Findings Citing § 200.318

Environmental Protection Agency, Passed through North Dakota Department of Environmental Quality Federal Financial Assistance Listing 66.468 Capitalization Grants for Drinking Water Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Criteria - Uniform Guidance and 2 CFR sections 200.318 through 200.327 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition - During the course of our engagement, it was identified that the District’s policy on procurement did not satisfy the requirements of 2 CFR sections 200.318 through 200.327 with regards to procurement levels and methods, conflicts of interest, and contract provisions. Cause - Lack of oversight, awareness, or understanding of all of the specific requirements under Uniform Guidance and applicable CFR sections, and controls were not adequately designed to ensure compliance with all of these requirements. Effect – A lack of documented policies increase the overall risk that employees are not aware of the specific requirements with of procurement, suspension, and debarment. Questioned Costs – None reported Context/Sampling – Overall procurement policy Repeat Finding from Prior Year(s) –Yes, prior year finding 2024-005 Recommendation - We recommend that management establish a written policy that addresses all of the procurement requirements for federal programs as identified in 2 CFR sections 200.318 through 200.327 and maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to comply with these CFR sections. View of Responsible Officials - There is no disagreement with the audit finding.

Internal Control over Compliance or Compliance Findings Criteria: Uniform Guidance §200.318 (General Procurement Standards) requires recipients and subrecipients to maintain and follow documented procurement procedures for transactions under a Federal award or subaward. These procedures must be consistent with applicable State, local, or tribal laws and regulations, as well as the standards set forth in 2 CFR §§200.317–200.327. Documentation must include, at a minimum, the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for contract pricing. In addition, recipients must ensure vendors are not suspended or debarred from participation in federal programs. Condition: Although the Organization followed procurement requirements in practice, including appropriate procurement methods, documentation of vendor selection, and verification that vendors were not suspended or debarred, it did not have formal, written procurement and suspension/debarment policies in place during the audit period. Cause: The Organization relied on established operating practices and staff knowledge to ensure compliance with federal procurement requirements. As a result, these practices were not formally documented in written policies aligned with 2 CFR Part 200. Effect: While no instances of noncompliance or questioned costs were identified, the absence of formal written policies increases the risk that procurement and suspension/debarment procedures may not be applied consistently in the future or adequately demonstrated during audits or monitoring reviews. Recommendation: We recommend that the Organization formally document its existing procurement and suspension/debarment practices in written policies that comply with 2 CFR Part 200. Views of Responsible Officials: Management agrees with the finding. The Organization notes that all federal procurement and suspension/debarment requirements were followed during the audit period and has formalized these practices in written policies for future federal awards.

Finding Number: 2025-006 Finding Type: Federal award finding Federal Assistance Listing No.: 15.685 Program Name: National Fish Passage Federal Agency: The U.S. Department of Interior Pass-Through Entity: n/a Grant Number: F24AC01768-00 Award Project Period: July 1, 2024 through July 1, 2029 Control Deficiency Type: Significant deficiency Instance of Noncompliance: Yes Compliance Requirement: Procurement, suspension and debarment Repeat Finding: No Criteria: A non-federal organization must follow its own documented procurement procedures, provided they comply with applicable state and local laws and align with the federal standards outlined in 2 CFR 200.318–200.327. Specifically, 2 CFR 200.318(i) requires entities to maintain records sufficient to detail the history of the procurement, including but not limited to the rationale for the procurement method chosen, the basis for selecting or rejecting contractors, and the justification for the contract price. In addition, all procurement transactions must be conducted in a manner providing full and open competition. Furthermore, federal requirements prohibit grant recipients from contracting with, or purchasing from, contractors who are suspended and debarred from doing business with the federal government. Whenever the organization enters into contracts or purchases goods or services with federal funds that it expects to equal or exceed $25,000, it must verify that the contractor or vendor has not been suspended, debarred or otherwise excluded. Finally, the organization must ensure that all federal programs comply with Section 70914 of the Build America, Buy America (BABA) Act for infrastructure projects. Condition: The Council has enacted a written procurement policy, which management believed met all the standards required under 2 CFR 200.318 through 200.327. However, the policy failed to include some of the most stringent requirements included in the Uniform Guidance. The organization did not comply with all the documentation requirements laid out in its procurement policy. In addition, the suspension and debarment verification occurred after the contract was entered into, and there was no documentation maintained to demonstrate the monitoring of contract compliance with BABA. Cause: This was the Council’s first year receiving direct federal funding and its first Single Audit. The organization is very small and has limited prior experience with federal procurement requirements. Effect: The absence of aligned written procurement policies and timely documentation increases the risk of non-compliance with federal procurement standards. While no unallowable costs were identified and the contractor was not suspended or debarred, the issues reflect a control deficiency in procurement documentation, suspension and debarment procedures, and monitoring of federal award requirements. Questioned Costs: None. Audit Recommendation: We recommend the Council: • Update its procurement policy to align with federal procurement methods, thresholds, and requirements. • Develop written procedures for technical evaluations, contractor selection, and documentation of procurement decisions. • Perform suspension and debarment verification prior to contract award. • Establish monitoring procedures for contractor compliance with federal award provisions, including Build America, Buy America Act requirements. Management’s Response: Rogue River Watershed Council will review 2 CFR 200.318 through 200.327 and update our Procurement Policy to meet the necessary standards. We will strengthen our policy by setting out procedures related to, when required: (1) suspension/ debarment verification of contractors (including the timing of such verification) and (2) required agreement language related to grant-required stipulations such as BABA requirements, monitoring, compliance, and documentation.

Procurement Suspension and Debarment (EPA Clean Water State Revolving Fund Assistance Listing 66.458) Condition: The Corporation did not perform verification of vendors against the System for Award Management (SAM.gov) to ensure vendors were not suspended or debarred prior to the award of contracts or payments for services. Criteria: In accordance with 2 CFR 200.214 and 2 CFR 200.318, non-federal entities are prohibited from contracting with or making subawards to parties that are suspended or debarred. Entities are required to verify that vendors are not suspended or debarred, which may be accomplished through review of SAM.gov or by obtaining appropriate certifications from vendors. Effect: The Corporation is at risk of contracting with or making payments to vendors that are suspended or debarred, which could result in noncompliance with federal requirements and potential disallowance of costs. Questioned Costs: None Noted. Recommendation: We recommend that the Corporation implement procedures to verify vendor eligibility prior to awarding contracts or making payments using SAM.gov or by obtaining appropriate certifications from vendors. Documentation of this verification should be retained. Views of Responsible Officials: Management agrees with the finding and will implement procedures to verify vendor eligibility through SAM.gov or equivalent methods for applicable vendors.

2025-004 LACK OF WRITTEN FEDERAL POLICIES AND PROCEDURES REQUIRED BY UNIFORM GUIDANCE Type of Finding: Material noncompliance Federal Program: Coronavirus State and Local Fiscal Recovery Funds (ALN# 21.027) Compliance Requirement: All Criteria - Per 2 CFR §200.303 and related sections (including §§200.305 and 200.318-320), non-federal entities expending federal awards must establish and maintain effective internal controls and must document policies and procedures governing compliance with applicable federal statutes, regulations, and terms of award. Condition - The Village has not developed or implemented the written policies and procedures required under the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Required documentation is absent in areas such as internal controls over compliance, cash management, procurement, and allowable costs. A similar issue was noted and reported last year as 2024-005. Cause - The Village has not formally developed Uniform Guidance-compliant policies due to limited administrative resources and competing operational priorities. Effect - The absence of formal written policies and procedures increases the risk of inconsistent or noncompliant treatment of federal expenditures. Without documented controls and expectations, the Village may fail to detect or prevent noncompliance with federal requirements in key grant administration areas. Questioned Costs - None Recommendation - We recommend that the Village adopt written policies and procedures addressing the specific requirements outlined in the Uniform Guidance. These policies should include, but not be limited to, internal controls over compliance, procurement, cash management, subrecipient monitoring (if applicable), and allowable cost determinations. Management should ensure that these policies are communicated and periodically reviewed. Views of Responsible Officials: Management agrees with the finding and will take appropriate steps to remedy noted finding.

Reference Number: 2024-001 Program Name: 14.267 Continuum of Care Reference Number: 2025-001 Program Name: 14.267 Continuum of Care Description: Procurement Criteria: 2 CFR 180.300 and 2 CFR 200.214 prohibit nonfederal entities from contracting with parties that are suspended or debarred. For covered transactions equal to or exceeding $25,000, the Organization must verify that the vendor is not excluded by checking the System for Award Management (SAM.gov) or through other approved methods. Additionally, HUD procurement requirements under 2 CFR 200.318 require entities to ensure vendor eligibility. When multiple transactions with the same vendor exceed $25,000 in aggregate, the total amount should be considered in determining whether suspension or debarment requirements apply. Condition: The Organization entered into multiple rental agreements with the same rental companies. While each contract was less than $25,000, total payments to the rental companies exceeded $25,000. The Organization did not perform or document a suspension and debarment verification. Questioned Costs: None identified. Cause: The Organization did not follow their procurement policy. The Organization’s procurement policy states that “no contract shall be made to the parties listed on the General Services List of Parties Excluded from Federal Procurement or Non-procurement Programs in accordance with E.O.’s 12549 and 12689”. Effect: The Organization is not in compliance with federal and HUD procurement requirements and may have contracted with a suspended or debarred party. This increases the risk of questioned costs. Identification of a Repeat Finding: This is not repeat finding. Auditors’ Recommendation: We recommend the Organization implement procedures to ensure SAM.gov verification is performed annually on all covered transactions and prior to signing leases with new rental companies. Views of Responsible Officials: See attachment for the Organization’s corrective action plan.

Procurement, Suspension, and Debarment and Written Policies Required by the Uniform Grant Guidance Finding Type. Immaterial Noncompliance/Significant Deficiency in Internal Control over Compliance (Procurement, Suspension, and Debarment). Program. COVID-19 Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; ALN 21.027; Passed through the City of Toledo, Ohio; Award Number 2021-16100-5WAYMANPALNEI. Criteria. Recipients of federal awards are required to ensure that federal procurement standards are followed for any purchases over the federal micropurchase threshold. 2 CFR 200.320 requires that these purchases must adhere to one of the allowable procurement methods (sealed bids, competitive proposals, noncompetitive procurement) and maintain documentation of this procurement decision. In addition, the Uniform Guidance requires a non-federal entity that has expended federal awards for a grant awarded on or after December 26, 2014 to have written policies pertaining to Procurement (including bidding and a conflict of interest policy) (§200.318). Condition. For one of the two vendors tested, the YMCA was unable to provide documentation to support that competitive bidding was performed in accordance with the YMCA's policies and procedures. Although the YMCA has processes in place to cover these areas, we noted during review of procurement policies, that management has two procurement policies, one for general competitive bids and one for federal funds. We noted that while the federal funds procurements thresholds are in line to what is required by 2 CFR 200.318, the policy was not being followed consistently. Cause. The YMCA does not have the proper internal controls in place to ensure that the appropriate procedures are being followed for procurement in accordance with the requirements of the Uniform Guidance. This condition appears to be the result of a time lag in identifying the requirement and developing a plan for consistency in its procurement policy. Effect. As a result of this condition, one vendor was paid with federal funding for which appropriate procurement records were not maintained in accordance with federal procurement standards. The YMCA did not fully comply with the Uniform Guidance applicable to the above noted grant. Questioned Costs. $129,673. Questioned costs represent the total known expenditures incurred under the contract for which the exception was identified. Recommendation. We recommend that the YMCA review its written policies and procedures over federal awards with employees responsible for grant compliance to ensure that they are being followed consistently. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.

Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP0135 – 2021 State Agency: Wisconsin Department Workforce Development State Number(s): Not applicable Award Period: December 14, 2021 – June 30, 2025 Type of Finding: • Material Weakness in Internal Control over Compliance and Noncompliance Criteria or specific requirement: 2 CFR Part 200 sections 200.318-327 outline the required general procurement standards, competition, and methods of procurement to be followed. These elements must be incorporated into an organization's procurement policies and must be followed to ensure procurements are supported and covered transactions are only entered into with entities that are not federally suspended or debarred. The Organization should be updated to reflect all procurement policy requirements outlined by Uniform Guidance. Additionally, the Organization should implement policies to ensure it is not entering into a covered transaction with an entity that has been suspended or debarred, as defined in 2 CFR section 180.995. Condition: Procurement and suspension and debarment policies are not in compliance with Uniform Guidance. Questioned costs: None Context: CLA completed procurement and suspension and debarment testing in 2024 and it was noted that the Organization's related policies were not in accordance with Uniform Guidance. Based on discussions with management, updated policies have not yet been implemented. Cause: The Organization does not have procedures in place for verifying that their policies meet federal procurement, suspension and debarment requirements. Effect: Noncompliant policies can lead to selecting vendors that are suspended and debarred and could result in the procurement of goods and services that are unideal for program. When not approved by the granting agency, not following suspension and debarment procedures is considered a form of noncompliance with the grant provision. Repeat Finding: Yes Recommendation: CLA recommends the Organization review their procurement and suspension and debarment policies to ensure they are compliant with Uniform Guidance requirements. CLA also recommends emphasizing the importance of following those standards and established policies with all authorized purchasers within the Organization, including verifying that suspension and debarment checks are performed and documented prior to entering into covered transactions. Views of responsible officials: There is no disagreement with the audit finding.

Finding 2025-002 – Significant Deficiency Award No.: 21.027 Federal Grantor: U.S. Department of Treasury, Passed-through the County of Butte, Pass-through Grantor’s Number X25534. Compliance Requirement: Procurement, Suspension and Debarment. Condition: The Agency’s procurement policy does not adequately document procurement requirements under the Uniform Guidance or contract provisions under Appendix II to Part 200 of the Uniform Guidance. Criteria: Uniform Guidance, Section 200.318(a) indicates “the recipient or subrecipient must maintain and use documenting procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in §§ 200.317 through 200.327”. Required contracting provisions are documented in Appendix II to Part 200 – Contract Provisions for Non-federal Entity Contracts Under Federal Awards. Cause: The Agency’s procurement policy needs to be updated to document the requirements of the Uniform Guidance. Effect: The Agency’s procurement policy does not comply with the requirements of the Uniform Guidance, which could result in procurements that do not comply with the Uniform Guidance and the awarding agency disallowing the federal award and requesting the return of the award. Context: The Agency’s procurement policy complies with many requirements of the Uniform Guidance, but the policy does not comply with certain required provisions, including the thresholds for micro purchases, simplified acquisition threshold and full public procurements and the requirements for sole sourcing procurements under section 200.320. The procurements tested were found to comply with procurement requirements under Uniform Guidance even though the policy did not include all of the required provisions. Recommendation: The Agency should update its procurement policy to reference Uniform Guidance §§ 200.317 through 200.327 and should reference contracting provisions under Appendix II to Part 200 to be in compliance with Uniform Guidance prior to procurements being made under future federal awards. Views of Responsible Officials and Planned Corrective Actions: Management’s response and planned corrective action is included in the Corrective Action Plan included at the end of the report.

SIGNIFICANT DEFICIENCY 2025-001 – Procurement Federal Program Information: US Environmental Protection Agency, Passed through the Maine Department of Environmental Protection ALN - 66.458 - Clean Water State Revolving Loan Funds Criteria: The following CFR(s) apply to this finding: 2 CFR 200.318(a) Condition: During audit procedures, it was identified that the District did not have a written procurement policy. Cause: The District did not realize a written procurement policy was a compliance requirement. Effect: The District may not be utilizing correct procurement methods and may not be in compliance with all procurement requirements. Identification of Questioned Costs: None identified. Context: The District did not have a written procurement policy at the time of procurement. The district did utilize the services of an engineer who managed the program and procured the contractor using correct procurement methods and in compliance with procurement requirements. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the District draft and implement a procurement policy. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Eagle Lake Sewer District.

Finding – Procurement, Suspension & Debarment - Congressional Grants; Assistance Listing Number 59.059; 9/1/22-8/31/27 Award Period, U.S. Small Business Administration Criteria or Specific Requirement Non-federal entities other than states, must follow the procurement standards set out at 2 CFR 200.318 through 200.327. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition and Context One procurement transaction for a building construction contract which covers 100% of the major program expenditures was tested. We noted that the expenditures of the major program were for valid allowable activities and costs, however we noted that the procurement, suspension and debarment requirements for a procurement transaction over the simplified acquisition threshold were not followed including, not obtaining competitive bids, missing cost/price analysis, and selecting the contractor primarily on qualifications but without a valid noncompetitive justification. Also, the suspension and debarment search was not conducted however, we noted through a search that the contractor is not suspended or debarred. The sample was not statistically valid. Cause The Organization’s written procurement policy was not followed. Effect The procurement transaction for the federal award was not in compliance with the procurement requirements. Identification as a Repeat Finding Not a repeat finding. Questioned Costs Undeterminable – Questioned costs are costs identified as potentially noncompliant due to a violation of a statute, regulations, or the terms and conditions of a federal award; where costs are not supported by adequate documentation or where costs incurred appear unreasonable, not reflecting actions a prudent person would take in the circumstances. The expenditure incurred was tested and determined to be for valid allowable activities and costs but was not in compliance with the procurement requirements. Recommendation We recommend that the Organization’s procurement policy for purchasing and contracting decisions be distributed and reviewed by all appropriate staff to ensure that the procurement policy is followed and procurement requirements are met. Views of Responsible Officials and Planned Corrective Actions See Corrective Action Plan.

2025-001 Procurement, Suspension and Debarment U.S. Department of Education 84.421F Pathways To Success: Creating a 21st Century Workforce 2025 Award Year Criteria: Under 2 CFR §§ 200.318 – 200.327, non-Federal entities must maintain written procurement policies that reflect applicable Federal, State, and local laws and regulations. These policies must include standards of conduct, competition requirements, methods of procurement, contract oversight, and procedures for verifying suspension and debarment. Entities must follow these written policies when procuring goods and services under Federal awards. In addition, in accordance with the Uniform Guidance (2 CFR Part 180), recipients and subrecipients are prohibited from entering into covered transactions with parties that are suspended or debarred. Covered transactions include contracts for goods and services expected to equal or exceed $25,000 and all subawards regardless of dollar amount, unless specifically exempt. Recipients and subrecipients are required to verify that contractors and subrecipients are not suspended or debarred. Universe / Population: The universe / population for Procurement is written procurement policies that reflect applicable Federal, State, and local laws and regulations. The universe / population for Suspension and Debarment was 12 vendors for the year ended December 31, 2025. We haphazardly selected 5 vendors for testing of suspension and debarment compliance requirements applicable to the program. Condition: The Organization does not have a documented written procurement policy that complies with the requirements of 2 CFR §§ 200.318 – 200.327 or documented internal controls to ensure compliance with suspension and debarment requirements. Specifically, the Organization does not have written policies or procedures requiring verification that vendors or subrecipients are not suspended or debarred prior to entering into covered transactions, nor does it consistently document such verification. As a result, the Organization does not have a formal policy framework to guide procurement activities in accordance with Federal procurement standards. Cause: The Organization has not developed written procurement policies that incorporate the specific requirements of the Uniform Guidance, including required verification procedures and documentation standards. Effect: Without a compliant, documented procurement policy and effective internal controls, the Organization is at risk of noncompliance with Federal procurement standards, inconsistent procurement practices, failure to properly verify suspension and debarment, and ineffective internal controls over procurement activities. This condition also increases the risk that required suspension and debarment checks are not performed or documented. Although no questioned costs were identified for the period under audit, the absence of compliant written policies represents a control deficiency in internal control over compliance for procurement requirements. Questioned Costs: None Repeat Finding: No Recommendation: Management should develop and implement written procurement policies and procedures that fully comply with 2 CFR §§ 200.318 – 200.327. The policies should include internal controls to ensure that supporting documentation is maintained for all procurements, including documentation of procurement method determination, price or cost analysis, vendor selection, required approvals, and suspension and debarment verification. View of Responsible Officials: Going forward, Lighthouse Louisiana will ensure that its procurement policy reflects its commitment to purchases made in a manner that promotes full and open competition, supports price reasonableness, and maintains appropriate documentation based on the applicable procurement threshold. Management confirms that the Organization will apply a $10,000 micro-purchase threshold, require price or rate quotations from an adequate number of qualified sources for small purchases between $10,000 and $250,000, and require a formal competitive process for procurements exceeding $250,000, unless a properly documented exception applies. Lighthouse Louisiana did not actively retain all SAM.gov search results in vendor files for each vendor included in the procurement testing; however, if a SAM.gov verification was performed but not retained in the file, management will document the issue, perform and retain an updated verification, and strengthen internal controls to require retention of SAM.gov evidence before agreement execution or renewal. As part of its corrective action, Lighthouse Louisiana will enhance its procurement file review process to ensure that each grant-funded procurement contains, as applicable, the procurement method determination, supporting quotes or price comparisons, price reasonableness analysis, vendor selection rationale, required approvals, contract or agreement, and SAM.gov verification. Management will also reinforce staff training on procurement documentation requirements and will implement a standardized procurement checklist for grant-funded purchases. The Chief Financial Officer, Chief Operations Officer, and Project Director will be responsible for ensuring that any requested documentation is gathered and submitted to the auditors and that procurement file improvements are implemented prospectively.

Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Planning and Construction Assistance Listing Number: 20.205 Federal Award Identification Number and Year: 395-0096-25-21 & 395-0096-25-22 – Year Ended December 31, 2025 Award Period: January 1, 2025 – December 31, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: § 200.318 “General procurement standards” states that recipients or subrecipients must maintain and use documented procedures for procurement transactions under a federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in §§ 200.317 through 200.327. The recipient or subrecipient must also maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts. Condition: The Commission had not established written procurement or conflict of interest policies. Questioned costs: None Context: Although the Commission followed procurement, suspension and debarment processes to verify vendors met compliance requirements, no documented process or policies were maintained by the Commission. Cause: The lack of written policy and internal control structure does not include a process for ensuring procurement, suspension and debarment requirements are met for all required vendors. Effect: The Commission may contract with or make subawards under covered transactions that do not follow proper procurement processes or to parties that are suspended or debarred. Repeat Finding: No Recommendation: We recommend that the Commission update their current procurement and conflict of interest policies and implement a system of internal controls over procurement, suspension and debarment that will ensure compliance. Views of responsible officials: Management agrees with the finding.

U.S. Department of Agriculture Passed through the Alabama State Department of Education Program: Child and Adult Care Food Program CFDA: 10.558 Grant Number: AF6-0000 Noncompliance/Significant Deficiency Procurement Criteria Per 2 CFR 200.318-200.326, non-federal entities must follow federal procurement standards when acquiring goods and services, including proper documentation. Condition During our audit of procurement activities, we identifed two food vendors that do not have formal agreements with the entity. Cause Staff believed that long-standing relations with vendors were sufficient and did not realize that federal procurement rules still apply annually. Effect Failure to follow procurement guidelines may affect allowability of expenditures charged to the program. Recommendation We recommend that the entity train staff on federal procurement guidelines. These guidelines should be followed for all vendors from which it is reasonably foreseeable that total purchases will exceed $10,000. Documentation should be maintained for all vendors. Management's Response The YMCA will implement additional procedures to ensure compliance with federal procurement requirements under Uniform Guidance. Staff responsible for purchasing and vendor management will receive additional training related to procurement standards, documentation requirements, and contract oversight. Management will also establish a formal review process to identify vendors expected to exceed the federal threshold and ensure appropriate agreements and supporting documentation are maintained annually.

Finding 2025-001 – Procurement and Suspension and Debarment Identification of the federal program: U.S. Department of Health and Human Services U.S. Department of Defense Research and Development Cluster Assistance Listing Number: 93.351 – Research Infrastructure Programs Federal Award Numbers Award Period Pass-Through Entity, if Applicable P51OD011133-26 5/1/2024-4/30/2025 N/A P51OD011133-27 5/1/2025-4/30/2026 N/A Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 200.318 General procurement standards. (i) Procurement records. The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. 200.319 Competition. (a) All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition and is consistent with the standards of this section and § 200.320. 200.320 Procurement Methods There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319. (a) Informal procurement methods for small purchases. These procurement methods expedite the completion of transactions, minimize administrative burdens, and reduce costs. Informal procurement methods may be used when the value of the procurement transaction under the Federal award does not exceed the simplified acquisition threshold as defined in § 200.1. Recipients and subrecipients may also establish a lower threshold. Informal procurement methods include: (1) Micro-purchases — (i) Distribution. The aggregate amount of the procurement transaction does not exceed the micro-purchase threshold defined in § 200.1. To the extent practicable, the recipient or subrecipient should distribute micro-purchases equitably among qualified suppliers. (ii) Micro-purchase awards. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the recipient or subrecipient considers the price reasonable based on research, experience, purchase history, or other information; and maintains documents to support its conclusion. Purchase cards may be used as a method of payment for micro-purchases. (iii) Micro-purchase thresholds. The recipient or subrecipient is responsible for determining and documenting an appropriate micro-purchase threshold based on internal controls, an evaluation of risk, and its documented procurement procedures. The micro-purchase threshold used by the recipient or subrecipient must be authorized or not prohibited under State, local, or tribal laws or regulations. (2) Simplified acquisitions — (i) Simplified acquisition procedures. The aggregate dollar amount of the procurement transaction is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. Unless specified by the Federal agency, the recipient or subrecipient may exercise judgment in determining what number is adequate. (ii) Simplified acquisition thresholds. The recipient or subrecipient is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk, and its documented procurement procedures, which may be lower than, but must not exceed, the threshold established in the FAR. (b) Formal procurement methods. Formal procurement methods are required when the value of the procurement transaction under a Federal award exceeds the simplified acquisition threshold of the recipient or subrecipient. Formal procurement methods are competitive and require public notice. The following formal methods of procurement are used for procurement transactions above the simplified acquisition threshold determined by the recipient or subrecipient in accordance with paragraph (a)(2)(ii) of this section: (1) Sealed bids. This is a procurement method in which bids are publicly solicited through an invitation and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid conforms with all the material terms and conditions of the invitation and is the lowest in price. The sealed bids procurement method is preferred for procuring construction services. (i) For sealed bidding to be feasible, the following conditions should be present: (A) A complete, adequate, and realistic specification or purchase description is available; (B) Two or more responsible bidders have been identified as willing and able to compete effectively for the business; and (C) The procurement lends itself to a firm-fixed-price contract, and the selection of the successful bidder can be made principally based on price. (ii) If sealed bids are used, the following requirements apply: (A) Bids must be solicited from an adequate number of qualified sources, providing them with sufficient response time prior to the date set for opening the bids. Unless specified by the Federal agency, the recipient or subrecipient may exercise judgment in determining what number is adequate. For local governments, the invitation for bids must be publicly advertised. (B) The invitation for bids must define the items or services with specific information, including any required specifications, for the bidder to properly respond; (C) All bids will be opened at the time and place prescribed in the invitation for bids. For local governments, the bids must be opened publicly. (D) A firm-fixed-price contract is awarded in writing to the lowest responsive bid and responsible bidder. When specified in the invitation for bids, factors such as discounts, transportation cost, and life-cycle costs must be considered in determining which bid is the lowest. Payment discounts must only be used to determine the low bid when the recipient or subrecipient determines they are a valid factor based on prior experience. (E) The recipient or subrecipient must document and provide a justification for all bids it rejects. (2) Proposals. This is a procurement method used when conditions are not appropriate for using sealed bids. This procurement method may result in either a fixed-price or cost-reimbursement contract. They are awarded in accordance with the following requirements: (i) Requests for proposals require public notice, and all evaluation factors and their relative importance must be identified. Proposals must be solicited from multiple qualified entities. To the maximum extent practicable, any proposals submitted in response to the public notice must be considered. (ii) The recipient or subrecipient must have written procedures for conducting technical evaluations and making selections. (iii) Contracts must be awarded to the responsible offeror whose proposal is most advantageous to the recipient or subrecipient considering price and other factors; and (iv) The recipient or subrecipient may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby the offeror’s qualifications are evaluated, and the most qualified offeror is selected, subject to negotiation of fair and reasonable compensation. The method, where the price is not used as a selection factor, can only be used to procure architectural/engineering (A/E) professional services. The method may not be used to purchase other services provided by A/E firms that are a potential source to perform the proposed effort. (c) Noncompetitive procurement. There are specific circumstances in which the recipient or subrecipient may use a noncompetitive procurement method. The noncompetitive procurement method may only be used if one of the following circumstances applies: (1) The aggregate amount of the procurement transaction does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be fulfilled by a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from providing public notice of a competitive solicitation; (4) The recipient or subrecipient requests in writing to use a noncompetitive procurement method, and the Federal agency or pass-through entity provides written approval; or (5) After soliciting several sources, competition is determined inadequate. 200.324 Contract cost and price. (a) The recipient or subrecipient must perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold. The method and degree of analysis conducted depend on the facts surrounding the particular procurement transaction. For example, the recipient or subrecipient should consider potential workforce impacts in their analysis if the procurement transaction will displace public sector employees. However, as a starting point, the recipient or subrecipient must make independent estimates before receiving bids or proposals. (b) Costs or prices based on estimated costs for contracts under the Federal award are allowable only to the extent that the costs incurred or cost estimates included in negotiated prices would be allowable for the recipient or subrecipient under subpart E of this part. The recipient or subrecipient may reference its own cost principles as long as they comply with subpart E of this part. (c) The recipient or subrecipient must not use the “cost plus a percentage of cost” and “percentage of construction costs” methods of contracting. Condition Texas Biomed did not comply with procurement requirements per the Uniform Guidance. Specifically, Texas Biomed did not comply with informal procurement methods for small purchases and noncompetitive procurement requirements. Texas Biomed also did not comply with its own procurement policy in relation to procurements of small purchases and noncompetitive procurements. Additionally, Texas Biomed did not maintain records for certain procurements sufficient to detail the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, the basis for the contract price, and the performance of a cost or price analysis, when required. Cause Texas Biomed did not have effective internal controls and procedures in place to ensure Texas Biomed complied with federal procurement requirements and Texas Biomed’s procurement policy and also maintained records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement and other required elements, including a cost or price analysis, when required. Effect or potential effect Texas Biomed did not comply with the general procurement standards, methods of procurement, and cost or price analysis requirements, according to the Uniform Guidance. Questioned costs $211,839 in total for 3 procurements as follows: $38,000 – Assistance Listing Number 93.351, Award Identification Number – P51OD011133-26 Procurement Date of January 28, 2025 $162,986 – Assistance Listing Number 93.351, Award Identification Number – P51OD011133-27, Procurement Date of May 22, 2025 $10,853 – Assistance Listing Number 93.351, Award Identification Number – P51OD011133-27, Procurement Date of May 22, 2025 Per 2 CFR 200.1, questioned cost means an amount, expended or received from a Federal award, that in the auditor’s judgment: (1) Is noncompliant or suspected noncompliant with Federal statutes, regulations, or the terms and conditions of the Federal award; (2) At the time of the audit, lacked adequate documentation to support compliance; or (3) Appeared unreasonable and did not reflect the actions a prudent person would take in the circumstances. Questioned costs were computed as the value of the individual procurements tested that were not compliant with the Uniform Guidance or that lacked adequate documentation to support compliance regarding the history of the procurement, including the rationale of the procurement and the performance of a cost or price analysis, when required. None of the questioned costs were related to procurements that appeared unreasonable. Context EY issued a material weakness for Texas Biomed related to internal control over procurement in the prior year. Based upon the implementation date for the corrective action of September 2025 through November 2025, provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding. EY tested 13 procurements over the micro-purchase threshold of $10,000, with expenditures totaling $1,383,894 from a population of 53 procurements over the micro-purchase threshold of $10,000 ($15,000 effective October 1, 2025), with expenditures totaling $4,752,988 during the year ended December 31, 2025. For 1 procurement with expenditures in the amount of $162,986, related to a purchase order dated May 22, 2025 for $660,754, for animal food, Texas Biomed did not perform a cost or price analysis prior to the procurement. Since the total purchase order for this procurement exceeded $250,000, the simplified acquisition threshold, a cost or price analysis was required. EY observed that a cost analysis was performed for this same vendor for animal food on October 22, 2025. For 1 procurement with expenditures in the amount of $38,000, related to a purchase order dated January 28, 2025 for the same amount, for lab services, Texas Biomed did not obtain quotes or document sole source justification or the history of the procurement, including the rationale for the method of procurement, at the time of the procurement. Subsequently, Texas Biomed prepared sole source documentation for the procurement during the audit. For 1 procurement with expenditures in the amount of $10,853, related to a purchase order dated May 22, 2025 for $232,000, for fuel, Texas Biomed did not document sole source justification at the time of the procurement but instead utilized outdated sole source justification prepared over a year earlier under a separate procurement. We consider the expenditures related to these procurements to be questioned costs due to Texas Biomed not adhering to federal procurement requirements per the Uniform Guidance and also Texas Biomed’s procurement policy. Identification as a repeat finding, if applicable This is a repeat finding – Finding 2023-002 and 2024-002. Recommendation Texas Biomed should comply with federal procurement requirements, as well as Texas Biomed’s procurement policy with regards to obtaining quotes for small purchases and documentation of sole source justification at the time of the procurement, as applicable. Texas Biomed should re-evaluate and document sole source justifications for vendors retained from year to year each time a new procurement is made from that vendor. Texas Biomed should retain written documentation for procurements, documenting the history of the procurement prior to the procurement of goods or services including, but not limited to, the rationale for the method of procurement, selection of contract type, contractor selection or rejection, the basis for the contract price, and the performance of a cost or price analysis, when required. Views of responsible officials Management agrees with the finding and implemented corrective action as of November 2025. The instances of noncompliance noted above occurred prior to November 2025. For the procurement with expenditures of $162,986 for animal food, a cost analysis was performed on October 22, 2025 and provided during the audit. This was a sole source procurement, but it should be noted that the cost analysis showed the supplier Texas Biomed used was 55% lower in cost than another supplier of similar, though not identical, animal food. For the procurement with expenditures of $38,000 for lab services, sole source documentation was prepared during the audit explaining that this is the only lab found to provide the services needed, accept Texas Biomed’s samples, and provide the results needed timely. For the procurement with expenditures of $10,853 for fuel, sole source documentation was updated July 1, 2025.

SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE – U.S. DEPARTMENT OF TRANSPORTATION – PASSED THROUGH MINNESOTA DEPARTMENT OF TRANSPORTATION – HIGHWAY PLANNING AND CONSTRUCTION FEDERAL ALN 20.205 2025-002 Internal Control Over Compliance With Federal Suspension and Debarment Requirements Criteria – 2 CFR § 180 and 2 CFR § 200.318-327 requires the City to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including suspension and debarment requirements applicable to the Highway Planning and Construction federal program. Condition – During our audit, we noted the City did not have sufficient controls in place within its major federal programs to ensure compliance with federal requirements related to assuring that the City was not contracting for goods or services with parties that are suspended or debarred, or whose principals are suspended or debarred from participating in contracts involving the expenditures of federal program funds. Questioned Costs – None. Our testing did not indicate any instances of noncompliance with this requirement. Context – The City did not obtain the appropriate documentation for three of four vendors tested applicable to the Highway Planning and Construction program to ensure the vendors were not suspended or debarred from participation in federal program contracts. This is not a statistically valid sample. Repeat Finding – This is a current year finding. Cause – This was an oversight by city personnel. Effect – Noncompliance with suspension and debarment requirements could result in the City expending federal funds inappropriately or utilizing vendors that are not eligible to be parties to such transactions, which could be viewed as a violation of the award agreement. Recommendation – We recommend that the City review its internal control procedures relating to suspension and debarment for the Highway Planning and Construction federal program. Internal controls over compliance for this area should include retention of adequate documentation of compliance with Uniform Guidance requirements related to suspension and debarment. These controls should include steps to ensure any vendor with which the City contracts for goods or services exceeding $25,000 is not listed as suspended or debarred on the federal Excluded Parties List System website. View of Responsible Official and Planned Corrective Actions – The City agrees with the finding. The City will review procedures relating to suspension and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The City has separately issued a Corrective Action Plan related to this finding.

PROCUREMENT United States Department of Transportation – Federal Transit Administration (FTA) Passed through Louisiana Department of Culture, Recreation, and Tourism – Office of State Parks Recreation Trails Program (Federal Assistance Listing No. 20.219) Criteria: Procurement standards set at 2 CFR 200.318 and 200.319 require procurements to be conducted in a manner providing full and open competition and that contract awards are based on the terms and conditions of the solicitation. Additionally, 2 CFR 200.516 (a)(4) requires the auditor to report known question costs greater than $25,000 for a federal program not audited as a major program when such costs come to the auditor’s attention. Condition: During audit procedures performed over contracts, we became aware of noncompliance related to the Recreation Trails Program which was not audited as a major program. The population selected for testing was all contracts entered into during the fiscal year regardless of funding. We sampled a total of 11 contracts. One contract was identified under this program that was awarded to the lowest bidder; however, a significant deductive change order reducing the contract amount was approved at the same time as the contract award resulting in this selection. This resulted in a material modification to the contract amount at the time of award. Cause: The exception noted above appears to be the result of inadequate controls over procurement and contract approval processes. Questioned Costs: $52,648 representing the amounts expended under this contract in the current fiscal year. Effect: Approving a deductive change order concurrently with the award may have impacted the competitive bidding process and calls into question whether the contract was awarded based on the original bid terms. Recommendation: Ensure contract awards are made based on the original bid specifications and that any change orders are approved subsequent to award and in accordance with procurement requirements. View of Responsible Official: Management agrees with the finding and will take corrective action. See corrective action plan submitted by management.

Procurement Federal agency: U.S. Department of Health and Human Services Federal program title: Health Center Program Cluster Assistance Listing Number: 93.224/93.527 Award Period: 6/1/24-5/31/25; 6/1/25-5/31/26 Criteria: CFR § 200.320 (methods of procurement to be followed) indicates that the non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and CFR § 200.317, 200.318, and 200.319 for any of the approved procurement methods used for the acquisition of property or services required under a Federal award or subaward. Condition: There was no documentation available to support that the Organization followed its procurement policies and procedures related to transactions selected for testing. Questioned Costs: $209,640 Context: Five of five transactions selected for procurement testing did not have documentation to support that policies and procedures were followed. Cause: Unknown. Effect: Potential use of federal funds in a manner that is not most efficient or economical. Repeat Finding: No. Recommendation: We recommend the Organization consistently follow its established policies and procedures related to the maintaining of necessary documentation to support the method of procurement utilized. The Organization may also consider qualifying multiple vendors for particular goods/services and then utilizing an approved vendors list. Views of Responsible Officials: There is no disagreement with the audit finding.

Assistance Listing: 66.957 Greenhouse Gas Reduction Fund: National Clean Investment Fund and 66.959 Greenhouse Gas Reduction Fund: Solar for All Finding No. 2025-002: Significant Deficiency in Controls Over Procurement Documentation and Approvals Condition: During testing of procurement transactions for the Solar for All (SFA) and Greenhouse Gas Reduction Fund: National Clean Investment Fund (GGRF) programs, documentation supporting required procurement approvals was not consistently maintained. Specifically, for one (1) of two (2) procurements tested under the SFA program ($130,000), required pre-approval by the Finance Department was not documented. For both procurements tested under the GGRF National Clean Investment Fund program ($36,094), written evidence of approval was not available; management indicated that approvals had been obtained verbally. Criteria: Non-federal entities are required to maintain effective internal controls over procurement to ensure compliance with Uniform Guidance (2 CFR 200.318–200.320). This includes ensuring that procurements are properly authorized in accordance with established policies, retaining sufficient documentation to support procurement decisions and approvals, and maintaining a clear audit trail demonstrating adherence to applicable requirements. Cause: These conditions appear to be attributable to inadequate documentation retention practices and the absence of formalized procedures requiring written evidence of procurement approvals. Additionally, reliance on verbal approvals and challenges associated with system transitions contributed to gaps in the retention of supporting documentation. Effect or Potential Effect: The lack of documented procurement approvals increases the risk of noncompliance with federal procurement requirements and weakens the audit trail supporting that purchases were appropriately authorized. As a result, there is an increased risk of questioned costs and reduced transparency and accountability over the use of federal funds. Questioned Costs: None Perspective Information: The exceptions identified appear to be primarily related to documentation and consistency in evidencing procurement approval controls rather than an indication that approvals were not obtained in all cases. Management indicated that certain approvals were performed verbally; however, these were not consistently supported by written documentation. Strengthening documentation practices and formalizing approval procedures will enhance transparency, support compliance with Uniform Guidance requirements, and improve the organization’s ability to demonstrate that procurement activities are appropriately authorized. Addressing these matters will also promote a more consistent and auditable control environment over federally funded procurements. Identification of Repeat Finding: Not applicable since this is a new finding. Recommendation: We recommend that management strengthen procurement controls by requiring documented, written approval for all procurements prior to execution and establishing standardized approval workflows and documentation requirements. Management should also maintain a centralized repository for procurement records to support accessibility and retention, and enhance data backup and migration procedures to mitigate the risk of loss of supporting documentation during system changes. Views of Responsible Officials: Management agrees with the finding. While procurement approvals were obtained, documentation was not consistently retained due to reliance on verbal approvals and limitations associated with a system transition. Management has implemented corrective actions to strengthen controls, including requiring documented, written approval for all procurements and establishing a centralized repository for procurement documentation. Standardized approval workflows will be used to ensure approvals are properly evidenced and retained. Additionally, data retention and backup procedures have been enhanced to prevent future loss of documentation. Management will incorporate these controls into formal policies and procedures and monitor compliance to ensure consistent application across programs.

FINDING 2025-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): CY2021 Pass-Through Entity: Morgan County, Indiana Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Significant Deficiency, Other Matters INDIANA STATE BOARD OF ACCOUNTS 13 TOWN OF MOORESVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The Town spent COVID-19 Coronavirus State and Local Fiscal Recovery Fund (SLFRF) award dollars from two sources during the audit period. One source was a direct allocation from the Department of the Treasury (Treasury). The other source was a pass-through from Morgan County, Indiana. Direct Treasury funds that are spent under the revenue loss eligible use category are not subject to the federal procurement requirements set forth in 2 CFR § 200.318-200.327. Because the Town classified all its direct Treasury funds spent during the audit period as revenue loss, federal procurement rules do not apply to those expenditures. However, procurement requirements do apply to the SLFRF funds the Town spent as a subrecipient of Morgan County, Indiana. Procurement - Policy Award funds may be used to procure goods and services necessary to carry out the purpose of the award. The Town must follow its own documented procurement policies and procedures, which must reflect applicable state and federal laws and regulations. The Town did not have a procurement policy or procedures that complied with state or federal laws and regulations for the procurement of goods or services with federal funds. Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for goods or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases are typically for those purchases $50,000 or under, and small purchase procedures are for those purchases above the micro-purchase threshold but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, the price or rate quotations must be obtained from an adequate number of qualified sources. The Town had one vendor that qualified for and was tested under the small purchase procedures. The Town paid this vendor $92,463 during the audit period for a sanitation project but did not obtain the required price or rate quotations. The ineffective internal controls and noncompliance were isolated to the procurement policy and the small purchase identified above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 14 TOWN OF MOORESVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases— (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Cause Management was unaware of this grant requirement relating to the federal procurement policy and obtaining quotes for federal small purchases. Effect The failure to establish an effective system of internal controls and retain and provide appropriate supporting documentation prevented the determination of the Town's compliance with the compliance requirement listed above. The failure to design and implement an effective system of internal controls enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the Town. INDIANA STATE BOARD OF ACCOUNTS 15 TOWN OF MOORESVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Town's management establish a system of internal controls to ensure that they are in compliance with the grant agreement the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Criteria Recipients and subrecipients other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR 200.318 through 200.327. Condition During internal control inquire, we noted the City did not follow federal procurement requirements. The City also entered into a covered transaction without checking the vendor to ensure they did not have an active suspended or debarred exclusion from receiving federal funds. Cause Management oversight Effect The City is not in compliance with federal procurement, suspension, and debarment requirements. Questioned Costs None Recommendation The City should follow their procurement policy. Views of Responsible Officials and Planned Corrective Actions City officials have already implemented internal controls to ensure the proper oversight of federal programs according to the Uniform Grant Guidance Policy for Federal Revenue Sources. Current Status This is a new finding in the current year.

SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE – U.S. DEPARTMENT OF THE TREASURY, COVID-19 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS (CSLFRF) – FEDERAL ALN 21.027 AND U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, ECONOMIC DEVELOPMENT INITIATIVE, COMMUNITY PROJECT FUNDING, AND MISCELLANEOUS GRANTS – FEDERAL ALN 14.251 2025-001 Internal Control Over Compliance With Federal Suspension and Debarment Requirements Criteria – 2 CFR § 180 and 2 CFR § 200.318-327 requires City of Farmington, Minnesota (the City) to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including suspension and debarment requirements applicable to the Economic Development Initiative and CSLFRF federal programs. Condition – During our audit, we noted the City did not have sufficient controls in place within its major federal programs to ensure compliance with federal requirements related to assuring that the City was not contracting for goods or services with parties that are suspended or debarred, or whose principals are suspended or debarred from participating in contracts involving the expenditures of federal program funds. The City’s internal controls required the City to review for compliance with suspension and debarment requirements. The City represented that it was performing the necessary search to verify the vendors used were not ineligible. However, documentation of the procedures performed and the results of the search was not retained. Questioned Costs – None. Checks were completed and none of the vendors were suspended or debarred. Context – The City did not obtain the appropriate documentation for 1 of 2 vendors tested applicable to the Economic Development Initiative program and 1 of 1 vendor tested applicable to the CSLFRF program to ensure the vendors were not suspended or debarred from participation in federal program contracts. This is not a statistically valid sample. Repeat Finding – This is a current year finding. Cause – This was an oversight by city personnel. Effect – Noncompliance with suspension and debarment requirements could result in the City expending federal funds inappropriately or utilized vendors that are not eligible to be parties to such transactions, which could be viewed as a violation of the award agreement. Recommendation – We recommend that the City review its internal control procedures relating to suspension and debarment for the Economic Development Initiative and CSLFRF federal programs. Internal controls over compliance for this area should include retention of adequate documentation of compliance with Uniform Guidance requirements related to suspension and debarment. These controls should include steps to ensure any vendor with which the City contracts for goods or services exceeding $25,000 is not listed as suspended or debarred on the federal Excluded Parties List System website. View of Responsible Official and Planned Corrective Actions – The City agrees with the finding. The City will review procedures relating to suspension and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The City has separately issued a Corrective Action Plan related to this finding.

Finding: 2025-005 – Procurement ALN and Title: 21.027 – COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Passthrough Entity: State of Nevada Governor’s Finance Office Budget Division Type of Finding: Significant Deficiency Criteria: Per 2 CFR §200.318(a), non-federal entities must: “Use their own documented procurement procedures which reflect applicable State, local, and Tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part.” Additionally, 2 CFR §200.318(b) requires non-federal entities to maintain oversight to ensure contractors perform in accordance with the terms, conditions, and specifications of contracts or purchase orders. Condition: The Foundation did not maintain a formal written procurement policy governing purchases made with federal funds during the fiscal year ended December 31, 2025. Cause: Management had not established and formally documented procurement procedures designed to ensure compliance with Uniform Guidance procurement standards Effect: Without a documented procurement policy, the Foundation is at increased risk of noncompliance with federal procurement requirements, including inadequate competition, inconsistent purchasing practices, and insufficient documentation supporting procurement decisions. Questioned Costs: Unknown. Identification of a repeat finding: Not applicable. Context: The Foundation did not have written policies surrounding procurement so formal control procedures were not documented. However, procurement procedures were followed. Recommendation: We recommend the Foundation adopt a formal written procurement policy that complies with Uniform Guidance requirements under 2 CFR §200.317–§200.327. The policy should address procurement methods, competition requirements, conflict of interest standards, documentation requirements, contractor oversight, and suspension and debarment procedures. View of Responsible Management agrees with this recommendation. See prepared corrective action plan Officials: for details.

Reportable Finding Considered a Significant Deficiency – Procurement Compliance Agency: Department of Housing and Urban Development Program: Rural Capacity Building for Community Development and Affordable Housing Grants ALN# 14.265 Program Year: 2025 Criteria: 2 CFR §200.320(a)(2) requires that procurements exceeding the micro-purchase threshold use small purchase procedures, including obtaining price or rate quotations from an adequate number of qualified sources. Additionally, 2 CFR §200.318(i) requires non-federal entities to maintain documentation sufficient to detail the history of the procurement, including the rationale for the method of procurement, contractor selection, and the basis for price reasonableness. Further, 2 CFR §200.320(c) permits noncompetitive (sole-source) procurement only when specific conditions are met and requires appropriate justification and documentation. Condition: During testing of procurement for ALN 14.265, we noted that the entity procured services totaling $17,500, exceeding the micro-purchase threshold and requiring small purchase procedures. Review indicated that the procurement was conducted under small purchase procedures; however, price quotations from multiple qualified vendors or other cost analysis were not obtained. In addition, the entity’s internal policy requires at least two price quotes for procurements within this dollar range, and no such quotes were documented. Although management stated the vendor was selected due to the unique nature of the training and specialized qualifications of the provider, the procurement file does not include contemporaneous documentation supporting sole-source eligibility or a formal sole-source justification. Cause: The deficiency occurred due to inadequate internal controls over procurement processes and lack of sufficient understanding and consistent application of procurement requirements. Specifically, management did not ensure that required price quotations were obtained and documented or that sole-source procurements were properly justified and supported. Effect: As a result, the entity did not comply with federal procurement requirements or its internal policy. This increases the risk that full and open competition was not achieved and that the entity may not have obtained services at the most reasonable price. Additionally, insufficient documentation reduces transparency and accountability and may result in questioned costs or increased scrutiny by federal or pass-through entities. Questioned costs: None Perspective: Statistical sampling was not used but sampling methodology followed AICPA guidelines. Repeat finding: This is not a repeat finding. Recommendation: We recommend that management strengthen procurement controls to ensure compliance with 2 CFR 200 and internal policy. Specifically, procedures should be implemented to require and document price quotations from an adequate number of qualified vendors for all procurements above the micro-purchase threshold. For noncompetitive procurements, management should prepare and retain contemporaneous written justification demonstrating that the procurement meets one of the allowable criteria under 2 CFR §200.320(c), supported by appropriate documentation such as market research or evidence of exclusivity. In addition, management should provide training to personnel responsible for procurement to ensure proper and consistent application of procurement requirements. Management’s response (unaudited): See Corrective Action Plan

FINDING 2025-001 Subject: Water and Waste Disposal Systems for Rural Communities - Procurement Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listings Number: 10.760 Federal Award Number and Year (or Other Identifying Number): BAN-2 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 13 CITY OF HUNTINGBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-002. Condition and Context As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The City had not properly designed or implemented such a system that would likely be effective in preventing, or detecting and correcting, noncompliance. The purchasing policy provided by the City for review did not include the applicable federal regulations, such as procedures to avoid the acquisition of unnecessary or duplicative items and procedures to ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Additionally, the City did not maintain written standards of conduct covering conflicts of interest and governing actions of its employees engaged in the selection, award, and administration of contracts. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must conform to the procurement standards identified in § 200.317 through 200.327." Cause The City did not fully implement the corrective measures stated in the City's corrective action plan prepared in response to this same finding included in the immediately prior audit report. Effect Without a proper system of internal controls in place that operated effectively, the City did not properly follow its corrective action plan and did not update its purchasing policy to reflect the required federal procurement standards. As a result, noncompliance identified in the immediately prior audit remained uncorrected throughout the current audit period. INDIANA STATE BOARD OF ACCOUNTS 14 CITY OF HUNTINGBURG SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City update its purchasing policy to incorporate all appropriate federal regulations to ensure compliance with the procurement standards applicable to federal awards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Finding No. 2025-002: Subrecipient Monitoring and Procurement and Suspension and Debarment – Noncompliance Federal Program Name: Juvenile Mentoring Program Pass-through Entity: None Federal Assistance Listing Number: 16.726 Criteria Uniform Guidance requires that non-Federal entities ensure that they do not make subawards to entities that are suspended or debarred from participating in Federal programs. Recipients and subrecipients are subject to the non-procurement suspension and debarment regulations set forth in 2 CFR §200.214 and 2 CFR Part 180, which restrict the issuance of Federal awards and subawards to excluded parties. Condition During the audit period, the Partnership issued subawards to subrecipients; however, the Partnership’s current subrecipient policies are missing several critical elements, including procedures to verify that subrecipients are not suspended or debarred by the federal government, requirements to pass applicable federal special conditions down to subrecipient awards, methods to track the total amount of funding provided to subrecipients under each federal program, processes to ensure that payments to subrecipients minimize the time between the transfer of federal funds from the grantee and disbursement to the subrecipient, a risk-based monitoring approach, and an on-site monitoring process that includes reviews of financial and administrative aspects of the program, among other areas. Cause The Partnership had not previously developed or updated its subrecipient monitoring policies to fully align with the requirements of Uniform Guidance. Management relied on informal practices and staff knowledge rather than comprehensive, documented procedures to address suspension and debarment verification, subaward compliance requirements, cash management, and risk-based monitoring. In addition, limited compliance resources and the absence of a centralized compliance review process contributed to gaps in policy development and implementation during the audit period. Effect Without verification of suspension and debarment status, the Partnership is at risk of making subawards to entities that are ineligible to receive Federal funds. This could result in questioned costs, required repayment of Federal funds, or other sanctions imposed by the Federal awarding agency or pass-through entity. Questioned Costs None noted. Context Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR 200.318 through 200.327 and must follow the subrecipient monitoring and management standards set out at 2 CFR 200.331 through 200.333. They must use their own documented procurement and subrecipient monitoring procedures, which reflect applicable state and local laws and regulations, provided that the procurements and subawards conform to applicable federal statutes and the procurement and subrecipient monitoring requirements identified in 2 CFR Part 200. Recommendation We recommend that the Partnership implement written policies and procedures to ensure that all subrecipients are verified as not suspended or debarred prior to the execution of subawards. Acceptable methods of verification include reviewing SAM.gov exclusion listings, obtaining written certifications from subrecipients, or incorporating suspension and debarment representations into subaward agreements. Documentation of the verification should be retained in accordance with record retention requirements. Management’s Response/View of Responsible Officials Management agrees with this finding, see the Corrective Action Plan.

FINDING 2025-002 Subject: Assistance to Firefighters Grant - Procurement and Suspension and Debarment Federal Agency: Department of Homeland Security Federal Program: Assistance to Firefighters Grant Assistance Listings Number: 97.044 Federal Award Number and Year (or Other Identifying Number): EMW-2023-FG-06299 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement Federal regulations require recipients of federal awards to maintain documented procedures for procurement under a federal award. These procedures must comply with State, local, and tribal laws, along with applicable provisions under 2 CFR 200.317 through 2 CFR 200.327. These requirements include the avoiding of acquisition of unnecessary or duplicative items, a clear and accurate description of technical requirements for the items or services to be procured, the requirements for solicitations to identify any and all requirements which offerors must fill and other factors to be used in evaluating bids or proposals, and a policy prohibiting the use of statutorily or administratively imposed state, local, or tribal geographical preferences in the evaluation of bids or proposals. The City did not present a procurement policy containing these required provisions for the audit. INDIANA STATE BOARD OF ACCOUNTS 15 CITY OF KENDALLVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Additionally, when the value of the procurement for property or service exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a nonfederal entity, formal procurement methods are required. The SAT is typically set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold. Therefore, the SAT threshold is set at $150,000. Formal procurement methods require adherence to documented procedures and formal methods such as sealed bids or proposals. Federal regulations require a firm-fixed-price contract to be awarded in writing to the lowest responsible and responsive bidder. The City solicited bids for Air-Paks funded through the Assistance to Firefighters Grant. After awarding the bid, the City did not enter into a formal written contract with the vendor. Suspension and Debarment Prior to entering into covered transactions with federal award funds, recipients are required to verify that vendors are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The City did not have policies or procedures in place to verify that vendors were not suspended or debarred before entering into covered transactions. During the audit period, the City entered into one covered transaction for Air-Paks, utilizing $837,350 of federal award monies, which met the $25,000 threshold for verification. However, the City did not verify the vendor's suspension or debarment status prior to payment because no process existed to ensure contractors were not suspended, debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities. The lack of internal controls and noncompliance was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. . . . INDIANA STATE BOARD OF ACCOUNTS 16 CITY OF KENDALLVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: . . . (ii) If sealed bids are used, the following requirements apply: . . . (D) A firm-fixed-price contract will be made in writing to the lowest responsive and responsible bidder. When specified in bidding documents, factors such as discounts, transportation cost, and life-cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM.gov Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause The City did not implement effective internal controls to safeguard their procurement policy. The City's procurement policy was destroyed in a storm, and no backup copies were available. Also, the City was not aware that a formal written contract was needed for procurements exceeding the SAT threshold or the Procurement and Suspension and Debarment compliance requirement when a covered transaction is expected to equal or exceed $25,000. Effect Without the proper implementation of an effectively designed system of internal controls, the City is at risk of noncompliance with the Procurement and Suspension and Debarment compliance requirement, including the potential for a loss of federal funds awarded to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City design and implement a proper system of internal controls, including policies and procedures, to ensure the City complies with the Procurement and Suspension and Debarment compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 17 CITY OF KENDALLVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

U.S Department of Health and Human Services Federal Financial Assistance Listing #93.493 Congressional Directives Procurement, Suspension & Debarment Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: 2 CFR 200. 303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.318 maintains that recipients must have and use documented procurement policies and must conform procurement standards to Uniform Guidance standards in sections 2 CFR 200.317 through 200.327. Additionally, 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are applicable. Condition: Testing of the federal program identified the following: 􀁸 The Hospital’s formally documented procurement policy was missing the required elements detailed under Uniform Guidance. 􀁸 Instances where the Hospital did not follow the procurement process, and/or retain documentation for reasoning of selection of vendor. Cause: The Hospital was not aware of the federal procurement requirements and did not have an established policy. Contract provisions were not evaluated compared to Uniform Guidance contract requirements and documentation was not retained to support procurement and selection of vendors. Effect: The Hospital was not in compliance with the procurement standards for their purchases and are not in compliance with the requirement to have a written policy in accordance with Uniform Guidance. Questioned Costs: None reported. Context: A nonstatistical sample of 4 out of 14 vendors were selected for testing. Repeat Finding from Prior Years: No Recommendation: We recommend the Hospital update their procurement policy to ensure it includes all the required elements in accordance with Uniform Guidance. In addition, we suggest that management implement procedures and control processes related to the review of procurement to ensure the procurement methods are being followed and documentation is retained to support compliance. Views of Responsible Officials: Management agrees with the finding.

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

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

#2025-004 – Major Federal Award Finding – Reporting; Procurement and Suspension and Debarment; Subrecipient Monitoring; Allowable Costs/Cost Principles Nature of Finding: Maintenance of Documentation/Records – Compliance Finding and Significant Deficiency in Internal Control over Compliance This is a repeat of prior year #2024-005. Criteria/Condition: Documentation was not maintained to support financial data provided in reports submitted to the funding source. Documentation was also not maintained to support certain procurement procedures. Per 2 CFR 200.334, financial records and supporting documentation must be maintained for three years from the date of the final financial report. Per 2 CFR 200.318(i), recipients must maintain records sufficient to detail the history of each procurement transaction, including (among other items) rationale for contractor selection or rejection. Cause/Context: The following activities did not consistently have supporting documentation: Expenditure balances reported to the State of Michigan in quarterly reports were not amended or reconciled to the final accounting records for each reporting period. The accounting periods were impacted by various transactions between the dates of the grant expenditure reports and the close of the respective period financial statement. Performance of subrecipient and contractor/vendor suspension and debarment search on SAM.gov prior to September 2025. No documentation was maintained to support review for the review of processed payroll registers for two of the three pay periods tested. For 1 of the 7 employee wage allocations tested, no documentation was retained to support independent review of the allocation. Effect: Evidence to support a reconciliation between reports submitted to a funding source and the general ledger is not readily available. Evidence to support that the appropriate contractor/vendor vetting process was conducted is not available. Recommendation: The Organization should produce and maintain supporting documentation for all reports submitted to funding sources, including information to reconcile reports to the final financial statements for the respective period and resolution of any reporting differences with the funding agency. We also recommend that the Organization maintain all documentation to support the decision process associated with procurement. Views of Responsible Officials and Planned Corrective Actions: Since the Finance Manager's arrival, a process has been implemented to reconcile quarterly expenditure reports submitted to the State of Michigan against the general ledger; this reconciliation has become clearer and more consistent with each subsequent period. Beginning in September 2025, suspension and debarment checks on SAM.gov are performed for every new vendor and subrecipient — owned by the Executive Director of the Center for Adult College Success for Center vendors and the Finance Manager for TalentFirst vendors, with all checks reviewed by the Finance Manager. Employee wage allocations are now supported by timesheets and documented on the monthly journal accrual e-signature form, which retains the allocation and its approval electronically.

Finding 2025-001 Internal control deficiency and noncompliance over procurement and suspension and debarment and special tests and provisions. Identification of the federal program: Assistance Listing Number 93.493: • Congressional Directives • U.S. Department of Health and Human Services • Federal award identification number – CE147096 • Federal award year – September 1, 2022 to August 31, 2025 Criteria or specific requirement (including statutory, regulatory or other citation): Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.318 General procurement standards (a) the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity’s documented procurement procedures must conform to the procurement standards identified in 200.317 through 200.327; (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders; (c) (1) the non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.318 General procurement standards (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.319 Competition (a) All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and 200.320. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.320 Methods of procurement to be followed. The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award: (a) (2) Small purchases – (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity; (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price; (2) Proposals. A procurement method in which either a fixed price or cost-reimbursement type contract is awarded. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.320 Methods of procurement to be followed. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.324 Contract cost and price. (a) The non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Title 2, Subtitle A, Chapter II, Part 200, Subpart C 200.214 Suspension and debarment. Non-Federal entities are subject to the non-procurement debarment and suspension regulations that restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Title 2, Subtitle A, Chapter I, Part 180, Subpart C 180.300 What must I do before I enter into a covered transaction with another person at the next lower tier? When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) checking SAM Exclusions; (b) Collecting a certification from that person; or (c) adding a clause or condition to the covered transaction with that person. The Health Resources and Services Administration (HRSA) project guidance requires the following: • Federal Interest – Real Property – For all construction projects, regardless of award amount, you are required to file a Notice of Federal Interest (NFI). The NFI requires prior written approval in order for the property owner to mortgage, sell, transfer, or use the property for a purpose inconsistent with the award. A notarized NFI must be filed against the property deed prior to construction in the appropriate public records office of the jurisdiction in which the property is located and once filed, a copy must be provided to the appropriate HRSA Grants Management Specialist. Condition: During our testing over procurement, we observed management did not have documented procurement procedures that conformed to the procurement standards identified in 2 CFR section 200.318 to 200.327 and written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Management did not have internal controls in place over small purchase procurements to ensure price or rate quotations were obtained from an adequate number of qualified sources, formal procurements to ensure sealed bids or proposals were obtained through public advertising, and completion of a cost or price analysis in connection with all procurement actions exceeding the simplified acquisition threshold. Management did not maintain records for procurements to document the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. During our testing over suspension and debarment, we observed management did not have documented suspension and debarment procedures and did not have internal controls in place to ensure vendors were searched for suspension and debarment at the time of vendor selection. During our testing over special tests and provisions, we observed management did not file an NFI against the property deed prior to construction in the appropriate public records office of the jurisdiction in which the property is located and provide to the appropriate HRSA Grants Management Specialist. Cause: Management did not have internal controls in place over the compliance requirements as stated in the criteria or specific requirement section above. Effect or potential effect: Procurements were not supported by internal controls and could potentially include unreasonable prices or rates. In addition, if a search for suspension and debarment is not conducted, the entity could contract with vendors that are suspended or debarred. Special tests and provisions were not supported by internal controls in that an NFI was not filed against the property deed prior to construction in the appropriate public records office of the jurisdiction in which the property is located. Questioned costs: $1,154,000 – Assistance Listing Number 93.493 – Congressional Directives – Federal award identification number – CE147096 Questioned costs were computed as the entire population of procurement transactions subject to small purchase, formal procurement, suspension and debarment, and special tests and provisions compliance requirements. Questioned costs means a cost that is questioned by the auditor because of an audit finding: (1) which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds or (2) where the costs, at the time of the audit, are not supported by adequate documentation. Context: During our testing over procurements, we obtained a listing of expenditures that included $1,154,000 of procurement transactions subject to small purchase, formal procurement, suspension and debarment, and special tests and provisions compliance requirements. We observed management did not have internal controls in place to ensure the compliance requirements as stated in the criteria or specific requirement section above were performed. Identification as a repeat finding, if applicable: No. Recommendation: Management should create documented procurement procedures that conform to the procurement standards identified in 2 CFR section 200.318 through 200.327 and written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Management should develop and implement internal controls over small purchase procurements to ensure price or rate quotations are obtained from an adequate number of qualified sources, formal procurements to ensure sealed bids or proposals are obtained through public advertising, and completion of a cost or price analysis in connection with all procurement actions exceeding the simplified acquisition threshold. Management should maintain records for procurements to document the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Management should create documented suspension and debarment procedures and develop and implement internal controls to ensure vendors were searched for suspension and debarment at the time of vendor selection. Management should review the procurements identified as questioned costs to identify if any improper payments were made to the entity. Management should develop and implement internal controls over special tests and procedures to ensure that an NFI is filed against the property deed prior to construction in the appropriate public records office of the jurisdiction in which the property is located and provide to the appropriate HRSA Grants Management Specialist. Views of responsible officials: We agree with the finding that internal controls were not sufficient to maintain compliance with federal procurement standards under Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.318 to 200.327 for a non-federal entity. However, the funds were expended for the intended purpose of the federal award. The Company is committed to implementing internal controls to ensure procurement related to federal awards follow 2 CFR section 200.318 to 200.327. The Company implemented the procurement policy it created on September 30, 2025, in response to prior audit findings 2024-001 and 2024-003, which occurred after the end of the federal award year for this program, that addresses this finding. This procurement policy complies with the requirements of 2 CFR section 200.318 through 200.327, that includes the written standards of conduct covering conflicts of interest and governs the actions of its employees who select, award and administer procurement contracts. This policy includes procedures to ensure proper procurement for small purchases to ensure sufficient price quotations are obtained from the required number of qualified sources, proper sealed bids or proposals are obtained through public advertising, an appropriate cost or price analysis is performed for procurement actions exceeding the simplified acquisition threshold, documentation is retained, and proper oversight is exercised in accordance with 2 CFR section 200.318 through 200.327. While the Company did not perform a check of each vendor against the SAM Exclusions prior to selecting a vendor, the Company has procedures in place to ensure the vendors are approved by Corporate purchasing and in good standing, which limits the risk of conflict of interest between employees and vendors, and limits contracting with a vendor who is suspended or debarred from federal related contracting. Further, the Company confirmed the vendors that were contracted with related to this finding were not included on the SAM Exclusions listing. The Company has now filed the Notice of Federal Interest (“NFI”), and provided the NFI to the appropriate HRSA Grants Management Specialist. The Company also updated its procurement policy to ensure that, regardless of the award amount, it files an NFI against the property deed prior to construction of any project in the appropriate public records office of the jurisdiction in which the property is located and provides a copy to the appropriate HRSA Grants Management Specialist.

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

Criteria Title 2 CFR §200.318(a), requires a non-Federal entity to maintain and use documented procurement procedures that conform to the procurement standards contained in 2 CFR §§200.317 through 200.327. Condition The Organization did not maintain documented procurement procedures that incorporated the procurement standards required by Uniform Guidance. During the year ended December 31, 2025, HUD funds were used to reimburse costs associated with a mixed-finance capital construction project. The general contractor for the project was selected prior to the commitment of HUD funding for the project. The grant agreement disclosed a contractor was already selected Cause Management had not previously administered federal funding for a capital construction project subject to Uniform Guidance procurement standards and accordingly had not developed formal written procurement procedures conforming to 2 CFR §§200.317 through 200.327. In addition, the general contractor was selected prior to the commitment of HUD funding to the project. Effect The absence of documented procurement procedures increases the risk that procurements funded in whole or in part with federal awards may not comply with applicable federal procurement requirements. This condition represents a significant deficiency in internal control over compliance and noncompliance with the Procurement and Suspension and Debarment compliance requirement. Questioned Costs None ($0). Context This finding relates to the Economic Development Initiative major program (ALN 14.251). This is the first year the program was audited as a major program and therefore is not a repeat finding. Recommendations We recommend the Organization develop, formally adopt, and implement written procurement procedures that conform to the requirements of 2 CFR §§200.317 through 200.327 and apply those procedures to all procurement activity funded in whole or in part by federal awards. Views of Responsible Officials Management agrees with the finding and will develop and implement written procurement procedures consistent with Uniform Guidance requirements.

FINDING 2025‐002 – Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance and Instance of Material Noncompliance Assistance Listing Number: 21.029 Federal Program Name: COVID-19 - Coronavirus Capital Projects Fund Award Year: 2024 Criteria: Uniform Guidance requires non-federal entities to establish and adhere to documented procurement procedures and ensure compliance with suspension and debarment requirements. 2 CFR §200.318(a): Requires entities to have and use documented procurement procedures consistent with federal standards. 2 CFR §200.318(i): Requires maintenance of records sufficient to detail the history of procurement. 2 CFR §200.214: Prohibits contracting with parties that are suspended or debarred, requiring verification. Condition and context: The Cooperative has not developed or implemented formal written procurement policies and procedures that comply with Uniform Guidance requirements. Additionally, the Cooperative has not established procedures to ensure compliance with suspension and debarment requirements. As a result, for a sample of two vendors and nine procurement transactions tested, the Cooperative did not document suspension and debarment verification (e.g., SAM.gov) for vendors and contractors procured under the federal award. The absence of documented procedures also indicates that procurement activities are not being performed under a standardized framework aligned with federal requirements. Questioned costs: None. Effect: Due to the lack of formalized procurement processes and controls there is an increased risk of noncompliance with federal procurement standards. Expenditures could be paid to suspended or debarred vendors resulting in disallowed expenditures, and noncompliance with the grant agreement. Cause: Management did not have a sufficient understanding of the procurement-related control requirements necessary to comply with the grant agreement and Uniform Guidance. As a result, procurement processes were not formally established or aligned with federal requirements. Repeat finding: Yes. Recommendation: We recommend the Cooperative develops and implements written procurement policies and procedures in compliance with 2 CFR §200.318–§200.327, including competitive procurement requirements, cost/price analysis, documentation, and record retention. Establish procedures to ensure compliance with suspension and debarment requirements, including performing SAM.gov verification prior to contract award and retaining documentation of verification in procurement files. Lastly, we recommend implementing monitoring controls to ensure procurement documentation and compliance requirements are consistently met. Views of responsible officials and planned corrective actions: Wabash currently maintains the process of procurement standards and internal controls. While we previously managed contractor selections through established internal practices, we recognize the requirement for a comprehensive written procurement policy that explicitly outlines selection criteria and mandatory debarment verification procedures. To remediate the identified material weakness, Wabash implemented a formal Procurement Policy and Procedure June 30, 2026. Contact Person(s): Jason Griffy, Network Operations Manager Justin Gephart, Chief Operating Officer

Finding 2025-003 Procurement, Suspension and Debarment Program: ALN 66.458 Clean Water State Revolving Fund Criteria: As required by the OMB Uniform Guidance (2 CFR § 200.318(a)), a non-federal entity must use its own documented procurement procedures, provided that they conform to Federal law and the standards outlined in the Uniform Guidance. Condition: The City’s procurement procedures do not conform to Uniform Guidance requirements. Effect: There is an increased risk of noncompliance with federal awards. Questioned Costs: N/A Cause: The City has not revised procurement procedures for many years. Recommendation: We recommend that the City revise their procurement procedures to conform with Minnesota statutes and Uniform Guidance.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Emergency Solutions Grant Assistance Listing Number: 14.231 Award Period: January 1, 2025 to December 31, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: In accordance with 2 CFR §200.318(a) and §200.318(d), non-federal entities are required to maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts, and must follow documented procurement procedures that promote full and open competition. Additionally, 2 CFR §200.320 requires entities to use appropriate procurement methods based on the nature and size of each procurement and to perform cost or price analysis as applicable. Further, pursuant to 2 CFR §200.214, non-federal entities are prohibited from contracting with or making subawards to parties that are suspended or debarred and are required to verify the eligibility of vendors (e.g., through the System for Award Management (SAM)) prior to entering into transactions and periodically as appropriate. These requirements imply the need for ongoing evaluation and documentation of procurement decisions, vendor eligibility, and compliance, particularly when procurements span multiple funding periods or awards. Condition: During our review, we noted that the organization performed procurement procedures, including vendor selection, cost/price evaluation, and suspension and debarment verification, at the time of initial engagement with a vendor. However, the organization did not subsequently review, monitor, or reperform procurement procedures—including periodic suspension and debarment checks—in later years, despite continued use of the vendor across different grant awards and grant periods. Questioned Costs: None Context: The organization engages vendors to provide goods and services supported by multiple grant awards over varying grant periods. Procurement requirements, including verification that vendors are not suspended or debarred, apply at the time of vendor selection and should be periodically reassessed to ensure continued compliance with applicable regulations, particularly when funding sources, grant terms, or procurement thresholds change. Cause: This condition appears to be the result of a lack of formal policies or controls requiring periodic reassessment of vendor selection, including suspension and debarment verification, as well as insufficient awareness of ongoing procurement and eligibility requirements under federal regulations. Effect or Potential Effect of Finding: Failure to reassess procurement decisions, monitor vendor relationships, and reverify suspension and debarment status across grant periods increases the risk of noncompliance with federal procurement standards. This includes the risk of contracting with ineligible vendors, inadequate competition, or unsupported pricing. Such noncompliance may result in questioned costs, disallowed expenditures, repayment of grant funds, and increased exposure to vendor performance and compliance risks. Repeat Finding: No. Recommendation: We recommend that management implement formal procurement policies requiring periodic reassessment of vendors used in federally funded programs, particularly when new grant awards are received or grant periods change. This should include evaluating whether the original procurement method remains appropriate, performing updated cost or price analyses as necessary, and conducting and documenting periodic suspension and debarment checks (e.g., SAM verification). Additionally, management should establish oversight controls to ensure procurement compliance and vendor eligibility are maintained throughout the lifecycle of vendor relationships in accordance with 2 CFR §200.318–200.320 and §200.214. Views of Responsible Official: There is no disagreement with the audit finding.

Program: ALN 66.458 Clean Water State Revolving Fund ALN 66.468 Drinking Water State Revolving Fund Criteria: As required by the OMB Uniform Guidance (2 CFR 200.318(a)), a non-federal entity must use its own documented procurement procedures, provided that they conform to Federal law and the standards outlined in the Uniform Guidance. Condition: The City's procurment procedures do not conform to Uniform Guidance requirements. Effect: There is an increased risk of noncompliance with federal awards. Questioned Costs: N/A Cause: The City has not revised procurement procedures for many years. Recommendation: We recommend that the City revise their procurement procedures to conform with Minnesota statutes and Uniform Guidance.

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

Department of Treasury 2025-002 – Internal Controls over Compliance Coronavirus State and Local Fiscal Recovery Fund Criteria: In accordance with 2 CFR 200.318(a), non-federal entities must use and maintain documented procurement procedures that comply with the procurement standards contained in Uniform Guidance. Written policies and procedures should establish requirements for procurement transactions, including methods, competition requirements, conflict-of-interest provisions, and purchasing thresholds. Condition: During our audit, we noted the Organization had not adopted formal written procurement policies and procedures governing purchases made with Federal award funds. Specifically, the Organization had not documented procurement methods, purchasing thresholds, quotation requirements, sole-source procurement requirements, or procedures for ensuring compliance with applicable Federal procurement standards. Although testing of procurement transactions selected for examination did not identify instances of noncompliance with Uniform Guidance procurement requirements, the Organization’s procurement practices were based on informal procedures. Cause: Management has not formally established and approved written procurement policies and procedures that incorporate the requirements of Uniform Guidance. Effect: The absence of documented procurement procedures increases the risk that Federal procurement requirements may not be applied consistently across the Organization and may not be effectively communicated to employees responsible for purchasing activities. In addition, the lack of formalized procedures increases the risk that noncompliance with Federal procurement requirements could occur and not be prevented or detected in a timely manner, particularly in the event of personnel turnover or changes in organizational responsibilities Auditor’s Recommendation: We recommend that management develop and formally adopt written procurement policies consistent with Uniform Guidance. At a minimum, such policies should address procurement methods and thresholds, competitive bidding and quotation requirements, sole-source procurement documentation, conflict-of-interest standards, contractor responsibility determinations, suspension and debarment considerations, and procurement record retention requirements. Management’s Response: We have documented and adopted our Procurement Policy in accordance with Uniform Guidance. A copy of this policy will be provided upon request.

2025-005 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance (Repeat of Finding 2024-005, 2023-006 and 2022-004) Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges and Higher Education Institutional Aid ALN Number: 15.027 and 84.031 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, all procurement transactions under the federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the procurement contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None. Context: Procurement documents were not retained for transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follows the sealed bid requirements listed in 2 CFR Section 200.320b1. Management’s Response: The College concurs with the finding. Management will follow procedures as outlined in its policies and procedures to ensure all stages of the process adequately conducted and documented.

Finding Number: 2025-001 Repeat Finding: Yes; 2024-002, 2023-002, 2022-002, 2021-002 Federal Program Name/Assistance Listing Title: Federal Transit Cluster Federal Assistance Listing Number: 20.507, 20.526 Federal Agency: U.S. Department of Transportation Federal Award Number: 5339-R-2024-GCTD-00025 Federal Pass-Through Agency: Texas Department of Transportation State Program Name: Urban State Program State Agency: Texas Department of Transportation Type of Finding: Noncompliance Material to Financial Statements and Federal/State Major Programs, Material Weakness in Internal Control Over Compliance Compliance Requirement: Procurement, Suspension and Debarment Questioned Costs: $368,203 Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition The District was unable to provide evidence that the federal guidelines were followed for purchases exceeding the small purchases and simplified acquisition threshold. Cause The District’s internal controls over procurement of goods and services were not adequate. Effect The District was not in compliance with Federal regulations and guidelines related to procurement of goods and services. Context During our testing of procurement compliance, we selected all vendors with expenditures exceeding the federal Simplified Acquisition Threshold for the fiscal year. The population consisted of one (1) vendor with total FY 2025 expenditures of $368,203. The District was unable to provide any documentation supporting the procurement method, competitive solicitation, or suspension and debarment verification for this vendor. Because the District could not produce a procurement file or alternative evidence demonstrating compliance with 2 CFR 200.318–200.326, the entire amount paid to this vendor was considered questioned costs. Recommendation The District should maintain documentation of procurement actions in the vendor file including sealed procurements issued and quotes. Review of procurement compliance should occur before the District’s funds are obligated. Views of Responsible Officials The District agrees with the finding and has taken steps to address this issue as detailed in the Corrective Action Plan.

Finding 2025-003: Conflict of Interest Attestations Federal Agency(ies): United States Agency for International Development (USAID) Federal Program(s): Adv HIV & AIDS Epidemic Control (AHEC) Activity Assistance Listing Number(s): N/A – Federal Contract Pass-through Entity (if applicable): N/A Award Identification Number and Year: 72066821C00001 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Under 2 CFR §200.112, non-Federal entities must disclose in writing any potential conflict of interest to the Federal awarding agency or pass-through entity. Additionally, 2 CFR §200.318(c)(1) requires organizations to maintain written standards of conduct governing the performance of employees engaged in the administration of Federal awards. Effective internal controls require employees to periodically acknowledge and attest to compliance with IntraHealth’s conflict of interest policy to ensure transparency, accountability, and compliance with Federal regulations. Condition: During our testing of payroll and employee personnel files at both headquarters and the field office level, we noted instances in which employee-signed conflict of interest attestation forms were not available for our review. For various employees included in our sample, there was no documentation evidencing that the employee had acknowledged or certified compliance with IntraHealth’s conflict of interest policy. Cause: Based on discussions with management, the condition appears to be the result of employees which were terminated prior to the fiscal year 2025 attestation date. However, we were unable to verify that the employees had signed the conflict of interest forms for the immediately preceding period (which their sampled pay periods pertained to). This limitation was due to the inability to access systems which were discontinued, as well as the termination of responsible employees, due to cost reduction measures in response to the stop-work orders issued by the Federal Government. Effect or Potential Effect: Failure to obtain and retain signed conflict of interest attestations increases the risk that potential or actual conflicts may not be identified, disclosed, or appropriately managed. This weakens IntraHealth’s internal control environment and increases the risk of noncompliance with Federal conflict of interest requirements. Without documented attestations, IntraHealth cannot demonstrate that employees involved in the administration of Federal awards are aware of and complying with established standards of conduct. Questioned Costs: N/A, as the condition does not lead to unallowable costs. Context: The exceptions were identified across multiple locations and arose from our testing of internal controls around the payroll cycle. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend that management strengthen controls over its conflict of interest compliance process by implementing procedures to ensure all employees complete and sign conflict of interest attestations upon hire and on a periodic basis thereafter. Management should establish a centralized tracking mechanism and perform periodic monitoring to ensure documentation is complete and retained in personnel files. Strengthening this process will enhance transparency, promote ethical conduct, and provide reasonable assurance of compliance with Federal conflict of interest requirements.

Item: 2025-001 Assistance Listing Number: 93.185 Program: Immunization Research, Demonstration, Public Information and Education Training and Clinical Improvement Projects Federal Agency: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention Pass-Through Agencies: n/a Contract/Pass-Through Grantor Identifying Number: NH23IP922665 Award Year: August 2024 to July 2029 Compliance Requirement: Procurement, Suspension and Debarment Criteria: Per 2 CFR §200.318 - §200.326, non-federal entities must follow procurement procedures that ensure full and open competition and maintain proper documentation of procurement transactions. Additionally, under 2 CFR §200.213, entities must verify that vendors and subrecipients are not suspended or debarred before entering into contracts funded by federal awards. Condition: AIRA did not retain sufficient/updated documentation to support compliance with Uniform Guidance procurement standards. Specifically: • Procurement files lacked evidence of cost/price analysis and vendor selection criteria for purchases exceeding the micro-purchase threshold of $10,000. • The entity did not retain verification records confirming that selected vendors were not suspended or debarred in SAM.gov before contract execution. Questioned Costs: n/a Context: In a population of 35 vendors with purchases in excess of $10,000, we conducted a non-statistical sample of six vendors. In our sample of six vendors, we noted that for two vendors selected and tested, AIRA did not retain sufficient documentation to support compliance with the Uniform Guidance procurement standards. Effect: Failure to maintain proper procurement documentation and verify vendor eligibility increases the risk of noncompliance with federal requirements. This may lead to questioned costs and potential disallowance of federal expenditures. This was deemed to be a significant deficiency in internal control over compliance. Cause: The deficiency appears to result from inadequate internal control over procurement documentation and a lack of formalized procedures ensuring compliance with federal procurement and debarment requirements for a portion of fiscal 2025. In April 2025, AIRA implemented a standardized procurement policy and a formal review process to verify and document vendor eligibility through SAM.gov before awarding any contracts funded with federal funds. As these controls were not in place during the entire fiscal year the finding is repeated. Identification as a Repeat Finding: Repeat finding. See 2024-001 Recommendation: Recommendations from prior year’s finding were implemented effectively beginning in April 2025. No additional action necessary. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.

U.S. Department of Treasury, Federal Financial Assistance Listing #21.027, COVID-19 – Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.2096 outlines the requirements the non-federal entity verify vendors for which it plans to enter into a covered transaction are not debarred, suspended, or otherwise excluded. We noted that while the County does have a purchasing policy, elements as required by Uniform Guidance are absent from the policy. In addition, we noted the County did not retain the supporting documentation indicating they had verified vendors they were entering into covered transactions with were neither suspended nor debarred. The County was made aware that the policy is out of compliance with the Uniform Guidance during the 2024 audit. However, management has not had sufficient time to draft an updated policy in compliance with the Uniform Guidance. While our testing noted no instances of noncompliance, the absence of internal controls over compliance as it relates to having a Uniform Guidance compliant policy, could lead the County to enter into covered transactions that are not compliant with federal regulations. Questioned Costs: None reported Context/Sampling: Sampling was not used to test the policy. Repeat Finding from Prior Year(s): Yes Recommendation: The County should review the applicable provisions of the CFR to ensure their written procurement policy is compliant with Uniform Guidance requirements. Additionally, the County should review their checklist and/or document retention requirements for contracts to be sure it includes the support the County verified the vendor was neither suspended nor debarred. Views of Responsible Officials: Management agrees with the finding.

Federal Agency: Environmental Protection Agency Federal Program Name: Water Pollution Control Assistance Listing Numbers: 66.419 Federal Award Identification Number: 98339418 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 10/1/2023 - 12/30/2025 Compliance Requirement: Procurement Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Criteria or specific requirement: Compliance: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §200.318 through §200.327. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR §200.320(b)). Control: Per 2 CFR §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 the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: For two of five procurements selected for testing, the Commission was unable to provide documentation (completed requisition form) to demonstrate compliance with their procurement policy. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that the Commission’s procurement policies were followed for procurements entered into where expenses were charged to the federal program. Effect: The Commission was unable to provide documentation to support compliance with Federal requirements. Repeat Finding: No. Recommendation: We recommend that the Commission ensure that it follows its procurement policies for all goods and services charged to the program and that documentation be readily available for audit. Views of responsible officials: To prevent future noncompliance the Commission will 1)clarify vendor coverage on existing agreements, 2) strengthen controls over procurement threshold, 3) monitor cumulative spending by vendor, and 4) reinforce training and communication.

Finding 2025-003: Procurement, Suspension and Debarment Federal Program Name: National Railroad Passenger Corporation Grants Assistance Listing No. 20.315 Federal Award Nos.: 69A36525520030AMTDC 69A36525520040AMTDC 69A36524520000AMTDC 69A36524520010AMTDC FR-AMT-0028-22 FR-AMT-0027-22 Federal Agency: Department of Transportation, Federal Railroad Administration Federal Program Name: Railroad Development Assistance Listing No. 20.314 Federal Award No.: 69A36524400010MEGDC Federal Agency: Department of Transportation, Federal Railroad Administration Federal Program Name: Railroad Rehabilitation and Improvement Financing Program Assistance Listing No. 20.316 Federal Award No.: RRIF_2016_0040 Federal Agency: Department of Transportation, Federal Railroad Administration Federal Program Name: Federal-State Partnership for Intercity Passenger Rail Assistance Listing No. 20.326 Federal Award Nos.: 69A36525421260FSPDC 69A36525521430FSPDC 69A36525421100FSPDC Federal Agency: Department of Transportation, Federal Railroad Administration Criteria 1. The code of federal regulations - 2 CFR 200.318 General procurement standards state that: (h) Responsible contractors. The recipient or subrecipient must award contracts only to responsible contractors that possess the ability to perform successfully under the terms and conditions of a proposed contract. The recipient or subrecipient must consider contractor integrity, public policy compliance, property classification of employees, past performance record, and financial and technical resources when conducting a procurement transaction. (i) Procurement records. The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. 2. Section 10 of the Annual Grant Agreements and Section 500 of the IIJA Supplemental Grant Agreements (Assistance Listing No. 20.315) state: The Recipient will ensure persons or entities that perform any part of the work under this Agreement, including Subrecipients, as defined in 2 C.F.R. § 200.1, or Contractors, as defined in 2 C.F.R. § 200.1, will comply with applicable federal requirements and federal guidance, and the applicable requirements of this Agreement. Recipient agrees that flowing down such requirements does not relieve it of any obligation to comply with the requirements itself. For each of the Recipient’s subawards or contracts to perform all or part of the work under this Agreement: (a) The Recipient must include applicable grant regulations in the subaward or contract and ensure compliance with these provisions, including applicable provisions of 2 C.F.R. § 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, and DOT’s implementing regulations at 2 C.F.R. § 1201. (b) The Recipient must include applicable federal statutory and regulatory requirements in the subaward or contract and ensure compliance with these requirements, including applicable limitations on use of federal funds. 3. Additionally, the code of federal regulations - 2 CFR 200 Appendix II Contract Provisions for Non-Federal Entity Contracts Under Federal Awards states that: 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. H) Debarment and Suspension – A contract award must not be made to parties listed on the government wide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 and 12689. SAM Exclusions contains the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549. 4. The code of federal regulations or 2 CFR 200.320 (c) Procurement Methods states that: (c) Noncompetitive procurement. There are specific circumstances in which the recipient or subrecipient may use a noncompetitive procurement method. The noncompetitive procurement method may only be used if one of the following circumstances applies: 2) The procurement transaction can only be fulfilled by a single source; Condition The following exceptions to the criteria were observed during the performance of the audit procedures: 1. Required flow-down provisions were not incorporated into the legal agreements related to both of EY's legal expense selections as part of its testing of the procurement, suspension and debarment compliance requirement. 2. Amtrak failed to comply with the key compliance requirement related to suspension and debarment which includes a review of sam.gov to verify the legal firms were not present in the suspension and debarment list prior to the procurement. 3. Amtrak lacked adequate documentation to support the sole source justification of the legal firm related to one of EY's legal expense selections as part of its testing of the procurement, suspension and debarment compliance requirement. Cause Amtrak’s inappropriate interpretation of the annual and IIJA supplemental grant agreements involved the treatment of the procurement of legal counsel as exempt from the 2 CFR procurement, suspension and debarment process requirements. Effect or Potential Effect Noncompliance with Section 10 of the Annual Grant Agreements, Section 500 of the IIJA Supplemental Grant Agreements, 2 CFR 200.318, 2 CFR 200 Appendix II and 2 CFR 200.320. Additionally, Amtrak is at risk of doing business with contractors that are suspended/debarred. Amtrak is also at risk of facing increased costs and increased reliance due to the lack of competitive procurement. Questioned Costs Total questioned costs of $1.3 million were identified. Of this amount, approximately $3,500 relates to two EY selections identified as part of procurement, suspension, and debarment testing involving two legal firms. The remaining questioned costs represent legal expenses associated with the two legal firms that are also included on the SEFA. Assistance Listing No. 20.315 69A36522503710AMTDC $ 150,928 69A365255200340AMTDC 40,449 69A36525520040AMTDC 9,964 Assistance Listing No. 20.315 Total $ 201,341 Assistance Listing No. 20.314 69A36524400010MEGDC 135,247 Assistance Listing No. 20.316 RRIF_2016_0040 84,659 Assistance Listing No. 20.326 69A36525521430FSPDC $ 461,261 69A36525421100FSPDC 254,394 69A36525421260FSPDC 197,655 Assistance Listing No. 20.326 Total $ 913,310 Total Questioned Costs $ 1,334,557 Context EY randomly selected 40 procurement transactions as part of the testing of the procurement, suspension and debarment compliance requirement. EY identified exceptions related to its two legal expenditure selections as noted in the Condition section above. Identification as a Repeat Finding Not a repeat finding. Recommendation EY recommends that Amtrak include legal expenses within their procurement, suspension and debarment policy as outlined within each of the grant agreements. Views of Responsible Officials Amtrak understands the need to comply with procurement requirements for grants and retain documentation of the compliance. Amtrak will change its approach for allocating grant funding and its review of legal contracts to address the issue identified in this finding.

Assistance Listing, Federal Agency, and Program Name - 93.045/93.053, Department of Health and Human Services, Aging Cluster Federal Award Identification Number and Year - N/A Pass through Entity - Area Aging on Aging 1C Finding Type - Material weakness Repeat Finding - Yes 2024-15 Criteria - Per 2 CFR 200.303, nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Per 2 CFR 200.318(b), recipients must maintain oversight to ensure contractors perform in accordance with the terms, conditions, and specifications of their contracts. Per the “Minimum Nutrition Program Standards” issued Commission on Services to the Aging, individuals receiving certain nutrition benefits to undergo a periodic reassessment of eligibility that includes obtaining confirmation of medical necessity for certain benefit levels. Condition - The County engaged a third party contractor to perform certain eligibility reassessments, including obtaining verification of medical necessity, when required. While the County had a process in place to properly identify when reassessment was required and to follow up with the contractor about the status of reassessments, controls did not ensure the third party contractor followed through on reassessments on a timely basis. 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 County is responsible for ensuring participants who receive meals are eligible under the terms of the grant. The County did not have a control over home delivered meal participants that ensured the third party contractor timely reassessed participants every six months. 3 of the 43 samples selected did not have updated assessment forms within six months of receiving meals and 17 of the 43 samples did not have updated assessment forms. Cause and Effect - The County's controls were not adequate to ensure that the third party contractor was reassessing participants every six months. The lack of controls could result in the County providing meals to ineligible participants. Recommendation - We recommend the County update its policy on the reassessment process, including actions to be taken when participants refuse to complete the reassessment or cannot be contacted. This plan should also include a schedule for actions to be taken when participants do not complete reassessment submissions timely. The County should also implement the appropriate controls to monitor the third-party contractor and ensure reassessments are being performed timely. Views of Responsible Officials and Corrective Action Plan - The Department of Senior Services would like to clarify that the third-party contractor is contracted through The Senior Alliance, the Area Agency on Aging for region 1 C and not Wayne County. Wayne County Senior Services will continue to monitor the third-party vendor for timely assessments and reassessments through the existing controls which include: • Providing the third-party contractor monthly lists of clients in need of assessment/reassessment • Generating monthly lists of outstanding reassessments (clients not reassessed from the monthly list) • Reminding clients of the requirement for six-month reassessments • Obtaining updated information (phone numbers, emergency contacts, etc.) twice per year • Providing updated information to third-party contractor • Documentation of communicated information regarding third-party contractor’s performance to The Senior Alliance

2025-001 Procurement, Suspension and Debarment – Significant Deficiency in Internal Control over Compliance Identification of federal programs: 20.205 Highway Planning and Construction Grand award numbers: 693JJ22440000Y176AK307502400199900 693JJ22440000Y602AK307502400199900 693JJ22540000Y177AK307502500299900 693JJ22540000Y271AK307502500199900 693JJ22540000Y602AK307502500199900 Criteria: Per 2 CFR §200.318(i), non-Federal entities must maintain records sufficient to detail the history of procurement transactions, including the rationale for the method of procurement, contractor selection, and the basis for contract price. Additionally, 2 CFR §200.214 prohibits awards, subawards, and contracts with parties that are suspended or debarred, requiring entities to verify contractor eligibility prior to award. Effective internal controls over procurement activities should ensure required documentation is obtained, reviewed, and retained in procurement files. Condition: During testing of procurement transactions, we noted three instances in which adequate supporting documentation was not retained internally to support that the vendors were not suspended or debarred. We also noted one sole source procurement transaction in which documentation supporting the noncompetitive procurement justification and approval was not maintained at the time of purchase. Cause: Management indicated procurement documentation procedures were not consistently followed, and existing review controls did not detect the missing documentation prior to purchase approval and payment processing. Effect or potential effect: Failure to maintain required procurement documentation increases the risk of noncompliance with federal procurement requirements and may result in unsupported procurement actions or questioned costs. Questioned Costs: None. Identification of Repeat Finding: N/A Recommendation: We recommend management strengthen internal controls over procurement activities by implementing procedures to ensure sole source procurements are properly supported with written justification and suspension and debarment checks are performed and documented timely. Views of Responsible Officials: Management concurs with this finding. See corrective action plan below.

Finding 2025-001 – Procurement, Non-compliance (Significant Deficiency) Federal programs: Covid-19 Coronavirus State and Local Fiscal Recovery Funds Criteria: 2 CFR § 200.318(a) requires that the recipient or subrecipient must maintain and use documented procurement procedures for procurement transactions under federal awards. These procedures must be consistent with applicable laws and the procurement standards in Sections 200.317 through 200.327. Condition: During our testing of procurement transactions, we noted that the Authority does not have formal, written procurement policies and procedures governing the acquisition of goods and services with federal award funds. Context: Procurement, Suspension and Debarment was identified as a direct and material compliance requirement for the major program. As such, the Uniform Guidance requires the auditee to both design and implement internal controls over compliance, including formal, documented procurement policies. Cause: Management has not developed or implemented formal written policies to address procurement requirements under the Uniform Guidance. Effect: The absence of documented procedures increases the risk that procurement activities are not conducted in accordance with Uniform Guidance requirements. Questioned Costs: None Repeat finding: No Recommendation: We recommend that management develop and implement formal, written procurement policies and procedures that comply with 2 CFR Sections 200.317 through 200.327, which address procurement methods, competition requirements, and documentation standards, and are consistently applied to all procurement transactions under federal awards. Views of Responsible Officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.