Findings Citing § 200.318

MATERIAL WEAKNESS Finding Number: 2024-003 Material Weakness in Internal Control over Compliance Federal Program: 84.027 & 84.173 Special Education Cluster (IDEA) Federal Program: 84.425D/84.425U Education Stabilization Fund Criteria: 2 CFR §200.318(a) requires non-federal entities to establish and maintain effective internal control over procurement transactions to ensure compliance with applicable federal statutes and regulations. 2 CFR §§200.317–200.327 require non-federal entities to maintain written procurement policies and procedures that address procurement methods, documentation requirements, and contract administration. 2 CFR §200.430(i) requires charges to federal awards for salaries and wages to be supported by documentation that accurately reflects the work performed and supports the allowability and allocation of payroll costs.2 CFR §200.302(b)(3) requires financial management systems to maintain records that adequately identify the source and application of funds for federally funded activities. Condition: The entity did not maintain adequate internal controls over procurement and payroll expenditures charged to the federal program. Specifically: • The entity does not have a formally adopted, written procurement policy that complies with federal procurement requirements. • Invoices tested did not include supporting documentation such as purchase orders, executed contracts, or memoranda of understanding (MOUs) to substantiate the procurement of goods or services, approval of the transactions, or the basis for the costs incurred. • Payroll expenditures charged to the federal program lacked sufficient supporting documentation, including employment contracts or documentation identifying the employee’s placement on the applicable salary chart within the Teacher and Support Staff Association agreement. • As a result, the entity was unable to demonstrate that payroll costs were calculated in accordance with approved pay rates and were allowable and properly supported. Cause: The deficiencies resulted from the absence of formal procurement policies and insufficient internal controls over documentation standards and record retention for procurement and payroll transactions. Effect: Due to the lack of written procurement policies and insufficient supporting documentation for procurement and payroll expenditures, the entity is unable to demonstrate compliance with federal procurement and cost principles. These deficiencies increase the risk that unallowable or improperly supported costs could be charged to the federal program and not be detected in a timely manner. Identification of Questioned Costs:None identified. Context: The absence of formal procurement policies and consistent supporting documentation limited the ability to readily demonstrate compliance with federal procurement and cost principles and increased the extent of audit procedures required. Repeat Finding: This is a repeat finding of 2023-03.Recommendation: We recommend that management update its procurement policy to include all current requirements under 2 CFR 200 and implement a process to periodically review and revise the policy to remain compliant with future federal regulation changes. Require that all procurement transactions be supported by purchase orders, executed contracts, MOUs, invoices, and evidence of approval and receipt. Ensure payroll expenditures charged to federal programs are supported by employment contracts and documentation identifying employee placement on the applicable salary schedule in accordance with collective bargaining agreements, as required by 2 CFR §200.430. Implement monitoring and training procedures to ensure consistent compliance with federal documentation requirements. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the entity.

Criteria: The Uniform Guidance 2 CFR Part 200.318 require 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: See management’s corrective action plan.

U.S. Department of Environmental Protection Agency Passed through State Department of Natural Resources and Conservation FFAL# 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension and Debarment Material Non-compliance Material Weakness in Internal Control Criteria: • 2 CFR §200.303 requires non-federal entities to establish and maintain effective internal control over federal awards. • 2 CFR §200.318 requires non-federal entities to have and follow written procurement procedures that conform to applicable federal laws and standards. • 2 CFR §200.320 outlines requirements for procurement to be followed depending on the purchase threshold. • 2 CFR §200.213 requires non-federal entities to ensure that entities with which they contract are not suspended or debarred from federal programs. Condition: The District does not have documented internal controls over procurement activities. Additionally, the District did not follow procurement methods including obtaining quotes or bids as necessary or perform any of the required suspension and debarment procedures for vendors, such as verifying that vendors were not excluded from federal programs. Further, the District does not have a written procurement policy as required by Uniform Guidance. Cause: The District has not implemented documented internal controls or written procurement policies and did not perform suspension and debarment checks. Effect: Failure to implement these requirements increases the risk of noncompliance with Uniform Guidance and may result in unallowable costs or questioned costs. Questioned Costs: $1,124,156 Context/Sampling: A nonstatistical sample of three vendors were selected for testing. Repeat Finding from Prior Years: No. Recommendation: We recommend the District: • Develop and adopt a written procurement policy that complies with Uniform Guidance requirements. • Implement documented internal controls over procurement activities, including procedures for suspension and debarment checks. • Train staff responsible for procurement to ensure compliance with federal requirements. Views of Responsible Officials: Agree.

Assistance Listing Number, Federal Agency, and Program Name 93.332 U.S. Department of Health and Human Services Navigator Grants Program Federal Award Identification Number and Year NAVCA210431 02, NAVCA210431 03 Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria 2 CFR 200.318 requires that a nonfederal entity that acquires property or services under a federal award or subaward is required to adopt, maintain, and follow written procurement procedures, which comply with sections 2 CFR 200.318 through 327. Condition The University did not follow the written procurement procedures in place. Questioned Costs $686,325 Identification of How Questioned Costs Were Computed Questioned costs reflect the amount of costs expended under the grant during 2024 that exceeded the procurement policy threshold. Context The University did not follow its written policy in place over procurement methods, including using a competitive bid process and reviewing for suspension and debarement for purchases over the policy's threshold. Cause and Effect Failure to comply with the University's written procurement policy, where controls were not in place to comply with the University's policy. Recommendation The University should ensure controls are in place to comply with the procurement policy on an ongoing basis. Views of Responsible Officials and Planned Corrective Actions It was noted that certain purchase orders and requisitions were processed after services had already been performed. To address this issue, procurement training will now be required for certain faculty and staff, emphasizing that requisitions and purchase orders must be submitted and approved prior to the initiation of any services, to ensure adherence to the University’s documented competitive bid process. The University Purchasing Department currently provides monthly procurement policy training. In the new award setup phase, the Office of Research Development and Administration will require that principal investigators (PIs) with awards with direct costs greater than the University's bid limit attend such training within three months of award date. PIs with multiple awards will only be required to attend such training every 24 months. Additionally, Sponsored Research Accounting will follow up with PIs on all awards opened within the first three months to confirm adherence to university purchasing policies. Continued noncompliance may result in corrective actions for the applicable principal investigator/award team, including, but not limited to, loss of eligibility to submit future proposals, suspension of existing funding, or the requirement to use indirect cost (IDC) funds to cover any unallowable expenses.

Improve Controls Over Procurement Procedures (Material Weakness, Compliance Finding) Federal Agency: Department of Agriculture Cluster/Program: Child Nutrition Cluster Assistance Listing Number(s): 10.553/10.555/10.559 Award Year: 2024 Compliance Requirement: Procurement Criteria Under 2 CFR 200.318–.326, recipients of federal funds must follow federal, state, and local procurement standards when acquiring goods and services under federal programs. This includes documented procedures, competitive bidding or quotes for procurements over established thresholds, and proper contract management. Condition During fiscal year 2024, the District did not perform proper procurement procedures for a food vendor selected for testing under the Child Nutrition Cluster. Specifically, there was no evidence of competitive bidding or solicitation of multiple quotes as required. Cause The District did not consistently adhere to established procurement policies or federal requirements for competitive procurement under the Child Nutrition Cluster. Effect Failure to follow federal procurement requirements increases the risk of noncompliance with program regulations, potentially resulting in questioned costs or loss of funding. Context This issue appears to be an isolated incident based on our procurement testing. Questioned Costs Although we identified deficiencies in the district’s procurement procedures, we have not identified questioned costs related to this finding. This is because, based on our review, all goods and services procured were received, were necessary for the grant program, and were properly supported by invoices and evidence of payment. While procurement procedures did not fully comply with federal requirements, there was no indication that the costs incurred were unreasonable, unallowable, or unrelated to the federal program. As such, no costs were questioned as a result of this finding. Recommendation We recommend the district ensure that all procurements under federal programs follow the required procedures, including documented solicitation of bids or quotes, vendor selection justification, and retention of procurement records. Staff responsible for procurement should be trained on federal requirements and procurement policies should be periodically reviewed for compliance. View of Responsible Officials and Planned Corrective Actions The District’s corrective action plan is included at the end of this report.

Finding 2024-005: Improve Procurement Procedures Federal Program(s) Information Federal Agency: Department of Education Cluster/Program: Special Education Cluster Award Name: Special Education Grants to States and Special Education Preschool Grants Assistance Listing Number: 84.027/84.173 Award Year: 2024 Compliance Requirement: Procurement Type of Finding - Compliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement Per 2 CFR 200.318–200.327, 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 set forth in the Uniform Guidance. In some cases, state procurement laws under MGL Chapter 30B are more restrictive than the Uniform Guidance. In the event state procurement laws are less restrictive, non-federal entities must follow the more restrictive requirement under the Uniform Guidance. Condition and Context During our testing of three procurement transactions under the Special Education Cluster, the Town was unable to provide documentation supporting whether procurement policies and procedures were followed for each transaction. Specifically, the Town believed that the contracts were exempt from procurement under MGL Chapter 30B for contracts utilizing special education funding, which is less restrictive than Uniform Guidance requirements in this particular circumstance. As a result, the Town did not comply with the federal procurement standards applicable to these transactions. Cause The Town’s internal controls over procurement did not ensure that federal requirements under Uniform Guidance were followed when state and federal rules differed. The Town applied state-level exemptions rather than adhering to more restrictive federal standards. Effect or Potential Effect The absence of procurement documentation and use of state exemptions rather than federal requirements increase the risk of non-compliance and may result in unallowable costs. Questioned costs are reported as follows over all expenditures with vendors in excess of the micro-purchase threshold of $10,000: AL Number(s): Name of Federal Program or Cluster Questioned Costs 84.027/84.173 Special Education Cluster $759,116 Recommendation We recommend that the Town strengthen its internal controls over procurement to ensure compliance with Uniform Guidance requirements, regardless of state law exemptions. The Town should ensure adequate documentation is retained for all federally funded procurements, and that procurement staff are trained on the distinction between federal and state procurement requirements. Views of Responsible Official See corrective action plan included herein.

Finding 2024-003: Improve Internal Controls Over Procurement Federal Program(s) Information Federal Agency: Department of the Treasury Award Name: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: 2024 Compliance Requirement: Procurement Type of Finding - Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Per 2 CFR 200.318–200.327, 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 set forth in the Uniform Guidance. In some cases, state procurement laws under MGL Chapter 30B are more restrictive than the Uniform Guidance. In the event state procurement laws are less restrictive, non-federal entities must follow the more restrictive requirement under the Uniform Guidance. Condition and Context During our testing of six procurement transactions under the Coronavirus State and Local Fiscal Recovery Funds program, the Town was unable to provide documentation supporting whether procurement policies and procedures were followed for one transaction. Specifically, the Town believed that the contract was exempt from procurement under MGL Chapter 30B for contracts with architects, engineers, and related professionals, which is less restrictive than Uniform Guidance requirements in this particular circumstance. As a result, the Town did not comply with the federal procurement standards applicable to this transaction. Cause The Town’s internal controls over procurement did not ensure that federal requirements under Uniform Guidance were followed when state and federal rules differed. The Town applied state-level exemptions rather than adhering to more restrictive federal standards. Effect or Potential Effect The absence of procurement documentation and use of state exemptions rather than federal requirements increase the risk of non-compliance and may result in unallowable costs. Questioned costs are reported as follows: AL Number(s): Name of Federal Program or Cluster Questioned Costs 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds $241,400 Recommendation We recommend that the Town strengthen its internal controls over procurement to ensure compliance with Uniform Guidance requirements, regardless of state law exemptions. The Town should ensure adequate documentation is retained for all federally funded procurements, and that procurement staff are trained on the distinction between federal and state procurement requirements. Views of Responsible Official See corrective action plan included herein.

Finding Reference: 2024-006 – I. Procurement, Suspension and Debarment Federal Program Information Federal Agencies: Department of Treasury Awards: Assistance Listing 21.027 – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award Periods: July 1, 2023 – December 31, 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 2023-001. 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 this program 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.

2024-004 Improve Internal Controls Over Procurement Federal Agency: Department of the Treasury Award Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: 2024 Compliance Requirement: Procurement Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria: Per 2 CFR 200.318–200.327, 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 set forth in the Uniform Guidance. For purchases exceeding the micro-purchase threshold, procurement must include documented procedures, full and open competition (unless an exemption applies), and executed contracts. All contracts must be fully executed and amendments provided for any changes to terms or scope. Additionally, any exemption from competitive bidding must be documented, and only applies to the period and scope approved. Suspension and debarment checks must also be performed and documented for covered transactions with vendors. Condition: During our testing of one procurement transaction under the SLFRF program, the Town received an exemption from bidding requirements typically required under Massachusetts’ state law. The exemption was due to an initial emergency procurement; however, expenditures continued to be incurred after the initial emergency ended and the associated contract’s substantial completion date. The Town did not provide contract amendments to extend the contract, nor did it perform additional procurement procedures for expenditures that occurred after the emergency period ended and outside the scope of the exemption. In addition, the contract with the vendor was not countersigned by the Town and therefore a fully executed contract did not exist. Further, suspension and debarment checks for vendors were not retained as required. Cause: The Town did not ensure contracts were fully executed prior to commencement of work, did not maintain documentation or perform procurement for additional expenditures incurred after the completion date of the original contract and outside the scope of the emergency exemption, and did not maintain documentation of required suspension and debarment checks. Effect: Failure to obtain a fully executed contract, perform and document suspension and debarment checks, and appropriately document or procure additional services beyond the contract term increases the risk of noncompliance with federal procurement requirements and may expose the Town to possible unallowable costs, conflicts of interest, or ineligible vendor participation. Recommendation: The Town should implement policies and procedures to ensure all contracts are fully executed prior to work commencement, and any extensions or additional services beyond the original contract are properly documented via contract amendments or appropriate procurement methods in accordance with Uniform Guidance. The Town should also ensure continued monitoring and documentation of procurement exemptions and maintain documentation of all suspension and debarment checks for vendors paid with federal funds. Views of Responsible Official: Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.

Finding 2024-016: Material Weakness in Internal Control and Material Noncompliance – Procurement and Suspension and Debarment Assistance Listing Program Title and Number: Special Education (IDEA) Cluster (84.027, 84.173), COVID 19-Coronavirus State & Local Fiscal Recovery Funds (21.027) Federal Agency: U.S. Department of Education, U.S. Department of Treasury Pass-through Entity: State of Connecticut Department of Education, State of Connecticut Department of Emergency Services and Public Protection Award year: 2023 – 2024 Criteria or specific requirement: The City, which includes Danbury Public Schools (DPS), must follow procurement standards set out at 2 CFR sections 200.318 through 200.326. There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319. Additionally, 2 CFR Section 180 requires that recipients of federal awards have policies and procedures in place to verify contracted vendors are not on the federal suspended or debarred parties list. Condition: The DPS Grant Administration did not adhere to the Danbury Public Schools “Bids and Purchases Competitive” procurement policies, that were compliant with Federal Part 3 compliance guidelines. DPS had a procurement policy in place that was consistent with the standards of the aforementioned compliance sections; however, DPS did not follow their own procurement policy in certain instances which consists of obtaining three quotes for a small purchase procurements and advertising for bids publicly for large >$5,000 purchase procurements. They only obtained one quote for small purchases, and they did not use a public bid process for expenditures over $5,000. Additionally, DPS did not have internal controls in place to ensure vendor eligibility was verified prior to entering into a covered transaction with them. Cause: While DPS has a formal policy around required bids, the thresholds have not been updated in several years and there was a lack of controls that ensured the DPS procurement policy was being adhered to in order to be compliant with the compliance standards. Finally, the policy did not address verifying vendors were neither suspended nor debarred. Effect: Possible effects include not awarding the purchase to the lowest qualified bidder or to a vendor on the suspended or debarred parties list. Context: For the Coronavirus State and Local Fiscal Recovery Funds program, there was a population of 183 procurements during the audit period. Of these procurements, there were 29 vendors that were subject to the rules on suspension and debarment. Of those 29 vendors, we sampled eight for testing. Two out of eight vendors tested did not have documentation that DPS verified the vendors were not suspended or debarred prior to entering into a covered transaction with them. The total amount of the two was $438,885 out of the total sample of $996,779. We also selected a sample of 23 procurements totaling $2,698,309 for testing. One sample was a small purchase totaling $2,550 which required three quotes however only one quote was obtained. The sample was not intended to be, and was not, a statistically valid sample. For the IDEA Cluster, there was a population of 251 procurements during the audit period. We sampled 31 procurements for testing totaling $659,075. Three of the procurements tested totaling $293,692 did not follow the DPS procurement policy. Two exceptions (totaling $290,722) were for large purchases which did not follow the policy for procurement through a formal bid process. The other exception was a small purchase totaling $2,970 which did not follow the requirement of obtaining three or more quotes. The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: For procurement under the Coronavirus State and Local Fiscal Recovery Program- $2,550 For procurement under the IDEA Cluster- $293,692 Repeat Finding: 2023-007 Recommendation: We recommend DPS implement controls that require review of each procurement to ensure DPS obtained the adequate number of quotes or bids for each expenditure. Additionally, we recommend DPS update their procurement thresholds to be more consistent with the compliance minimum requirements. Finally, we recommend DPS modify their policy to address suspension and debarment requirements to ensure they don’t enter into a covered transaction with a suspended or debarred vendor. The policy should require documentation of the search performed. Views of Responsible Officials: Management agrees with the finding.

Information on the Federal Program(s): 14.228 Community Development Block Grants/State’s Program Compliance Requirements: Procurement. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.318(c)(1) requires that 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. Condition: We noted that the City did not have written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Cause: The City was not aware of the requirement to have written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Effect: Failure to have written standards of conduct could result in noncompliance with Uniform Guidance requirements. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City develop written standards of conduct that include the requirements of 2 CFR § 200.318(c)(1). Views of Responsible Officials and Planned Corrective Action: The City will develop written standards of conduct in that satisfy the requirements of 2 CFR § 200.318(c)(1).

Information on the Federal Program(s): 14.228 Community Development Block Grants/State’s Program Compliance Requirements: Procurement. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.319(d) requires that the non-Federal entity must maintain written procedures for procurement transactions. Condition: We noted that the City did not have written procedures for procurement transactions that include the provisions required by the Procurement Standards 2 CFR § 200.318 through 2 CFR § 200.327. Cause: The City was not aware of the requirement to have written procedures for procurement transactions. Effect: Failure to have adequate written procedures for procurement transactions could result in the acquisition of goods or services in violation with administrative requirements, federal regulations, other procurement requirements, and Uniform Guidance requirements. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop adequate written policies and procedures for procurement transactions. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written policies and procedures which include the relevant provisions required by 2 CFR § 200.318 through 2 CFR § 200.326 Contract provisions.

Information on the Federal Program(s): 14.228 Community Development Block Grants/State’s Program Compliance Requirements: Procurement. Type of Finding: Material Weakness in Internal Control Over Compliance. Criteria: Internal controls should be in place to provide reasonable assurance that procurement of goods and services are made in compliance with federal regulations and other procurement requirements, as applicable. Condition: The City lacks sufficient controls over procurement to ensure compliance with federal regulations and other procurement requirements, as applicable. Cause: The City did not design and implement controls over compliance with procurement. Effect or Potential Effect: Failure to have adequate internal controls over compliance with procurement could result in the acquisition of goods or services in violation with administrative requirements, federal regulations, and other procurement requirements. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City create and adopt an official written policy for procurement and contracts establishing contract files that document significant procurement history; methods of procurement authorized including selection of contract type, contractor selection or rejection, and the basis of contract price; verification that procurements provide full and open competition; requirements for cost or price analysis, including for contract modifications; obtaining and reacting to suspension and debarment certifications; and other applicable requirements for procurements under federal awards are followed. We also recommend that personnel with adequate knowledge and experience of responsibilities for procurements for federal awards review procurement and contracting decisions for compliance with federal procurement policies. Views of Responsible Officials and Planned Corrective Action: Management concurs with the audit finding. The City will develop written policies and procedures for procurement, including the relevant provisions required by 2 CFR § 200.318 through 2 CFR § 200.326 Contract provisions. Management will evaluate the need to contract with local government consultants to perform control procedures where City personnel are not available or qualified to perform.

Finding 2024-003: Documentation of Procurement and Competitive Bidding Procedures Condition During testing of procurement transactions, we noted that a vendor was selected for services without documented evidence that competitive bidding or price quotations were obtained, and the procurement file did not include documentation describing the basis for vendor selection. While Home Start, Inc.’s fiscal policies allow for the use of oral quotes and permit vendor selection based on responsiveness and advantage to the Organization considering factors such as price, quality, and other relevant considerations, the procurement documentation maintained by the Organization did not include evidence that quotes were obtained or documentation supporting the basis for vendor selection. Criteria Under 2 CFR §200.318(a), non-federal entities must establish and maintain effective internal controls over the procurement process to ensure compliance with federal statutes, regulations, and the terms and conditions of federal awards. Additionally, 2 CFR §200.318(i) requires non-federal entities to maintain records sufficient to detail the history of procurement, including documentation of the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Further, 2 CFR §§200.319–200.320 require that procurements be conducted in a manner providing full and open competition, and that appropriate price or rate quotations be obtained depending on the procurement method. Cause The Organization did not consistently maintain documentation supporting the procurement process, including evidence of quotes obtained or documentation explaining the basis for vendor selection when competitive quotes were not documented. Effect The absence of procurement documentation reduces the Organization’s ability to demonstrate compliance with Uniform Guidance procurement requirements and increases the risk that procurements funded with federal awards may not meet federal competition standards. Recommendation We recommend that management strengthen procurement documentation procedures to ensure that procurement files include sufficient documentation of the competitive bidding or quotation process, including: • Evidence of quotes or bids obtained, including oral quotes where permitted by policy. • Documentation supporting the evaluation and selection of vendors. • Written justification when competitive bids or quotes are not obtained, consistent with both Uniform Guidance requirements (2 CFR §200.318(i)) and the Organization’s fiscal policies. Implementing these procedures will help ensure that procurement activities funded by federal awards are adequately documented and compliant with Uniform Guidance procurement standards.

Finding 2024-2 Assistance listing number: 21.027 Program name: Coronavirus State and Local Fiscal Recovery Funds Pass-through entity: State of Michigan EGLE Project numbers: A5817-01 Finding type: Material weakness and material noncompliance with laws and regulations Repeat finding: No Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires non-federal entities to maintain specific written policies to ensure accountability for federal awards. Minimum mandatory policies include procurement procedures, allowability of costs, conflict of interest, cash management, and internal controls. Conditions: The City did not have written policies, as are required by Uniform Guidance, that adhered fully to the requirements of Uniform Guidance. Questioned Costs: None Why Questioned Costs Not Determinable: N/A How Questioned Computed: N/A Context: The City has some written policies or resolutions that address procurement and conflict of interest. The procurement policy, however, did not fully address the requirements of UG Section 200.318. In addition, the City had developed some procedures for cash management, allowability costs and internal control but did not adopt the written policies for cash management, allowability of costs and internal control that would fully address the requirements of UG Sections 200.305, 200.302, 200.400 and 200.303. Cause: The City was not in compliance with the UG requirements to have the correct written policies related to procurement, cash management, allowability costs and internal control. Effect: The absence of those properly prepared written policies increases the potential for further noncompliance because the City’s procedures may not adequately address the relevant compliance requirements. Recommendation: We recommend that the City create and put in place the written policies that address the requirements of 2 CFR 200.318-Procurement, 200.305-Cash Management, 200.302 & 200.400-Allowability of Costs, 200.303-Internal Control. View and Response of Responsible Officials: The City is reviewing existing documents and the requirements of UG for written policies to determine the best course of action to create and put in place the written policies required by UG.

Federal Agency: U.S. Department of Justice Federal Program Title: Crime Victim Assistance Federal Assistance Listing Number: 16.575 Federal Award Identification Number and Year: 15POVC23GG00443ASSI-2024 Pass-Through Agency: Minnesota Office of Justice Programs Pass-Through Number(s): A-CVS-2024-AMS-077 Award Period: 10/01/2023 to 09/30/2025 Type of Finding: • Significant Deficiency in Internal Control over Major Federal Programs and Other Matters Criteria or Specific Requirement: 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. Condition: The Organization did not have a written procurement policy in accordance with Uniform Guidance for a portion of the year. In addition, during our testing, we noted the Organization did not apply the proper procurement procedures for two vendors as they did not perform appropriate procedures nor retain adequate documentation in accordance with Uniform Guidance. Questioned Costs: Unknown Context: Two out of the two procurement selections did not have procurement procedures followed. Cause: Vendors were procured prior to the implementation of a formal procurement policy; therefore, proper documentation was not retained as of the procurement date. Effect: Potential effect of noncompliance with Uniform Guidance when procuring goods and services for expenditures over federal awards. Repeat Finding: This is a repeat finding. Recommendation: The Organization should continue to apply its current procurement policy to new and existing vendors to ensure proper documentation is retained in accordance with said procurement policy and SA UG. Views of Responsible Officials and Planned Corrective Actions: The Organization will apply its current procurement policy to new and existing vendors in order to comply with applicable procurement requirements.

SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the year ended May 31, 2024 SECTION II – FINANCIAL STATEMENTS FINDINGS No matters were reported. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Finding Number: 2024-001 Federal Program: 14.267 Continuum of Care Category: Compliance/internal control Criteria: As established in CFR 200.318 of General procurement standards (c)- Conflict of interest - (1) “The recipient or subrecipient 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. No employee, officer, agent, or board member with a real or apparent conflict of interest may participate in the selection, award, or administration of a contract supported by the Federal award. A conflict of interest includes when the employee, officer, agent, or board member, any member of their immediate family, their partner, or an organization that employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from an entity considered for a contract. “ The Conflict-of-Interest policy of the Organization establishes the parameters that define an actual, potential or apparent conflict of interest as follows: • actual conflict of interest - includes any link or relationship between any employee, any Board member and/or any volunteer facing a real and existing conflict • potential conflict of interest - includes any link or relationship between any employee, any Board member and/or any volunteer that could be in a situation that may result in a conflict of interest • apparent conflict of interest - includes any link or relationship between any employee, any Board member and/or any volunteer that could be in a situation that may be perceived having to do with conflict, although in fact it is not Employees, directors, Board members and/or volunteers of the Organization must recognize when they have, could have, or could be thought to have a conflict of interest and must be reported immediately. The Organization can employ relatives, partners and/or spouses of an employee, if the family romantic or marital relationship does not cause a conflict of interest or negative and adversely impact the Organization. In addition, on January 1, 2024, the Organization established a new protocol through an agreement regarding how the working relationships between family members will be managed. The purpose is to reasonably accommodate the supervision status of any immediate family member recruited by the Organization. Specific controls are established for functions such as the performance evaluation process, the disciplinary or reprimand process, evaluation and approval of legal documents, requisition of funds, and programmatic implementation process, among others, to ascertain that any actual, potential or apparent conflict of interest is appropriately mitigated. The agreement needs to be signed by the parties having the relationship and another independent party. Condition: An immediate family member of the Executive Director was promoted to Director of Services and the safeguard measures established in the Conflict-of-Interest policy and the new protocol of the Organization were not followed. The following instances were noted: • The Employment Agreement was signed exclusively by the Executive Director and the Director of Services. • The Reasonable Accommodation of the Supervisory Role of the Director of Services Agreement was signed exclusively by the Executive Director and the Director of Services. In addition, another immediate family member of the Director of Services was hired as a professional contractor. At the moment of the recruitment, the document establishing the relationship was not signed. Subsequently the referred document was signed but it did not specify the existing conflicts with the Director of Services and the Executive Director. Cause: Failure to include a third-party signature in certain legal agreements signed by Executive Director and its immediate family member as established in the new protocol. Failure to follow the Conflict-of-interest policy established policies regarding the timely completion of conflict-ofinterest document, and proper disclosure of such conflict. The conflict of interest between the professional contractor, the Executive Director and the Director of Services was not notified to the Board of Directors to take appropriate remedial action. Context: Not applicable Effect or potential effect: Payments or transactions made between parties that have conflicts of interest and generate economic benefits can occur without being detected. Recommendation: • Review all contracts to ensure that they comply with the conflict-of-interest clause. • In the event of a potential conflict, establish a third-party signature for the Human Resources director or any member of the board executive committee. • Update the employee manual to include the new protocol. Views of responsible officials: Management agrees with the audit findings and is committed to addressing the issues identified to ensure compliance with CFR 200.318, our Conflict-of-Interest policy, and new organizational protocols. We would like to bring to your attention that effective on November 30, 2024, the Executive Director resigned from his position with Corporacion La Fondita de Jesús. We will review and revise our Conflict-of-Interest policy and protocols to ensure they are comprehensive and clear. This includes detailing the steps to be followed when hiring or promoting individuals with familial relationships within the organization. We will establish an independent review and approval process for all employment and promotion agreements involving immediate family members of senior management. This process will include an additional review by a member of the executive committee of the Board of Directors to ensure objectivity and compliance with policies. We will review all contracts to ensure that they comply with the conflict-ofinterest clause.

Federal agency: U.S. Environmental Protection Agency Federal program title: Capitalization Grant for Clean Water State Revolving Funds Assistance Listing Number: 66.458 Federal Award Identification Number and Year: N/A Pass-Through Agency: Illinois Environmental Protection Agency Pass-Through Number: L176108 Award Period: March 27, 2023 – September 17, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Uniform Grant Guidance (2 CFR 180 and 200.318) requires non-federal entities to have formal, documented policies and procedures for procurement and suspension and debarment to ensure transparency, consistency, and compliance with applicable laws and regulations. Condition: During our audit, we noted that the District does not have a formal, documented policy for procurement and suspension and debarment. This includes the absence of procedures for vendor selection, contract management, and criteria for suspension and debarment of vendors. Questioned costs: None Context: The organization operates in a highly regulated environment where procurement activities and vendor management are critical to operational success. Effective procurement policies ensure that the organization engages with qualified vendors, maintains compliance with regulatory requirements, and mitigates risks associated with vendor relationships. Suspension and debarment policies are essential to prevent engaging with vendors who have previously demonstrated non-compliance or unethical behavior. Cause: The District relies on their contractor to ensure vendors and purchases comply with regulatory guidelines. Effect: The absence of a formal procurement and suspension and debarment policy increases the risk of non-compliance with federal regulations. Without these policies, the entity may inadvertently engage in transactions with parties that are debarred, suspended, or otherwise excluded from federal programs. Additionally, the lack of structured procurement procedures can result in inefficient use of resources, increased costs, and potential conflicts of interest. Repeat finding: No. Recommendation: We recommend that the organization develop and implement a formal, documented policy for procurement and suspension and debarment. Views of responsible officials: Management agrees with the finding. The District will work on implementing a formal, documented policy for procurement and suspension and debarment.

Finding 2024-004 Federal assistance listing number and name: 10.415 Rural Rent Housing Loans Awards numbers and years: 2024 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 2024-004 Federal assistance listing number and name: 10.415 Rural Rent Housing Loans Awards numbers and years: 2024 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.

SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the year ended May 31, 2024 SECTION II – FINANCIAL STATEMENTS FINDINGS No matters were reported. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Finding Number: 2024-001 Federal Program: 14.267 Continuum of Care Category: Compliance/internal control Criteria: As established in CFR 200.318 of General procurement standards (c)- Conflict of interest - (1) “The recipient or subrecipient 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. No employee, officer, agent, or board member with a real or apparent conflict of interest may participate in the selection, award, or administration of a contract supported by the Federal award. A conflict of interest includes when the employee, officer, agent, or board member, any member of their immediate family, their partner, or an organization that employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from an entity considered for a contract. “ The Conflict-of-Interest policy of the Organization establishes the parameters that define an actual, potential or apparent conflict of interest as follows: • actual conflict of interest - includes any link or relationship between any employee, any Board member and/or any volunteer facing a real and existing conflict • potential conflict of interest - includes any link or relationship between any employee, any Board member and/or any volunteer that could be in a situation that may result in a conflict of interest • apparent conflict of interest - includes any link or relationship between any employee, any Board member and/or any volunteer that could be in a situation that may be perceived having to do with conflict, although in fact it is not Employees, directors, Board members and/or volunteers of the Organization must recognize when they have, could have, or could be thought to have a conflict of interest and must be reported immediately. The Organization can employ relatives, partners and/or spouses of an employee, if the family romantic or marital relationship does not cause a conflict of interest or negative and adversely impact the Organization. In addition, on January 1, 2024, the Organization established a new protocol through an agreement regarding how the working relationships between family members will be managed. The purpose is to reasonably accommodate the supervision status of any immediate family member recruited by the Organization. Specific controls are established for functions such as the performance evaluation process, the disciplinary or reprimand process, evaluation and approval of legal documents, requisition of funds, and programmatic implementation process, among others, to ascertain that any actual, potential or apparent conflict of interest is appropriately mitigated. The agreement needs to be signed by the parties having the relationship and another independent party. Condition: An immediate family member of the Executive Director was promoted to Director of Services and the safeguard measures established in the Conflict-of-Interest policy and the new protocol of the Organization were not followed. The following instances were noted: • The Employment Agreement was signed exclusively by the Executive Director and the Director of Services. • The Reasonable Accommodation of the Supervisory Role of the Director of Services Agreement was signed exclusively by the Executive Director and the Director of Services. In addition, another immediate family member of the Director of Services was hired as a professional contractor. At the moment of the recruitment, the document establishing the relationship was not signed. Subsequently the referred document was signed but it did not specify the existing conflicts with the Director of Services and the Executive Director. Cause: Failure to include a third-party signature in certain legal agreements signed by Executive Director and its immediate family member as established in the new protocol. Failure to follow the Conflict-of-interest policy established policies regarding the timely completion of conflict-ofinterest document, and proper disclosure of such conflict. The conflict of interest between the professional contractor, the Executive Director and the Director of Services was not notified to the Board of Directors to take appropriate remedial action. Context: Not applicable Effect or potential effect: Payments or transactions made between parties that have conflicts of interest and generate economic benefits can occur without being detected. Recommendation: • Review all contracts to ensure that they comply with the conflict-of-interest clause. • In the event of a potential conflict, establish a third-party signature for the Human Resources director or any member of the board executive committee. • Update the employee manual to include the new protocol. Views of responsible officials: Management agrees with the audit findings and is committed to addressing the issues identified to ensure compliance with CFR 200.318, our Conflict-of-Interest policy, and new organizational protocols. We would like to bring to your attention that effective on November 30, 2024, the Executive Director resigned from his position with Corporacion La Fondita de Jesús. We will review and revise our Conflict-of-Interest policy and protocols to ensure they are comprehensive and clear. This includes detailing the steps to be followed when hiring or promoting individuals with familial relationships within the organization. We will establish an independent review and approval process for all employment and promotion agreements involving immediate family members of senior management. This process will include an additional review by a member of the executive committee of the Board of Directors to ensure objectivity and compliance with policies. We will review all contracts to ensure that they comply with the conflict-ofinterest clause.

Federal agency: U.S. Environmental Protection Agency Federal program title: Capitalization Grant for Clean Water State Revolving Funds Assistance Listing Number: 66.458 Federal Award Identification Number and Year: N/A Pass-Through Agency: Illinois Environmental Protection Agency Pass-Through Number: L176108 Award Period: March 27, 2023 – September 17, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Uniform Grant Guidance (2 CFR 180 and 200.318) requires non-federal entities to have formal, documented policies and procedures for procurement and suspension and debarment to ensure transparency, consistency, and compliance with applicable laws and regulations. Condition: During our audit, we noted that the District does not have a formal, documented policy for procurement and suspension and debarment. This includes the absence of procedures for vendor selection, contract management, and criteria for suspension and debarment of vendors. Questioned costs: None Context: The organization operates in a highly regulated environment where procurement activities and vendor management are critical to operational success. Effective procurement policies ensure that the organization engages with qualified vendors, maintains compliance with regulatory requirements, and mitigates risks associated with vendor relationships. Suspension and debarment policies are essential to prevent engaging with vendors who have previously demonstrated non-compliance or unethical behavior. Cause: The District relies on their contractor to ensure vendors and purchases comply with regulatory guidelines. Effect: The absence of a formal procurement and suspension and debarment policy increases the risk of non-compliance with federal regulations. Without these policies, the entity may inadvertently engage in transactions with parties that are debarred, suspended, or otherwise excluded from federal programs. Additionally, the lack of structured procurement procedures can result in inefficient use of resources, increased costs, and potential conflicts of interest. Repeat finding: No. Recommendation: We recommend that the organization develop and implement a formal, documented policy for procurement and suspension and debarment. Views of responsible officials: Management agrees with the finding. The District will work on implementing a formal, documented policy for procurement and suspension and debarment.

Finding 2024-004 Federal assistance listing number and name: 10.415 Rural Rent Housing Loans Awards numbers and years: 2024 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 2024-004 Federal assistance listing number and name: 10.415 Rural Rent Housing Loans Awards numbers and years: 2024 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.

Health Center Program Cluster – Assistance Listing Nos. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 6 H80CS00751-22-03, April 1, 2023 – March 31, 2024 Award No. 4 H8GCS47984-01-01, December 1, 2022 – December 31, 2023 Award No. 6 H8FCS41089‐01‐03, April 1, 2021 – March 31, 2024 Community Health Center Program – State Identifying No. 435.151301 Wisconsin Department of Health Agreement No. 435100-G24-3919588107-90, July 1, 2023 – June 30, 2024 Agreement No. 435100-G23-3919588107-390, July 1, 2022 – June 30, 2023 Criteria or Specific Requirement – Procurement – Federal: 45 CFR 75.329. State: Wisconsin Department of Health Services ACPM and 2 CFR 200.318. Condition – The Organization’s policy governing procurement requirements for the purchase of goods or services charged to federal or state awards was not compliant with Uniform Guidance. Questioned Costs – None Context – The Organization’s procurement policy does not incorporate the following methods of procurement established by Uniform Guidance: micro-purchases, small purchase procedures, sealed bids, competitive proposals, and noncompetitive proposals. Effect – Purchases of goods or services were made that may not have been obtained in the most effective manner or in compliance with Uniform Guidance. Cause – The Organization’s procurement policy has not been updated to align with Uniform Guidance. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – The Organization should revise its procurement policy consistent with requirements in Uniform Guidance and provide staff education and training on the updated policy. Additionally, the Organization should review Uniform Guidance requirements on an annual basis to ensure its procurement policy remains compliant with Uniform Guidance. Views of responsible officials and planned corrective actions – The Organization has historically addressed procurement in our finance manual., however we will create a stand-alone procurement policy that is monitored regularly to ensure compliance with Uniform Guidance. Further, relevant staff participated in a training focused on CHC grants management matters in December 2024 and will continue to look for learning opportunities to support and challenge compliance matters.

Health Center Program Cluster – Assistance Listing Nos. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 6 H80CS00751-22-03, April 1, 2023 – March 31, 2024 Award No. 4 H8GCS47984-01-01, December 1, 2022 – December 31, 2023 Award No. 6 H8FCS41089‐01‐03, April 1, 2021 – March 31, 2024 Community Health Center Program – State Identifying No. 435.151301 Wisconsin Department of Health Agreement No. 435100-G24-3919588107-90, July 1, 2023 – June 30, 2024 Agreement No. 435100-G23-3919588107-390, July 1, 2022 – June 30, 2023 Criteria or Specific Requirement – Procurement – Federal: 45 CFR 75.329. State: Wisconsin Department of Health Services ACPM and 2 CFR 200.318. Condition – The Organization’s policy governing procurement requirements for the purchase of goods or services charged to federal or state awards was not compliant with Uniform Guidance. Questioned Costs – None Context – The Organization’s procurement policy does not incorporate the following methods of procurement established by Uniform Guidance: micro-purchases, small purchase procedures, sealed bids, competitive proposals, and noncompetitive proposals. Effect – Purchases of goods or services were made that may not have been obtained in the most effective manner or in compliance with Uniform Guidance. Cause – The Organization’s procurement policy has not been updated to align with Uniform Guidance. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – The Organization should revise its procurement policy consistent with requirements in Uniform Guidance and provide staff education and training on the updated policy. Additionally, the Organization should review Uniform Guidance requirements on an annual basis to ensure its procurement policy remains compliant with Uniform Guidance. Views of responsible officials and planned corrective actions – The Organization has historically addressed procurement in our finance manual., however we will create a stand-alone procurement policy that is monitored regularly to ensure compliance with Uniform Guidance. Further, relevant staff participated in a training focused on CHC grants management matters in December 2024 and will continue to look for learning opportunities to support and challenge compliance matters.

Health Center Program Cluster – Assistance Listing Nos. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 6 H80CS00751-22-03, April 1, 2023 – March 31, 2024 Award No. 4 H8GCS47984-01-01, December 1, 2022 – December 31, 2023 Award No. 6 H8FCS41089‐01‐03, April 1, 2021 – March 31, 2024 Community Health Center Program – State Identifying No. 435.151301 Wisconsin Department of Health Agreement No. 435100-G24-3919588107-90, July 1, 2023 – June 30, 2024 Agreement No. 435100-G23-3919588107-390, July 1, 2022 – June 30, 2023 Criteria or Specific Requirement – Procurement – Federal: 45 CFR 75.329. State: Wisconsin Department of Health Services ACPM and 2 CFR 200.318. Condition – The Organization’s policy governing procurement requirements for the purchase of goods or services charged to federal or state awards was not compliant with Uniform Guidance. Questioned Costs – None Context – The Organization’s procurement policy does not incorporate the following methods of procurement established by Uniform Guidance: micro-purchases, small purchase procedures, sealed bids, competitive proposals, and noncompetitive proposals. Effect – Purchases of goods or services were made that may not have been obtained in the most effective manner or in compliance with Uniform Guidance. Cause – The Organization’s procurement policy has not been updated to align with Uniform Guidance. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – The Organization should revise its procurement policy consistent with requirements in Uniform Guidance and provide staff education and training on the updated policy. Additionally, the Organization should review Uniform Guidance requirements on an annual basis to ensure its procurement policy remains compliant with Uniform Guidance. Views of responsible officials and planned corrective actions – The Organization has historically addressed procurement in our finance manual., however we will create a stand-alone procurement policy that is monitored regularly to ensure compliance with Uniform Guidance. Further, relevant staff participated in a training focused on CHC grants management matters in December 2024 and will continue to look for learning opportunities to support and challenge compliance matters.

Health Center Program Cluster – Assistance Listing Nos. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 6 H80CS00751-22-03, April 1, 2023 – March 31, 2024 Award No. 4 H8GCS47984-01-01, December 1, 2022 – December 31, 2023 Award No. 6 H8FCS41089‐01‐03, April 1, 2021 – March 31, 2024 Community Health Center Program – State Identifying No. 435.151301 Wisconsin Department of Health Agreement No. 435100-G24-3919588107-90, July 1, 2023 – June 30, 2024 Agreement No. 435100-G23-3919588107-390, July 1, 2022 – June 30, 2023 Criteria or Specific Requirement – Procurement – Federal: 45 CFR 75.329. State: Wisconsin Department of Health Services ACPM and 2 CFR 200.318. Condition – The Organization’s policy governing procurement requirements for the purchase of goods or services charged to federal or state awards was not compliant with Uniform Guidance. Questioned Costs – None Context – The Organization’s procurement policy does not incorporate the following methods of procurement established by Uniform Guidance: micro-purchases, small purchase procedures, sealed bids, competitive proposals, and noncompetitive proposals. Effect – Purchases of goods or services were made that may not have been obtained in the most effective manner or in compliance with Uniform Guidance. Cause – The Organization’s procurement policy has not been updated to align with Uniform Guidance. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – The Organization should revise its procurement policy consistent with requirements in Uniform Guidance and provide staff education and training on the updated policy. Additionally, the Organization should review Uniform Guidance requirements on an annual basis to ensure its procurement policy remains compliant with Uniform Guidance. Views of responsible officials and planned corrective actions – The Organization has historically addressed procurement in our finance manual., however we will create a stand-alone procurement policy that is monitored regularly to ensure compliance with Uniform Guidance. Further, relevant staff participated in a training focused on CHC grants management matters in December 2024 and will continue to look for learning opportunities to support and challenge compliance matters.

Finding 2024-005 – Suspension and debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds; Health Center Program Cluster Assistance Listing Number: 21.027; 93.224/93.527 Pass-Through Entity: Cook County Department of Public Health, N/A Pass-Through Number: None; N/A Award Periods: May 1, 2023-November 30, 2026; July 1, 2021 – June 30, 2023; Type of Finding: Significant deficiency in internal control over compliance Criteria: 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: Legacy did not document that sam.gov was checked prior to entering into a contract with a vendor. Questioned Costs: None. Context: One (1) of two (2) vendors tested within 21.027 and two (2) of two (2) vendors within 93.224/93.527. Cause: Legacy did not create and maintain documentation showing that suspension and debarment had been checked prior to engaging a vendor. Effect: Contracted vendors may be ineligible to receive federal dollars for services performed. Repeat Finding: Yes. Prior Year Finding: 2023-006. Recommendation: We recommend that Legacy check, and document, the use of Sam.gov to verify that a vendor was not suspended, debarred, or otherwise excluded from participating in the transaction prior to entering into a contract. Views of Responsible Officials: There is no disagreement with the audit finding.

Finding 2024-005 – Suspension and debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds; Health Center Program Cluster Assistance Listing Number: 21.027; 93.224/93.527 Pass-Through Entity: Cook County Department of Public Health, N/A Pass-Through Number: None; N/A Award Periods: May 1, 2023-November 30, 2026; July 1, 2021 – June 30, 2023; Type of Finding: Significant deficiency in internal control over compliance Criteria: 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: Legacy did not document that sam.gov was checked prior to entering into a contract with a vendor. Questioned Costs: None. Context: One (1) of two (2) vendors tested within 21.027 and two (2) of two (2) vendors within 93.224/93.527. Cause: Legacy did not create and maintain documentation showing that suspension and debarment had been checked prior to engaging a vendor. Effect: Contracted vendors may be ineligible to receive federal dollars for services performed. Repeat Finding: Yes. Prior Year Finding: 2023-006. Recommendation: We recommend that Legacy check, and document, the use of Sam.gov to verify that a vendor was not suspended, debarred, or otherwise excluded from participating in the transaction prior to entering into a contract. Views of Responsible Officials: There is no disagreement with the audit finding.

Health Center Program Cluster – Assistance Listing Nos. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 6 H80CS00751-22-03, April 1, 2023 – March 31, 2024 Award No. 4 H8GCS47984-01-01, December 1, 2022 – December 31, 2023 Award No. 6 H8FCS41089‐01‐03, April 1, 2021 – March 31, 2024 Community Health Center Program – State Identifying No. 435.151301 Wisconsin Department of Health Agreement No. 435100-G24-3919588107-90, July 1, 2023 – June 30, 2024 Agreement No. 435100-G23-3919588107-390, July 1, 2022 – June 30, 2023 Criteria or Specific Requirement – Procurement – Federal: 45 CFR 75.329. State: Wisconsin Department of Health Services ACPM and 2 CFR 200.318. Condition – The Organization’s policy governing procurement requirements for the purchase of goods or services charged to federal or state awards was not compliant with Uniform Guidance. Questioned Costs – None Context – The Organization’s procurement policy does not incorporate the following methods of procurement established by Uniform Guidance: micro-purchases, small purchase procedures, sealed bids, competitive proposals, and noncompetitive proposals. Effect – Purchases of goods or services were made that may not have been obtained in the most effective manner or in compliance with Uniform Guidance. Cause – The Organization’s procurement policy has not been updated to align with Uniform Guidance. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – The Organization should revise its procurement policy consistent with requirements in Uniform Guidance and provide staff education and training on the updated policy. Additionally, the Organization should review Uniform Guidance requirements on an annual basis to ensure its procurement policy remains compliant with Uniform Guidance. Views of responsible officials and planned corrective actions – The Organization has historically addressed procurement in our finance manual., however we will create a stand-alone procurement policy that is monitored regularly to ensure compliance with Uniform Guidance. Further, relevant staff participated in a training focused on CHC grants management matters in December 2024 and will continue to look for learning opportunities to support and challenge compliance matters.

Health Center Program Cluster – Assistance Listing Nos. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 6 H80CS00751-22-03, April 1, 2023 – March 31, 2024 Award No. 4 H8GCS47984-01-01, December 1, 2022 – December 31, 2023 Award No. 6 H8FCS41089‐01‐03, April 1, 2021 – March 31, 2024 Community Health Center Program – State Identifying No. 435.151301 Wisconsin Department of Health Agreement No. 435100-G24-3919588107-90, July 1, 2023 – June 30, 2024 Agreement No. 435100-G23-3919588107-390, July 1, 2022 – June 30, 2023 Criteria or Specific Requirement – Procurement – Federal: 45 CFR 75.329. State: Wisconsin Department of Health Services ACPM and 2 CFR 200.318. Condition – The Organization’s policy governing procurement requirements for the purchase of goods or services charged to federal or state awards was not compliant with Uniform Guidance. Questioned Costs – None Context – The Organization’s procurement policy does not incorporate the following methods of procurement established by Uniform Guidance: micro-purchases, small purchase procedures, sealed bids, competitive proposals, and noncompetitive proposals. Effect – Purchases of goods or services were made that may not have been obtained in the most effective manner or in compliance with Uniform Guidance. Cause – The Organization’s procurement policy has not been updated to align with Uniform Guidance. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – The Organization should revise its procurement policy consistent with requirements in Uniform Guidance and provide staff education and training on the updated policy. Additionally, the Organization should review Uniform Guidance requirements on an annual basis to ensure its procurement policy remains compliant with Uniform Guidance. Views of responsible officials and planned corrective actions – The Organization has historically addressed procurement in our finance manual., however we will create a stand-alone procurement policy that is monitored regularly to ensure compliance with Uniform Guidance. Further, relevant staff participated in a training focused on CHC grants management matters in December 2024 and will continue to look for learning opportunities to support and challenge compliance matters.

Health Center Program Cluster – Assistance Listing Nos. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 6 H80CS00751-22-03, April 1, 2023 – March 31, 2024 Award No. 4 H8GCS47984-01-01, December 1, 2022 – December 31, 2023 Award No. 6 H8FCS41089‐01‐03, April 1, 2021 – March 31, 2024 Community Health Center Program – State Identifying No. 435.151301 Wisconsin Department of Health Agreement No. 435100-G24-3919588107-90, July 1, 2023 – June 30, 2024 Agreement No. 435100-G23-3919588107-390, July 1, 2022 – June 30, 2023 Criteria or Specific Requirement – Procurement – Federal: 45 CFR 75.329. State: Wisconsin Department of Health Services ACPM and 2 CFR 200.318. Condition – The Organization’s policy governing procurement requirements for the purchase of goods or services charged to federal or state awards was not compliant with Uniform Guidance. Questioned Costs – None Context – The Organization’s procurement policy does not incorporate the following methods of procurement established by Uniform Guidance: micro-purchases, small purchase procedures, sealed bids, competitive proposals, and noncompetitive proposals. Effect – Purchases of goods or services were made that may not have been obtained in the most effective manner or in compliance with Uniform Guidance. Cause – The Organization’s procurement policy has not been updated to align with Uniform Guidance. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – The Organization should revise its procurement policy consistent with requirements in Uniform Guidance and provide staff education and training on the updated policy. Additionally, the Organization should review Uniform Guidance requirements on an annual basis to ensure its procurement policy remains compliant with Uniform Guidance. Views of responsible officials and planned corrective actions – The Organization has historically addressed procurement in our finance manual., however we will create a stand-alone procurement policy that is monitored regularly to ensure compliance with Uniform Guidance. Further, relevant staff participated in a training focused on CHC grants management matters in December 2024 and will continue to look for learning opportunities to support and challenge compliance matters.

Health Center Program Cluster – Assistance Listing Nos. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 6 H80CS00751-22-03, April 1, 2023 – March 31, 2024 Award No. 4 H8GCS47984-01-01, December 1, 2022 – December 31, 2023 Award No. 6 H8FCS41089‐01‐03, April 1, 2021 – March 31, 2024 Community Health Center Program – State Identifying No. 435.151301 Wisconsin Department of Health Agreement No. 435100-G24-3919588107-90, July 1, 2023 – June 30, 2024 Agreement No. 435100-G23-3919588107-390, July 1, 2022 – June 30, 2023 Criteria or Specific Requirement – Procurement – Federal: 45 CFR 75.329. State: Wisconsin Department of Health Services ACPM and 2 CFR 200.318. Condition – The Organization’s policy governing procurement requirements for the purchase of goods or services charged to federal or state awards was not compliant with Uniform Guidance. Questioned Costs – None Context – The Organization’s procurement policy does not incorporate the following methods of procurement established by Uniform Guidance: micro-purchases, small purchase procedures, sealed bids, competitive proposals, and noncompetitive proposals. Effect – Purchases of goods or services were made that may not have been obtained in the most effective manner or in compliance with Uniform Guidance. Cause – The Organization’s procurement policy has not been updated to align with Uniform Guidance. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – The Organization should revise its procurement policy consistent with requirements in Uniform Guidance and provide staff education and training on the updated policy. Additionally, the Organization should review Uniform Guidance requirements on an annual basis to ensure its procurement policy remains compliant with Uniform Guidance. Views of responsible officials and planned corrective actions – The Organization has historically addressed procurement in our finance manual., however we will create a stand-alone procurement policy that is monitored regularly to ensure compliance with Uniform Guidance. Further, relevant staff participated in a training focused on CHC grants management matters in December 2024 and will continue to look for learning opportunities to support and challenge compliance matters.

Finding 2024-005 – Suspension and debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds; Health Center Program Cluster Assistance Listing Number: 21.027; 93.224/93.527 Pass-Through Entity: Cook County Department of Public Health, N/A Pass-Through Number: None; N/A Award Periods: May 1, 2023-November 30, 2026; July 1, 2021 – June 30, 2023; Type of Finding: Significant deficiency in internal control over compliance Criteria: 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: Legacy did not document that sam.gov was checked prior to entering into a contract with a vendor. Questioned Costs: None. Context: One (1) of two (2) vendors tested within 21.027 and two (2) of two (2) vendors within 93.224/93.527. Cause: Legacy did not create and maintain documentation showing that suspension and debarment had been checked prior to engaging a vendor. Effect: Contracted vendors may be ineligible to receive federal dollars for services performed. Repeat Finding: Yes. Prior Year Finding: 2023-006. Recommendation: We recommend that Legacy check, and document, the use of Sam.gov to verify that a vendor was not suspended, debarred, or otherwise excluded from participating in the transaction prior to entering into a contract. Views of Responsible Officials: There is no disagreement with the audit finding.

Finding 2024-005 – Suspension and debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds; Health Center Program Cluster Assistance Listing Number: 21.027; 93.224/93.527 Pass-Through Entity: Cook County Department of Public Health, N/A Pass-Through Number: None; N/A Award Periods: May 1, 2023-November 30, 2026; July 1, 2021 – June 30, 2023; Type of Finding: Significant deficiency in internal control over compliance Criteria: 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: Legacy did not document that sam.gov was checked prior to entering into a contract with a vendor. Questioned Costs: None. Context: One (1) of two (2) vendors tested within 21.027 and two (2) of two (2) vendors within 93.224/93.527. Cause: Legacy did not create and maintain documentation showing that suspension and debarment had been checked prior to engaging a vendor. Effect: Contracted vendors may be ineligible to receive federal dollars for services performed. Repeat Finding: Yes. Prior Year Finding: 2023-006. Recommendation: We recommend that Legacy check, and document, the use of Sam.gov to verify that a vendor was not suspended, debarred, or otherwise excluded from participating in the transaction prior to entering into a contract. Views of Responsible Officials: There is no disagreement with the audit finding.

Assistance Listing Number 66.468 Drinking Water State Revolving Fund United States Environmental Protection Agency North Dakota Public Finance Authority Procurement Suspension & Debarment 2 CFR Part 200.318 Criteria 2 CFR Part 200.318 states that a non-Federal entity must have and use documented procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR part 200.317 through 200.327. Condition District does not have a written procurement policy in place. Cause The District has not approved a written procurement policy. Effect Non-compliance with Procurement Suspension & Debarment compliance requirements. Questioned Costs Not Applicable Repeat Finding See 2022-005. Recommendation We recommend for the board of the District to create and implement a procurement policy that adheres to state and local regulations as well as 2 CFR Part 200.317 through 200.327. Views of Responsible Officials and Planned Corrective Actions The District will create and approve a procurement policy that adheres to state and local regulations as well as 2 CFR Part 200.317 through 200.327.

Finding 2023-001 Noncompliance and material weakness in internal control over compliance with procurement requirements Federal Agency: Department of Housing and Urban Development Assistance Listing Number: 14.251 Assistance Listing Name: Community Project Funding Award Number: B-23-CP-WA-1530 Criteria Nonfederal entities must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. For acquisitions exceeding the simplified acquisition threshold, the nonfederal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b)(i); the competitive proposals method under the conditions specified in 2 CFR section 200.320(b)(2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). Condition and Effect During our testing of the procurement compliance requirement, we noted that the Aquarium had not performed the required procurement procedures for one of the vendors in our sample. For this one vendor the acquisition exceeded the simplified acquisition threshold. The Aquarium used a noncompetitive method to select the vendor; however, the acquisition did not meet one of the four qualifying circumstances for a noncompetitive procurement. Cause The Aquarium’s system of internal control did not operate effectively to prevent the Aquarium from incorrectly using a noncompetitive procurement process, when instead a proscribed competitive procurement process should have been followed. Context During the year under audit there was a total population of nine vendors to which the procurement compliance requirement applied. For our testing of the procurement compliance requirement, we tested a sample of two vendors from the total population of nine. As noted in the condition section above, our testing found that the Aquarium did not comply with the procurement compliance requirements for one of the vendors tested. We also noted that the procurement activity for this vendor occurred in 2017 and prior to the Aquarium seeking federal funding for the Ocean Pavilion project. Questioned Costs Payments to that one vendor during 2023 that were charged to the major federal program totaled $118,845. Repeat Finding This is not a repeat finding. Recommendation We recommend management provide training for those involved with procurement activities for acquisitions that will be charged to federal awards to ensure the Aquarium’s procurement policies and procedures are consistently applied. We also recommend management update the Aquarium’s procurement policies and procedures to ensure they incorporate the required procedures and controls to ensure compliance with the procurement requirements in 2 CFR 200 (the Uniform Guidance) for acquisitions that will be charged to federal awards. Views of Responsible Officials and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.

Finding 2023-003: Significant Deficiency - Internal Control Over Procurement, Suspension and Debarment Program Water and Waste Disposal Systems for Rural Communities Federal Agency U.S. Department of Agriculture Assistance Listing Number 10.760 Criteria: For federal awards after January 1, 2018, guidance provided in 2 CFR part 200.318 requires nonfederal entities to establish and follow their own documented procurement procedures that conform to applicable federal law and standards. 2 CFR part 200.320 includes different allowable methods of procurement. There are also requirements to verify the vendors are not suspended or debarred. Condition/Context: During our testing for this program, we noted that the City did not have a written procurement policy to conform with Uniform Guidance requirements. The City contracted with a thirdparty administrator who provided the services related to procurement for this grant program. Cause: The City was not aware that a written policy was required to be in place outside of the terms and condition in the grant agreement. Effect: Without an adequate policy in place, procurement procedures may not adhere to requirements of federal awards. Questioned Costs: None noted. Recommendation: Program personnel should become familiar with the procurement, suspension and debarment rules for Federal programs and implement a formal written policy to conform with Uniform Guidance requirements. Views of Responsible Officials: Management agrees with the finding and will make efforts to implement a formal procurement policy.

Assistance Listing, Federal Agency, and Program Name - ALN 47.074, National Science Foundation, Biological Sciences - Collaborative Research: Phenobase: Community, Infrastructure, and Data for Global Scale Analyses of Plant Phenology; ALN 47.074, National Science Foundation, Biological Sciences - REU Site: Plant Biology and Conservation Research Experiences for Undergraduates Federal Award Identification Number and Year - DBI-2223510, DBI2149888 Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 180.300 - 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 of disqualified. You do this by: (a) checking SAM exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. 2 CFR 200.318(i) - The entity must maintain records sufficient to detail the history of procurement. These records will include, but are not 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. 2 CFR 200.319(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. 2 CFR 200.320(a)(2)(i) - 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. Condition - The Society did not have documentation to support that two covered transactions were checked for potential suspension or debarment before entering into the transaction. There was one covered transaction where the Society did not have documentation to support the procurement process followed or that more than one vendor was reviewed for pricing before selecting the vendor chosen. Questioned Costs - The Society charged a total of $31,000 to grant DBI-2223510 during 2023 for a covered transaction in which there was not supporting documentation that the service was procured under the requirements above. Identification of How Questioned Costs Were Computed - The amount of the covered transaction that was submitted for reimbursement during 2023. Context - Two covered transactions with total expenditures charged to the grants of $85,735 were reviewed. The population subject to testing included a total of three covered transactions. Cause and Effect - The Society experienced significant personnel turnover during the year within its accounting and grants departments, which resulted in issues with documentation retention and records retrieval. Recommendation - The Society should implement an internal review process of its record retention to ensure that all procurement documentation is appropriately retained in accordance with its formal policies. Views of Responsible Officials and Planned Corrective Actions - Staff turnover in early 2023 resulted in limited capacity for dedicated staff to check for potential suspension or debarment before adding vendors to the system. We have dedicated staff who will be managing this process going forward. The Society has written procurement policies and procedures. Key leadership stakeholders have been apprised of our policies and procedures. The Society will be implementing a training series for government funded procurement stakeholders within the Society to ensure compliance.

Assistance Listing, Federal Agency, and Program Name - ALN 47.074, National Science Foundation, Biological Sciences - Collaborative Research: Phenobase: Community, Infrastructure, and Data for Global Scale Analyses of Plant Phenology; ALN 47.074, National Science Foundation, Biological Sciences - REU Site: Plant Biology and Conservation Research Experiences for Undergraduates Federal Award Identification Number and Year - DBI-2223510, DBI2149888 Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 180.300 - 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 of disqualified. You do this by: (a) checking SAM exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. 2 CFR 200.318(i) - The entity must maintain records sufficient to detail the history of procurement. These records will include, but are not 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. 2 CFR 200.319(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. 2 CFR 200.320(a)(2)(i) - 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. Condition - The Society did not have documentation to support that two covered transactions were checked for potential suspension or debarment before entering into the transaction. There was one covered transaction where the Society did not have documentation to support the procurement process followed or that more than one vendor was reviewed for pricing before selecting the vendor chosen. Questioned Costs - The Society charged a total of $31,000 to grant DBI-2223510 during 2023 for a covered transaction in which there was not supporting documentation that the service was procured under the requirements above. Identification of How Questioned Costs Were Computed - The amount of the covered transaction that was submitted for reimbursement during 2023. Context - Two covered transactions with total expenditures charged to the grants of $85,735 were reviewed. The population subject to testing included a total of three covered transactions. Cause and Effect - The Society experienced significant personnel turnover during the year within its accounting and grants departments, which resulted in issues with documentation retention and records retrieval. Recommendation - The Society should implement an internal review process of its record retention to ensure that all procurement documentation is appropriately retained in accordance with its formal policies. Views of Responsible Officials and Planned Corrective Actions - Staff turnover in early 2023 resulted in limited capacity for dedicated staff to check for potential suspension or debarment before adding vendors to the system. We have dedicated staff who will be managing this process going forward. The Society has written procurement policies and procedures. Key leadership stakeholders have been apprised of our policies and procedures. The Society will be implementing a training series for government funded procurement stakeholders within the Society to ensure compliance.

Procurement Policy Federal Agency: U.S. Department of the Treasury Federal Program Title: NeighborWorks® America Grant Cluster Federal Assistance Listing Number: 21.U12 Compliance Requirement: Procurement Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Criteria or Specific Requirement: The Organization should have a formal procurement policy to guide the Organization when entering into covered transactions. The policy needs to include all components identified in 2 CFR 200.318. Condition: The Organization had 3 expenses applied to the grant in excess of the $10,000 required micro-purchase threshold and below their internal $15,000 policy. The Organization also did not have a procurement policy in place that follows Uniform Guidance. Questioned Costs: None Context: The Organization had an internal procurement policy in effect that specified procurement controls and documentation for purchases greater than $15,000, which exceeds the $10,000 micro-purchase threshold required under Uniform Guidance. The Organization entered into three transactions below their $15,000 internal policy but in excess of the $10,000 required micro purchase threshold for which an adequate number of price or rate quotes were not documented. Cause: Management Oversight Effect: The effect of not having a procurement policy with all the required components would be noncompliance with 2 CFR 200.318. Recommendation: It is recommended that the Organization review and update the procurement policy as necessary to ensure compliance with the Uniform Guidance. Views of Responsible Officials: There is no disagreement with the audit finding. Refer to the Organization’s Corrective Action Plan for more information.

Finding 2023-001: Procurement Policy Information on the Federal Program: All Criteria: According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, 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 Procurement Standards. 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. The non-Federal entity must have written procedures for procurement transactions." Additionally, according to 2 CFR §200.318 Procurement standards, 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 Procurement Standards. 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. The non-Federal entity must have written procedures for procurement transactions. Condition: During our testing performed over procurement and through inquiries with management, we noted the Organization does not have a formally documented procurement policy in place that is consistent with 2 CFR §200.318(a). Cause: Management has not formalized and implemented an official organizational procurement policy. Effect or Potential Effect: An official procurement policy will outline specified thresholds for which procurement is required, required documentation needed for each threshold, and individuals responsible for ensuring procurement is performed in all required circumstances. When no policy is in place, there is a risk that procurement would not be performed, or adequate documentation would not be obtained, when required. Questioned Costs: None noted. Context: We noted that the Organization does not have a documented procurement policy in effect.Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that management formalize and implement an official procurement policy. This policy should include thresholds for which various levels of procurement are required. The policy should also include what documentation is required for each level of procurement. Additionally, the policy should specify individuals responsible for conducting procurement, and approving the final selection.

Finding # 2023-002 Type: Immaterial noncompliance over procurement Assistance Listing: 10.937 Partnerships for Climate-Smart Commodities Criteria/Requirement The Organization’s procurement policies should incorporate the provisions of the procurement standards set out at 2 CFR sections 200.318 through 200.327. Cause: The Organization’s fiscal policies and procedures do not meet the required federal standards for procurement. Effect: Executed contracts using federal funds may be in violation of federal guidelines. Questioned Costs: None. Recommendation: The Organization's procurement policy must have documented procurement procedures, consistent with state, local, and tribal laws and regulations for the acquisition of property or services required under a federal award or subaward. The Organization should maintain records sufficient to detail the history of procurement. Management’s Response: The Organization agrees with the auditor’s recommendation. At the time of this audit’s issuance, the Organization has updated its procurement policies and procedures to be consistent with federal requirements.

Finding # 2023-002 Type: Immaterial noncompliance over procurement Assistance Listing: 10.937 Partnerships for Climate-Smart Commodities Criteria/Requirement The Organization’s procurement policies should incorporate the provisions of the procurement standards set out at 2 CFR sections 200.318 through 200.327. Cause: The Organization’s fiscal policies and procedures do not meet the required federal standards for procurement. Effect: Executed contracts using federal funds may be in violation of federal guidelines. Questioned Costs: None. Recommendation: The Organization's procurement policy must have documented procurement procedures, consistent with state, local, and tribal laws and regulations for the acquisition of property or services required under a federal award or subaward. The Organization should maintain records sufficient to detail the history of procurement. Management’s Response: The Organization agrees with the auditor’s recommendation. At the time of this audit’s issuance, the Organization has updated its procurement policies and procedures to be consistent with federal requirements.

Finding Number: 2023-001 Repeat Finding: No Program Name / Title: Special Supplemental Nutrition Program for Women, Infants, and Children and Grants for Capital Development in Health Centers Federal Assistance Listing Number: 10.557 and 93.526 Federal Agencies: United States Department of Agriculture and and U.S. Department of Health and Human Services Federal Award Number: 22-10305 and C8ECS44546 Type of Finding: Significant Deficiency Compliance Requirement: Procurement and Suspension and Debarment Questioned Cost: No Criteria: Under 2 CFR sections 180.220 and 200.318 through 200.326, 45 CFR 75.327 through 75.334 and 45 CFR 75 Part E, the Organization is required to implement certain written Procurement and Suspension and Debarment policies and procedures that adhere to the minimum Federal Procurement standards. The Organization must use its 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 outlined in Uniform Guidance and maintain sufficient records to detail the history of procurements. Condition: Although the Organization maintained a written procurement policy, the Organization did not have adequate procurement policies in place to meet the minimum federal requirements for procurement standards and did not always follow its own procurement policies. Cause: The Organization's policy did not meet all of the minimum federal requirements under Uniform Guidance. In addition, the Organization could not provide support to demonstrate that it performed all of the necessary procurement steps and did not always retain documentation demonstrating compliance with Uniform Guidance for purchases made with federal funds. Effect: The Organization was not in compliance with federal regulations or its own policies. Recommendation: The Organization should update their procurement policy to meet the minimum federal requirements and ensure procurement policies are being followed for all procurement levels with written documentation. View of Responsible Officials: Introduction United Health Centers of the San Joaquin Valley (the "Organization") vigorously protests this finding. The Organization rigorously complies with not only federal and state procurement regulations, but also WIC regulations and the requirements found in the contract between the Organization and WIC. Additionally, numerous audits have been conducted by various entities (including audits by both WIC and the Health Resources and Services Administration (HRSA)) without any findings related to the Organization’s procurement. Finally, the Organization trains all individuals participating in the procurement process and provides guidance on procurement rules. Compliance with Regulations and WIC Program Contract The Organization’s compliance efforts are top tier. It uses many checks and balances to ensure compliance across the board with not only federal and state procurement regulations, but also WIC regulations and the requirements found in the contract between the Organization and WIC. It maintains written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts, intentionally avoids acquisition of unnecessary or duplicative items and uses surplus items instead of purchasing items when feasible. It uses full and open competition and obtains prior written authorization from the appropriate CDPH Program Contract Manager as required. The Organization maintains a narrative description of the procurement system, guidelines, rules, or regulations that is used to make purchases, which is audited by WIC for compliance. The Organization’s contract with WIC even goes above and beyond the requirements of 2 CFR § 180.220 and §§ 200.318 through 200.327. For example, the contract requires the reporting, tagging and annual inventorying of all equipment and/or property that is furnished by CDPH or purchased/reimbursed with funds provided through the contract. Upon receipt of equipment and/or property, the Organization reports the receipt to the CDPH Program Contract Manager and receives property tags for the items, then tags and logs them. For all purchases, the Organization maintains copies of all paid vendor invoices, documents, bids and other information used in vendor selection, for inspection or audit. Justifications supporting the absence of bidding (i.e., sole source purchases) are also maintained on file by the Organization for inspection or audit. Finally, although training is not required under 2 CFR § 180.220 or §§ 200.318 through 200.327, the Organization trains all pertinent staff related to procurement, the Organization’s procurement policies and procedures, the WIC contract requirements, WIC’s regulations and Uniform Guidance. This is done to ensure compliance with the principles and requirements of each of these requirements. No Prior Audit Findings Most recently, in January 2024 the Organization’s procurement policies and procedures were comprehensively audited by the federal HRSA through an Operational Site Visit to verify the status of UHC’s compliance with the relevant statutory and regulatory requirements. The HRSA audit specifically reviewed the Organization’s procurement policies and procedures, as well as reviewed documentation related to procurements during the prior three years by evaluating ten elements. This assessment evaluated written procurement procedures to ensure compliance with federal procurement standards, including a process for ensuring that all procurement costs are allowable, consistent with federal cost principles found in 45 CFR 75 Subpart E: Cost Principles. Additionally, the audit reviewed records for procurement actions paid for in whole or in part under the federal award that include the rationale for method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. This review involved documentation related to noncompetitive procurements. The audit also included evaluating the Organization’s retention of final contracts and related procurement records, consistent with federal document maintenance requirements, for procurement actions paid for in whole or in part under the federal award. Another element of the audit was to ensure that all activities and reporting requirements are being carried out in accordance with the provisions and timelines of the related contract and UHC’s own policies and procedures. Following completion of the expansive audit, HRSA’s evaluation resulted in no findings related to procurement. UHC successfully met all six elements of the Operational Site Visit audit conducted by HRSA. Conclusion In conclusion, the Organization vehemently disputes the findings presented, underscoring its unwavering commitment to stringent compliance with federal and state procurement regulations, as well as the stipulations outlined in its contract with WIC. The Organization's robust compliance mechanisms, encompassing meticulous checks and balances, written standards of conduct, and adherence to full and open competition, exemplify its dedication to procurement integrity. Furthermore, the Organization's proactive measures, such as reporting, tagging, and inventorying equipment, surpass the mandated requirements, ensuring transparency and accountability. Notably, recent audits by both WIC and the Health Resources and Services Administration (HRSA) have yielded no findings pertaining to procurement, validating the efficacy of the Organization's practices. The Organization's unwavering commitment to compliance, coupled with its comprehensive procurement protocols and ongoing training efforts, unequivocally refute any assertions of impropriety. UHC will reevaluate the audit findings and may or may not adopt a Corrective Action Plan.

Finding Number: 2023-001 Repeat Finding: No Program Name / Title: Special Supplemental Nutrition Program for Women, Infants, and Children and Grants for Capital Development in Health Centers Federal Assistance Listing Number: 10.557 and 93.526 Federal Agencies: United States Department of Agriculture and and U.S. Department of Health and Human Services Federal Award Number: 22-10305 and C8ECS44546 Type of Finding: Significant Deficiency Compliance Requirement: Procurement and Suspension and Debarment Questioned Cost: No Criteria: Under 2 CFR sections 180.220 and 200.318 through 200.326, 45 CFR 75.327 through 75.334 and 45 CFR 75 Part E, the Organization is required to implement certain written Procurement and Suspension and Debarment policies and procedures that adhere to the minimum Federal Procurement standards. The Organization must use its 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 outlined in Uniform Guidance and maintain sufficient records to detail the history of procurements. Condition: Although the Organization maintained a written procurement policy, the Organization did not have adequate procurement policies in place to meet the minimum federal requirements for procurement standards and did not always follow its own procurement policies. Cause: The Organization's policy did not meet all of the minimum federal requirements under Uniform Guidance. In addition, the Organization could not provide support to demonstrate that it performed all of the necessary procurement steps and did not always retain documentation demonstrating compliance with Uniform Guidance for purchases made with federal funds. Effect: The Organization was not in compliance with federal regulations or its own policies. Recommendation: The Organization should update their procurement policy to meet the minimum federal requirements and ensure procurement policies are being followed for all procurement levels with written documentation. View of Responsible Officials: Introduction United Health Centers of the San Joaquin Valley (the "Organization") vigorously protests this finding. The Organization rigorously complies with not only federal and state procurement regulations, but also WIC regulations and the requirements found in the contract between the Organization and WIC. Additionally, numerous audits have been conducted by various entities (including audits by both WIC and the Health Resources and Services Administration (HRSA)) without any findings related to the Organization’s procurement. Finally, the Organization trains all individuals participating in the procurement process and provides guidance on procurement rules. Compliance with Regulations and WIC Program Contract The Organization’s compliance efforts are top tier. It uses many checks and balances to ensure compliance across the board with not only federal and state procurement regulations, but also WIC regulations and the requirements found in the contract between the Organization and WIC. It maintains written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts, intentionally avoids acquisition of unnecessary or duplicative items and uses surplus items instead of purchasing items when feasible. It uses full and open competition and obtains prior written authorization from the appropriate CDPH Program Contract Manager as required. The Organization maintains a narrative description of the procurement system, guidelines, rules, or regulations that is used to make purchases, which is audited by WIC for compliance. The Organization’s contract with WIC even goes above and beyond the requirements of 2 CFR § 180.220 and §§ 200.318 through 200.327. For example, the contract requires the reporting, tagging and annual inventorying of all equipment and/or property that is furnished by CDPH or purchased/reimbursed with funds provided through the contract. Upon receipt of equipment and/or property, the Organization reports the receipt to the CDPH Program Contract Manager and receives property tags for the items, then tags and logs them. For all purchases, the Organization maintains copies of all paid vendor invoices, documents, bids and other information used in vendor selection, for inspection or audit. Justifications supporting the absence of bidding (i.e., sole source purchases) are also maintained on file by the Organization for inspection or audit. Finally, although training is not required under 2 CFR § 180.220 or §§ 200.318 through 200.327, the Organization trains all pertinent staff related to procurement, the Organization’s procurement policies and procedures, the WIC contract requirements, WIC’s regulations and Uniform Guidance. This is done to ensure compliance with the principles and requirements of each of these requirements. No Prior Audit Findings Most recently, in January 2024 the Organization’s procurement policies and procedures were comprehensively audited by the federal HRSA through an Operational Site Visit to verify the status of UHC’s compliance with the relevant statutory and regulatory requirements. The HRSA audit specifically reviewed the Organization’s procurement policies and procedures, as well as reviewed documentation related to procurements during the prior three years by evaluating ten elements. This assessment evaluated written procurement procedures to ensure compliance with federal procurement standards, including a process for ensuring that all procurement costs are allowable, consistent with federal cost principles found in 45 CFR 75 Subpart E: Cost Principles. Additionally, the audit reviewed records for procurement actions paid for in whole or in part under the federal award that include the rationale for method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. This review involved documentation related to noncompetitive procurements. The audit also included evaluating the Organization’s retention of final contracts and related procurement records, consistent with federal document maintenance requirements, for procurement actions paid for in whole or in part under the federal award. Another element of the audit was to ensure that all activities and reporting requirements are being carried out in accordance with the provisions and timelines of the related contract and UHC’s own policies and procedures. Following completion of the expansive audit, HRSA’s evaluation resulted in no findings related to procurement. UHC successfully met all six elements of the Operational Site Visit audit conducted by HRSA. Conclusion In conclusion, the Organization vehemently disputes the findings presented, underscoring its unwavering commitment to stringent compliance with federal and state procurement regulations, as well as the stipulations outlined in its contract with WIC. The Organization's robust compliance mechanisms, encompassing meticulous checks and balances, written standards of conduct, and adherence to full and open competition, exemplify its dedication to procurement integrity. Furthermore, the Organization's proactive measures, such as reporting, tagging, and inventorying equipment, surpass the mandated requirements, ensuring transparency and accountability. Notably, recent audits by both WIC and the Health Resources and Services Administration (HRSA) have yielded no findings pertaining to procurement, validating the efficacy of the Organization's practices. The Organization's unwavering commitment to compliance, coupled with its comprehensive procurement protocols and ongoing training efforts, unequivocally refute any assertions of impropriety. UHC will reevaluate the audit findings and may or may not adopt a Corrective Action Plan.

2023-002 - Internal Control over Compliance and Compliance with Procurement, Suspension and Debarment Procurement, Suspension and Debarment Information on the Major Federal Program(s) U.S. Department of Health and Human Services Center for Disease Control and Prevention Assistance Listing Number: 93.261 Assistance Listing Name: Scaling the National Diabetes Prevention Program Preventing Type 2 Diabetes Among People at High Risk Grant Award Number(s): 6 NU58DP006364-05-05 Award Period: September 30, 2021 to September 30, 2023 Criteria or Specific Requirement – In accordance with 2 CFR §200.318(a), General Procurement Standards, the non-federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, §200.318(i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to 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. In accordance with §200.213 and §180.300, Suspension and Debarment, non-federal entities cannot enter into awards, subawards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Non-federal entities must either check for exclusions in the System for Award Management (SAM); collect a certification from the entity, or add a clause or condition to the covered transaction with the entity prior to entering into a covered transaction with a non-federal entity. In addition, in accordance with §180.415(b), non-federal entities cannot renew or extend covered transactions (other than no-cost time extension) with any excluded person, or under which an excluded person is a principal, unless the non-federal entity obtains an exception under §180.135. Condition - During our testing of the procurement, suspension and debarment compliance requirements, we identified one procurement sample (out of a total of 1 procurement) that did not have documentation in the vendor/ procurement file to document that the debarment attestation from the vendor was provided and obtained prior to entering into contract with the vendor. The attestation statements directly from the vendor concluded that the vendor was not suspended or debarred. This is considered a finding as ADA did not follow its policy to maintain documentation in the vendor files (with a time stamp). Cause - ADA did not adhere to its documented policies and procedures for ensuring proper suspension and debarment validations were performed before entering into a contract. Effect or Potential Effect - Failure to timely verify that a vendor is not suspended or debarred could result in transactions involving unreasonable costs or result in unintentionally entering a contract with an entity that is barred from performing work for the Federal government. Questioned Costs - None. Context - This is a condition based on testing of ADA’s compliance with specified requirements. The sample was selected using a non-statistical method. Repeat Finding - This is not a repeat finding. Recommendation - We recommend management ensure that suspension and debarment regulations are followed. We also recommend management ensure all required procurement documentation is maintained in conjunction with its documented policy. Views of Responsible Officials - The finding related to a vendor that was in place and performing work in advance of inclusion as a covered transaction. Going forward, ADA will ensure that suspension and debarment regulations are followed. ADA will also ensure that all required procurement documentation is maintained in conjunction with its documented policy.

FINDING 2023-001 – Procurement and Suspension and Debarment-Significant Deficiency over Internal Controls over Compliance Federal Agency: U.S. Department of Housing and Urban Development Program: Emergency Solutions Grant Assistance Listing Number: 14.231 Compliance Requirement: Procurement and Suspension and Debarment (I) Pass-Through Agency: Los Angeles Homeless Services Authority Award Number: GT-BH-PHKCO-016 Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that federal award recipients must establish and maintain effective internal control over the federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Federal award recipients 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 Title 2 U.S. Code of Federal Regulations § 180.220. Per 2 CFR §180.300 when a federal award recipient enters into a covered transaction with another person at the next lower tier, it must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person. Per 2 CFR §200.318 (c )(1) Ethics and conflict of interest, the 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. The policy should ensure that no one with a conflict of interest participates in the selection, award, or administration of a federal contract. Condition/Context: We selected two out of a universe of three vendors that had covered transactions over the covered transactions threshold. National Health Foundation was unable to provide supporting evidence documenting that it had verified either entity was not excluded or disqualified before National Health Foundation went under contract with those vendors. However, a subsequent review did show both vendors were not on the excluded or disqualified listing. The written policies at National Health Foundation include the requirement to attach evidence of the debarment verification when submitting an invoice for payment. The procurement policy effective during the audit period did not include the required written ethics and conflicts of interest standard to avoid actual or apparent conflict of interest involving expenditures of federal grant awards. National Health Foundation has a conflict-of-interest policy for employees to adhere to; however, the specific consideration for anyone who participates in the selection, awarding, or administration of a contract with federal funding was not included. Effect: Vendors to whom payments equal to or in excess of $25,000 may not be verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in accidental engagement with excluded vendors. Cause: The system of internal controls as established by management of National Health Foundation was not properly implemented to ensure that the policies and procedures in place related to procurement and suspension and debarment were appropriately documented. Repeat finding: No. Recommendation: We recommended that management of National Health Foundation establish a proper system of internal controls, including strengthening its policies and procedures to ensure its compliance with requirements related to procurement and suspension and debarment. The use of standard forms or templates could help document verification that parties are not suspended or debarred before National Health Foundation goes under contract with such an entity. Additionally, we recommend the conflict-of-interest policy be amended to properly include all required verbiage for federal procurement contracts. Views of responsible officials: Management agrees with the recommendation.

Finding # 2023-002 Procurement, Suspension and Debarment (Significant Deficiency) Information on the Federal Programs: Assistance Listing #98.001 USAID Foreign Assistance for Programs Overseas Criteria or Specific Requirement: § 200.318 (i) General procurement standards, states that 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. Furthermore: §200.320 (f) Methods of procurement to be followed, states that procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when certain requirements have been met. Additionally, §200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award states that non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations 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. The nonfederal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) checking SAM Exclusions; (b) collecting a certification from that person; (c) adding a clause or condition to the covered transaction with that person. Condition: During our audit, we noted contractual relationships under the federal awards for which evidence of procurement procedures and documentation of SAM Exclusion checks were unavailable for our inspection. It is our understanding that some contracts were procured under noncompetitive (sole source) justification. However, in certain instances we were unable to review documentation (prepared at the time the contracts were executed) detailing the history and rationale of the procurements. Cause: The Institute's processes in place during 2023 did not provide for the formalization and retention of procurement records and vendor screenings consistent with the expectations outlined in 2 CFR 200 and related guidance provided by USAID. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to. Additionally, the Institute may have inadvertently selected noncompetitive proposals method when the circumstances did not meet the requirements noted in § 200.320 (f) Methods of procurement to be followed, and thereby failing to administer full and open competition as required by the regulations. Finally, the Institute could inadvertently enter into a contractual relationship with an entity that is suspended, debarred or otherwise included on the US Federal sanction list. Questioned Costs: N/A Context: Our audit sample consisted of transactions incurred by both JGI USA and JGI Tanzania. The finding relates to a transaction incurred by both entities. Both entities have defined procurement policies. Identification as a Repeat Finding: N/A Recommendation: We recommend that the Institute ensure its policy is distributed and communicated in a formal manner to its employees, and that management properly enforce compliance with its policy. All procurement actions should be clearly documented in writing and maintained in the vendor or contractor files. Such documentation should include, but is not limited to; (1) Bids (2) Bid Analysis with documentation of vendor selection and rationale (3) Minutes of meetings of procurement committee (4) for sole source procurements, documentation of which of the allowable sole source criteria the procurement was done under. Additionally, we recommend that the procurement policies are enhanced to include compliance with §200.320 (f) Methods of procurement to be followed and, §200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award.