Findings Citing § 200.303

FINDING: 2025-001 - Suspension and Debarment Federal Program: Research and Development Cluster – Various ALNs Federal Agency: U.S Department of Defense and U.S. Department of Health and Human Services Statement of Condition: The Foundation did not follow internal control procedures designed to ensure compliance with suspension and debarment requirements for covered contracts. During our testing of procurement transactions subject to suspension and debarment requirements, we noted that the Foundation did not retain documentation demonstrating that it had reviewed the System for Award Management (SAM.gov) exclusion records prior to entering into contractual agreements. Specifically, there was no evidence that a SAM.gov printout was reviewed or approved to verify that vendors were not suspended or debarred at the time of contract execution. In conjunction with the audit, we reviewed the SAM Exclusions for all transactions in our sample and we noted that no transactions were with entities that were suspended or debarred. Criteria: In accordance with 2 CFR Part 200.303, a non-Federal entity must establish and maintain effective internal control over Federal awards that provide reasonable assurance that the non-Federal entity manages the Federal award in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Cause: The Foundation did not follow the internal control procedures to document the review of the SAM.gov exclusion list prior to contract execution. Effect: The lack of following internal control procedures to review the verification of suspension and debarment prior to entering into contracts, agreements, and grants, could result in the Foundation entering into covered transactions with entities that are suspended and debarred which is not allowed under the Research and Development Cluster. Although no actual noncompliance was identified during our procedures, the lack of documented verification represents a deficiency in internal control over compliance that could adversely affect the Foundation's ability to comply with suspension and debarment requirements. Questioned Costs: None Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Foundation consistently apply written procedures to verify, prior to executing any covered transaction expected to equal or exceed $25,000, that the prospective contractor is not suspended, debarred, or otherwise excluded. The Foundation should document its verification by retaining a dated SAM.gov exclusion search printout (or equivalent screenshot), obtaining a certification from the contractor, or including an appropriate suspension and debarment clause in the agreement. Evidence of the review and approval should be retained in the procurement file to demonstrate compliance. Views of responsible officials and planned corrective action: Management agrees with the finding. See separate corrective action plan.

Finding 2025-002: Reporting – Material Weakness and Scope Limitation Federal Program: Health Center Program (Assistance Listing 93.224) Criteria: Pursuant to 2 CFR 200.303, the Organization is required to establish and maintain effective internal control over federal awards to provide reasonable assurance that the award is managed in compliance with federal statutes, regulations, and the terms and conditions of the award. In addition, the Uniform Data System (UDS) submitted to the Health Resources and Services Administration (HRSA) should be supported by underlying records and documentation sufficient to demonstrate the accuracy and completeness of the information reported. Condition: During testing of the UDS Universal Report, the auditors selected key data elements for testing to determine whether the reported amounts were supported by underlying documentation. The Organization was able to provide support for Table 9E, Line 1g and Table 9E, Line 1q. However, sufficient supporting documentation, reconciliations, reports, or other evidence was not available to support the remaining key data elements selected for testing. As a result, the auditors were unable to determine whether the reported information was complete and accurate. Cause: The Organization did not maintain adequate documentation and reconciliation procedures to support all data reported within the UDS Universal Report. Effect: The lack of supporting documentation increases the risk that errors, omissions, or inaccurate information submitted to HRSA may not be detected and corrected in a timely manner. Additionally, the auditors were unable to obtain sufficient appropriate audit evidence to determine whether certain reported UDS data elements were accurate and in compliance with reporting requirements. Questioned Costs: None. Context: Of the key data elements selected for testing, only two line items, Table 9E, Line 1g and Table 9E, Line 1q, were successfully reconciled to supporting documentation. The remaining key data elements could not be verified due to insufficient supporting documentation. Repeat Finding: This is not a repeat finding. Recommendation: Management should establish and implement procedures to ensure that all information reported within the UDS Universal Report is supported by detailed documentation and reconciled to underlying source records prior to submission. Supporting documentation and reconciliations should be retained and readily available for review. Management Response: Management concurs with the finding. The Organization recognizes that documentation and reconciliation procedures supporting the Uniform Data System (UDS) submission were not sufficient to demonstrate the accuracy and completeness of all reported data elements. During 2026, management will implement formal procedures requiring each UDS reporting element to be supported by documented source data, reconciled to underlying records, and independently reviewed prior to submission. These procedures will include a pre-submission review checklist and internal timeline so that all reconciliations and supporting documentation are completed and reviewed in advance of the UDS reporting deadline. Responsibility for preparation, review, and approval of UDS reporting will be formally assigned and documented. To strengthen this review, management plans to hire additional senior management personnel, including an Accounting Manager, to support the Accounting Department and oversee reconciliation of the UDS financial tables (Tables 8A, 9D, and 9E) to the general ledger and audited financial statements. In addition, management plans to hire a Director of Risk and Compliance, who will be responsible for overseeing the Organization's compliance with HRSA Health Center Program requirements, including the UDS reporting process. The Director of Risk and Compliance will perform an independent review of the completed UDS submission prior to certification, verifying that each reported data element is supported by documented source data and reconciliations, and will periodically monitor adherence to the procedures described in this response, with results reported to the Chief Executive Officer (CEO) and the Board of Directors. Any discrepancies identified before or after submission will be documented, investigated, and corrected in a timely manner, including through the HRSA UDS review and revision process where applicable. Management will also provide additional training to all staff involved in collecting, preparing, and reviewing UDS data, covering HRSA UDS reporting requirements, data definitions, and documentation standards. In addition, management will establish document retention procedures to ensure all supporting schedules, reconciliations, and reports are maintained in a centralized location and readily available for future review. New policies requiring timely account reconciliations and the retention of supporting records will be monitored and reviewed regularly by the Chief Financial Officer (CFO) to ensure they are consistently followed.

Finding 2025-005: Sliding Fee Discount Applications Not Updated Annually – Significant Deficiency and Instance of Noncompliance Federal Program: Health Center Program (Assistance Listing 93.224) Criteria: Health centers are required to establish and implement a board-approved sliding fee discount program. Consistent with the organization's policy, patients seeking a sliding fee discount are required to complete and update their sliding fee discount application annually to support continued eligibility for discounted services. Condition: During testing of four patient selections receiving services under the sliding fee discount program, we noted that 2 of 40 selections did not have a sliding fee discount application completed within one year of the date of service. As a result, the organization did not maintain current eligibility documentation supporting the discounts provided to these patients in accordance with its board-approved policy. Cause: Controls were not operating effectively to ensure sliding fee discount applications were renewed annually and updated documentation was obtained prior to providing discounted services. Effect: Failure to obtain updated sliding fee discount applications increases the risk that discounts may be provided to individuals without current eligibility documentation and that the sliding fee discount program may not be administered in accordance with the organization's board-approved policy. Questioned Costs: None. Context: We tested 40 patient selections receiving sliding fee discounts under the Health Center Program. Of the 40 selections tested, 2 did not have a sliding fee discount application completed within one year of the applicable date of service. These exceptions indicate that controls designed to monitor the timely renewal of sliding fee discount applications were not operating effectively. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management strengthen controls over the sliding fee discount program by implementing procedures to track application expiration dates and ensure updated applications are obtained prior to providing discounted services. Management should also perform periodic monitoring of patient records to verify compliance with the annual renewal requirement established in its board-approved policy. Management Response: Management concurs with the finding. The Organization acknowledges that controls intended to ensure annual renewal of sliding fee discount applications were not consistently operating as intended. Management is strengthening monitoring procedures by implementing tracking mechanisms to identify expiring applications and requiring verification of eligibility documentation prior to continued application of discounts, consistent with the requirement under Section 330(k)(3)(G) of the Public Health Service Act (42 U.S.C. 254b(k)(3)(G)) that health centers establish systems for sliding fee eligibility determination. In addition, management will provide additional training to all billing and front-desk staff on the sliding fee discount program, including eligibility determination, income and household-size documentation requirements, application renewal procedures, and the proper application of discounts in the practice management system. Periodic supervisory reviews will be performed to ensure compliance with the Board-approved sliding fee discount policy, consistent with the internal control requirements of the Uniform Guidance (2 CFR 200.303). Management will also review the sliding fee discount schedule on a regular basis, no less than annually, and will update it in a timely manner whenever necessary, including upon publication of the annual Federal Poverty Guidelines, so that discounts continue to be adjusted on the basis of each patient’s ability to pay as required by 42 CFR 51c.303(f), with all updates presented to the Board of Directors for approval and communicated promptly to billing staff. Documentation of staff training, schedule reviews, and Board approvals will be retained to demonstrate compliance with HRSA Health Center Program requirements, including Chapter 9 (Sliding Fee Discount Program) of the HRSA Health Center Program Compliance Manual.

Finding 2025-008: Activities Allowed/Unallowed and Allowable Costs – Significant Deficiency Federal Program: Health Center Program (Assistance Listing 93.224) and Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease (Assistance Listing 93.918) Criteria: Pursuant to 2 CFR 200.303, the Organization is required to establish and maintain effective internal control over federal awards to provide reasonable assurance that the award is managed in compliance with federal statutes, regulations, and the terms and conditions of the award. In addition, 2 CFR 200.403(g) requires costs charged to a federal award to be adequately documented. Effective controls should include documented review and approval of expenditures and reimbursement requests to ensure costs charged to the federal award are allowable, allocable, reasonable, and adequately supported. Condition: The Organization represented that expenditures charged to Federal Programs were reviewed and approved by the Chief Executive Officer prior to reimbursement requests being submitted. During testing, the auditors noted no evidence of review or approval by the Chief Executive Officer for expenditures selected for testing. In addition, reimbursement requests prepared by the Chief Financial Officer were not supported by documentation demonstrating that the amounts requested were reconciled to specific expenditures incurred under the grant at the time the requests were prepared. Cause: Management did not maintain documented procedures requiring retention of evidence of review and approval over expenditures charged to the grant. In addition, reimbursement requests were prepared and submitted without a formal reconciliation package demonstrating that the requested amounts were supported by documented expenditures. Effect: The lack of documented review and approval increases the risk that expenditures charged to the federal award may not be allowable, allocable, reasonable, or adequately documented and that errors or noncompliance may not be detected in a timely manner. Questioned Costs: None. Context: Of the items tested, the auditors noted the review control described by management was not operating as designed. Specifically, documentation evidencing Chief Executive Officer review and approval of expenditures was not maintained and support for reimbursement requests was not consistently retained. Repeat Finding: This is not a repeat finding. Recommendation: Management should establish and document a formal review process over expenditures charged to Federal Programs. Documentation supporting reimbursement requests should be maintained and should include a reconciliation of amounts requested to actual allowable expenditures incurred under the grant. Evidence of reviewer approval should be retained. Management Response: Management concurs with the finding. The Organization acknowledges that evidence of review and approval was not consistently retained and that documentation supporting reimbursement requests was not maintained at a level sufficient to demonstrate compliance with federal requirements. To address this deficiency, management is implementing formal documentation standards requiring each reimbursement request to be supported by a reconciliation of amounts requested to actual allowable expenditures recorded in the general ledger, together with documented evidence of reviewer approval. Each reconciliation will be prepared by grant and budget category and will compare cumulative expenditures recorded in the general ledger to cumulative amounts previously drawn through the Payment Management System, with any differences investigated and resolved before the request is submitted. The Chief Financial Officer (CFO) or the Chief Executive Officer (CEO) will then review and approve each Request for Reimbursement form and related reconciliation before submission, consistent with the approval process described in the responses to Findings 2025-003 and 2025-006. Evidence of this review will include the approver’s handwritten or electronic signature and the approval date on both the Request for Reimbursement form and the supporting reconciliation. In addition, all expenditures will require documented preapproval by the respective department director or other designated personnel before costs are incurred. Original receipts, invoices, and other supporting documentation will be submitted to the Accounting Department, which will review each expenditure to verify that it is properly authorized, adequately supported, accurately coded, and incurred for a legitimate business purpose of the Organization. Prior to the submission of any reimbursement request, expenditures charged to federal awards will be reviewed for allowability, allocability, reasonableness, and adequate documentation in accordance with the cost principles of the Uniform Guidance (2 CFR Part 200, Subpart E). All reconciliations, approvals, and supporting documentation will be retained in accordance with federal record retention requirements and made readily available for review. Supporting documentation will be maintained in a centralized location, organized by grant and reimbursement period, and retained in accordance with the Uniform Guidance record retention requirements (2 CFR 200.334). The Organization will incorporate these review and approval procedures into its written financial policies and procedures, and finance staff involved in preparing reimbursement requests will receive training on them. In addition, management will periodically perform a secondary review of a sample of completed reimbursement requests to verify that reconciliations, approvals, and supporting documentation are complete, and any exceptions identified will be promptly corrected and documented.

Finding 2025-009: Activities Allowed/Unallowed and Allowable Costs – Significant Deficiency Federal Program: Health Center Program (Assistance Listing 93.224) and Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease (Assistance Listing 93.918) Criteria: Management should establish and maintain appropriate internal controls to ensure employee compensation is reviewed and approved by authorized personnel independent of payroll processing and accounting functions. Segregation of duties helps reduce the risk of unauthorized or inappropriate compensation changes. Condition: The organization's control documentation indicates that the Chief Executive Officer (CEO) is responsible for reviewing and approving employee pay rates. During testing, we noted that employee pay rate approvals were instead being performed by the CFO, who is also responsible for various accounting and payroll-related functions. Cause: The control was not operating as designed, as responsibility for pay rate approvals had been delegated to the accountant rather than the CEO. Effect: The lack of independent approval over employee pay rates increases the risk that unauthorized or inaccurate compensation changes could occur and remain undetected. No instances of unallowable payroll costs or noncompliance were identified during our testing. Questioned Costs: None. Context: This is a systemic problem. The deficiency relates to the organization's control over the review and approval of employee compensation rates charged to federal programs. Although management's documented control assigns responsibility for pay rate approval to the CEO, the control was not operating as designed because approvals were being performed by the CFO, who also has payroll and accounting responsibilities. Repeat Finding: This is not a repeat finding. Recommendation: Management should ensure that employee pay rates and subsequent compensation changes are reviewed and approved by an appropriate member of management, such as the CEO or another designated individual independent of payroll processing and accounting functions. Documentation of such approvals should be maintained. Management Response: Management concurs with the finding. The Organization acknowledges that employee compensation approvals were not consistently performed in accordance with documented procedures. To strengthen segregation of duties and oversight, responsibility for review and approval of employee compensation changes will be reassigned to appropriate executive leadership personnel independent of payroll processing responsibilities, consistent with the requirement under the Uniform Guidance (2 CFR 200.303) that the Organization establish and maintain effective internal control over federal awards. All pay raises will be initiated upon the recommendation of the respective department directors and must be approved by the Chief Executive Officer (CEO) or Chief Financial Officer (CFO) prior to processing. All compensation changes will be made in accordance with the Organization's Board-approved written compensation policies and will be reasonable and consistent with compensation paid for similar work, as required by the compensation standards for personal services under the Uniform Guidance (2 CFR 200.430). Human Resources will be responsible for ensuring that all pay raise documentation, including department director recommendations and CEO/CFO approvals, is properly completed and filed in the employee’s personnel record. Documentation of all compensation approvals will be maintained in accordance with the record retention requirements of the Uniform Guidance (2 CFR 200.334) and periodically reviewed to ensure compliance with established policies and procedures.

FINDING 2025-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed 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): 2025 Compliance Requirement: Activities Allowed or Unallowed Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2024-003. Condition and Context As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with applicable requirements. The City had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. INDIANA STATE BOARD OF ACCOUNTS 19 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Prior to the receipt of direct COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF), all eligible entities were required to execute a Financial Assistance Agreement (Agreement), which included the Award Terms and Conditions that recipients must comply with in carrying out the objectives of their award. Per the Agreement, the City was responsible for the effective administration of the federal award, as well as the application of the sound management practices and administration of federal funds in a manner consistent with program objectives and terms and conditions of the award. Recipients may use the SLFRF funds for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act, as added by section 9901 of the American Rescue Plan Act of 2021. The SLFRF program provides substantial flexibility for each recipient to meet the local needs within four separate eligible use categories. Recipients may use the SLFRF funds to:  Respond to the COVID-19 public health emergency and its negative economic impacts;  Respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of eligible employers that have eligible workers who are performing essential work;  Provide government services, to the extent COVID-19 caused a reduction in revenues collected in the most recent full fiscal year of the recipient; and  Make necessary investments in water, sewer, or broadband infrastructure. The City elected to receive the standard revenue loss allowance, allowing it to claim its total SLFRF allocation of $3,821,386 as revenue loss to use for government services. The allocated funds may only be used to cover costs incurred from the period beginning on March 3, 2021, and ending on December 31, 2024. Obligations for costs incurred are required to be liquidated no later than December 31, 2026. During the audit period, the City paid claims related to health care premiums. The City did not process these payments in the same manner as other City disbursements. The payments were made via ACH transactions through the City's financial institution. An Accounts Payable Voucher (APV) or check was not prepared for these payments. As a result, the payments were not presented to the Common Council for review and approval nor were they certified by the fiscal officer. The lack of effective internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 20 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls over the SLFRF expenditures was not designed by management of the City to ensure the SLFRF funds were being used appropriately. The City did not process the SLFRF payments in the same manner as other payments. The City was not aware that ACH payments should be supported by an APV, approved by the Common Council, and certified by the fiscal officer. Effect The lack of an effective internal control system could enable material noncompliance to occur and remain undetected. Noncompliance with the Activities Allowed or Unallowed compliance requirement could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended the City's management establish a proper system of internal controls and develop policies and procedures to ensure that expenditures of federal awards are allowable. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-004 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 2025 Compliance Requirements: Allowable Costs/Cost Principles, Period of Performance Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-003. Condition and Context As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with applicable requirements. The City had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. INDIANA STATE BOARD OF ACCOUNTS 21 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Prior to the receipt of direct COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF), all eligible entities were required to execute a Financial Assistance Agreement (Agreement), which included the Award Terms and Conditions that recipients must comply with in carrying out the objectives of their award. Per the Agreement, the City was responsible for the effective administration of the federal award, as well as the application of the sound management practices and administration of federal funds in a manner consistent with program objectives and terms and conditions of the award. Recipients may use the SLFRF funds for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act, as added by section 9901 of the American Rescue Plan Act of 2021. The SLFRF program provides substantial flexibility for each recipient to meet the local needs within four separate eligible use categories. Recipients may use the SLFRF funds to:  Respond to the COVID-19 public health emergency and its negative economic impacts.  Respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of eligible employers that have eligible workers who are performing essential work.  Provide government services, to the extent COVID-19 caused a reduction in revenues collected in the most recent full fiscal year of the recipient.  Make necessary investments in water, sewer, or broadband infrastructure. The City elected to receive the standard revenue loss allowance, allowing it to claim its total SLFRF funds allocation of $3,821,386 as revenue loss to use for government services. The allocated funds may only be used to cover costs incurred from the period beginning on March 3, 2021, and ending on December 31, 2024. Obligations for costs incurred are required to be liquidated no later than December 31, 2026. During the audit period, the City identified that it had not properly obligated its remaining unspent SLFRF funds by the required deadline. Based on guidance from its financial consultant, the City reevaluated activity recorded in its Coronavirus State and Local Fi fund and adjusted the fund to include health insurance payments that had previously been made from another City fund. These payments related to a contractual agreement executed in July 2024 for coverage from August 2024 through July 2025. Health insurance costs incurred and paid between January and July 2025 totaled $591,563. Of the total SLFRF funds balance, the City had $77,706 in funds that were properly obligated by December 31, 2024, but remained unspent. These obligated funds were reclassified to cover $77,706 of the $591,563 in health insurance costs incurred between January and July 2025, leaving $513,857 of those costs without a corresponding obligation as of the December 31, 2024 deadline. In addition, the City incurred and paid health insurance costs totaling $619,875 for the period August through December 2025, which occurred after the contractual coverage period ended. These costs also were not obligated by December 31, 2024. As a result, a total of $1,133,732 in SLFRF funds expenditures were not obligated within the required timeframe and were not paid within the period of performance. Accordingly, these costs do not meet program requirements and are considered unallowable. The City also did not have written procedures for determining the allowability of costs in accordance with subpart E of C CFR 200. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 22 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.300(b) states in part: "The non-Federal entity is responsible for complying with all requirements of the Federal award. . . ." 2 CFR 200.302 states: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. . . . (7) Written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award." INDIANA STATE BOARD OF ACCOUNTS 23 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (g) Be adequately documented. . . ." 31 CFR 35.5 states in part: "(a) . . . A recipient may only use funds for the purposes enumerated in § 35.6 (b) through (f) to cover costs incurred during the period beginning March 3, 2021, and ending December 31, 2024 . . . (c) . . . A recipient must return any funds that have not been obligated by December 31, 2024, pursuant to orders placed for property and services or entry into contracts, subawards, and similar transactions that require payment other than funds in the amount reported to Treasury by April 30, 2024, as the estimate of funds that the recipient will expend to comply with 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. A recipient must return funds obligated for a use . . . by December 31, 2024, but not expended by December 31, 2026. . . ." Cause A proper system of internal controls over the SLFRF funds expenditures was not designed by management of the City to ensure the SLFRF funds were being used appropriately. The City did not have policies and procedures in place to ensure that its SLFRF funds were properly obligated by the December 31, 2024 deadline. Effect The lack of an effective internal control system enabled material noncompliance with the Allowable Costs/Cost Principles and Period of Performance compliance requirements to occur and remain undetected. Payments made from the SLFRF funds which were not obligated as of December 31, 2024, as required by the federal grant funding resulted in payments not made in compliance with the period of performance, and, therefore, were not allowable costs. Questioned Costs We identified $1,133,732 in known questioned costs as noted above in the Condition and Context. Recommendation We recommended that management of the City establish a proper system of internal controls and develop policies and procedures to ensure that expenditures of federal awards are allowable costs and occur within the period of performance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-005 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - 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): 2025 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2024-004. Condition and Context Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that vendors or subrecipients are not suspended, debarred, or otherwise excluded from receiving federal funds. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification can be done by checking SAM.gov Exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Upon inquiry of the City, in order to review the procedures in place verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the City disclosed that the venders were not verified by any of the three methods. Two covered transactions, exceeding $25,000 for goods or services that were paid using COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, were identified during the audit period, and both were selected for testing. The City did not perform any procedures to verify the suspension and debarment status prior to executing the contracts. The amount paid totaled $1,211,438. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 25 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause The City did not establish policies and procedures to ensure that appropriate suspension and debarment verification procedures were performed for vendors and subrecipients prior to entering into any contracts or subawards. Effect The lack of an effective internal control system enabled material noncompliance to occur and remain undetected. Noncompliance with the Procurement and Suspension and Debarment compliance requirement could lead to contracting with vendors who are suspended or debarred from receiving federal grant funding. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City establish a proper system of internal controls and develop policies and procedures to ensure that appropriate suspension and debarment verification procedures are performed for vendors and subrecipients prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-006 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): 2025 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-005. INDIANA STATE BOARD OF ACCOUNTS 26 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with applicable requirements. The City had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. Recipients are required to submit an initial interim report and quarterly or annually submit Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates are based upon the type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The City was classified as a city with a population below 250,000 residents that was allocated less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF). As such, an annual P&E report, covering one calendar year from April 1, 2024 to March 31, 2025, was prepared and submitted by the Clerk-Treasurer to the Treasury by April 30, 2025. The P&E report data to be submitted included, but was not limited to, current period and total cumulative obligations and current period and total cumulative expenditures. We were unable to trace the annual P&E report to the City's records. The errors identified were as follows:  Total cumulative obligations were overstated by $1,133,732.  Current period obligations were understated by $97,891.  Current period expenditures were understated by $41,094.  Total cumulative expenditures were understated by $2,696. In addition, the P&E report required obligations and expenditures to be reported by project. The City completed the report utilizing total amounts for all projects. There were 11 projects appropriated using the SLFRF funds award. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 27 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds, . . ." Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds, page 13, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." Cause The City officials appropriated the entire SLFRF award funds in May 2022 and reported the entire award amount as obligated in the P&E reports completed in 2023, 2024, and 2025. City officials were not aware that appropriating the funds alone does not constitute obligations of the award. Additionally, correcting adjustments made after the report was submitted partially contributed to the differences noted in expenditures. City officials were also not aware that obligations and expenditures could not be reported in total but should be reported by project. Effect Without a proper system of internal controls in place that operated effectively, the City did not file an accurate annual P&E report as required under the federal award. As such, the City did not accurately report current period obligations, current period expenditures, cumulative obligations, and cumulative expenditures when filing the P&E report for the period April 1, 2024 to March 31, 2025. As a result, material noncompliance occurred and remained undetected. Noncompliance with the provisions of federal statues, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a proper system of internal controls and develop and implement reporting policies and procedures to ensure that all required reports are completed and accurate when submitted. INDIANA STATE BOARD OF ACCOUNTS 28 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 29

FINDING 2025-003 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): FY 2025 Compliance Requirement: Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 17 GRANT COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Prior to entering into subawards and covered transactions with the COVID-19 - Coronavirus State and Local Fiscal Recovery (SLFRF) Funds, recipients are required to verify that such contracts and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under procurement and nonprocurement transactions (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person or adding a clause or condition to the covered transaction with that person. During the audit we identified seven vendors associated with contracts and covered transactions. A sample of two vendors were examined to determine whether the County verified the suspension and debarment status prior to payment. The County had not verified vendor's suspension and debarment status for either of the vendors tested prior to issuing payment. The lack of internal controls and noncompliance were systematic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause This condition arose because the County lacked documented procedures requiring suspension and debarment verification during the contracting process. Procurement staff were not consistently performing eligibility checks or including the necessary federal clauses in contracts for BW Construction and J&K Communications. Consequently, the County did not have effective internal controls to ensure vendors were eligible to receive federal funds at the time contracts were executed. INDIANA STATE BOARD OF ACCOUNTS 18 GRANT COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect As a result of this issue, the County may be unable to support the SLFRF funds that were used in accordance with federal regulations, creating the potential for repayment or other corrective action. The deficiency also weakens overall accountability and could impact the County's reliability in managing future federal awards. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County review and evaluate internal controls over federal programs to ensure compliance with requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2025 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Prior to entering into subawards and covered transactions with the COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF), recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expended 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 that person, or adding a clause or condition to the covered transaction with that person or entity. A population of six covered transactions paid from SLFRF award funds were identified, and three were tested. None of the three covered transactions tested totaling $304,371 included the appropriate provisions in the contract, nor did the County require a certification or check the SAM EPLS to ensure the entity was not suspended or debarred prior to making payment. The lack of internal controls and noncompliance was a systemic issue throughout the audit period and enabled material noncompliance to occur and remain undetected. INDIANA STATE BOARD OF ACCOUNTS 16 MIAMI COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "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. These internal controls should align with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control-Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management of the County did not have a formalized suspension and debarment policy to ensure procedures related to suspension and debarment requirements were in place and followed. Effect Any program funds the County used to pay vendors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the management of the County 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 2025-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2025 Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-004. Condition and Context Recipients are required to submit quarterly or annual Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates, are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The County was classified as a county with a population below 250,000 residents that received an allocation of less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF). As such, the P&E report covering the period from April 1, 2024 to March 31, 2025, was required to be submitted to the Treasury by April 30, 2025. The P&E report was submitted April 30, 2025, as required; however, the information submitted did not match the County's ledgers for Total Period Expenditures. Total Period Expenditures were reported as $4,048,983. The ledger amount was $1,229,644, resulting in expenditures being overstated by $2,819,339. One person prepared and submitted the report with no review by an additional person. There were no internal controls in place to prevent, or detect and correct, noncompliance related to the P&E report. The lack of internal controls and noncompliance was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 18 LAWRENCE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds, page 13, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary or her delegate, as applicable, periodic reports providing detailed accounting of the uses of funds, . . ." Cause The County's system of internal controls was not effective in detecting the errors noted in the Condition and Context above and did not allow for the appropriate supporting documentation to be retained for review. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As such, the County did not report current period expenditures properly when filing the P&E reports during the audit period. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. In addition, not meeting the SLFRF reporting requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of federal awards. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 19 LAWRENCE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the County design and implement a proper system of internal controls, including policies and procedures to ensure that effective internal controls are implemented over all grant compliance requirements for reporting. One person should prepare the report, and a second person, who is knowledgeable about the reporting requirement for the program, should review the report 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.

Department of Energy and Passed through Nebraska Department of Environment and Energy Federal Financial Assistance Listing 81.254, 2025-150224869 Grid Infrastructure Deployment and Resilience Procurement, Suspension & Debarment Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.318 maintains that recipients must have and use documented procurement policies and must conform procurement standards in sections 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are applicable. Additionally, 2 CFR 200.214 requires recipients to restrict the subawards and contract with certain parties that are debarred, suspended, or excluded from ineligible participation in Federal assistance programs or activities. Condition: Testing of expenditures under the federal program identified opportunities to strengthen the District’s procurement and vendor compliance documentation practices. Specifically: -The District has not formalized and adopted a written procurement policy. - In two instances involving covered transactions exceeding $25,000, documentation was not retained to demonstrate that a verification was performed to confirm the vendor was not suspended or debarred from participation in federally funded programs. - In two instances, supporting documentation was not maintained to demonstrate the procurement method utilized and the basis for vendor selection. Cause: Covered transactions were not evaluated compared to Uniform Guidance as it relates to procurement methods and suspension and debarment. Effect: Ineffective controls over this area of compliance could result in a reasonable possibility the District would be noncompliant with the compliance requirements outlined above. Additionally, the District may enter into a covered transaction with a vendor that is suspended or debarred. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 2 out of 5 vendors were selected for testing. Repeat Finding from Prior Year: No Recommendation: We recommend the District implement a procurement policy that complies with Uniform Guidance. In addition, we suggest that management implement procedures and control processes related to the review of covered transactions to ensure the procurement methods are being followed and any contracts include the required Uniform Guidance provisions. Also, management should ensure vendors are not suspended or debarred from doing business with the federal government prior to entering into work with the vendor. Views of Responsible Officials: Management agrees with the finding.

Significant Deficiency in Internal Control over Compliance Finding number: 2025-001 AL number: 17.259 AL title: Workforce Innovation and Opportunity Act (WIOA) Name of federal agency: U.S. Department of Labor Repeat finding: Yes - 2024-002 Criteria: Uniform Guidance (2 CFR 200.303 and 2 CFR 200.430) requires that charges to federal awards be accurate, allowable, and supported by sufficient documentation. Internal controls should be designed and implemented to provide reasonable assurance that payroll costs are accurately billed to federal programs. Condition: During testing of payroll disbursements for allowable costs and activities under the Workforce Innovation and Opportunity Act ("WIOA"), two payroll billing errors were identified totaling $151. The errors related to payroll costs charged to the grant for two individuals in July 2025. Specifically, the reimbursement calculation utilized total compensation amounts that included incentive pay rather than the eligible salary amounts required for grant reimbursement purposes. Payroll charges are entered by accounting staff and subject to monthly review by the CFO. While this review process represents a key control, the errors identified indicate that the review was not sufficiently detailed to detect all inaccuracies in the reimbursement calculations. Cause: The errors resulted from insufficient internal control over the review of grant reimbursement calculations and supporting documentation prior to submission. Specifically, controls were not operating effectively to verify that salary amounts used in reimbursement requests agreed to approved payroll records and allocation schedules. Effect or potential effect: The absence of a robust review process increases the risk of noncompliance with grant requirements and the potential for inaccurate billing to federal programs, even if the financial impact is not material. Recommendation: We recommend enhancing the existing review process to ensure payroll charges billed to federal programs are supported by underlying documentation such as payroll registers, time records, and allocation spreadsheets. This could include developing a standardized reconciliation checklist or requiring secondary review for accuracy. Strengthening the existing control will help minimize the risk of billing errors due to human oversight. Views of responsible officials: Management acknowledges that errors occurred in the July 2025 WIOA reimbursement calculations due to the use of compensation amounts that included incentive pay rather than the appropriate base salary amounts. While management had revised reimbursement calculations in other periods to exclude incentive compensation, the July calculations were not fully updated resulting in these exceptions. Management believes the errors were isolated and immaterial in nature but recognizes the opportunity to strengthen review procedures surrounding grant reimbursement calculations. Additional review procedures and reconciliation steps will be implemented to enhance the accuracy of future grant billings. Management also notes that participation in the WIOA program concluded in October 2025, reducing the likelihood of similar issues occurring within this specific program in future periods. Responsible party: Nora Davis, Chief Financial Officer

ELIGIBILITY (2025-005) Federal Agency: U.S. Department of Human Services Federal Program Name: Temporary Assistance for Needy Families (TANF) Assistance Listing Number: 93.558 Federal Award Identification Number and Year: 2501MNTANF, 2025 Compliance Requirement Affected: Eligibility Award Period: Year Ended December 31, 2025 Type of Finding: Significant Deficiency in Internal Control 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 County is not doing internal casefile reviews on TANF cases. The County's internal controls do not include a process to review and ensure accuracy of case files for TANF cases. Questioned Costs: None. Context: The County is not doing internal casefile reviews on TANF cases. The County's internal controls do not include a process to review and ensure accuracy of case files for TANF cases. Cause: Ongoing healthcare emergency has changed many processes in the HHS department and county is short staffed. Effect: The county could be reporting inaccurate information affecting the status of eligibility. Repeat Finding: No. Recommendation: It is recommended that the County start reviewing casefiles. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding.

FINDING 2025-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): CY 2025 Compliance Requirement: Reporting Audit Finding: Material Weakness Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the County to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Recipients are required to quarterly or annually submit Project and Expenditure (P&E) reports for the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective dues dates, are based upon the type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The County was classified as a metropolitan county with a population below 250,000 residents that received an allocation of less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds. As such, the P&E report, covering April 1, 2024 to March 31, 2025, was required to be submitted to the Treasury by April 30, 2025. INDIANA STATE BOARD OF ACCOUNTS 17 BLACKFORD COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The County submitted the annual P&E report as required; however, the County did not have internal controls in place of the reporting process. The P&E report was prepared and submitted by the same person without a proper oversight or review process in place. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds, page 13, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds, . . ." Cause The County did not establish an internal control process over reporting. Effect There is not any evidence of effective internal controls being in place over reporting, which could allow for errors to go undetected. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County's management establish a system of internal controls to ensure compliance and comply with the grant agreements and the Reporting compliance requirement. Additionally, the County should ensure that all necessary personnel understand the requirements and County policies. INDIANA STATE BOARD OF ACCOUNTS 18 BLACKFORD COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

2025-001 Eligibility Prior Year Finding Number: N/A Year of Finding Origination: 2022 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: 2501MNTANF; 2025 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish, document, 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. § 142G.10, subd. 1, establish the general eligibility requirements for TANF benefits. Condition: The Minnesota Department of Human Services maintains the computer system, MAXIS, which is used by Stearns County to support the eligibility determination process. In the recipient files reviewed for eligibility, not all documentation was available, updated, or input correctly to support recipient eligibility. The following exceptions were noted in the sample of 40 MAXIS recipient files tested: • One recipient’s case file did not include supporting documentation for verification of school enrollment. • One recipient’s case file did not include evidence of a signature on the combined application form. • One recipient’s case file did not include supporting documentation for establishing parenthood. Questioned Costs: Not applicable. The County administers the program, but the State of Minnesota pays benefits to recipients in this program. Context: The State of Minnesota and Stearns County split the eligibility determination process. Pursuant to Minnesota statutes, Stearns County performs the “intake function” needed for this program, while the State maintains the MAXIS system, which supports the eligibility determination process. Recipients receive benefit payments from the State. The total population of eligible recipients was 885. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of updating information in MAXIS and the lack of verification or follow-up of eligibility determining factors increase the risk that program recipients will receive benefits when they are not eligible. Cause: Program personnel entering recipient data into MAXIS did not ensure all required information was input correctly, supported, and 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 2025-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Auditor's Response The Town acknowledged in its Corrective Action Plan that one vendor paid with SLFRF funds was not verified for suspension and debarment status. Regardless of the timing of the prior audit engagement, the Town remains responsible for adhering to all grant requirements, including procurement and suspension and debarment compliance throughout 2025. We reaffirm our finding and will review the status of the finding during our next audit. Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2025 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-002. Condition and Context The Town elected to receive the standard revenue loss allowance, allowing the Town to claim its total direct COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) allocation as revenue loss to use for government services. As such, all SLFRF program funds to date were expended under the revenue loss eligible use category. Prior to entering into covered transactions with SLFRF award funds, recipients are required to verify that such contracts and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under procurement and nonprocurement transactions (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person or adding a clause or condition to the covered transaction with that person. We sampled four vendors and related contracts to determine whether the Town verified the suspension and debarment status prior to payment. The Town had not verified the vendor's suspension and debarment status for one vendor prior to issuing payment. Federal expenditures to the vendor totaled $172,700. The lack of internal controls and noncompliance was isolated to the one vendor identified. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 TOWN OF ZIONSVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." 2 CFR 200.214 states: "Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities." Cause A proper system of internal controls was not designed by the management of the Town. The Director of Finance and Records was not aware internal control over suspension and debarment was needed until after the prior (FY2024) audit engagement. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Any program funds the Town used to pay vendors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Additionally, 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 the Town strengthen its system of internal controls to ensure that all vendors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2025 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-003. Condition and Context Recipients of COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) grants are required to submit quarterly or annual Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates, are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The Town was classified as a Tier 5 auditee - a metropolitan city with a population below 250,000 residents which received less than $10 million in SLFRF funding. Tier 5 auditees are required to submit an annual P&E report due in April of each year. The Town was required to file an annual P&E report by April 30, 2025. The report was to cover the period of April 1, 2024 to March 31, 2025. The Town presented this report for audit, and while internal controls were in place they were not effective to prevent, or detect and correct, errors, which resulted in the following:  The Town reported $0 in current period obligations, despite entering into multiple contracts during the reporting period. Current period obligations should have been $364,521.  The Town understated current period expenditures by $3,000, which is immaterial to the program. The lack of effective internal controls and noncompliance was isolated to the 2025 P&E report. INDIANA STATE BOARD OF ACCOUNTS 18 TOWN OF ZIONSVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds, page 13, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary or her delegate, as applicable, periodic reports providing detailed accounting of the uses of funds . . ." Cause A proper system of internal controls over the P&E reports was not designed by management of the Town. A properly designed and implemented internal control system should include internal controls consisting of documented policies and procedures. The Director of Finance and Records did not understand that contracts entered into during the reporting period should be considered current period obligations. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the Town did not accurately report current period obligation and current period expenditures when filing the P&E report for the period April 1, 2024 to March 31, 2025. 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. INDIANA STATE BOARD OF ACCOUNTS 19 TOWN OF ZIONSVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the Town design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight of federal reports are taking place. We also recommended the development of policies and procedures to ensure the Town provides the Treasury with complete and accurate information for the P&E report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

2025-005 Medical Assistance Eligibility Federal Agency: U.S. Department of Health and Human Services Program Name: Grants to States for Medicaid (Medical Assistance) ALN: 93.778 Award Number and Year: 2505MN5ADM, 2505MN5MAP, 2025 Pass-Through Agency: Minnesota Department of Human Services Type of Finding; Material Weakness in Internal Control over Compliance and Compliance Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish, document, 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. Federal regulations require that eligibility determinations for Medical Assistance participants be supported by adequate documentation maintained in participant case files. Documentation supporting eligibility factors, including income and other information used to determine eligibility, should be retained and available for review. Condition: During our testing of Medical Assistance eligibility determinations, we identified two instances in which eligibility information was not adequately supported by documentation maintained by the County. In one case, income used in the eligibility determination did not agree to the supporting source documentation contained within the case file. In another case, an income source used in the eligibility determination was not supported by documentation maintained in the case file. Additionally, the County has not implemented internal control procedures designed to verify that documentation supporting eligibility factors is obtained, reviewed, and retained prior to approval of eligibility determinations. As a result, unsupported eligibility information was not detected and corrected in a timely manner. Questioned Costs: None. Context: We tested 60 participant case files for compliance with eligibility requirements. Two of the 60 case files tested contained documentation deficiencies related to the support maintained for eligibility determinations. In addition, our review of internal controls determined the County did not have sufficient review controls in place to ensure documentation supporting eligibility determinations was consistently obtained, reviewed, and retained. The sample was not intended to be and was not statistically valid. Cause: County personnel did not consistently ensure that all required eligibility documentation was properly obtained, reviewed, and retained in participant case files. Effect: Without effective internal controls and adequate supporting documentation, the County cannot demonstrate compliance with federal eligibility requirements. This increases the risk that eligibility determinations may be based on inaccurate, incomplete, or unsupported information and increases the risk of noncompliance with federal program requirements. Recommendation: The County should strengthen internal controls over the eligibility determination process to ensure supporting documentation is obtained, reviewed, and retained for all eligibility factors used in determining participant eligibility. Supervisory reviews should include verification that required documentation is present and supports information entered into the eligibility system Repeat Finding: No. Management Response: County management agrees with the finding and will review current procedures, provide additional staff training as necessary, and implement monitoring procedures designed to ensure that eligibility determinations are adequately supported by documentation maintained in participant case files.

FINDING 2025-003 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): CY2022 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Significant Deficiency, Other Matters Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2024-002. INDIANA STATE BOARD OF ACCOUNTS 16 CLINTON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods or services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. Verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from the vendor, or adding a clause or condition to the covered transaction with the vendor. Due to the U.S. Department of the Treasury's determination that the revenue loss eligible use category does not give rise to subawards, the County was only required to comply with suspension and debarment requirements related to covered transactions. Covered transactions in the amount of $2,256,164 were made during the audit period to five vendors. Of the five vendors, four included a suspension and debarment clause and/or certification. For one vendor with expenditures that totaled $45,714, the County did not check the EPLS, nor was a certification collected from the vendor, and a clause did not exist in the agreement with the vendor. Although the County had a policy to include a clause in vendor contracts related to covered transactions, no documentation to verify the County's compliance with the suspension and debarment federal requirement was provided for audit. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." 2 CFR 200.214 states: "Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities." INDIANA STATE BOARD OF ACCOUNTS 17 CLINTON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The system of internal controls established by management of the County was not properly implemented to ensure that there was adequate documentation of the implementation of internal control policies and procedures. Effect Without the proper implementation of an effectively designed system of internal controls, the system is incapable of effectively preventing, or detecting and correcting, material noncompliance. As a result, no documentation was available for the status of one vendor to whom payment equal to or in excess of $25,000 was paid. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County's management establish a system of internal controls to ensure that proper documentation is kept on file for each applicable vendor. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-004 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - 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): CY2022 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2024-003. Condition and Context The County had not properly designed or implemented a system of internal controls, which would likely be effective in preventing, or detecting and correcting, noncompliance. 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 on the type of recipient and the recipient's population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. INDIANA STATE BOARD OF ACCOUNTS 18 CLINTON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The County was classified as a county with a population below 250,000 residents that received an allocation of less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF). As such, the P&E report, covering the period from April 1, 2024 to March 31, 2025, was required to be submitted to the Treasury by April 30, 2025. The County submitted one P&E report during the audit period, which was obtained from the Treasury's website. Although one employee prepared the P&E report and another reviewed the entries, the system of internal controls was not effective in preventing, detecting or correcting, errors. The information submitted included amounts based on the incorrect period, amounts that should have been omitted, and amounts which were based on budgeted amounts instead of actual amounts, as such, the reports were not fairly presented. Errors identified included the following:  Total current obligations for government services were overstated by $145,000.  Total current obligations for roundabouts were overstated by $323,628.  Total current obligations for fairgrounds were overstated by $97,362. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds, page 13, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 CLINTON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 31 CFR 35.4(c) states: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary or her delegate, as applicable, periodic reports providing detailed accounting of the uses of funds, modifications to a State or Territory's tax revenue sources, and such other information as the Secretary or her delegate, as applicable, may require for the administration of this section. In addition to regular reporting requirements, the Secretary may request other additional information as may be necessary or appropriate, including as may be necessary to prevent evasions of the requirements of this subpart. False statements or claims made to the Secretary may result in criminal, civil, or administrative sanctions, including fines, imprisonment, civil damages and penalties, debarment from participating in Federal awards or contracts, and/or any other remedy available by law." Cause Although a system of internal controls over the P&E report was designed by management, it did not ensure that the County provided the Treasury with complete and accurate information related to the SLFRF awards. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. In addition, not meeting the SLFRF reporting requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of federal awards. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County design and implement a proper system of internal controls that would ensure appropriate reviews, approvals, and oversight are taking place. Additionally, we recommended that management develop policies and procedures to ensure that the County provides the Treasury with complete and accurate information for the P&E report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 20

FINDING 2025-003 Information on the federal program: Subject: Drinking Water State Revolving Fund – Internal Controls Federal Agency: Environmental Protection Agency Federal Program: Drinking Water State Revolving Fund (DWSRF) Assistance Listing Number: 66.468 Federal Award Numbers and Years (or Other Identifying Numbers): 2025 Pass-Through Entity: Indiana Financing Authority Compliance Requirement: Procurement Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: a. Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) " 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . b. Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources " Condition: An effective internal control system was not in place at the Town to ensure compliance with requirements related to the Drinking Water State Revolving Fund and Procurement compliance requirements as part of the small purchases procurement threshold. Cause: The Town was not aware that procurement policies/practices were needed for professional services, such as hiring a project engineer. Effect: The failure to obtain multiple bids placed the Town at risk of noncompliance with the grant agreement and the procurement compliance requirements. Questioned Costs: There were no questioned costs identified. Context: One contract was subject to small purchase procurement testing for calendar year 2025. The Town disbursed $147,963 to DLZ, Inc. during 2025 for engineering services related to the new water treatment plant. Based on our testing, the Town did not obtain quotes or otherwise solicit proposals from other qualified engineering firms prior to procuring these services. Identification as a repeat finding, if applicable: No. Not a repeat finding Recommendation: We recommend the Town establish and implement procedures to ensure purchases subject to small purchase procurement requirements are made in accordance with applicable procurement policies and regulations. Such procedures should include obtaining and documenting quotes for an adequate number of qualified sources prior to selecting a vendor. The Town should also retain documentation supporting the procurement process, including quotes received, vendor selection, and the basis for the award. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

FINDING 2025-004 Information on the federal program: Subject: Drinking Water State Revolving Fund – Internal Controls Federal Agency: Environmental Protection Agency Federal Program: Drinking Water State Revolving Fund (DWSRF) Assistance Listing Number: 66.468 Federal Award Numbers and Years (or Other Identifying Numbers): 2025 Pass-Through Entity: Indiana Financing Authority Compliance Requirement: Procurement Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: a. Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) " 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . b. Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources " Condition: An effective internal control system was not in place at the Town to ensure compliance with requirements related to the Drinking Water State Revolving Fund and Procurement compliance requirements as part of the Build America Buy America (BABA) requirement. Cause: The Town’s procurement review process was not designed or implemented to ensure that all applicable BABA requirements were incorporated into contracts subject to BABA. Specifically, the review process focused on the American Iron and Steel requirements and did not adequately consider the additional domestic preference requirements applicable to manufactured products and construction materials. As a result, the respective contracts did not include provisions addressing all applicable BABA requirements. Effect: The failure to include the BABA requirements within the respective contracts placed the Town at risk of noncompliance with the grant agreement and the procurement compliance requirements. Questioned Costs: There were no questioned costs identified. Context: Crowe sampled two contracts that were subject to the procurement compliance requirements. Only one of the two contracts were subject to the Build America Buy America (BABA) requirements. Crowe noted that in that contract, management included contractual provisions addressing the American Iron and Steel requirements; however, the contract did not include provisions addressing the manufactured products and construction materials requirements applicable under BABA. As a result, the procurement control did not operate effectively to ensure that all applicable BABA requirements were incorporated into the respective contracts. Additionally, management was unable to provide sufficient supporting documentation demonstrating that construction materials used in the project were produced in the United States in accordance with applicable BABA requirements. Further, the documentation provided did not allow for a determination of the portion of total project costs attributable to construction materials as compared to iron and steel. Accordingly, Crowe was unable to determine whether the project complied with the applicable BABA requirements, resulting in a material weakness finding. Identification as a repeat finding, if applicable: No. Not a repeat finding Recommendation: We recommend the Town strengthen its procurement and contract review procedures to ensure that all applicable Build America, Buy America Act (BABA) requirements are identified and incorporated into contracts prior to execution. Such procedures should include consideration of the domestic preference requirements applicable to iron and steel, manufactured products, and construction materials. Management should also establish procedures to obtain and retain sufficient supporting documentation demonstrating compliance with applicable BABA requirements, including documentation necessary to substantiate that covered materials and products were produced in the United States. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

FINDING 2025-003 Subject: Drinking Water State Revolving Fund – Procurement Federal Agency: Environmental Protection Agency Federal Program: Drinking Water State Revolving Fund Assistance Listings Number: 66.468 Federal Award Number and Year (or Other Identifying Number): DW24312502 Pass-Through Entity: Indiana Finance Authority Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context The City had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance for the acquisition of property and services. The City expended federal funds to pay five separate vendors to provide goods and services for the duration of the City's Lead Service Line Replacement project. One vendor was identified with contract amount or aggregated total of expenditures that exceeded the simplified acquisition threshold of $150,000. The vendor was tested, and the City did not have documented procurement procedures or polices used to procure engineering and design services. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. INDIANA STATE BOARD OF ACCOUNTS 17 CITY OF ROCHESTER SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases– (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction, if the conditions. (i) In order for sealed bidding to be feasible, the following conditions should be present: (A) A complete, adequate, and realistic specification or purchase description is available; (B) Two or more responsible bidders are willing and able to compete effectively for the business; and (C) The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price. (ii) If sealed bids are used, the following requirements apply: (A) Bids must be solicited from an adequate number of qualified sources, providing them sufficient response time prior to the date set for opening the bids, for local, and tribal governments, the invitation for bids must be publicly advertised; INDIANA STATE BOARD OF ACCOUNTS 18 CITY OF ROCHESTER SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (B) The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond; (C) All bids will be opened at the time and place prescribed in the invitation for bids, and for local and tribal governments, the bids must be opened publicly; (D) A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and (E) Any or all bids may be rejected if there is a sound documented reason. (2) Proposals. A procurement method in which either a fixed price or costreimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. They are awarded in accordance with the following requirements: (i) Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Proposals must be solicited from an adequate number of qualified offerors. Any response to publicized requests for proposals must be considered to the maximum extent practical; (ii) The non-Federal entity must have a written method for conducting technical evaluations of the proposals received and making selections; (iii) Contracts must be awarded to the responsible offeror whose proposal is most advantageous to the non-Federal entity, with price and other factors considered; and (iv) The non-Federal entity may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby offeror's qualifications are evaluated and the most qualified offeror is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms that are a potential source to perform the proposed effort." Cause The City did not develop effective internal controls to ensure the appropriate procedures were followed when procuring with federal funding and were not aware of the need to follow federal guidelines for procurement expenditures associated with the SRF awards. INDIANA STATE BOARD OF ACCOUNTS 19 CITY OF ROCHESTER SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, proper procurement procedures were not adhered to for all vendors. Without following the required methods for procurement, the City could be overpaying for services. 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 funds to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a proper system of internal controls to ensure expenditures made from federal awards use the appropriate procurement method and retain the documentation to support the procurement methods used in order to ensure compliance with the grant agreement and the Procurement compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 20

FINDING 2025-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): SLFRP0032 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-001. Condition and Context Prior to entering sub awards and covered transactions with COVID-19 - State and Local Fiscal Recovery Funds (SLFRF, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Due to the U.S. Department of the Treasury's determination that the revenue loss eligible use category does not give rise to sub awards, the City was only required to comply with suspension and debarment requirements related to contracts. Upon inquiry of the City in order to review the procedures for verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the City stated certifications are collected when covered transactions are entered into by the City in order to verify that an entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities. Seven covered transactions for goods or services that equaled or exceeded $25,000 that were paid from the SLFRF funds were identified. Four transactions were examined to determine whether the City verified the suspension and debarment status of the vendor prior to payment. The City had not verified the vendor's suspension and debarment status for one of the covered transactions examined prior to issuing payment. For the tested covered transactions, the City did not verify the vendor's suspension and debarment status prior to payment due to the City not having any policies or procedures in place to verify that contractors were neither suspended nor debarred or otherwise excluded or disqualified from participating in federal assistance programs or activities. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 16 CITY OF TERRE HAUTE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause The City had not implemented an effectively designed system of internal controls for suspension and debarment. The City was not aware that this was required until the prior audit. Effect Without the proper implementation of an effectively designed system of internal controls, the City cannot ensure the vendors paid with federal funds are eligible to participate in federal programs. Any program funds the City used to pay vendors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions or the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City strengthen its system of internal controls to ensure that all vendors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Period of Performance Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): SLFRP0032 Compliance Requirement: Period of Performance Audit Findings: Material Weakness, Other Matters Condition and Context Under the COVID-19 - State and Local Fiscal Recover Funds (SLFRF), recipients may only use funds to cover costs incurred beginning March 3, 2021, and ending December 31, 2024. Of 73 claims selected for testing, 12 were incurred after the grant period ended. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 35.5(a) states: "In general. A recipient may only use funds for the purposes enumerated in § 35.6 (b) through (f) to cover costs incurred during the period beginning March 3, 2021, and ending December 31, 2024, subject to the restrictions set forth in sections 602(c)(2) and 603(c)(2) of the Social Security Act, as applicable. A recipient may only use funds for the purposes enumerated in § 35.6 (g) through (h) to cover costs incurred during the period beginning December 29, 2022, and ending December 31, 2024, subject to the restrictions set forth in sections 602(c)(2), 602(c)(5)(C), 603(c)(2), and 603(c)(6)(B) of the Social Security Act, as applicable." 31 CFR 35.3 states in part: ". . . Obligation means an order placed for property and services and entering into contracts, subawards, and similar transactions that require payment. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3)." INDIANA STATE BOARD OF ACCOUNTS 18 CITY OF TERRE HAUTE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The grant period ended on December 31, 2024; however, the cost of 12 invoices selected for testing occurred in 2025. There was no contract or any documentation stating that the projects with the vendors started before the end of the grant period. Effect Without the proper implementation of an effectively designed system of internal controls, payment was made on claims that occurred after the period of performance. Noncompliance with the provisions of federal statues, regulations, and terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs Questioned costs totaling $74,698 were identified. Recommendation We recommended that management of the City establish a system of internal controls and develop policies and procedures to ensure the SLFRF funds are used appropriately. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-004 Subject: Federal Transit Cluster - Period of Performance Federal Agency: Department of Transportation Federal Program: Federal Transit Formula Grants Assistance Listings Number: 20.507 Federal Award Numbers and Years (or Other Identifying Numbers): IN-2025-010-01, IN-2025-010-02 Compliance Requirement: Period of Performance Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the City in order to ensure compliance with requirements related to the grant agreement and the Period of Performance compliance requirement. The City submitted four claims to a grant with an invoice dated before the grant started. These invoices were dated in 2024, but the grant did not begin until January 1, 2025. The lack of internal controls and noncompliance were systematic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 19 CITY OF TERRE HAUTE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.343 states: "Costs to the recipient or subrecipient resulting from financial obligations incurred by the recipient or subrecipient during a suspension or after the termination of a Federal award are not allowable unless the Federal agency or pass-through entity expressly authorizes them in the notice of suspension or termination or subsequently. However, costs during suspension or after termination are allowable if: (a) The costs result from financial obligations which were properly incurred by the non- Federal entity before the effective date of suspension or termination, and not in anticipation of it; and (b) The costs would be allowable if the Federal award was not suspended or expired normally at the end of the period of performance in which the termination takes effect." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Period of Performance compliance requirement. The Director of Transit did not look at invoice dates to ensure costs were incurred during the grant period, nor did they get approval from the federal awarding agency to pay outside of the grant period. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could have resulted in the loss of funds to the City. Questioned Costs Questioned costs totaling $12,208 were identified. Recommendation We recommended that management of the City establish a system of internal controls and develop policies and procedures to ensure the Federal Transit Cluster funds are used appropriately. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Internal Controls Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): YR 2025, SWIF 235542 Pass-Through Entity: Indiana Finance Authority Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, Reporting Audit Finding: Material Weakness Condition and Context Internal control is generally defined as a process affected by an entity's oversight body, management, and other personnel that provides reasonable assurance that the objectives of an entity will be achieved. With respect to federal awards, nonfederal entities, such as the Town, are required to establish and maintain internal control over federal awards that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of federal awards. INDIANA STATE BOARD OF ACCOUNTS 17 TOWN OF WHEATLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) During the audit period, the Town disbursed the remainder of the Town's funding received under the federal program as an advance grant directly from the U.S. Department of the Treasury totaling $13,697 as part of the American Rescue Plan Act (ARPA). The Town was also the recipient of a State Water Infrastructure Fund award under the federal program, which was a reimbursable grant passed through the Indiana Finance Authority (IFA). Reimbursements received under this grant during the audit period totaled $1,020,924. The Town had not implemented a proper system of internal controls over multiple compliance requirements for both sources of funding as detailed below. ARPA Direct Award - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance The Town paid four claims from the ARPA funds during the audit period, which were prepared by the Clerk-Treasurer or the Deputy Clerk-Treasurer. There was no evidence of an oversight, review, or approval process by a second person who was knowledgeable of the requirements to ensure that the disbursements were for activities or costs that were allowable under the federal award or that the disbursements were for expenses incurred within the period of performance. State Water Infrastructure Fund Award - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, and Reporting The Deputy Clerk-Treasurer was solely responsible for submitting the reimbursement requests to the IFA. There was no evidence of an oversight, review, or approval process by a second person who was knowledgeable of the requirements to ensure that the disbursements for which reimbursement was requested were for activities or costs that were allowable under the federal award, that the disbursements were for expenses incurred within the period of performance, or that the requests were accurately prepared and in compliance with the reporting requirements of the federal award. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 18 TOWN OF WHEATLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to the limited number of Town employees and the Clerk-Treasurer holding a separate full-time position, there was often only one individual involved with various aspects of the federal program with limited opportunity for proper segregation of duties. Historically, the Town has had little experience receiving federal funding. Additionally, the Clerk-Treasurer was new to the position and was unfamiliar with requirements related to establishing and maintaining a proper system of internal controls over the Town's federal awards. Effect Without internal controls that are adequately designed and implemented, the Town's internal control system cannot be effective and renders the Town incapable of preventing, or detecting and correcting, noncompliance with the requirements of the federal award. The lack of proper internal controls could allow material noncompliance to remain undetected, which could result in the Town preparing inaccurate reports or disbursing funds that were not for activities and costs that were allowable or that were for expenses that were incurred outside the period of performance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Town's management establish a proper system of internal controls to ensure compliance with the terms and conditions of the federal award. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-004 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): SWIF235542 Pass-Through Entity: Indiana Finance Authority Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context As part of sound management of the federal award, the Town was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The Town had not properly designed or implemented such a system that would likely be effective in preventing, or detecting and correcting, noncompliance with the procurement and suspension and debarment requirements of the federal award. As a result, we identified the following noncompliance. INDIANA STATE BOARD OF ACCOUNTS 19 TOWN OF WHEATLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Suspension and Debarment As part of properly managing and administering federal awards, the Town was required to verify that vendors were not excluded or disqualified from receiving federal funding prior to entering into a covered transaction. The Town disbursed the entire funding received under the federal award totaling $1,020,924 to one vendor during the audit period, which constituted a covered transaction. The Town did not have any procedures in place to perform this verification, and as a result, the Town did not verify that this vendor was not suspended or debarred, or otherwise excluded, from receiving federal funding prior to entering into the covered transaction with the vendor. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Historically, the Town has had little experience receiving federal funding. Additionally, the Clerk-Treasurer was new to the position and was unfamiliar with the compliance requirements associated with federal awards. As a result, the Town was unaware of the Procurement and Suspension and Debarment compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 20 TOWN OF WHEATLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of preventing, or detecting and correcting, noncompliance. As a result, the Town did not adopt a purchasing policy and therefore did not comply with the procurement requirements of the federal award. Additionally, the Town did not verify that the one vendor with which the Town entered into a covered transaction was not excluded or disqualified from receiving federal funds, which resulted in material noncompliance with the suspension and debarment requirements of the federal award. By not performing this verification, the Town could disburse funding to a vendor that is not eligible to receive federal funding. 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 the Town's management establish a proper system of internal controls to pass policies and procedures for review of suspension and debarment. Once policies are in place, establish internal controls to review suspension and debarment procedures to ensure they are performed properly and in compliance with federal requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 21

2025-001 Activities Allowed or Unallowed and Allowable Costs / Cost Principles (Allowability) U.S. Department of Health and Human Services, Passed through County of Hudson, Department of Health and Human Services: HIV Emergency Relief Project Grants (93.914) Federal Grant Numbers and Years: H89HA00010- Medical Case Management (1/1/2025-12/31/2025) and H89HA00010- Minority Health Initiative (1/1/2025-12/31/2025) Statistically Valid Sample: No, and it was not intended to be Prior Year Finding: Not a repeat finding Finding Type: Significant Deficiency and Noncompliance Criteria: Under the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200, Subpart E - Cost Principles): • 2 CFR § 200.403 (Factors affecting allowability of costs): Costs must be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles, and also must be documented adequately and conform to any limitations or exclusions set forth in these principles or in the federal award as to types or amounts of cost items. • 2 CFR § 200.426: Bad Debts, defined as debts determined to be uncollectible, including losses (whether actual or estimated) arising from uncollectible accounts and other claims are unallowable under federal cost principles. • 2 CFR § 200.303: Non-federal entities receiving federal awards must establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the Schedule of Expenditures of Federal Awards (SEFA) and information provided for audit purposes is complete and accurate. Condition and Context: RWJ Barnabas Heath, Inc. (RWJBH) administers a component of the HIV Emergency Relief Project Grants (Ryan White Part A) (the Program) through its Jersey City Medical Center (JCMC) facility. During our testing of other than personal services (OTPS) expenditures at JCMC, we identified through our initial sample selection that JCMC submitted and received federal reimbursement of approximately $620 for patient laboratory costs under the Program for both Medical Case Management and Minority Health Initiative grants. We noted that these specific clinical laboratory tests were recorded as bad debt expense in RWJBH’s consolidated financial statements. Because bad debt and losses arising from uncollectible accounts are explicitly unallowable under Uniform Guidance cost principles, these expenditures should not have been charged to the federal grant. A further evaluation of the full population identified a total of $121,358 in patient clinical laboratory costs recorded as bad debt that were improperly approved and submitted for federal grant reimbursement that are also deemed unallowable under 2 CFR § 200.426. Cause: There was no automated or manual interface or screening rule within the enterprise resource planning or laboratory information management systems to flag and block patient accounts classified as bad debt or uncollectible balances from having their clinical costs allocated to federal grant cost centers. Additionally, management did not perform effective manual reviews or reconciliations prior to requesting reimbursement to identify and exclude bad debt expenses from OTPS expenditure reimbursement requests under the Program. Effect: Unallowable bad debt costs under 2 CFR § 200.403 and 2 CFR § 200.426 were approved and submitted for federal reimbursement. Questioned costs: $121,358 ($104,164 for Medical Case Management and $17,194 for the Minority Health Initiative). Recommendation: We recommend that RWJ Barnabas Health, Inc. strengthen its current processes and internal controls to ensure that all clinical laboratory costs being submitted for reimbursement are deemed allowable in accordance with the Uniform Guidance cost principles and have not been recorded as bad debt. Views of Responsible Official: Management concurs with the finding. Due to an administrative error, JCMC included certain ineligible patient clinical laboratory testing costs, recorded as bad debt expense, in federal grant expenditures. Although management consulted with the Program administrator, the County of Hudson, prior to seeking reimbursement and received approval to include these costs, JCMC acknowledges its responsibility to ensure federal funds are not used to reimburse unallowable services. Going forward, JCMC will strengthen its review process to exclude unallowable bad debt costs from grant expenditures. Management has reviewed the applicable Uniform Guidance cost principles with Program grant personnel and supporting analysts to reinforce compliance.

Finding 2025–001: Reporting – Recordkeeping Federal Department: U.S. Department of Agriculture Federal Award Identification Numbers and Year: 25N1199 Pass-through Agency: Illinois State Board of Education (ISBE) Child Nutrition Cluster: Summer Food Service Program for Children (SFSPC), Federal Assistance Listing Number 10.559 Criteria Federal regulations (7 CFR 225.15(d)) state (1) each sponsor shall hold Program training sessions for its administrative and site personnel and must not allow a site to operate until personnel have attended at least one of these training sessions. The State agency may waive these training requirements for operation of the Program during unanticipated school closures. (i) Training of site personnel must, at a minimum, include: the purpose of the Program; site eligibility; recordkeeping; site operations, including both congregate and non-congregate meal services; meal pattern requirements; and the duties of a monitor. (ii) Each sponsor must ensure that its administrative personnel attend State agency training provided to sponsors, and sponsors must provide training throughout the summer to ensure that administrative personnel are thoroughly knowledgeable in all required areas of Program administration and operation and are provided with sufficient information to enable them to carry out their Program responsibilities. (iii) Each site must have present at each meal service at least one person who has received this training. (2) Sponsors must conduct pre-operational visits for new sites, sites that experienced operational problems the previous year, and existing sites that are new to non-congregate meal service, to determine that the sites have the capacity to provide meal service for the anticipated number of children in attendance and the capability to conduct the proposed meal service. (3) Sponsors must visit each of their sites, as specified in paragraphs (d)(3)(i) through (iv) of this section, at least once during the first two weeks of program operations and must promptly take such actions as are necessary to correct any deficiencies. Sponsors must conduct these visits for: (i) All new sites; (ii) All existing sites that are new to providing non-congregate meal service; (iii) All sites that have been determined by the sponsor to need a visit based on criteria established by the State agency pertaining to operational problems noted in the prior year, as set forth in § 225.7(o); and (iv) Any other sites that the State agency has determined need a visit. (4) Sponsors must conduct a full review of food service operations at each site at least once during the first four weeks of Program operations, and thereafter must maintain a reasonable level of site monitoring. Sponsors must complete a monitoring form developed by the State agency during the conduct of these reviews. Sponsors may conduct a full review of food service operations at the same time they are conducting a site visit required under paragraph (d)(3) of this section. The United States Department of Agriculture, Food and Nutrition Service, The Summer Food Service Program (SFSP), 2024 Introduction to the Summer Food Service Program Administration Guide, Unit 4: Operating the Meal Service for the Summer Food Service Program states, “It is critical that site personnel and monitors understand the importance of accurate point of service meal counts. Only complete meals served to eligible children can be claimed for reimbursement. Meal counts are required for each day and each meal service in which meals and snacks are served. Therefore, meals and snacks must be counted at the actual point of service, as they are served, to ensure that an accurate count of meals served is obtained and reported). Counting meals at the point of service also allows site personnel to ensure that only complete meals are served.” Also, Unit 3: Administering Summer Food Service Program states, “sponsors must be able to document that they have complied with monitoring requirements. Monitors must submit the following reports: Pre-operational site visits for new sites, sites that experienced operational problems the previous year, and existing sites that are new to non-congregate meal service; Initial site visits, conducted at least once during the first 2 weeks of Program operations; and Additional site visits conducted throughout the period of Program operation.” Chicago Park District’s (the District) Summer Food Program Monitor Manual requires monitors checking site operations to make sure that the site maintains adequate records and that the program is operating in accordance with the requirements. To comply with this requirement, the District utilizes a monitoring checklist that is attached to each site file. The checklist requires documentation of ISBE-approved application, ISBE participation details, the District application, field trip data, authorized signature form, training sign-in sheets, certificate of training, park enrollment roster, and site responsibilities. Per the District’s Summer Food Program Management Manual, the District replaced a series of paper forms with two online forms: Summer Food Weekly Summary and Summer Food Program Daily Timesheets. However, two paper documents will continue to exist. They are the daily receipts and the state-mandated Daily Meal Count Form. 2 CFR Part 200, Subpart D – Post Federal Awards Requirements, 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 and subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award. (c) Evaluate and monitor the recipient’s or subrecipient’s compliance with statutes, regulations, and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified. (e) Take reasonable cybersecurity and other measures to safeguard information including protected personally identifiable information and other types of information. This also includes information the Federal agency or pass-through entity designates as sensitive or other information the recipient or subrecipient considers sensitive and is consistent with applicable Federal, state, local, and tribal laws regarding privacy and responsibility over confidentiality. Condition During the current-year audit period, the District did not adequately document its compliance with the special tests and provision requirements of the SFSPC. This included maintaining adequate controls over required monitoring and meal count forms to ensure forms were properly completed and approved by authorized personnel. Cause Per our discussions with management, the SFSP was administered across 197 sites on a daily basis during the summer months. Specifically, in 2025, the program and the corrective actions planned were interrupted and significantly impacted due to a shortage of staff as positions were not filled successfully. Effect Failure to maintain supporting documentation of the required monitoring and meal count forms and ensure that the forms have been properly completed and approved by authorized personnel is a violation of the program’s requirements and impairs the District’s ability to adequately monitor the federally funded program. This could also result in questioned and disallowed costs, which the District may need to reimburse to its grantor agency. Questioned Costs None. Context During our testing of monitoring at 25 sites (total sites operating under the program during 2025 were 197 sites), we noted the following:  For three sites (12%), the site monitoring review was not conducted within the first four weeks of program operations, as required.  For one site (4%), lunch was served at 11:30 AM on one day, which was outside the approved meal service window of 12:00 PM to 12:30 PM. For the 25 sites sampled, we tested a total of 10 days (July 7 through July 11 and July 21 through July 25) from a population of 39 days (calculated based on the number of days meals were claimed for reimbursements during the program) to verify that the delivery ticket, daily meal count form, and the Summer Food Weekly Summary form were properly completed and reviewed by authorized personnel. We noted the following:  For one site (4%), 85 snacks were incorrectly reported and claimed as lunch, resulting in a total of $350 net over-claimed in meal reimbursements. Identification of Repeated Findings Repeated (Prior Finding Numbers 2024-001, 2023-001, and 2022-001). Recommendation We recommend the District continue to implement internal controls to improve compliance with federal regulations over the SFSP. In addition, we recommend the District ensure adequate staff resources and training are in place to ensure accurate reporting of all meals served, as well as all required forms are properly completed. Also, we suggest the District update its policy manual to define “reasonable monitoring” of the SFSP program, including any deviations from its current practice of completing at least two monitoring site reviews forms. Lastly, we suggest the District update its required forms (daily meal count, site visit/monitoring site review) to have authorized personnel include a printed signature, which will assist in easily identifying and verifying that the person is authorized to sign the form(s). Views of Responsible Officials and Planned Corrective Action The District agrees with the finding and recommendation. The District’s corrective action plan is on page 15.

Findings and Questioned Costs Relating to Federal Awards 2025-004: Compliance Requirements: Allowable Costs/Cost Principles Federal Granting Agency: U.S. Department of Homeland Security Award Name: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Award Number: FEMA-4506-DR-PA Geisinger Project: 698009 Assistance Listing Number: 97.036 Award Year: Fiscal year 2025 Pass-through Entity: Commonwealth of Pennsylvania Emergency Management Agency Criteria: The terms and conditions for recipients of Disaster Grants - Public Assistance (Presidentially Declared Disasters) require that federal funds be used only for eligible emergency protective measures and other eligible work. Emergency work is defined as work that must be performed immediately to save lives, protect public health and safety, or avert or lessen the threat of a major disaster. Federal Emergency Management Agency (FEMA) guidance provides that claimed costs must be: • Directly tied to the performance of eligible work; • Adequately documented (2 CFR § 200.403(g)); • Reduced by all applicable credits and other sources of funding, including those that would result in a duplication of benefits (Stafford Act § 312; 42 U.S.C. § 5155; 2 CFR § 200.406); • Authorized and not prohibited under applicable laws and regulations; • Consistent with the entity’s established policies and procedures; and • Necessary and reasonable for the performance of the federal award (2 CFR § 200.403). In addition, 2 CFR § 200.303 requires non-federal entities receiving federal awards to establish and maintain effective internal controls that provide reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Geisinger made claims to the Federal Emergency Management Agency (FEMA) under the Disaster Grants - Public Assistance (Presidentially Declared Disasters) program for qualifying costs incurred to prepare for and respond to the COVID-19 pandemic. Geisinger’s applications and supporting documentation demonstrated that the claimed costs were incremental to its normal operating costs and were directly attributable to pandemic response activities. Geisinger prepared and submitted its claims in accordance with FEMA guidance available at that time. FEMA subsequently approved, obligated, and paid several projects. Accordingly, Risant reported approximately $615,555 on its Schedule of Expenditures of Federal Awards (SEFA) for the year ended December 31, 2025, based on amounts obligated by FEMA prior to FEMA’s duplication of benefits review. Following the approval and obligation of the projects, FEMA issued clarifying guidance related to patient care revenue duplication of benefits in December 2023 and subsequently performed a duplication of benefits analysis of Geisinger’s applications. On September 22, 2025, FEMA issued an Applicant Review Memo concluding that certain costs previously approved and obligated were at risk of duplication with patient care revenue. FEMA’s recommended reductions were based on its reassessment of previously approved claims utilizing the duplication of benefits methodology established in the clarifying guidance. Based on FEMA’s reassessment, Geisinger accepted FEMA’s determination and returned $72,763 related to one FEMA project obligated during 2025. Questioned Cost: $72,763 representing costs associated with the identified project that FEMA subsequently determined to be at risk of duplication of benefits and that Geisinger returned to FEMA during 2025. Repeat Finding in the Prior Year Not a repeat finding. Cause: FEMA issued clarifying guidance in December 2023 regarding the evaluation of potential duplication of benefits and subsequently performed a retrospective review of previously approved and obligated Geisinger projects. Effect: Costs previously approved and obligated by FEMA were subsequently determined to be at risk of duplication under FEMA’s revised duplication-of-benefits assessment methodology resulting in a reduction of previously awarded funding and federal expenditures reported on the SEFA. Recommendation: We recommend that management continue to monitor FEMA guidance related to COVID-19 Public Assistance funding and assess the impact of any subsequent FEMA determinations on amounts reported on the SEFA for existing and future awards. Views of Responsible Officials: Management agrees with the finding and the following corrective actions are being taken to minimize future risks. Management will continue to monitor FEMA guidance and determinations related to COVID-19 Public Assistance funding. Geisinger will evaluate the impact of subsequent FEMA reviews or determinations on amounts reported on the SEFA and adjust, as appropriate.

Federal Program: Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Criteria: In accordance with 2 CFR §200.303, non-Federal entities are required to establish and maintain effective internal controls over Federal awards that provides reasonable assurance the entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The Organization did not maintain adequately documented internal controls over compliance for the Federal program. Written policies and procedures were not maintained for several compliance areas, including procurement, cash management, allowable costs, and cost allocation methodologies. In addition, significant turnover among personnel responsible for program administration contributed to inconsistent documentation of compliance-related procedures and responsibilities. Cause: The deficiency resulted from significant personnel turnover, limited formalization of compliance processes, and insufficient documentation of internal controls and compliance procedures. Effect: The lack of documented policies and formalized compliance procedures increases the risk that noncompliance with Federal requirements could occur and not be detected in a timely manner. Recommendation: We recommend the Organization develop and implement comprehensive written policies and procedures addressing applicable Uniform Guidance requirements, including procurement, cash management, allowable costs, and cost allocation. Management should also establish documented compliance monitoring procedures and provide training to personnel responsible for administering Federal awards. We noted that subsequent to year-end, the Organization developed and implemented several written policies and procedures addressing many of these compliance areas. Questioned Costs: None. Context: Audit testing did not identify any instances of noncompliance with Federal program requirements. In addition, dual-purpose testing identified certain informal controls that were operating during the period under audit. Accordingly, this matter is reported as a significant deficiency in internal control over compliance and does not result in material noncompliance with Federal program requirements. Views of Responsible Officials: Management agrees with the finding and has formalized and documented compliance policies and procedures and provided additional training to personnel responsible for Federal program administration.

FINDING 2025-003 Subject: National Infrastructure Investments - Suspension and Debarment Federal Agency: Department of Transportation Federal Program: National Infrastructure Investments Assistance Listings Number: 20.933 Federal Award Number and Year (or Other Identifying Number): 69A36525420080RASIN Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context As part of sound management of the federal award, the Authority was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The Authority had not properly designed or implemented such a system that would likely be effective in preventing, or detecting and correcting, noncompliance with the suspension and debarment requirements of the federal award. Prior to entering into subawards and covered transactions with the National Infrastructure Investments award funds, recipients are required to verify that such beneficiaries are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting certification from that person, or adding a clause or condition to the covered transaction with that person. INDIANA STATE BOARD OF ACCOUNTS 17 PERRY COUNTY PORT AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The Authority designed procedures to verify that vendors were not suspended or debarred or otherwise excluded from receiving federal awards prior to entering into a covered transaction by including a clause in the contracts signed with each vendor. We identified four vendors during the audit period with which the Authority entered into a covered transaction and selected all four vendors for testing. For three of these vendors, the signed contract included the required clause. The fourth contract, however, did not include the required clause, nor did the Authority perform other procedures to verify the vendor's status prior to entering into the covered transaction. The Authority disbursed grant funds totaling $70,600 to this vendor. The lack of internal controls and noncompliance were isolated to one of the four vendors with which the Authority entered into a covered transaction during the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause The Authority lacked adequate internal controls to verify that contracts incorporated the required suspension and debarment certification and related federal compliance clause prior to awarding the contract. INDIANA STATE BOARD OF ACCOUNTS 18 PERRY COUNTY PORT AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of preventing, or detecting and correcting, noncompliance. The Authority did not follow its stated procedures for verifying that a vendor is not excluded or disqualified from receiving federal funds and did not include a clause in the contract with a vendor with which the Authority entered into a covered transaction, placing the Authority in noncompliance with the suspension and debarment requirement of the federal award. By not performing this verification, the Authority could disburse funding to a vendor that is not eligible to receive federal funding. 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 Authority. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Authority enhance its system of internal controls to ensure compliance with the suspension and debarment requirements of the federal award and follow its stated procedures, or perform alternative procedures, for verifying that a vendor is not excluded or disqualified from receiving federal funding for all vendors with which the Authority plans to enter into a covered transaction. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Finding 2025-003 - Reporting - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services. Federal Program Names: Health Center Program and Grants for New and Expanded Services Under the Health Center Program. Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Numbers and Years: Health Center Program Cluster: H80CS00626‐2023, H8KCS49691-2023, H8KCS49691-2024, H8ICS53459-2024 Criteria In accordance with 2 CFR Section 200.303, Internal Controls, 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. Condition During our audit, we noted that there was no evidence of the review and approval of the Uniform Data System (UDS) before its submission. Cause There is no formal policy in place requiring the CEO (or designee) to review and approve the UDS report before submission. Effect or Potential Effect The condition could result in key data elements being inaccurately reported and/or not supported by the source documentation. Questioned Costs None. Context One exception from a sample of one. Identification as a Repeat Finding No Recommendation We recommend that the UDS report be reviewed and approved by the CEO or designee before submission and evidence of approval be maintained. Views of Responsible Officials Management has implemented a formal UDS review and approval process requiring management review and documented approval by the designated responsible official prior to submission. In this process, the CFO will email the draft UDS report to the CEO for review. Once the UDS is reviewed, the CEO will email the CFO approving the UDS report. Then the CFO will submit the report. Evidence of the review and approval will be maintained and retained with the final UDS submission documentation to ensure accuracy, completeness, and compliance with reporting requirements.

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

Criteria – Federal regulations (2 CFR 200.302 and 2 CFR 200.303) require recipients of federal awards to maintain effective internal controls over federal programs and financial transactions to provide reasonable assurance that expenditures are properly authorized, allowable, and in compliance with applicable program requirements. Sound internal control practices include independent review and approval of invoices prior to payment and recording. Condition – During testing of expenditures charged to the federal program, it was noted that invoices were processed and recorded by the accounting staff without documented evidence of review and approval by an individual independent of the recording function. The Organization did not maintain documentation demonstrating supervisory approval of invoices prior to payment. Context and Cause – The Organization has not implemented a formal policy requiring documented review and approval of invoices by personnel independent of the accounting function responsible for recording transactions. Effect of Condition – Without documented independent approval, there is an increased risk that unallowable, unsupported, inaccurate, or unauthorized expenditures could be charged to the federal program without timely detection. Questioned Cost – None. Recommendation – Management should establish and implement procedures requiring all invoices to be reviewed and approved by an authorized individual independent of the employee responsible for recording the transaction. Evidence of approval should be documented and retained with the supporting invoice documentation. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding and will implement procedures requiring documented supervisory review and approval of invoices prior to payment and recording. Documentation of approvals will be retained with the payment records to strengthen internal controls over federal expenditures.

Criteria – Pursuant to 2 CFR 200.302 and 2 CFR 200.303, recipients of federal awards are required to establish and maintain effective internal controls over federal funds. Appropriate internal controls over cash management include independent review and approval of cash draw requests to ensure drawdowns are accurate, supported, and limited to immediate cash needs. Condition – During our testing of cash draw requests, we noted the Organization did not maintain documented evidence of an independent review and approval of cash draw requests. Cash draw requests were prepared and submitted by the accounting employee responsible for recording the related accounting transactions, with no documented review by another authorized individual. Context and Cause – The Organization has not established procedures requiring documented independent review and approval of cash draw requests before submission. Effect of Condition – The lack of independent review increases the risk that cash draw requests may contain errors, unsupported amounts, or drawdowns that do not comply with federal cash management requirements. Such errors may not be detected in a timely manner. Questioned Cost – None. Recommendation – Management should implement procedures requiring all cash draw requests to be reviewed and approved by an individual independent of the employee preparing and recording the transaction. Evidence of the review and approval should be documented and retained with the draw request documentation. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding and will implement procedures requiring documented supervisory review and approval of all cash draw requests prior to submission. Supporting documentation and evidence of approval will be retained to demonstrate compliance with established internal control procedures.

Federal Agency: U.S. Department of Homeland Security Federal Program Name: Disaster Grants – Public Assistance Assistance Listing Number: 97.036 Federal Award Identification Number and Year: FEMA-4630-DR-KY - 2024 Pass-Through Agency: Commonwealth of Kentucky, Department of Emergency Management Pass-Through Number(s): 083-U5TN-00 Award Period: 3/1/2024 – 6/10/2026 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: Under uniform guidance, 2 CFR 200.303, the recipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes. Under Uniform Guidance, the Organization is required to submit financial reports in the same method in which their financial statements are prepared, accrual basis under US GAAP. Condition: In our testing, we noted the following: 1. There was no evidence that the quarterly reports were reviewed and approved by someone other than the person who prepared the report prior to being submitted to the grantor. 2. The reports were not prepared on an accrual basis of accounting. Questioned costs: None Context: For 2 of the 4 reports tested, we noted that expenditures reported on the quarterly report did not match the accrual basis accounting records. For 4 of the 4 reports tested, we noted there was no review and approval of the report by someone other than the person that prepared the reports. Cause: Clerical oversight and lack of established controls Effect: Reports could be improperly prepared. Repeat Finding: No Recommendation: We recommend that management implement and system of internal controls to ensure that reports are reviewed by a second person and that the reports are reconciled to the Organizations accrual basis accounting records. Views of responsible officials: There is no disagreement with the audit finding

2025-002 Suspension and Debarment Prior Year Finding Number: N/A Year of Finding Origination: 2023 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: SLFRP1349; 2021 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish, document, 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. 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. Condition: For both covered transactions selected for testing, the County did not perform the verification for suspended or debarred vendors prior to entering into the covered transactions. Questioned Costs: $1,094,066; known questioned costs were determined based on payments to the two vendors tested. Context: Covered transactions to the two vendors totaled $1,094,066. Both vendors were included in our sample. A subsequent check to SAM.gov did not identify either vendor as suspended or debarred. 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 to the grant. Cause: The County informed us that they believed checks for suspension and debarment were performed, however, were unable to locate the documentation to support this. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not debarred, suspended, or otherwise excluded from conducting business with the County; this documentation should be completed prior to entering a covered transaction. View of Responsible Official: Acknowledge

Eligibility – Lack of Internal Controls Federal Program: Rural Rental Housing Loans – Assistance Lising #10.415 Federal Agency: U.S. Department of Agriculture - Rural Development Award Period: 2025 Finding resolution status Unresolved Information on universe and population size The universe consisted of tenant files of all tenants living in projects financed with rural rental housing loans (143) during the fiscal year. Sample size information 15 tenant files were reviewed. Identification as a repeat finding This is a repeat finding. Criteria 2 CFR §200.303(c) requires non-Federal entities to establish and maintain effective internal controls over Federal awards that provide reasonable assurance of compliance with applicable laws, regulations, and program requirements. As a fundamental internal control principle, review of key financial and program compliance documents, including tenant certifications, should be performed by an individual independent from the preparer to prevent and detect errors or misstatements. Statement of condition During our testing of compliance for eligibility, we noted that the same employee was responsible for both preparing and reviewing the tenant files. Cause The organization has limited staffing resources, resulting in the assignment of incompatible duties to a single employee without sufficient compensating controls. Effect When the preparer is also the reviewer, the risk of undetected errors or omissions increases. This could result in inaccurate tenant certifications, noncompliance with RD program requirements, and potential misreporting of tenant eligibility or rental assistance amounts. Auditor non-compliance code S – Internal Control Deficiency Questioned costs None Section III – Federal Award Findings and Questioned Costs (Continued) Views of responsible officials Management concurs with the finding and will take steps to resolve the material weakness. Context This issue was observed in the preparation and review process for RD Form 3560-8 and/or HUD Form 50058, where staffing limitations resulted in the same individuals both preparing and reviewing tenant certifications. Recommendation We recommend that the Authority establish procedures to ensure all RD Form 3560-8 and HUD Form 50058 submissions are subject to an independent review prior to submission.

Federal Agency: U.S. Department of Energy Federal Program: Energy Efficiency and Renewable Energy Information Dissemination, Outreach, Training and Technical Analysis/Assistance Assistance Listing Number: 81.117 Federal Award Identification Number(s) and Federal Award Year(s): DE-EE0009951 (2022), DE-EE0011801 (2025), DE-EE0011383 (2024) Pass-Through Entity: Not applicable—direct award Compliance Requirement: C—Cash Management Criteria or Specific Requirements: In accordance with 2 CFR §200.303, non-Federal entities are required 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 award. In addition, 2 CFR §200.305 establishes requirements related to the management of Federal payments. Appropriate internal controls over cash management should include documented review and approval of Federal cash drawdown or reimbursement submissions prior to submission. Condition: During the review of cash management compliance for the major program, we corroborated that responsibility for preparing and reviewing Federal grant submissions was assigned to separate individuals. However, the Organization did not retain documentation evidencing review and approval prior to submission for the items tested. Accordingly, we could not verify that the review and approval control operated for those submissions. Our compliance testing did not identify exceptions to the applicable cash management requirements. Cause: Internal controls over cash management were not operating effectively to ensure that the review and approval of Federal grant submissions was consistently documented and retained. Effect: The lack of documented review and approval increases the risk that inaccurate or unsupported Federal cash drawdown or reimbursement requests could be submitted without timely detection. Perspective Information: We tested 7 Federal grant submissions for the major program during 2025 using a nonstatistical sampling method. None of the submissions tested had retained documentation evidencing review and approval prior to submission. Questioned Costs: None. Repeat Finding: None. Recommendations: We recommend that management formalize and document procedures for the review and approval of Federal cash drawdown or reimbursement submissions. The procedures should require evidence of review and approval, such as documented sign-off prior to submission. Management should also ensure that the evidence of review and approval is retained with the supporting documentation for each submission. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See attached corrective action plan.

Federal Agency: U.S. Department of Energy Federal Program: Energy Efficiency and Renewable Energy Information Dissemination, Outreach, Training and Technical Analysis/Assistance Assistance Listing Number: 81.117 Federal Award Identification Number(s) and Federal Award Year(s): DE-EE0009951 (2022), DE-EE0011801 (2025), DE-EE0011383 (2024) Pass-Through Entity: Not applicable—direct award Compliance Requirement: L—Reporting Criteria or Specific Requirements: Under 2 CFR §200.302(b)(2)–(3), the Organization’s financial management system must provide accurate, current, and complete financial reporting and maintain records supported by source documentation. Additionally, 2 CFR §200.303(a) requires effective internal control over Federal awards. Controls over financial reporting should provide reasonable assurance that reports agree to supporting accounting records and that differences are identified and resolved. Documentation should be retained to demonstrate the reconciliation and review performed. Condition: For the six SF-425 financial reports selected for testing, the Organization did not retain sufficient documentation demonstrating reconciliation of reported amounts to the underlying accounting records or the substantive review of those reconciliations. We corroborated segregation of duties between preparation and review and obtained evidence of approval and timely submission. However, the approval evidence did not demonstrate the procedures performed to verify the completeness and accuracy of the reported amounts. Our compliance testing did not identify reportable noncompliance with the applicable reporting requirements. Cause: The Organization’s reporting procedures did not ensure that supporting reconciliations and evidence of the scope of supervisory review were consistently documented and retained. Effect: Insufficient documentation of reconciliations and supervisory review limits the Organization’s ability to demonstrate that reporting controls operated effectively and increases the risk that inaccurate or unsupported amounts could be reported without timely detection and correction. Perspective Information: We selected six quarterly SF-425 financial reports covering three awards under ALN 81.117. The documentation deficiency described above affected all six selected reports. The selections included two reports each for SolSmart 2.0, Advancing Equity, and SEAC 2.0. Questioned Costs: None. Repeat Finding: None. Recommendations: We recommend that management retain a complete supporting package for each financial report, including the accounting records used at the time of preparation, a reconciliation to the amounts reported, and explanations of reconciling items. A knowledgeable individual other than the preparer should review the report and supporting reconciliation for completeness and accuracy and document the review and resolution of any differences. Management should also evaluate subsequent accounting adjustments to determine whether previously submitted reports require correction under the applicable reporting requirements. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See attached corrective action plan.

Finding Type: Significant Deficiency in Internal Control Over Compliance Title and ALN of Federal Program: 93.558 – Temporary Assistance for Needy Families Criteria or Specific Requirement: B. Allowable Costs and Cost Principles - 2 CFR section 200.303 of the Uniform Guidance 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. In addition, 2 CFR section 200.403 provides that costs charged to a Federal award must be necessary, reasonable, allocable, adequately documented, and in conformance with applicable Federal requirements and the terms and conditions of the Federal award. Condition: During the audit, it was noted that the Association was unable to provide formal support for the internal review and approval of costs relating to stipends paid that were submitted to the pass-through grantor under the major program. Cause: The Association lacks established procedures which provide formal evidence that the allowability, accuracy and completeness of stipend transactions were verified before submission. Effect or Potential Effect: Although no stipend payments were identified which exceeded the allowable amount under the subaward agreement, without adequate controls in place to ensure all charges to the federal program are properly reviewed and approved for allowability, the Association faces increased risk of noncompliance with the allowability requirement and could request funds for unallowed costs. Questioned Costs: None. Identification as a Repeat Finding: N/A — this was not reported as a finding in the prior year audit report. Context: For the stipend payments selected for testing, there was no formal support for the internal review and approval of costs submitted to the pass-through grantor under the major program. Recommendation: We recommend the Association implement a formal process for review and approval of stipend payments. This should include maintenance of a standardized stipend calculation form or comparable documentation for each payment. The documentation should identify the participant, applicable payment period, attendance and participation records and/or milestones achieved, calculation of the stipend amount, and evidence of review and approval before payment. Views of Responsible Officials: Management agrees with the finding and recommendation.

Finding Type: Noncompliance with Major Program Requirements Title and ALN of Federal Program: 93.558 – Temporary Assistance for Needy Families Criteria or Specific Requirement: E. Eligibility - 2 CFR section 200.303 of the Uniform Guidance 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. In accordance with the Temporary Assistance for Needy Families subaward agreement, only individuals who meet the applicable eligibility criteria may receive services, benefits, or other assistance funded by the Federal award. The Association is required to maintain documentation of eligibility for program participants receiving assistance. Condition: For one of twenty-five participants selected for testing, the Association did not provide formal documentation demonstrating the participant’s eligibility for the program was determined in accordance with applicable program requirements. Cause: The Association did not have consistently established procedures to ensure that formal evidence supporting participant eligibility determinations was obtained, retained, and available for review. Effect or Potential Effect: The absence of adequate eligibility documentation increases the risk that services, benefits, or other assistance funded by the subaward could be provided to individuals who do not meet applicable eligibility requirements. Questioned Costs: None. Identification as a Repeat Finding: N/A — this was not reported as a finding in the prior year audit report. Context: Twenty-five participants were selected for testing of eligibility. For one participant, the Association did not maintain documentation supporting the participant’s eligibility determination. Recommendation: We recommend that the Association obtain, retain, and maintain documentation supporting the eligibility determination for all program participants receiving federally funded services, benefits, or other assistance. If eligibility documentation is provided or maintained through subrecipient monitoring procedures, the Association should enhance its monitoring procedures to ensure the subrecipient maintains complete enrollment forms and eligibility support for all individuals included in participant listings or reported to the pass-through entity. The Association should also perform periodic reconciliations of participant listings and Program Outcome Reports to underlying enrollment and eligibility documentation and investigate or remove from reported participant listings individuals who did not ultimately participate in the program. Views of Responsible Officials: Management agrees with the finding and recommendation.

FINDING 2025-002 Subject: Economic Development Cluster - Reporting Federal Agency: Department of Commerce Federal Program: Economic Adjustment Assistance Assistance Listings Number: 11.307 Federal Award Number and Year (or Other Identifying Number): 06-36-02088 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the City to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The City did not have internal controls in place to ensure that the required reports were submitted and/or retained for audit. The City submitted the Form ED-209 RLF Financial Report as of June 30, 2024, late during the audit period. The City was unable to provide that report for audit. Additionally, per the City's "Notice of Material Noncompliance and Suspension" from the U.S. Department of Commerce, the Economic Department Administration (EDA) had not received the semiannual financial reports for the periods ending December 31, 2024, June 30, 2025, and December 31, 2025. The City was unable to provide the reports for audit. The same Notice of Material Noncompliance and Suspension states, "EDA is authorized under 2 CFR § 200.339 to suspend and terminate the Award in response to Richmond's failure to submit semi-annual reports on time. Accordingly, this correspondence provides formal notice that the Award is suspended from the date of this letter until further written notice from the EDA. During the period of suspension, no additional costs should be incurred except the servicing of outstanding RLF loans." This Notice of Material Noncompliance and Suspension is dated February of 2026, and the suspension will not take effect until that date in terms of not being able to disburse any funds. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 16 CITY OF RICHMOND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 13 CFR 307.13(b) states: "Administrative records. RLF Recipients must at all times: (1) Maintain adequate accounting records and source documentation to substantiate the amount and percent of RLF Income expended for eligible RLF administrative costs. (2) Retain records of administrative expenses incurred for activities and equipment relating to the operation of the RLF for three years from the actual submission date of the report that covers the fiscal year in which such costs were claimed. (3) Consistent with § 307.11(a), for the duration of RLF operations, maintain records to demonstrate: (i) The adequacy of the RLF's accounting system to identify, safeguard, and account for the entire RLF Capital Base, outstanding RLF loans, and other RLF operations; (ii) That standard RLF loan documents reasonably necessary or advisable for lending are in place; and (iii) Evidence of fidelity bond coverage for persons authorized to handle funds under the Grant award in an amount sufficient to protect the interests of EDA and the RLF. (4) Make available for inspection retained records, including those retained for longer than the required period. The record retention periods described in this section are minimum periods and such prescription does not limit any other record retention requirement of law or agreement. In no event will EDA question claimed administrative costs that are more than three years old, unless fraud is at issue." 13 CFR 307.14 states: "(a) Frequency of reports. All RLF Recipients, including those receiving Recapitalization Grants for existing RLFs, must complete and submit an RLF report, using Form ED-209, in a format and at a frequency as required by EDA. (b) Report contents. RLF Recipients must certify as part of the RLF report to EDA that the RLF is operating in accordance with the applicable RLF Plan and that the information provided is complete and accurate." Cause Management had not established a system of internal controls that would have ensured compliance or that the appropriate reports were submitted and/or retained for audit related to the grant agreement and the Reporting compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 17 CITY OF RICHMOND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to retain or provide appropriate reports prevented the determination of the City's compliance with the grant agreement and the Reporting compliance requirement. Should the award be terminated for cause, a federal debt would be created, and the EDA would pursue, at a minimum, the federal share of the remaining RLF Capital Base plus interest. A Termination for Cause could impair the City's future applications for federal assistance from any federal agency. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's Management establish internal controls and ensure that the reports are submitted timely and will be maintained and made available for audit related to the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-003 Subject: Water and Waste Disposal Systems for Rural Communities - Equipment and Real Property Management Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listings Number: 10.760 Federal Award Number and Year (or Other Identifying Number): 15-048-349178652 Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 18 TOWN OF FRANKTON SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The Town had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. A capital asset listing was presented for audit but did not include all required details. Required details include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds the title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property. The Town purchased one asset totaling $477,750, which exceeded the Town's capitalization threshold. The equipment was included in the capital asset listing; however, it did not include the proper identifying information below: • Description (including serial number or other identification number). • Source of funding for the property (including the federal award identification number [the FAIN]). • The percentage of federal participation in the project costs for the federal award under which the property was acquired. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. INDIANA STATE BOARD OF ACCOUNTS 19 TOWN OF FRANKTON SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause A proper system of internal controls was not designed and implemented by management of the Town to ensure that assets purchased using federal dollars were added to the Town's capital asset listing with all required information. The Town was not aware of the requirement to have all the information on the asset listing for assets acquired with federal funds. Effect The lack of an effective system of internal controls placed the Town in noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement. The Town's capital asset listing did not include all information required for assets acquired with federal funds. Noncompliance with the grant agreement and the compliance requirement could result in the repayment or loss of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Town establish internal controls to ensure that equipment acquired with federal funds are added to the inventory listing with the required information necessary for compliance with requirements as outlined in the grant agreements and the federal guidelines. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

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, 2025 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: Yes, 2024-004 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 2025-001 Federal Agency: U.S. Department of Housing and Urban Development Program Name: Section 811 Supportive Housing for Persons with Disabilities Assistance Listing Number: 14.181 Federal Award Year: Funding periods between January 1, 2025 and December 31, 2025 Compliance Requirement: Special Tests and Provisions Finding Type: Significant Deficiency - Compliance Criteria Per U.S. Housing and Urban Development Memo dated June 19, 2015 related to residual receipts authority – Section 202/811 Project Rental Assistance Contacts (PRACs): “The purpose of this memorandum is to implement statutory language in the Consolidated and Further Continuing Appropriations Act, 2015 addressing the remission of residual receipts for projects subject to a Section 202 or 811 Project Rental Assistance Contract (PRAC). The language directs the Department to utilize residual receipts account balances to support current program purposes. Any excess balance greater than $250 per unit in a Residual Receipts account must be remitted to HUD’s Accounting Center upon “termination” of the PRAC.” Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements, Section 200.303(a) states that non-federal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During Special Tests and Provision – Residual receipts balances for five of the nine residual receipts accounts subject to testing exceeded the $250 per unit threshold, and remittance was not made upon termination of the PRAC agreement. As noted above, the Arc is required to establish controls to ensure timely remittance of excess funds back to HUD. Effect The Arc was not in compliance with Special Tests and Provisions – Residual Receipts. Cause Due to lack of internal controls surrounding review of changes to the residual receipts requirements, the required remittance amount was not made to HUD timely resulting in excess residual receipt balances over HUD maximum amounts. Questioned Costs There are no questioned costs related to the finding. Repeat Finding This is not a repeat finding. Recommendation We recommend that the Arc enhance its policies and procedures to ensure responsible program personnel timely review HUD communications and then ensure residual receipts account amounts are remitted timely to HUD when necessary. View of Responsible Official Management agrees with the finding. Management will institute a process and control to ensure that when PRACs expire, the balance of residual receipt accounts are reviewed in order to ensure that funds are timely remitted to HUD when they exceed allowed limits.