Findings Citing § 200.318

Federal agency: U.S. Small Business Administration Federal program name: Congressional Grants Inclusive Ventures Small Business Program Assistance listing number: 59.059 Pass-through agency: Anne Arundel County, Maryland Pass-through number: SBAHQ23I0140 Award Period: September 1,2023 through August 31, 2028 Compliance Requirement: Procurement and Suspension and Debarment Type of Findings: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Compliance: Nonfederal entities must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327. 2 CFR section 200.318 states the grant 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 sections 200.317 through 200.327. Compliance: 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. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. 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, as defined in 2 CFR section 180.995 and agency adopting regulations, 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 (GSA), (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). Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Corporation did not follow their written procurement procedures which reflect applicable State, local, and tribal laws and regulations which also conform to the applicable federal law and standards identified in the Uniform Guidance. The Corporation could not provide documentation that it ensured contractors were not suspended or debarred before executing contracts with the entities. Questioned Costs Amounts paid to the two contractors for the fiscal year ended June 30, 2025 was $175,000. Context Supporting documentation for the procurement, suspension and debarment status for two of the two contractors selected for testing was not documented. Cause The Corporation has not historically received federal funding so the procurement, suspension and debarment documentation was not deemed necessary. Effect A lack of documented procurement standards for the Corporation could increase the risk of goods and services being procured through a method which is not in accordance with applicable State, local, and tribal law as well as federal regulations including the Uniform Guidance. If the suspension and debarment status is not verified when entering into covered transactions, it is possible that a subaward could be issued to an ineligible entity. Repeat Finding No Recommendation We recommend that management follow their written procurement policies and controls to ensure it maintains documentation of procurement, suspension and debarments checks and that the documentation is available for audit. Views of Responsible Officials Management agrees with finding. See corrective action plan for additional information.

Federal Agency: U.S. Department of Transportation and U.S. Treasury Federal Program Name: Research & Development and Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 20.000 and 21.027 Federal Award Identification Number and Year: 692Ml5-20-T-00029-2025 and SLFRP4646-2025 Pass-Through Agency: Iowa State University Pass-Through Number: 692M15-20-T-00029 PASS THRU 023063C Award Period: July 1, 2024 to June 30, 2025 Type of Finding: - Significant Deficiency in Internal Control over Compliance - Other Matters Criteria or specific requirement: Per Uniform Guidance 2 CFR 200.318(i), the recipient 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. Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: Oklahoma State University Stillwater (OSU STW) and Oklahoma State University Center for Health Sciences (OSU CHS) did not go through procurement procedures prior to entering into a contract with the vendor. Questioned costs: None. Context: During our testing of the Research & Development Cluster, we identified 1 transaction from OSU STW out of 40 transactions that did not go through the proper procurement procedures. During our testing of the Coronavirus State and Local Fiscal Recovery Funds Program, we identified 1 transaction from OSU CHS out of 6 transactions that did not go through the proper procurement procedures. Cause: OSU STW and OSU CHS did not have an effective control in place to ensure that the purchases went through the procurement procedures. Effect: OSU STW and OSU CHS were not in compliance with the regulation to go through the procurement procedures prior to entering a contract. Repeat Finding: No Recommendation: We recommend that OSU STW and OSU CHS review policies and procedures for procurement to ensure that every applicable transaction is going through the proper procurement procedures. Views of responsible officials: Management agrees with the finding and has developed a plan to correct the finding.

Finding Number: 2025‐001 Repeat Finding: No Program Name/Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Agency: Department of Treasury Federal Award Number: WCG2023‐‐00008 Pass‐Through Agency: Water Infrastructure Finance Authority of Arizona Questioned Costs: N/A Type of Finding: Significant Deficiency Compliance Requirement: Procurement and Suspension and Debarment 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. Subrecipients 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 §§200.214 requires that vendors are checked to ensure they are not suspended or debarred from receiving federal funds. Condition The District did not follow Federal and State regulations governing procurement. Cause The District did not have policies and procedures in place to verify a vendor was not suspended or debarred. Effect The District was not in compliance with Federal and State regulations governing procurement. Context The sample was not intended to be, and was not, a statistically valid sample. For two vendors reviewed for suspension and debarment check requirements, the District did not maintain verification that the vendor was not suspended or debarred. Upon review of the vendors, neither were suspended or debarred. Recommendation The District should implement policies and procedures over procurement, specifically suspension and debarment, to ensure goods and services are procured through vendors who are not suspended or debarred, so that federal monies exceeding the formal procurement threshold are used appropriately. Views of Responsible Officials See Corrective Action Plan.

Finding 2025-002: Procurement - Significant Deficiency. Program name: Substance Abuse and Mental Health Services Projects of Regional and National Significance. Assistance Listing: 93.243. Federal award number: 45CBB04530. Federal award year: 7/1/2024 - 6/30/2025. Federal awarding agency: U.S. Department of Health and Human Services. Criteria - 2 CFR §200.318 requires written procurement procedures and awarding contracts only to responsible contractors, with sufficient procurement documentation. Condition - NAMI Chicago’s procurement controls were not designed or operating effectively. The procurement policy does not fully comply with Uniform Guidance. Cause - Management has not fully updated procurement policies or implemented consistent controls over vendor eligibility verification and contract authorization. Effect - There is an increased risk of noncompliance with federal procurement requirements, including contracting with ineligible vendors or entering into unauthorized agreements, which could result in questioned or disallowed costs. Questioned costs - None identified. Identification of Repeat Findings - No. Recommendation - Management should update the procurement policy to align with Uniform Guidance. Management response - See corrective action plan.

Finding 2025-001 Internal control deficiency and noncompliance over procurement and suspension and debarment. Identification of the federal program: Assistance Listing Number 93.493: • Congressional Directives • U.S. Department of Health and Human Services • Federal award identification number – CE146487 • Federal award year – 7/1/2024 – 6/30/2025 • Pass-through entity – The Board of Regents of the University of Oklahoma Health Sciences Center • Pass-through entity identifying numbers: H79FG000747 and H79FG001034 Criteria or specific requirement (including statutory, regulatory, or other citation): Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.303, Internal controls: The non-Federal entity must (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government,” issued by the Comptroller General of the United States, or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.318, General procurement standards: (a) the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity’s documented procurement procedures must conform to the procurement standards identified in 200.317 through 200.327; (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders; (c) (1) the non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.318, General procurement standards: (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.319, Competition: (a) All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and 200.320. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.320, Methods of procurement to be followed: The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award: (a) (2) Small purchases – (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity; (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate –(1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price; (2) Proposals. A procurement method in which either a fixed price or cost-reimbursement type contract is awarded. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.320, Methods of procurement to be followed: (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.324, Contract cost and price: (a) The non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold, including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but, as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Title 2, Subtitle A, Chapter II, Part 200, Subpart C 200.214, Suspension and debarment: Non-Federal entities are subject to the non-procurement debarment and suspension regulations that restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Title 2, Subtitle A, Chapter I, Part 180, Subpart C 180.300: What must I do before I enter into a covered transaction with another person at the next lower tier? When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by (a) checking SAM Exclusions; (b) Collecting a certification from that person; or (c) adding a clause or condition to the covered transaction with that person. Condition: During our testing over procurement, we observed management did not have documented procurement procedures that conformed to the procurement standards identified in 2 CFR section 200.318 to 200.327 and written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts. Management did not have internal controls in place over procurements to ensure price or rate quotations were obtained from an adequate number of qualified sources, formal procurements to ensure sealed bids or proposals were obtained through public advertising, and completion of a cost or price analysis in connection with all procurement actions exceeding the simplified acquisition threshold. Management did not maintain records for procurements to document the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, during our testing over suspension and debarment, we observed management did not retain support for internal control documentation for all vendors, evidencing that the vendors were searched for suspension and debarment upon entering into a contract supported with federal funds. Cause: Management did not have internal controls in place over the compliance requirements as stated in the criteria or specific requirement section above. Effect or potential effect: Procurements were not supported by internal controls and could potentially include unreasonable prices or rates. In addition, if a search for suspension and debarment is not conducted, the entity could contract with vendors that are suspended or debarred. Questioned costs: $1,385,165 – Assistance Listing Number 93.493 Federal award identification number – CE146487 Pass-through entity identifying numbers: H79FG000747 and H79FG001034 Questioned costs were computed as all procurements selected for testing. Questioned costs for each award are as follows: • CE146487: $60,874 • H79FG000747: $119,479 • H79FG001034: $1,204,812 Questioned costs means an amount, expended or received from a Federal award, that (1) is noncompliant or suspected noncompliant with Federal statutes, regulations, or the terms and conditions of the Federal award or (2) at the time of the audit, lacked adequate documentation to support compliance. Context: During our testing over procurements, we selected five vendors for testing with total expenditures of $1,385,165 from a population of procurements totaling $1,425,361, subject to formal procurement procedures. We observed management did not have internal controls in place to ensure the compliance requirements as stated in the criteria or specific requirement section above were performed for any of the five procurements selected for testing. For suspension and debarment, we selected five vendors for testing totaling $1,385,165. Management was unable to provide documentation that internal controls were executed for any of the vendors selected for testing. Identification as a repeat finding, if applicable: No. Recommendation: Management should create documented procurement procedures that conform to the procurement standards identified in 2 CFR section 200.318 through 200.327 and written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts. Management should develop and implement internal controls over procurements to ensure price or rate quotations are obtained from an adequate number of qualified sources, formal procurements to ensure sealed bids or proposals are obtained through public advertising, and completion of a cost or price analysis in connection with all procurement actions exceeding the simplified acquisition threshold. Management should maintain records for procurements to document the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Management should create documented suspension and debarment procedures and develop and implement internal controls to ensure vendors were searched for suspension and debarment at the time of awarding a contract supported by federal funding and retain evidence supporting such procedures. Management should review the procurements identified as questioned costs to identify if any improper payments were made to the entity. Views of responsible officials: We agree with the finding that internal controls were not sufficient to maintain compliance with federal procurement standards under Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.318 to 200.327 for a non-federal entity. However, the funds were expended for the intended purpose of the federal award. The Company is committed to implementing internal controls to ensure procurement related to federal awards follow 2 CFR section 200.318 to 200.327. The Company will update the procurement policy to ensure it complies with the requirements of 2 CFR section 200.318 through 200.327, which includes the written standards of conduct covering conflicts of interest, governing the actions of its employees who select, award, and administer procurement contracts. This policy will include procedures to ensure proper procurement for purchases to ensure sufficient price quotations are obtained from the required number of qualified sources, proper sealed bids or proposals are obtained through public advertising, an appropriate cost or price analysis is performed for procurement actions exceeding the simplified acquisition threshold, documentation is retained, and proper oversight is exercised to demonstrate compliance with 2 CFR section 200.318 through 200.327.

Federal Agency: U.S. Department of the Treasury; U.S. Department of Homeland Security Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds; Assistance to Firefighters Grant Assistance Listing Number: 21.027; 97.044 Federal Award Identification Number and Year: SLFRP0136-2021, EMW-2021-FG-00409 Pass-through Agency: State of Rhode Island's Pandemic Recovery Office (CSLFRF) Award Period: 3/3/21- 12/31/26, 2/28/23 - 2/27/25 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Repeat Finding: No Criteria or specific requirement The Town must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Condition The Town's purchasing policies do not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs None Context Although the Town's purchasing policies do not include all elements as outlined in 2CFR sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 7 of 7 procurement transactions tested. Cause The Town's has not updated its purchasing policy to fully incorporate all procurement requirements under Uniform Guidance. Effect The Town is at risk for noncompliance with Federal grants as it relates to procurement. Recommendation We recommend that the Town updates its procurement policy to include all elements identified in 2 CFR sections 200.303 and 200.318 through 200.326. Views of Responsible Officials Management agrees with this finding.

U.S. Department of Treasury Pass-through Entity: Mecklenburg County, North Carolina Program Name: Coronavirus State and Local Fiscal Recovery Funds Federal Assistance Listing Number: 21.027 Significant Deficiency and Nonmaterial Noncompliance – Procurement Finding 2025-006 – Repeat Finding Criteria: Per Sections 200.318 – 200.327 of the Uniform Grant Guidance, a non-federal entity must have and use documented procurement procedures, consistent with Uniform Grant Guidance Title 2 CFR Section 200.318 for the acquisition of property or services required under a Federal award or subaward. Furthermore, a contract award must not be made to a suspended or debarred party listed on the System for Award Management. Condition: There was one (1) contract out of two (2) contracts tested where Roof Above did not retain documentation demonstrating that the bid was publicly advertised as required under Uniform Grant Guidance procurement standards. Additionally, Roof Above did not perform or retain documentation evidencing verification that the vendor was not suspended or debarred on the System for Award Management (SAM.gov) prior to procuring services. Questioned Costs: None of the nonmaterial noncompliance items resulted in questioned costs. Effect: By not having sufficient documentation, the Organization may not be able to evidence compliance with Uniform Grant Guidance and could have improperly contracted with a vendor. Cause: The Organization did not have formalized procedures in place to ensure procurement requirements under Uniform Grant Guidance were consistently documented and reviewed, including public advertisement of bids and verification of vendor suspension or debarment status, prior to entering into contracts. Recommendation: The Organization should consider implementing a procurement policy in line with Uniform Grant Guidance and ensure proper documentation of the procurement process for all vendors utilized with federal funding. Views of Management: Management agrees with the finding and is implementing procedures to correct this which are further discussed in the Corrective Action Plan. See Corrective Action Plan for more information.

Finding 2025-001 – Material Weakness AL No: 20.205 Highway Planning and Construction Federal Grantor: U.S. Department of Transportation, Federal Highway Administration (FHWA) Passed-through: California Department of Transportation (Caltrans) and the Sacramento Area Council of Governments (SACOG) Passed-through Grantor’s No’s.: SPIL-6085 (091) for Caltrans and #240023 for SACOG. Compliance Requirement: Procurement, Suspension and Debarment Criteria: 2 CFR Part 200, Subpart E (Uniform Guidance) Section 200.318(a) states that the “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 Sections 200.317 through 200.327.” The contract should have conformed to the following sections in the Caltrans Local Assistance Procedures Manual (LAPM): - Section 10.1 provides requirements for federally funded architectural and engineering (A&E) contracts. - Section 10.3 provides requirements for non-A&E contracts. - Section 10.1.9 states that the local public agency (LPA) must “obtain Caltrans approval on the Exhibit 12- F: Cost Effectiveness/Public Interest Finding/A&E Noncompetitive and retain all documents in the project files” for procurements by noncompetitive proposals. - Section 9.7.2 states that the LPA must have a Disadvantaged Business Enterprise (DBE) goal set, and “must have an Exhibit 9-D: DBE Contract Goal Methodology submitted to the” District Local Assistance Engineer (DLAE). “LPAs may not advertise the contract before receiving DLAE feedback on the DBE goal.” Condition: Caltrans notified the Authority that two Next-Generation Facility Project (the Project) consulting contracts were procured in compliance the Federal Transit Administration’s (FTA’s) procurement guidelines but did not conform with the State of California LAPM. Caltrans indicated that the AECOM A&E consultant contract procurement did not comply with Sections 10.01 and 10.1.9 of the LAPM, including not including a Public Interest Finding for the sole source procurement of the agreement, and the LeFlore Group, LLC non-A&E consultant contract procurement did not comply with Section 10.3 of the LAPM. In addition, a Disadvantaged Business Enterprise goal was not requested nor completed as part of the advertisement for the project, which was required under Section 9.7.2 of the Caltrans LAPM. Effect: The Authority was not in compliance with the Caltrans LAPM and as a result, the Authority was required to halt work and repay Caltrans and SACOG for funds already reimbursed to the Project of $300,000 under AL 20.205. Cause: Caltrans and SACOG are both pass-through agencies for this grant, with the Authority being the final subrecipient. SACOG was not aware that the procurement requirements under this grant follow U.S. Department of Transportation, Federal Highway Administration requirements that differ from U.S. Department of Transportation, Federal Transit Administration requirements, which are administered by a different Caltrans department. As a result, the additional requirements in the LAPM were not communicated to the Authority and the Authority was not aware of the requirements and failed to comply with the LAPM. Context: The Authority submitted the procurement to the Caltrans Federal Transit Administration Programs Procurement Oversight Branch for approval prior to contracting with the consultants and the procurement was approved. However, the grant was provided through the Federal Highway Administration (FHWA) and Caltrans has a different oversight Branch for FHWA funded projects, which was not made clear to the Authority by either passthrough agency. AL 20.205 was originally reported on the SEFA and was selected for testing a major program as it was a high-risk Type B program under which the Authority incurred $300,000 of grant expenses and received the grant proceeds prior to June 30, 2025. Caltrans issued a sanction letter on December 9, 2025, which required the grant funds to be returned to Caltrans. As a result, the Authority removed the expenses from the SEFA, but the program is reported as a major program to report the procurement finding on the schedule of findings and questioned costs. - Questioned Costs: $300,000 Recommendation: We recommend the Authority add additional language to its Procurement Policy documenting the requirement to follow Section 10 of the LAPM and the criteria under which it applies when grants are received from the FHWA. Management’s Response: Management’s response is included in the attached Corrective Action Plan. Report on Internal Control over Compliance See finding 2025-001 above, which is also considered to be an internal control over compliance finding in the Major Federal Awards Program Audit.

U.S. Department of Treasury Passed through the Colorado Department of Human Services Federal Financial Assistance Listing 21.027 Award 24 IBEH 18932 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance and Material Non-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. This includes the requirements of a procurement policy and the processes that are to be followed when entering into contracts subject to procurement, suspension, and debarment. Condition: In our testing of procurement, suspension and debarment it was identified that the Organization did not have a written policy on procurement that satisfied the requirements of 2 CFR sections 200.318 through 200.326 implemented at the beginning of the fiscal year. In addition, there was no formal review of vendors to ensure they are not suspended or debarred prior to entering into transactions. Cause: Identification of the specific requirements under the Uniform Guidance and applicable CFR sections was made during the prior year audit, which occurred during fiscal year 2025. This resulted in a period of time in the fiscal year in which transactions were entered into without a compliant policy. Effect: Due to the timing of the implementation of a compliant policy, a material contract was entered into without following procurement, suspension, and debarment processes as required by Uniform Guidance. Questioned Costs: $292,562 Context/Sampling: One contract was identified as subject to procurement, suspension, and debarment requirements. That one contract was selected for testing. Repeat Finding from Prior Year: Yes, prior year findings 2024-03 and 2024-04. Recommendation: We recommend that management continuously review the now implemented policy to ensure it is in compliance with Uniform Guidance and being implemented throughout the Organization for all levels of transactions.

Section III - Findings and Questioned Costs - Major Federal Award Program Audit Finding Reference Number: 2025-001 Title and Assistance Listing Number of Federal Program: Economic Development Initiative, Community_x0004_ Project Funding, and Miscellaneous Grants - 14.251 Type of Finding: Federal Award Finding Finding Resolution Status: In Process Information on Universe Population Size: N/A Sample Size Information: N/A Identification of Repeat Finding and Finding Reference Number: Not a repeat finding 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. Statement of Condition: United Playaz, Inc. and Subsidiary (the "Organization") does not have a documented procurement policy that complies with the procurement standards in 2 CFR 200.317–200.327. The Organization has purchasing policies, but no written procedures addressing required elements such as procurement methods, competition, conflicts of interest, domestic preferences, price/cost analysis, or contractor oversight. Cause: The absence of a compliant procurement policy appears to stem from insufficient familiarity with the detailed procurement requirements in the Uniform Guidance, as this was their first award and audit under these standards. Management utilized other local government procurement policies to perform their procurement procedures. Effect or Potential Effect: While no procurement errors were identified during the audit and no questioned costs resulted from this condition, the lack of required written procedures increases the risk of: -Noncompliance with Federal procurement standards -Inadequate competition and pricing documentation -Increased susceptibility to conflict of interest risks -Potential future questioned costs or disallowed expenditures Failure to maintain documented procedures also impairs the organization’s ability to demonstrate compliance to Federal agencies and pass through entities. Auditor Non-Compliance Code: S - Internal control deficiencies Questioned Costs: $- Reportable Views of Responsible Officials: While United Playaz did not have their own policy compliant with federal standards, the organization has historically used procurement guidelines as required by the San Francisco Mayor’s Office of Housing and Community Development (MOHCD) which complies to the Federal standards and guidelines administered and approved by HUD. In addition, the general contractor procurement process was completed prior to the initiation and receipt of the HUD award. _x0004__x0004_Management acknowledges that, while procurement activities were performed using established external guidelines, the Organization did not have a formally adopted written procurement policy that fully complies with the requirements of 2 CFR 200.317–200.327 at the time of the audit. Management has since identified this gap and is in the process of developing a compliant written procurement policy. Context: For procurement processes, the Organization has historically utilized procurement guidelines required by the San Francisco Mayor’s Office of Housing and Community Development and other applicable local government procurement frameworks. In addition, the general contractor procurement process was completed prior to the initiation and receipt of the federal award. Recommendations: 1. Develop and formally adopt a written procurement policy that complies with 2 CFR 200.317–200.327 addressing at minimum: -Procurement methods and applicable dollar thresholds -Full and open competition requirements -Standards of conduct and conflicts of interest -Price or cost analysis (200.324) -Domestic preference (200.322) -Use of small/minority owned businesses (200.321) -Required contract provisions (200.327) 2. Train staff involved in procurement to ensure consistent understanding and implementation. 3. Periodically review and update the policy to remain compliant as Federal requirements evolve Auditors’ Summary of the Auditee’s Comments on the Findings and Recommendations: Response Indicator: Agree Completion Date: 6/30/2026 Response: The Organization is in the process of developing, and will formally adopt and implement, a written procurement policy that complies with the requirements of 2 CFR 200.317–200.327. The policy will address, at a minimum, procurement methods, competition requirements, standards of conduct and conflicts of interest, price or cost analysis, domestic preference requirements, and required contract provisions. In addition, management will provide formal training to personnel involved in procurement to ensure consistent application of the policy and ongoing compliance with Federal procurement standards.

Finding Reference: 2025-003 – I. Procurement, Suspension and Debarment Federal Program Information Federal Agencies: Department of Health and Human Services Department of Justice Awards: Assistance Listing 93.078 – Strengthening Emergency Care Delivery in the United States Healthcare System through Health Information and Promotion Assistance Listing 16.753 – Congressionally Recommended Awards Award Periods: September 30, 2023 – September 29, 2025 July 1, 2024 – September 30, 2026 Description: Incomplete Federal Requirements within Procurement Policies Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Part 200.320 Methods of procurement to be followed states the following: “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” regarding the methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Condition As part of our testing over the operating effectiveness of internal controls over the Procurement, Suspension and Debarment assertion for our major programs, we noted that the Corporation did not have a procurement policy that conforms to all applicable standards contained in the Uniform Guidance, when purchasing goods or services with the federal funds. Cause The Corporation did not comply and maintain a procurement policy that conforms to the provisions required by the Uniform Guidance upon receiving such federal funds related to their federal programs. Effect or potential effect Purchasing of goods and/or servicing with the major federal programs may not be in compliance with the Uniform Guidance. Questioned costs None. Identification of a repeat finding This is a repeat finding of Finding 2024-006. Context Management has not established a procurement policy in line with the applicable standards contained in the Uniform Guidance based on review of the existing policy and discussions with management, however, no other instances of noncompliance with procurement standards identified in 2 CFR part 200 were noted as the amount of purchases exceeding the micro-purchase threshold was not direct and material to these programs and therefore no further testing over procurement was performed. Recommendation The Corporation should update its procurement policy to include the provisions required by the Uniform Guidance for purchasing goods and/or services with federal funds. View of responsible officials There is no disagreement with the audit finding.

Federal Program: Maternal, Infant and Early Childhood Home Visiting Grant (including COVID-19) - ALN 93.870; Federal Award # 24853633; passed through Texas Department of Family and Protective Services; passed through Texas Health and Human Services Commission. State Programs: Texas Home Visiting (THV) Program Grant - Award # 24853633; direct funding from Texas Department of Family and Protective Services. Texas Home Visiting (THV) Program Grant - Award # 24853633; direct funding from Texas Health and Human Services Commission. Criteria: Uniform Guidance (2 CFR 200.318 - 200.327) and TxGMS (General Procurement Standards) requires non-federal entities to ensure procurements are conducted using appropriate methods based on dollar thresholds and retain supporting documentation, including an adequate number of quotations from qualified sources for simplified acquisitions (formerly small purchases). Condition /Context: During testing of procurement transactions, two instances were identified in which management incorrectly classified procurements as sole source without adequate justification in accordance with Uniform Guidance or TxGMS, as applicable. Additionally, in these two instances tested, management did not retain sufficient documentation of quotes to support that procurements were conducted in compliance with simplified acquisition requirements (formerly small purchase). Questioned Costs: None Effect: Noncompliance with procurement requirements of Uniform Guidance and TxGMS, which increases the risk that purchases were not conducted in a manner providing full and open competition and may result in disallowed costs or increased scrutiny from grantor agencies. Cause: The condition resulted from inadequate procurement controls, including a lack of formalized review procedures for determining and documenting appropriate procurement methods. This resulted in United Way ATX not retaining the required supporting documentation for competitive procurements. Recommendations: United Way ATX should strengthen procurement controls by performing supervisory review of procurement classification and supporting documentation prior to approval and payment. In addition, management should implement standardized documentation requirements, including identification of procurement methods used and retention of quotes or bids for applicable procurements.

NONCOMPLIANCE WITH PROCUREMENT AND SUSPENSION AND DEBARMENT REQUIREMENTS, CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS, ASSISTANCE LISTING No. 21.027, Direct Allocation, AM-23-0256, AM-23-0255, YEAR ENDED JUNE 30, 2025 Criteria: Per 2 CFR 200.214, non-Federal entities are subject to the non-procurement, debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The city did not comply with the procurement standards outlined in 2 CFR §200.318-§200.327, which require competitive procurement processes and verification that contractors are not suspended or debarred. Specifically, the city did not verify the eligibility of program recipients/participants/contractors through the System for Award Management (SAM) or equivalent documentation in order to verify that they were not suspended, debarred, or otherwise excluded from participation in the program. Cause: The city does not have procurement policies and procedures in place that allow it to comply with procurement standards outlined in the Uniform Guidance. Effect: Non-compliance with program terms and conditions. Questioned costs: None. Recommendation: Management should develop procedures that will provide reasonable assurance that procurement of goods and services are made in compliance with applicable federal regulations and other procurement requirements specific to a federal award or subaward, and that no subaward, contract, or agreement for purchase of goods or services is made with any suspended or debarred party. Views of responsible officials and planned corrective actions: The government agrees with this finding and will adhere to the attached corrective action plan.

2025-001 Improve Procurement Process Federal Agency: U.S. Department of Education Cluster/Program: Child Nutrition Cluster AL Number(s): 10.553/10.555 Award Year: 2025 Federal Agency: U.S. Department of Education Cluster/Program: Special Education Cluster AL Number(s): 84.027/84.173 Award Year: 2025 Compliance Requirement: Procurement Type of Finding - Compliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement Uniform Guidance (2 CFR § 200.318–200.320) requires recipients of federal funds to follow their own documented procurement procedures, which must conform to applicable federal and state laws and promote full and open competition. For large purchases, Uniform Guidance and Massachusetts General Law (MGL) require obtaining competitive proposal or sealed bids. Additionally, proper contract documentation must be maintained for vendor relationships. Condition and Context The primary vendor tested for procurement under the Child Nutrition Cluster program did not have a signed contract or proof of the competitive procurement process for fiscal year 2025. Further, the Special Education Cluster did not have quotes for vendors tested or recent sole source letters on file. Effect or Potential Effect Noncompliance with policies and procedures regarding required procurement practices with vendors increases the risk of noncompliance with federal procurement requirements, lack of competition, and unallowable costs. Questioned Costs: None. Cause The District did not implement adequate controls to ensure compliance with procurement policies for obtaining sufficient quotes or competitive bids and did not formalize vendor relationships with contracts as required. Recommendation The District should strengthen its procurement controls by ensuring that the Uniform Guidance and MGL procurement practices are followed. Views of Responsible Official and Planned Corrective Action Management’s views and Corrective Action Plan are included at the end of this report.

Material Weakness in Internal Control over Compliance and Material Noncompliance - Child Nutrition Cluster Criteria: Federal regulations require non-federal entities to follow specific procurement standards when making purchases with federal award funds: • 2 CFR 200.320 requires the use of specific procurement methods (micro-purchase, small purchase, sealed bids, competitive proposals, etc.) based on the value of the transaction. • 2 CFR 200.318 requires the District to maintain oversight that ensures contractors perform in accordance with terms, conditions, and specifications. • 2 CFR 200.319 requires full and open competition and prohibits practices that restrict competition. • 2 CFR 200.324 requires cost or price analysis for certain procurements. • 2 CFR 200.213 requires verification that contractors are not suspended or debarred Condition: During testing of procurement transactions charged to the Child Nutrition Cluster, we noted that the District did not consistently follow the federal procurement standards required by 2 CFR 200.318-327. Specifically: The District did not obtain the required number of price or rate quotations for purchases exceeding the micro-purchase threshold. • For procurements that exceeded the simplified acquisition threshold, the District did not maintain documentation supporting full and open competition. • In several cases, the District was unable to provide evidence that vendors were verified against the SAM.gov exclusion list prior to contract award. • Procurement files did not contain required elements such as cost/price analysis, written procurement method selection, or justification for sole-source procurements. The transactions identified totaled approximately $50,000, which represents a material portion of federal expenditures tested under this major program. Cause: The District did not employ adequate internal controls to ensure that all federally funded procurements consistently followed the federal procurement standards. Staff turnover and insufficient training regarding federal procurement requirements also contributed to the deficiencies. Recommendation: We recommend that the School District design and follow internal controls to ensure proper procurement procedures are followed to comply with Uniform Guidance standards. Effect: Failure to follow federal procurement requirements increases the risk of: • Noncompliance with the Uniform Guidance, • Potential favoritism or lack of competition, • Unallowable costs being charged to federal programs, and • Federal funds being used inefficiently or in a manner inconsistent with federal regulations. The nature and extent of the exceptions identified represent a material weakness in internal control and material noncompliance with procurement requirements. Views of Responsible Official and Planned Corrective Action: See corrective action plan included in this report package.

2025-005 – Procurement Federal program information: Funding agency: U.S. Department of Health and Human Services Title: All major programs Assistance listing numbers: 93.696, 93.912 Award year: 7/1/2024 – 6/30/2025 Criteria: According to 2 CFR Part 200.318 through 200.327, non-federal entities 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. SFRC’s P&P Manual requires two written quotes for purchases between $10,000 and $250,000. Purchases over $250,000 require advertisement in the local newspaper, bid opening/evaluation, and the Board of Directors shall approve purchases in excess of $250,000 prior to contract signing. Condition: For one vendor paid in excess of $10,000 during fiscal year 2025, no written quotes were obtained for the services. There was also no purchase order approved with this vendor and there is no evidence that the Board of Directors approved the purchase. The contract signed with this vendor exceeded $250,000, and there is also no evidence that the Board of Directors approved this contract. One additional vendor was also paid in excess of $10,000 during fiscal year 2025, and there were no written quotes were obtained for the goods purchased. Context: One of ten vendors tested under ALN 93.696 and two of ten vendors tested under ALN 93.912. Questioned Costs: None Cause: SFRC has not implemented the requirements of its P&P Manual over procurement. Effect: SFRC is not in compliance with its P&P Manual and SFRC could be paying more for goods and services than if bids/quotes had been obtained. Auditor’s Recommendation: SFRC should enforce internal control procedures to ensure that all purchases are made in a manner consistent with its P&P Manual. Management’s Response: Management reviewed existing accounting staffing structure, revised position descriptions, and have advertised to fill two of three open positions; Accounts Payable Specialist and Controller. Management feels with these revised position descriptions, more focus on accounting operations, procedures, and property and equipment management.

NONCOMPLIANCE WITH PROCUREMENT AND SUSPENSION AND DEBARMENT REQUIREMENTS, CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS, ASSISTANCE LISTING No. 21.027, Direct Allocation, MT-ARPA-CG-23-613, RRG-22-1864A, AMC-22-0137, YEAR ENDED JUNE 30, 2025 Criteria: Per 2 CFR 200.214, non-Federal entities are subject to the non-procurement, debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The city did not comply with the procurement standards outlined in 2 CFR §200.318-§200.327, which require competitive procurement processes and verification that contractors are not suspended or debarred. Specifically, the city did not verify the eligibility of program recipients/participants/contractors through the System for Award Management (SAM) or equivalent documentation in order to verify that they were not suspended, debarred, or otherwise excluded from participation in the program. Cause: The city does not have procurement policies and procedures in place that allow it to comply with procurement standards outlined in the Uniform Guidance. Effect: Non-compliance with program terms and conditions. Questioned costs: None. Recommendation: Management should develop procedures that will provide reasonable assurance that procurement of goods and services are made in compliance with applicable federal regulations and other procurement requirements specific to a federal award or subaward, and that no subaward, contract, or agreement for purchase of goods or services is made with any suspended or debarred party. Views of responsible officials and planned corrective actions: The government agrees with this finding and will adhere to the attached corrective action plan.

Coronavirus State and Local Fiscal Recovery Funds Criteria: Under 2 CFR 200.214, recipients and subrecipients are subject to procurement suspension and debarment requirements, which prohibit entering into covered transactions with parties that are suspended, debarred, or otherwise excluded from participation in federal programs. These requirements apply to contracts and subawards funded with federal financial assistance. In addition, 200.318–200.327 requires non federal entities to follow procurement standards applicable to federal awards, which include maintaining adequate oversight and compliance with applicable federal requirements, including suspension and debarment provisions. Condition: During our review of procurement transactions charged to federal awards, we noted that the Town did not document verification that vendors used for information technology and phone system upgrades and for the purchase of tasers and body worn cameras were not suspended or debarred at the time the contracts or purchase orders were executed. Specifically, the Town did not perform or retain evidence of a search of the System for Award Management (SAM.gov) or obtain vendor certifications demonstrating compliance with federal suspension and debarment requirements for these procurements. we did not identify any vendors that were suspended or debarred at the time of procurement. We did not identify any vendors that were suspended or debarred at the time of procurement. Universe/ Population: Four contracts totaling $7,347,577 were subjected to compliance testing. For two of the four contracts totaling $90,955, the Town did not perform or retain evidence of a search SAM.gov or obtain vendor certifications demonstrating compliance with federal suspension and debarment requirements. Cause: The Town did not have written procurement procedures or internal controls that required suspension and debarment verification to be performed and documented prior to awarding contracts or issuing purchase orders funded with federal awards. As a result, procurement staff relied on informal practices that did not include consistent SAM.gov verification. Questioned Costs: No questioned costs were identified. Effect: Without performing and documenting suspension and debarment checks, the Entity increases the risk of awarding contracts to vendors that are ineligible to participate in federally funded transactions. This noncompliance exposes the Town to potential cost disallowance, increased federal oversight, and audit findings related to procurement and internal controls. Further, questioned costs could arise if future review determines that payments were made to ineligible vendors. Recommendation: We recommend that the Town: 1. Update its written procurement policies and procedures to require verification of vendor eligibility through SAM.gov prior to awarding any contract or issuing any purchase order funded with federal awards. 2. Require procurement staff to retain documentation of the suspension and debarment verification (e.g., dated SAM.gov search results or vendor certifications). 3. Provide training to relevant personnel on federal procurement requirements, including suspension and debarment compliance under 2 CFR Part 200. 4. Require that all contracts pertaining to federally funded transactions include language that addresses termination for cause as well as other requirements stipulated in 2 CFR Part 200. View of Responsible Official: Management concurs with the finding.

Coronavirus State and Local Fiscal Recovery Funds Criteria: Under 2 CFR 200.320(a), recipients and subrecipients may use informal procurement methods for small purchases when the value of the procurement does not exceed the Simplified Acquisition Threshold. However, small purchase procedures require the solicitation of price or rate quotations from an adequate number of qualified sources and documentation supporting the procurement decision. In addition, 2 CFR 200.318(a) requires recipients and subrecipients to maintain and use documented procurement procedures that conform to federal procurement standards and applicable state and local laws and regulations. Condition: During our review of procurement transactions charged to federal awards, we noted that the Town did not follow required small purchase (informal procurement) procedures for certain purchases. Specifically, for selected procurement transactions with values above the micro purchase threshold but below the Simplified Acquisition Threshold, the Town did not solicit price or rate quotations from an adequate number of qualified sources and did not retain documentation to support price reasonableness, as required by federal procurement standards. Universe/Population: Four contracts totaling $7,347,577 were subjected to compliance testing. For two of the four contracts totaling $90,955 that were below the Simplified Acquisition threshold were subjected to compliance testing. The Town did not solicit price or rate quotations from an adequate number of qualified sources for one contract and did not retain documentation to support price reasonableness, as required by federal procurement standards, for the other contract. Cause: The Entity did not have written procurement procedures or internal controls as required by 2 CFR 200.318(a). As a result, inconsistent application of small purchase requirements, including the failure to obtain and document required price or rate quotations and support for price reasonableness, occurred. Questioned Costs: No questioned costs were identified. Effect: Failure to follow small purchase procedures increases the risk that procurements are not conducted in a manner that ensures full and open competition and cost reasonableness. This noncompliance exposes the Town to potential questioned costs, cost disallowance, and increased federal or pass through oversight. Recommendation:. We recommend that the Town: 1. Update its written procurement policies and procedures to clearly define small purchase requirements, including quotation thresholds and documentation standards. 2. Require procurement staff to solicit and retain documentation of price or rate quotations from an adequate number of qualified sources for all small purchases. 3. Provide training to relevant personnel on federal procurement requirements under 2 CFR Part 200, including informal procurement methods. 4. Implement supervisory review of procurement files to ensure compliance prior to payment. View of Responsible Official: Management concurs with the finding.

Federal agency: Department of Housing and Urban Development Federal program title: Continuum of Care Program FALN Number: 14.267 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: December 1, 2024 – November 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance and Immaterial Noncompliance Criteria or specific requirement: 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6 outlines that the non-Federal entity must verify that the agency in which it is entering into a contract is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The Organization did not verify that a vendor utilized was not suspended, debarred, or otherwise excluded prior to entering into a transaction. Questioned costs: None Context: This condition impacted one (1) of one (1) transaction selected for testing. During the audit, the vendor was checked via SAM.gov and determined to not be included as suspend or debarred. Cause: Oversight. Effect: The Organization could potentially enter into a transaction with an entity that has been suspended or debarred. Repeat Finding: No Recommendation: We recommend that the Organization retain documentation that SAM.gov was used to verify that vendors are not suspended, debarred, or otherwise excluded from participating in the transaction prior to contract. To the extent practicable, the Organization can engage with a third party that will verify any new and existing vendors have not been suspended or debarred on a monthly basis. Views of responsible officials: There is no disagreement with the audit finding.

Finding No. 2025-066 Federal Awarding Agency: USDOT Impact: Significant Deficiency, Noncompliance AL Number and Title: 20.205 HPC Federal Award Number: 0A41(034), 0902(042), 0A31(035), 0772(001) Applicable Compliance Requirement: Special Tests and Provisions Condition: Contractor certified payrolls for four of 11 construction projects tested were not submitted during FY 25. Context: All laborers and mechanics employed by contractors or subcontractors that perform work on construction projects in excess of $2,000 financed by federal funds must be paid wages not less than the prevailing wage rates established by the Department of Labor and Workforce Development for a project’s locality. To ensure compliance with federal regulations, required provisions for federal-aid construction contracts are included in the contractors’ contract. The provision outlines the frequency and method for submission of certified payrolls to the contracting agency and requires contractors and subcontractors to submit a certified copy of payrolls for each week of contract work. Contractors and subcontractors submit payroll submissions electronically to DOTPF using AASHTOWare. Cause: DOTPF lacked adequate procedures for project staff to oversee contractors’ and subcontractors’ submission of certified payrolls to ensure federal requirements were met. According to DOTPF programming staff, AASHTOWare lacked the ability to automatically send notifications to contractors for missing certified payrolls. Although training was provided to project staff to help ensure certified payrolls were appropriately reviewed, approved, or rejected; due to competing priorities, project staff did not regularly generate payroll status reports and follow up on missing certified payrolls. Criteria: Title 29 CFR 3.4 requires that each certified payroll be delivered by the contractor or subcontractor within 7 days after the regular payment date of the payroll period. Title 2 CFR 200.318(b) requires that recipients and subrecipients maintain oversight to ensure contractors perform in accordance with the terms, conditions, and specifications of their contracts. Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Effect: Federal agencies may suspend future payments, advances, or guarantee of future funds if a state does not comply with prevailing wage rate requirements. Questioned Costs: None Recommendation: DOTPF’s Division of Statewide Design and Engineering Services director should implement procedures and continue to provide training to ensure project staff perform timely review of contractors’ and subcontractors’ payroll submission to comply with federal requirements. Views of Responsible Officials: Management agrees with this finding.

SIGNIFICANT DEFICIENCY; CRITERIA: 2 CFR §200.318(a) requires non‑Federal entities to maintain and follow written procurement procedures that are consistent with Federal laws, the Uniform Guidance, and applicable state laws. State procurement rules also require local governments to follow competitive purchasing and contracting procedures when expending public funds.; CONDITION: The Town’s written procurement policies have not been updated to reflect current Federal procurement standards under 2 CFR §§200.317–200.327 or applicable state procurement requirements. ; EFFECT: Because the Town’s procurement policies are not current with Federal and state requirements, the Town risks noncompliance with Federal procurement standards which increases the likelihood of questioned costs for federally funded purchases. Noncurrent policies could allow insufficient competition, incomplete documentation, or use of unallowable contract types. FEMA or other Federal agencies could determine costs to be ineligible, resulting in reimbursement reductions or the need for the Town to repay Federal funds.; CAUSE: The Town had not conducted a recent review of its procurement policies and procedures and was unaware of necessary updates. Limited staffing in the finance and administrative functions contributed to the delay in updating the written policies.; RECOMMENDATION: The Town should update its written procurement policies to fully incorporate the current Federal procurement standards under 2 CFR §200.317–§200.327 and applicable state laws. The Town should provide staff training on the revised procurement procedures and establish a periodic review schedule to ensure ongoing compliance with Federal and state requirements.; VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Town of Spruce Pine agrees with this finding. Procurement policies and procedures will be updated to be compliant with federal and state laws. Staff will be trained on new procedures, and the policy will be reviewed on an annual basis.

2025-002 Procurement Policy Condition: The Organization has not adopted a written procurement policy. Criteria: Per Code of Federal Regulations 2 CFR 200.318 ("2CFR 200.318"), the Organization must maintain and use documented procedures for procurement transactions under a Federal award or subaward. Cause: The Organization has not yet created a standalone procurement policy in accordance with 2 CFR 200.318. Effect: The Organization does not have documented procurement procedures, which could cause procurement requirements outlined in 2 CFR 200.318 to not be followed. Recommendation: RBT recommends that the Organization formally adopt a written procurement policy that complies with procurement requirements in 2 CFR 200.318. Management's Response: See corrective action plan.

2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. § 200. 2 C.F.R. § 200.318(a) requires that the recipient or subrecipient must maintain and use documented procedures for procurement transactions under the 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. 2 C.F.R. § 200.318(i) requires that 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 C.F.R § 200.320 provides three types of procurement methods: 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. 2 C.F.R. § 200.320(a)(2) provides the requirements for simplified acquisitions. 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. New Philadelphia City School District Federal Purchasing Procedures documents small purchases are those from $10,001 to $25,000. The policy stipulates that quotes for small purchases must be obtained from at least two vendors. Quotes may be obtained in writing, verbally, or from a website. Documentation of all quotes must be maintained. While price must be a consideration, other criteria such as quality, availability, service and expertise must also be considered. The rational for the recommended vendor must be documented on the Rubric. The School District did not have the proper internal controls in place to maintain supporting documentation for the procurement history for one of the three selected vendors. During fiscal year 2025 the School District made one procurement falling within the simplified acquisition dollar threshold (formerly referred to as a small purchase) which was for the renewal of a contract for individualized education instruction (IEP) software. However, documentation was not available to support the procurement process for this fiscal year 2025 purchase. Failing to have appropriate controls in place may result in the School District not entering procurement transactions with the most appropriate vendor. The School District should review their policies and procedures and take steps necessary to ensure that procurement procedures are properly followed. The School District should also ensure they comply with the applicable Uniform Guidance requirements, ensuring open competition through procurement.

Finding Reference Number: 2025-002 Reportable finding considered a significant deficiency - Inadequate Controls over Procurement documentation retention Program name and CFDA: Supportive Services for Veteran Families (SSVF) 64.033 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) 21.027 Federal award identification number: SSVF – 23-CA-437 CSLFRF – UNKNOWN Federal award year: SSVF – 10/1/2022-9/30/2025 CSLFRF – 8/1/2024-6/30/2025 Federal awarding agency: SSVF – Department of Veterans Affairs CSLFRF – Department of the Treasury Name of pass-through entity: SSVF – None CSLFRF – Alameda County Criteria Federal procurement requirements under 2 CFR 200.318–200.320 outline expectations for maintaining documentation to show procurement activity aligns with written procedures and promotes full and open competition. Additionally, 2 CFR 180.300, incorporated by 2 CFR 200.214, requires organizations to verify that vendors are not suspended or debarred before entering into an agreement. This verification can be completed by checking SAM.gov or obtaining a vendor certification. Statement of Condition Organization has written procurement procedures and consistently performs cost analyses for rental assistance-related procurements. Audit testing also confirmed that none of the vendors involved were suspended or debarred. However, the Organization was not able to provide documentation showing that suspension/debarment checks were performed before onboarding these vendors. While the procedures appear to be followed in practice, the documentation step was not retained. Cause It appears that documentation was not transitioned between staff members when the individual who initially performed these procedures left the organization. Effect or Potential Effect Without documentation of these checks, the Organization cannot fully demonstrate compliance with federal procurement and suspension/debarment requirements. Although no ineligible vendors were used, the missing documentation increases the risk that future procurements could be questioned or require additional follow-up. Questioned Costs None Recommendation We recommend the Organization take a few steps to strengthen this process going forward:  Incorporate a simple, consistent step for keeping documentation of SAM.gov checks or vendor certifications in each procurement file.  Communicate this requirement to the staff performing vendor onboarding so expectations are clear.  Periodically review procurement files to make sure documentation is being consistently retained. These adjustments should help ensure the strong practices already in place are fully supported by required documentation. Reportable Views of Responsible Officials See corrective action plan.

Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Repeat Finding: No Criteria or Specific Requirement Lincoln Public Schools must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Condition Lincoln Public Schools purchasing policy does not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs None Context Although Lincoln Public Schools purchasing policies do not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 1 of 1 procurement transactions tested. Cause Management was not aware of the procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Effect Lincoln Public Schools is at risk for noncompliance with Federal grants as it relates to procurement. Repeat Finding No Recommendation We recommend that Lincoln Public Schools update its procurement policies to include all elements identified in 2 CFR sections 200.303 and 200.318 through 200.326. Views of Responsible Officials and Planned Corrective Action Management is working with our current auditors to update the Lincoln Public Schools procurement policies to be in compliance with the Uniform Guidance.

Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform guidance) requires non-federal entities other than States to follow 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 sections 200.318 through 200.326. This includes using the small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(b). Condition, Cause, and Effect/Potential Effect: Internal controls at the County were not sufficient to ensure full and open competition on grant-funded contracts. Individuals involved in the procurement process incorrectly relied on NRS requirements instead of the County’s procurement policy and federal procurement guidelines. Questioned Costs: None noted. Context: A nonstatistical sample of the procurement transactions funded with the ARPA Coronavirus State and Local Recovery Funds revealed that the County did not conduct procurement transactions in a manner providing fair and open competition on two construction contracts. Recommendation: We recommend that the County provide additional training to grantoversight personnel and ensure controls are sufficiently enhanced to ensure procurement policies are followed on federal grant-funded purchases. Views of Responsible Officials and Planned Corrective Actions: We agree with this finding and will enhance control procedures as recommended. Repeat Finding from Prior Year: Yes; 2024-008.

Finding 2025-001 – COVID 19 – Coronavirus State and Local Fiscal Recovery Fund - AL No. 21.027 U.S. Department of Treasury Other Matters Related to Internal Control over Compliance of the Major Program 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 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. Condition and Context: During our testing as it related to compliance with procurement we noted that an expense for engineering services for the Waste Water Treatment Assessment services charged to the major program would have required a formal bidding process as the project exceeded the simplified acquisition threshold. The Town had selected the engineering company for “On Call” engineering services as it related to the DPW through a request for qualifications process. The contract does include as part of the services to be provided Waste Water Treatment Assessment services. However, the contract is not specific to federally funded projects. The Town of Medfield had submitted the request for qualifications documentation as well as the executed contracted for “On Call” services to both the Town’s consulting service and the pass through entity for approval of the Waste Water Treatment Assessment. The pass through entity and the pass through entities Auditors did not have any concerns with the request for qualifications as it relates to the Waste Water Treatment Assessment project. Questioned Costs: $175,500 Cause: Based on the judgement of the pass through entity (Norfolk County) and their auditors, the Town was approved to procure engineering services for the Waste Water Treatment Assessment as part of a larger “On Call” services contract. The Town did select the contractor through a competitive request for qualifications process, but did not initiate a separate procurement for the sub-project. Effect or Potential Effect: There is risk that amounts charged to the federal awards major program may not be in accordance with procurement, suspension, and debarment principles. Identification as a Repeat Finding: 2024-001 Recommendation: Going forward, the Town of Medfield should consider a separate bidding process for expenses related to federal grant funds. Management Response: Due to the differences in the interpretation of federal requirements regarding competitive procurement, the Town will follow the more restrictive one on an ongoing basis. New projects paid for by federal grants will have separate procurements.

Federal Procurement Regulations Significant Deficiency U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES ALN #: 93.224 - Health Centers Program and 93.527 - Grants for New and Expanded Services under the Health Center Program Federal Award Identification #: H80CS00111 Condition: During the Health Centers Program audit, it was noted that HAH did not follow their procurement policies as required by the Uniform Guidance 2 CFR 200.318. Criteria: 2 CFR 200.318 Questioned Costs: $0 Context: During the audit, it was noted that while the majority of program expenditures are salary and benefits, HAH did not follow their policies for procurement for other goods and services, and did not obtain multiple bids or sole source justification for three out of eight vendors selected for testing that exceeded the micro-purchases threshold. Cause: Turnover at HAH, who separated from the parent entity in FY24 resulting in changes in procedures. Effect: Lack of internal control to ensure program requirements Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend that HAH establish an updated procurement policy and designate an individual to review all purchases over the micro-purchases threshold and review procurement documentation to ensure it is sufficient before expenses are approved for payment. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Criteria: Nonfederal 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. Nonfederal entities other than States, including those operating Federal programs as subrecipients of States, must follow the suspension and debarment standards set out at 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension,” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition: During transactional testing, the following was noted: • 4 out of 8 vendors reviewed did not have evidence of multiple competitive bids being obtained. Additionally, there are no consistent processes in place to check to ensure vendors are not suspended or debarred prior to conducting business. • 4 out of 8 vendors reviewed did not have evidence or processes in place to check to ensure vendors were not suspended or debarred prior to conducting business. None of the 6 vendors were suspended or debarred. Context: The audit findings represent a systematic problem, see condition above. Cause: There were ineffective controls in place during the period over procurement, along with lack of management oversight. Effect: The Clinic is not enacting fair competition in the procurement process nor are they following their policies by making sure bidding support is provided before the appropriate officials sign the Purchase Order. Additionally, the Clinic may be paying vendors that are suspended and debarred which would be an unallowable cost. Questioned Costs: AL#: 93.441 Known: Procurement- $60,729 Repeat Finding: Yes, 2022-007, 2023-004, and 2024-002. Recommendation: We recommend the Clinic conduct training for staff and program managers to review the Clinic’s procurement and suspension and debarment policies and procedures along with federal regulations. Views of Responsible Officials: The Clinic will review the procurement standards set forth at 2 CFR part 200 and will update the procurement and purchasing policies to comply with all required purchasing standards. All vendors will be required to submit and certify a statement regarding debarment and suspension prior to contract award.

Criteria: The Uniform Guidance 2 CFR Part 200.318 requires that the Agency have documented procurement procedures for procurement transactions under a Federal award or subaward. Condition: The Agency has a procurement policy in place; however, it is not fully aligned with the procurement standards set forth in 2 CFR Part 200.317–200.327 of the Uniform Guidance. Specifically, the policy does not incorporate all required procurement methods or procedures, such as competitive bidding (sealed bids), even though no purchases during the audit period met the threshold requiring formal bidding. Cause: The Agency's current policy has not been updated to fully address the specific requirements of 2 CFR Part 200.317–200.327 of the Uniform Guidance. Effect: The Agency is not in compliance with 2 CFR Part 200.317–200.327 of the Uniform Guidance. Questioned Costs: None reported. Context: Not applicable. Repeat Finding: Not applicable. Recommendation: Although there were no purchases in the audit period meeting the threshold for competitive bidding, we recommend that the Agency review and revise its procurement policy to ensure compliance. This should include procedures for all procurement methods including sealed bids. View of Responsible Officials: Refer to management’s corrective action plan.

Identification of the Federal Program: Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants Cluster - Entitlement/Special Purpose Federal Agency: U.S. Department of the Housing and Urban Development Pass-through Entity: County of Orange Community Resources Department Pass-through Identification Number: J2JWJVWQBEA6 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): For federally funded programs, recipients are required to establish and maintain effective internal control over compliance in accordance with 2 CFR §200.303. These controls should provide reasonable assurance that federal awards are managed in compliance with applicable laws, regulations, and the provisions of contracts or grant agreements. Pursuant to 2 CFR §§200.403 through 200.405, costs charged to federal programs must be allowable, reasonable, necessary, and adequately documented. Recipients must maintain sufficient documentation to support the nature of expenditures, vendor selection, and cost reasonableness to ensure compliance with allowable cost principles. Additionally, pursuant to 2 CFR §200.318, non-Federal entities are required to use documented procurement procedures that reflect applicable federal, state, and local requirements. These procedures must ensure that procurement activities are conducted in a manner providing for full and open competition, use appropriate procurement methods, and include adequate documentation to support vendor selection and cost reasonableness. Recipients are responsible for ensuring that procurement activities performed by employees, consultants, or contractors on their behalf comply with these requirements. Failure to follow these procedures may result in costs that are not adequately supported as allowable under federal requirements. Further, pursuant to 24 CFR §570.506, when CDBG funds are used for rehabilitation activities, recipients must ensure that work is completed in accordance with applicable laws, codes, and requirements related to housing safety, quality, and habitability. This includes ensuring that required permits are obtained and inspections are performed in accordance with local building and safety requirements prior to and throughout construction activities. Condition: During our audit of the CDBG program, we identified the following deficiencies related to internal control and compliance over compliance requirements: Allowable Costs/Cost Principles: The City did not maintain sufficient documentation to support compliance with federal requirements related to CDBG-funded rehabilitation activities. Specifically, the City did not maintain adequate documentation to support vendor selection, cost reasonableness, or the basis for contractor procurement. In addition, the City did not maintain evidence demonstrating that procurement-related activities performed by a consultant on its behalf were conducted in accordance with established procedures. Special Tests and Provisions – Rehabilitation: During our testing of nine CDBG-funded rehabilitation projects, we noted that one project had a building permit on file that expired in 2008 and was not renewed prior to or during construction. Additionally, five projects had building permits that were issued after construction activities had already commenced, indicating that required permits were not obtained prior to the start of rehabilitation work. Cause: The City has not established and implemented effective internal controls and monitoring procedures over its CDBG program to ensure compliance with all federal requirements. Effect or Potential Effect: The City did not maintain sufficient documentation to support expenditures, limiting its ability to demonstrate that costs charged to the program are allowable, reasonable, and adequately supported in accordance with federal requirements. As a result, there is an increased risk that costs may be questioned or disallowed. Additionally, failure to obtain and maintain valid permits prior to construction increases the risk of noncompliance with rehabilitation requirements and may result in ineligible activities. Questioned Costs: None. Context: See condition above for the context of the finding. Recommendation: We recommend that the City strengthen its internal control system over the CDBG program by implementing and documenting formal policies and procedures to ensure compliance with federal requirements. This includes maintaining sufficient documentation to support vendor selection, cost reasonableness, and overall allowability of costs, as well as ensuring appropriate oversight of consultants performing activities on the City’s behalf. Additionally, the City should enhance its monitoring procedures over rehabilitation activities by maintaining sufficient documentation to support that work was performed in accordance with program requirements, including evidence of inspections and completion of approved work; permits or local approvals alone should not be relied upon as sole evidence of compliance. The City should provide training to staff involved in program administration and implement ongoing monitoring procedures to ensure compliance with federal requirements. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.

2025-001 PROCUREMENT, SUSPENSION AND DEBARMENT Grantors: U. S. Department of Justice U. S. Department of Health and Human Services Federal Program Names: Crime Victim Assistance Maternal, Infant and Early Childhood Home Visiting Grant FALN Numbers: 16.575 and 93.870 Pass-through Entities: CT Office of Victim Services CT Office of Early Childhood Criteria: When procuring property and services, entities must follow the procurement standards set out at 2 CFR sections 200.318-200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The procurement policy in place during the first part of fiscal 2025 was not updated to comply with the requirement of the Uniform Guidance as stated above, and did not specify a micro-purchase or small purchase threshold above which written quotes would be required, although this was addressed in January 2025. A formal written policy for ensuring vendors are not suspended or debarred was not included in the old policy and, although the new policy does include such language, no specific procedures were performed regarding the determination as to whether vendors were suspended or debarred. Questioned Costs: None. Effect: Certain purchases could be incurred at higher amounts than might have been the case had multiple written quotes been obtained prior to the transaction. However, all purchases tested appeared to be in the normal course of business and costs appeared reasonable. Our testing did not result in any questioned costs. Additionally, the potential existed that a vendor that could either be suspended or debarred could have unknowingly been utilized due to the existing process. Cause: The agency did not timely complete the process to update its policies and procedures to conform with the Uniform Guidance by the expiration of the extended implementation deadline cited in the Uniform Guidance. A new procurement policy was implemented during the fiscal year, however while the policy states that suspension and debarment of vendors will be addressed, no procedures were actually implemented and documented to ensure that new or existing vendors’ statuses were verified. Recommendation: Management should create and implement a procedure that ensures all vendors are checked for suspension and debarment on an ongoing basis to prevent any further noncompliance in this area. Additional training of relevant staff regarding the new policies and procedures should be considered, especially regarding retention of adequate documentation of bids, quotes, or other procedures including documentation of the checking of vendors against the suspension and debarment lists. Views of Responsible Officials: A new procurement procedure to ensure vendors are not suspended or debarred, was prepared and implemented effective in fiscal 2026. Relevant staff have been and continue to be trained appropriately regarding execution of related procedures to ensure all aspects are being properly performed.

2025-001 – Procurement, Suspension and Debarment Federal Program Information: Department of Education - Child Nutrition Cluster: CFDA - 10.553/10.555/10.559//10.582 Criteria: The following CFR(s) apply to this finding: 2 CFR 200.318 General procurement Standards and 2 CFR 200.214 Suspension and Debarment Condition: During audit procedures, it was identified that the Supervisory Union did not have internal controls in place to ensure that all appropriate procurement standards and procedures were followed. Cause: Unknown Effect: The Supervisory Union may not be consistently following all appropriate procurement standards and procedures. There were instances where the suspension and debarment verification were not performed. Identification of Questioned Costs: None identified. Context: Of the 8 procurement purchases tested, 6 were not verified for suspension or debarment in SAM.gov. Repeat Finding: This is a repeat finding of 2024-002. Recommendation: It is recommended that the Supervisory Union implements controls to ensure that it follows all appropriate procurement standards and procedures. We also recommend that the Supervisory Union review its procurement policy to ensure that it is updated and complete.

FA 2025-001 Improve Controls over Procurement and Suspension and Debarment Compliance Requirement: Procurement and Suspension and Debarment Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 10.553 – School Breakfast Program; 10.555 – National School Lunch Program Federal Award Numbers: 255GA324N1199 (Year: 2025) Questioned Costs: $7,536 Description: A review of expenditures charged to the Child Nutrition Cluster revealed that the School District’s internal control procedures were not operating appropriately to ensure that the School District’s procurement and suspension and debarment procedures were followed. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential child care institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding is granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture, and GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $2,718,778.68 were expended and reported on the Jeff Davis County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2025. Criteria: As a recipient of federal awards, the School District is required to establish, document, and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state, “(a)… 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… (b) Recipients and subrecipients must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” In addition, provisions included in the Uniform Guidance, Section 200.320 – Procurement Methods provide guidance for informal procurement methods and state “If simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.” Furthermore, Title 2 CFR Section 180.300 states in part that the recipient or subrecipient must “verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM.gov Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person.” Condition: A sample of 40 procurement transactions was randomly selected for testing using a nonstatistical sampling approach. These transactions were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were noted: • For twenty expenditures, documentation maintained to support the entity’s verification that the vendors were not suspended or debarred or otherwise excluded from participating in the transaction lacked evidence of supervisory review as required by the School District’s policies and procedures. • The School District could not provide evidence that an adequate number of rate or price quotations were obtained from qualified sources for two small purchase expenditures reviewed. Questioned Costs: Upon testing a sample of $82,497 in procurement transactions, known questioned costs of $7,536 were identified for expenditures that did not follow the School District’s procurement procedures. Using the total population of $1,613,491 in procurement transactions, we project the likely questioned costs to be approximately $147,385. The following Assistance Listing Numbers were affected by known and likely questioned costs: 10.553 and 10.555. Cause: In discussing these deficiencies with the School District, they believe these issues are primarily due to the lack of proper documentation and not following its policies and procedures that govern the procurement process for federal programs. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. Failure to appropriately implement procedures to address procurement and suspension and debarment compliance requirements exposes the School District to unnecessary risk of error and misuse of federal funds and could result in the expenditure of federal funds with unqualified vendors. In addition, this deficiency could lead to the return of federal funds associated with unallowable expenditures. Recommendation: The School District should evaluate and improve internal control procedures to ensure that required procurement methods are properly identified and followed and required procurement and suspension and debarment documentation is properly identified, safeguarded, and retained. In addition, management should develop a monitoring process to ensure that these procedures are operating appropriately. Views of Responsible Officials: We concur with this finding.

FINDING 2025-003 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Numbers and Years (or Other identifying Numbers): 22611-133-PN01, 23611-133-PN01, 24611-133-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 19 LEWIS CASS SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The internal control system in place at the School Corporation was not effective in ensuring compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for property 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, the informal procurement method is 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, typically for those purchases $10,000 or under, and small purchase procedures 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, then price or rate quotations must be obtained from an adequate number of qualified sources. A total of two vendors were determined to require small purchase procedures, totaling $123,078. For the two vendors tested, the School Corporation did not obtain price or rate quotations. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was absent for those two vendors. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the System for Award Management (SAM) Excluded Parties List System (EPLS), collecting a certification from that person or entity, or adding a clause or condition to the covered transaction with that person or entity. A population of two covered transactions for goods or services totaling $123,078, both of which equaled or exceeded the $25,000 threshold paid from the special education funds during the audit period, were identified and selected for testing. For both transactions, the School Corporation did not verify that the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in federal assistance programs or activities prior to issuing payment. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 20 LEWIS CASS SCHOOLS 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 awards 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 200.214 states: "Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities." 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 The School Corporation did not have adequate internal controls to ensure compliance with procurement and suspension and debarment requirements. Effect The lack of an effective internal control system enabled material noncompliance to occur and remain undetected. Noncompliance with the Procurement and Suspension and Debarment compliance requirement could enable small purchases made by the School Corporation to be uncompetitive and could lead to contracting with vendors who are suspended or debarred from receiving federal grant funding. INDIANA STATE BOARD OF ACCOUNTS 21 LEWIS CASS SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the management of the School Corporation develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are verified to not be suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING REFERENCE NUMBER 2025-008 FEDERAL PROGRAMS (ALN – 84.027) SPECIAL EDUCATION – GRANTS TO STATES (IDEA, PART B) – SPECIAL EDUCATION CLUSTER (IDEA) (ALN – 84.173) SPECIAL EDUCATION – PRESCHOOL GRANTS (IDEA PRESCHOOL) – SPECIAL EDUCATION CLUSTER (IDEA) U.S. DEPARTMENT OF EDUCATION AWARD NUMBERS H027A230003 (07/01/2023 – 09/30/2024); H027A240003 (07/01/2024 – 09/30/2025); H173A230003 (07/01/2023 – 09/30/2024); H173A240003 (07/01/2024 – 09/30/2025); COMPLIANCE REQUIREMENT PROCUREMENT AND SUSPENSION AND DEBARMENT TYPE OF FINDING INTERNAL CONTROL AND COMPLIANCE – MATERIAL WEAKNESS AND MATERIAL NONCOMPLIANCE CRITERIA 2 CFR Section 200.317, establishes that when conducting procurement transactions under a Federal award, a State or Indian Tribe must follow the same policies and procedures it uses for procurements with non-Federal funds. 2 CFR §200.318(a)(i) establishes that 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. 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. STATEMENT OF CONDITION As part of our audit procedures over procurement process, we requested a list of all procurement procedures performed related to professional services and direct services to participants. No information was provided related to procurement procedures. In relation to quotation process, we selected a sample of forty (40) transactions for which a quotation process should have been performed. We found the following deficiencies: 1. In one quotation process, we were not provided with the document listing the bidders, evidence of the bidder selection, and the reasons for that selection. 2. In another quotation process, the requisition specifying the goods for which quotations were requested did not correspond to the fiscal year and made no reference to the quotations submitted. In addition, we requested a detailed list of all contracts formalized during the year and financed with IDEA funds. When selecting a sample of twenty-five (25) contracts, we were informed that several were financed with State funds. We requested the list of IDEA program contracts again, but it was not provided. This constitutes a scope limitation. QUESTIONED COSTS None. PERSPECTIVE INFORMATION After we requested all the supporting information related to procurement processes and contracts, the PRDE was not able to provide the basic documentation for the procurement performed and a list of contracts with IDEA funding during a reasonable period of time. This is a systemic deficiency that should properly be corrected, and the information should be available for audit process. The samples were statistically valid samples. STATEMENT OF CAUSE The IDEA program performs a procurement process related to specific services for which no evidence of the procurement performed was provided. The PRDE does not maintain a detail of contracts financed with IDEA funding. In addition, quotations for some purchases are performed through the Purchase Department of the PRDE, and no proper controls over the documentation are maintained POSSIBLE ASSERTED EFFECT Due to the lack of filing documentation related to the procurements performed and formalized contracts, we were unable to ascertain compliance with the procurement and suspension and debarment process. In relation to the quotation process, PRDE is not maintaining proper documentation to demonstrate compliance with procurement. IDENTIFICATION OF REPEAT FINDING This is a repeat finding (Finding Reference Number 2024-009). RECOMMENDATIONS We recommend that the PRDE review its internal control procedures for filings to ensure that all procurement documentation is readily available to any auditor or entity tasked with assessing the procurement process.

Program All federal programs Criteria The City must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within the Uniform Guidance. Condition The City’s procurement standards do not include all the essential elements as outlined in 2 CFR sections 200.318 through 200.326. In addition, the City did not retain adequate documentation for verification that vendors were not suspended or debarred parties. Questioned costs None noted. Context Although the City’s policy is not in conformity with all sections the federal Uniform Guidance criteria, the City did follow the established purchasing procedures for purchases for the City’s major programs. With respect to the verification that vendors are not suspended or debarred, the City provided documentation that vendors were reviewed on SAM.gov, but the documentation did not provide evidence of that there were no active exclusion records. Effect The City is at risk for noncompliance for expenditures of federal monies as it relates to federal procurement. Cause Unknown. Recommendation We recommend that the City update the procurement policies to include each of the criteria as set out in 2 CFR sections 200.318 through 200.326. We also recommend that the City retain documentation to support the verification check for suspended or debarred vendors. Views of responsible official and planned corrective actions The City agrees with the finding.

Procurement and Suspension and Debarment Federal Agencies: United States Department of Transportation Federal Program Name: Highway Planning and Construction Assistance Listing Number: 20.205 Federal Award Identification Number and Year: Not Available Pass-Through Agency: State of Connecticut Department of Transportation Pass-Through Number: 12062-DOT57151-22108 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: There was no documentation of controls in place to review for suspension and debarment on related procurement activities at the time the contracts were executed. Questioned Costs: None Context: Although testing did not reveal vendors providing services that were suspended and debarred, no documentation existed to verify compliance with this requirement when the contracts were executed. Cause: The Town did not properly document the requirement at the time the contracts were executed. Effect: No effect can be determined. Repeat Finding: Yes, 2024-001 Recommendations: We recommend that the Town continue its formal procurement policies with the criteria in 2 CFR sections 200.318 and 200.326 moving forward. Views of Responsible Officials: Management agrees with this finding.

III Federal Award Findings and Questioned Costs FA 2025-001 Improve Controls over Procurement and Suspension and Debarment Compliance Requirement: Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 10.553 – School Breakfast Program; 10.555 – National School Lunch Program 10.582 - Fresh Fruit and Vegetable Program Federal Award Numbers: 255GA324N1199 (Year: 2025), 255GA324L1603 (Year: 2025) Questioned Costs: $6,267 Description: A review of expenditures charged to the Child Nutrition Cluster revealed that the School District’s internal control procedures were not operating appropriately to ensure that the School District’s procurement and suspension and debarment procedures were followed. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential child care institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding is granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture, and GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $3,568,611.24 were expended and reported on the Jones County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2025. Criteria: As a recipient of federal awards, the School District is required to establish, document, and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state, “(a)… 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… (b) Recipients and subrecipients must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” In addition, provisions included in the Uniform Guidance, Section 200.320 – Procurement Methods provide guidance for informal procurement methods and state “If simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.” Condition: A sample of 40 procurement transactions was randomly selected for testing using a nonstatistical sampling approach. These transactions were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The School District could not provide evidence that an adequate number of rate or price quotations were obtained from qualified sources for four small purchase expenditures reviewed. Questioned Costs: Upon testing a sample of $159,951.89 in procurement transactions, known questioned costs of $6,267 were identified for expenditures that did not follow the School District’s procurement procedures. Using the total population of $1,778,019 in procurement transactions, we project the likely questioned costs to be approximately $69,659. The following Assistance Listing Numbers were affected by known and likely questioned costs: 10.553, 10.555, and 10.582. Cause: In discussing these deficiencies with the School District, they stated that the internal control procedures related to procurement were not being followed appropriately. In addition, management did not adequately monitor the procurement internal control procedures. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. Failure to appropriately implement procedures to address procurement and suspension and debarment compliance requirements exposes the School District to unnecessary risk of error and misuse of federal funds and could result in the expenditure of federal funds with unqualified vendors. In addition, this deficiency could lead to the return of federal funds associated with unallowable expenditures. Recommendation: The School District should evaluate and improve internal control procedures to ensure that required procurement methods are properly identified and followed and required procurement and suspension and debarment documentation is properly identified, safeguarded, and retained. In addition, management should develop a monitoring process to ensure that these procedures are operating appropriately. Views of Responsible Officials: We concur with this finding.

2025-004: FEDERAL PROCUREMENT PROCEDURES Program: Child Nutrition Cluster Federal Assistance Listing Number: 10.553, 10.555, 10.559 Federal Agency: U.S. Department of Agriculture Pass-Through Agency: Arizona Department of Education Grantor Number: ADE ED09-0001 Questioned Costs: $-0- Type of Finding: Noncompliance (Other Matter), significant deficiency in internal control Compliance Requirement: I. Procurement, Suspension, and Debarment Condition: During testing of procurement activities within the Child Nutrition Cluster, we selected three purchases for review. For all three purchases tested, the District did not perform and document the procurement procedures required under federal regulations to obtain written price quotations. Specifically, the District was unable to provide evidence demonstrating that applicable procurement requirements, including obtaining and documenting competition as required by federal procurement standards, were followed prior to making the purchases. Criteria or Specific Requirement: Title 2 CFR §200.318 through §200.327 requires non-federal entities expending federal awards to establish and follow documented procurement procedures that reflect applicable federal, state, and local laws and regulations. These procedures must ensure full and open competition and maintain sufficient records to detail the history of the procurement, including the rationale for the method of procurement, contractor selection, and the basis for contract pricing. Cause: District personnel responsible for procurement and federal program administration did not consistently apply and document procurement procedures for purchases charged to the Child Nutrition Cluster. The District did not maintain documentation to support that three written quotes were maintained to support the purchases or that other applicable methods of procurement were utilized (cooperative purchases, RFPs, etc.) Additionally, management's monitoring controls were not sufficient to ensure compliance with federal procurement requirements prior to the expenditure of federal funds. Effect: Failure to follow and document required procurement procedures increases the risk that purchases may not be made in accordance with federal requirements, potentially limiting competition and resulting in questioned costs, repayment of federal funds, or other sanctions from grantor agencies. Repeat Finding: No. Recommendation: We recommend the District strengthen internal controls over procurement compliance by implementing procedures to ensure all purchases made with federal funds are reviewed for compliance with applicable procurement requirements before purchases are finalized, maintaining documentation supporting the procurement method utilized, solicitation of bids or quotes when required, vendor selection, and price determination. Views of Responsible Officials: The District concurs with this recommendation. See the corrective action plan in a separately published document.

2025-005: FEDERAL PROCUREMENT PROCEDURES Program: Child Nutrition Cluster Federal Assistance Listing Number: 10.553, 10.555, 10.559 Federal Agency: U.S. Department of Agriculture Pass-Through Agency: Arizona Department of Education Grantor Number: ADE ED09-0001 Questioned Costs: $-0- Type of Finding: Noncompliance (Other Matter), significant deficiency in internal control Compliance Requirement: I. Procurement, Suspension, and Debarment Condition: During testing of procurement activities within the Child Nutrition Cluster, we selected three purchases for review. For all three purchases tested, the District did not perform and document the procurement procedures required under federal regulations to obtain written price quotations. Specifically, the District was unable to provide evidence demonstrating that applicable procurement requirements, including obtaining and documenting competition as required by federal procurement standards, were followed prior to making the purchases. Criteria or Specific Requirement: Title 2 CFR §200.318 through §200.327 requires non-federal entities expending federal awards to establish and follow documented procurement procedures that reflect applicable federal, state, and local laws and regulations. These procedures must ensure full and open competition and maintain sufficient records to detail the history of the procurement, including the rationale for the method of procurement, contractor selection, and the basis for contract pricing. Cause: District personnel responsible for procurement and federal program administration did not consistently apply and document procurement procedures for purchases charged to the Child Nutrition Cluster. The District did not maintain documentation to support that three written quotes were maintained to support the purchases or that other applicable methods of procurement were utilized (cooperative purchases, RFP’s, etc.) Additionally, management's monitoring controls were not sufficient to ensure compliance with federal procurement requirements prior to the expenditure of federal funds. Effect: Failure to follow and document required procurement procedures increases the risk that purchases may not be made in accordance with federal requirements, potentially limiting competition and resulting in questioned costs, repayment of federal funds, or other sanctions from grantor agencies. Repeat Finding: No. Recommendation: We recommend the District strengthen internal controls over procurement compliance by implementing procedures to ensure all purchases made with federal funds are reviewed for compliance with applicable procurement requirements before purchases are finalized, maintaining documentation supporting the procurement method utilized, solicitation of bids or quotes when required, vendor selection, and price determination. Views of Responsible Officials: The District concurs with this recommendation. See the corrective action plan in a separately published document.

FA 2025-001 Improve Controls over Procurement and Suspension and Debarment Compliance Requirement: Procurement and Suspension and Debarment Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Title: 84.027A – Grants to States; 84.173A – Preschool Grants Federal Award Number: H027A230073 (Year: 2024), H027A240073 (Year: 2025), H173A240081 (Year: 2025) Questioned Costs: $4,500 Description: A review of expenditures charged to the Special Education Cluster revealed that the School District’s internal control procedures were not operating appropriately to ensure that the School District’s procurement and suspension and debarment procedures were followed. Background Information: The Special Education Cluster (SEC), which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was authorized under the Individuals with Disabilities Education Act (IDEA). Special Education Cluster funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities. SEC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. SEC funds totaling $525,466 were expended and reported on the Evans County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2025. Criteria: As a recipient of federal awards, the School District is required to establish, document, and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state, “(a)… 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… (b) Recipients and subrecipients must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” In addition, provisions included in the Uniform Guidance, Section 200.320 – Procurement Methods provide guidance for informal procurement methods and state “If simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.” Provisions included in the Uniform Guidance, Section 200.320(c) – Noncompetitive Procurement states that procurement by a noncompetitive method may only be used if one of the circumstances outlined applies, including when “the procurement transaction can only be fulfilled by a single source.” Furthermore, Title 2 CFR Section 180.300 states in part that the recipient or subrecipient must “verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM.gov Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person.” Condition: A sample of 12 procurement transactions was randomly selected for testing using a nonstatistical sampling approach. These transactions were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The School District could not provide evidence that an adequate number of rate or price quotations were obtained from qualified sources or documentary evidence as justification for single source procurement for one small purchase expenditure reviewed. In addition, a sample of 2 covered transactions was randomly selected for testing using a nonstatistical sampling approach. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. Although it was determined that the vendors associated with these transactions were not suspended or debarred or otherwise excluded from participating in the transaction, documentation could not be provided to support the entity’s verification as required by the School District’s policies and procedures. Questioned Costs: Upon testing a sample of $10,504 in procurement transactions, known questioned costs of $4,500 were identified for expenditures that did not follow the School District’s procurement procedures. Using the total population of $101,739 in procurement transactions, we project the likely questioned costs to be approximately $43,585. The following Assistance Listing Numbers were affected by known and likely questioned costs: 84.027A and 84.173A. Cause: In discussing these deficiencies with the School District, they believe these issues are primarily due to the lack of proper documentation and not following its policies and procedures that govern the procurement process for federal programs. Specifically, Management stated that rate or price quotations were not obtained because the vendor was considered a single source provider; however, documentation supporting the single source procurement method was not maintained. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. Failure to appropriately implement procedures to address procurement and suspension and debarment compliance requirements exposes the School District to unnecessary risk of error and misuse of federal funds and could result in the expenditure of federal funds with unqualified vendors. In addition, this deficiency could lead to the return of federal funds associated with unallowable expenditures. Recommendation: The School District should evaluate and improve internal control procedures to ensure that required procurement methods are properly identified and followed and required procurement and suspension and debarment documentation is properly identified, safeguarded, and retained. In addition, management should develop a monitoring process to ensure that these procedures are operating appropriately. Views of Responsible Officials: We concur with this finding.

Finding 2025-003 Federal assistance listing number and name: 10.415 Rural Rent Housing Loans Awards numbers and years: 2025 Federal agency: United States Department of Agriculture Compliance Requirement: Procurement Questioned Costs: None Criteria: 2 CFR 200.318(a) requires nonfederal entities to have and use documented procurement procedures, consistent with federal, state, and local requirements, for the acquisition of property or services under a federal award. These procedures must ensure full and open competition and address conflicts of interest Condition and Context: The entity has not established or documented a formal procurement policy or procedures to guide the acquisition of goods and services. No written guidelines were provided during the review period. Cause: The absence of an established procurement policy appears to be due to a lack of prioritization or awareness of regulatory requirements regarding procurement governance. Effect: The lack of a procurement policy increases the risk of non-compliance with applicable procurement laws and guidelines, and reduced accountability and transparency in financial operations. Recommendation: The management should develop, approve, and implement a comprehensive procurement policy in accordance with applicable laws and best practices.

Finding 2025-001 – Procurement (Material Weakness) Repeat Finding: No Federal Agency – National Science Foundation; National Institute of Health Research and Development Cluster Social, Behavioral, and Economic Sciences – Passed through New York University: 47.075, Mathematical and Physical Sciences – Passed through Loyola University of Chicago: 47.049, Biological Sciences: 47.074, Allergy and Infectious Disease Research: 93.855 Federal Award Years: Year Ended May 31, 2025 Condition The College's procurement policy does not reflect all applicable state and local laws and federal regulations. For two out of three (67%) small purchase procurements, there was not sufficient evidence to support that documentation of the noncompetitive procurement method selected was provided at the time of purchase. 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 sections 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. In accordance with 2 CFR sections 200.319 and 200.320(f), price quotations should be obtained from an adequate number of qualified sources for procurements that meet the small purchase procurement threshold or require documentation in support of the rationale to limit competition in those cases where competition was limited. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure the College has a procurement policy that meets the all applicable state and local laws and regulations. Questioned Costs There were no questioned costs related to this finding. Cause The College does not have a procurement policy that follows the procurement standards set out at 2 CFR sections 200.318 through 200.327. Context Two out of three vendors tested. Expenditures totaled $100,553. Effect Lack of a documented procurement policy that meets applicable state and local laws and federal regulations can result in improper procurement of goods and services which can lead to loss of future funding. Recommendation We recommend the College implement a procurement policy that conforms to federal regulations. We also recommend that the College implement policies and procedures around documentation of noncompetitive bidding. Views of Responsible Officials We agree with this finding. See corrective action plan.

Finding 2025‐006 Procurement and Suspension and Debarment Information on the federal program: Federal awarding agency: United States Department of Education (ED) Federal program: School Safely National Activities, Assistance Listing No. 84.184X Award year: 2024‐2025 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 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). 2 CFR 200.318 (i) General Procurement Standards states, “the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.” Condition: The University did not maintain records for procurements sufficient to detail the history of the procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Cause: The University did not have effective internal controls and procedures in place to ensure the University maintained records for procurements sufficient to detail the history of the procurement, including the rationale for the method of procurement and other required elements. Effect or potential effect: The University did not comply with the general procurement standards per the Uniform Guidance to maintain sufficient detail of the history of the procurement, including the rationale of the method of procurement. The University also did not retain evidence of internal controls related to approval of procurements. The performance of internal controls, including approval documentation of the procurement, is necessary to ensure compliance with federal procurement requirements. Questioned costs: $167,398 – Questioned costs were calculated based on the amount of two procurements for which the history of the procurement, including the rationale of the procurement method, was not documented ($73,980 plus $93,418). Context: We issued a material weakness related to internal control over compliance with procurement requirements in the prior year. Based upon the implementation date for the corrective action of May 31, 2025, provided by management, the finding related to this internal control had not been remediated for the period under audit. As such, we did not test the operating effectiveness of this internal control and are issuing a material weakness consistent with the prior year finding. We selected and tested the two procurements in the population over $10,000 with expenditures totaling $167,398 for the year ended May 31, 2025 for the School Safely National Activities program. For these procurements of an occupational therapist contractor ($73,980) and another vendor for supplies and materials ($93,418), the University did not obtain quotes or document sole source justification or the history of the procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. We consider the expenditures related to these procurements to be questioned costs due to lack of supporting documentation for the procurement, as noted above. The University’s total School Safely National Activities program expenditures were $1,310,305 for the year ended May 31, 2025. Of this amount, $262,030 related to procurements of goods and services during the year, of which 2 procurements were over $10,000. Identification as a repeat finding, if applicable: Yes – 2024-004; 2023-004 Recommendation: The University 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, and the basis for the contract price. The University should also retain evidence of internal controls, including approval documentation of the procurement, performed prior to entering into procurements. Views of responsible officials: Management agrees with the finding and has developed a corrective action plan in which the University will document the methodology used to select sole source or preferred vendor procurements through completion of the Sole Source/Preferred Vendor Justification Form. The corrective action will be implemented by March 1, 2026.

Noncompliant Procurement Policy Federal Program Information: Funding agency: U.S. Environmental Agency Title: Drinking Water State Revolving Funds AL number: 66.468 Criteria or Specific Requirement: According to 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 2 CFR §200.317 through 2 CFR §200.326. Condition: The Village has a written procurement policy; however, the policy has not been updated to align with the procurement standards under 2 CFR §200.317 through 2 CFR §200.326. Context: We reviewed the procurement policy and compared it to federal requirements. Questioned Costs: None Effect: The use of a noncompliant policy increases the risk that the Village may face sanctions, including, repayment of funds or termination of awards. Cause: Management did not adopt a procurement policy that conforms with the Uniform Guidance requirements. Repeat: No Auditor's Recommendation: We recommend the Village review and update its procurement policy to ensure full compliance with 2 CFR §200.317 through 2 CFR §200.32 View of Responsible Officials: Management acknowledges the finding and has prepared a corrective action plan.

2025-008: Procurement Policy Information on the federal program: 66.468 – Capitalization Grants for Drinking Water State Revolving Fund Environmental Protection Agency (EPA) Passed through Illinois EPA L174235 and C176673 Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.318 requires that recipients of Federal awards maintain and use documented procedures for procurement transactions. Condition: We noted that the Village does not have a documented procurement policy in place as required by 2 CFR 200.318. No instances of noncompliance were identified in the procurement transactions tested. Cause: Management has not yet developed or formally adopted procurement policies and procedures consistent with the Uniform Guidance requirements. Effect or potential effect: The lack of a documented procurement policy may result in procurement activities that are not compliant with federal requirements. Questioned costs: None Context: We reviewed procurement practices related to purchases made under federal programs during the audit period. Procurement transactions selected for testing complied with applicable federal requirements. Identification as a repeat finding, if applicable: Not applicable Recommendation: We recommend that the Village develop and adopt a written procurement policy that aligns with the requirements of 2 CFR 200.318–.326 to strengthen internal control over procurement activities. Views of responsible officials and planned corrective actions: A purchasing and procurement policy was created and discussed at the May 2026 finance committee meeting and approved by the board in May 2026.

Congressional Grants - Procurement: Information on Federal Program: U.S. Department of Housing and Urban Development Congressional Grant (Federal Assistance Listing Number 14.251). Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Statement of Condition: During our discussions with management, we noted that the Organization does not have documented procurement procedures in place. Statement of Cause: The Organization did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318. Statement of Effect: The Organization is not in compliance with 2 CFR Section 200.218. The Organization does not have documented procedures and is therefore not performing required procedures that would be standard for all purchases over a given threshold. Questioned Costs: None. Perspective Information: As part of the required procurement testing, inquiries are made of the Organization’s management as to any procurement policies that the Organization has. Recommendation: We recommend that the Organization review the requirements of 2 CFR Section 200.318 to develop procurement policies to be followed. Views of responsible officials and planned corrective actions: The Capital District YMCA will develop and implement a written procurement policy in accordance with CFR Section 200.318. We will have this in place by July 31, 2025.

Congressional Grants - Procurement: Information on Federal Program: U.S. Department of Housing and Urban Development Congressional Grant (Federal Assistance Listing Number 14.251). Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Statement of Condition: During our discussions with management, we noted that the Organization does not have documented procurement procedures in place. Statement of Cause: The Organization did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318. Statement of Effect: The Organization is not in compliance with 2 CFR Section 200.218. The Organization does not have documented procedures and is therefore not performing required procedures that would be standard for all purchases over a given threshold. Questioned Costs: None. Perspective Information: As part of the required procurement testing, inquiries are made of the Organization’s management as to any procurement policies that the Organization has. Recommendation: We recommend that the Organization review the requirements of 2 CFR Section 200.318 to develop procurement policies to be followed. Views of responsible officials and planned corrective actions: The Capital District YMCA will develop and implement a written procurement policy in accordance with CFR Section 200.318. We will have this in place by July 31, 2025.