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.

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.

Reference Number: 2025-004 Compliance Requirement: Procurement and Suspension/Debarment Type of Finding: Internal Control and Compliance Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance AL Number(s) and Title(s): 84.027 – Special Education Cluster Federal Awarding Agency: U.S. Department of Education Federal Award Number: None Pass-through Entity: Alabama Department of Education Pass-through Award Number: A250254 Questioned Costs: $264,966.68 The Institute failed to comply with Federal procurement standards and the Code of Alabama 1975. The U. S. Code of Federal Regulations Title 2, Part 200.318(a), of the Uniform Administrative Requirements, Costs Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states “the recipient or subrecipient 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.” Part 200.318(i), states “The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction.” Section 200.320 describes the methods of procurement to be followed. This guidance includes procedures for small purchases. Small purchases are purchases higher than the micro-purchase threshold but not exceeding the simplified acquisition threshold. During the 2025 fiscal year, the thresholds were $10,000 and $250,000, respectively. When small purchase procedures are used, price or rate quotations should be obtained from an adequate number of sources. Article 5 of the Code of Alabama 1975, Section 41-4-124(b), states that all educational or eleemosynary institutions are subject to the article except as it relates to the purchase of professional services and the oversight and authority of the Chief Procurement Officer. It further states that those entities should maintain procurement offices and personnel and adopt rules as may be necessary to comply with the article. The Institute’s procurement policy references the Code of Alabama 1975, Section 41-16-50, which no longer applies to the Institute due to passage of Act 2021-296, now codified at Code of Alabama 1975, Section 41-4-110, et seq. Since the Institute has not updated their procurement policies and procedures to comply with current State law and regulations, the Institute did not have adequate policies and procedures in place to ensure compliance with the U.S. Code of Federal Regulations Title 2, Part 200.318 and 200.320. Additionally, the Institute’s procurement policy states the bid threshold is $15,000.00. Therefore, small purchase procedures can only be used for purchases between the micro-purchase threshold ($10,000) and the threshold set by the Institute ($15,000). Furthermore, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Institute failed to adopt rules as necessary to comply with Code of Alabama 1975, Section 41-4-124(b). Due to a lack of properly designed and implemented procurement policies and procedures, the Institute awarded three contracts during the fiscal year without obtaining price or rate quotations from an adequate number of sources. These purchases totaled $188,631.68. The Institute also purchased $76,335.00 in visual aid equipment without bidding the award in accordance with Institute policies. As a result, the Institute did not comply with Uniform Guidance procurement requirements or the Code of Alabama 1975 for these purchases. It was also noted that the Institute failed to verify that vendors were not suspended or debarred before entering into a covered transaction. As a result, procurements could be improperly entered into with vendors that are suspended or debarred. Recommendation The Institute should implement policies and procedures to ensure compliance with the Uniform Guidance and the Code of Alabama 1975 requirements related to procurement transactions and to ensure proper suspension and debarment verifications are performed and that documentation of the suspension and debarment status is retained. Views of Responsible Officials of the Auditee Management agrees that the Institute' s procurement policy was not updated for the passage of Act 2021-296 and will take corrective actions.

Criteria: The Uniform Guidance requires non-federal entities to maintain written procurement policies and procedures that comply with federal regulations, ensuring procurements are conducted through full and open competition while avoiding conflicts of interest. In addition, unless a waiver is obtained, the City must comply with the Build America, Buy America (BABA) Act's domestic preference provisions for all infrastructure projects. Under Section 70914 of the BABA Act, all iron, steel, manufactured products, and construction materials used in these projects must be produced in the United States. The Uniform Guidance further requires the City to maintain documented procurement procedures and monitor contractor compliance with project agreement terms, including BABA provisions. Condition: During our audit, we identified the City had not adopted documented procurement procedures until after the audit period concluded. As a result, the required policies under the Uniform Guidance (2 CFR Part 200.318) were not in place during the period under audit. Additionally, while the City included BABA provisions in its contract agreements, it failed to establish monitoring policies and procedures to verify contractor compliance with the BABA requirements. Cause: The entity has not developed or implemented written procurement policies and procedures. Additionally, the City did not establish policies and procedures to monitor contractor compliance with BABA requirements. Effect: Without documented procurement policies, there is an increased risk of non-compliance with federal procurement standards, potential conflicts of interest, and inefficient use of federal funds. As a result, the City did not ensure contractors complied with the BABA provisions. Repeat Finding: Similar finding in the prior year. Recommendation We recommend that the entity develop and implement written procurement policies and procedures that comply with the Uniform Guidance. These policies should include standards of conduct covering conflicts of interest, procurement methods, and documentation requirements. Additionally, the City should implement and enforce policies and procedures to monitor infrastructure projects to ensure contractor compliance with BABA requirements.

Information on the federal program: United States Airforce, Assistance listing # 12.840 Civil Air Patrol Program Criteria: 2 CFR 200.318(i) states, "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." CAP regulation NHQ OI GC 24-02 section 18.3, states, "CAP/GCC will conduct procurement file reviews for all procurements costing $25,000 or more. The CAPF GCC-06, Procurement File Review Checklist, will be used to document the review." The Procurement File Review Checklist requires General Counsel review of all procurements over $100,000. Condition: Documentation of the procurement procedures of five purchase orders examined in the fourth quarter of the fiscal year were not complete. Cause: Controls and related responsibilities were not updated to address staffing changes in the contract and legal departments. Effect: Several components of the required documentation of five procurements examined from the fourth quarter of the fiscal year were not available upon request. Repeat Finding: No Questioned Costs: None reported. Recommendation: Documentation for each procurement should be maintained in a file by vendor. CAP's procurement file checklist should be completed retrospectively and included in the file for each procurement to ensure the completeness of the documentation. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan included at the end of the report.

Finding Number: 2025-007 Prior Year Finding Number: N/A Compliance Requirement: Procurement and Suspension and Debarment Program: U.S. Department of the Treasury COVID-19 – Coronavirus Capital Projects Fund ALN: 21.029 Award #: CPFFN0167 Award Year: 02/09/2022 – 12/31/2026 Government Department/Agency: Department of General Services (DGS), on behalf of the Department of Parks and Recreation (DPR) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Section 180.300, Suspension and Debarment, non-federal entities cannot enter into awards, subawards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Non-federal entities must either check for exclusions in the System for Award Management (SAM); collect a certification from the entity, or add a clause or condition to the covered transaction with the entity prior to entering into a covered transaction with a non-federal entity. In addition, in accordance with 2 CFR Section 180.415(b), non-federal entities cannot renew or extend covered transactions (other than no-cost time extension) with any excluded person, or under which an excluded person is a principal, unless the non-federal entity obtains an exception under 2 CFR Section 180.135. Condition – During our testing of procurement and suspension and debarment requirements, we examined seven (7) procurement contracts, valued at $24,796,728, out of a total population of eleven (11), valued at $25,329,758. We noted that DGS did not maintain documentation evidencing the suspension and debarment check for two (2) separate procurement contracts, valued at $97,508, involving the same contractor, hence, performance of the required suspension and debarment check could not be verified. Questioned Costs – Not determinable. Context – DPR owns and maintains budget authority over the project property, while DGS is responsible for managing construction and conducting all procurement activities for the project on DPR’s behalf. As such, DGS performs all required suspension and debarment checks for the project’s procurement transactions. This is a condition identified per review of DGS’s compliance, on behalf of DPR, with the specified procurement and suspension and debarment requirements using a statistically valid sample. Effect – Failure to adhere to the procurement procedures specified in the Uniform Administrative Requirements may lead to the Federal agency disallowing the procurement and associated costs. Cause – DGS did not maintain documentation of the suspension and debarment check as required by 2 CFR Section 180.300 and 2 CFR Section 200.318(i) listed above, preventing verification that the required check was performed prior to accepting the contractor. Recommendation – We recommend that management ensure consistent adherence to federal procurement requirements (2 CFR Section 180.300 and 2 CFR Section 200.318(i)) to perform the suspension and debarment verification for all covered transactions and to retain documentation evidencing the verification in the procurement file. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DGS and DPR management concur with the finding. DGS acknowledges that documentation of the required suspension and debarment checks was not retained in two procurement files. While the checks were performed, the absence of supporting documentation does not meet federal record-retention standards. DGS and DPR remain committed to full compliance with 2 CFR Section 180.300 and 2 CFR Section 200.318(i) and will strengthen internal controls to ensure complete and consistent documentation of all verification activities. The hard copies of the tax compliance documentation may have been filed in the paper records, which are currently unavailable for review. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Department of Treasury, State of Indiana Office of Community and Rural Affairs, Federal Financial Assistance Listing 21.029, AL192-23-NLC-23-103, AL192-23-NLC-25-104 A, AL192-23-NLC-25-104 B Coronavirus Capital Projects Fund 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. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are applicable. Additionally, 2 CFR 200.214 requires recipients to restrict the subawards and contract with certain parties that are debarred, suspended, or excluded from ineligible participation in Federal assistance programs or activities. Condition: Testing of the federal program identified the following: • The Entity’s formally documented procurement policy was missing the required elements detailed under Uniform Guidance • Four instances where the Entity did not follow the procurement process and did not have any formal documentation in place with the vendors. • Four instances where the Entity entered into a contract with a vendor over $25,000 and there was no review performed to ensure the vendor was not suspended or debarred. Cause: The Entity was not aware of the federal procurement requirements. Contract provisions were not evaluated compared to Uniform Guidance contract requirements. Contracts entered were not evaluated in accordance with Uniform Guidance as it relates to suspension and debarment. Effect: Ineffective controls over this area of compliance could result in a reasonable possibility the Entity would be noncompliant with the compliance requirements outlined above. Additionally, the Entity may enter into a covered transaction with a vendor that is suspended or debarred. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 4 out of 10 vendors were selected for testing. Repeat Finding form Prior Year: No Recommendation: We recommend the Entity 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. Also, management should ensure vendors are not suspended or debarred from doing business with the federal government prior to entering into a procurement transaction. Views of Responsible Officials: Management agrees with the finding.

Information on Federal Program: United States Department of Treasury. Passed through Florida Department of Commerce. Federal Assistance Listing Number 21.029 – Coronavirus Capital Projects Fund. Compliance Requirements: Procurement Criteria: In accordance with 2 CFR §200.318, the County 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. Condition: During testing over procurement transactions, it was noted the County did not maintain records sufficient to detail the history of a procurement transaction entered into with a vendor. Specifically, documentation was not available to support compliance with federal procurement requirements. Context: Out of a population of (2) procurement transactions totaling of $490,452, we tested $488,092 and found one (1) instance where the County did not maintain records sufficient to detail the history of a procurement transaction in the amount of $352,703. The County should maintain all records necessary to detail each procurement transaction. Cause: Controls were not in place or were not operating effectively to ensure required procurement documentation was obtained and retained in accordance with Uniform Guidance requirements. Effect: Lack of sufficient documentation over procurement transactions provides an opportunity for the County to award projects that are not subject to full and open competition nor consistent with federal regulations. Recommendation: We recommend that management implements procedures to ensure all required procurement documentation is retained and properly documented. We also recommend management reviews and updates their procurement policy to incorporate applicable state and federal regulations. Views of Responsible Officials and Planned Corrective Actions: The Clerk's Office will work to develop better standardized procedures and update current procedures to ensure that proper actions have been taken prior to and at the time of procurement. We anticipate having reviewed and/or developed these procedures by the end of the first quarter of the of FY26/27.

Assistance Listing, Federal Agency, and Program Name 93.493, U.S. Department of Health and Human Services, Congressional Directives Federal Award Identification Number and Year CE1HS52674 & CE1HS53568 2025 Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria The Corporation is required to maintain and follow written procurement procedures that comply with Uniform Guidance procurement standards, including the requirements in 2 CFR 200.317-200.327 regarding procurement methods and documentation of the history of procurement transactions. The Corporation is also required to comply with suspension and debarment requirements, including verification procedures required under 2 CFR 200.212, 2 CFR 200.318(h), 2 CFR 180.300, and 48 CFR 52.209-6. The requirements state that procurements paid with federal funds are supported by documentation showing the method of procurement, the basis for contractor selection, and compliance with suspension and debarment requirements. Condition The Corporation’s procurement and suspension/debarment policies and procedures were not in conformance with Uniform Guidance requirements. In addition, procurement records for the items tested did not contain sufficient documentation to support the procurement method used, the basis for contract selection, or compliance with suspension and debarment requirements. Questioned Costs $1,350,000 If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed The questioned costs represent activity reported on the SEFA incurred under contracts not in compliance with federal procurement standards. Context For both contracts tested, no records were available to support the procurement method, contractor selection, or performance of required suspension/debarment verification procedures. Based on the items tested, the issue was not an isolated documentation exception but reflected a control and compliance deficiency affecting the compliance areas of procurement and suspension/debarment. Cause and Effect The Corporation did not have sufficiently developed procurement, suspension, and debarment policies and procedures aligned to Uniform Guidance requirements. As a result, compliance procedures over these areas were not adequately established or performed. Without Uniform Guidance-compliant procurement policies, required procurement history documentation, and evidence of suspension/debarment verification, the Corporation cannot demonstrate that contracts charged to the federal award were procured in accordance with federal requirements. This increases the risk of noncompliance with procurement and suspension/debarment requirements and resulted in material noncompliance over the major program. Recommendation The Corporation should update and formally adopt written procurement, suspension, and debarment policies and procedures to conform to Uniform Guidance requirements and should implement procedures to ensure those policies are consistently followed and documented for all federally funded procurements. Views of Responsible Officials and Planned Corrective Actions The Corporation concurs with the finding. The Corporation will update and formally adopt written procurement, suspension, and debarment policies and procedures to conform to Uniform Guidance requirements and implement procedures to ensure those policies are consistently followed and documented for all federally funded procurements.

Non-compliance with Federal Award Requirement Identification of Federal Program 20.205 - Highway Construction and Planning; U.S. Department of Transportation; Passed-through State of Mississippi Department of Transportation Criteria 2 CFR 200.318(a) requires non-Federal entities to maintain and use documented procurement procedures that are consistent with applicable Federal statutes, regulations, and the standards identified in 2 CFR 200.317 through 200.327 as well as maintaining written standards of conduct covering conflicts of interest and governing the actions of employees engaged in the selection, award, and administration of contracts supported by Federal funds. Condition For the year under audit, the City did not have documentation of adopted procurement policies and procedures that addressed procurement standards or a written standard of conduct governing employees engaged in contract administration as required by Uniform Guidance. Cause Management had not established or adopted formal policies and procedures to ensure compliance with the procurement requirements of Uniform Guidance. Effect Without documented procurement policies and written standards of conduct, the City is at increased risk of noncompliance with Federal procurement requirements. Questioned Costs No questioned costs resulted from this matter. Repeat Finding This is not a repeat finding. Recommendation We recommend management development, approve, and implement written procurement policies and procedures and adopt a written standard of conduct addressing conflicts of interest and ethical expectations for employees and officials involved in the procurement process. Views of Responsible Officials Managment contends they have followed state procurement law and has since adopted a formal policy stipulating compliance with State of Mississippi procurement and Federal procurement requirements. A written standard of conduct for employees engaged in contract selection, award, and administration is in process and expected to be formally adopted in the near future.

2025-003 Procurement Material Weakness in Internal Control (Repeated in part from prior year, Finding No. 2024-003) Condition: For two of the four contracts tested, the contracts were not solicited in accordance with the Authority’s procurement policy. The contracts did not go through a formal solicitation process, and instead three informal bids were received. Additionally, none of the contracts tested contained quality control documentation to support internal controls. Context: The auditor haphazardly selected four contract files out of the population of thirteen contracts procured during the year ended September 30, 2025, which we consider to be a statistically valid sample. As part of our audit procedures, we reviewed procurement files to assess areas of compliance with HUD requirements and the effectiveness of internal controls over procurement activities. Criteria: The Authority’s procurement policy, HUD rules and regulations, and 2 CFR 200.318 require that certain procedures be performed in the procurement of vendors to ensure that fair and open competition results in services of the best possible value to the Authority, and that sufficient documentation be maintained to support the procurement method selected for the contract award process. Cause: The Authority experienced staffing and operational changes during and subsequent to the year ended September 30, 2025. Due to staffing changes and ineffective controls over the procurement process, the Authority was unable to ensure procurement requirements were consistently followed and that proper documentation was retained. Effect: As a result of the lack of adequate procurement documentation, the Authority is unable to demonstrate that contracts were awarded in compliance with the Authority’s and HUD’s procurement requirements. Questioned Costs: $141,395. Auditor’s Recommendations: The Authority should strengthen their internal controls over procurement by implementing standardized procurement procedures, including documentation checklists and supervisory review processes to ensure compliance with procurement requirements. The Authority should also provide training to staff involved in the process to ensure they are aware of the requirements and processes. Management Response: See Corrective Action Plan.

Condition SCORE has an established procedure requiring review of vendors in the System for Award Management (SAM.gov) to ensure vendors are not suspended or debarred prior to engagement using federal funds. During our testing of suspension and debarment for new and renewed contracts, we noted that the documentation provided as evidence that SCORE conducted the required checks did not consistently include clear evidence that vendors were verified in SAM.gov for suspension, debarment, and active registration status at the time of award or renewal. In several instances, the documentation provided lacked dated SAM.gov search results or other proof of verification, making it difficult to confirm the date the required eligibility checks were completed before obligating federal funds. Additionally, for multi-year or continuing contracts, certain vendors that were originally vetted at the time of initial engagement did not have documented evidence of a subsequent suspension and debarment verification. Criteria Federal procurement standards require non-Federal entities to: ▪ Verify that vendors are not suspended or debarred prior to entering into or renewing an agreement (2 CFR § 180 and § 200.214). ▪ Maintain complete procurement documentation, including approvals, selection methods, contract documents, and evidence of compliance with procurement rules, in accordance with Uniform Guidance procurement requirements (2 CFR § 200.318–327). A SAM.gov verification—via screenshot, printout, or automated system—is an acceptable form of documentation. Cause While SCORE has implemented procedures to verify new vendors through SAM.gov, the procedures did not explicitly require periodic verification for existing vendors whose contracts continue across multiple years or are renewed. Also, while personnel may be performing eligibility checks for new vendors, there is no standardized requirement or checklist to ensure that proof of the verification (such as dated screenshots or search results) is consistently saved. Effect As a result, the organization lacks sufficient documentary evidence to demonstrate that the required SAM.gov verifications were performed at the time of contract award or renewal. Although no vendors were identified as suspended or debarred, the absence of supporting documentation limits the organization’s ability to substantiate compliance with federal procurement requirements. Also, there is a risk that an existing vendor could become suspended or debarred after the initial contract award and continue to receive payments without updated verification. Recommendation We recommend that SCORE expand its existing vendor compliance procedures to include periodic verification of suspension and debarment status for multi-year or continuing service agreement vendors. We also recommend that management implement a standard procedure requiring documentation of dated SAM.gov verification for all vendors prior to contract award and renewal. These dated SAM.gov verifications should be retained as part of the vendor file.

Finding No.: 2025-012 Identification of Federal Program: Federal Agency: U.S. Department of Housing and Urban Development (HUD) AL Program: 14.267 Continuum of Care Program Federal Award No.: GU0018L9C002209, GU0026L9C002305, GU0028L9C002204, GU0037L9C002201, GU0031L9C002203 Area: Procurement and Suspension and Debarment Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.214 states: Recipients and subrecipients are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. 2 CFR 200.318(h) states: (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, proper classification of employees (see the Fair Labor Standards Act, 29 U.S.C. 201, chapter 8), past performance record, and financial and technical resources when conducting a procurement transaction. Condition: Of seven items tested, totaling $288,950 out of $1,053,179 in expenditures subject to suspension and debarment testing, five subawards (71%) lacked evidence of the required verification, as follows: Item # Federal Award No. Vendor No. Expenditures Questioned Costs 1 GU0018L9C002209 LL00000078 $ 40,015 $ 40,015 2 GU0026L9C002305 LL00000078 43,917 43,917 3 GU0028L9C002204 VN000HAPP 118,418 118,418 4 GU0037L9C002201 VN00092963 59,368 59,368 5 GU0031L9C002203 VN00200326 27,232 27,232 $288,950 $288,950 Finding No.: 2025-012, continued Cause: Management has not established formal procedures or documented guidelines requiring verification of vendor suspension/debarment status as part of the awarding process. Effect or potential effect: GHURA is in noncompliance with applicable suspension and debarment requirements. Questioned costs: $288,950 Identification as a repeat finding: Not applicable. Recommendation: Responsible management should establish and consistently enforce formal procedures requiring the retention of all subaward-related documentation, including documented verification of entity eligibility (e.g., SAM.gov checks) and applicable certifications, within the subrecipient file. Views of Responsible Officials: Management concurs with the finding. Refer to Management’s position as outlined in the Corrective Action Plan.

2025-002 PROCUREMENT (repeat comment) Type: Material weakness in internal control over compliance/noncompliance Program: ALN 93.696 Certified Community Behavioral Health Clinics Expansion Grants (CCBHC) Criteria: Per 2 CFR section 200.318, the non-Federal entity, “…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.” Condition: During testing, it was noted that the CMHSP had not followed procurement requirements for the contract entered into for project evaluation and coordination services. This is the same contract that produced a material finding in the prior year single audit. Cause/Effect: Management oversight. Questioned Cost: $150,000 – the amount paid during the fiscal year pursuant to contract in question. Recommendation: We recommend that the CMHSP review/update policies and procedures to ensure that all federal requirements for procurements are followed for future contracts entered into with federal funds. Management’s Resp: Management is in agreement with this recommendation. Also, the grantor was notified of this finding and has notified the CMHSP that there is no elevated level of risk moving forward through the remainder of the grant cycle.

#2025-001 Federal Program: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555 Compliance Requirement: I. Procurement and Suspension and Debarment Type of Finding: Significant Deficiency and Compliance Criteria: An independent estimate must be completed for every procurement action equal to or above 250,000, the federal simplified acquisition threshold in effect during fiscal year 2025. This applies even when purchasing through a cooperative or interlocal contract. The independent estimate must be developed and documented before soliciting or receiving quotes from vendors through the purchasing cooperative. The documentation should include the estimated cost, the date it was prepared, who prepared it, and the basis for the estimate (e.g ., historical data, market research). It ensures compliance with federal regulations (2 CFR § 200.318(e) and 2 CFR § 200.323) to confirm that the prices offered by the cooperative are reasonable. Even though purchasing cooperatives perform competitive procurements, the member district is responsible for the independent estimate to ensure the purchasing cooperative's pricing matches the member district's expected market value for the specific purchase. Condition: During our review of procurement transactions, we noted that the District did not prepare or document an independent cost estimate for a vendor whose expenditures exceeded the simplified acquisition threshold. Cause: The District was unaware of the requirement to prepare and document an independent estimate for procurements exceeding the simplified acquisition threshold. Effect: Failure to perform and document the required independent estimates results in noncompliance with federal requirements for procurements exceeding the simplified acquisition threshold. Additionally, without an independent estimate, the District cannot demonstrate that the amount paid was fair and reasonable, increasing the risk of paying more than market value. Questioned Costs: None reported Repeat Finding: No Recommendation: We recommend that management: 1. Update procurement policies and procedures to clearly require an independent estimate for all procurements exceeding the simplified acquisition threshold. 2. Implement internal control checkpoints, such as required approvals or system prompts, to ensure that documentation is completed and retained prior to contract award. 3. Provide training to procurement and program staff on Federal procurement standards and documentation requirements. 4. Conduct periodic reviews of procurement files to ensure ongoing compliance and strengthen internal controls. Views of Responsible Official: Management concurs with the finding. The District acknowledges that an independent estimate was not documented for the procurement transaction identified. Management is committed to strengthening procurement compliance and improving internal controls to prevent recurrence.

Finding 2025-001: Reportable finding considered a significant deficiency - Noncompliance with Internal Procurement Authorization Controls Program name: Child and Adult Care Food Program Assistance Listing: 10.558 Federal awarding agency: U.S. Department of Agriculture (USDA) Pass-through entity: Maryland State Department of Education, District of Columbia Education Office Award identification number: 012-2024/2025-3539-000 Award Years: 2024/2025 Criteria: Under 2 CFR 200.318(a), non-federal entities must establish and maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. As required under 2 CFR Subpart D (§§200.317–200.327), organizations must follow written procurement procedures that reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards in the Uniform Guidance. The Organization’s internal procurement policy includes specific thresholds for contract approvals and designates levels of review and signature authority based on the contract value. Adherence to these internal controls is essential to ensure compliance with federal procurement requirements and appropriate stewardship of federal funds. Condition: During our testing of procurement activity, we noted that procurement contracts were executed (in September/October of 2024) by an individual who did not have the delegated authority to approve or sign the agreement, as required by the Organization’s internal procurement policy. The contracts exceeded the individual’s approval threshold. The policy’s required internal approval levels were not followed prior to execution. Cause: This issue appears to have resulted from a breakdown in adherence to established internal control procedures, possibly due to a lack of training or oversight. The Organization’s procurement policy was in place and compliant with 2 CFR requirements, but it was not enforced in practice. Effect: Noncompliance with internal procurement approval controls increases the risk of unauthorized or inappropriate spending, lack of transparency, and potential ineligibility of costs charged to federal programs. While the transaction itself may ultimately be allowable, failure to follow established approval protocols constitutes a significant deficiency in internal control over compliance. Repeat finding: This is a repeat finding. See 2024-004 in prior year report. Questioned costs: None identified, as the expenditure appeared otherwise allowable. However, the control deficiency presents a risk for future noncompliance. Perspective: We selected two procurement transactions from a population of four procurement transactions from this program. The issue reflects a control failure affecting procurement activity across federally funded programs and may result in future questioned costs if not corrected. Recommendation: We recommend that the Organization follow up with the relevant parties to ensure proper reporting requirements are met on a timely basis. Management’s response and corrective action plan (unaudited): See corrective action plan

Procurement and Suspension and Debarment Federal Agency: U.S. Environmental Protection Agency Federal Program Title: Drinking Water State Revolving Fund (DWSRF) ALN: 66.468 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2521902915 September 1, 2024 - August 31, 2025 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: "Per 2 CFR §200.303(a), Texas Commission on Environmental Quality (TCEQ) must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR §200.318, the recipient or subrecipient 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. Per 2 CFR §200.214, recipients and subrecipients are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Condition: Audit procedures included a review of five procurements conducted during the fiscal year to assess whether TCEQ adhered to required procurement procedures and performed vendor eligibility verifications prior to entering into covered transactions. For one procurement, totaling $16,175, the required procurement processes were not followed, and the necessary vendor compliance checks, including verification of suspension and debarment status, were not completed before executing the transaction. Questioned costs: None. Context: See “Condition.” Cause: The procurement was initiated directly by the program area without notifying or coordinating with the Procurement and Contracts Section. Program staff proceeded with the purchase under the assumption that procurement involvement was unnecessary because the selected vendor was the sole provider of the required item. As a result, established procurement procedures and vendor compliance verification processes were not followed. Effect: Failure to follow procurement procedures and complete proper vendor compliance checks prior to entering into a covered transaction may lead to entering contracts with suspended or debarred vendors that could result in noncompliance and questioned costs. Repeat Finding: No Recommendation: TCEQ should provide targeted training to program staff on federal procurement requirements, including the necessity of coordinating all purchases through the P&C Section and completing required vendor compliance checks. Training should emphasize procedures for sole‑source or limited‑source procurements and reinforce staff responsibilities under 2 CFR procurement and internal control standards. Regular refresher sessions and documented guidance will help ensure consistent understanding and adherence to required procurement practices across all program areas. Views of responsible officials: The Financial Administration Division (FAD) will implement the audit’s recommendations. FAD will reinforce the guidance provided through continuous training, documentation, and improved internal controls.

Assistance Listing, Federal Agency, and Program Name - 93.088, U.S. Department of Health and Human Services, Advancing System Improvements for Key Issues in Women's Health 93.323, U.S. Department of Health and Human Services, Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) 93.592, U.S. Department of Health and Human Services, Family Violence Prevention and Services/Discretionary and COVID - 19 Family Violence Prevention and Services/Discretionary 93.837, U.S. Department of Health and Human Services, Cardiovascular Disease Research (Research and Development Cluster) Federal Award Identification Number and Year - 93.088 ASTWH220110 (2023 and 2024) 93.323 - 32680012K (2024) 93.592 - 90EV0516 (2021); 90EV0530 (2023); ; 90EV0544 (2024) 93.837 - U01HL146245 (2024) Pass through Entity - 93.088 N/A 93.323 - Illinois Department of Public Health 93.592 - N/A 93.837 - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2024-001 Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls 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. These internal controls should be in compliance 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 Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(a), the nonfederal entity must have and use documented 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 nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§200.317 through 200.327. The LLC has established in its internal procurement policies and procedures that a minimum of 3 quotes must be obtained for purchases made under informal, simplified acquisition procedures. Per 2 CFR 200.318(i), the nonfederal 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. Condition - Controls were not sufficient to ensure that the history of procurement decisions was documented, as required by 2 CFR 200. Additionally, controls were not sufficient to ensure checks for suspension and debarment were documented before entering into covered transactions with third parties. Questioned Costs - unknown If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported We are unable to predictably quantify, had federal procurement standards been followed, which portion of activity presented on the SEFA under these contracts would be in question. Identification of How Questioned Costs Were Computed N/A Context - 93.088 - Management was unable to provide evidence that three out of three contractors tested was checked for suspension and debarment in advance of entering into a covered transaction. 93.323 - Management was unable to provide evidence that three out of three contractors tested was checked for suspension and debarment in advance of entering into a covered transaction. 93.592 - Management was unable to provide evidence that four out of four contractors tested was checked for suspension and debarment in advance of entering into a covered transaction. 93.837 - Of the four contracts tested, management was unable to produce records sufficient to detail the history of procurement for one contract. Additionally, for that same contractor, management was unable to provide evidence that the third party was checked for suspension and debarment in advance of entering into a covered transaction. Because we were able to confirm via a check of the Excluded Parties Listing that the contractors noted above were not suspended or debarred, no questioned costs related to this noncompliance were identified. Cause and Effect - Newly revised procurement policies and procedures implemented during the last month of the fiscal period under audit were not in place during the time of the contract acquisitions noted above, and therefore a lack of internally established procurement documentation practices resulted in material noncompliance with federal procurement standards. Recommendation - We recommend that management continue to follow and formalize its procurement policies and procedures to demonstrate how the LLC will achieve compliance with federal procurement standards identified in §§200.317 through 200.327. Additionally, we recommend management retain documented evidence that its policies and procedures were followed to ensure compliance with federal procurement standards. Views of Responsible Officials and Corrective Action Plan - Management will continue to strengthen internal controls through the revised Procurement Policy, enhanced documentation requirements, and clarified approval procedures. A centralized tracking database has been implemented to document sanctions, suspension, and debarment checks, as well as other required verifications based on the nature of each purchase or service. These procedures are required prior to entering into covered transactions and are monitored through dual staff reviews. Management believes that ongoing monitoring and consistent enforcement of these procedures will ensure compliance and prevent recurrence.

Federal Grantor: Department of Agriculture, Pass-Through: Nebraska Department of Education Program: Child Nutrition Cluster, Special Education Cluster Award No. and Year: 13898414/13897314/47600262900 and 2024, 24-6406-00-19-028-0001/24-6408-00-19-028-0001/24-6411-00-19-028-0001/24-6412-00-19-028-0001/24-6418-132-28-0001P and 2024 Federal Assistance Listing Number: 10.553/10.555/10.559/10.582, 84.027/84.173 Compliance Requirement: Procurement, Suspension, and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition: In our testing of procurement, suspension, and debarment it was identified that the District’s procurement policy does not address the following items: Avoid acquisition of duplicative items (2 CFR 200.318) Disadvantaged Business Enterprise Program (2 CFR 200.321) Domestic preferences (2 CFR 200.322) Recovered materials, if subject to EPA requirements (2 CFR 200.323) Contract price/types (2 CFR 200.326) Cause: Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, and controls were not adequately designed to ensure compliance with these requirements. Effect: A lack of compliant policies increases the overall risk of non-compliance. Questioned Costs: None reported Context/Sampling: Overall procurement policy. Repeat Finding from Prior Year(s): No Recommendation: We recommend that management adopt a revised procurement policy addressing the avoidance of acquisition of duplicative items, Disadvantaged Business Enterprise Program, domestic preferences, recovered materials if subject to EPA requirements, and contract price/types. Views of Responsible Officials - There is no disagreement with the audit finding.