Findings Citing § 200.320

#2024-006 – Major Federal Award Finding – Procurement and Suspension and Debarment Nature of Finding: Administrative Requirements – Procurement Policy/Documentation Compliance Finding and Material Weakness in Internal Control over Compliance Criteria/Condition: The Organization did not have a formal procurement policy as required by 2 CFR 200.320 until June 2024. Six out of thirteen vendor contracts were in place before the policy was formalized. Documentation supporting various procurement decisions was not retained. Cause/Context: Documentation was lacking for the following contracts as required by the procurement standards of 2 CFR 200.320: • Evidence of price quotations was not retained for one contract tested above the micro-purchase threshold (but below the simplified acquisition threshold). Such evidence would be required under the Organization’s current procurement policy (in place June 2024). • Evidence of procurement rationale was not retained for three contractor selections above the micro-purchase threshold (but below the simplified acquisition threshold). Management provided memorandums documenting vendor selection process and rationale during the audit. • Evidence of public solicitation for bid/proposal was not retained for one contract that was above the simplified acquisition threshold (currently $250,000) in accordance with 2 CFR 200.320(b). Management provided a memorandum documenting the assessment and solicitation of various providers, the selection process and rationale during the audit. Effect: Contracts executed prior to the enacted procurement policy could have been created without ensuring full and open competition in compliance with 2 CFR 200.320. Recommendation: We recommend that TalentFirst, Inc. follow procurement standards that comply with the requirements of Uniform Guidance and 2 CFR 200.320, including the retention of documentation to support purchasing decisions. Views of Responsible Officials and Planned Corrective Actions: All procurement following the adoption of the procurement policy have been done in alignment with the policy. We also introduced procurement “kickoff meetings’ for new grants to review each budget line, determine the correct procurement method and plan documentation.

Finding 2024-002 – Procurement and Suspension and Debarment Identification of the federal program: U.S. Department of Health and Human Services U.S. Department of Defense Research and Development Cluster Assistance Listing Numbers: 12.910 – Research and Technology Development 93.279 – Drug Use and Addiction Research Programs 93.351 – Research Infrastructure Programs 93.855 – Allergy and Infectious Diseases Research Federal Award Numbers Award Period Pass-Through Entity, if Applicable HR00112420365 7/23/2024-1/22/2026 Texas A&M Engineering Experiment Station (M2404608) U19AI135972-07 1/1/2024-12/31/2024 Icahn School of Medicine at Mount Sinai P51OD011133-26 5/1/2024-4/30/2025 N/A R01DA052845-04 7/1/2023-6/30/2024 N/A Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 200.318 General procurement standards. (i) Procurement records. The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. 200.319 Competition. (a) All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition and is consistent with the standards of this section and § 200.320. 200.320 Procurement Methods There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319. (a) Informal procurement methods for small purchases. These procurement methods expedite the completion of transactions, minimize administrative burdens, and reduce costs. Informal procurement methods may be used when the value of the procurement transaction under the Federal award does not exceed the simplified acquisition threshold as defined in § 200.1. Recipients and subrecipients may also establish a lower threshold. Informal procurement methods include: (1) Micro-purchases — (i) Distribution. The aggregate amount of the procurement transaction does not exceed the micro-purchase threshold defined in § 200.1. To the extent practicable, the recipient or subrecipient should distribute micro-purchases equitably among qualified suppliers. (ii) Micro-purchase awards. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the recipient or subrecipient considers the price reasonable based on research, experience, purchase history, or other information; and maintains documents to support its conclusion. Purchase cards may be used as a method of payment for micro-purchases. (iii) Micro-purchase thresholds. The recipient or subrecipient is responsible for determining and documenting an appropriate micro-purchase threshold based on internal controls, an evaluation of risk, and its documented procurement procedures. The micro-purchase threshold used by the recipient or subrecipient must be authorized or not prohibited under State, local, or tribal laws or regulations. (2) Simplified acquisitions — (i) Simplified acquisition procedures. The aggregate dollar amount of the procurement transaction is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. Unless specified by the Federal agency, the recipient or subrecipient may exercise judgment in determining what number is adequate. (ii) Simplified acquisition thresholds. The recipient or subrecipient is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk, and its documented procurement procedures, which may be lower than, but must not exceed, the threshold established in the FAR. (b) Formal procurement methods. Formal procurement methods are required when the value of the procurement transaction under a Federal award exceeds the simplified acquisition threshold of the recipient or subrecipient. Formal procurement methods are competitive and require public notice. The following formal methods of procurement are used for procurement transactions above the simplified acquisition threshold determined by the recipient or subrecipient in accordance with paragraph (a)(2)(ii) of this section: (1) Sealed bids. This is a procurement method in which bids are publicly solicited through an invitation and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid conforms with all the material terms and conditions of the invitation and is the lowest in price. The sealed bids procurement method is preferred for procuring construction services. (i) For sealed bidding to be feasible, the following conditions should be present: (A) A complete, adequate, and realistic specification or purchase description is available; (B) Two or more responsible bidders have been identified as willing and able to compete effectively for the business; and (C) The procurement lends itself to a firm-fixed-price contract, and the selection of the successful bidder can be made principally based on price. (ii) If sealed bids are used, the following requirements apply: (A) Bids must be solicited from an adequate number of qualified sources, providing them with sufficient response time prior to the date set for opening the bids. Unless specified by the Federal agency, the recipient or subrecipient may exercise judgment in determining what number is adequate. For local governments, the invitation for bids must be publicly advertised. (B) The invitation for bids must define the items or services with specific information, including any required specifications, for the bidder to properly respond; (C) All bids will be opened at the time and place prescribed in the invitation for bids. For local governments, the bids must be opened publicly. (D) A firm-fixed-price contract is awarded in writing to the lowest responsive bid and responsible bidder. When specified in the invitation for bids, factors such as discounts, transportation cost, and life-cycle costs must be considered in determining which bid is the lowest. Payment discounts must only be used to determine the low bid when the recipient or subrecipient determines they are a valid factor based on prior experience. (E) The recipient or subrecipient must document and provide a justification for all bids it rejects. (2) Proposals. This is a procurement method used when conditions are not appropriate for using sealed bids. This procurement method may result in either a fixed-price or cost-reimbursement contract. They are awarded in accordance with the following requirements: (i) Requests for proposals require public notice, and all evaluation factors and their relative importance must be identified. Proposals must be solicited from multiple qualified entities. To the maximum extent practicable, any proposals submitted in response to the public notice must be considered. (ii) The recipient or subrecipient must have written procedures for conducting technical evaluations and making selections. (iii) Contracts must be awarded to the responsible offeror whose proposal is most advantageous to the recipient or subrecipient considering price and other factors; and (iv) The recipient or subrecipient may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby the offeror’s qualifications are evaluated, and the most qualified offeror is selected, subject to negotiation of fair and reasonable compensation. The method, where the price is not used as a selection factor, can only be used to procure architectural/engineering (A/E) professional services. The method may not be used to purchase other services provided by A/E firms that are a potential source to perform the proposed effort. (c) Noncompetitive procurement. There are specific circumstances in which the recipient or subrecipient may use a noncompetitive procurement method. The noncompetitive procurement method may only be used if one of the following circumstances applies: (1) The aggregate amount of the procurement transaction does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be fulfilled by a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from providing public notice of a competitive solicitation; (4) The recipient or subrecipient requests in writing to use a noncompetitive procurement method, and the Federal agency or pass-through entity provides written approval; or (5) After soliciting several sources, competition is determined inadequate of single-use plastic products. See Executive Order 14057, section 101, Policy. 200.324 Contract cost and price. (a) The recipient or subrecipient must perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold. The method and degree of analysis conducted depend on the facts surrounding the particular procurement transaction. For example, the recipient or subrecipient should consider potential workforce impacts in their analysis if the procurement transaction will displace public sector employees. However, as a starting point, the recipient or subrecipient must make independent estimates before receiving bids or proposals. (b) Costs or prices based on estimated costs for contracts under the Federal award are allowable only to the extent that the costs incurred or cost estimates included in negotiated prices would be allowable for the recipient or subrecipient under subpart E of this part. The recipient or subrecipient may reference its own cost principles as long as they comply with subpart E of this part. (c) The recipient or subrecipient must not use the “cost plus a percentage of cost” and “percentage of construction costs” methods of contracting. Condition Texas Biomed did not comply with procurement requirements per the Uniform Guidance. Specifically, Texas Biomed did not comply with informal procurement methods for small purchases and noncompetitive procurement requirements. Texas Biomed also did not comply with its own procurement policy in relation to procurements of small purchases and noncompetitive procurements. Additionally, Texas Biomed did not maintain records for certain procurements sufficient to detail the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, the basis for the contract price, and the performance of a cost or price analysis, when required. Cause Texas Biomed did not have effective internal controls and procedures in place to ensure Texas Biomed complied with federal procurement requirements and Texas Biomed’s procurement policy and also maintained records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement and other required elements, including a cost or price analysis, when required. Effect or potential effect Texas Biomed did not comply with the general procurement standards, methods of procurement, and cost or price analysis requirements, according to the Uniform Guidance. Questioned costs $270,923 in total as follows: $29,438 – Assistance Listing Number 12.910, Award Identification Number – HR00112420365 $149,500 – Assistance Listing Number 93.351, Award Identification Number – P51OD011133-26 $11,295 – Assistance Listing Number 93.855, Award Identification Number – U19AI135972-07 $80,690 – Assistance Listing Number 93.279, Award Identification Number – R01DA052845-04 Questioned costs were computed by using the total procurements over $10,000 that did not adhere to procurement methods per the Uniform Guidance or were not supported by adequate documentation regarding the history of the procurement, including the rationale of the procurement and the performance of a cost or price analysis, when required. Per 2 CFR 200.1, questioned cost means an amount, expended or received from a Federal award, that in the auditor’s judgment: (1) Is noncompliant or suspected noncompliant with Federal statutes, regulations, or the terms and conditions of the Federal award; (2) At the time of the audit, lacked adequate documentation to support compliance; or (3) Appeared unreasonable and did not reflect the actions a prudent person would take in the circumstances. Context EY issued a material weakness for Texas Biomed related to internal control over procurement in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding. EY tested 12 procurements over the micro-purchase threshold of $10,000, with expenditures totaling $2,148,830 from a population of 48 procurements over $10,000 with expenditures totaling $3,629,769 during the year ended December 31, 2024. For 1 procurement with expenditures in the amount of $29,438 for supplies, Texas Biomed obtained only 2 quotes rather than 3 quotes, as required by Texas Biomed’s procurement policy in effect at the time of the procurement. Documentation of the history of the procurement did not include a reason for obtaining 2 quotes instead of 3 quotes. For 1 procurement with expenditures in the amount of $149,500, related to a total purchase order of $980,500, for animal food, Texas Biomed did not contemporaneously document sole source justification at the time of the procurement. Additionally, since the total purchase order for this procurement exceeded $250,000, the simplified acquisition threshold, a cost or price analysis was required but was not performed. For 2 procurements with expenditures in the amounts of $11,295 for supplies and $80,690 for animal purchases, Texas Biomed did not obtain quotes or document sole source justification or the history of the procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. We consider the expenditures related to these procurements to be questioned costs due to Texas Biomed not adhering to federal procurement requirements per the Uniform Guidance and also Texas Biomed’s procurement policy. Identification as a repeat finding, if applicable This is a repeat finding – Finding 2023-002. Recommendation Texas Biomed should comply with federal procurement requirements, as well as Texas Biomed’s procurement policy with regards to obtaining quotes for small purchases and documentation of sole source justification at the time of the procurement, as applicable. Texas Biomed should retain written documentation for procurements, documenting the history of the procurement prior to the procurement of goods or services including, but not limited to, the rationale for the method of procurement, selection of contract type, contractor selection or rejection, the basis for the contract price, and the performance of a cost or price analysis, when required. Views of responsible officials Management agrees with the finding and will implement corrective action to ensure controls are in place to retain the required written documentation for procurements.

FINDING 2024-003 Subject: Drinking Water State Revolving Fund - Procurement and Suspension and Debarment Federal Agency: Environmental Protection Agency Federal Programs: Drinking Water State Revolving Fund Assistance Listing Number: 66.468 Federal Award Numbers (or Other Identifying numbers): DW23150901, DW24660904 Pass-Through Entity: Indiana Finance Authority Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-004. Condition and Context An effective internal control system was not designed or implemented at the City to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement - Policy The City had not established a purchasing policy that reflected applicable state laws and regulations, including procedures to avoid the acquisition of unnecessary or duplicative items and procedures to ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Additionally, the City did not maintain a policy that prohibits the use of statutorily or administratively imposed state, local, or tribal geographical preferences in evaluation of bids or proposals. Procurement The City expended federal funds to pay ten separate vendors to provide goods and services for the duration of the City's Lead Service Line Replacement project. A population of seven vendors were tested that had aggregated expenditures for the audit period that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. All seven of the vendors were tested; for four of the seven vendors, the City was unable to provide any documentation that the procurement method used was appropriate or that the procurement provided full and open competition or rationale to support the determination to limit competition. The history of the procurement, including rationale for the method of procurement, selection of the vendor, and the basis for the price, was not adequately documented. Additionally, a population of three vendors were identified with contract amount or aggregated total of expenditures that exceeded the simplified acquisition threshold of $150,000. All three vendors were tested; for one of these vendors, the procurement method used was not appropriate as the City relied on quotes obtained, rather than a formal procurement method as required for purchases that exceed the simplified acquisition threshold. Suspension and Debarment Prior to entering into sub-awards and covered transactions with award funds, recipients are required to verify that vendors are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Due to the agreement with the Indiana Finance Authority (IFA), the City was not required to perform testing over suspension and debarment for a majority of the vendors used; however, several drawdowns from the State Revolving Funds (SRF) program were used to reimburse the City for payments made to specific vendors. The vendors paid directly by the City were not included in IFA's procedures for checking suspension and debarment; therefore, the City was obligated to meet the requirement. The City did not maintain a set of procedures for checking suspension and debarment status of vendors for expenditures related to the SRF awards. A total of three vendors paid directly by the City exceeded the S&D threshold of $25,000 and were subject to testing. No documentation to show that suspension and debarment was verified prior to entering into the contract could be provided for any vendor. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases– (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction, if the conditions. (i) In order for sealed bidding to be feasible, the following conditions should be present: (A) A complete, adequate, and realistic specification or purchase description is available; (B) Two or more responsible bidders are willing and able to compete effectively for the business; and (C) The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price. (ii) If sealed bids are used, the following requirements apply: (A) Bids must be solicited from an adequate number of qualified sources, providing them sufficient response time prior to the date set for opening the bids, for local, and tribal governments, the invitation for bids must be publicly advertised; (B) The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond; (C) All bids will be opened at the time and place prescribed in the invitation for bids, and for local and tribal governments, the bids must be opened publicly; (D) A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and (E) Any or all bids may be rejected if there is a sound documented reason. (2) Proposals. A procurement method in which either a fixed price or costreimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. They are awarded in accordance with the following requirements: (i) Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Proposals must be solicited from an adequate number of qualified offerors. Any response to publicized requests for proposals must be considered to the maximum extent practical; (ii) The non-Federal entity must have a written method for conducting technical evaluations of the proposals received and making selections; (iii) Contracts must be awarded to the responsible offeror whose proposal is most advantageous to the non-Federal entity, with price and other factors considered; and (iv) The non-Federal entity may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby offeror's qualifications are evaluated and the most qualified offeror is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms that are a potential source to perform the proposed effort. 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the 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 200.214 states: "Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities." 2 CFR 200.318(a) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327." 2 CFR 200.318(d) states: "The non-Federal entity's procedures must avoid acquisition of unnecessary or duplicative items. Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, an analysis will be made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach." 2 CFR 200.319(c) states: "The non-Federal entity must conduct procurements in a manner that prohibits the use of statutorily or administratively imposed state, local, or tribal geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference. Nothing in this section preempts state licensing laws. When contracting for architectural and engineering (A/E) services, geographic location may be a selection criterion provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract." 2 CFR 200.319(d) states: "The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a 'brand name or equivalent' description may be used as a means to define the performance or other salient requirements of procurement. The specific features of the named brand which must be met by offers must be clearly stated; and (2) Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals." Cause The City did not maintain a procurement policy that would demonstrate the appropriate procedures to be followed when procuring with federal funding and were not aware of the need to follow federal guidelines for procurement or suspension and debarment for expenditures associated with the SRF awards. Effect Without a proper system of internal controls in place that operated effectively, noncompliance remained undetected. As a result, proper procurement procedures were not adhered to for all vendors. Without following the required methods for procurement, the City could be overpaying for services, or providing federal funds to an entity that is suspended or debarred. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funds to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a proper system of internal controls to ensure expenditures made from federal awards use the appropriate procurement method and retain the documentation to support the procurement methods used in order to ensure compliance with the terms and conditions of the federal award and ensure that vendors paid from federal funds are neither suspended nor debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Finding No. 2024-001: Procurement Policy Program: AL# 59.059 – Congressional Grants Federal Grantor: U.S. Small Business Administration Criteria – Non-Federal entities must maintain documented procurement procedures that conform to applicable Federal statutes and the procurement standards identified in the Uniform Guidance, including thresholds, procurement methods, standards of conduct, and contract provisions. Citation – 2 CFR 200.319 & 2 CFR 200.320 Condition – The Organization has adopted both a grant-specific procurement policy and entity-wide procurement procedures included in its overall financial policy manual. However, neither policy is fully compliant with the federal procurement requirements. The following outlines the specific deficiencies in the policies: 1. Standard of Conduct for Conflicts of Interest (§200.318(c)): The policies do not contain written standards of conduct covering personal and organizational conflicts of interest in procurement. 2. Full and Open Competition (§200.319): While the policy in the financial manual requires three bids for purchases of $20,000 and greater, there is no overarching requirement that all procurements be conducted to provide full and open competition. 3. Procurement Methods (§200.320): The policies do not address all five procurement methods (micro-purchases, small purchases, sealed bids, competitive proposals, noncompetitive proposals). Additionally, micro-purchase and small purchase thresholds are not aligned with Uniform Guidance (the financial manual sets approval thresholds at $250 and $20,000 but does not incorporate the federal $10,000 micro-purchase threshold or $250,000 simplified acquisition threshold) 4. Noncompetitive Proposals (§200.320(f)): The policies do not identify circumstances where noncompetitive (sole-source) procurements are allowable or require documentation of justification Cause – The Organization’s procurement policies were originally designed around internal approval structures. Upon receiving federal funds for the first time in 2024, a grant specific policy was implemented to meet the grant requirements but neither policy was updated to reflect the detailed procurement requirements under Uniform Guidance. Effect – Since the procurement policies are not fully compliant with federal requirements, there is increased risk that procurements made under federal awards may not be conducted in an appropriate manner. If there were additional contracts with federal funds, this could result in potential questioned costs or disallowed expenditures. Questioned Costs – None. The finding is about deficiencies in written policies and procedures (compliance framework), not about an actual procurement transaction that violated the rules.

Finding 2024-002 Material weakness in internal controls over procurement and material noncompliance related to procurement compliance requirements. Federal Agency: U.S. Department of Treasury Program Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Awards Number: SLFRP0152 Award Period: 1/1/2024 – 12/31/2025 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires a non-Federal entity that has expended Federal awards to have written policies to its federal grants for procurement and that the history of each procurement is documented in accordance with 2 CFR section 200.318 to 200.320. Further, the regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Condition/Context During our testing, for three out of three procurement transactions tested in excess of the micro purchase threshold, the Organization did not maintain documentation sufficient to detail the history of the procurement transaction. The Organization did not maintain contemporaneous documentation identifying the procurement method, contract type selection, contract selection, basis of contract price, and consideration of vendor suspension and debarment. For one selection over the simplified acquisition threshold, the Organization received three proposals based upon a request for proposal process. For two selections above the micro-purchase threshold there was insufficient document to determine if price or rate quotations were obtained from an adequate number of qualified sources and no noncompetitive proposal process was documented in accordance with the Organizations procurement policy. Effect/Potential Effect Procurements were entered into that did not meet the minimum Uniform Guidance procurement standards. Questioned Costs N/A Repeat Finding Not applicable Recommendation We recommend that the Organization maintain records to support that any procurement entered into with federal funds was done so in accordance with its policies and procedures for procuring goods and services with the proceeds of a federal award. We further recommend that a control is implemented to ensure that the organization does not contract with parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Views of Responsible Officials Management agrees with the finding and has provided the corrective action plan following the Single Audit Report.

FINDING 2024-002 Subject: Drinking Water State Revolving Fund - Procurement Federal Agency: Environmental Protection Agency Federal Program: Drinking Water State Revolving Fund Assistance Listings Number: 66.468 Federal Award Number and Year (or Other Identifying Number): DW23332501 Pass-Through Entity: Indiana Finance Authority Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context The Town had not established an effective internal control system related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The Town was not in compliance with the Procurement and Suspension and Debarment compliance requirement. Purchasing Policy The Town's purchasing policy did not reflect applicable state laws and regulations. In addition, the policy did not include procedures to avoid acquisition of unnecessary or duplicative items, procedures to ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured, or procedures that prohibits the use of statutorily or administratively imposed state, local, or tribal geographical preferences in the evaluation of bids or proposals. Additionally, the Town's policy did not contain written standards of conduct covering conflicts of interest and governing the performance of its employees engaged in the selection, award, and administration of contracts. Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. Micro-purchases are typically for those purchases $10,000 or under, and small purchase procedures are for those purchases above the micro-purchase threshold but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. INDIANA STATE BOARD OF ACCOUNTS 16 TOWN OF KEWANNA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Two vendors were identified that fell within the small purchase threshold. Purchases from the vendors totaled $34,414 and $92,437. As such, price or rate quotations from an adequate number of qualified sources should have been obtained. However, the Town did not obtain price or rate quotations for the purchases nor was full and open competition provided for the vendors. Additionally, the history of each procurement was not adequately documented, including rationale for the method of procurement, selection of vendor, and basis for price. The lack of internal controls and noncompliance were isolated to the purchasing policy and to small purchases procured during the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327." 2 CFR 200.318(c)(1) states: "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. No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by a Federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which 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 a firm considered for a contract. The officers, employees, and agents of the non-Federal entity may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts. However, non-Federal entities may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value. The standards of conduct must provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the non-Federal entity." INDIANA STATE BOARD OF ACCOUNTS 17 TOWN OF KEWANNA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.318(d) states: "The non-Federal entity's procedures must avoid acquisition of unnecessary or duplicative items. Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, an analysis will be made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach." 2 CFR 200.319(c) states: "The non-Federal entity must conduct procurements in a manner that prohibits the use of statutorily or administratively imposed state, local, or tribal geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference. Nothing in this section preempts state licensing laws. When contracting for architectural and engineering (A/E) services, geographic location may be a selection criterion provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract." 2 CFR 200.319(d) states: "The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a 'brand name or equivalent' description may be used as a means to define the performance or other salient requirements of procurement. The specific features of the named brand which must be met by offers must be clearly stated; and (2) Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . INDIANA STATE BOARD OF ACCOUNTS 18 TOWN OF KEWANNA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (2) Small purchases– (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Cause The Town was unable to provide documentation to demonstrate it had policies or procedures in place to comply with the Procurement and Suspension and Debarment compliance requirement. Effect Without the proper implementation of an effectively designed system of internal controls, the Town cannot demonstrate it obtained an adequate number of price or rate quotations prior to selecting a vendor. Therefore, the Town could have overpaid for the services obtained. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Town's management design and implement a system of internal controls to ensure that a purchasing policy is in place and that quotes are obtained for all small purchases. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Federal Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number 21.027 Federal Agency: U.S. Department of Treasury Pass-through Entity: Illinois Department of Human Services Condition: The Organization does not have documented procurement policies that address all required federal standards, including conflict-of-interest disclosures, thresholds for competitive bidding, and vendor suspension/debarment checks. Criteria: 2 CFR §§200.318–200.320 require non-federal entities to use documented procurement procedures consistent with federal standards, including conflict of interest, competitive procurement thresholds, and vendor responsibility checks. Cause: Lack of awareness of Uniform Guidance procurement standards and incomplete written policies. Effect: SCC risks awarding contracts that are not allowable or are subject to disallowance under federal regulations. Questioned Costs: None noted during audit testing. Auditor’s Recommendation: The Organization should revise and implement procurement policies and procedures that meet all requirements of 2 CFR 200 and train staff accordingly.

2024-001: Procurement – Material Weakness Federal Program Information: Funding Agency: U.S Department of Transportation FALN: 20.942 Thriving Communities Program Award Year: 2023-2025 Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.320, the Foundation must have and use documented procurement procedures for acquisition of goods and services under a federal award or a sub‐award. Condition: 2 CFR Section 200.320, the Foundation is required to have and use documented procurement procedures for acquisition of goods and services under a federal award. The Foundation does not have approved policies and procedures over procurement. The Foundation was unable to identify any controls to ensure that transactions weren’t had between ineligible parties. Effect: Not having a procurement policy may result in funds to be returned back to grantor and/or impact future funding. Cause: Supporting procurement documentation for the acquisition of goods and services were not properly established largely due to overall limited number of personnel for certain functions and lack of board oversight. Questioned Costs: None Recommendation: We recommend the Foundation strengthen its policies and procedures to ensure procurement is adequately documented for that goods and services purchased in accordance with Uniform Guidance and other federal guidelines.

2024-004 Federal Grants Management - Procurement Policy Federal Agency: Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Award Period: March 1, 2021 – December 31, 2024 Type of Finding: Significant deficiency in internal control over compliance. Criteria or Specific Requirement 2 CFR 200 requires that 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 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. Further, the method of procurement, whether informal or formal, must follow the County’s written procurement policy on approval thresholds and controls. Condition The County did not follow controls related to ensuring procurement procedures were followed. Questioned Costs None Context While performing compliance procedures, it was noted that the County did not follow adopted policies for procurement. Cause The County did not follow controls related to ensuring procurement procedures were followed. Effect The County is not in compliance with procurement or suspension and debarment requirements. Contracts for construction, nonconstruction-related procurements, and those over the simplified acquisition threshold may not be in compliance with the Uniform Guidance. Vendors may be paid with federal funds that are suspended and debarred entities which would not be in compliance with the Uniform Guidance. Repeat Finding The finding is not a repeat finding in the immediately prior year. Section III – Findings and Questioned Costs – Major Federal and State Programs (Continued) 2024-004 (Continued) Recommendation We recommend the County follow their procurement policy and maintaining this documentation. Views of Responsible Officials and Planned Corrective Actions There is no disagreement with the audit finding.

Finding 2024-01 United States Department of Treasury Federal Assistance Listing No. 21.027 American Rescue Plan Act (ARPA) Type of Finding: Internal Control and Compliance Compliance and Material Weakness Deficiency over Procurement and Suspension and Debarment Repeat Finding: No Condition: During our testing and review of the Organization’s procurement policy, we were unable to obtain documentation to support that the Organization entered into contractual agreements with vendors who had gone through a competitive bidding or procurement process, as required under applicable procurement standards. Criteria: The Uniform Guidance and 45 CF Part 75 require that non-Federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. The characteristics of internal controls are presented in the context of the components of internal controls discussed in the Internal Control-Integrated Framework (COSO Report), published by the Committee of Sponsoring Organizations of the Treadway Commission. The COSO Report provides a framework for organizations to design, implement, and evaluate controls that will facilitate compliance with the requirements of Federal laws, regulations, and program compliance requirements. Per 2 CFR 200.320 General procurement states: (a) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold .(2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation;(4) The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Per 2 CFR 200.318 General procurement states: (b) 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 this part. Per Uniform Guidance, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov Home (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Cause: The Organization did not maintain adequate documentation or controls to ensure compliance with federal procurement requirements of the use of competitive bidding procedures. Effect: Failure to verify vendor eligibility and follow competitive procurement procedures increases the risk of noncompliance with federal regulations, including potential use of federal funds for unallowable costs. This may also expose the Organization to audit findings, questioned costs, or repayment of grant funds. Questioned Costs: $370,461 Recommendation: We recommend the Organization update and follow their documented procurement policies to identify vendors that should go through the procurement process for federal funds at time of award and to document those procedures. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the Corrective Action Plan. Auditor’s Conclusion: Finding remains as stated.

Program name: State and Local Fiscal Recover Funds Assistance Listing: 21.027 Federal award Identification number: 43210256 Federal award year: All Federal awarding agency: U.S. Department of Treasury Criteria: Under 2 CFR § 200.318(a), recipients and subrecipients must “maintain and use documented procedures for procurement transactions under a Federal award or subaward.” Additionally, 2 CFR § 200.318(i) requires that “the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction,” including:  Rationale for the method of procurement,  Selection of contract type,  Contractor selection or rejection, and  Basis for the contract price. Condition: During our audit of procurement activities under Federal award 21.027, we noted that the Organization did not follow its documented procurement procedures. Specifically:  The procurement plan lacked evidence of adherence to competitive procurement methods as required under 2 CFR § 200.320.  No documentation was maintained to support when or how procurement decisions were made, including missing records of contractor selection, price justification, and procurement method rationale. Cause: The Organization did not implement adequate internal controls to ensure compliance with federal procurement standards. Procurement activities were conducted informally without sufficient oversight or documentation, and staff were not adequately trained on Uniform Guidance requirements. Effect or Potential Effect: Failure to follow documented procurement procedures and maintain required records increases the risk of:  Noncompliance with federal regulations,  Unfair or noncompetitive procurement practices,  Inability to justify expenditures to federal agencies or auditors,  Disallowed costs or questioned costs during federal review. Repeat finding: This is not a repeat finding. Questioned costs: None identified for this transaction. However, the breakdown in controls presents a broader compliance risk. Perspective: This finding pertains to 3 purchases under AL 21.027 and reflects a broader issue in control enforcement that may affect other procurements under the same or other federal programs. -20- HEARTS FOR THE INVISIBLE CHARLOTTE COALITION SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED DECEMBER 31, 2024 Recommendation: We recommend that the organization:  Update and enforce its procurement policies to align with 2 CFR Part 200 standards.  Train staff on federal procurement requirements.  Implement a checklist or control mechanism to ensure all required documentation is retained for each procurement transaction. Management’s response and corrective action plan (unaudited): See corrective action plan.

Assistance Listing, Federal Agency, and Program Name 21.027 U.S Department of the Treasury Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year HB 33 336648 ARPA 2024 Pass through Entity The Ohio Department of Mental Health and Addiction Services Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per 2 CFR 200.302(a)(2)(ii), Uniform Guidance establishes that the recipient is responsible for determining and documenting in procurement procedures an appropriate Simplified Acquisition Threshold, based on internal controls and evaluation of risk, which may be lower than, but must not exceed, the threshold established in the FAR. Additionally, per 2 CFR 200.320(a)(2), if simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. Condition Controls in place were not adequate to ensure the policy included a well defined Simplified Acquisition Threshold and related procurement method. Additionally, controls were not adequate to ensure price or rate quotations were obtained from an adequate number of qualified sources for contracts above the Simplified Acquisition Threshold. Questioned Costs $136,910 If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed Questioned costs represent all costs reported on the SEFA for the contracts in question. Context During testing of contracts procured above the micro purchase threshold, but below the Simplified Acquisition Threshold, we noted management did not obtain price or rate quotations from an adequate number of qualified sources, as required by Uniform Guidance. Cause and Effect Not defining the Simplified Acquisition Threshold within the System's written policies and procedures, nor establishing the minimum number of required prcie and rate quotations needed could lead to noncompliance with Uniform Guidance and questioned costs. Recommendation Management should implement controls to ensure all procurement policies include specific thresholds for procurement methods in line with Uniform Guidance and that appropriate procurement methods are used for each contract entered into. Views of Responsible Officials and Corrective Action Plan Management understands the importance of adhering to procurement thresholds and methods. Procurement policies and grant policies will be updated to include federal thresholds and methods to reflect federal Uniform Guidance. Additionally, the procurement procedures will be amended to include additional review and sign-off from Grant and Purchasing leadership prior to purchases being made with federal funds to ensure price and rate quotations were obtained for contracts above the Simplified Acquisition Threshold.

U.S. Department of the Treasury Finding: Procurement Policy & Procurement Action Documentation Reference Number: 2024-004 Program: 21.027 COVID-19 State and Local Fiscal Recovery Funds Program Identifying Number: SLFRP0139 Type of Finding: Significant Deficiency Compliance Requirement: Procurement and Suspension and Debarment Condition: The Land Bank did not retain supporting documentation for procurements entered during the year ended December 31, 2024. The Land Bank adopted a written procurement policy on September 11, 2024. The Land Bank entered contracts after the adoption of its new procurement policy during the period from September 11, 2024 through December 31, 2024 without performing the required procurement actions. A similar finding was reported in the 2023 audit. Context: The Land Bank represented that contractors were evaluated by analyzing City of Wilmington permit information prior to the implementation of the procurement policy in September 2024. The Land Bank did not retain documentation of this analysis to support its procurement actions. Criteria: CFR § 200.318, General Procurement Standards and § 200.320 Methods of Procurement to be Followed, of the Uniform Guidance apply to the State and Local Fiscal Recovery Funds Program and require the following: i. The Land Bank must adopt documented procurement procedures that are consistent with the applicable State, local, and federal regulations. ii. The Land Bank’s documented procurement procedures must include the following elements at a minimum: a. Micro-purposes - purchases up to $50,000 may be made without soliciting competitive price or rate quotations if the price is considered reasonable. b. Small Purchases - purchases between $50,000 and $250,000 may be made with soliciting competitive price or rate quotations from an adequate number of qualified sources. c. Formal Procedures - purchases over $250,000 must be made by sealed bid or competitive proposal. The Land Bank’s procurement policy requires the following: Method of Purchase: Selection of contracts for goods and services shall be made only on a competitive basis except as otherwise set forth herein. The following method of purchase shall be used when required by this Policy in order to achieve the highest quality and lowest cost: i. Micro-purposes ($0-$49,999) - Designated staff may procure goods and services on behalf of the Land Bank without obtaining three quotations and without approval of the Board. Vendor selection and pricing should be reviewed at least annually for convenience and cost savings. ii. Small Purchases ($50,000-$249,999) - At least three written quotations will be obtained whenever possible. The Land Bank shall solicit informal quotations utilizing sources most likely to identify the highest quality and lowest price of a particular good or service, including newspaper and magazine advertisements, internet searches, chamber of commerce recommendations, and prior experience of the Land Bank. The Land Bank shall create and maintain a written or digital record of the quotations solicited and received for such purchases. At its discretion, Land Bank staff may decide to utilize the RFP process in lieu of the quotation process for any contract even when it is not required. iii. Large Purchases ($250,000+)- A request for proposals (RFP) issued by the Land Bank shall be required. Any large purchase contract entered into by the Land Bank shall require the approval of the Board. Cause: The Land Bank did not adopt a written procurement policy until September 2024. The Land Bank did not retain evidence to support its assertion that procurement actions were performed during the year ended December 31, 2024. Questioned Costs: None Effect: The Land Bank did not comply with the Uniform Guidance requirement to adopt a procurement policy until September 2024 and did not fully document its procurement actions. Recommendation: We recommend Land Bank adhere to the adopted procurement policy and prepare and retain documentation for each procurement action.

2024-001 – Internal Controls over Compliance and Compliance with Procurement Standards Identification of the Federal Program - U.S. Department of the Treasury, Passed through Whitman-Walker Health System, Inc. 21.029 - COVID-19 – Coronavirus Capital Projects Fund Criteria – 2 CFR Section §200.318(i) states, “The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.” Per 2 CFR Section §200.319, “All procurement transactions for the acquisition of property or services 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 Section §200.324 stipulates that a non-Federal entity must perform a cost or price analysis for each procurement in excess of a minimum threshold. Additionally, 2 CFR Section §200.320(c) states in part, “There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of [the defined] circumstances apply”. Condition – We noted there was insufficient documentation retained to support adherence to the required procurement policy and standards. Documentation was unable to be provided to support that cost or price analyses were performed and were conducted providing full and open competition. Additionally, for one procurement deemed noncompetitive by WWH, none of the circumstances allowing noncompetitive procurement were met. Cause – WWH did not maintain all required aspects of formal documentation as required by the applicable 2 CFR standards, was unable to provide evidence of full and open competition, and in one instance improperly elected noncompetitive procurement. Effect – We were unable to determine whether the value of procurements for goods or services that exceeded the micro-purchase threshold followed a proper formal procurement method in accordance with 2 CFR Sections §200.319, 320, and 324. Questioned costs – Not determinable Context – We selected a sample of 7 procurements by non-statistical methods, out of a population of 8 procurements. All procurements related to eligible pre-award costs. WWH was unable to provide sufficient formal procurement documentation to support full and open competition and performance of cost or price analysis for 4 out of 7 selected procurements. One of those samples was deemed noncompetitive by WWH but did not meet the circumstances allowing noncompetitive procurement. Repeat finding – This is not a repeat finding. Recommendation – We recommend WWH designate a responsible and qualified individual within the organization to oversee the procurement policy and ensure compliance. Additionally, we recommend WWH explore alternative organizational and tracking methods to ensure all procurements are properly tracked for workflow purposes and adequately maintained for retention. View of Responsible Officials - WWH has internal controls for the procurement process for federal funds and did not follow those practices as clearly with these investments. The utilization of team members with multiple responsibilities, without stronger controls, led to document retention challenges.

Information on the federal program – 21.027 – Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; Dallas County; Program years 2023-2024, 2024-2025 16.575 – Crime Victim Assistance; U.S. Department of Justice; Texas Office of the Governor – Criminal Justice Division; Program years 2023-2024, 2024-2025 Type of Finding – Significant deficiency in internal control over compliance and other instance of noncompliance Criteria or specific requirement – The Uniform Guidance requires auditees to maintain internal controls to prevent or identify and correct noncompliance with direct and material compliance requirements in a timely fashion, specifically in regard to Procurement (2 CFR 200.320) and Suspension and Debarment (2 CFR 200.214). Condition – The Family Place was unable to provide evidence supporting procurement for a particular vendor, as well as evidence supporting verification of a lessor not having been suspended or debarred occurred during the year. Cause – The auditee's controls did not properly identify necessary procurement and suspension and debarment processes to undertake as required by policy and Uniform Guidance. Effect or potential effect – Procurement did not occur for one vendor relationship selected. Evidence of verification of vendor status of one lessor selected was not available. Questioned costs – $10,837 (ALN 21.027) Context – Procurement: Of three covered procurement transactions identified for ALN 21.027, 100% were selected for testing, the total of which was $58,517. One transaction did not have documented procurement procedures having taken place. The total of the transaction resulting in questioned costs was $10,837. Suspension and Debarment: Of two lessors with expenditures greater than $25,000 for ALN 16.575, one was selected for testing of suspension and debarment. While the lessor was not listed as having been suspended or debarred on SAM.gov, evidence of review occurring was not available. Identification as a repeat finding, if applicable – Not applicable Recommendation – We recommend management review all contracts with vendors and review the procurement policy to ensure compliance with the procurement and suspension and debarment standards within their policy and the Uniform Guidance. Views of responsible officials and planned corrective actions – See accompanying corrective action plan.

Information on the federal program – 16.575 – Crime Victim Assistance; U.S. Department of Justice; Texas Office of the Governor – Criminal Justice Division; Program years 2023-2024, 2024-2025 Type of Finding – Other instance of noncompliance Criteria or specific requirement - The Uniform Guidance requires auditees to maintain internal controls to prevent or identify and correct noncompliance with direct and material compliance requirements in a timely fashion, specifically in regard to Reporting (2CFR 200.320). Condition – The Family Place was unable to provide original financial records used to prepare the financial reports submitted. The general ledger for the program did not agree to the financial reports submitted for the corresponding period. Cause – The auditee's controls did not properly retain documentation evidencing accurate financial report submissions. Refer to finding 2024-002. Effect or potential effect – The financial reports submitted for all four quarters of the 2023-2024 program year were unable to be traced back to the general ledger and there was no support maintained for what was originally submitted. Questioned costs – None noted. Context – Of a population of four financial reports submitted during the year, four were selected for testing. Total expenditures recorded in the general ledger for each period did not agree to the financial report. Identification as a repeat finding, if applicable – Not applicable Recommendation – We recommend management implement internal controls to ensure financial reports are submitted accurately, with supporting documentation retained. Views of responsible officials and planned corrective actions – See accompanying corrective action plan.

Assistance Listing Number, Federal Agency, and Program Name 59.059, U.S. Small Business Administration, Congressional Grants Federal Award Identification Number and Year - SBAHQ24I0024, 2024 Pass through Entity - Not applicable Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 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 nonfederal entity. Condition - The Organization did not have controls to retain documentation that the procurement process was followed to ensure more than one vendor was reviewed for pricing before selecting the vendor chosen (as required under 2 CFR 320(a)(2)(i)). Questioned Costs - The Organization charged a total of $107,795 to grant SBAHQ24I0024 during 2024 for covered transactions for which there was no supporting documentation to indicate that the services were procured under the requirements above. If Questioned Costs are not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could not be Reported - Not applicable Identification of How Questioned Costs Were Computed - The amount of the covered transactions charged against grant advances during 2024 Context - Four covered transactions with total expenditures charged to the grants totaling $107,795 were reviewed. The population subject to testing included a total of five covered transactions. Cause and Effect - The Organization's internal controls did not ensure written documentation of procurement procedures or decisions were retained, which resulted in a lack of evidence to support that the procurement policies were followed. Recommendation - The Organization 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 Corrective Action Plan - Management agrees that documentation of the procurement process was not adequately retained. Management will implement controls to ensure proper support of the procurement process is retained. Although the procurement process was not fully documented, management believes its procurement policies were appropriately followed when entering these four covered transactions.

FINDING 2024-003 Subject: Water and Waste Disposal Systems for Rural Communities - Procurement Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listings Number: 10.760 Federal Award Numbers and Years (or Other Identifying Numbers): 92-02, 92-03, 92-04, 92-05 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The City had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. The State of Indiana has established a more restrictive threshold of $150,000 for informal procurement methods. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Small purchase procedures require that price or rate quotations must be obtained from an adequate number of qualified sources or documented reasoning to support a single source provider. Two vendors were identified that were paid $10,500 and $59,408, respectively, during the audit period using federal funds under the award, thereby requiring small purchase procedures for both procurements. Both vendors were selected for testing. The City was unable to provide any documentation for either vendor that the procurement method used was appropriate or that the procurement provided full and open competition or rationale to support the determination to limit competition. Additionally, the history of the procurement, including the rationale for the method of procurement, selection of the vendor, and the basis for the price, was not adequately documented for either vendor. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases- (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate." Cause The vendors in question had been utilized by the City for various services over the course of multiple years, including for several years under this award with the ongoing multi-year project. For continuity purposes, the City chose to limit competition when procuring the services. The City included the requirements for limiting competition in its purchasing policy but did not follow the established policy. Effect Without a proper system of internal controls in place that operated effectively, noncompliance remained undetected. As a result, proper procurement procedures were not adhered to for all vendors. Without following the required methods for procurement, the City could be overpaying for services by not receiving the most competitive pricing. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a proper system of internal controls to ensure expenditures made from federal awards use the appropriate procurement method and retain the documentation to support the procurement methods used in order to ensure compliance with the terms and conditions of the federal award. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Finding 2024-002 Failure to Follow Procurement Policy Type of Finding Noncompliance and Significant Deficiency in Internal Control over Compliance Condition The Organization maintains a procurement policy that establishes spending thresholds and outlines the requirements for obtaining rate quotations at each of these levels. During audit procedures, it was noted that the Organization did not follow the policy’s requirements for obtaining and documenting rate quotations for two of the transactions reviewed. The Organization explained that the vendor was considered a unique partner, and competition was intentionally limited based on the specialized nature of the services provided. However, no documentation was retained to justify this decision to limit competition, as required by federal procurement standards. The absence of such documentation resulted in questioned costs for these transactions. Criteria: Federal regulations require non-federal entities to maintain written procurement procedures that are consistent with applicable laws and standards, including the requirement to conduct procurement transactions in a manner that provides full and open competition, except in limited circumstances, as specifically defined in 2 CFR 200.320. When competition is restricted, entities are required to document the basis for their determination, including the rationale for selecting a particular vendor. Additionally, entities must maintain documentation to support procurement actions and decisions to ensure compliance with applicable requirements. Cause This issue appears to stem from a lack of adherence to the Organization’s procurement policy and an underdeveloped process for documenting exceptions to competitive procurement requirements. While management considered the vendor relationship justified, there was no formal documentation of the rationale, resulting in noncompliance with both internal policy and federal procurement requirements. Possible of Known Effect As a result of this deficiency, the Organization cannot demonstrate that the procurement process complied with the federal requirements under 2 CFR 200.320, nor can it substantiate its rationale for limiting competition. This lack of documentation increases the risk of unsupported or inappropriate expenditures, and in this instance, led to questioned costs related to the two transactions tested. Questioned Costs Known questioned costs of $29,164 were identified. Repeat Finding This is not a repeat finding. Recommendation We recommend that the Organization strengthen its procurement practices by ensuring that all procurements, including those where competition is intentionally limited, are fully documented in accordance with federal requirements and the Organization’s procurement policy. Documentation should include the rationale for limiting competition and evidence of compliance with the applicable procurement threshold requirements. Implementing a review process to ensure procurement files are complete prior to payment or grant charging would further reduce the risk of noncompliance. Views of Responsible Officials Prior to the award of ARPA grant funding in 2023, the Organization did not have a formal procurement policy in place. Implementation of such a policy was required to receive the award. At the time of implementation, however, partnerships had already been established and were identified in the original grant proposal. With respect to legal services, the Organization engaged the two primary organizations in Indianapolis that provide expungement assistance. Indiana Legal Services ("ILS") was the first entity contacted, but after multiple attempts, no response was received from the designated point of contact. Subsequently, the Organization engaged with another nonprofit organization, which responded promptly and agreed to serve as a partner under the grant. For grant compliance services, the Organization engaged a third party. This decision was based on recommendations from community partners, as well as her demonstrated work quality, professional reliability, and commitment to serving the target population.

Compliance Requirement Procurement Type of Finding Material Weakness in Internal Control over Compliance, Material Noncompliance Program Port Security Grant Program ALN# 97.056 Federal Agency Department of Homeland Security – Direct Award Federal Award Year 2020, 2021, 2022 and 2023 Grant Number EMW-2020-PU-00079 – IJ#1, IJ#3, IJ #4 EMW-2021-PU-00030 – IJ#1, IJ#3 EMW-2022-PU-00022 – IJ#1, IJ#2, EMW-2023-PU-00164 – IJ#1, IJ#2, IJ#3, IJ#4 EMW-2024-PU-05541 – IJ#4 Questioned Costs $463,460 Criteria - Federal rules require grant recipients to follow strict purchasing standards. This includes seeking fair and open competition when buying goods or services, obtaining bids or quotes once purchases reach certain dollar thresholds, and verifying that vendors are not suspended or barred from receiving federal funds through the SAM.gov system. Federal rules set strict procurement standards that the District must follow: • 2 CFR 200.318 – Requires non-federal entities to maintain oversight to ensure contractors perform in accordance with the terms, conditions, and specifications of their contracts. • 2 CFR 200.319 – Requires full and open competition in all procurement transactions. • 2 CFR 200.320 – Establishes methods of procurement, including micro-purchases, small purchases, sealed bids, competitive proposals, and noncompetitive proposals. • 2 CFR 200.323 – Requires cost or price analysis for procurements above the Simplified Acquisition Threshold. • 2 CFR 200.213 – Requires checks for suspension and debarment (SAM.gov).Under Louisiana law, political subdivisions such as ports are also subject to state purchasing thresholds: (a) $0 – $9,999: Purchases may be made directly but must be reasonable and properly documented. (b) $10,000 – $60,000: At least three (3) telephone or written quotations are required, with documentation kept on file. (c) Over $60,000: A formal advertised public bid process is required in compliance with Louisiana Public Bid Law. For professional services, the District is required to follow competitive selection processes consistent with their policies, Louisiana state law and federal guidance, ensuring fair opportunity, transparency, and reasonable pricing. Condition - The District failed to comply with federal procurement standards in multiple areas, indicating a pervasive breakdown in procurement controls and noncompliance with 2 CFR 200.318–.327. a) The District did not obtain competitive bids for the camera purchases and installation, resulting in questioned costs of $234,217 b) For professional services contracts funded by the PSGP, relating the IT services, engineering and consulting services, and GIS implantation services, the District did not maintain records documenting requests for price quotes or maintain records demonstrating the reasonableness of costs. Resulting in questioned costs of $305,657. c) For all ten (10) vendors tested under the Port Security Grant Program, the District did not retain documentation demonstrating that SAM.gov suspension and debarment verifications were performed prior to award or payment. Cause - The District failed to enforce federally required procurement standards and did not maintain sufficient documentation to demonstrate compliance. This deficiency reflects a significant weakness in procurement oversight and a lack of management attention to ensuring adherence with federal regulations governing competition, cost reasonableness, and vendor selection. Effect - Because the District did not obtain the required bids, quotes, or suspension and debarment checks, it cannot demonstrate compliance with federal procurement standards. This failure increases the risk of waste, favoritism, or contracting with ineligible vendors, and resulted in questioned costs as calculated by the auditor.Recommendation - The District must consistently apply written procurement policies that require competitive bids or price quotes for all purchases and professional services. Documentation of price reasonableness must be retained for every procurement action to ensure compliance with 2 CFR 200.318–.327 The District must document SAM.gov suspension and debarment verification for all vendors and contractors prior to contract execution or payment. This documentation must be maintained in the procurement file. The District must consult with FEMA regarding the allowability of identified questioned costs.

Finding 2024-004 Significant Deficiency in Internal Control over Compliance and Noncompliance – Procurement Identification of the federal program Agencies Award Numbers ALN 15.022 Tribal Self Governance ` Department of Interior GT-OSGT812- Year 2013 GT-OSGT812- Year 2017 GT-OSGT812- Year 2018 GT-OSGT812- Year 2019 GT-OSGT812- Year 2020 GT-OSGT812- Year 2021 GT-OSGT812- Year 2022 GT-OSGT812- Year 2023 GT-OSGT812- Year 2024 GT-OSGT812- Year 2025 Criteria The Uniform Guidance in 2 CFR Section 200.320(b), Procurement Methods – Small Purchase, is required if the aggregate dollar amount of the procurement transaction is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. Unless specified by the Federal agency, the recipient or subrecipient may exercise judgment in determining what number is adequate. The recipient or subrecipient is responsible for determining an appropriate small purchase threshold based on internal controls, an evaluation of risk, and its documented procurement procedures, which may be lower than, but must not exceed, the threshold established in the Federal Acquisition Regulation. Condition The Association is not consistently following their own internal control policy for purchases that meet their small purchase threshold for procurement to obtain price or rate quotations from an adequate number of qualified sources. Cause AVCP is subject to high turnover in its purchasing department. Due to the frequency of new personal onboarding, the small purchase policy was missed was certain contracts. Effect or possible effect The Association not adhering to its established procedures, can lead to noncompliance, questioned costs, repayment obligations, or loss of funding. Questioned Costs None Identified. Context 2 out of 5 vendors selected for testing were not procured for in accordance with AVCP’s policy. Identification as a Repeat Finding None. Recommendation We recommend AVCP implement additional internal controls to ensure AVCP’s internal procurement policies are being followed. Views of Responsible Official and Planned Corrective Action Management concurs with the finding. Thorough training in AVCP’s procurement policies and procedures will be provided to departmental staff. AVCP will also hold an overall training of AVCP’s key and senior personnel by an outside expert in government procurement rules and regulations.

Finding 2025-002: Competitive Proposal Process for Dental Van Procurement (Significant Deficiency) Federal Program: FIP [93.526] Federal Agency: U.S. Department of Health and Human Services (HHS) Criteria: Federal regulations under the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200), specifically 2 CFR § 200.319(b) and § 200.320(b), require that all procurement transactions be conducted in a manner providing full and open competition. For a competitive proposal process, the organization must publicly advertise the procurement and include a clear and accurate description of the technical requirements and specifications for the goods or services to be procured. Furthermore, 2 CFR § 200.320(b)(2)(i) requires that proposals be evaluated and a selection made based on established evaluation criteria. These criteria must be clearly stated in the solicitation and must be used as the basis for the selection, ensuring that price is a factor but not the only one. Condition: The organization intended to use a competitive proposal process to procure a van. However, it failed to publicly advertise the request for proposals, limiting the pool of potential vendors to only those known to the organization. Additionally, the request for proposals did not include a complete and accurate list of specifications, nor did it include the evaluation and selection criteria that would be used to assess the proposals. While the organization did obtain three proposals and documented its rationale for selecting a vendor that was not the lowest bidder, the overall process did not meet the standards for full and open competition required by federal regulations. Questioned Costs: None Cause: The organization lacked a clear understanding of the specific requirements for a federal competitive proposal process. There were no written procedures or internal controls in place to ensure all required documentation and steps were followed. This oversight, combined with an over-reliance on informal practices, contributed to the noncompliance. Effect: The non-compliant procurement process increases the risk that the organization paid more than was necessary for the vehicle, which is an inefficient use of federal funds. Context: This procurement was for a significant asset for the program. While the organization has made an attempt to solicit proposals, the process was fundamentally flawed from the outset due to the lack of public advertising, incomplete specifications, and missing evaluation criteria. This is the first time the organization has procured a van with these funds, and the error was an oversight rather than an intentional act of noncompliance. Repeat Finding: No. This is the first time this specific finding has been identified. Recommendation: The organization should immediately develop and implement a comprehensive procurement policy and procedures manual that fully aligns with 2 CFR Part 200. This manual should provide a detailed checklist for all procurement methods, including specific requirements for public advertising, developing clear specifications, and documenting the full evaluation process based on a set of pre-established criteria. Mandatory training on federal procurement regulations should be provided to all staff involved in federal awards management and procurement to ensure they understand the importance of compliance. Management Response: The organization acknowledges the finding. To address this, we are committing to develop and implement a comprehensive procurement policy and procedures manual that strictly aligns with requirements within the Uniform Guidance. This manual will include detailed checklists for all procurement methods, covering public advertising, clear specification development, and the use of pre-established, documented evaluation criteria, followed by mandatory training for all staff involved in procurement.

FINDING 2024-001 Subject: Water and Waste Disposal Systems for Rural Communities - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listings Number: 10.760 Federal Award Number or Year (or Other Identifying Number): Interim Financing Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context The City did not have an effective system of internal controls over federal award requirements, including procurement and suspension and debarment. The City failed to properly design and implement internal controls, such as appropriate segregation of duties, to ensure compliance and detect or correct noncompliance in a timely manner. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Procurement - Small Purchases During the audit period, the City had six vendors with purchases under the $150,000 threshold that were considered simplified acquisition procurements and over the $10,000 threshold that was considered micro-purchase procurements. All six vendors were selected for testing, and for five of those vendors, the City could not provide the procurement history or the rationale for the method of procurement, the selection of vendor, or the basis for price. The total dollar amount spent with these five vendors during 2024 was $246,055. Procurement - Simplified Acquisitions During the audit period, the City had three vendors with purchases over the $150,000 threshold that were considered simplified acquisition procurements. All three vendors were selected for testing, and for two of those vendors, the City could not provide the procurement history or the rationale for the method of procurement, the selection of vendor, or the basis for price. The total dollar amount spent with these two vendors during 2024 was $2,654,999. Procurement - Policy Per Uniform Guidance, 2 CFR 200.318(a), a non-federal entity that receives federal funds must have and use documented procurement procedures that conform to applicable federal, state, and local laws and regulations. Additionally, state law, such as Indiana Code 5-22, prescribes specific procedures for purchasing supplies and services based on various dollar thresholds. The City did not provide a purchasing policy for review that included the applicable federal regulation, such as procedures to avoid the acquisition of unnecessary or duplicative items and procedures to ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or services to be procured. Additionally, the City did not maintain written standards of conduct covering conflicts of interest and governing actions of its employees engaged in the selection, award, and administration of contracts. Suspension and Debarment Prior to entering into subawards and covered transactions, recipients are required to verify that such contracts and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (ELPS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The City failed to verify that vendors were not suspended or debarred prior to entering into covered transactions exceeding $25,000. Of the eight vendors tested, no documentation was provided to show that a check was performed against the EPLS or through other acceptable verification methods. The lack of internal controls and noncompliance was determined to be a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320(b) states in part: "Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance awards exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. . . . (2) Proposals. A procurement method in which either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM.gov Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause The City's management was not aware of federal compliance requirements related to procurement and suspension and debarment. The City had not established or implemented the necessary internal controls and written policies to ensure purchases and contracts were administered in accordance with federal and state regulations. Effect Without the proper implementation of an effectively designed system of internal controls, the City cannot ensure that the services obtained provided full and open competition or the basis of the price. In addition, the City cannot ensure the vendors paid were eligible to participate in federal programs. Any program funds the City used to pay vendors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Noncompliance with the provisions of federal statues, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a proper system of internal controls to ensure expenditures made from federal awards use the appropriate procurement method and retain the documentation to support the procurement methods used in order to ensure compliance with the terms and conditions of the federal award. We recommended that management of the City establish a proper system of internal controls and develop policies and procedures to ensure contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into contracts or subawards. We also recommended strengthening its policies and procedures to ensure appropriate supporting documentation for federal programs is retained to be presented for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

2 CFR 1000.10 gives regulatory effect to the U.S. Department of Treasury for 2 CFR § 200.318 through 200.327 which describe specific procedures non-Federal entities must follow when entering into procurement transactions using Federal funds. 2 CFR § 200.320(b) provides formal procurement methods are required when the value of the procurement transaction under a Federal award exceeds the simplified acquisition threshold of the recipient or subrecipient. Formal procurement methods are competitive and require public notice. 2 CFR § 200.320(b) outlines two formal methods of procurement that are used for procurement transactions above the simplified acquisition threshold, which are (1) sealed bids and (2) competitive proposals. Further, 2 CFR § 200.318(i) indicates the non-Federal entity must maintain records sufficient to detail the history of procurement transaction. These records must 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. Due to inadequate controls over the procurement process, for one out of three (33%) vendors examined during testing of the Coronavirus State and Local Fiscal Recovery Funds, the Village did not obtain sealed bids or competitive proposals before contracting with Arcadis G & M of Ohio to provide engineering services. Expenditures for these services funded with Coronavirus State and Local Fiscal Recovery Funds during 2024 totaled $403,969. Failure to obtain proposals from a variety of vendors may result in the Village not utilizing the most qualified vendor as well as further noncompliance with federal requirements. The Village should adopt procedures to help ensure records are maintained to document the history of the procurement, including the rationale for the purchase method, selection of vendors, cost/price analysis (if applicable) and the reason for limiting competition (if applicable).

2024-005 Procurement, Suspension and Debarment Federal Assistance Listing Numbers – 21.027 Federal Agency – Department of Treasury Federal Program Title – COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award Period – 03/31/2021 through 12/31/2024, 10/01/2020 through 12/31/2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matter Compliance Requirement: Procurement, Suspension and Debarment Condition: The County did not follow its procurement policy. Additionally, the procurement policy in place does not meet UG requirements, which includes having a policy on suspension and debarment verification. Criteria: 2 CFR 200 requires that 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 nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Further, the method of procurement, whether informal or formal, must follow the County’s written procurement policy on approval thresholds and controls. 2 CFR 200 states that nonfederal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220). All nonprocurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Questioned Costs: Unknown Context: During testing, it was noted that the County does have a purchasing policy but not a procurement policy that follows Uniform Guidance (UG) nor does the County have a policy that covers suspension and debarment. Furthermore, the County did not retain supporting documentation for the procurement method selected. All six of the transactions tested did not follow the required procedures in place. Cause: The County has a purchasing policy but not a procurement policy that follows Uniform Guidance (UG) nor does the County have a policy that covers suspension and debarment. Effect: The County is not in compliance with procurement or suspension and debarment requirements. Contracts for construction, nonconstruction related procurements, and those over the simplified acquisition threshold may not be in compliance with the Uniform Guidance. Vendors may be paid with federal funds that are suspended and debarred entities which would not be in compliance with the Uniform Guidance. Repeat Finding: This is a repeat finding of 2023-004. Recommendation: We recommend the County review and update procurement policies for the entire County to ensure it meets the minimum requirements of 2 CFR 200 for all federal grants and establish a procurement process in order to ensure this policy is followed which includes adding language over suspension and debarment. Views of Responsible Officials: There is no disagreement with the finding. The County is working on reviewing policies and procedures and updating as necessary. Further, training will be available to all those involved in grants.

Internal Controls over Compliance and Compliance with Procurement Standards Information on the Federal Program: Federal Agency: U.S. Department of Treasury Assistance Listing Number: 21.029 Assistance Listing Name: COVID-19 - Coronavirus Capital Projects Fund Pass-through Award: Pass-through Entity Award Number Award Period District of Columbia CPFFN0167 November 21, 2023 through December 31, 2026 Criteria: 2 CFR Section §200.318(i) states, “The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.” Per 2 CFR Section §200.319, “All procurement transactions for the acquisition of property or services 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 Section §200.324 stipulates that a non-Federal entity must perform a cost or price analysis for each procurement in excess of a minimum threshold. Additionally, 2 CFR Section §200.320(c) states in part, “There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of [the defined] circumstances apply”. Condition: We noted there was insufficient documentation retained to support adherence to the required procurement policy and standards. Documentation was unable to be provided to support that cost or price analyses were performed and were conducted providing full and open competition. Additionally, for one procurement deemed noncompetitive by WWHS, none of the circumstances allowing noncompetitive procurement were met. Cause: WWHS’ internal controls over procurement did not fully operate as designed for the year ended December 31, 2024. WWHS did not maintain all required aspects of formal documentation as required by the applicable 2 CFR standards, was unable to provide evidence of full and open competition, and in one instance improperly elected noncompetitive procurement. Effect: We were unable to determine whether the value of procurements for goods or services that exceeded the micro-purchase threshold followed a proper formal procurement method in accordance with 2 CFR Sections §200.319, 320, and 324. Failure to perform procurement procedures in accordance with WWHS’ documented policies and General Procurement Standards as outlined in the 2 CFR Part 200 could result in the procurement being disallowed. Questioned costs: Not determinable Context: We selected a sample of 6 procurements by non-statistical methods, out of a population of 11 procurements. All procurements are related to eligible pre-award costs. WWHS was unable to provide sufficient formal procurement documentation to support full and open competition and performance of cost or price analysis for 4 out of 6 selected procurements. One of those samples was deemed noncompetitive by WWHS but did not meet the circumstances allowing noncompetitive procurement. The prevalence of these findings is detailed in the condition section above. Repeat finding: This is not a repeat finding. Recommendation: We recommend management refine their procurement tracking method by clarifying established policies and procedures to create more consistency throughout all WWHS purchase transactions. We also recommend management ensure all required procurement documentation is maintained in conjunction with its document retention policy and that a standardized checklist is used for all purchase transactions. Finally, we recommend management train personnel involved in procurement transactions, including reviewer and approver, to adhere to the documented procurement procedures. View of Responsible Officials: The procurement referenced in this finding was completed in 2021 and was connected to the buildout of a new facility that was opened in 2023. The federal award used to ultimately fund the project was obtained in 2024, and thus the expenditures retroactively applied to the award. Management concurs with this finding and will ensure proper adherence to the procurement policy.

Failure to Conduct Competitive Procurement Procedures Criteria Per 2 CFR §§ 200.318–200.327, non-federal entities must conduct all procurement transactions in a manner providing full and open competition. Sole source procurement may only be used when one of the circumstances outlined in 2 CFR § 200.320(c) applies and is adequately documented in the procurement file. Condition The Organization procured services from contractors identified in the approved grant budget prior to award. However, no evidence was provided to demonstrate that a competitive procurement process was conducted in accordance with the Uniform Guidance. There was no documentation of a sole source justification or other exception permitting noncompetitive procurement. Cause The Organization did not conduct competitive procurement or maintain a documented sole source justification for 4 out of 7 contracts reviewed. Listing the contractor in the grant budget prior to award does not satisfy federal procurement requirements outlined in the Uniform Guidance. Effect Failure to conduct competitive procurement increases the risk of noncompliance with the Uniform Guidance and the possibility that funds are not used appropriately, potentially resulting in questioned costs. Questioned Costs No questioned costs were identified as a result of our procedures. Context/Sampling Seven procurement transactions were tested under the program. In four instances, the Organization did not follow federal procurement requirements. No evidence of competitive bidding or documented sole source justification was provided for these transactions. Recommendation We recommend that the Organization implement procedures to ensure compliance with the procurement standards in 2 CFR §§ 200.318–200.327 for all federally funded purchases, including those where a contractor is named in the grant budget. For future procurements, the Organization should either conduct a competitive bidding process or document and obtain approval for a sole source procurement as allowed under 2 CFR § 200.320(c). Management’s Corrective Action Planned Management accepts the recommendation and will ensure compliance with the procurement standards in 2 CFR §§ 200.318–200.327 for all federally funded purchases by either conducting a competitive bidding process or documenting and obtaining approval for a sole source procurement as allowed under 2CFR §200.320(c).

2 CFR § 200.302(b)(7) requires written procedures for determining the allowability of costs in accordance with Subpart E-Cost Principles of this part and the terms and conditions of the Federal award. 2 CFR 200.320(b)(2) requires non-federal entities to have a written method for conducting technical evaluations of the competitive proposals receive and for selecting contract recipients. 2 CFR 200.319(d) requires non-federal entities to have written procedures for procurement transactions to ensure all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured and identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals. The Village was awarded grant monies under the Uniform Guidance (UG); however, the Village did not establish formal written policies required by the UG for the sections listed above. To help ensure compliance with the Uniform Guidance requirements, the Village should establish and maintain timely updated policies and, more importantly, implement procedure as specified by UG requirements for all grant monies received. Any changes to the Village's policies should also be formally approved by Council and documented within the minutes.

2024-002 – Procurement, Suspension, and Debarment Program: ALN# 47.070 = Computer and Information Science and Engineering Federal Agency: National Science Foundation Federal Award Identification Number(s): 2216614, 2122756 Period: Year Ended December 31, 2024 Criteria: Under 2 CFR 200.319, and 2 CFR 200.320, non-federal entities must maintain written procurement policies and internal controls to ensure compliance with Federal requirements, including suspension and debarment checks. Under 2 CFR 200.214, non-federal entities must not enter into contracts with parties that are suspended or debarred. Condition: During our review of procurement policies, we noted that the Organization did not have written procedures addressing procurement suspension and debarment requirements and the Organization was unable to furnish documentation that procurement, suspension, and debarment procedures took place for all contracts selected for testing. Cause: The Organization has not developed formal written procurement, suspension, and debarment policies and procedures. Effect: Without written polices and procedures, the Organization is at increased risk of: • Failing to verify vendor eligibility. • Contracting with suspended or debarred entities. • Procurements conducted in a manner that fails to provide full and open competition. Questioned Costs: No questioned costs identified. Context: This sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: Yes Recommendation: We recommend that the Organization: • Develop and implement written procurement policies that clearly outline procedures for suspension and debarment verification. • Require and document evidence of compliance for all covered procurement transactions • Train staff on the updated procedures. • Periodically review procurement files to ensure consistent adherence. Views of Responsible Officials: See management corrective action plan attached.

Finding: Finding Type: Material Weakness Title and Federal Assistance Listing Number of Federal Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: In accordance with 2 CFR 200.320, non-federal entities must conduct all procurement transactions in a manner providing full and open competition. For purchases exceeding the micro-purchase threshold of $10,000, the entity must obtain price or rate quotations from an adequate number of qualified sources, unless the purchase qualifies as a sole-source procurement under 2 CFR 200.320(c). Additionally, 2 CFR 200.303 requires the non-federal entity to establish and maintain effective internal control over compliance with federal statutes, regulations, and the terms and conditions of the federal award. Furthermore, 2 CFR 200.318(b) and 200.324 require that written contracts be executed with contractors, including all required Federal provisions to safeguard Federal funds. Condition: We examined 60 transactions during our testing of procurement transactions under the Coronavirus State and Local Fiscal Recovery Funds. We noted that a competitive bidding process was not used in 42 of 60 transactions tested. In all 42 instances, Historic South did not provide evidence that multiple bids or quotes were solicited. The documentation and explanation provided by Historic South was not deemed to be adequate justification to qualify for the use of sole-source procurement under 2 CFR 200.320(c). Additionally, all 60 procurement transactions tested did not have a fully executed, signed contract with the respective contractors. The award/contracting process and methods used to render and pay services did not meet the expected level of formal contractual agreements in place. Cause: In early 2024, Historic South made revisions to the procurement process in order to maximize efficiency and improve overall project outcomes. These revisions were made based on the challenges of securing bids on all potential projects, the need to expend the awarded dollars in a timely fashion and a verbal agreed-upon understanding with the Ohio Department of Health. The requirement to obtain multiple bids was replaced with a strategic invitation approach based on a preferred vendor pool. The result was that Historic South did not have a procedure in place to ensure that procurement transactions were conducted in compliance with Uniform Guidance. Specifically, the procurement policy lacked provisions to enforce competitive procurement practices for purchases above the micro-purchase threshold. Additionally, the process Historic South used to make awards to contractors did not meet the expected standards required for formal contract execution prior to project initiation or payment. - 29 - Historic South Initiative Schedule of Findings and Questioned Costs - continued Year Ended December 31, 2024 Section III – Federal Program Audit Findings and Questioned Costs - continued Effect: Failure to obtain competitive bids or quotes increases the risk of paying higher prices for goods/services, or unfair contracting practices. Additionally, the lack of competitive procurement represents noncompliance with Uniform Guidance, which may lead to questioned costs and potential disallowance by the granting agency. Furthermore, the lack of formally signed contracts increases the risk of misuse of federal funds and an inability to enforce contractual obligations or resolve disputes. While our testing did not identify any instances of misspent or improperly used federal funds, the control deficiencies represent a material weakness in internal control over compliance. Questioned Costs: $1,555,114 These costs are considered questioned due to lack of compliance with Uniform Guidance. The amount represents the total bid/contract amount of the 42 transactions tested, that did not meet the competitive bidding requirements. Recommendation: We recommend that Historic South implement and enforce formal procurement procedures that comply with the requirements of 2 CFR 200.317-200.327. These procedures should include obtaining competitive bids and/or maintaining documentation for any alternative bidding process used and approval requirements. Additionally, Historic South should require that fully executed, signed contracts be obtained prior to the start of work or payment to contractors. Staff responsible for procurement should be trained on federal procurement standards to ensure compliance. Views of Responsible Official and Planned Corrective Action: Prospectively, Historic South will review best practices related to the contract awarding process and formal contracting arrangements for construction work. In addition, Historic South will implement policies of: 1. Requiring the solicitation of multiple bids for all construction work in excess of $10,000 2. Establishing criteria for awarding all construction work 3. Implementing formal contracting processes for all construction work

Finding 2024-001 – Noncompliance with Procurement Standards – Professional Services Federal Program: Coronavirus State and Local Fiscal Recovery Funds (Covid-19), ALN #21.027 Criteria: Uniform Guidance requires non-federal entities to maintain documented procurement procedures that ensure full and open competition (2 CFR §200.318). For procurements within the small purchase threshold, nonfederal entities are required to obtain price or rate quotations from an adequate number of qualified sources (2 CFR §200.320). Professional service contracts are subject to these requirements. Condition: The auditee did not follow established procurement policies and the procurement standards set forth in 2 CFR §200.317–§200.327 when engaging legal counsel. Specifically, the auditee procured legal services with total costs between $10,000 and $250,000 without obtaining and documenting required price or rate quotations or performing a documented evaluation of qualified firms. Cause: The auditee did not document a noncompetitive procurement justification or otherwise comply with the small purchase procurement requirements because it was not aware that professional legal services were subject to standards under Uniform Guidance. Additionally, at the time the legal services were engaged, management did not anticipate that the related expenditures would be subject to a Single Audit. Effect: Failure to follow required procurement procedures increases the risk of noncompliance with federal regulations and may result in questioned costs if the expenditures are determined to be unallowable. Context: The audit finding represents an isolated instance. The amount of the audit finding was $22,672 out of the total of $4,605,256 for the program and was discovered using a valid judgmentally selected sample size. Recommendation: We recommend the auditee strengthen internal controls over procurement by ensuring all professional service contracts within the $10,000 to $250,000 threshold comply with federal procurement standards, including obtaining and documenting price or rate quotations from qualified sources and documenting justification for any noncompetitive procurements. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and plans to reinforce procurement requirements, and implement review procedures to ensure compliance with procurement thresholds and documentation requirements prior to contract execution.

Federal Agency: U.S. Department of Agriculture Federal Program Name: Supplemental Nutrition Assistance Program Cluster Assistance Listing Number: 10.561 Federal Award Identification Number and Year: 232MN101S2514 – 2024 Passed Through Entity: Minnesota Department of Human Services Pass Through Numbers: H55240010 Compliance Requirement: Procurement, Suspension, and Debarment Award Period: 2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: The County must follow Uniform Guidance Subsection 200.320 Methods of Procurement for all applicable procurements over the County’s micro-purchase threshold. For purchases over the County's micro-purchase threshold of $10,000 but not exceeding the simplified acquisition threshold of $250,000, the County should follow small purchase procedures. 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 County. Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During our testing, it was noted that for one contract out of four tested the County was unable to provide documentation showing that the county followed the open competition requirement. Questioned costs: None Context: One out of the four contracts tested had no documentation of open competition. Cause: The County purchasing likely followed County purchase policies for nonfederal expenditures. Effect: It would be possible that the County could end up spending more federal dollars than necessary for a product or service, if they are not going through the steps to ensure they are utilizing the best vendor for the county and documenting this process each year. Repeat finding: 2023-010 Recommendation: We recommend the County follow their federal purchasing policy in all their federal programs and retain documentation of that process occurring. As necessary, the County may need to add internal controls that are specific to each program to ensure this properly occurs. Views of responsible officials: There is no disagreement with the finding.

Program: ALL No. 10.523 Centers of Excellence at 1890 Institutions Significant Deficiency and Noncompliance over Procurement and Suspension and Debarment Repeat Finding: Yes Condition: During our audit we noted that procurement documentation was not available to support the selection of a sole source vendor nor able to obtain documentation to support the Foundation entering into contractual agreements with vendors who were not debarred or suspended from doing business with the federal government. Criteria: In accordance with 2 CFR 200.514: (c) Internal control. (1) The compliance supplement provides guidance on internal controls over Federal programs based upon the guidance in Standards for Internal Control in the federal Government issued by the Comptroller General of the United States and the Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO requires entities to establish and maintain effective internal controls to achieve operational, reporting and compliance objectives. Per 2 CFR 200.320 General procurement: (a) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Per 2 CFR 200.318 General procurement: (b) 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 this part. Per Uniform Guidance, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Cause: Program personnel were unaware of the requirement included in Uniform Guidance related to procedures required for procurement. Effect: If procurement were not in compliance with Uniform Guidance, the Foundation would not identify the noncompliance timely. Questioned Costs: Unknown. Recommendation: We recommend that management develop and implement written procurement policies and procedures in accordance with Uniform Guidance, provide periodic training to program personnel, and establish a review process to ensure procurement activities comply with applicable federal requirements. We also recommend the Foundation follow their process to verify that entities are not suspended, debarred, or otherwise excluded annually at time of award and to document these procedures. Auditee Response and Corrective Action Plan: Refer to management’s corrective action plans. Auditor’s Conclusion: Finding remains as stated.

Finding 2024-001: Procurement US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Condition: During our testing of procurement for ALN 21.027, we noted that the City procured certain goods/services through the Commonwealth of Pennsylvania’s COSTARS cooperative purchasing program. For items selected for testing, totaling $184,512, the City did not conduct its own competitive procurement process. In addition, in accordance with the Uniform Guidance, a purchase price from the Commonwealth of Pennsylvania COSTARS cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. The City does not have implemented monitoring procedures over its use of COSTARS, including [e.g., periodic review of COSTARS procurement documentation, confirmation that COSTARS contracts were competitively awarded, and verification that applicable federal clauses are incorporated]. Documentation in the procurement files was not sufficient to clearly demonstrate how the underlying COSTARS procurement complied with the Uniform Guidance procurement standards for the specific federal award (e.g., basis for contractor selection, method of procurement relative to 2 CFR 200.320 thresholds, and required federal contract provisions). Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the value of the procurement transaction. Cooperative purchasing arrangements (such as state contracts or COSTARS) are not prohibited by the Uniform Guidance; however, the municipality must assume responsibility for the procurement and document how the cooperative contract satisfies the federal procurement requirements applicable to the award. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. The City has chosen to leverage the COSTARS cooperative purchasing program to improve efficiency and obtain favorable pricing. While the City has implemented monitoring over COSTARS (for example, reviewing selected COSTARS contract information and maintaining communication with the state regarding procurement practices), those procedures have not been formalized in the written procurement policy, and the related documentation is not consistently retained in the individual grant procurement files. As a result, the audit file did not contain clear, consistent evidence that the COSTARS contracts used for the tested transactions met all applicable Uniform Guidance procurement requirements. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. In addition, without documentation demonstrating clear, consistent evidence that COSTARS contracts used for purchases met all applicable Uniform Guidance procurement requirements, there is an increased risk of noncompliance which could result in unallowable costs being charged to the Federal awards. Repeat finding: Yes, finding 2023-002 Questioned costs known and likely: $184,512 known and $124,662 likely. Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows all Uniform Guidance procurement standards, especially regarding cooperating purchasing programs. View of Responsible Officials: Management agrees. See Corrective Action Plan.

2 CFR § 300 codified in 45 CFR part 75 gives regulatory effect to the Department of Health and Human Services. 2 CFR § 200.302(b)(6) states the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 Payment. Additionally, for Federal awards, the Uniform Guidance requires a written policy for the procurement requirements outlined in 2 CFR § 200.318(c)(1), 2 CFR § 200.318(c)(2), and 2 CFR § 200.320(B) 2 CFR 200.302(b)(7) requires written procedures for determining the allowability of costs in accordance with Subpart E-Cost Principles of this part and the terms and conditions of the Federal award. 2 CFR 200.430 states that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR 200.431 requires established written leave policies if the entity intends to pay fringe benefits. 2 CFR 200.464(a)(2) requires reimbursement of relocation costs to employees be in accordance with an established written policy must be consistently followed by the employer. 2 CFR 200.475 requires reimbursement and/or charges to be consistent with those normally allowed in like circumstances in the non-Federal entity's non-federally-funded activities and in accordance with non-Federal entity's written travel reimbursement policies. The General Health District did not have written policies as required by Uniform Guidance. The failure to implement written policies as required by Uniform Guidance could result in noncompliance with the District’s federal programs. The General Health District should adopt written policies in accordance with the Uniform Guidance.

2024-004 COMPLIANCE AND INTERNAL CONTROL OVER PROCUREMENT – ARPA Assistance Listing: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: The American Rescue Plan Act (ARPA) provided significant funding to state, local, and tribal governments to address the public health and economic impacts of the COVID-19 pandemic. These funds are subject to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200), which include the specific standards under Public Bid Law. Condition: For the year ended December 31, 2024, twelve vendors with expenditures totaling $ 2,179,730 were selected for testing. We noted for one of the vendors selected for testing, the City was unable to provide any contract or bid support for the project, which incurred $434,190 of expenditures during the year. Universe/Population: The total population for procurement considerations was all vendors of the American Rescue Plan Act whose transactions for the year ended December 31, 2024, exceeded the micro-purchase threshold of $10,000. Payroll and benefit-related transactions were excluded from the population. Based on these requirements, the population consisted of twenty-three vendors totaling $2,790,345. Sample size : A sample of 12 vendors were selected for testing based on those with total expenditures over $10,000 during the fiscal year. Cause: The City did not adhere to compliance with Uniform Guidance Federal regulations per 2 CFR section 200.320 and its established procurement policy. The City did not maintain appropriate records needed to evidence compliance with Bid Law requirements. Effect: The City may enter into contracts with vendors that do not provide the best possible price when using public funds. Questioned Costs: For the purposes of this finding, there were no questioned costs. Recommendation: The City should strengthen controls to ensure appropriate consideration to competitors is given and adequate documentation is maintained with respect to procurement in accordance with federal Uniform Guidance requirements. Management’s response: The City concurs with the finding described above.

2024-004 COMPLIANCE AND INTERNAL CONTROL OVER PROCUREMENT – ARPA Assistance Listing: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: The American Rescue Plan Act (ARPA) provided significant funding to state, local, and tribal governments to address the public health and economic impacts of the COVID-19 pandemic. These funds are subject to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200), which include the specific standards under Public Bid Law. Condition: For the year ended December 31, 2024, twelve vendors with expenditures totaling $ 2,179,730 were selected for testing. We noted for one of the vendors selected for testing, the City was unable to provide any contract or bid support for the project, which incurred $434,190 of expenditures during the year. Universe/Population: The total population for procurement considerations was all vendors of the American Rescue Plan Act whose transactions for the year ended December 31, 2024, exceeded the micro-purchase threshold of $10,000. Payroll and benefit-related transactions were excluded from the population. Based on these requirements, the population consisted of twenty-three vendors totaling $2,790,345. Sample size : A sample of 12 vendors were selected for testing based on those with total expenditures over $10,000 during the fiscal year. Cause: The City did not adhere to compliance with Uniform Guidance Federal regulations per 2 CFR section 200.320 and its established procurement policy. The City did not maintain appropriate records needed to evidence compliance with Bid Law requirements. Effect: The City may enter into contracts with vendors that do not provide the best possible price when using public funds. Questioned Costs: For the purposes of this finding, there were no questioned costs. Recommendation: The City should strengthen controls to ensure appropriate consideration to competitors is given and adequate documentation is maintained with respect to procurement in accordance with federal Uniform Guidance requirements. Management’s response: The City concurs with the finding described above.

Criteria: In accordance with 2 CFR §200.320, federal procurement standards require non- Federal entities to follow documented procedures that promote full and open competition. For small purchases between $10,000 and $250,000, price or rate quotations must be obtained from at least three qualified sources. Purchases exceeding $250,000 must undergo formal procurement procedures such as sealed bidding or competitive proposals. Condition: During our testing of procurement transactions, we identified two vendors with individual purchases exceeding the small purchase threshold of $10,000 for which no documentation of competitive quotes was obtained. Additionally, one vendor exceeded the $250,000 threshold for which a formal competitive procurement process, such as sealed bids or proposals, was not conducted. Cause: While the Organization had a procurement policy aligned with federal requirements, the policy was not effectively enforced throughout the year. Possible effect: The Organization risked overpaying for goods or services and may not have achieved the best value for federal expenditures. Questioned cost: $325,883 – Represents the total expenditures with the three identified vendors during fiscal year 2024. Recommendation: We recommend the Organization enhance its internal controls over procurement by implementing a pre-procurement review process and staff training to ensure consistent compliance with federal procurement thresholds and documentation requirements. Views of responsible officials: Management agrees with the finding and will implement procedures to ensure procurement compliance.

Criteria: In accordance with 2 CFR §200.320, federal procurement standards require non- Federal entities to follow documented procedures that promote full and open competition. For small purchases between $10,000 and $250,000, price or rate quotations must be obtained from at least three qualified sources. Purchases exceeding $250,000 must undergo formal procurement procedures such as sealed bidding or competitive proposals. Condition: During our testing of procurement transactions, we identified two vendors with individual purchases exceeding the small purchase threshold of $10,000 for which no documentation of competitive quotes was obtained. Additionally, one vendor exceeded the $250,000 threshold for which a formal competitive procurement process, such as sealed bids or proposals, was not conducted. Cause: While the Organization had a procurement policy aligned with federal requirements, the policy was not effectively enforced throughout the year. Possible effect: The Organization risked overpaying for goods or services and may not have achieved the best value for federal expenditures. Questioned cost: $325,883 – Represents the total expenditures with the three identified vendors during fiscal year 2024. Recommendation: We recommend the Organization enhance its internal controls over procurement by implementing a pre-procurement review process and staff training to ensure consistent compliance with federal procurement thresholds and documentation requirements. Views of responsible officials: Management agrees with the finding and will implement procedures to ensure procurement compliance.

Criteria: In accordance with 2 CFR §200.320, federal procurement standards require non- Federal entities to follow documented procedures that promote full and open competition. For small purchases between $10,000 and $250,000, price or rate quotations must be obtained from at least three qualified sources. Purchases exceeding $250,000 must undergo formal procurement procedures such as sealed bidding or competitive proposals. Condition: During our testing of procurement transactions, we identified two vendors with individual purchases exceeding the small purchase threshold of $10,000 for which no documentation of competitive quotes was obtained. Additionally, one vendor exceeded the $250,000 threshold for which a formal competitive procurement process, such as sealed bids or proposals, was not conducted. Cause: While the Organization had a procurement policy aligned with federal requirements, the policy was not effectively enforced throughout the year. Possible effect: The Organization risked overpaying for goods or services and may not have achieved the best value for federal expenditures. Questioned cost: $325,883 – Represents the total expenditures with the three identified vendors during fiscal year 2024. Recommendation: We recommend the Organization enhance its internal controls over procurement by implementing a pre-procurement review process and staff training to ensure consistent compliance with federal procurement thresholds and documentation requirements. Views of responsible officials: Management agrees with the finding and will implement procedures to ensure procurement compliance.

Criteria: In accordance with 2 CFR §200.320, federal procurement standards require non- Federal entities to follow documented procedures that promote full and open competition. For small purchases between $10,000 and $250,000, price or rate quotations must be obtained from at least three qualified sources. Purchases exceeding $250,000 must undergo formal procurement procedures such as sealed bidding or competitive proposals. Condition: During our testing of procurement transactions, we identified two vendors with individual purchases exceeding the small purchase threshold of $10,000 for which no documentation of competitive quotes was obtained. Additionally, one vendor exceeded the $250,000 threshold for which a formal competitive procurement process, such as sealed bids or proposals, was not conducted. Cause: While the Organization had a procurement policy aligned with federal requirements, the policy was not effectively enforced throughout the year. Possible effect: The Organization risked overpaying for goods or services and may not have achieved the best value for federal expenditures. Questioned cost: $325,883 – Represents the total expenditures with the three identified vendors during fiscal year 2024. Recommendation: We recommend the Organization enhance its internal controls over procurement by implementing a pre-procurement review process and staff training to ensure consistent compliance with federal procurement thresholds and documentation requirements. Views of responsible officials: Management agrees with the finding and will implement procedures to ensure procurement compliance.

Criteria: In accordance with 2 CFR §200.320, federal procurement standards require non- Federal entities to follow documented procedures that promote full and open competition. For small purchases between $10,000 and $250,000, price or rate quotations must be obtained from at least three qualified sources. Purchases exceeding $250,000 must undergo formal procurement procedures such as sealed bidding or competitive proposals. Condition: During our testing of procurement transactions, we identified two vendors with individual purchases exceeding the small purchase threshold of $10,000 for which no documentation of competitive quotes was obtained. Additionally, one vendor exceeded the $250,000 threshold for which a formal competitive procurement process, such as sealed bids or proposals, was not conducted. Cause: While the Organization had a procurement policy aligned with federal requirements, the policy was not effectively enforced throughout the year. Possible effect: The Organization risked overpaying for goods or services and may not have achieved the best value for federal expenditures. Questioned cost: $325,883 – Represents the total expenditures with the three identified vendors during fiscal year 2024. Recommendation: We recommend the Organization enhance its internal controls over procurement by implementing a pre-procurement review process and staff training to ensure consistent compliance with federal procurement thresholds and documentation requirements. Views of responsible officials: Management agrees with the finding and will implement procedures to ensure procurement compliance.

Criteria: In accordance with 2 CFR §200.320, federal procurement standards require non- Federal entities to follow documented procedures that promote full and open competition. For small purchases between $10,000 and $250,000, price or rate quotations must be obtained from at least three qualified sources. Purchases exceeding $250,000 must undergo formal procurement procedures such as sealed bidding or competitive proposals. Condition: During our testing of procurement transactions, we identified two vendors with individual purchases exceeding the small purchase threshold of $10,000 for which no documentation of competitive quotes was obtained. Additionally, one vendor exceeded the $250,000 threshold for which a formal competitive procurement process, such as sealed bids or proposals, was not conducted. Cause: While the Organization had a procurement policy aligned with federal requirements, the policy was not effectively enforced throughout the year. Possible effect: The Organization risked overpaying for goods or services and may not have achieved the best value for federal expenditures. Questioned cost: $325,883 – Represents the total expenditures with the three identified vendors during fiscal year 2024. Recommendation: We recommend the Organization enhance its internal controls over procurement by implementing a pre-procurement review process and staff training to ensure consistent compliance with federal procurement thresholds and documentation requirements. Views of responsible officials: Management agrees with the finding and will implement procedures to ensure procurement compliance.

Finding 2024-003 Procurement, Suspension and Debarment (Significant Deficiency) Information on the Federal Programs: Assistance Listing #15.657 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 non- Federal 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 detailing the history and rationale of the procurements. Cause: The Organization's processes in place during 2024 did not provide for the formalization and retention of procurement records and vendor screenings consistent with the expectations outlined in 2 CFR 200. Additionally, the Organization does not have a formal policy in place related to contractor screenings under CFR §200.213. 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 Organization 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 Organization 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: The Organization failed to adhere to its procurement policy, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Yes, continuation of Finding 2023-003 Recommendation: We then recommend that the Organization 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. We also recommend that the Organization enhance its existing policy related to noncompetitive procurement to ensure include the five specific circumstances in which noncompetitive procurement can be used under CFR 200.320. Additionally, we recommend that the Organization enhance its policies to include screening procedures related to 200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award.

Finding 2024-003 Procurement, Suspension and Debarment (Significant Deficiency) Information on the Federal Programs: Assistance Listing #15.657 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 non- Federal 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 detailing the history and rationale of the procurements. Cause: The Organization's processes in place during 2024 did not provide for the formalization and retention of procurement records and vendor screenings consistent with the expectations outlined in 2 CFR 200. Additionally, the Organization does not have a formal policy in place related to contractor screenings under CFR §200.213. 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 Organization 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 Organization 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: The Organization failed to adhere to its procurement policy, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Yes, continuation of Finding 2023-003 Recommendation: We then recommend that the Organization 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. We also recommend that the Organization enhance its existing policy related to noncompetitive procurement to ensure include the five specific circumstances in which noncompetitive procurement can be used under CFR 200.320. Additionally, we recommend that the Organization enhance its policies to include screening procedures related to 200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award.

Finding 2024-003 Procurement, Suspension and Debarment (Significant Deficiency) Information on the Federal Programs: Assistance Listing #15.657 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 non- Federal 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 detailing the history and rationale of the procurements. Cause: The Organization's processes in place during 2024 did not provide for the formalization and retention of procurement records and vendor screenings consistent with the expectations outlined in 2 CFR 200. Additionally, the Organization does not have a formal policy in place related to contractor screenings under CFR §200.213. 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 Organization 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 Organization 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: The Organization failed to adhere to its procurement policy, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Yes, continuation of Finding 2023-003 Recommendation: We then recommend that the Organization 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. We also recommend that the Organization enhance its existing policy related to noncompetitive procurement to ensure include the five specific circumstances in which noncompetitive procurement can be used under CFR 200.320. Additionally, we recommend that the Organization enhance its policies to include screening procedures related to 200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award.

Finding 2024-003 Procurement, Suspension and Debarment (Significant Deficiency) Information on the Federal Programs: Assistance Listing #15.657 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 non- Federal 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 detailing the history and rationale of the procurements. Cause: The Organization's processes in place during 2024 did not provide for the formalization and retention of procurement records and vendor screenings consistent with the expectations outlined in 2 CFR 200. Additionally, the Organization does not have a formal policy in place related to contractor screenings under CFR §200.213. 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 Organization 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 Organization 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: The Organization failed to adhere to its procurement policy, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Yes, continuation of Finding 2023-003 Recommendation: We then recommend that the Organization 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. We also recommend that the Organization enhance its existing policy related to noncompetitive procurement to ensure include the five specific circumstances in which noncompetitive procurement can be used under CFR 200.320. Additionally, we recommend that the Organization enhance its policies to include screening procedures related to 200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award.

Finding 2024-003 Procurement, Suspension and Debarment (Significant Deficiency) Information on the Federal Programs: Assistance Listing #15.657 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 non- Federal 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 detailing the history and rationale of the procurements. Cause: The Organization's processes in place during 2024 did not provide for the formalization and retention of procurement records and vendor screenings consistent with the expectations outlined in 2 CFR 200. Additionally, the Organization does not have a formal policy in place related to contractor screenings under CFR §200.213. 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 Organization 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 Organization 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: The Organization failed to adhere to its procurement policy, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Yes, continuation of Finding 2023-003 Recommendation: We then recommend that the Organization 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. We also recommend that the Organization enhance its existing policy related to noncompetitive procurement to ensure include the five specific circumstances in which noncompetitive procurement can be used under CFR 200.320. Additionally, we recommend that the Organization enhance its policies to include screening procedures related to 200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award.

Finding 2024-003 Procurement, Suspension and Debarment (Significant Deficiency) Information on the Federal Programs: Assistance Listing #15.657 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 non- Federal 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 detailing the history and rationale of the procurements. Cause: The Organization's processes in place during 2024 did not provide for the formalization and retention of procurement records and vendor screenings consistent with the expectations outlined in 2 CFR 200. Additionally, the Organization does not have a formal policy in place related to contractor screenings under CFR §200.213. 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 Organization 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 Organization 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: The Organization failed to adhere to its procurement policy, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Yes, continuation of Finding 2023-003 Recommendation: We then recommend that the Organization 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. We also recommend that the Organization enhance its existing policy related to noncompetitive procurement to ensure include the five specific circumstances in which noncompetitive procurement can be used under CFR 200.320. Additionally, we recommend that the Organization enhance its policies to include screening procedures related to 200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award.

Finding 2024-003 Procurement, Suspension and Debarment (Significant Deficiency) Information on the Federal Programs: Assistance Listing #15.657 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 non- Federal 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 detailing the history and rationale of the procurements. Cause: The Organization's processes in place during 2024 did not provide for the formalization and retention of procurement records and vendor screenings consistent with the expectations outlined in 2 CFR 200. Additionally, the Organization does not have a formal policy in place related to contractor screenings under CFR §200.213. 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 Organization 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 Organization 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: The Organization failed to adhere to its procurement policy, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Yes, continuation of Finding 2023-003 Recommendation: We then recommend that the Organization 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. We also recommend that the Organization enhance its existing policy related to noncompetitive procurement to ensure include the five specific circumstances in which noncompetitive procurement can be used under CFR 200.320. Additionally, we recommend that the Organization enhance its policies to include screening procedures related to 200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award.