amount represents the total bid/contract amount of the 42 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: Prospectively, Historic South will review best practices related to the contract awarding process and formal contracting arrangements for construction work. In addition, Historic South will implement policies of: 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

Criteria – The HRSA Compliance Manual requires federally qualified health centers (FQHCs) to establish and maintain a sliding fee discount program to ensure that services are accessible to patients regardless of their ability to pay. Eligibility must be based solely on income and family size, supported by appropriate documentation. Under Uniform Guidance (2 CFR §200.303), non-federal entities must establish and maintain effective internal controls over compliance with federal statutes, regulations, and program requirements. The OMB Compliance Supplement (Part 4, Health Center Program Cluster) further emphasizes that health centers must document income and family size to properly apply sliding fee discounts and must consistently implement the approved discount schedule. Condition and Description – During our testing of compliance with the sliding fee discount program, we identified deficiencies in the application and documentation of the sliding fee discount schedule. Of 10 patient encounters selected for review, 6 patient files did not contain a registration form to support determination of sliding fee eligibility. In addition, although the Organization’s policy requires retention of two paystubs for each patient to verify income, only one paystub was maintained in several patient records. Further, 4 patient files reviewed did not contain documentation of household member information, which is required to calculate family size for eligibility determination. These deficiencies reflect noncompliance with the Organization’s policies and federal program requirements and may result in patients not being charged in accordance with their ability to pay. Questioned Costs – Unknown. Cause/Effect –. The Organization did not obtain or retain adequate documentation of patient income, family size, and registration forms to support eligibility determinations. Without this information, compliance with the sliding fee discount requirements could not be demonstrated, creating the risk that discounts were not applied appropriately and federal program requirements were not met

Finding 2024-004: 93.591 - U.S. Department of Health and Human Services - Family Violence Prevention and Services/State Domestic Violence Coalitions Allowable Costs/Cost Principles, Material Weakness in Internal Control and Noncompliance Criteria: In accordance with 2 CFR §200.403(g), costs must be adequately documented in order to be allowable under a federal award. Additionally, per 2 CFR §200.302(b)(3), recipients must maintain records that identify the source and application of funds for federally funded activities. Furthermore, effective internal controls per 2 CFR §200.303 require that transactions be properly authorized and reviewed to ensure compliance with applicable requirements. Condition: During our testing of expenses charged to the federal award, we reviewed a sample of 10 transactions totaling $9,284. Of those, 7 transactions (representing $8,980) were found to be noncompliant due to one or both of the following: • Missing supporting documentation, such as receipts or invoices • Missing approval documentation, such as required supervisor sign-offs These issues impaired our ability to determine whether the expenses were allowed, reasonable, and allocable under the terms of the award. Due to the high rate of errors, we performed extrapolation procedures over the population of similar expenses totaling $107,782. Based on the sample error rate and our extrapolation methodology, we estimate that $36,846 of the total expenses charged to the federal award may be unallowable and are thus considered extrapolated questioned costs. Effect: As a result of insufficient supporting and approval documentation, the allowability of a significant portion of expenses charged to the federal award could not be determined. This has led to an extrapolated questioned cost of $36,846. Questioned Costs: $36,846 (extrapolated) Cause: The deficiencies noted appear to be the result of weak internal controls related to documentation and approval workflows for federal expenditures. Specifically, the Organization does not appear to have a consistent process to: • Ensure documentation is retained for all expenses • Verify and record supervisory or grant-related approvals Recommendation: We recommend the Organization take immediate steps to improve internal controls related to documentation and record retention for federal program expenditures. The Organization should ensure that all expenses charged to the federal award are supported with adequate documentation. Additionally, the Organization should also ensure approvals are properly documented regardless if the expense is paid by check or electronic payment.

Federal Agency: U.S. Department of Agriculture Federal Program Name: Supplemental Nutrition Assistance Program Cluster Assistance Listing Number: 10.561 Federal Award Identification Number and Year: 242MN101S2514 – 2024 Passed Through Entity: Minnesota Department of Human Services Pass Through Number: H55240010 Compliance Requirement: Special Provisions Award Period: 2024 Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Agencies are required to automate their SNAP operations and computerize their systems for obtaining, maintaining, utilizing, and transmitting information concerning SNAP (7 CFR sections 272.10 and 277.18). This includes: (1) processing and storing all case file information necessary for eligibility determination and benefit calculation, identifying specific elements that affect eligibility, and notifying the certification unit of cases requiring notices of case disposition, adverse action and mass change, and expiration; (2) providing an automatic cutoff of participation for households that have not been recertified at the end of their certification period by reapplying and being determined eligible for a new period (7 CFR sections 272.10(b)(1)(iii) and 273.10(f) and (g)); and (3) generating data necessary to meet federal issuance and reconciliation reporting requirements. 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. Condition: The Minnesota Department of Human Services (DHS) maintains the computer system, MAXIS, which is used by the County to support the eligibility determination process. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. While periodic supervisory case reviews are performed to monitor compliance with grant requirements for eligibility, when performing our case file review for eligibility, we noted: • There was no verification of income on 2 of the 60 casefiles tested. • There was not a proper documented redetermination of eligibility on 1 of the 60 casefiles tested. Questioned costs: None Context: Three of the 60 casefiles tested had the above noted issues. Cause: The County has had significant turnover and new staff over the past few years as well as increases in caseloads. There was also changing guidance as waivers from the pandemic expired. All of this provided more opportunities for errors to occur. Effect: Improper input or updating of information in MAXIS and lack of verification or follow-up of eligibility determining factors increase the risk that a program participant will receive benefits when they are not eligible. Repeat finding: Yes – 2023-007 Recommendation: We recommend the County implement processes and procedures to provide reasonable assurance that all necessary documentation to support eligibility determination exists and is properly input or updated in MAXIS and issues are followed up in a timely manner. Views of responsible officials: There is no disagreement with the finding.

Federal Agency: U.S. Department of Agriculture Federal Program Name: Supplemental Nutrition Assistance Program Cluster Assistance Listing Number: 10.561 Federal Award Identification Number and Year: 232MN101S2514 – 2024 Passed Through Entity: Minnesota Department of Human Services Pass Through Numbers: H55240010 Compliance Requirement: Procurement, Suspension, and Debarment Award Period: 2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: The County must follow Uniform Guidance Subsection 200.320 Methods of Procurement for all applicable procurements over the County’s micro-purchase threshold. For purchases over the County's micro-purchase threshold of $10,000 but not exceeding the simplified acquisition threshold of $250,000, the County should follow small purchase procedures. 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 County. 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. Condition: During our testing, it was noted that for one contract out of four tested the County was unable to provide documentation showing that the county followed the open competition requirement. Questioned costs: None Context: One out of the four contracts tested had no documentation of open competition. Cause: The County purchasing likely followed County purchase policies for nonfederal expenditures. Effect: It would be possible that the County could end up spending more federal dollars than necessary for a product or service, if they are not going through the steps to ensure they are utilizing the best vendor for the county and documenting this process each year. Repeat finding: 2023-010 Recommendation: We recommend the County follow their federal purchasing policy in all their federal programs and retain documentation of that process occurring. As necessary, the County may need to add internal controls that are specific to each program to ensure this properly occurs. Views of responsible officials: There is no disagreement with the finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance Assistance Listing Numbers: 93.778 Federal Award Identification Numbers and Years: 2405MN5ADM - 2024 Passed Through Entity: Minnesota Department of Human Services Pass Through Numbers: H55245048 Compliance Requirement: Allowable Activities Award Period: 2024 Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Criteria or specific requirement: The Minnesota Department of Human Services (DHS) requires a listing of employees working on social services programs to be submitted quarterly, known as a random moment study listing (RMS listing). DHS then determines the amount applicable to the applicable income maintenance programs through random moment studies. Each quarter the County’s coordinator reviews their RMS listing to ensure the employees listed are accurate for the people working and being coded in the general ledger. 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. Condition: One individual was included in the 2nd quarter Social Services RMS listing sent to the State that was not supposed to be included in the listing, one individual was noted to have the same issue on the 2nd quarter of the public health local collaborative time study participant listing. Questioned costs: None Context: In our testing of two of the eight quarterly RMS listings, one individual was included in the 2nd quarter Social Services RMS listing sent to the State that was not supposed to be included in the listings, one individual was noted to have the same issue on the 2nd quarter public health local collaborative time study participant listing. There were 335 County staff listed in the 2nd quarter’s RMS listing and 52 participants listed in the 2nd quarter public health LCTS RMS listing. Cause: The County's RMS controls and procedures were not robust enough to note that the RMS listings should have excluded the noted individuals. Increased turnover and growth of the programs also created an increase in the number changes that were needed to be made to the listings. Effect: Lack of proper controls could affect allocation of fundings due to the staff not being in MAXIS or actually assigned to social services or public health LCTS case files to properly respond to the random moment requests that are sent by the State as part of the random moment study. Repeat Finding: Yes 2023-009 Recommendation: We recommend that the County review its procedures and control to ensure all RMS listings sent to the State properly exclude those necessary individuals no longer working in the programs. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance Assistance Listing Numbers: 93.778 Federal Award Identification Numbers and Years: 2405MN5ADM - 2024 Passed Through Entity: Minnesota Department of Human Services Pass Through Numbers: H55245048 Compliance Requirement: Special Provisions Award Period: 2024 Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Criteria or specific requirement: 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. The County and the Minnesota Department of Human Services (DHS) have a contract surrounding the federal funds. This contract has several obligations and reporting requirements the County must follow including the requirement the county must work with its collaborative partners to ensure that the LCTS coordinators and staff sampled by the LCTS have completed training approved by the State in the LCTS. Condition: The County was unable to provide a documented formal review process to ensure that LCTS fiscal site contacts were trained on completing cost schedules. Questioned costs: None Context: The County did not provide the documentation of the review over the noted requirement. Cause: The County did not maintain a record of their review process. Also, there has been fewer resources provided in recent years from the Minnesota Department of Human Services to help meet the specific training requirements of LCTS fiscal site contacts completing cost schedule reports. Effect: There is no way to verify the review process was completed and completed timely. Repeat finding: 2023-013 Recommendation: We recommend that the County reviews its polices and controls to ensure there is a formally documented control that ensures all required training of LCTS fiscal site contacts is completed and the documentation of the completions of the training is retained. Views of responsible officials: There is no disagreement with the finding.

2024-001: Internal Controls Over SEFA Preparation Federal Assistance Listing Number: 21.027 Name of Program or Cluster: Coronavirus State and Local Fiscal Recovery Funds Agency: U.S. Department of the Treasury Criteria Per 2 CFR §200.510(b), non-federal entities that expend $750,000 or more in federal awards during the fiscal year are required to prepare a SEFA that includes accurate and complete information about all federal awards expended. The Uniform Guidance also emphasizes the importance of internal control systems over compliance and reporting, as outlined in 2 CFR §200.303. Entities must establish and maintain effective internal controls to ensure compliance with federal statutes, regulations, and the terms and conditions of federal awards Condition Life Management, Inc. (LMI) does not appear to have implemented sufficient internal controls to ensure the complete and accurate preparation of the Schedule of Expenditures of Federal Awards (SEFA) for the year ended December 31, 2024. Although LMI’s SEFA preparation memo states that the Chief Financial Officer (CFO) is responsible for compiling the SEFA using information from the accounting system and supporting grant documentation, in practice, we noted that the entity relied on an external entity to provide essential grant documentation necessary for SEFA preparation. Additionally, the SEFA/SESFA provided appeared to be outdated and not reflective of current-year grant activity. Cause The absence of a fully developed control structure and oversight mechanism appears to have contributed to reliance on external or related-party sources for preparing SEFA-related documentation. This suggests a lack of staff with adequate skills, knowledge, and experience (SKE) necessary for SEFA preparation. Repeat Finding No Recommendation We recommend that Life Management, Inc. strengthen its internal control processes over SEFA preparation. This may include: • Providing training to appropriate staff to ensure they have the requisite skills, knowledge, and experience to independently prepare the SEFA in accordance with federal requirements. • Engaging or hiring qualified personnel with federal grant accounting expertise to oversee the SEFA preparation process. • Reducing reliance on external or related parties for documentation by maintaining a centralized, internal repository of grant agreements and related records. Views of Responsible Officials See Corrective Action Plan

Federal Agency: U.S. Department of Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Passed Through: N/A Finding Type: Material weakness Condition: During our testing of this major program, we noted that the County incorrectly completed the SLFRF Compliance Report – SLT-2073 – P&E Report – 2025 by reporting erroneous amounts for all categories of obligations and expenditures during the period. Criteria: The Uniform Guidance (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 statutes, regulations, and the terms and conditions of the federal awards. Effective internal controls should include procedures in place to ensure accurate reporting of the activity. Cause: The County has not designed and implemented internal controls over its federal award programs to ensure compliance with the terms and conditions of its federal award programs. Effect: The County could provide incorrect information to the federal government regarding the actual federal awards expended and obligated. Context: Reporting was direct and material to the program. Each category of the report had incorrect information reported. Questioned Costs: None Recommendation: We recommend that management design and implement internal controls that would ensure the accurate preparation of all required reporting. Repeat Finding: No Views of Responsible Officials and Planned Corrective Action: The County agrees with the finding and the recommendation will be implemented.

Criteria:2 CFR §200.303(a) requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Effective internal control should be consistent with the COSO Internal Control—Integrated Framework or the GAO Green Book. In addition, Uniform Guidance requires written policies and procedures in certain compliance areas. Condition:The entity does not have a formally documented system of internal control, including written policies and procedures, over its federal programs. While certain controls are performed in practice, these controls are not formally documented Cause:Management has not developed or formally documented written policies and procedures related to internal control over compliance with federal requirements. Effect / Potential Effect: The absence of written policies and procedures increases the risk that controls may not be consistently applied, that staff may not have clear guidance regarding compliance responsibilities, and that noncompliance with federal requirements could occur and not be detected or prevented in a timely manner. No instances of noncompliance were identified during audit testing. Questioned Costs:None. Repeat Finding:No. Recommendation:We recommend that management develop, implement, and maintain written policies and procedures documenting its system of internal control over federal programs to ensure compliance with Uniform Guidance and applicable federal requirements. Views of Responsible Officials and Planned Corrective Action:Management agrees with the finding and plans to develop and implement written internal control policies and procedures over federal programs. Management anticipates completion by June 30, 2026.

Program: ALL No. 10.523 Centers of Excellence at 1890 Institutions Significant Deficiency and Noncompliance over Subrecipient Monitoring Repeat Finding: Yes Condition: Management did not verify that its subrecipients were not suspended or debarred or otherwise excluded from participating in the transactions. Criteria: In accordance with 2 CFR §200.303, the non-federal entity must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Pursuant to 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)), 2 CFR sections 200.330, .331, and .501(h), a pass-through entity must identify the award and applicable requirements, evaluate risk, monitor, and ensure accountability of subrecipients. Additionally, when entering into subaward transactions, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, 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 (2CFR 180.300). Cause: Program personnel were unaware of the requirement included in Uniform Guidance related to procedures required for subrecipient monitoring. Effect: If subrecipients were not in compliance with Uniform Guidance, the Foundation would not identify the noncompliance timely. Questioned Costs: Unknown. Recommendation: We recommend that the Foundation implements subrecipient monitoring controls by documenting and implementing procedures in accordance with Uniform Guidance requirements, including providing training to program personnel and developing written policies and checklists to ensure consistent compliance. Auditee Response and Corrective Action Plan: Refer to management’s corrective action plans. Auditor’s Conclusion: Finding remains as stated.

CRITERIA: In accordance with Uniform Guidance (2 CFR 200.303), recipients of federal awards are required to establish and maintain effective internal controls. These internal controls over major federal programs are essential to ensure that federal funds are managed properly, used efficiently, and administered in compliance with all applicable laws, regulations, and award provisions. CONDITION: During our audit, we noted that while the Organization has established procurement policies and procedures, it does not have comprehensive written accounting policies and procedures. Additionally, the Organization is not currently utilizing accounting software to track and manage federal award activity. CAUSE: The Organization operates with limited personnel, making it challenging to appropriately segregate financial duties. The absence of detailed policies and procedures further increases the likelihood of inconsistent practices, operational inefficiencies, and errors. EFFECT: These conditions weaken the Organization’s overall internal control environment, increasing the risk that errors, misstatements, or irregularities may occur and remain undetected. RECOMMENDATION: We recommend that the Organization enhance its internal control environment by developing and implementing formal accounting policies and procedures. This should include strengthening processes related to federal award management and improving segregation of duties where feasible. Implementing appropriate accounting software would also support more efficient and accurate financial reporting. MANAGEMENT’S RESPONSE: See management’s corrective action plan on page 17.

2024-002 – IMPROPER REPORTING OF EXPENDITURES - ALN 21.027 – OTHER NONCOMPLIANCE AND SIGNIFICANT DEFICIENCY FINDING TYPE: OTHER NONCOMPLIANCE AND SIGNIFICANT DEFICIENCY Finding 2024-002 Federal Program: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Year(s): SLFRP5402, 2024 Federal Agency: U.S. Department of Treasury Pass Through Agency: North Dakota State Treasurer Office Questioned Cost: $0 Condition Morton County did not properly report expenditures on the March 31, 2024, Project and Expenditure Report for the Coronavirus State and Local Fiscal Recovery Funds program. The total cumulative expenditures were understated by $233,268. Context As stated in the SLFRF Compliance and Reporting Guidance for counties allocated less than $10 million with a population below 250,000 residents such as Morton County, "the initial Project and Expenditure Report covered the period from March 3, 2021 to March 31, 2022 and was required to be submitted to Treasury by April 30, 2022. The subsequent annual reports will cover one calendar year and must be submitted to Treasury by April 30 each year." Therefore, each year after March 31, 2022, Morton County must then submit an annual P&E report for the period covering April 1 202X - March 31, 202Y. Morton County did submit the 2024 (period covering April 2023 - March 31, 2024) report by April 30, 2024, but did not properly include 6 expenses that were incurred between January 2024 - March 2024, totaling $233,268 on the 2024 P&E report. Effect The amounts reported as cumulative expenditures on the March 31, 2024, Project and Expenditure Report were inaccurate. Cause Morton County did not ensure that all expenditures were included when completing reporting for the March 31, 2024 Project and Expenditure Report. The County identified the misstatement after the P&E Report had been submitted. As Treasury does not allow revisions to submitted reports, the County was unable to amend the inaccurate report. Criteria Page 19 of the Coronavirus State and Local Fiscal Recovery Funds: Project and Expenditure Report User Guide Version 12 (September 30, 2024) states: • An expenditure is the amount that has been incurred as a liability of the entity (the service has been rendered or the good has been delivered to the entity). • 2 CFR 200.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Repeat Finding No. Recommendation We recommend Morton County develop a review process that includes reconciling SLFRF expenditures to supporting documentation prior to preparing and submitting the P&E Report. Strengthening review steps will help ensure accurate reporting in accordance with Treasury and Uniform Guidance requirements. Morton County’s Response See Corrective Action Plan.

2024-003 –LACK OF CONTROLS OVER SUSPENSION AND DEBAREMENT - ALN 21.027 – SIGNIFICANT DEFICIENCY FINDING TYPE: SIGNIFICANT DEFICIENCY Finding 2024-003 Federal Program: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Year(s): SLFRP5402, 2024 Federal Agency: U.S. Department of Treasury Pass Through Agency: North Dakota State Treasurer Office Questioned Cost: $0 Condition Morton County did not have documented policies in place to verify that vendors receiving federal funds were not suspended or debarred from participation in federal programs. During the audit period, the County did not perform checks of the federal System for Award Management (SAM.gov) or obtain certifications from vendors to demonstrate compliance with federal suspension and debarment requirements. Context During the audit period, Morton County entered one contract in the amount of $190,400. The vendor was not on the suspension and debarment listing on SAM.gov. Effect Without documented controls to verify vendor eligibility, the County was exposed to an increased risk of noncompliance with federal requirements. Although no instances of transactions with suspended or debarred parties were identified during audit testing, the lack of controls limits the County’s ability to demonstrate ongoing compliance with suspension and debarment regulations. Cause Morton County was not aware of the requirement to establish and document procedures specific to suspension and debarment compliance under the Uniform Guidance. As a result, controls and documentation practices were not implemented during the audit period. Criteria 2 CFR §200.214 and 2 CFR §180.300 require non-federal entities to verify that parties to covered transactions are not suspended or debarred prior to entering such transactions. Additionally, 2 CFR 200.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Repeat Finding NO. Recommendation We recommend Morton County develop and implement documented procedures to verify vendor eligibility under federal suspension and debarment requirements prior to entering into contracts. Acceptable verification methods include SAM.gov checks, vendor certifications, or contract clauses, and documentation of compliance should be retained. Morton County’s Response See Corrective Action Plan.

2 CFR § 300 codified in 45 CFR part 75 gives regulatory effect to the Department of Health and Human Services. 2 CFR § 200.303(a) provides that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The General Health District has established procedures to approve timesheets by requiring the employee and department supervisor to sign the timesheets indicating they are accurate (employee) and approved (supervisor). For 2024, 11% of payroll disbursement timesheets tested over the Community Health Workers for Public Health Response and Resilient Program were not signed by the Health Commissioner and/or Director of Administration to indicate timesheets were accurate. Failure to follow the approved procedures could result in the occurrence of unallowable payroll transactions. The General Health District should ensure that both the employee and department supervisor sign the timesheets. These approvals should be maintained for audit.

2024-004 Procurement and Suspension and Debarment Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Transportation Program: 20.205 Highway Planning and Construction Award Number and Year: 1057187; 2024 Pass-Through Agency: Minnesota Department of Transportation 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. The Minnesota Department of Transportation State Aid Manual provides guidance and responsibilities for project sponsors. In addition to acting as the fiscal agent, the sponsor is taking on responsibility that the project will be completed in accordance with all of the federal and state rules and regulations that apply. Title 2 U.S. Code of Federal Regulations § 200.318(i) states that the County 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. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction with the contracting party. Condition: Faribault County acted as the sponsor for a project for a local city and the Minnesota Department of Transportation. The County did not develop controls over the sponsored project to ensure compliance for procurement. This included: • The County did not maintain records to support the history of procurement. • The County did not maintain documentation that the requirements for suspension or debarment were met by (a) checking SAM.gov exclusions, (b) collecting a certification from the vendor, or (c) verifying a clause or condition was included in the contract. Questioned Costs: None. Context: In June 2024, the County approved a resolution to act as a sponsoring agent for a city project. The project expenditures were $61,458 with payments made to the city for reimbursement. Effect: Without controls in place over the sponsored project, there is an increased risk of noncompliance with applicable laws, rules, and regulations. Cause: The County was unaware of the responsibilities of a project sponsor. Recommendation: We recommend the County implement controls to ensure projects the County sponsors are completed in accordance with all the federal and state rules and regulations that apply. View of Responsible Official: Acknowledge

2024-005 Suspension and Debarment Prior Year Finding Number: 2023-007 Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: Federal Direct; 2022 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must maintain internal control over federal programs that provides reasonable assurance that the auditee is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The County’s procurement policy requires SAM.gov search results to be documented prior to entering into a covered transaction. Condition: The County did not have documentation to support that verification for suspension or debarred vendors was performed by County staff prior to entering into the covered transactions. Questioned Costs: None. Context: None of the vendors tested were listed as suspended or debarred on SAM.gov at the time of the audit. There were two covered transactions during 2024. Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded prior to entering into a covered transaction may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services under the grant. Cause: The County informed us that documentation of SAM.gov searches for covered transactions could not be located due to staffing changes. In addition, staff were unaware of the requirements. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not suspended, debarred, or otherwise excluded from conducting business with the County; the County should complete this documentation prior to entering into a covered transaction. View of Responsible Official: Acknowledge

2024-006 Reporting Prior Year Finding Number: 2023-006 Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: Federal Direct; 2022 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must maintain internal control over federal programs that provides reasonable assurance that the auditee is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. The U.S. Department of the Treasury requires submission of an annual Project and Expenditure Report for Coronavirus State and Local Fiscal Recovery Funds (SLFRF) that includes current period expenditures. Condition: The County overstated current period obligations and expenditures reported on the annual Project and Expenditure Report submitted to the U.S. Department of the Treasury by $997,578 and $1,149,654, respectively, due to not updating projects reported in prior annual reports. Additionally, cumulative expenditures were understated by $49,837, due to not including all applicable expenditures. Also, the County did not submit the annual Project and Expenditure Report by the federal deadline of April 30, 2025. Questioned Costs: None. Context: The County opted to spend the SLFRF award under the Revenue Replacement category, which allows spending on broader types of government services. The annual Project and Expenditure Report required to be submitted to the U.S. Department of the Treasury by April 30 of each year for the reporting period ending March 31 was submitted June 6, 2025. Effect: The County is not in compliance with federal reporting requirements. Cause: The County indicated difficulty tracking project expenditures due to staff turnover. Recommendation: We recommend the County review the U.S. Department of the Treasury’s guidance and form instructions to ensure accurate reporting of SLFRF activity. We also recommend the County submit future Project and Expenditure Reports by the federal deadline. View of Responsible Official: Acknowledge

2024-002 – CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS – IMPROPER REPORTING OF EXPENDITURES & OBLIGATIONS – ALN 21.027 – MATERIAL WEAKNESS & MATERIAL NONCOMPLIANCE FINDING TYPE: MATERIAL WEAKNESS & MATERIAL NONCOMPLIANCE Finding 2024-003 Federal Program: FAIN: CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS SLFRP3716, 2024 ALN: 21.027 Year(s): 2024 Federal Agency: U.S. Department of Treasury Questioned Cost: $0 Condition Mountrail County did not properly report total expenditures and obligations on the March 31, 2024, Project and Expenditure Report for the Coronavirus State and Local Fiscal Recovery Funds program. The total reported cumulative and current period expenses were overstated by $516,186 and $500,897, respectively, and the total cumulative and current period obligations were overstated by $49,056 and $144,401, respectively. Effect The amounts reported as cumulative and current expenditures and obligations on the March 31, 2024, Project and Expenditure Report were inaccurate. Cause Mountrail County did not ensure that all expenditures and obligations were in agreement with their ledger when completing reporting for the March 31, 2024 Project and Expenditure Report. Criteria Page 19 of the Coronavirus State and Local Fiscal Recovery Funds: Project and Expenditure Report User Guide Version 12 (September 30, 2024) states: • An expenditure is the amount that has been incurred as a liability of the entity (the service has been rendered or the good has been delivered to the entity). • An obligation is an order placed for property and services, contracts and subawards made, and similar transactions that require payment. An obligation also means a requirement under federal law or regulation or provision of the award terms and conditions to which a recipient becomes subject as a result of receiving or expending funds. • 2 CFR 200.303 states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Context As stated in the SLFRF Compliance and Reporting Guidance, for counties allocated less than $10 million with a population below 250,000 residents such as Mountrail, "the initial Project and Expenditure Report covered the period from March 3, 2021 to March 31, 2022 and was required to be submitted to Treasury by April 30, 2022. The subsequent annual reports will cover one calendar year and must be submitted to Treasury by April 30 each year." Therefore, each year after March 31, 2022, the Mountrail County must then submit an annual P&E report for the period covering April 1 202X - March 31, 202Y. Mountrail County did submit the 2024 (period covering April 1, 2023-March 31, 2024) report by April 30, 2024, but did not properly include the current and cumulative expenses and obligations on the 2024 P&E report. Repeat Finding No. Recommendation We recommend Mountrail County review and comply with all reporting requirements of the Coronavirus State and Local Fiscal Recovery Funds program by properly reporting all expenditures and obligations in the Project and Expenditure Reports. Mountrail County’s Response See Corrective Action Plan.

Finding 2024-001: Lack of documentation of review and approval - Material Weakness Program name:Office for Coastal Management Assistance Listing: 11.473 Federal award Identification number: 20 NFWF 339630 Federal award year: 9/1/2020 - 9/30/2024 Federal awarding agency: U.S. Department of Commerce Criteria - In accordance with 2 CFR 200.303, recipients and subrecipients must establish, document and maintain effective internal control over Federal awards. These controls should be in compliance with Federal statutes, regulations, and the terms and conditions of the award, and should align with standards such as the “Standards for Internal Control in the Federal Government” (Green Book) or the COSO framework. This includes controls over: Expenses: Ensuring proper documentation and approval. (2 CFR 200.400(d) ) Reporting: Ensuring financial reports are accurate, complete, and reviewed prior to submission (2 CFR 200.328). Condition - The Organization has limited written processes of certain transaction classes. There was a pervasive lack of documentation of approval over transactions, including expenses, and reporting. Cause - The Organization did not maintain or consistently apply documentation protocols for internal control reviews. Formal documentation practices were not in place during the audit period. Effect - Lack of documentation as evidence that controls over compliance were being performed. Documentation should be maintained as evidence that sufficient control activities are in place and would effectively prevent or detect and correct noncompliance. Controls must be followed for every transaction and documentation of the control being performed must be maintained. Questioned costs - None identified. Perspective - The deficiency was pervasive across multiple compliance areas and was not isolated to a specific transaction or department. The scope indicates a systemic control weakness during the audit period. Identification of Repeat Findings - This is a repeat finding from the prior year (Finding 2023-002). As a result of the 2023 audit report, issued in February 2026, the Organization began the process of developing updated policies for compliance. In 2025, the Organization formally adopted new policies and procedures that align with the internal control standards per 2 CFR Part 200. Recommendation - We recommend that the Organization ensure updated policies and procedures are implemented and consistently applied. This includes: Documented review and approval of all transactions related to expenses, and reporting. Maintenance of written evidence supporting such reviews. Regular training and internal monitoring to ensure control procedures are consistently followed. Management response - Management agrees with this assessment and has committed to a corrective action plan. Management has also engaged with a new accounting firm to oversee the financial reporting functions at the Organization.

2024 – 004 INTERNAL CONTROLS OVER CASH MANAGEMENT Federal Agency: Department of Transportation Federal Program: Formula Grants for Rural Areas and Tribal Transit Program Assistance Listing Number: 20.509 Federal Award Identification Number and Year: MN-2020-020-01, MN-2023-045-00 Pass-Through Agency: Minnesota Department of Transportation Pass-Through Number: MN-2020-020-01, MN-2023-045-00 Award Period: Year Ended December 31, 2024 Compliance Requirement Affected: Cash Management Type of Finding: Significant Deficiency in Internal Controls over Compliance Criteria or specific requirement: 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. Condition: The Transit Board did not have adequate internal controls over the cash management reports. Questioned Costs: None Context: The Transit Board did not have anyone internally reviewing the quarterly reports being submitted. Cause: Limited personnel. Effect: The Transit Board could be reporting inaccurate information effecting the status of cash management. Repeat Finding: No Recommendation: We recommend the Transit Board designate qualified personnel for conducting the quarterly reporting review. The review should be performed and documented. Formal procedures should be documented to ensure consistency and effectiveness of the quality review process. Views of responsible officials: There is no disagreement with the audit finding.

Finding Reference Number: 2024-002 Reportable finding considered a significant deficiency - Inadequate support for distribution of donated food Title and CFDA Number of Federal Program: Emergency Food Assistance Program: 10.568 & 10.569 Federal award numbers & periods: 22-MOU-00108 23/24. 10/1/2023 - 9/30/2024 22-MOU-00108 24/25. 10/1/2024 - 9/30/2025 Type of Finding: Financial Statement and Federal Award Finding Finding Resolution Status: In Process Identification of Repeat Finding and Finding Reference Number: This is not a repeat finding Criteria: Organizations are required to maintain adequate documentation and an audit trail for all food distributions, including goods sent to distribution sites and goods used for on-site meal preparation, in accordance with sound internal control practices and applicable grant requirements (e.g., Uniform Guidance 2 CFR §200.302 – Financial Management and §200.303 – Internal Controls). Statement of Condition: During the audit, Food Bank Distribution Reports were provided showing goods sent to three locations, including recipient sign-offs, stating they received the food. Each location tracks food received and distributed to individuals. Leftover food is sent to various nonprofits to assist with distribution, if any. However, documentation for goods that were received and not distributed, at these three locations, could not be produced for review as an audit trail for who received and distributed leftover food. Additionally, Congregate Aggregate Feeding Reports, which track goods used for on-site meal preparation, and subsequent distribution, were also not available for review as they were not kept on file. The Organization lacked distribution documentation to support their monthly Distribution Report for goods distributed resulting in an incomplete audit trail. Cause: The Organization did not have formalized procedures or controls to ensure that all food distributions and on-site meal preparation activities were consistently documented and retained. Tracking was handled internally without standardized reporting requirements, resulting in incomplete records. Effect or Potential Effect: The absence of complete supporting documentation limits the Organization’s ability to demonstrate compliance with internal policies and donor requirements. It increases the risk of misstatement, misappropriation of goods, and potential noncompliance with grant or regulatory requirements. Questioned Costs: There are no questioned costs associated with this finding. Context: During our testing of food distribution documentation, we selected Food Bank Distribution Reports from three distribution locations for the audit period. For each location, we reviewed documentation supporting goods received, goods distributed, and any goods remaining at the end of the distribution cycle. While signed recipient logs were available to support goods initially received at the locations, supporting documentation for goods that were received but not distributed—including records identifying where leftover food was subsequently sent—was not available for any of the three locations reviewed. Additionally, for onsite meal preparation activities, we requested Congregate Aggregate Feeding Reports used to track the quantities of goods prepared and served; however, the Organization did not retain these reports for the period under audit. As a result, none of the sampled items related to meal preparation activities had supporting documentation available for review. Recommendation: We recommend that management implement and enforce policies to ensure that all food distributions, including on-site meal preparation and any goods not distributed separately, are properly tracked and supported by documentation. This should include maintaining Congregate Aggregate Feeding Reports, retaining all distribution records and reconciling them to the Monthly Distribution Report, establishing procedures to ensure discarded goods are documented appropriately. These steps will strengthen internal controls and provide a clear audit trail for all commodities. Auditors’ Summary of the Auditee’s Comments on the Findings and Recommendations: See Corrective Action Plan

Finding 2024-005 - Reporting Federal Award Information: Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Texas Department of Housing and Community Affairs Assistance Listing Number (ALN): 93.568 Federal Program Name: Low-Income Home Energy Assistance Type of Finding: Material Weakness in Internal Control Over Compliance Reporting Compliance Requirement No Questioned Costs Criteria: Under 2 CFR 200.303, the Organization is required to establish and maintain effective internal control over Federal awards that provides reasonable assurance of compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, 2 CFR 200.302(a) requires that the financial management system provide accurate, current, and complete disclosure of the financial results of each Federal award. Further, 2 CFR 200.334 requires financial records, supporting documents, statistical records, and all other records pertinent to a Federal award be retained to support amounts reported. The OMB Compliance Supplement identifies Reporting as a compliance requirement for this program and requires that financial reports be supported by underlying accounting records and subject to appropriate review prior to submission. Condition: During our audit, we noted that financial reports submitted to the Federal awarding agency were not consistently supported by retained documentation demonstrating how reported amounts were calculated. In addition, there was no documented evidence of supervisory review or approval of the reports prior to submission. During interim testing of reports, we noted that certain periodic financial reports submitted to the pass-through entity did not reconcile to the Organization’s general ledger at the time of submission. The variances were attributable to journal entries, voided checks, and other posting adjustments recorded after report submission. While cumulative and final reports ultimately agreed to the Organization’s accounting records and no amended reports were required, documentation reconciling the differences at the time of submission was not retained. documentation was retained for amounts reported to the Federal awarding agency or to require documented supervisory review of reports prior to submission. Effect or Potential Effect: The absence of supporting documentation and independent review increases the risk that inaccurate, incomplete, or unsupported information could be reported to the Federal awarding agency and not be detected in a timely manner. Although no questioned costs were identified as a result of our audit procedures, this deficiency creates a reasonable possibility that material noncompliance with reporting requirements could occur and not be prevented or detected on a timely basis. Questioned Costs: None. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that management implement procedures to:  Retain supporting documentation for all amounts reported to Federal awarding agencies, including reconciliations to the general ledger;  Require documented supervisory review and approval of reports prior to submission; and  Ensure that adjustments occurring after report submission are documented and, when necessary, corrected through revised reporting. Views of Responsible Officials and Planned Corrective Action: Management acknowledged that supporting documentation was not consistently retained and that supervisory review was not formally documented. Management has indicated that procedures will be implemented to ensure reports are reconciled to accounting records, properly supported, and reviewed prior to submission.

Finding 2024-006 – DCF Audit Submission Federal Reporting Requirement: Uniform Guidance – Subpart F Reporting Requirements Type of Finding: Significant Deficiency in Internal Control Over Compliance Noncompliance with Federal Reporting Requirements No Questioned Costs Criteria: Under 2 CFR 200.512(a), the auditee must submit the reporting package and Data Collection Form (DCF) to the Federal Audit Clearinghouse (FAC) no later than the earlier of:  30 calendar days after receipt of the auditor’s report(s), or  Nine months after the end of the audit period. Further, 2 CFR 200.303 requires the Organization to establish and maintain effective internal control over Federal awards to provide reasonable assurance that the entity complies with Federal statutes, regulations, and the terms and conditions of Federal awards. Effective internal control includes procedures to monitor compliance with required reporting deadlines. Condition: The Organization did not submit the reporting package and Data Collection Form (DCF) for the year ended December 31, 2023 within the timeframe required by 2 CFR 200.512(a). The reporting package was due no later than September 30, 2024 (nine months after fiscal year-end). The Organization submitted the reporting package to the Federal Audit Clearinghouse (FAC) on March 15, 2025, which was 166 days after the required deadline. Cause: The Organization did not have adequate procedures in place to monitor and ensure timely submission of the reporting package and Data Collection Form. In addition, broader financial reporting control deficiencies contributed to delays in completing the audit process, which affected the timeliness of submission. Effect or Potential Effect: Failure to submit the reporting package and Data Collection Form timely constitutes noncompliance with Uniform Guidance reporting requirements. Late submission delays Federal oversight and public transparency of audit results and increases the risk of heightened Federal scrutiny or potential funding restrictions. Questioned Costs: None. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that management implement procedures to ensure timely submission of the reporting package and Data Collection Form. Such procedures should include:  Establishing a formal compliance calendar with assigned responsibility;  Monitoring audit progress against statutory deadlines; and  Addressing underlying financial reporting control deficiencies that impact audit completion timelines. Views of Responsible Officials and Planned Corrective Action: Management acknowledged that the prior year reporting package and Data Collection Form were not submitted within the required timeframe. Management indicated that procedures will be implemented to monitor deadlines and improve the timeliness of financial reporting and audit completion going forward.

Finding 2024-001 - U.S. Department of Housing and Urban Development, Mortgage Insurance Rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate, CFDA #14.135 Statement of Condition: Internal control processes over financial accounting did not ensure that all transactions were properly recorded. Internal control processes over financial accounting did not ensure that key accounts were reconciled or reviewed on a periodic basis. Criteria: The HUD Handbook 4370.2 REV-1, Chapter 2 requires the books and accounts to be complete and accurate. HUD Handbook 4370.2 REV-1, Chapter 2, Section 12 requires monthly reconciliations of all cash accounts. Additionally, 2 CFR Part 200 Section 200.302 Financial Management states that the financial management system of each non-federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award in accordance with the reporting requirements. Additionally, 2 CFR Part 200 Section 200.303(a), Internal Controls, requires that non-federal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the non-federal entity is managing the award in compliance with federal statutes, regulations and the terms and conditions. Effect: Noncompliance with HUD and Uniform Guidance requirements and the possibility of undetected material misstatements and/or undetected misappropriation of assets. Cause: Prior management oversight. Context: An understanding of processes and internal controls was performed with the Corporation's management and tests were performed to determine if the processes and internal controls were implemented and effective. As part of this process we noted the following processes and internal controls were not effective and/or implemented. 1) Only two of the six bank accounts were reconciled. The outsourced bookkeeper only performed a bank reconciliation for the operating and security deposit cash accounts. 2) The accounts receivable, tenants and accounts receivable, HUD were not reconciled. 3) The monthly review process of the Corporation's financial information is not fully supported by evidence of such review. Questioned Costs: N/A Recommendation: We recommend management review/enhance its accounting and internal control procedures to ensure that all key accounts are reconciled and reviewed with supporting evidence of such review. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding and will review the accounting and financial procedures, system of internal controls and policies. The Corporation has executed a new management agreement with Remnant Management Inc. effective October 1, 2024. Remnant Management Inc. will ensure that all transactions are properly recorded and that key accounts are reconciled and reviewed on a periodic basis beginning October 1, 2024 and going forward.

2024-003 Reporting Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medicaid Cluster Award Number and Year: 2405MN5ADM; 2024 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. For County federal awards received from the Minnesota Department of Human Services (DHS), internal control should be established and maintained to provide assurance that program reports submitted to DHS are completed in accordance with DHS reporting instructions. As part of Western Prairie Human Services’ reporting requirements, the County submits the Social Service Fund Report, Form DHS-2556 on a quarterly basis to DHS. Condition: The following errors were noted in the Social Service Fund Report, Form DHS-2556 submitted to DHS for the third quarter of 2024: • State revenues were understated by $158,645. • Federal revenues were understated by $41,926. • Charges for services were understated by $1,130. • Miscellaneous revenue was overstated by $51,837. Questioned Costs: None. Context: Western Prairie Human Services was unable to submit corrections for the Social Service Fund Report, Form DHS-2556 for the third quarter of 2024. The population consisted of eight quarterly reports: four for the Income Maintenance Quarterly Expense Report, Form DHS-2550 and four for the Social Services Fund Report, Form DHS-2556. The sample size of four quarterly reports was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Incorrect information relating to revenues was reported to DHS on a Social Service Fund Report, Form DHS-2556. Cause: The Western Prairie Human Services’ controls over preparation of the quarterly reports were not sufficient to identify that the related revenues were not properly reported. Recommendation: We recommend that Western Prairie Human Services implement controls that ensure that all applicable amounts are reported on the reports in a manner that is consistent with DHS guidance. View of Responsible Official: Concur

Department of the Treasury Local Assistance and Tribal Consistency Fund (ALN 21.032) Activities Allowed and Unallowed, Allowable Costs / Cost Principles, and Reporting Criteria or specific requirement: In accordance with 2 CFR Part 200.303, non-Federal entities must establish 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. Furthermore, effective internal control should include regular reconciliations between subsidiary tracking systems (spreadsheets) and the primary accounting system (General Ledger) to ensure data integrity. Condition: While the County utilizes General Ledger software for its primary accounting functions, grant-level financial tracking and reporting are often performed using manual spreadsheets. Although the data entered into these spreadsheets is intended to reflect the same transactions recorded in the General Ledger, formal reconciliations are not regularly performed to ensure the spreadsheet data matches the General Ledger records. Cause: Management relied on the assumption that because the spreadsheet data originates from General Ledger transactions, the output would inherently remain consistent. Management has not implemented a formal policy or procedure requiring a periodic, documented reconciliation between these two data sets. Effect of potential effect: The lack of reconciliation between spreadsheets and the General Ledger increases the risk of misstatements within the Schedule of Expenditures of Federal Awards or noncompliance of individual grants and programs. Furthermore, the use of spreadsheets alone lack the automated controls found in the General Ledger software, such as: 1) Data Protection: Risk of accidental deletion or modification of formulas/data. 2) Data Validation: No automated prevention of duplicate entries or formatting errors. 3) Dual Entry/Audit Trail: No systematic record of who changed data or why. Questioned costs: No reportable questioned costs. Context: A total of 60 transactions were selected for testing from programs that relied on spreadsheets for tracking and reporting. Of the 60 transactions selected, a sole deviation was identified. The difference between what was reported on the tracking spreadsheet and the General Ledger was trivial in amount and clearly immaterial to the program and Schedule of Expenditures of Federal Awards as a whole. However, the reliance on spreadsheets, and a lack of reconciliation back to the General Ledger for grant tracking and reporting, was found to be systemic to the County’s system of internal control over grant reporting. Repeat finding: No Recommendation: We recommend that the County implement a formal reconciliation process between the grant tracking spreadsheets and the General Ledger. This reconciliation should be performed periodically, such as monthly, and should include: 1) Documented Comparison: A side-by-side verification of total expenditures and revenues per grant on amounts reported within the general ledger and amounts included on subsidiary tracking spreadsheets. This verification should include specific general ledger account numbers used for tracking revenues and expenditures. 2) Supervisory Review: Reconciliations should be reviewed and signed off by a person independent of the spreadsheet preparation. 3) System Integration: The County should explore available grant management features and modules within their existing General Ledger software to eliminate the reliance on manual "shadow" systems or spreadsheets. Views of responsible officials: Management acknowledged the finding and recommendation, and plans to implement a formal reconciliation process between grant tracking spreadsheets and the General Ledger. This reconciliation will be performed at minimum quarterly (when most grants are submitted).

U.S. Department of Agriculture Federal Financial Assistance Listing #10.766 FaCommunity cilities Loans and Grants Special Tests and Provisions Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The Loan Resolution Security Agreement requires a monthly amount to be set aside in a reserve fund until the specific account balance is reached. Condition – The Hospital did not sufficiently fund their reserve account. As of December 31, 2024, the Hospital should have USDA debt reserves at least equal to $459,327. The USDA debt reserves equaled $141,821 as of December 31, 2024. Cause – Management has not funded the USDA debt reserves adequately. Effect – The Hospital was not in compliance with their provisions of the USDA debt agreements. Questioned Costs – None reported. Context – Sampling was not used. Repeat Finding from Prior Years – Yes, repeated finding 2023-003. Recommendation – We recommend the Hospital fund the reserve account adequately at each measurement date. Views of Responsible Officials – Management agrees with the finding.

FINDING 2024-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2024 Pass-Through Entity: Indiana Finance Authority 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 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF), recipients are required to verify that 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 (e.g., grant agreement) that are expected to equal or exceed $25,000 and all subawards. The verification is to be done by checking the System for Award Management (SAM) Excluded Parties List System (EPLS), collecting a certification from the person or entity, or adding a clause or condition to the covered transaction with that person or entity. One covered transaction paid from the SLFRF award during the audit period was identified and tested. The covered transaction, totaling $262,504, did not include the appropriate provisions in the contract, nor did the Town require a certification or check the SAM EPLS to ensure the entity was not suspended or debarred prior to entering into the contract. The lack of internal controls and noncompliance was isolated to the instance noted above. 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 do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or INDIANA STATE BOARD OF ACCOUNTS 20 TOWN OF FLORA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 Management of the Town did not develop a system of internal controls to ensure that policies and procedures related to suspension and debarment were in place and followed as they were unaware of the requirements. Effect Without the proper implementation of an effectively designed system of internal controls, the Town could not ensure the vendors paid with federal funds were eligible to participate in federal programs. Any program funds the Town used to pay vendors that 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 Town. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the Town develop written policies and procedures to ensure its compliance with requirements related to suspension and debarment. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 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): FY2024 Pass-Through Entity: Indiana Finance Authority Compliance Requirement: Reporting Audit Finding: Material Weakness 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. INDIANA STATE BOARD OF ACCOUNTS 21 TOWN OF FLORA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The Town was classified as a metropolitan town with a population below 250,000 residents that received an allocation of less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds. The annual report was to cover one calendar year and must be submitted to the Treasury by April 30, 2024. The Town submitted the required P&E report during the audit period timely, and the report agreed to the Town's records. However, there were no internal controls in place to prevent, or detect and correct, errors in the P&E report prior to submission. The Clerk-Treasurer prepared and submitted the P&E report without an oversight or review process in place. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The Town's management did not have properly designed internal controls in place to review reports prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls over reporting, the Town could not ensure that the report submitted was materially accurate and correct. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the Town establish a system of internal controls to provide for segregation of duties in the preparation and review of federal reports prior to submission. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

2024-002 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: Direct, Not Provided Pass-Through Agency: Direct and City of Saint Paul 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. Title 2 U.S. Code of Federal Regulations §§ 200.403(a) and 200.403(g) require costs to be necessary and reasonable, and be adequately documented. Condition: The County did not obtain itemized documentation for five out of 44 disbursements tested. Questioned Costs: $181,377; known questioned costs were determined based on individual expenditures with exceptions identified. Context: The County treated one vendor as a subrecipient and approved a budget for this vendor by type of expenditure. The County monitored the vendor's actual expenditures against approved budgeted expenditures. Total expenditures reported on the Schedule of Expenditures of Federal Awards is $50,901,938 for this program. The sample tested included approximately $2,570,500. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Additionally, four individually important items were selected for testing. Effect: The County has insufficient documentation to demonstrate expenditures were for allowable activities and met the requirements of allowable costs. Cause: The County felt its procedures over monitoring actual expenditures to budgeted expenditures were sufficient in lieu of reviewing itemized supporting documentation. Recommendation: We recommend the County obtain supporting documentation related to expenditures, including payroll reports and supporting receipts for purchases, sufficient to determine expenditures were for allowable activities. View of Responsible Official: Concur.

2024-003 Eligibility and Child Support Non-Cooperation Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.558 Temporary Assistance for Needy Families Award Number and Year: 2401MNTANF; 2024 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. Title 42 United States Code § 602(a)(1)(B)(iii) requires each state to create a written document that shall set forth the objective criteria for the delivery of benefits and the determination of eligibility. The Minnesota Department of Human Services’ State Plan for Temporary Assistance for Needy Families (TANF) and Minn. Stat. § 256J.10 [see now Minn. Stat. § 142G.10, subd. 1] establish the general eligibility requirements for TANF benefits. Title 45 U.S. Code of Federal Regulations § 264.30 states: “What procedures exist to ensure cooperation with the child support enforcement requirements? (a)(1) The State agency must refer all appropriate individuals in the family of a child, for whom paternity has not been established or for whom a child support order needs to be established, modified, or enforced, to the child support enforcement agency (i.e., the IV-D agency). (2) Referred individuals must cooperate in establishing paternity and in establishing, modifying, or enforcing a support order with respect to the child. (b) If the IV-D agency determines that an individual is not cooperating, and the individual does not qualify for a good cause or other exception established by the State agency responsible for making good cause determinations in accordance with section 454(29) of the Act or for a good cause domestic violence waiver granted in accordance with § 260.52 of this chapter, then the IV-D agency must notify the IV-A agency promptly. (c) The IV-A agency must then take appropriate action by: (1) Deducting from the assistance that would otherwise be provided to the family of the individual an amount equal to not less than 25 percent of the amount of such assistance; or (2) Denying the family any assistance under the program.” Condition: The Minnesota Department of Human Services maintains the computer system, MAXIS, which is used by Ramsey County to support the eligibility determination process. In the case files reviewed for eligibility, not all documentation was available, updated, or input correctly to support participant eligibility. The following exceptions were noted in the sample of 40 MAXIS case files tested: • one case file where the relationship between the minor child and the parent or other caretaker relative was not documented, • one case file where the social security number of one member of the assistance unit was not documented, and • one case file where the income in MAXIS did not agree with the supporting documentation on file. In a sample of 11 cases with non-cooperation in establishing paternity tested, an exception was noted in one case file where sanctions were not imposed for four months when they should have been based on supporting documentation on file. Questioned Costs: Not applicable. The County administers the program, but the State of Minnesota pays benefits to participants in this program. Context: The State of Minnesota and Ramsey County split the eligibility determination process. Pursuant to Minnesota statutes, Ramsey County performs the “intake function” needed for this program, while the State maintains the MAXIS system, which supports the eligibility determination process. Participants receive benefit payments from the State. The total population of eligible participants was 4,025. Child support non-cooperation is determined by the County, and the Providing Resources to Improve Support in Minnesota (PRISM) system maintains the information and recipient status. When a Child Support Officer at the County updates PRISM to show non-cooperation, it interfaces with MAXIS. From this interface, MAXIS receives a Worker’s Daily Report message which notifies the entity of child support non-cooperation. The County is responsible for updating the recipient’s record in MAXIS, including entering child support sanctions, or closing a case on the seventh occurrence of noncompliance. The total population of cases of non-cooperation at the County was 370. Sample sizes were based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of updated information in MAXIS documenting verification of key eligibility-determining factors increases the risk that program participants will receive benefits when they are not eligible. In addition, benefit overpayments could be paid when child support non-cooperation is not properly processed for a benefit month. Cause: Program personnel entering case data into MAXIS did not ensure all required information was input correctly, supported, and obtained or retained. Recommendation: We recommend the County implement additional procedures to provide reasonable assurance that all necessary documentation to support eligibility determinations exists, information is properly input or updated in MAXIS, and child support non-cooperation case files benefits are being reduced as necessary in MAXIS. In addition, the County should consider providing further training to program personnel. View of Responsible Official: Concur.

2024-004 Eligibility Prior Year Finding Number: N/A Year of Finding Origination: 2024 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 Medical Assistance Program Award Number and Year: 2405MN5ADM; 2024 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. Title 42 U.S. Code of Federal Regulations §§ 435.911 and 435.945 require the state Medicaid agency to determine and verify eligibility of enrollees in Medicaid. The Minnesota Department of Human Services provides the Minnesota Health Care Programs Eligibility Policy Manual. The manual contains the Minnesota Department of Human Services eligibility policies for the Minnesota Health Care Programs, including the eligibility requirements of Medical Assistance. Specific eligibility requirements are included for participants’ citizenship verification, income limits, applications, and asset verification. Minnesota Statutes, Section 256B.05, requires county agencies to administer Medical Assistance. Condition: The Minnesota Department of Human Services maintains the computer system, MAXIS, which is used by Ramsey County to support the eligibility determination process. In the case files reviewed for eligibility, not all documentation was available, updated, or input correctly to support participant eligibility. The following exceptions were noted in the sample of 40 MAXIS case files tested: • two case files where the verification of citizenship was not documented, • one case file where the application was not documented, • two case files where the verification of income was not documented or documentation did not agree with MAXIS, and • nine case files where the verification of assets was not documented or documentation did not agree with MAXIS. Questioned Costs: Not applicable. The County administers the program, but the State of Minnesota pays benefits to participants in this program. Context: The State of Minnesota and Ramsey County split the eligibility determination process. Pursuant to Minnesota statutes, Ramsey County performs the “intake function” needed for this program, while the State maintains the MAXIS system, which supports the eligibility determination process. Participants receive benefit payments from the State. The total population of eligible participants was 32,937. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of updated information in MAXIS documenting verification of key eligibility-determining factors increases the risk that program participants will receive benefits when they are not eligible. Cause: Program personnel entering case data into MAXIS did not ensure all required information was input correctly, supported, and obtained or retained. Recommendation: We recommend the County implement additional procedures to provide reasonable assurance that all necessary documentation to support eligibility determinations exists and information is properly input or updated in MAXIS. In addition, the County should consider providing further training to program personnel. View of Responsible Official: Concur.

Finding 2024- 007 – Timecard Approval Controls – Payroll Charge to Federal Grant, Significant Deficiency Federal award agency: US Department of Transportation Federal Transit Administration Program name and ALN: Federal Transit Cluster ALN 20.507 Federal Transit Formula Grants, ALN 20.525 State of Good Repair Grants Federal award identification number: IL-2017-028-00, IL-2018-024-00, IL-2019-022-01, IL-2021-050-00, IL-2022-005-01, IL-2022-032-00, IL-2023-036-01, IL-2024-025-00 Federal award year: 2017, 2018, 2019, 2022, 2023, 2024 Criteria: The Uniform Guidance requires non‑Federal entities to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award (2 CFR §200.303). In addition, payroll costs charged to Federal awards must be adequately supported and properly authorized to ensure that only allowable and accurate costs are charged (2 CFR §200.430(i)). Condition: During testing of payroll transactions charged to the Federal program, RSM identified instances in which employee timecards were not supported by evidence of timely supervisory review and approval. Specifically, for certain timecards tested, approval either could not be substantiated, occurred after fiscal year end, or lacked documentation evidencing the date of approval. Cause: Management did not consistently maintain documentation evidencing timely supervisory review and approval of employee timecards charged to Federal grants. Additionally, monitoring controls over the timeliness of timecard approvals were not sufficient to ensure compliance with established payroll control procedures. Effect or potential effect: Without timely supervisory approval of timecards, there is an increased risk that unallowable, inaccurate, or improperly allocated payroll costs could be charged to Federal awards. Questioned costs: None noted. Context: 16 control exceptions out of 60 selections. The sample was not intended to be, and was not, a statistically valid sample. Recommendation: RSM recommends that management strengthen internal controls over payroll charged to Federal grants by ensuring that all employee timecards are reviewed and approved by supervisors in a timely manner and that documentation evidencing the approval date is retained. Management should also implement periodic monitoring to verify compliance with timecard approval requirements. Views of responsible officials: Management acknowledges the finding and agrees that remediation is necessary. Management will implement the recommendations that it has defined within the corrective action plan required by Title 2 CFR 200.511(c) executed on April 16, 2026.

Subrecipient Monitoring Federal Department – U.S. Department of Justice Pass-through Illinois Criminal Justice Information Authority Federal Award Identification Number and Year: 15JOVW-21-GG-00543-STOP and 2021 15JOVW-22-GG-00422-STOP and 2022 Violence Against Women Formula Grants, Federal Assistance Listing #16.588 County Department – State’s Attorney Office Finding 2024 – 002 CRITERIA 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. CONDITION During the current audit period, the Cook County State’s Attorney Office (SAO) did not adequately comply with its subrecipient monitoring requirements as required by Federal regulations. CAUSE Based on discussions with management, the cause of this finding was an inadequate understanding of sub-recipient monitoring policies and best practices. While the Department believed at the time that they were in compliance with the applicable monitoring requirements, they now recognize that their efforts did not fully meet the necessary standards. EFFECT Failure to adequately perform and document the risk assessments on its subrecipient(s) could result in the inadequate monitoring of the activities and performance of a subrecipient. Also, this could result in Federal awards being used by the subrecipient for unauthorized purposes. QUESTIONED COSTS None. CONTEXT During our review of two (2) subrecipients (of a population of 4 subrecipients), we noted the following:  For both subrecipients, we noted documentation was not maintained to support SAO’s evaluation of the subrecipients’ risk of noncompliance and the frequency of monitoring to be conducted by SAO based on the assessed risk.  We also noted for both subrecipients, no documentation was provided to verify whether the subrecipients were required to have a Single Audit conducted, including SAO’s review of the report, and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332e(3).  The SAO utilized a “Subrecipient Monitoring Checklist” (Checklist) to conduct and document its monitoring of subrecipients. Based on review, we noted the Checklist does not include evidence of who completed the monitoring, the date the actual monitoring was performed nor the subrecipient personnel with whom the monitoring results were discussed during the site visit. Also, the Checklist appears to be inaccurately completed. Specifically, we noted the Checklist noted that the results include expected corrective actions and dates for resolution. However, there was no finding or issues noted in the formal letter submitted to the subrecipient(s) after the site visit(s). IDENTIFICATION OF REPEATED FINDINGS None. RECOMMENDATION We recommend SAO implement procedures to ensure adequate documentation is maintained to support the evaluation of each subrecipient’s risk of noncompliance and review of the Single audit report, as required by Federal regulations. Also, we suggest that the Checklist be accurately prepared and updated to include evidence of who completed the monitoring, the date the actual monitoring was performed, and the subrecipient personnel with whom the monitoring results were discussed during the site visit. 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 38-39.

Assistance Listing, Federal Agency, and Program Name COVID 19 21.027, U.S. Department of Treasury, Coronavirus State and Local Fiscal Recovery Fund Federal Award Identification Number and Year N/A Pass through Entity Michigan Department of Health and Human Services Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria The City must establish and maintain effective internal controls to ensure compliance with federal requirements including period of performance as outlined in 2 CFR 200.303. Condition The City lacked adequate controls to verify that expenditures charged to the grant were incurred within the proper period of performance. Transactions were processed without sufficient review or procedures around the period of performance, resulting in expenditures being charged from outside the allowable timeframe. Questioned Costs None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed N/A Context During the year, the City requested reimbursement for $151,621 of expenditures that were not within the period of performance. Cause and Effect The City's control for identifying whether expenditures charged to the grant was not effective as it relied on the date of the vendor's invoice and not the period in which the services were performed. As a result, reports and reimbursement requests improperly included $64,109 of expenditures incurred prior to the period of performance. The City identified the error after year end and appropriately excluded the expenditures from the final SEFA. Later, it was discovered that an additional $87,512 was improperly included on the SEFA. The City removed the additional expenditures discovered from the SEFA as well, thus creating no questioned costs. Recommendation Internal controls should be strengthened to ensure expenditures are being properly reviewed for period of performance before submitting for reimbursement. Views of Responsible Officials and Corrective Action Plan The CIty concurs with this finding and has already implemented controls to look specifically at service period of expenditures when reviewing invoices and submitting reports and reimbursement requests.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (initially reported 2014) Assistance Listing Number: 93.224 and 93.527 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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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 also lacks a clear review process related to the sliding fee scale to identify errors quickly to allow for corrections to be made in a timely manner. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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 13 of the 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 as well as additional supporting staff within the finance department. The Billing and Collections Policy was updated to waive co-pays for students in the School-Based Program. The Billing Department is in the process of auditing and implementing quarterly feedback & training sessions for the Operations Department for training and compliance for the Sliding Fee Discount Program. This process was implemented in 2025.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) Finding Type: Significant Deficiency in Internal Control Questioned Costs: $0 Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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. Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs. Effect: The Organization could submit incorrect information. Recommendation: Documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: No documentation of employee time approval by supervisors could be provided. The payroll clerk processes the payroll, and the finance director approves through the releasing of the payroll. However, there is no formal documentation of the overall review of the payroll process and the supervisors’ approval of time recorded by employees. This is a systemic issue and has been a finding in the previous year. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards The requirement is for the Organization to have a process in place to correctly calculate, record, and pay payroll related expenses in accordance with grant and program requirements. Cause: The Organization does not have an effective process to review, approve, and document the supervisor’s approvals prior to making the payments. Effect: This situation provides an opportunity for errors and unauthorized transactions to occur and not be detected in a timely manner resulting in payroll expenses to be charged incorrectly to the federal awards. Recommendation: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a new payroll process using the ADP system. Employees are now required to approve their own time within the ADP portal, and this approval is documented. Following this, supervisors review and approve their employees’ time, which is also documented in the portal. Human Resources then prepares the payroll, reviewing all entries and initialing a shared file of payroll items and providing backup for changes. Once HR confirms accuracy, they notify Finance. Finance then reviews the payroll, with the Finance Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within ADP by employees and supervisors and the shared file drive where HR and Finance initial off on the reviewed payroll items, ensuring a traceable record of the entire payroll approval process.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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. Also, under eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (initially reported 2014) Assistance Listing Number: 93.224 and 93.527 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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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 also lacks a clear review process related to the sliding fee scale to identify errors quickly to allow for corrections to be made in a timely manner. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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 13 of the 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 as well as additional supporting staff within the finance department. The Billing and Collections Policy was updated to waive co-pays for students in the School-Based Program. The Billing Department is in the process of auditing and implementing quarterly feedback & training sessions for the Operations Department for training and compliance for the Sliding Fee Discount Program. This process was implemented in 2025.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) Finding Type: Significant Deficiency in Internal Control Questioned Costs: $0 Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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. Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs. Effect: The Organization could submit incorrect information. Recommendation: Documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: No documentation of employee time approval by supervisors could be provided. The payroll clerk processes the payroll, and the finance director approves through the releasing of the payroll. However, there is no formal documentation of the overall review of the payroll process and the supervisors’ approval of time recorded by employees. This is a systemic issue and has been a finding in the previous year. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards The requirement is for the Organization to have a process in place to correctly calculate, record, and pay payroll related expenses in accordance with grant and program requirements. Cause: The Organization does not have an effective process to review, approve, and document the supervisor’s approvals prior to making the payments. Effect: This situation provides an opportunity for errors and unauthorized transactions to occur and not be detected in a timely manner resulting in payroll expenses to be charged incorrectly to the federal awards. Recommendation: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a new payroll process using the ADP system. Employees are now required to approve their own time within the ADP portal, and this approval is documented. Following this, supervisors review and approve their employees’ time, which is also documented in the portal. Human Resources then prepares the payroll, reviewing all entries and initialing a shared file of payroll items and providing backup for changes. Once HR confirms accuracy, they notify Finance. Finance then reviews the payroll, with the Finance Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within ADP by employees and supervisors and the shared file drive where HR and Finance initial off on the reviewed payroll items, ensuring a traceable record of the entire payroll approval process.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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. Also, under eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (initially reported 2014) Assistance Listing Number: 93.224 and 93.527 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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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 also lacks a clear review process related to the sliding fee scale to identify errors quickly to allow for corrections to be made in a timely manner. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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 13 of the 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 as well as additional supporting staff within the finance department. The Billing and Collections Policy was updated to waive co-pays for students in the School-Based Program. The Billing Department is in the process of auditing and implementing quarterly feedback & training sessions for the Operations Department for training and compliance for the Sliding Fee Discount Program. This process was implemented in 2025.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) Finding Type: Significant Deficiency in Internal Control Questioned Costs: $0 Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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. Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs. Effect: The Organization could submit incorrect information. Recommendation: Documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: No documentation of employee time approval by supervisors could be provided. The payroll clerk processes the payroll, and the finance director approves through the releasing of the payroll. However, there is no formal documentation of the overall review of the payroll process and the supervisors’ approval of time recorded by employees. This is a systemic issue and has been a finding in the previous year. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards The requirement is for the Organization to have a process in place to correctly calculate, record, and pay payroll related expenses in accordance with grant and program requirements. Cause: The Organization does not have an effective process to review, approve, and document the supervisor’s approvals prior to making the payments. Effect: This situation provides an opportunity for errors and unauthorized transactions to occur and not be detected in a timely manner resulting in payroll expenses to be charged incorrectly to the federal awards. Recommendation: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a new payroll process using the ADP system. Employees are now required to approve their own time within the ADP portal, and this approval is documented. Following this, supervisors review and approve their employees’ time, which is also documented in the portal. Human Resources then prepares the payroll, reviewing all entries and initialing a shared file of payroll items and providing backup for changes. Once HR confirms accuracy, they notify Finance. Finance then reviews the payroll, with the Finance Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within ADP by employees and supervisors and the shared file drive where HR and Finance initial off on the reviewed payroll items, ensuring a traceable record of the entire payroll approval process.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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. Also, under eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (initially reported 2014) Assistance Listing Number: 93.224 and 93.527 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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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 also lacks a clear review process related to the sliding fee scale to identify errors quickly to allow for corrections to be made in a timely manner. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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 13 of the 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 as well as additional supporting staff within the finance department. The Billing and Collections Policy was updated to waive co-pays for students in the School-Based Program. The Billing Department is in the process of auditing and implementing quarterly feedback & training sessions for the Operations Department for training and compliance for the Sliding Fee Discount Program. This process was implemented in 2025.