Findings Citing § 200.313

2025-004 — Equipment and Real Property Management – Significant Deficiency in Internal Control Over Compliance and Noncompliance (Repeat of Finding 2024-004) Federal program information: Funding agencies: U.S. Department of Education Titles: Higher Education Institutional Aid ALN Number: 84.031 Award years: Various Criteria: 2 CFR 200.313(c) through (e), requires that equipment be used in federal programs for which it was acquired for, when appropriate, other federal programs. Equipment records shall be maintained including required elements, a physical inventory of equipment be taken at least once every 2 years and reconciled to the equipment records, an appropriate control system shall be used to safeguard equipment, and equipment shall be adequately maintained. Condition: The College has not completed a physical inventory within the previous two fiscal years as required. In addition, the records were not detailed enough that program management is able to adequately and efficiently identify and locate any and all items. Questioned Costs: None. Cause: The College is not enforcing their procedures to verify that the capital assets inventory has been taken annually and reconciled to the general ledger. Effect: Without a physical inventory, there is an increase in the probability that the capital asset listing will be incorrect, or assets listed may not exist. Auditor’s Recommendations: Enforce internal control procedures and complete an inventory of the College’s capital assets annually. Management’s Response: The College concurs with the finding. Management will conduct an inventory to include location, funding source and required maintenance records.

Finding 2025-003 – Significant Deficiency and Noncompliance – Federal Equipment Program Information: Assistance to Firefighters, U.S. Department of Homeland Security, EMW- 2022-FG-06581 and EMW-2023-FG-08163, 2024, ALN #97.044 Criteria: Per 2 CFR §200.313(d), non-federal entities must maintain accurate property records for equipment acquired with federal funds including certain information. Additionally, entities must conduct a physical inventory of equipment at least once every two years and reconcile the results with equipment records. Condition: The auditee did not maintain a complete and accurate listing of equipment purchased with federal funds under ALN 97.044. Furthermore, the auditee did not perform, or document physical inventory counts of such equipment during the audit period. Questioned Costs: None identified at this time. However, due to the lack of inventory controls, there is an increased risk of misappropriation or loss of federally funded equipment. Cause and Effect: The auditee lacked adequate internal controls and procedures to ensure compliance with federal equipment management requirements. There was no designated responsibility for maintaining equipment records or conducting inventory counts. Failure to maintain equipment records and conduct inventory counts may result in: Inability to verify the existence and condition of federally funded equipment, Increased risk of asset loss or misuse, Potential disallowance of costs by the federal awarding agency, Noncompliance with Uniform Guidance requirements, which may impact future funding eligibility. Recommendation: We recommend the auditee: Develop and implement formal procedures for tracking equipment purchased with federal funds, Assign responsibility to staff for maintaining equipment records in accordance with 2 CFR §200.313(d), Conduct and document physical inventory counts at least biennially, reconciling results with equipment records, Train relevant personnel on federal equipment management requirements to ensure ongoing compliance. Views of Responsible Officials: Management agrees with the finding Corrective Action Plan: See attached corrective action plan.

Assistance Listing Number, Federal Agency, and Program Name Research and Development Cluster National Science Foundation, Department of Commerce, Department of Health and Human Services, Department of Energy, National Endowment for the Humanities, and Department of Transportation ALN 47.083, 47.041, 47.070, 47.084, 47.049, 11.024, 12.RD, 93.884, 93.113, 81.089, 59.065, 81.010, 81.RD, 45.129, 12.600, 59.059, 20.200, 20.505 Federal Award Identification Number and Year Various Pass through Entity Various Finding Type Significant deficiency Repeat Finding No Criteria According to 2 CFR 200.313(d)(2), a physical inventory of the property must be conducted and the results must be reconciled with the property records at least once every two years. Condition The University did not complete a physical inventory of the property within the last two years. Questioned Costs None If Questioned Costs are not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could not be Reported N/A Identification of How Questioned Costs Were Computed N/A Context The University did not complete a physical inventory of the property within the last two years. Cause and Effect Policies in place did not include a control to ensure a physical inventory of property is completed at least once every two years. Recommendation The University should implement controls to ensure a physical inventory of property is completed at least once every two years. Views of Responsible Officials and Corrective Action Plan Management agrees with the finding. Management will establish a formal inventory schedule that mandates physical inventory and reconciliation at least once every two years. Designated personnel will be assigned responsibility for executing and documenting the inventory process. Additionally, internal controls will be enhanced through periodic monitoring and reminders to ensure timely completion and proper record keeping.

Finding 2025-003 - Internal control over Major Federal Program Compliance Internal Control: Equipment and Real Property Management Compliance Program: Education Stabilization fund. CFDA Number: 84.425 Criteria: OMB Uniform Guidance requires the district to establish and maintan effective internal controls to ensure compliance with asset management. Condition: Federally funded asset acquisitions were not properly recorded, identified, and reported in an inventory system. Cause: The District did not implement procedures to inventory, record, and monitor federally funded asset acquisitions as required by 2 CFR 200.313 of Uniform Guidance. Repeat Finding: Yes, prior year Finding 2024-244. Recommendation: The District should review its policies and procedures for asset inventory management. The District should ensure the policies require asset inventory management to comply with Equipment and Real property Management compliance requirements. The District should provide training to personnel assigned to the inventory procedures. The District should implement specific inventory procedures to ensure compliance with the requirements of 2 CFR 200.313 of the Uniform Guidance. Management Views: Management's views and Corrective Action Plan are include at the end of this report.

Finding Type. Immaterial Noncompliance/Significant Deficiency in Internal Control over Compliance (Equipment and Real Property Management). Program. Childcare Access Means Parents in School (CCAMPIS); U.S. Department of Education; Assistance Listing Number 84.335A; Award Number P335A230060. Criteria. Per 2 CFR §200.313 (Uniform Guidance), non-federal entities must maintain property records that include a description, serial number, source of funding, title, acquisition date, cost, location, use, condition, and disposition data for property and equipment purchased with federal funds. Entities must also conduct regular inventories and reconcile them with property records. Condition. The College does not have a formal process or system in place to track fixed assets acquired with federal award funds. As a result, there is no centralized or consistent documentation of asset details, location, or usage for assets purchased with federal funds. Cause. The absence of a fixed asset tracking process appears to be due to a lack of awareness of federal requirements and insufficient internal controls over asset management related to federal awards. Effect. Without proper tracking, the College is at risk of noncompliance with federal regulations, potential loss or misuse of federally funded assets, and challenges in conducting accurate inventories or audits. This could lead to questioned costs or disallowed expenditures during federal reviews. Questioned Costs. No costs were questioned related to this finding. Recommendation. The College should implement a formal fixed asset tracking system that complies with 2 CFR §200.313. This system should include procedures for recording asset details, conducting periodic inventories, and reconciling records. Staff responsible for asset management should be trained on federal requirements to ensure ongoing compliance. View of Responsible Officials. Management agrees with finding and has prepared a corrective action plan.

FINDING 2025-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425U200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 23 METROPOLITAN SCHOOL DISTRICT OF DECATUR TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not properly designed a system of internal controls in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment purchased with the COVID-19 - Education Stabilization Fund grant award to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation maintained a detailed listing of capital assets; however, the capital asset listing provided did not identify which assets were purchased with federal dollars, the federal award identification number, or the percentage of federal participation in the project costs for the federal award under which the property was acquired. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 24 METROPOLITAN SCHOOL DISTRICT OF DECATUR TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation's management was not aware of the property record requirements for equipment and real property purchased with federal awards. Effect The failure to establish an effective system of internal controls placed the School Corporation in noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation'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 of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls that would ensure compliance with the equipment and real property management records and update its capital asset listing to include all required information. 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 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed a system of internal controls in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment purchased with federal grant awards to ensure adequate safeguards are in place to prevent loss or damage of items. The School Corporation used federal funds to pay for various purchases of capital assets totaling $361,012. Carpeting/flooring improvements, turf upgrades, and weight room equipment were all included in the School Corporation's capital asset listing; however, the capital asset listing did not include the following required information: • The use and condition of the property. • The percentage of federal participation in the project costs for the federal award under which the property was acquired. • Source of funding for the property [including the federal award identification number (FAIN)]. 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 20 CLOVERDALE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. . . ." Cause The School Corporation was unaware of the requirements regarding identifying information for assets purchased with federal funds. Effect The lack of an internal control system enabled noncompliance to occur and remain undetected. As a result, assets purchased with federal dollars were not properly identified in the School Corporation's capital asset records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure asset records include all the necessary information for assets purchased with federal funds. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Information on the federal program: Subject: Head Start Cluster – Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Equipment and Real Property Federal Agency: Department of Health and Human Services Federal Program: Head Start Cluster Assistance Listing Number: 93.600 Federal Award Numbers and Years (or Other Identifying Numbers): 05HP000285 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Equipment and Real Property Audit Finding: Material Weakness, Other Matters Criteria: 45 CFR 75.308(c)(1) states in part: "For non-construction Federal awards, recipients must request prior approval from HHS awarding agencies for one or more of the following program or budget-related reasons: . . . (xi) The recipient wishes to dispose of, replace, or encumber title to real property, equipment, or intangible property that are acquired or improved with a Federal award. . . ." 45 CFR 75.323 states: "Real property, equipment, and intangible property, that are acquired or improved with a Federal award must be held in trust by the non-Federal entity as trustee for the beneficiaries of the project or program under which the property was acquired or improved. The HHS awarding agency may require the non-Federal entity to record liens or other appropriate notices of record to indicate that personal or real property has been acquired or improved with a Federal award and that use and disposition conditions apply to the property." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. Condition: An effective internal control system was not in place at the Unit to ensure compliance with requirements related to the grant agreement and the equipment compliance requirements related to prior approval, property records, and physical inventory. Cause: The Unit's management had not developed a system of internal controls to ensure compliance with the equipment requirements. Effect: The failure to establish an effective internal control system allowed noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: $160,847. Context: During testing, we noted the Unit spent $160,847 on flooring upgrades which exceeded the $5,000 federal equipment and real property threshold. However, the Unit did not perform any of the required federal compliance steps related to the flooring purchase (getting approval before making the purchase, adding the flooring purchase to the capital asset listing, and performing an inventory of the flooring). The Unit believed the flooring purchase did not require approval because it does not meet the criteria of a major renovation under Head Start guidelines. However, as noted in the criteria above, the flooring still qualifies as an equipment and real property purchase. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the Unit perform the required steps to maintain compliance with the federal equipment compliance requirements.

2025-004: Equipment Management U.S. Department of Education Passed through Missouri Department of Elementary and Secondary Education Education Stabilization Fund, Assistance Listing No. 84.425D (COVID-19—Elementary and Secondary School Emergency Relief Fund), 84.425U (COVID-19—American Rescue Plan-Elementary and Secondary School Emergency Relief), 84.425W (COVID-19—American Rescue Plan-Elementary and Secondary School Emergency Relief-Homeless Children and Youth) Federal award years 2023-2025 Criteria: The Uniform Guidance (2CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Also, in accordance with 2 CFR section 200.313(d)(1), property records must be maintained that include a description of the property, a serial number of other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. In accordance with 2 CFR section 200.313(d)(2), a physical inventory of equipment and property must be taken, and the results reconciled with the property records at least once every two years. Condition: During the fiscal year 2024 audit, it was previously reported that the District’s controls were not operating effectively to reasonably ensure the District had maintained property records with the above required information, nor had it performed the required physical inventory of equipment within the two previous years. During fiscal year 2025, the District incorporated processes and controls over equipment management that met the property record requirements. The District also performed a physical inventory during fiscal year 2025 that included counting and reconciling approximately half of the District’s equipment and property within this grant program. Therefore, the District had not yet met the requirements of performing a physical inventory of all equipment and property within the previous two years. Cause: Given the timing of when the District incorporated its processes and controls, insufficient time remained to perform a physical inventory of all the District’s equipment and property within this grant program, and only approximately half of the items were subject to the physical inventory. Effect or potential effect: The District is not in compliance with federal grant requirements over the physical inventory of equipment. Improper equipment procedures could result in actions taken by oversight agencies which could impact future funding. Questioned costs: None Context: As noted above, the District updated its property records for all its property and equipment, and then approximately half of the District’s property and equipment was subject to a physical inventory. Identification as a repeat finding, if applicable: 2024-004 and 2024-006. Recommendation: We recommend the District continue to perform the processes and controls it added during fiscal year 2025, and complete the inventory count for the remaining items, to be compliance with the federal grant 2 year cycle. View of responsible officials: Management agrees with this finding.

Information on the federal program: Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425U, 84.425W Federal Award Numbers: S425U210013, S425W210015 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the 3 sample items tested, the acquisitions were not reported on the capital asset listing for the School Corporation as of June 30, 2025. For 1 sample item, the School Corporation expended $5,528,730 on building renovations which was charged to the ESSER III (84.425U) grant award. The other 2 sample items were equipment purchases totaling $25,554 charged to the Homeless Children and Youth Grant (84.425W) grant award. Additionally, we noted the School Corporation’s capital asset listing did not contain all the required information, including the source of funding for the property, outlined in the criteria above. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation update the capital asset listing at least annually to include all equipment and real property acquisitions and review for potential capital asset dispositions. Additionally, we recommend the School Corporation update the capital asset listing to include all the required information, including the source of funding for the property, outlined in the criteria above. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

SA 2025-002: Develop Written Policies and Procedures Assistance Listing Number: 20.509 Federal Program/Cluster Name: Formula Grants for Rural Areas and Tribal Transit Federal Agency: U.S. Department of Transportation – Federal Transit Administration Federal Award Number: 64BA24-02507/64CA17-02442/64HC22-02180/64RO21-01648/64TO21-01865/64MO21-01910/64HC21-01500 Federal Award Year: July 1, 2024 to June 30, 2025 Compliance Requirement Others Criteria 2 CFR 200.303 requires nonfederal entities to establish and maintain effective internal control over federal awards to provide reasonable assurance that organizations who manage the federal award: • Understand and comply with the federal statutes, regulations, and terms and conditions of the award; • Evaluate and monitor compliance; • Take prompt action when instances of noncompliance is identified. 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). Additionally, the Uniform Guidance requires non-federal entities to develop written procedures related to the following areas: 1. Cash Management 2 CFR 200.302(b)(6) states that the financial management system of each non-Federal entity must provide for the written procedures to implement the requirements of 2 CFR 200.305 Federal Payment. 2. Equipment Management Requirements Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e). Condition MARTA does not have comprehensive written policies and procedures concerning the following key compliance areas which are required by the Uniform Guidance: Cash Management MARTA does not have written procedures to implement the requirements of 2 CFR 200.305 Federal Payment. Equipment and Real Property Management MARTA has an Asset Inventory Policy and Procedures, however, it does not clearly define the policies and procedures that are in place for the use, management and disposition of equipment acquired under a Federal award in accordance with 2 CFR sections 200.313(c) through (e). Cause MARTA’s reliance on informal business practices leads to inconsistencies in its internal controls. Effect The absence of formal policies and procedures in the key compliance areas could result in non-compliance with federal regulations, which may lead to unnecessary sanctions. Additionally, without formal written policies and procedures, it is difficult to ensure consistent practices across the organization. Questioned Costs None Repeat Findings Yes, see the Summary Schedule of Prior Year Audit Findings, SA 2024‑001. The Cash Management and Equipment and Real Property Management policies have not been updated since last year’s audit. Recommendation MARTA should develop and implement formal written policies and procedures for the specific areas required by the Uniform Guidance. These policies and procedures must clearly delineate the requirements of Uniform Guidance. Personnel responsible for these areas should receive adequate training and apply the policies effectively. Regular reviews should be conducted to update the policies and procedures as needed. Views of Responsible Officials and Planned Corrective Action MARTA has grown substantially in the last several years. This progress includes identifying areas that need to be updated or developing new processes and documentation. MARTA has an Asset Inventory Policy and Procedures in which the purpose is to ensure that fixed assets are properly accounted for, identified, and tracked. MARTA also has Cash Handling Policy and Procedures which addresses safeguarding public funds and maximizing the available resources. This is designed to reduce the risks associated with the collection, receipts storage and reporting of cash transactions and to safeguard and maintain the security and integrity of MARTA's fiscal assets. MARTA will review and update these policies and/or create new policies to make sure that they are compliant with the Uniform Guidance. Personnel responsible: Sandy Benson, General Manager Anticipated completion date: October 2026

FINDING 2025-001 – EQUIPMENT AND REAL PROPERTY MANAGEMENT Significant Deficiency Federal Programs: Education Stabilization Fund – Assistance Listing Number 84.425 Repeat Finding: This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-002. Criteria 2 CFR 200.313(d) contains equipment management requirements which dictate property records entities must maintain and the need for procedures to adequately safeguard and maintain assets acquired with federal funding. Condition The Organization did not retain in their accounting records all the required information. Specifically, the federal award identification number, holder of the title, use, and condition were not listed. The federal participation was assumed based on allocations between fund codes in the general ledger. Additionally, sufficient and appropriate documentation did not exist to support a physical inventory had been completed for all assets once in the last two years. Cause and Effect Individuals responsible for the use of federal funds or maintenance and safeguard of assets acquired with federal funds lacked knowledge of the compliance requirements pertaining to the use of the funds or the maintenance and safeguard of the acquired assets. As a result, adequate documentation was not maintained for equipment acquired with federal funds or to support the performance of a physical inventory occurring within the required time period. Recommendation We recommend the Organization develop a system of internal controls aligned with the applicable compliance requirements to properly track equipment acquisitions in the accounting records and to ensure a physical inventory is appropriately documented when completed. Views of Responsible Officials and Planned Corrective Actions The Organization’s Corrective Action Plan is included on pages 37 to 38.

Reference Number: 2025-020 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Agriculture Federal Program: Research and Development Cluster Assistance Listing Number: 93.103 Award Number and Year: Various Compliance Requirement: Equipment and Real Property Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: 2 CFR 200.313 prescribes the requirements for non-federal entities regarding equipment and real property management. Requirements include the following: 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 federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Agriculture did not manage equipment purchased with federal program funds in accordance with federal requirements. Context: Sixty items were selected for testing which included three from the Department of Agriculture (Department), five from Bluefield State College (BSC), and fifty-two from West Virginia University. We noted the following exceptions: Department of Agriculture: For one of three property records selected for testing, the Department did not maintain property records. Cause: The Department does not have sufficient procedures or internal controls to ensure that equipment and property acquired with federal funds is maintained in accordance with federal requirements. Effect: Failure to adequately manage federal equipment and property could allow for undetected loss, theft, damage, or unauthorized use of the property. Questioned costs: Undetermined. Recommendation: We recommend that the Department review and enhance internal controls and procedures to ensure that equipment and property acquired using federal funds is managed in accordance with federal requirements. The Department should maintain property records and perform a physical inventory for all equipment. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.

FINDING 2025-003 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number and Year (or Other Identifying Number): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-009. Condition and Context The School Corporation 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 related to the Equipment and Real Property Management compliance requirement. The School Corporation made a real property purchase, 200 N Preston Street (Church Property), in the amount of $27,951 with grant funds. The Church Property was acquired in January 2024, and the expenditure was reimbursed under the ESSER III award in January 2024. The School Corporation did not maintain a capital asset ledger during the audit period, so the equipment purchased was not properly added to an asset ledger or property record. In addition, the School Corporation did not perform a physical inventory of equipment/property at least once every two years as required. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 17 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. . . ." Cause The School Corporation's management had not designed or implemented a system of internal controls that would have ensured procedures were in place so that the School Corporation would be in compliance with the provisions of the grant agreements and the Equipment and Real Property Management compliance requirement. Effect The failure to design and implement an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the provisions of the grant agreements and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 18 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure compliance with the grant agreements and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Significant Deficiency 2025-001. Equipment and Real Property Management United States of Education, Passed-through New York State, Department of Education: Special Education Cluster Special Education Grants to States: IDEA Part B ALN: 84.027 Special Education Preschool Grants: IDEA Preschool ALN: 84.173 Criteria: 2 CFR §200.313 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires management to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that 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), and who holds title. In addition, it requires the District to track 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. Condition: The District did not include, as additions in the District’s capital assets inventory records, all equipment purchased with federal awards. Cause: The District uses specific codes to identify and track equipment purchased during the year. Since the District did not have procedures in place to timely review and reconcile the District’s purchases posted to the equipment codes to the annual capital assets additions in the inventory records, equipment purchased with federal awards was inadvertently omitted from the current year capital assets inventory. Effect: The inability to include and differentiate capital assets acquired with federal awards in the capital assets inventory records could lead to improper procedures for tracking and disposal of those capital assets. Questioned Costs: Dollar amount undetermined, as adequate documentation was not available. Context: The District rarely uses federal awards for the purchase of equipment. As a result of this, when District staff was compiling the listing of equipment purchased during the year, to be provided to the District’s third-party capital assets management company, the equipment purchased using federal awards was inadvertently omitted from the listing. Identification of a Repeat Finding: This is a repeat finding from the previous year audit, 2024-001 in connection with audit of the Education Stabilization Fund awards expended, ALN: 84.425D, ALN: 84.425U, and ALN: 84.425W. Recommendation: The District should implement procedures where there is a formal reconciliation performed annually for all equipment expenditures with the additions to the District’s capital assets inventory. This will ensure that all equipment purchased with federal awards is captured and included in the capital assets inventory records. Additionally, all capital assets additions purchased with federal funds should be managed in accordance with 2 CFR §200.313. Views of Responsible Officials of Auditee: Management agrees with the finding and will ensure that the equipment purchased with federal awards is identified and included in the District’s capital assets inventory records as part of the capital assets reconciliation process.

Finding #: 2025-001 Research and Development Cluster (Various Assistance Listing Numbers, refer to SEFA) Type of Finding: Equipment and Real Property Management - Compliance and Internal Control (Significant Deficiency) Criteria: In accordance with 2 CFR section 200.313(d)(2), a physical inventory of property purchased with federal grant funds must be conducted, and the results must be reconciled with the property records at least once every two years. Condition/Context: Montclair State University (the “University”) records and assigns an asset identification number to each equipment purchase made using Research and Development grant funds through its financial reporting system as assets are acquired for use. However, the University is also required to physically inspect and document inventory observations at least once every two years, in accordance with 2 CFR section 200.313(d)(2). As part of the audit procedures performed, we determined that the University did not perform and document the required physical observation within the prior two years. Cause/Effect: While the University has procedures in place to properly track equipment purchases made through the use of Research and Development funds, the controls in place did not include ensuring that a physical inventory count was performed at least once every two years, as required. Questioned Costs: None identified. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the University strengthen controls over the physical inventory review process to ensure inventory observations are performed and documented at least once every two years.

FINDING 2025-003 Information on the federal program: Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers: S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For 1 of the 3 sample items tested, the acquisitions were not reported on the capital asset listing for the School Corporation as of June 30, 2025. For 1 sample item, the School Corporation expended $38,840 on building renovations which was charged to the ESSER III (84.425U) grant award. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation update the capital asset listing at least annually to include all equipment and real property acquisitions and review for potential capital asset dispositions. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

FINDING 2025-001 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Number and Year (or Other Identifying Number): S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 15 GREATER JASPER CONSOLIDATED SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-006. Condition and Context A property record or capital asset listing would include the following for each asset: a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. The property record or capital asset listing should be maintained for assets purchased that exceed the School Corporation's capitalization threshold. The School Corporation did not properly design or implement a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation purchased a laser engraver during the audit period from the ESSER II grant totaling $29,655. The asset was purchased using ESSER II funds obtained by the Special Education Cooperative (Cooperative), for which the School Corporation is the fiscal agent. The asset exceeded the School Corporation's capitalization threshold of $5,000; but was omitted from the capital asset listing. Additionally, proper safeguards were not put in place to protect the asset. 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: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. INDIANA STATE BOARD OF ACCOUNTS 16 GREATER JASPER CONSOLIDATED SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (2) A physical inventory of the property must be conducted, and the results must be reconciled with the property records at least once every two years. (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. . . ." Cause Although management was aware of the equipment purchase by the Cooperative and the related invoice, they misidentified the ownership of the asset, believing it did not belong to the School Corporation. Furthermore, the School Corporation and the Cooperative had not established formalized procedures to ensure that assets acquired under such agreements were identified, communicated, and recorded in accordance with federal guidelines and the School Corporation's capital asset policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, assets purchased with federal dollars, ESSER funds, were not properly added to the School Corporation's asset listing. In addition, assets on the listing did not denote whether federal funds were used to acquire the asset or an identification number. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure asset records include all the necessary information and new assets are added, including those of the Cooperative. 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 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Number and Year (or Other Identifying Number): S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-001. Condition and Context The School Corporation had not properly designed a system of internal controls in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment purchased with the COVID-19 - Education Stabilization Fund grant award to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment is to be included in the capital asset listing when valued over $5,000. The School Corporation maintained a detailed listing of capital assets; however, the capital asset listing provided did not identify which assets were purchased with federal dollars, the federal award identification number, or the percentage of federal participation in the project costs for the federal award under which the property was acquired. One identifiable capital asset purchased using federal dollars was omitted from the School Corporation's detailed listing of capital assets. 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 16 SCHOOL TOWN OF SPEEDWAY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause The School Corporation's management was unaware of the recording requirements for equipment and real property obtained through the use of federal awards or that an asset got omitted from its capital asset record. Any assets, obtained through the use of federal monies, are not immediately identifiable due to the omission of the federal award identification number field. Effect The failure to establish an effective system of internal controls placed the School Corporation in noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation'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 loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls that would ensure compliance with the Equipment and Real Property compliance requirement and update the capital asset listing include the missing asset as well as to include all required information. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-001 Information on the federal program: Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers: S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For 1 of 2 sample items tested, we noted the School Corporation expended $88,727 on bus garage additions which was charged to the ESSER III (84.425U) grant award. It was noted this capital asset acquisition was not reported on the capital asset listing for the School Corporation as of June 30, 2025. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation update the capital asset listing at least annually to include all equipment and real property acquisitions and review for potential capital asset dispositions. The capital asset listing should include all required information to track capital asset acquisitions purchased with federal funding. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Information on the federal program: Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U, 84.425W Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013, S425W210015 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the 2 sample items tested, the acquisitions were not reported on the capital asset listing for the School Corporation as of June 30, 2025. For 1 sample item, the School Corporation expended $810,047 on building renovations which was charged to the ESSER III (84.425U) and ESSER II (84.425D) grant awards. For the other item, the School Corporation expended $9,182 on a vehicle which was charged to the ESSER HCY (84.425W) grant award. Additionally, we noted that the School Corporation’s capital asset listing did not contain all required information, including the source of funding for the property, as outlined in the criteria above. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation update the capital asset listing at least annually to include all equipment and real property acquisitions and review for potential capital asset dispositions. Additionally, we recommend the School Corporation update the capital asset listing to include all the required information, including the source of funding for the property, outlined in the criteria above. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Information on the federal program: Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers: S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the 2 sample items tested, the acquisitions were not reported on the capital asset listing for the School Corporation as of June 30, 2025. For one of the sample items, the School Corporation expended $333,000 on building renovations which was charged to the ESSER III (84.425U) grant award. For the other sample item, the School Corporation expended $71,000 for locker room upgrades that was charged to the ESSER III grant. Additionally, we noted the School Corporation’s capital asset listing did not contain all the required information, including the source of funding for the property, outlined in the criteria above. Identification as a repeat finding, if applicable: No. Recommendation: We recommend the School Corporation update the capital asset listing at least annually to include all equipment and real property acquisitions and review for potential capital asset dispositions. Additionally, we recommend the School Corporation update the capital asset listing to include all the required information, including the source of funding for the property, outlined in the criteria above. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Research and Development Cluster – various ALNs Statistically valid sample: No, and it was not intended to be. Repeat finding: Not a repeat finding. Compliance Requirement – Equipment and Real Property Management – Material Weakness and Material Noncompliance Criteria Non federal entities other than states must follow 2 CFR sections 200.313(c) through (e) which require that: (a) 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 federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). (b) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). (c) 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 (2 CFR section 200.313(d)(3)). Condition and Context There were several matters noted. First, there was no evidence that the University conducted a physical inventory of its federal equipment in the past two years. The value of equipment related to the Research and Development Cluster is $1,141,319 at June 30, 2025. Second, we selected seven pieces of equipment out of thirty one pieces of equipment that existed at June 30, 2025. While the property records included all the required elements, three of the pieces were not properly tagged. Cause Management was not aware of the two-year physical inventory compliance requirement over federally purchased equipment. Management incorrectly noted that the requirement was once every three years, resulting in non-compliance. Effect The equipment purchased with federal funds may not be properly safeguarded. Questioned Costs There were no questioned costs related to this finding. Recommendation We recommend that the University strengthen its policies and procedures over equipment, including adding procedures to perform the physical inventory at least once every two years, timely tagging equipment upon the purchase of equipment with federal funds, and properly reviewing and reconciling equipment records with the results of the inventory. Views of Responsible Official Management agrees with the recommendation. Management is currently in the process of conducting a full physical inventory of equipment purchased using federal funds that have a net book value greater than zero in accordance with 2 CFR sections 200.313(c) through (e). The inventory process will be reviewed by management to ensure timely, accurate completion. Going forward, the University will tag all new assets acquired using federal funds. In addition, a revised policy has been established relating to an annual physical inventory of federally purchased equipment to facilitate compliance and increase related inventory controls. The revised policy includes, among other details, standard requirements for inventory tagging and related monitoring.

FINDING 2025-005 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-004. INDIANA STATE BOARD OF ACCOUNTS 23 LAKELAND SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not established an effective internal control system to ensure compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation had not completed a capital asset inventory since June 30, 2023. Additionally, the School Corporation purchased the following items from the grant award during the audit period that exceeded its capitalization threshold, none of which were added to the capital asset ledger:  One 86" LifeTouchPro for $8,359  Three Tem Spec Units for $14,550  Five Tem Spec Units for $13,650 each  6,000' Fiber Cable for $46,330  900' Fiber Cable for $7,610  1,600' Fiber Cable for $23,853 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: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. INDIANA STATE BOARD OF ACCOUNTS 24 LAKELAND SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. . . ." Cause The School Corporation did not have effective internal controls in place to ensure equipment was properly managed. 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, equipment was not properly managed and could lead to misuse of the grant award. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls, including policies and procedures that would ensure equipment is properly managed for compliance with the grant agreement and the Equipment and Real Property Management 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 Information on the federal program: Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers: S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For 1 of the 2 sample items tested, a portion of one of the acquisitions were not reported on the capital asset listing for the School Corporation as of June 30, 2025. For that sample item, the School Corporation expended $2,690,454 on building renovations which was charged to the ESSER III (84.425U) grant award of which $365,063 was not added to the capital asset listing. The missing portion related to some invoices not being captured timely. Additionally, we noted the School Corporation’s capital asset listing did not contain all the required information, including the source of funding for the property, outlined in the criteria above. Identification as a repeat finding, if applicable: This is a repeat finding from the immediately prior audit. The prior finding number was 2023-006. Recommendation: We recommend the School Corporation update the capital asset listing at least annually to include all equipment and real property acquisitions and review for potential capital asset dispositions. Additionally, we recommend the School Corporation update the capital asset listing to include all the required information, including the source of funding for the property, outlined in the criteria above. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND MATERIAL NONCOMPLIANCE – U.S. DEPARTMENT OF EDUCATION – PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, COVID-19 – EDUCATION STABILIZATION FUND – FEDERAL ALN 84.425 2025-007 Internal Control Over Compliance and Material Noncompliance With Equipment and Real Property Management Requirements Criteria – 2 CFR § 200.313 requires the District to designate fixed assets purchased under federal programs and to maintain related property records, including a description of the property, a serial number or other unique identification number, the source of funding for the property (including the federal Assistance Listing Number (ALN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use, and condition of the property, and any ultimate disposition data, including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least every two years. Condition – During our audit, we noted that the District did not have sufficient controls in place within the COVID-19 – Education Stabilization Fund federal program to specifically identify federally funded fixed assets and maintain the required records as noted above to assure compliance with federal equipment and real property management requirements. The District does not have a process or procedure in place for a physical inventory of property acquired with federal funds. Fixed assets purchased with federal awards have not been maintained in accordance with federal equipment and real property management requirements. Questioned Costs – None. Context – Fixed assets purchased with federal awards have not been maintained in accordance with federal equipment and real property management requirements. This was not a statistically valid sample. Repeat Finding – This is a current year and prior year finding. Cause – The District did not have a system in place for specifically identifying federally-funded fixed assets and maintaining the required records as noted above. Effect – This could be viewed as a violation of the award agreement. Recommendation – We recommend that the District review its internal control procedures to ensure future compliance with the federal compliance requirements specific to equipment and real property management for the COVID-19 Education Stabilization Fund federal program. View of Responsible Official and Planned Corrective Actions – The District agrees with the finding. The District intends to review its control procedures relating to equipment and real property management requirements to ensure compliance for future federal awards expenditures. The District has separately issued a Corrective Action Plan related to this finding.

Information on the federal program: Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers: S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation expended $2,354,885 during the previous audit period on equipment acquisitions for a new HVAC system and chiller at the North White Middle-High School building. Equipment acquisitions were charged to the ESSER II (84.425D) and ESSER III (84.425U) grant awards in the prior audit period. During the testing of equipment acquisitions, it was noted the School Corporation had not updated the capital asset ledger as of June 30, 2025 for federal equipment acquisitions made in the current and prior period and had not fully implemented the corrective action plan from the previous audit related to this finding. Identification as a repeat finding: Yes, see finding 2023-005. Recommendation: We recommend that the School Corporation's management implement a system of controls to ensure the capital asset ledger is updated timely for capital asset acquisitions and dispositions on at least an annual basis. Capital asset acquisitions funded with federal awards should comply with all federal requirements for tracking and maintaining capital assets. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

IDEA Equipment Management Program - Special Education Cluster (IDEA), Assistance Listing Numbers 84.027A, 84.173A. Criteria or Specific Requirement - Federal regulations outlined in 2 CFR 200.313 and the Compliance Supplement, as amended by the State of Tennessee Department of Education, require that equipment purchases in excess of $5,000 (or more than $100 if the item is considered sensitive minor equipment) be properly accounted for and tracked by the entity if funded by Federal grants. Specifically, property records must be maintained that includes a description of the property, a serial number or other identification number, the acquisition date, cost of the property, the location, use and condition of the property, and any ultimate disposition of the property. Condition - During our single audit testing, we noted various instances where School equipment was not being tracked properly. Issues included equipment not being entered into the system with a correct value, not receiving an asset tag, or not being tracked accurately as to its location. Cause and Effect - The issue resulted from inconsistent execution and monitoring of existing equipment inventory procedures, which affected the completeness and accuracy of information recorded in the equipment management system. The effect was immaterial noncompliance with equipment management required under Uniform Guidance. Questioned Costs - None Context - We tested 40 current year property acquisitions during our audit. In that sample size, seven were not recorded accurately as to cost due to shipping or discounts. In addition, one item did not have an asset tag or serial number listed. We also selected 50 inventory items to test. Of these selections, 16 items were in a different location than where the system said they were supposed to be and not able to be counted or not able to be counted. Recommendations - The Schools need to strengthen oversight and monitoring to ensure existing inventory procedures for IDEA funded equipment are fully and consistently followed. Management’s Response - We concur. Oversight and monitoring will be strengthened by undertaking a new inventory and a departmental restructure for improving management of items purchased with Federal IDEA grant funds.

FINDING 2025-003 Subject: Head Start Cluster - Equipment and Real Property Management Federal Agency: Department of Health and Human Services Federal Program: Head Start Assistance Listings Number: 93.600 Federal Award Numbers and Years (or Other Identifying Numbers): 05CH012250-01a, 05CH012250-02 Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation designed a system of internal controls; however, it was not properly implemented to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment purchased with the Head Start grant award to ensure adequate safeguards are in place to prevent loss or damage of items. The School Corporation used federal funds in the amount of $224,077 to purchase two buses. The equipment was included in the capital asset listing of the School Corporation; however, it did not include the proper identifying information. The School Corporation's capital asset listing did not include the following required information:  The use and condition of the property.  The percentage of federal participation in the project costs for the federal award under which the property was acquired.  Source of funding for the property (including the federal award identification number (the FAIN)). 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 20 FAYETTE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. (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 School Corporation to ensure that assets purchased using federal dollars were added to the School Corporation's capital asset listing with all required information. Effect The failure to establish an effective system of internal controls placed the School Corporation in noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation'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 of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure that equipment purchased 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 Compliance Supplement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-006 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number and Year (or Other Identifying Number): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 24 DELPHI COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context A property record or capital asset listing which would 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 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 is to be maintained for assets purchased that exceed the School Corporation's capitalization threshold of $5,000. The School Corporation hired a consultant to compile a capital asset listing report that was to contain all inventory and assets purchased that exceeded the School Corporation's capitalization threshold through June 30, 2025. The consultant prepared the report; however, the School Corporation did not have any policies or procedures in place to ensure the listing was complete. The School Corporation spent $802,314 on improvements, of which $344,829 was paid with COVID-19 - Education Stabilization Funds. The improvements should have been recorded as a capital asset purchased with grant funds as this project exceeded the capitalization threshold. The capital asset listing provided only included part of the project totaling $167,208 and did not identify the source of the funding, the correct cost of the property, or the percentage of federal participation as required. The lack of internal controls and noncompliance were isolated to the ESSER III grant S425U210013 in both fiscal years 2023-2024 and 2024-2025. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. INDIANA STATE BOARD OF ACCOUNTS 25 DELPHI COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause Effective internal controls were not in place to ensure that all assets purchased with federal funds were added to the School Corporation's capital asset listing. The School Corporation uses a consultant to prepare the capital asset listing which did not include all required information. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls that would ensure compliance with the equipment and real property management requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

2 CFR § 3474.1 gives regulatory effect to the Office of Budget and Management Guidance in 2 CFR §200.313(d) for the Department of Education, which states, in part, that a control system must be in place to ensure safeguards to prevent loss, damage, or theft of the equipment. It also requires that the recipient or subrecipient maintain property records that include a description of the asset, a serial number or other source of identification (including the FAIN), the source of funding for the property and other data to identify the equipment. Finally, it requires recipients or subrecipients to perform a physical inventory of property purchased with federal funds and reconcile the inventory results to the recipient or subrecipient’s property records at least once every two years. Due to insufficient knowledge of and controls in place over the federal requirements related to equipment and property management we noted the following issues: • The District could not provide evidence that a physical inventory over property purchased with Elementary and Secondary School Emergency Relief (ESSER) Fund (AL #84.425D) and American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Funds (AL #84.425U) had been taken and reconciled with property records in the required timeframe. • 30 items (out of 60) selected for physical observation during the prior-year audit were still not properly tagged and still could not be reconciled with the District’s property listing provided by management. • 28 property items selected for testing during the prior year still could not be located for physical observation. • Asset records for all ten (100%) assets purchased with ARP ESSER funds during the audit period were not properly updated with the required information; and • District could not determine if there was any equipment purchased with ARP ESSER or ESSER I fund, disposed of during the audit period. Lack of controls over equipment management and failure to complete the required inventory could lead to misappropriation of District assets and potential questioned costs and non-compliance with federal requirements.

FINDING 2025-003 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-003. Condition and Context The School Corporation had not properly implemented an effective system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. A property record or capital asset listing, which would 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 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, is to be maintained for assets purchased that exceed the School Corporation's capitalization threshold. INDIANA STATE BOARD OF ACCOUNTS 20 EASTERN PULASKI COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) During the audit period, the School Corporation purchased six pieces of equipment with COVID-19 - Education Stabilization Funds that exceeded the capitalization threshold. Of the six assets, one was not added to the detailed listing of capital assets. Additionally, of the five that were added to the capital asset listing, the records did not include all the required information such as a serial or identification number, the source of funding for the property (including the federal award identification number), who holds title, acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, location of the property, and the use and condition of the property. In addition, assets were not properly safeguarded and maintained. 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: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause The School Corporation did not have adequate internal controls to ensure compliance with the Equipment and Real Property Management compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 21 EASTERN PULASKI COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation cannot ensure that capital asset purchases are properly accounted for in the capital asset listing. Not properly accounting for equipment that meets the capital asset threshold does not provide an accurate depiction of the total capital assets maintained by the School Corporation and does not denote whether federal funds were used to acquire the asset. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure asset records include all the necessary information and new assets are added individually. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Finding Number: 2025-001 Assistance Listing Number and Title: AL#84.425U, Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: U.S. Department of Education Compliance Requirement: Equipment and Real Property Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Significant Deficiency 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.313(d)(1) which provides that 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 Federal award identification number), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. The District purchased equipment in the amount of $14,797 using their American Rescue Plan Elementary and Secondary School Emergency Education Relief (AL#84.425U) federal funding without adding this asset to their capital asset listing due to a failure in adequately designed controls. The failure to properly record assets can lead to difficulties maintaining accountability for the related assets. The Treasurer should monitor transactions and ensure that all capital additions are properly documented in the capital asset records.

FINDING 2025-010 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number and Year (or Other Identifying Number): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed a system of internal controls to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation prepared a fixed asset report that contained all inventory and assets purchased that exceeded the School Corporation's capitalization threshold through June 30, 2025. The School Corporation did not have any policies or procedures in place to ensure the listing was complete and contained all the required information nor was there any documentation that a physical inventory was completed every two years as required by Indiana Code. The School Corporation had the following required information missing from the details of capital assets: source of funding for the property, acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, use and condition of the property, and disposition data. In addition, assets were not properly safeguarded and maintained. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 39 GRIFFITH PUBLIC SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause The vendor the School Corporation contracts with did not complete the fixed asset detail report due to being behind schedule. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, not all assets purchased, in whole or in part with federal dollars, were added to the capital asset listing. In addition, the assets added to the capital asset listing did not include all required information. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 40 GRIFFITH PUBLIC SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties, to ensure an asset inventory is performed at least every two years. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Information on the federal program: Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers: S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the 4 sample items tested, the acquisitions were not reported on the capital asset listing for the School Corporation as of June 30, 2025. For 3 of the sample items, the School Corporation expended $8,378,388 on building renovations which were charged to the ESSER III (84.425U) and ESSER II (84.425D) grant awards in the current audit period and prior audit period. For the other sample item, the School Corporation expended $17,513 for playground equipment that was charged to the ESSER III grant in the current period. Additionally, we noted the School Corporation’s capital asset listing did not contain all the required information, including the source of funding for the property, outlined in the criteria above. Identification as a repeat finding, if applicable: This is a repeat finding from the immediately prior audit. The prior audit finding number was 2023-003. Recommendation: We recommend the School Corporation update the capital asset listing at least annually to include all equipment and real property acquisitions and review for potential capital asset dispositions. Additionally, we recommend the School Corporation update the capital asset listing to include all the required information, including the source of funding for the property, outlined in the criteria above. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

FINDING 2025-008 Subject: COVID-19 - Education Stabilization Fund - Condition of Records Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U, 84.425W Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013, S425W210015 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Equipment and Real Property Management; Matching, Level of Effort, Earmarking; Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding numbers were 2023-007 and 2023-009 over the compliance requirements Equipment and Real Property Management and Special Tests and Provisions - Wage Rate Requirements, respectively. Condition and Context The School Corporation received reimbursements totaling $30,316,384 from the COVID-19 - Education Stabilization Fund (ESF) federal awards during the audit period. The reimbursements were associated with three separate federal awards, each of which was required to be accounted for in a separate fund within the School Corporation's financial management system. Expenditures were to be made in accordance with the approved grant applications and budgets, with reimbursement requests subsequently submitted to the Indiana Department of Education (IDOE). The School Corporation was responsible for maintaining detailed disbursement ledgers for each grant fund to support the amounts claimed for reimbursement. As is typical with reimbursement-based grants, the ending cash and investment balances of each grant fund were expected to reflect overdrawn balances until the subsequent reimbursements were received from the IDOE. The $30,316,384 received in ESF funds during the audit period was based on 28 reimbursement requests for expenditures incurred between June 1, 2023 through December 13, 2024. Based on our review of grant fund records and inquiry with management, we identified the following deficiencies:  The detailed disbursement ledger for the period of June 1, 2023 through December 13, 2024, excluding June 2024 for Grant #S425U210013 as no reimbursement request was submitted, reflected total expenditures of $23,051,334. This resulted in $7,265,050 in reimbursements that were not adequately supported by detailed records. INDIANA STATE BOARD OF ACCOUNTS 33 SCHOOL CITY OF EAST CHICAGO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)  A review of the submitted reimbursement requests indicated that $1,069,865 was reimbursed for indirect costs; however, a disbursement from the grant funds to other operating funds was not recorded within the School Corporations records.  Of the 28 reimbursement requests submitted, only 5 were supported by detailed disbursement ledgers that agreed with the dates and amounts claimed. The remaining 23 reimbursement requests could not be directly reconciled to the supporting documentation provided. Upon further inquiry with management, additional records were provided; however, these records lacked sufficient detail, such as fund number, fund name, check numbers, dates, and vendor names to be useable.  Reimbursements received were not posted to each grant fund properly. This resulted in the ARP EESER III fund receipts to be understated by $4,297,935 and the ESSER II and GEER PD funds receipts to be overstated by $4,174,376 and $123,560, respectively.  Since this is a reimbursement-based grant, the ending cash and investment balances of each grant fund should either be zero or overdrawn while awaiting reimbursement. However, as of June 30, 2025, the ESSER II and Geer PD funds reported positive cash and investment balances of $5,047,932 and $404,653, respectively. Due to the deficiencies noted above, the School Corporation was unable to provide sufficient appropriate evidence for us to determine populations, and, therefore, audit and base an opinion on the compliance requirements subject to audit that were determined to have a direct and material effect on the program. As a result, the $30,316,384 in reimbursements received during the audit period were considered questioned costs. The lack of internal controls and noncompliance were material and systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302 states in part: "(a) . . . 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. See also § 200.450. INDIANA STATE BOARD OF ACCOUNTS 34 SCHOOL CITY OF EAST CHICAGO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) The financial management system of each non-Federal entity must provide for the following (see §§ 200.334, 200.335, 200.336, and 200.337): (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 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 assets. The non- Federal entity must adequately safeguard all assets and ensure that they are used solely for authorized purposes. See § 200.303. (5) Comparison of expenditures with budget amounts for each Federal award. (6) Written procedures to implement the requirements of § 200.305. (7) Written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award." 2 CFR 200.1 states in part: ". . . Questioned cost means a cost that is questioned by the auditor because of an audit finding: (1) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds; (2) Where the costs, at the time of the audit, are not supported by adequate documentation; or (3) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances. (4) Questioned costs are not an improper payment until reviewed and confirmed to be improper as defined in OMB Circular A-123 appendix C. (See also the definition of Improper payment in this section)." 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. INDIANA STATE BOARD OF ACCOUNTS 35 SCHOOL CITY OF EAST CHICAGO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 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. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." 29 CFR 5.5 states in part: "(a) Required contract clauses. The Agency head will cause or require the contracting officer to require the contracting officer to [sic] insert in full, or (for contracts covered by the Federal Acquisition Regulation (48 CFR chapter 1)) by reference, in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the laws referenced by § 5.1, the following clauses . . . (1) Minimum wages— (i) Wage rates and fringe benefits. All laborers and mechanics employed or working upon the site of the work (or otherwise working in construction or development of the project under a development statute), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of basic hourly wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Records and certified payrolls— (ii) Certified payroll requirements— INDIANA STATE BOARD OF ACCOUNTS 36 SCHOOL CITY OF EAST CHICAGO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (A) Frequency and method of submission. The contractor or subcontractor must submit weekly, for each week in which any DBA- or Related Acts-covered work is performed, certified payrolls to the [write in name of appropriate Federal agency] if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the certified payrolls to the applicant, sponsor, owner, or other entity, as the case may be, that maintains such records, for transmission to the [write in name of agency]. . . ." 2 CFR 200 Appendix II to Part 200 states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, 'Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction'). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause The School Corporation experienced turnover in key personnel over the federal program, which contributed to the lack of appropriate supporting records. A proper system of internal controls was not designed to ensure continuity of policies, procedures, and records when personnel transitions occurred. Effect Noncompliance with the grant agreement and the compliance requirements could result in the repayment of federal funds. Questioned Costs We identified $30,316,384 in known questioned costs as noted in the Condition and Context. Recommendation We recommended that the School Corporation's management develop policies and procedures to ensure continuity of school records during a personnel change and that all reimbursement requests are properly supported by detail records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

2025 – 047. Equipment and Real Property Management Federal Agency: Department of Health and Human Services Federal Program Title: Public Health Emergency Preparedness and Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response Assistance Listing: 93.069 and 93.354 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the recipient and subrecipient 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. 2 CFR § 200.313(d)(1) requires property records include a description of the property, a serial number or another identification number, the source of funding for the property (including the Federal Award Identification Number (FAIN)), the title holder, the acquisition date, the cost of the property, the percentage of the Federal agency contribution towards the original purchase, the location, use, and condition of the property, and any disposition data including the date of disposal and sale price of the property. Condition: The Department was not in compliance with several equipment and real property requirements. Cause: The Department’s processes did not ensure that assets transferred during the transition from the Department of Health and Environmental Control (DHEC) to the Department of Public Health (DPH) were properly associated with the applicable federal funding source or grant information within the asset management system. Effect: Incomplete property records increase the risk that equipment purchased with federal funds may not be properly tracked, monitored, or reported in accordance with federal regulations. Questioned Costs: None, as this finding relates to equipment record keeping, rather than unallowable expenditures. Context: During follow-up procedures related to equipment and real property management, the Department provided an asset history listing for review. However, the listing did not clearly identify assets purchased with federal funds. Additionally, assets transferred from DHEC to DPH in the South Carolina Enterprise Information System (SCEIS) were not associated with a federal funding source or specific grant. As a result, the Department was unable to demonstrate that equipment purchased with federal funds was being tracked in accordance with federal requirements. In addition, since assets were not listed under federal grants, we were unable to obtain a population to test whether assets bought with federal grants were accounted for in the Department’s annual physical inventory. This is a repeat finding from the fiscal year 2023 Single Audit. The Office stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2023, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2023-026 Recommendation: We recommend the Department strengthen procedures to ensure equipment purchased with federal funds is properly tracked and associated with the applicable federal funding source within the asset management system and property records should include all elements required by federal regulations. Views of responsible officials and planned corrective actions: See management’s response on page 213.

Research and Development Cluster—Physical Inventory Requirements for Federal Equipment Background: During FY 2024-25, UW institutions expended approximately $900 million in federal funding as part of the Research and Development Cluster. UW-Madison expended the majority of the funding and used a portion of it, and similar funding from prior years, to purchase equipment needed for research activities. Such equipment is known as federal equipment. In report 23-4, we found that during FY 2021 22 UW Madison had not conducted physical inventories of all federal equipment within a two year period due to a physical inventory backlog that occurred during the public health emergency (Finding 2022-700). In report 23-4, we recommended that UW Madison conduct physical inventories as required by federal regulations. Criteria: When UW-Madison purchases federal equipment, it must maintain comprehensive records of each item, periodically conduct a physical inventory of the equipment, and potentially reimburse the federal agency that originally funded the purchase with any proceeds from the disposal of the federal equipment no longer needed for research activities. Under 2 CFR s. 200.313 (d) (2), UW Madison is required to complete biennially a physical inventory of all federal equipment and reconcile the results with its records. UW System Policy 334, Accountability for Capital Equipment requires biennial physical inventories of federal equipment. UW-Madison Procedure 3008.6, Physical Inventory Procedure identifies how it completes the inventory. To comply with these policies and procedures, UW-Madison assigned central accounting staff the responsibility for tracking federal equipment and scheduling inventories. Staff within various UW-Madison departments are responsible for safekeeping the equipment, locating items during physical inventories, and authorizing disposal when specific equipment is no longer useful. Under 2 CFR s. 200.313 (e), UW Madison is required to potentially provide repayment to the federal agency that originally funded the equipment purchase when federal equipment is no longer needed for research activities. Condition: UW-Madison did not perform a physical inventory of all federal equipment during the period from July 1, 2023, through June 30, 2025. Based on UW Madison equipment records, UW Madison needed to conduct a physical inventory during FY 2023-24 and FY 2024-25 of 7,265 federal equipment items purchased prior to July 1, 2023. UW Madison performed a physical inventory of 4,088 federal equipment items (56.3 percent) during the period, but did not perform a physical inventory of 3,177 federal equipment items (43.7 percent). Context: Based on available data as of June 30, 2025, UW Madison reported actively managing federal equipment with an acquisition value totaling $429.5 million. We discussed UW Madison’s procedures with the central accounting staff responsible for scheduling physical inventories of UW-Madison departments, obtained documentation of physical inventories UW Madison performed, and conducted other testing of UW Madison’s management of federal equipment. Questioned Costs: None. Effect: UW Madison did not comply with federal requirements to complete biennially a physical inventory of all federal equipment. Without completion of regular physical inventories of all federal equipment, UW Madison is at increased risk of theft or loss of equipment, it cannot be assured that federal equipment records were accurately maintained, and it may not be aware of all equipment disposals or losses, which may result in failure to reimburse the federal agency that originally funded the equipment purchase with any proceeds from disposal of the federal equipment. Cause: The majority of the federal equipment for which UW Madison did not complete an inventory were last inventoried in early 2023. UW Madison central accounting staff indicated that it annually selects the departments to conduct a physical inventory of federal equipment, including by prioritizing those departments with more federal equipment. UW Madison reported that it eliminated its physical inventory backlog in June 2024. However, we found UW-Madison did not conduct physical inventories during FY 2024-25 at a sufficient number of departments to ensure that all those departments that last inventoried federal equipment during FY 2022-23 were included in the scheduled physical inventories during FY 2024-25. UW Madison central accounting staff annually select approximately 40 to 45 of the 136 departments that have federal equipment, and during FY 2024-25 it selected 43 departments. We found that all 43 departments selected for a physical inventory during FY 2024-25 completed physical inventories. However, based on its process, UW Madison central accounting staff acknowledged that not all departments will be scheduled for an inventory within a two year period and therefore not all federal equipment will be inventoried. UW-Madison central accounting staff stated that selecting a larger number of departments annually could not be accommodated by its three staff assigned to these activities due, in part, to the time needed to review each department’s results and follow up with each department to ensure timely completion of the physical inventory. Finally, UW-Madison did not perform an annual review of its federal equipment listing to identify federal equipment that has not been inventoried within the last two year period. Doing so would assist it in assessing whether a sufficient number of departments conducted physical inventories during the prior two years to meet federal requirements. Recommendation: We recommend that the University of Wisconsin-Madison ensure that it conducts a complete physical inventory of all federal equipment within a two year period by: -conducting a physical inventory by September 30, 2026, of all federal equipment last inventoried before June 2023; -updating its procedures to require inventories be conducted at a sufficient number of departments to complete a review of at least one half of federal equipment annually; and -developing written procedures to require an annual review of the federal equipment listing to identify any federal equipment that did not have a physical inventory within the last two years, documenting the annual review, and completing any required physical inventories by the end of each fiscal year. Finding 2025-701: Research and Development Cluster—Physical Inventory Requirements for Federal Equipment Research and Development Cluster (various Assistance Listing numbers) Award Numbers Award Years Various Various Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the University of Wisconsin-Madison: The University of Wisconsin-Madison agrees with the audit finding and recommendations.

Information on the federal program: Subject: Education Stabilization Fund (ESF) Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425U, 84.425W Federal Award Numbers and Years (Or Other Identifying Numbers): S425U210013, S425W210015 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR section 200.313 states in part: (a) Title. Subject to the requirements and conditions set forth in this section, title to equipment acquired under a Federal award will vest upon acquisition in the non-Federal entity. Unless a statute specifically authorizes the Federal agency to vest title in the non-Federal entity without further responsibility to the Federal Government, and the Federal agency elects to do so, the title must be a conditional title. Title must vest in the non-Federal entity subject to the following conditions: (1) Use the equipment for the authorized purposes of the project during the period of performance, or until the property is no longer needed for the purposes of the project. (2) Not encumber the property without approval of the Federal awarding agency or pass-through entity. (3) Use and dispose of the property in accordance with paragraphs (b), (c), and (e) of this section. (d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. (5) If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: There were nine equipment purchases made during the audit period and charged to the ESF grants which totaled $564,248 in the aggregate. During testing of equipment purchases, the following items were noted: • The School Corporation provided a capital asset listing that had not been updated since 2020. As a result, none of the equipment items selected for testing that were purchased with ESF funds were included on the listing. Additionally, the listing did not include required elements under 2 CFR §200.313(d), including documentation of the federal funding source and the condition of the property. • The School Corporation did not perform a physical inventory of equipment at least once every two years as required by 2 CFR §200.313(d)(2). As such, management was unable to demonstrate that federally funded equipment was being periodically verified and reconciled to property records. Identification as a repeat finding, if applicable: No. Recommendation: We recommend the School Corporation implement and enforce procedures to ensure federally funded equipment is properly recorded, maintained, and inventoried in accordance with 2 CFR §200.313, including updating the capital asset listing to include all required elements and performing physical inventories at least once every two years. Views of Responsible Officials and Planned Corrective Actions: For the views of the responsible officials, refer to the Corrective Action Plan that is part of this report.

Equipment Property Management Federal Program: Congressional Directives (ALN 93.493) Federal Agency: Department of Health and Human Services Federal Award Number: 1CE1HS52890-01-00 Federal Award Year: September 30, 2023 through June 30, 2026 Criteria or Requirement Per 2 CFR section 200.313, 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 federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context For 2 out of 9 purchase transactions, equipment exceeding the capitalization threshold per 2 CFR section 200.1 was not capitalized. Therefore, a property record did not exist for federally funded equipment purchased in the amount of $937,768. The total program expenditures were $2,112,657 for which $1,640,656 were capital equipment purchases and $472,001 were non-capital purchases. Further, $67,919 of the $702,888 that was capitalized, the property record did not properly identify the asset’s federal award program. Cause and Potential Effect The University's internal controls for determining and documenting whether an equipment acquisition was a capital asset for which a property record should be created in the system with the required information was not operating effectively. Accordingly, the University acquired federally funded equipment, and a property record was not created. Questioned Cost There were no questioned costs associated with the finding. Statistically Valid Sample The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding is a Repeat of a Finding in the Immediately Prior Audit Yes – prior year finding 2024-003. Recommendation We recommend the University enhances the precision of the controls over equipment purchases to ensure that a property record is created within the system containing the required information, inclusive of the federal award, for all federally funded equipment. View of Responsible Officials Management of the University takes no exception to this reported finding. We have implemented the remedial actions as outlined in our Corrective Action Plan.

2025-001 Finding: Equipment Federal Program: Research and Development Cluster, Various Assistance Listing Numbers, Various Agencies, Award Year 2025 Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.313(d)) requires non-federal entities to maintain effective control and accountability for all federally funded equipment, including procedures to ensure assets exist, are used for authorized purposes, and are properly disposed of when no longer needed. Uniform Guidance further contemplates periodic physical inventories of equipment and reconciliation to property records at least once every two years. Policies and procedures should address all federal awards, regardless of awarding agency. Condition: Out of a sample of 25 assets, five assets with acquisition dates between 1990 and 2016, had been disposed but not removed from the asset subledger. In addition, a full inventory of federally funded assets was not completed within a two year timeframe and key data was not reconciled. Our sampling methodology was not, and was not intended to be, statistically valid. Questioned Costs: $52,511.60 - Costs relate to multiple awards within the Research and Development Cluster. Cause: The Organization's fixed asset monitoring policy is primarily designed to comply with National Institute of Health requirements and has not been expanded to fully incorporate Uniform Guidance requirements applicable to all federal awards. Controls were not operating as designed to identify and remove assets from the subledger when disposed. Effect: As a result, the Organization’s fixed asset records were not fully accurate or complete for certain federally funded assets, increasing the risk that assets disposed of in prior years remain recorded in the subledger and that federally funded equipment is not consistently tracked in accordance with Uniform Guidance. Identification as a repeat finding: Not a repeat finding Recommendation: We recommend that the Organization expands and formalizes its fixed asset monitoring policy to fully align with Uniform Guidance requirements, including (1) Performing and documenting a physical inventory of federally funded equipment at least once every two years, with reconciliation to the fixed asset subledger. (2) Ensuring timely communication and documentation of asset disposals to Finance for record updates. Views of Responsible Officials: The Organization agrees with the finding. See separate auditee document for planned corrective action.

2025-001 – Federal Equipment Inventory Cluster: Research and development Sponsoring Agency: Various Award Name: All awards for 3 campuses with federal equipment expenditures in the Schedules of Expenditures of Federal Awards (SEFA) Award Number: Various Assistance Listing Title: All awards for 3 campuses with federal equipment expenditures in the SEFA Assistance Listing Number: All awards for 3 campuses with federal equipment expenditures in the SEFA Award Year: 2024-2025 Pass-through entity: All pass-through awards for 3 campuses with equipment expenditures in the SEFA Criteria 2 CFR 200.313(d) requires that a physical inventory of equipment acquired in whole or in part under a Federal award must be conducted and the results reconciled with the property records at least once every two years and the recipient is responsible for maintaining and updating property records when there is a change in the status of the property. Condition Through our testing of federal equipment and real property management across four campuses, we identified deficiencies related to (1) the timeliness of required physical inventory procedures and (2) the completeness and accuracy of federal equipment listings. More specifically, our testing identified the following: Campus 1 This campus has a control by which all custodians are responsible for the completion of their federal equipment inventory on a 2-year rolling basis. Through discussion with the campus, the last equipment inventory observation for federal equipment was performed in July 2022 and covered half of the campus assets acquired through December 2021. As such, a physical inventory at this campus has not been completed over existing or newly acquired equipment in approximately 3.5 years, which is outside the two-year requirement. Through our federal equipment observation procedures, we selected 25 assets from the federal equipment listing to observe and also selected 25 pieces of equipment from the floor to trace back to the equipment listing. We noted the following: • For 2 equipment selections from the federal equipment listing, we were unable to verify the asset we selected was the asset viewed, as there was no tag, serial # or other identifying information we could validate to the equipment listing. • 1 equipment selection from the federal equipment listing was located but not in working condition and should have been disposed of. • 3 equipment selections were on the federal equipment listing, but were unable to be located or were previously disposed of and incorrectly on the equipment listing. • 1 equipment selection from the “floor” was federally funded, but not included in the list of federal assets. Campus 2 In order to comply with the federal biennial inventory requirement, this campus has a policy that every two years by 10/31, Equipment Certification Forms for each custodial code need to be submitted verifying the existence of the assets assigned to the custodian. We selected 25 custodial codes to review the two most recent Equipment Certification Forms to verify a physical inventory of federal assets was performed within two years. Through our testing, we noted the following: • 5 Equipment Inventory Certification Forms due by 10/31/25 were completed timely, however, the previous inventories for these custodial codes were each completed in October or November 2019 and thus 2 cycles elapsed between inventories, which is not in compliance with the federal biennial inventory requirement. • 5 Equipment Inventory Certification Forms due 10/31/25 were late (14 days, 10 days, 1 day, 81 days, and 3 days late, respectively). For 2 of the 5, the previous inventory was last completed in October 2019 and thus 2 cycles elapsed between inventories. Campus 3 This campus completes a full equipment inventory of the campus every 2 years. Based on the current cycle, all federal equipment was required to be inventoried between 7/1/22 and 6/30/24. Any inventories completed by 6/30/24 are considered timely and within the 2-year period, assuming the financial unit appropriately completed an inventory in the previous period covering 7/1/20 to 6/30/22. Each individual asset is "validated" in the equipment management system and dates of validation are noted upon inventory completion. In order to test the equipment validation control, 25 individual federal assets were selected for testing to 1) determine whether the asset was verified between 7/1/22 and 6/30/24; and 2) to review the date of the previous inventory to confirm the asset was inventoried within a two-year period. Through our testing, we noted the following: • 3 federal equipment selections were not validated during the most recent inventory cycle with the last validation being completed during the FY18 cycle (2 selections) and the FY22 cycle (1 selection) • 3 federal equipment selections were validated in the current cycle, however, they were not validated during the previous cycle and as such, more than two years elapsed between inventories. • 1 federal equipment selection was not validated in either the current or previous inventory cycle Additionally, through our federal equipment observation procedures, 2 out of 25 federal equipment selections were unable to be located. Cause • Campus 1 – Through discussion with the campus, no federal equipment inventory counts were performed since July 2022 due to lack of personnel. The equipment inventories not being performed timely were also the cause of the federal equipment listing not being complete and accurate. • Campus 2 - The 2019 inventories were due in 2021 (during COVID-19) and the University received a letter dated March 17, 2021 from the Department of Health and Human Services that stated: “We fully acknowledge the concerns detailed in your letter and hereby approve your request to delay the physical inventory of property for one fiscal year. The University of California should plan to resume the biennial physical inventory process in Fiscal Year 2022.” Those not completed in the subsequent inventory were overlooked. These custodial codes continued with no Equipment Certification Forms being submitted as the next due date overlapped with a significant system implementation, and the campus was not as diligent in following up with the custodians. Three of the four late submissions in 2025 were due to oversight of the deadline and the submission that was 81 days late was due to a new asset representative not realizing a certification had to be submitted until a follow-up notification was received. • Campus 3 - Assets not validated in the most recent cycle were missed due to resource constraints. Assets not inventoried in the previous cycle (and thus not within the two-year period) were due to being overlooked once inventories resumed after the COVID-19 pandemic period and not revisited timely due to resource constraints. The assets not located during the federal equipment observations procedures were assumed to have been disposed and the asset listing not appropriately updated. Effect Failure to complete physical inventories within the required two-year timeframe increases the risk that federal equipment records are incomplete or inaccurate and that discrepancies are not identified and corrected in a timely manner. Questioned Costs None noted. Recommendation We recommend that each campus review and, where necessary, update its federal equipment inventory policies and procedures to help ensure that (1) physical inventories are completed within the required two-year timeframe and (2) federal equipment listings are maintained in a complete and accurate manner in accordance with 2 CFR 200.313. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

Federal Agency: Federal Government Federal Program Name: Research & Development, Agriculture Extension at 1890 Land-grant Institutions, and Higher Education Institutional Aid Assistance Listing Number: Multiple Federal Award Identification Number and Year: Multiple Award Period: July 1, 2024 to June 30, 2025 Type of Finding: - Material Weakness in Internal Control over Compliance Criteria or specific requirement: Uniform Grant Guidance, 2 CFR 200.313(d)(2), procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements, a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University did not have documentation of physical inventory of the equipment purchased with Federal funds. Questioned costs: None. Context: During inquiries with management, the University had been unable to fill a staffing position to help implement correct action of tracking equipment purchased with Federal funds. Cause: The University did not have an effective control in place to ensure physical inventory over equipment was completed every two years. Effect: Failure to maintain accurate inventory records inhibits the University from properly safeguarding and maintaining equipment. Repeat Finding: Yes, 2024-002 Recommendation: We recommend the University ensures that a physical inventory over equipment is completed at least every two years. Views of responsible officials: Management agrees with the finding and has developed a plan to correct the finding.

Questioned Cost $ – Finding No. 2025-010: Equipment (Material Weakness) State Agency: Department of Land and Natural Resources Federal Agency: Department of Defense AL Number and Title: 12.107 – Readiness and Environmental Protection Integration Award Number and Award Year: N62742-22-2-0002 2022 Repeat Finding? No Condition During our audit, we examined all 16 acquisitions of equipment and real property in the current year. Of the 16 acquisitions, 15 were not properly entered into the State’s Fixed Asset Inventory System (FAIS). Criteria Pursuant to 2 CFR 200.313(b), the State must use, manage and dispose of equipment acquired under a Federal award in accordance with State laws and procedures. The State’s procedures require division-designated individuals to be knowledgeable about submitting Form 17A – Detail Inventory of Property along with supporting evidence, such as purchase orders with proper approvals and final billings and invoices to the State Procurement Office to enter into FAIS in the quarter the asset is placed in service. Effect Failure to record equipment properly reflects noncompliance with State procedures and Federal requirements. Cause and View of Responsible Officials The department did not submit Form 17A timely due to delays and errors in preparation of the forms. Recommendation We recommend that the State department develop internal control procedures to ensure that items are entered into the FAIS accurately and in the proper period.

FINDING 2025-003 – Equipment Management: Significant Deficiency in Internal Control Over Compliance (SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS - SECTION III - FINDING 2025-003 FOR INCLUDED TABLE) Criteria – 2 CFR section 200.313(d)2: A physical inventory of the property must be conducted, and the results must be reconciled with the property records at least once every two years. Condition/Context – During our audit we requested the results of the most recent physical inventory of federally purchases equipment. The most recent physical inventory had been completed during the fiscal year ending June 30, 2020. Effect – Management may not have full knowledge of the current location, existence and condition of federally purchased equipment. Cause – University of San Diego does not currently have a protocol in place to initiate the physical inventory on the required basis. Repeat Finding – No. Recommendation – We recommend the University of San Diego implement a process to trigger the process of a physical inventory of equipment every other year. Views of Responsible Officials– Management concurs with this finding and has established new responsibilities at individual employee levels to allow for additional oversight over the process. The process of completing the inventory has also been added to the annual fiscal close process documentation.

Program: Epidemiology and Laboratory Capacity for Infectious Disease Federal Financial Assistance Listing Number: 93.323 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: Multiple Compliance Requirements: Equipment and Real Property Management Type of Finding: Material Weakness in Internal Control Over Compliance and Material Instance of Noncompliance Criteria: In accordance with 2 CFR section 200.313(d)(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 Federal Award Identification Number), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. Condition: Property records were not maintained in accordance with Uniform Guidance for all property and equipment purchased. As a result, we were unable to (1) test whether differences between the physical inventory and equipment records were resolved and (2) sample equipment from the property records and physically inspect the equipment and determine whether the equipment is appropriately safeguarded and maintained. Cause: The HCA department did not have adequate internal controls to ensure its property records included all the requirements under Uniform Guidance or properly identify all property and equipment purchased with federal funds. Effect: Property records were not adequately maintained. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. We examined the Agency’s property records in total. Repeat Finding from Prior Years: Yes. Recommendation: We recommend the HCA department enhance internal controls to ensure its property records include all the requirements under Uniform Guidance and properly identify all property and equipment purchased with federal funds. Views of Responsible Officials: See separately issued Corrective Action Plan.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Research & Development Assistance Listing Number: 93.859 Federal Award Identification Number and Year: 5P20GM109097 - 2025 Award Period: July 1, 2024 to June 30, 2025 Type of Finding: - Significant Deficiency in Internal Control over Compliance - Other Matters Criteria or specific requirement: Uniform Grant Guidance, 2 CFR 200.313(d)(2), procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: Oklahoma State University Center for Health Sciences (OSU CHS) did not properly maintain physical inventory of property purchased with federal funds. Questioned costs: None. Context: During our testing, we identified 1 out of 40 equipment items sampled that were purchased with federal funds did not have documentation of a completed physical inventory and could not be physically observed, as the equipment was reported to be misplaced. Cause: OSU CHS did not have effective controls in place to ensure that equipment purchased with federal funds was subject to a timely physical inventory and appropriately tracked, including procedures to ensure equipment could be located for observation. Effect: As a result, OSU CHS was unable to demonstrate the existence and proper safeguarding of equipment purchased with federal funds, increasing the risk that equipment may not be properly monitored, safeguarded, or used in accordance with federal requirements. Repeat Finding: No Recommendation: We recommend that OSU CHS implement and consistently perform procedures to ensure that all equipment purchased with federal funds is subject to a physical inventory at least once every two years, with results properly documented and reconciled to equipment records. We further recommend that OSU CHS strengthen controls over tracking equipment locations to ensure that federally funded equipment can be readily identified and physically located when required. Views of responsible officials: Management agrees with the finding and has developed a plan to correct the finding.

Federal Agencies: 11 – Department of Commerce, 12 – Department of Defense, 15 – Department of the Interior, 16 – Department of Justice, 43 – National Aeronautics and Space Administration, 47 – National Science Foundation, 81 – Department of Energy, 84 – Department of Education, 93 – Department of Health and Human Services Federal Program Title: R&D Cluster and Congressional Directives Assistance Listing Number: R&D and 93.493 Award Period: July 1, 2024, through June 30, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: In accordance with 2 CFR §200.313(d), non-Federal entities must maintain effective control and accountability for all equipment acquired under a Federal award. Property records must be maintained and include, at a minimum, a description of the equipment (including a serial number or other identification number), source of funding (including the Federal award identification number), who holds title, acquisition date, cost of the equipment, percentage of Federal participation in the cost, location, use and condition of the equipment, and any ultimate disposition data, including the date of disposal and sales price or the method used to determine current fair market value. Additionally, 2 CFR §200.313(d)(2) requires a physical inventory of equipment to be taken and the results reconciled with the property records at least once every two years. 2 CFR §200.313(d)(3) further requires non-Federal entities to establish adequate safeguards to prevent loss, damage, or theft of equipment. Condition/Context: During our testing of Equipment and Real Property Management, we selected a sample of 11 equipment items, consisting of 6 items from the R&D Cluster and 5 items from the Congressional Directives program. The following exceptions were noted: • For 2 of the 6 R&D equipment items, the UEC did not perform a physical inventory within the last two years. • For 1 of the 6 R&D equipment items and 1 of the 5 Congressional Directives equipment items, the UEC did not maintain property records containing the information required under Federal equipment management requirements. • For 1 of the 6 R&D equipment items, we were unable to physically inspect the equipment, as photographs or other evidence of existence were not provided by the UEC. • For 1 of the 6 R&D equipment items, while initial property records (invoice support demonstrating review and confirmation that the equipment was received) were available, we were unable to confirm that ongoing control systems were in place to safeguard the equipment after initial acquisition. Questioned Costs: $77,610. Effect: Without complete property records, timely physical inventories, and adequate safeguarding controls, the UEC is unable to demonstrate compliance with Federal equipment management requirements, increasing the risk of loss, misuse, or improper disposition of equipment purchased with Federal funds. Cause: The UEC’s internal controls over equipment tracking, inventory, and safeguarding were not designed or implemented to consistently ensure compliance with Federal equipment management requirements across Federal programs. Repeat Finding: No. Recommendation: We recommend the UEC establish and implement equipment management procedures to ensure property records are complete, physical inventories are performed at least biennially, and adequate safeguards are maintained for all equipment acquired with Federal funds. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding.

Equipment means tangible personal property, including information technology systems, having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-Federal entity for financial statement purposes or $5,000 (2 CFR 200.1_Equipment). Title to equipment acquired by a non-Federal entity under grants and cooperative agreements vests in the non-Federal entity subject to certain obligations and conditions (2 CFR 200.313(a)). Non-Federal Entities Other than States Non-Federal entities other than States must follow 2 CFR 200.313(c) through (e) which require that: 1. Equipment, including replacement equipment, be used in the program or project for which it was acquired as long as needed, whether or not the project or program continues to be supported by the Federal award or, when appropriate, under other Federal awards; however, the non-Federal entity must not encumber the equipment without prior approval of the Federal awarding agency (2 CFR 200.313(c) and (e)). 2. 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 Federal award identification number), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR 200.313(d)(1)). 3. A physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 years (2 CFR 200.313(d)(2)). 4. 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 (2 CFR 200.313(d)(3)). 5. Adequate maintenance procedures must be developed to keep the property in good condition (2 CFR 200.313(d)(4)). 6. If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return (2 CFR 200.313(d)(5)). 7. When original or replacement equipment acquired under a Federal award is no longer needed for a Federal program (whether the original project or program or other activities currently or previously supported by the Federal government), the non-Federal entity must request disposition instructions from the Federal awarding agency if required by the terms and conditions of the award. Items of equipment with a current per-unit fair market value of $5,000 or less may be retained, sold, or otherwise disposed of with no further obligation to the Federal awarding agency. If the Federal awarding agency fails to provide requested disposition instructions within 120 days, items of equipment with a current per-unit fair market value in excess of $5,000 may be retained or sold. The Federal awarding agency is entitled to the Federal interest in the equipment, which is the amount calculated by multiplying the current market value or sale proceeds by the Federal agency’s participation in total project costs (2 CFR 200.313(e)). While testing equipment acquisitions acquired using ESSER funds, one instance was noted in which equipment purchased was not fully added to the District records. Without proper controls over equipment requirements, there is an increased risk that the District is not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. The District should establish (or perform existing) controls to include the required clauses of 2 CFR 200.313 to ensure equipment is being properly safeguarded and tracked.

Assistance Listing Number 84.425 Education Stabilization Fund Department of Education Passed Through North Dakota Department of Public Instruction Passed Through Turtle Mountain Band of Chippewa Indians Equipment/Real Property Management Criteria 2 CFR sections 200.313(c) and (e) includes a requirement for the non-federal entity to not encumber the equipment without prior approval of the federal awarding agency. 2 CFR section 200.311 includes a requirement for the non-federal entity, with prior approval by the ED or passthrough entity, may also use ESF funds to purchase real property, perform construction or minor remodeling, and for improvements to land, buildings, or equipment. Condition The District did not obtain prior approval for equipment acquisition or construction projects. This condition was noted for the following expenditures: Check 241010 Dated 12/27/2024 for $104,931.00 Check 240640 Dated 11/14/2024 for $147,398.90 Check 239597 Dated 8/30/2024 for $121,240.00 Context Per discussion with the District staff and review of program expenditures, there were 22 capital asset acquisitions during the year, we tested three of them for prior state approval. All three of these purchases were made without prior state approval. Cause The District did not properly submit for prior approval for equipment acquisition or construction until after the expenditure had been incurred and in some instances there were no submissions for prior approval. Effect The District may have purchased capital items that were not allowed by the State. Questioned Costs Undeterminable. Repeat Finding See prior year finding 2024-004. Recommendation We recommend the District to review all compliance requirements of federal programs to ensure they have procedures to ensure compliance with those requirements and for the requests for acquisition to be made timely and for the appropriate expenditure amount. Management’s Response See corrective action plan.