Findings Citing § 200.328

Finding 2025-003 – Reporting (Significant Deficiency and Noncompliance)- (Repeat finding) Information on the Federal Program: U.S. Department of Education, Higher Education – Institutional Aid, Assistance Listing No. 84.031 Criteria: 2 CFR Part 200.328 and 329 establish reporting requirements for non-federal entities that include timely and accurate reporting. Non-federal entities are also required to establish controls over the reporting process to ensure compliance with reporting requirements. Condition: We selected two annual reports submitted during the year to test for controls and compliance. No documentation of review or approval of the reports was available. In addition, amounts reported on one report did not tie to underlying financial support. Cause: The College did not retain documentation of a review and approval of the reports submitted. The College did not submit an accurate report. Effect: The College did not have appropriate review and approval processes in place or documentation. Questioned Costs: None reported Recommendation: We recommend the College strengthen its policies and procedures over the grant reporting process to ensure controls are properly implemented and working effectively. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Nature of Finding: Compliance Finding and Material Weakness in Internal Controls over Compliance - Reporting Criteria/Condition: Federal regulations 2 CFR 200.328 - 200.329 provide that required reporting under the federal program must be completed timely and accurately. Per the federal award agreement, specific reporting requirements with established due dates were outlined. We noted during review of the different reporting requirements that none of the reports required to be filed through September 30, 2025 were filed in a timely manner. Per the federal award agreement, the following reporting requirements were applicable through September 30, 2025: • Performance reports were required to be submitted on a semi-annual basis no later than thirty calendar days after the end of each six-month reporting period. • A written request was required to be submitted to the U.S. Department of Housing and Urban Development (HUD) no later than thirty calendar days after all grant funds were drawn down and the project was completed. Cause/Context: Controls were not in place to ensure timely reporting. Five performance reports required through September 30, 2025 were submitted late. These reports were required to be completed semi-annually subsequent to the grant agreement being signed with due dates ranging from July 2023 through July 2025, but were all filed after September 30, 2025. A written request required after project completion was also filed late as it was due thirty days following the completion of the projects but was not submitted until after September 30, 2025. The lack of controls over these reporting requirements was specific to the housing division of Hope Network and Affiliates. Effect: A lack of controls could result in late or missed reporting. Recommendation: We recommend the Network establish procedures and controls to ensure financial and performance reports are filed timely and that the Network submit all outstanding reports for the federal award. We also recommend that the Network monitor the due date of any upcoming reports, including the final closeout reports. Upon completion of the final close out report, the Network should ensure that the proper allocation of expenditures are communicated to HUD timely and accurately. Views of Responsible Officials and Planned Corrective Actions: Subsequent to September 30, 2025, the Network has filed all over-due semi-annual performance reports and submitted the required written request for confirmation of final drawdown of funds and project completion. The finance department will review all grant agreements and procedures to ensure all required reporting is tracked and filed timely according to grant documents and will develop a uniform process for existing grants across all Hope Network Affiliates.

Finding 2025-001 – Internal Control over Indirect Cost Calculation, Monitoring and Reporting Federal Program – Office of Air and Radiation (OAR) Assistance Listing Number - #66.034 Award Number – XA-84066101 Criteria: Uniform Guidance (2 CFR §200.414) requires that indirect costs charged to federal awards be supported by a current, approved Negotiated Indirect Cost Rate Agreement (NICRA) and applied in accordance with the approved rate and allocation base. Costs charged in excess of the approved indirect cost rate are unallowable. Additionally, Uniform Guidance (2 CFR §200.328) requires that financial reports submitted to federal awarding agencies or pass-through entities, including Federal Financial Reports (FFRs), accurately reflect the allowable costs incurred under the award and be supported by the Organization’s underlying accounting records. Condition: The Organization charged indirect costs to the major federal program in excess of the amount permitted under its approved NICRA for the fiscal year ended September 30, 2025. The Organization’s NICRA has historically been based on a salary and fringe benefits allocation base. During fiscal year 2025, the Organization experienced significant turnover of long-tenured employees, resulting in a substantial decrease in salaries and wages and, accordingly, a reduction in the approved indirect cost rate. As a result, indirect costs were overcharged to the federal program by $96,196. In addition, amounts reported on the annual Federal Financial Report (FFR) to the federal funder were incorrect, reporting the wrong base and charged amounts. The amounts reported on the FFR did not match the actual indirect cost base and charges for fiscal year 2025. Cause: Although the revised NICRA rate reflected the lower salary base, the Organization charged indirect costs throughout the year using actual indirect expenses rather than recalculating allowable indirect costs based on the approved rate. Also, it appears the errors in the FFR were caused by oversight. Effect: The Organization charged unallowable indirect costs totaling $96,196 to the federal program, resulting in noncompliance with Uniform Guidance requirements. This overcharge may subject the Organization to repayment to the federal awarding agency or reduction of a future award. In addition, the FFR submitted to the federal awarding agency was inaccurate and did not reflect the allowable indirect costs. Questioned Costs: $96,196 Repeat Finding: No Recommendation: We recommend the Organization strengthen internal controls over the calculation, monitoring and reporting of indirect costs charged to the federal program. Specifically we recommend that the Organization evaluate and received approval from the federal agency, whether certain costs currently included in the indirect cost pool may be directly charged to the federal award when those costs can be specifically identified with the program and allocated based on actual usage or time incurred, in accordance with Uniform Guidance requirements. Additionally, management should establish documentation and review procedures to support the allocation methodology used for any costs charged directly to federal programs. This approach may help ensure compliance with the approved NICRA while allowing the Organization to recover eligible program costs in a manner consistent with federal requirements. Response: To address this issue going forward, NACAA met with its auditors and accountant to discuss corrective action. It was recommended that some of NACAA’s overhead costs that have traditionally been added to the indirect cost pool (professional fees, rent, office insurance, etc.) be charged as direct costs using NACAA’s grant-related salaries and fringe benefits to allocate expenses between direct and indirect costs. To correct the other issue related to the Federal Financial Report (FFR) errors, NACAA will work with its accountant to complete the required FFRs to ensure that all figures being reported are correct.

Finding: Reporting Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing No.: 21.027 Federal Agency: Department of Treasury Criteria or Specific Requirement: In accordance with 2 CFR 200.328 and 31 CFR section 35.4(c), recipients must adhere to the Treasury’s Recipient Compliance and Reporting Responsibilities, which require accurate completion of the annual Project and Expenditure Report. Required reporting elements include current period obligation, cumulative obligation, current period expenditure, and cumulative expenditure. Management is responsible for establishing and maintaining effective internal control to ensure compliance with these reporting requirements. Condition: The current period obligation and current period expenditures reported in the annual Project and Expenditure Report were inaccurate and did not reflect the underlying supporting documentation. Cause: The City’s internal controls and supervisory review procedures over the preparation of the Project and Expenditure Report were not operating effectively, resulting in incorrect amounts being reported. Effect or Potential Effect: Inaccurate reporting may impair the Department of Treasury’s oversight and monitoring efforts and could result in the City being viewed as noncompliant with federal reporting requirements. Questioned Costs: None reported. Context: During our testing, we recalculated the current period obligation and current period expenditure amounts and identified discrepancies when compared to the amounts submitted in the annual Project and Expenditure Report to the Department of Treasury. Identification as a Repeat Finding: N/A Recommendation: Management should strengthen existing policies and procedures to ensure accurate calculation and reporting of key line items within the Project and Expenditure Report. This should include enhanced supervisory review to verify the accuracy and completeness of the report prior to submission. Views of Responsible Officials: We agree with the finding. See separate report for planned corrective action plan.

Finding 2025-009 – Reporting (Material Weakness and Noncompliance)(Repeat Finding) Identification of the Federal Program: Community Development Block Grants, ALN 14.218, Department of Housing and Urban Development (CDBG) and Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027, Department of the Treasury (CRF). Criteria: 2 CFR 200.328-330 establish the requirements of nonfederal entities for financial and performance reporting that include timely and accurate reporting. 2 CFR 200.303 requires nonfederal entities to establish, document and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Typical control procedures for reporting include having a supervisor review the submitted report and ensuring the work is performed and documented in a way that confirms the accuracy and completeness of all data and information included. Condition: We selected five reports for the two grant programs to test for compliance and controls over reporting requirements. No documentation of review or approval of the reports was available. For CDBG, 2 quarterly cash reports and the FY24 Consolidated Annual Performance and Evaluation Report (CAPER) were tested, one cash report was late. Cause: The City did not retain documentation of a review and approval of federal reports submitted. Effect: The City did not have appropriate controls in place over documentation of reporting requirements. Questioned Costs: None reported. Recommendation: We recommend the City strengthen its policies and procedures over the grant reporting process to ensure controls are properly implemented and working effectively. Views of Responsible Officials: The City agrees with the finding. See Management’s View and Corrective Action Plan included at the end of the report.

2025-006 — Reporting – Significant Deficiency in Internal Control Over Compliance and Noncompliance (Repeat of Finding 2024-006, 2023-007, 2022-005, 2021-002, and 2020-004) Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid ALN Number: 15.027 and 84.031 Award years: Various Criteria: According to 2 CFR Section 200.328, nonfederal entities may be required to submit performance reports at least annually as required by the terms of the federal award. Condition: The College did not submit annual performance reports on time for the programs. Additionally, the annual report submitted for the ALN 15.027 was submitted with inaccurate information. Cause: The College did not have sufficient procedures in place to ensure that the reports were completed timely and accurately. Effect: Submitting inaccurate and untimely reports is noncompliance with grant requirements and could lead to decreased or loss of funding. Questioned Costs: None. Context: The annual reports were not submitted timely, and one report was not accurate. Recommendation: The College should ensure that all grant reports are prepared in a timely manner and are accurate. Management’s Response: The College concurs with the finding. Annual performance reports will be submitted on time as required by the funding agency. Management has developed a comprehensive listing of all reporting requirements and will utilize this information to ensure all reporting requirements are met.

Strengthening Institutions Program – Department of Education Federal Financial Assistance Listing #84.031 P031A080196 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.328 and 2 CFR 200.329 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with the program requirements. Condition: Section 3 of the Title III Endowment Report for the year ending June 30, 2024, was completed materially incorrect for Type of Savings Account Security line items and Total Invested line item. Cause: There was a lapse within the internal control process ensuring the report was completed materially correct. Effect: The annual report was completed materially incorrect and filed with the Department of Education. Questioned Costs: None. Context/Sampling: No sampling was utilized. The only report required to be filed in the fiscal year was tested. Repeat Finding from Prior Years: Yes. Recommendation: The University should review their current internal control process to ensure required reports are completed materially correct. Views of Responsible Officials: Management agrees with the finding.

Finding 2025-003 Lack of Internal Controls over Reporting Federal Agency: U.S. Department of Education Federal Program(s): Indian Education – Tribal Leaders of Tomorrow Assistance Listing Number(s):84.299A Award Number(s): S299A200024-24 Award Years: 2024 Type of Finding: Significant deficiency in internal control over compliance and noncompliance. Criteria: All recipients are required to submit an annual Grant Performance Report providing the most current performance and financial expenditure information that is sufficient to meet the reporting requirements of 2 CFR 200.328, 200.329 and 34 CFR 75.720. Yukon Flats is required to submit quarterly performance reports within 30 days after the end of each quarter. Condition and Context: The client was unable to locate the annual report that was submitted for the program. Additionally, they were unable to show that the annual report or the quarterly reports were submitted timely. Cause: Lack of internal controls related to reporting requirements and employee turnover at the District. Effect: Lack of internal controls over reporting could allow requirements to be missed that could in turn lead to a loss of funding. Repeat Finding: This is not a repeat finding. Questioned Costs: None reported. Recommendation: We recommend that management implement stronger internal controls over reporting, specifically to retaining supporting documentation of timely submission. Management Response: Management concurs with this finding. See Corrective Action Plan.

Finding 2025 - 002 Untimely Submission of Federal Reports Federal Agencies: U.S. Agency for International Development Federal Programs: Foreign Assistance for Programs Overseas Assistance Listing Numbers: 98.001 Pass-through Entities: JSI Research & Training Institute, Inc. and RTI International Award Identification Number and Year: 7200AA22CA00011, 2022 and 72066923CA00003, 2023 Criteria or Specific Requirement: Per 2 CFR § 200.328(b)(1), recipients are required to submit performance and financial reports “no less frequently than annually and no more frequently than quarterly” and “not later than 30 calendar days after the reporting period end date for quarterly or semi-annual reports, and 90 calendar days for annual or final reports” unless otherwise specified by the Federal agency or pass-through entity. Timely submission ensures the awarding agency has current and accurate information to monitor the recipient’s financial performance and compliance. Condition: During our testing of BRAC USA's compliance with Federal reporting requirements, we noted that required Federal Financial and Programmatic Reports were not submitted to the passthrough entities within the time frames specified in the grant terms and conditions. Specifically, 3 of 4 reports tested were submitted between 8 and 10 days after the required due dates.Cause: The delinquent submissions occurred because of delays in reconciliation of financial data and support provided by BRAC USA's subrecipients which contributed to the late filings. Effect or Potential Effect: Failure to submit required financial reports on time reduces transparency and impairs the Federal awarding agency’s ability to effectively monitor grant performance. Continued noncompliance may result in sanctions, delayed payments, or other administrative actions by the Federal agency. Questioned Costs: Costs associated with qualitative monitoring measures are not identifiable. Context: During our audit, we examined three financial reports and one programmatic report. We noted 2 of the 3 financial reports and the programmatic report were late. Identification as a Repeat Finding, if applicable: Not a repeat finding Recommendation: BRAC USA should strengthen internal controls over Federal reporting to ensure timely submission of required financial reports. This should include, establishing a reporting calendar with due dates and reminders, assigning responsibility for preparation and review of reports, and implementing a secondary review process to verify timely submission and accuracy. The recommendations should also be communicated to BRAC USA's subrecipients to ensure any required financial or programmatic data is submitted in a timely manner.

Congressional Directives, U.S Department of Health and Human Services, Federal Assistance Listing #93.493; Contract No. 90XP0658-01-00 Condition: The amount of expenditures covered by the report period were inaccurately reported to the federal granting agency. Criteria: In compliance with Title 24 CFR Subpart D Post Federal Award Requirements §200.302 Financial management (b): The financial management system must provide for (2) Accurate, current, and complete disclosure of the financial results of each Federal award program in accordance with the reporting requirements set forth in SS 200.328 and 200.329.” Cause: The error stems from a clerical oversight related to evaluating the amount of expenditures at the wrong date, as the transactions in the final month of the reporting period had not been closed out by the Organization at the time the report was prepared. Effect: The Organization failed to report the actual amount of expenditures in accordance with the program requirements, resulting in an understatement of $85,195 on the report. Failure to submit accurate funding and financial data could result in loss of future funding. Recommendation: Management should perform an internal review over inputs into federal financial reports before they’re submitted, to verify that inputs are accurate and cover the appropriate reporting period.

2025-001: Significant Deficiency - Reporting U.S. Department of Education Pass-through Oregon Department of Education Child Nutrition Cluster – AL #s 10.553, 10.555, 10.559 and 10.582 Criteria – Management is responsible for ensuring reporting meets the Reporting Principles as required by 2 CFR §200.302, §200.328 and program regulations, where information reported is complete, accurate and timely. Monthly claim reports submitted through the state reporting system must accurately reflect reimbursable meals served Condition – The District submitted monthly child nutrition reimbursement claims that contained inaccurate meal counts for multiple months during the fiscal year. Specifically, the District overstated reimbursable meal counts due to errors in including nonreimbursable meals served. Additionally, the claims were not subject to an independent review prior to submission to ensure accuracy and completeness. Cause – The District did not have a formalized review and reconciliation process for monthly child nutrition claims and responsibilities for claim preparation and review were not adequately segregated. Effect or potential effect – As a result, the District received federal reimbursements in excess of allowable meals served. Based on audit procedures performed, the resulting questioned costs were less than $25,000, which is below the Uniform Guidance reporting threshold and therefore not required to be reported. Recommendations – We recommend the District enhance internal controls by implementing an independent review to the reporting process to ensure meal counts are properly calculated prior to submission. Views of Responsible Officials and Planned Corrective Actions – Management agrees with this finding. Management will revisit internal controls and independent review processes to ensure meal counts reported are in accordance with requirements as defined in 2 CFR §200.302, §200.328 and program regulations.

Finding 2025-001: Information on the Federal Program: Assistance Listing Number 20.106—Airport Improvement Program (AIP). Award Number(s): 3-49-0024-063-2023, 3-49-0024-065-2024, 3-49-0024-064-2024. Compliance Requirement: Reporting Type of Finding: Noncompliance. Criteria: 2 CFR § 200.328(a) requires that the non-federal entity submit financial reports as required by the terms and conditions of the federal award, including the frequency and due dates for submission. The federal awarding agency or pass-through entity must use OMBapproved information collections, such as the SF-425A (federal financial report) to collect financial information from recipients. The AIP grant agreements further specify the requirement for timely submission of the SF-425A as a condition of the award. Condition: The City did not submit the required federal financial report for the AIP grant within the required reporting deadline – within 90 days after the end of the fiscal year. Cause: The City program staff and management did not have complete understanding and oversight regarding federal reporting deadlines. Effect or Potential Effect: Failure to submit required federal financial reports in a timely manner may result in noncompliance with federal award terms, potential delays in future funding, and increased risk of federal sanctions or additional monitoring by the awarding agency. Questioned Costs: None identified as the finding relates to a reporting compliance issue. Context: Of the required reports for the fiscal year, the federal financial report for the AIP grant was submitted approximately one year and 3 months late (December 8, 2025). Recommendation: The City program staff and management should implement procedures to ensure timely submission of all required federal financial reports. Procedures should include establishing a tracking system for necessary reports and deadlines as well as providing training to program staff responsible for submission of required reports.

2025-001 – Significant Deficiency– Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement(s): Period of Performance and Reporting ALN 21.027 U.S. Department of the Treasury Criteria: The District was a subrecipient of Ohio’s K-12 School Safety Grant Program. Under Uniform Guidance, 2 CFR §§200.77 and 200.309 require that all costs be incurred within the grant’s period of performance, and §200.344 mandates liquidation of obligations by the specified deadlines, which were December 31, 2023 for encumbrances and September 30, 2024 for liquidation. For reporting, §§200.302(b) and 200.328 require accurate financial and programmatic reporting to the pass-through entity. Condition: The District liquidated $72,970 in expenditures after September 30, 2024, which was beyond the grant’s period of performance. In addition, quarterly reports did not accurately reflect the timing of expenditures, resulting in discrepancies between reported and actual activity between quarters. Context: Our testing focused on expenditures near the end of the performance period and included a review of all four quarterly reports. Multiple reports contained errors in the timing of reported expenditures compared to actual disbursements. Cause: The District lacked controls to prevent expenditures beyond the grant’s performance period and did not have adequate review procedures for quarterly reporting. Effect: The questioned costs may be subject to disallowance, creating a potential liability for the District. Inaccurate financial reporting also increases the risk of improper drawdowns, misinformed oversight, and potential impact on future funding decisions. Questioned Costs: $72,970 Repeat Finding: No Recommendation: We recommend that the District establish and enforce controls to ensure all expenditures are incurred and liquidated within the grant’s period of performance, implement a documented review process for quarterly grant reporting that includes reconciliation to the general ledger prior to submission, and develop a documented training schedule to ensure staff understand Uniform Guidance requirements for compliance with period of performance and reporting. Views of Responsible Officials: See management’s response in the District’s Corrective Action Plan.

Finding 2025.002 - Reporting - Material Weakness Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Name and Assistance Listing Number: Head Start Cluster, 93.600 Federal Award Identification Number and Year: 01CH011268-05-01 (2024), 01CH012890-01-01 (2024), 01CH011268-05-03 (2024) Name of Pass-through Entity (if applicable): N/A Criteria In accordance with §200.328 Financial Reporting and 200.329, Monitoring and Reporting Program Performance, recipients and subrecipients must submit financial and performance reports as required by the award. Under the requirements of the Federal Funding Accountability and Transparency Act (“FFATA”) that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to identify awards subject to FFATA, collect and report information on each first tier subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System. Condition A SF-425 report was not properly supported by accounting records or reviewed prior to filing. Additionally, the Federal Funding Accountability and Transparency Act ("FFATA") report for the subrecipient was not filed. Cause CLC lacks sufficiently documented policies and procedures related to the grant's reporting requirements. CLC experienced a change in personnel. Management did not maintain supporting documentation for the SF-425 report and did not have the report reviewed prior to submission. Additionally, management was unaware of the FFATA reporting requirement. Effect or Potential Effect Inadequate documentation of policies and procedures for reporting requirements and controls over the preparation and review of reports resulted in the untimely filing of required reports causing there to be noncompliance with the reporting requirement set forth by the Uniform Guidance. Lack of review and support may result in the improper reporting of activity to the granting agency. Questioned Costs None Context One of two SF-425 reports was tested. The report tested did not have supporting documentation or evidence of review. The entity was required to submit 1 FFATA report, which was not submitted. Identification as a Repeat Finding This is not a repeat finding. Recommendation We recommend that management establish and formally document comprehensive policies and procedures for the reporting process. These policies and procedures should clearly outline all required reports, filing timelines, and the method for maintaining supporting documentation. We recommend that CLC develop and implement a standardized checklist outlining all required grant compliance requirements. The checklist should clearly identify the individual responsible for preparation and the individual responsible for review. Additionally, both the preparer and reviewer should document their completion of the review to provide evidence that compliance requirements have been appropriately verified. Views of Responsible Officials Children’s Learning Centers of Fairfield County, Inc. concurs with this finding. Management will establish and formally document grant reporting policies and procedures for the Head Start Cluster, including a centralized compliance calendar, required deliverables list, and a standardized checklist for each reporting package (including SF-425 and FFATA subaward reporting, as applicable). All reports will be supported by underlying accounting records, retained in a centralized repository, and subject to documented preparer and independent reviewer sign-off prior to submission. CLC will provide staff training and cross-training to maintain continuity during personnel changes.

Name of Federal Agency: United States Department of Health and Human Services Federal Program Name: Early Head Start (EHS) Assistance Listing Number 93.600 Federal Award Identification Number and Year: 04CH011372-04 - 2023 04CH011372-05 - 2024 Name of Pass-through Entity: N/A Criteria Program regulations and contracts require timely submission of SF-425 FFR reports to the regulatory agent as specified in 2 CFR section 200.328. Condition Durham’s Partnership for Children did not submit timely SF-425 FFR reports related to ongoing 2023 and 2024 EHS grants. Cause Management does not have controls in place to ensure timely data compilation and reporting. Effect or Potential Effect Management is not in compliance with the program guidelines requiring timely reporting to the regulatory agent. Questioned Costs: None Context During testing of the reporting compliance requirement for EHS, it was noted that there were severe delays in submission of all required reports for the current year. Identification of Repeat Finding: This finding is a repeat finding (see prior year finding number 2024-002). Recommendation Management should implement procedures to ensure timely submission of required reports to the regulatory agent. Reporting Views of Responsible Officials The Partnership has hired a new Chief Financial Officer with experience in federal grant management and reporting, including Early Head Start. All reporting requirements for the continuing EHS grants have been completed and submitted timely. Head Start system alerts are reviewed as they are received, and the CFO actively monitors upcoming reporting due dates on a monthly basis to ensure continued compliance. In addition, for fiscal year 2025–26 the Chief Financial Officer has updated financial policies and procedures, re-established a Finance Committee for oversight, and implemented monthly financial reporting to the Board of Directors. These actions strengthen governance, improve compliance monitoring, and are expected to result in the finding being fully resolved in future audits.

Finding Number: 2025-001 Federal Program: YouthBuild Grants Federal Award Identification Number and Year: YB-38198-22-60-A-39, 2024 & YB-000086-01-60-A- 24, 2025 Assistance Listing Number (ALN): 17.274 Federal Awarding Agency: U.S. Department of Labor Compliance Requirement: Reporting – Quarterly Financial Reports Pass-through Entity: N/A Repeat Finding: Yes Prior Audit Finding Number: 2024-001 Significant Deficiency and Noncompliance – Timely Submission of Quarterly Financial Reports Criteria: 2 C.F.R. § 200.328 Financial Reporting states, in part, the Federal agency or pass-through entity must collect financial reports no less than annually. The Federal agency or pass-through entity may not collect financial reports more frequently than quarterly unless a specific condition has been implemented in accordance with § 200.208. To the extent practicable, the Federal agency or pass-through entity should collect financial reports in coordination with performance reports. The recipient must submit financial reports as required by the Federal award. In the YouthBuild Grant Condition of Award, U.S. Department of Labor, Section 12 Administrative Requirements, Part L, Reports, Section A, Quarterly Financial Reports, all ETA grant award recipients are required to report financial data on the ETA-9130 Financial Report. ETA-9130 reports are due no later than 45 calendar days after the end of each specified reporting quarter. Condition: The School did not submit the quarter ending September 30, 2024 ETA-9130 Quarterly Financial Report until November 20, 2024, six days after the deadline of November 14, 2024. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Context: Auditor reviewed the ETA-9130 Quarterly Financial Report for period ending September 30, 2024 via submission through the U.S. Department of Labor’s Payment Management System, and noted the School did not submit the report until November 20, 2024, which was six days after the deadline of November 14, 2024. Cause and Effect: The School did not have procedures in place to review and submit the ETA-9130 Quarterly Financial Report timely. As a result, the School filed the Quarter Ending September 30, 2024 ETA-9130 Quarterly Financial Report after the required due date. Recommendation: We recommend that the School implement a process to ensure that future Quarterly Financial Reports are filed by the required due date. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.

Section 3 – Federal Award Findings and Questioned Costs Finding 2025-001 Identification of Federal Program: Department of Housing and Urban Development AL Number: 14.251 – Economic Development Initiative, Community Project Funding, and Miscellaneous Grants. Type of Finding: Significant Deficiency in Internal Control over Compliance - Reporting. Criteria / Requirement: 2 CFR section §200.303 requires that non-federal entities receiving federal awards establish, document and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Per the program requirements and 2 CFR §200.328, non-federal entities must submit accurate and complete federal financial reports in accordance with the terms and conditions of the federal award. Condition / Context: The Department of Housing and Urban Development (HUD) requires a Performance Report to be submitted, which must include a completed Federal Financial Report as an attachment. The required Progress Report was filed timely and accepted by HUD, however the required Federal Financial Report was omitted from the submission. Cause: The entity did not have adequate controls in place to ensure that required reports were submitted in their entirety. Effect: Failure to submit required the required Federal Financial Report results in noncompliance with federal program requirements and limits the federal awarding agency’s ability to monitor program performance and use of federal funds. Questioned Costs: None. Recommendation: The entity should implement and document internal controls to ensure all required reports are prepared, reviewed, and submitted in accordance with federal award requirements. Management’s Response: Management concurs with the audit finding regarding the omission of the Federal Financial Report (FFR) from the Performance Report submission. We acknowledge that while the narrative Progress Report was submitted promptly, the accompanying financial data was inadvertently excluded due to a lapse in our final review process.

Finding No. 2025-002: Reporting – Material Weakness in Internal Control over Compliance Agency: Economic Development Administration ALN: 11.307 Federal Award Identification Number: ED22HDQ3070127 Criteria: Under the Committee of Sponsoring Organization framework, control activities are established through policies and procedures that help ensure that management’s directives to mitigate risks to the achievement of objectives are carried out. Segregation of duties is typically built into the selection and development of control activities. Furthermore, according to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administration Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), sections 200.327 and 200.328, recipients of federal awards are required to submit performance and financial reports by the due dates specified in the terms and conditions of the federal award. Context and Condition: There was an overall lack of segregation of duties surrounding the preparation and submission of reports to the awarding agency as the member of management performed this function with no review and approval for the period from July 2024 through March 2025. In addition, three of the four reports selected and tested were not submitted by the reporting due dates. Cause: The District failed to maintain a system of controls and procedures to ensure segregation of duties and appropriate review and approval process as well as submission within the required reporting timeframes. Effect: Due to the lack of adequate review and oversight over grant reporting and failure to submit required reports within the required dates may result in the District being noncompliant with 2 CFR 200.327 and 200.328. Repeat Finding: Yes, previously reported under ALN 17.289 Recommendation: We recommend that the District establish internal controls and procedures to incorporate segregation of duties and ensure that all reporting requirements are being adhered to and the reports are being submitted within the specified due dates. Views of Responsible Officials and Planned Corrective Action: See attached corrective action plan. Questioned Costs: None

FINDING 2025-004 Subject: COVID-19 - Education Stabilization Fund - Cash Management Federal Agency: Department of Education Federal Program: COVID - 19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-009. Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to the Cash Management compliance requirement. Reimbursement requests for the program were prepared by one employee and reviewed by another employee; however, the supporting documentation that was provided to the reviewer did not give a clear distinction as to what expenditures were included in the reimbursement. As the documentation provided was not adequate that accompanied the reimbursement request, and the reimbursement requests, as noted below, did not agree to the ledger, the reviewer could not have ensured expenses were paid prior to requesting reimbursement. For 5 of 25 expenditures tested, the School Corporation was unable to provide supporting documentation traceable to the reimbursement request. There were 2 of those expenditures, totaling $1,715, that were for ESSER II's final reimbursement which requested the remainder of the grant award and expenses could not be traced to the documentation provided for the reimbursement amount. There were 3 of the expenditures, totaling $6,665, that were not traceable to an ESSER III reimbursement request. Therefore, as the expenditure could not be traced to a reimbursement request, it could not be determined if the School Corporation paid for the expense prior to requesting reimbursement. INDIANA STATE BOARD OF ACCOUNTS 21 SILVER CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Additionally, 1 of 25 expenditures tested, for $154, was an expense that occurred after the School Corporation requested reimbursement. The lack of internal controls and noncompliance were systemic issues throughout the audit period for ESSER II and ESSER III. 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 200.305(b) states in part: "For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. . . . (3) Reimbursement is the preferred method when the requirements in this paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per § 200.208, or when the non-Federal entity requests payment by reimbursement. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." Cause A proper system of internal controls was not designed and implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. The School Corporation had not developed any policies that would have ensured compliance or that supporting documentation would have been maintained and available for audit related to the Cash Management compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 22 SILVER CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the Cash Management compliance requirement. Noncompliance with the grant agreement and the Cash Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and available for audit and comply with the grant agreement and the Cash Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Name: Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and COVID-19 Airport Programs; ASL#: 20.106; Federal Grantor: U.S. Department of Transportation; Pass Through Entity: State Department of Transportation; Award No.: 3-06-0193-020, 3-06-0193-021; Year: 2024/2025; Compliance Requirement: Reporting; Criteria: 2CFR 200.328 (Monitoring and Reporting Program Performance) and the FAA AIP Grant Assurances. Reports must be submitted by the deadlines specified in the grant agreement.; Condition: The City did not submit the required Federal Financial Reports (SF-425) for the fiscal year ended June 30, 2025.; Cause: The entity was not aware of the requirement.; Effect: Noncompliance with reporting requirements can lead to delayed closeout of federal funds, and in extreme cases, the withholding of future grant funds.; Questioned Cost: No questioned costs were identified as a result of our procedures.; Context: Our sample testing included four AIP projects, and for two, the annual SF-425 reporting packages were not submitted.; Repeat Finding: This is not a repeat finding.; Recommendation: We recommend that the City establish a tracking system to monitor all required reports and their due dates to ensure timely submission.; Views of Responsible Officials and Planned Corrective Action: Refer to separate Management’s Corrective Action Plan for views of responsible officials and management’s responses.

Finding Reference 2025-005 Federal Agency: U.S. Department of Homeland Security Pass-Through Agency: Central Office of Recovery, Reconstruction and Resiliency of Puerto Rico (COR3) Program: Disaster Grants – Public Assistance (Presidentially Declared Disaster) (ALN 97.036) Compliance Requirement: Reporting (L) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) This finding is similar to prior-year finding 2023-005 and 2024-005. Statement of Condition In our Reporting Test, we evaluated the Quarterly Progress Reports of a total of eleven (11) projects for two quarters of fiscal year 2024-2025. During our audit procedures, we noted that the reports did not agree with the accounting and project records. Criteria 2 CFR 200.302 (a) stated that the state’s and the other non-Federal entity’s financial management system, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Also, 2 CFR 200.302 (b) (2) states that the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. Cause of Condition The Municipality accounting controls and procedures fail to ensure accurate, current and complete disclosure of the financial results of federal assisted activities. Effect of Condition The expenses reported in the Quarterly Progress Reports do not agree with the accounting records. Recommendation We recommend that Program Administrators reconcile the differences between the quarterly report and the accounting records before the submission of the next submission to the pass-through entity. Questioned Cost None Prior Year Finding Yes. This finding is similar to prior-year finding 2023-005 and 2024-005. Views of Responsible Officials and Planned Corrective Action We concur with the finding. We understand that only two reports did not agree with the accounting records. We have consultants that are responsible for the preparation of these reports. Instructions were given to the consultants in order to correct the reports that do not agree with the accounting records. There was a misunderstanding with the reports, in which the pass-through entity instructed that purchase orders and expenditures incurred should be reported. As subsequently clarified, only the expenditures incurred should be reported as expended. Implementation Date: June 30, 2026 Responsible Person: Meyleen Hernández Rivera Finance Director

Federal Program: The Emergency Food Assistance Program (TEFAP) / Temporary Assistance for Needy Families (TANF) Assistance Listing (CFDA) Numbers: 10.187 and 93.558 Awarding Agency: U.S. Department of Agriculture / U.S. Department of Health and Human Services Pass-Through Entity: Ohio Association of Foodbanks (OAF) Compliance Requirement: Reporting Finding Type: Material Weakness in Compliance 2025-001 Inaccurate Federal Reporting Due to Insufficient Reconciliation Controls Criteria: Uniform Guidance (2 CFR §200.303 and §200.328) requires non-federal entities to establish and maintain effective internal control over federal awards and to ensure that required reports are accurate, complete, and supported by underlying accounting records. The OMB Compliance Supplement identifies Reporting as a direct and material compliance requirement. The Ohio Association of Foodbanks (OAF) prescribes specific data elements for monthly reporting, including counties served, member agencies, distribution activity, and service statistics. Condition: During testing of reporting compliance for major federal programs, we selected three of twelve monthly OAF reports submitted during the fiscal year. For each month tested, reported amounts did not reconcile to MOFC’s internal Poundage Distribution reports and Product Code – Agencies by County reports. Specifically, we identified material variances between the OAF reports and internal distribution records, including: - October 2024: ACP distributions were omitted from the OAF report, resulting in a variance of approximately 821,528 pounds (projected dollar impact of $262,889). - January 2025: VA/Holiday Purchase distributions were omitted from the OAF report, resulting in a variance of approximately 310,898 pounds (projected dollar impact of $155,449). - June 2025: Donated distributions, primarily Direct Retail Pickup (DRP) quantities, were omitted from the OAF report, resulting in a variance of approximately 933,505 pounds (projected dollar impact of $1,764,324). Additional differences were noted in purchased distributions at 40,399 pounds (projected dollar impact of $16,968. Although management provided explanations indicating that certain distributions were omitted in error or excluded due to differences in reporting scope, MOFC did not maintain documented reconciliations supporting the reported amounts. Evidence of review and approval demonstrating that differences were identified, investigated, and resolved prior to report submission was not provided. Cause of Condition: MOFC did not have formalized, documented reconciliation procedures to ensure that internal distribution reports were reconciled to amounts reported to OAF. In addition, management review controls over the preparation and approval of OAF reports were not sufficiently designed or documented to detect and prevent reporting errors prior to submission. Potential Effect of Condition: As a result, OAF reports submitted during the fiscal year were not fully supported by underlying records, increasing the risk of inaccurate reporting to the passthrough entity. This condition resulted in noncompliance with Uniform Guidance reporting requirements and may affect MOFC’s continued eligibility for federal funding. Based on the magnitude and frequency of the variances identified, this condition represents a material weakness in compliance for the reporting compliance requirement. Context: The materiality thresholds for assessing material noncompliance for the major programs were $217,800 for TEFAP (CFDA 10.187) and $301,000 for TANF (CFDA 93.558). Questioned Costs: No questioned costs were identified for this finding, as the variances relate to reporting accuracy rather than unsupported or ineligible expenditures. Recommendation: We recommend that MOFC implement formal, documented reconciliation procedures between internal distribution reports and the OAF report. Such procedures should include: 1. Preparation of a detailed supporting schedule used in compiling OAF reports 2. Documentation of reconciling items and explanations for differences between internal reports and amounts reported to OAF 3. Evidence of management review and approval prior to report submission Views of Responsible Officials and Planned Corrective Action: MOFC management acknowledged the reporting differences and stated that certain variances resulted from omitted distributions and differences in reporting scope. Management indicated plans to enhance internal review procedures and improve documentation supporting the preparation and submission of OAF reports.

FINDING NUMBER 2025-004 FEDERAL AGENCY U.S. DEPARTMENT OF HOMELAND SECURITY PASS-THROUGH AGENCY CENTRAL OFFICE OF RECOVERY, RECONSTRUCTION AND RESILIENCY OF PUERTO RICO (COR3) FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA) FEDERAL PROGRAM DISASTER GRANTS – PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) (ALN 97.036) REQUIREMENT REPORTING (L) TYPE OF FINDING SIGNIFICANT DEFICIENCY (SD) / NONCOMPLIANCE (NC) CONDITION In our Reporting Test, we evaluated the Quarterly Progress Reports of a total of eleven (11) projects for two quarters of fiscal year 2024-2025. During our audit procedures, we noted that the reports did not agree with the accounting and project records. CRITERIA 2 CFR 200.302 (a) states that the states’ and other non-Federal entities’ financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Also, 2 CFR 200.302 (b) (2) states that the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. CAUSE The Municipality’s accounting controls and procedures fail to ensure accurate, current and complete disclosure of the financial results of federal assisted activities. EFFECT The expenses reported in the Quarterly Progress Reports do not agree with the accounting records. RECOMMENDATION We recommend the Program Administrators reconcile the differences between the quarterly report and the accounting records before the submission to the pass-through entity. QUESTIONED COST None. PRIOR YEAR FINDING No. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE We concur with the auditors’ finding. The Municipality acknowledges the differences identified between the expenses reported in the Quarterly Progress Reports (QPRs) and the accounting records. To address this issue, the Municipality will implement a reconciliation process between the accounting records and the QPRs prior to their submission to the pass-through entity. Additionally, management will perform a supervisory review to ensure that the reported expenses agree with the accounting records and supporting documentation. Implementation Date: Fiscal Year 2026-2027. Responsible Person: Miguel Fonseca, Federal Programs Director

U.S. Department of Transportation, Federal Railroad Administration Assistance Listing 20.325, CRISI Windsor Extension Systems Agreement Number: 69A36519400600CRSCA, Federal Identifying Number: FR-CRS-0013, Award year: 2019, amended 2022 Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: Title 2 CFR §200.302 requires non‑Federal entities to establish and maintain internal control over Federal awards that provides reasonable assurance that the entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Title 2 CFR §200.328 and the terms and conditions of the award require recipients to submit financial reports in the form and manner prescribed by the Federal awarding agency, including the Federal Financial Report (SF‑425), prepared in accordance with the form’s instructions. The SF‑425 instructions require federal cash receipts and disbursements to be reported on a cumulative basis and require accurate identification of the basis of accounting. Condition: We identified an instance in which one quarterly SF‑425 did not reflect cumulative federal cash receipts and disbursements as required by the SF‑425 instructions. Instead, the report reflected only current‑quarter federal cash activity. No additional cash reporting errors were identified by the audit, and the other SF-425 lines were prepared correctly. Cause: The condition resulted from limitations in the consistency of review procedures over SF‑425 preparation, particularly during periods of staff absence. While a reporting process was in place, review controls did not consistently ensure that all SF‑425 data elements, including cumulative cash presentation, were verified prior to submission. Effect: The condition resulted in the submission of federal financial reports that did not fully conform to SF‑425 reporting instructions. The errors did not affect allowable costs, cash drawdowns, reimbursements, or the maximum Federal share under the award. However, incomplete or inaccurate reporting increases the risk that federal agencies may rely on information that does not fully reflect the recipient’s financial status for monitoring purposes. Questioned Costs: No questioned costs are associated with this matter. Context/Sampling: No sampling was used. We tested four of four SF-425 reports. Repeat Finding from Prior Year(s): No Recommendation: We recommend that management continue to strengthen review procedures over SF‑425 preparation, including documented review of cumulative cash reporting and verification of all report attributes, particularly during periods when backup personnel are responsible for report preparation. Views of Responsible Officials: See the separately issued Corrective Action Plan.

Finding Reference 2025-004 Federal Agency: U.S. Department of Homeland Security Pass-Through Agency: Central Office of Recovery, Reconstruction and Resiliency of Puerto Rico (COR3) Program: Disaster Grants – Public Assistance (Presidentially Declared Disaster) (ALN 97.036) Compliance Requirement: Reporting (L) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) It is not a prior-year finding. Statement of Condition In our Reporting Test, we evaluated the Quarterly Progress Reports of a total of five (5) projects for two quarters of fiscal year 2024-2025. During our audit procedures, we noted that the reports of two (2) projects did not agree with the accounting and project records. Criteria 2 CFR 200.302 (a) stated that the state’s and the other non-Federal entity’s financial management system, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Also, 2 CFR 200.302 (b) (2) states that the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. Cause of Condition The Municipality’s accounting controls and procedures fail to ensure accurate, current and complete disclosure of the financial results of federal assisted activities. Effect of Condition The expenses reported in the Quarterly Progress Reports do not agree with the accounting records. Recommendation We recommend that Program Administrators reconcile the differences between the quarterly report and the accounting records before the submission of the next submission to the pass-through entity. Questioned Cost None Views of Responsible Officials and Planned Corrective Action We concur with the finding. During the testing of reports, the Quarterly Progress Reports of five (5) projects, corresponding to two (2) quarters of fiscal year 2024-2025, were evaluated. It was found that in two (2) projects, the quarterly reports did not match the accounting records or the project documentation. Therefore, for the purposes of this audit, the municipal accounting controls and procedures did not ensure that the reported information was accurate, up-to-date, and fully reconciled with the financial records. In light of the above, the reports will be reconciled with the accounting records, and the discrepancies found will be identified, documented, and adjusted in the system where the error originated, as appropriate. Furthermore, from this point forward, once the Quarterly Reports (QPR) are issued, a copy must be sent to the Program Accountant, the Finance Director, and myself for validation and reconciliation prior to official filing, thus preventing situations like this to occur. This process will form part of the internal control required to ensure that the reported information is accurate, current, complete, and consistent with the accounting records, in accordance with applicable federal requirements. Implementation Date: From March 2026. Full implementation is expected in fiscal year 2026-2027. Responsible Person: Mrs. Natasha Vázquez Federal Programs Director

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: 1505-0271 - 2021 Award Period: March 3, 2021 – December 31, 2024, liquidated by December 31, 2026 Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-Compliance (Modified Opinion) Criteria or Specific Requirement: Under 2 CFR 200.302 and 2 CFR 200.328, recipients of federal funds must maintain accurate financial records and ensure that all reports submitted to federal agencies are complete, accurate, and supported by the accounting system. In addition, Treasury guidance requires that expenditures reported in the Project and Expenditure (P&E) Report be accurate and properly classified. Condition: During the audit, it was noted that certain expenditures reported in the Treasury Project and Expenditure (P&E) Report were inaccurate. Specifically, expenditures included in the P&E Report had been reimbursed under another federal or pass-through grant and therefore should not have been reported as expenditures under the Coronavirus State and Local Fiscal Recovery Funds program. The Schedule of Expenditures of Federal Awards (SEFA) was reviewed and found to be accurately stated in all material respects and properly reconciled to the general ledger. The inaccuracy was limited to the P&E Report submitted to the U.S. Department of the Treasury and did not impact the SEFA. Questioned Cost: None. Context: $520,252 of expenditures reported in the P&E Report submitted to the U.S. Department of the Treasury were reimbursed by another grant. Cause: The Town did not have adequate review procedures in place to ensure that amounts reported in the Project and Expenditure Report were reconciled to the accounting system prior to submission and not reported elsewhere. Effect: As a result, expenditures reported in the Treasury P&E Report were overstated. While this did not affect the accuracy of the SEFA or the basic financial statements, inaccurate reporting to the federal awarding agency increases the risk of noncompliance and may result in the need for corrections, repayments, or increased federal oversight. Repeat Finding: No Recommendation: We recommend that the Town implement stronger internal controls over federal reporting, including establishing a formal reconciliation process between the general ledger and the Project and Expenditure Report, requiring Town Administrator’s review and approval of all federal reports prior to submission, and providing additional training to staff on Federal reporting requirements. View of Responsible Officials: Management concurs with this finding.

FINDING 2025-004 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, Fresh Fruit and Vegetable Program Assistance Listings Numbers: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2023-2024, FY 2024-2025 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not designed or implemented a system of internal controls, which would have included appropriate segregation of duties, that would have likely been effective in preventing, or detecting and correcting, noncompliance. The School Corporation transferred $313,369 from the School Lunch fund into the Operations fund. This transfer was labeled as an indirect cost transfer; however, indirect costs were not approved to be charged to the program. This transfer was also not approved by the School Board. The issue was identified and corrected by the current Treasurer prior to June 30, 2025. The lack of internal controls and noncompliance over allowable activities was an isolated instance. Criteria 2 CFR 200.302 states in part: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. INDIANA STATE BOARD OF ACCOUNTS 23 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (4) Effective control over, and accountability for, all funds, property, and other assets. . . ." 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 200.400 states in part: "The application of these cost principles is based on the fundamental premises that: (a) The non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices. (b) The non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. (c) The non-Federal entity, in recognition of its own unique combination of staff, facilities, and experience, has the primary responsibility for employing whatever form of sound organization and management techniques may be necessary in order to assure proper and efficient administration of the Federal award. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.404 states in part: "A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non- Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: . . . (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost." INDIANA STATE BOARD OF ACCOUNTS 24 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.508 states in part: "The auditee must: . . . (d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and any other information as needed for the auditor to perform the audit required by this part." Federal Register, Vol. 87, No. 18 states in part: "Treasury has divided the Restriction on Use section into . . . (B) other restrictions on use, which include (1) debt service and replenishing reserves, (2) settlements and judgements, and (3) general restrictions. These restrictions apply to all eligible use categories. . . ." Cause The School Corporation had not developed a system of internal controls that would have ensured that all activities and costs were in compliance with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system was not capable of effectively preventing, or detecting and correcting, noncompliance as identified in the Condition and Context. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure all activities are allowable. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-006 Subject: Title I Grants to Local Educational Agencies - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation did not have effective internal controls in place to ensure all costs paid from Title I funds and submitted for reimbursement were for allowable activities or allowable costs. As a result, the following compliance issues were noted:  On May 26, 2023, a check for $886 was issued for which supporting documentation could not be provided. As a result, it could not be determined if the expense was for an allowable activity or an allowable cost.  On August 16, 2024, seven stipends were paid to non-Title I administrative staff from Title I grant funds. Two employees received $5,000 each and five employees received $3,000 each.  On December 20, 2024, three stipends for $918 each were paid from Title I grant funds to employees who had previously received a stipend payment on August 16, 2024. These stipends were determined to not be an allowable activity or an allowable cost. The current Treasurer identified the stipend errors. The School Corporation requested and received reimbursement from the seven employees who received these stipends. INDIANA STATE BOARD OF ACCOUNTS 27 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.302 states in part: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. . . ." 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 200.400 states in part: "The application of these cost principles is based on the fundamental premises that: (a) The non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices. INDIANA STATE BOARD OF ACCOUNTS 28 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) The non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. (c) The non-Federal entity, in recognition of its own unique combination of staff, facilities, and experience, has the primary responsibility for employing whatever form of sound organization and management techniques may be necessary in order to assure proper and efficient administration of the Federal award. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.404 states in part: "A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non- Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: . . . (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost." 2 CFR 200.508 states in part: "The auditee must: . . . (d) Provide the auditor access to personnel, accounts, books, records, supporting documentation, and any other information as needed for the auditor to perform the audit required by this part." Federal Register, Vol. 87, No. 18 states in part: "Treasury has divided the Restriction on Use section into . . . (B) other restrictions on use, which include (1) debt service and replenishing reserves, (2) settlements and judgements, and (3) general restrictions. These restrictions apply to all eligible use categories. . . ." Cause The School Corporation did not design and implement an effective internal control system to review all payroll expenditures from the Title I funds, ensuring they were for allowable activities. Effect The failure to design and implement an effective internal control system over payroll expenditures caused noncompliance with the compliance requirements as detailed in the Condition and Context. INDIANA STATE BOARD OF ACCOUNTS 29 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a system of internal controls to ensure that grant award fund compliance requirements are appropriately researched prior to spending. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-005 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2023-2024, FY 2024-2025 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education based upon the number of meals served for the month. The Claims were prepared by the School Corporation's Food Service Director and a food service management company (FSMC) employee. The School Corporation maintained manual meal count records. A point-of-sale system (POS) was used to summarize the manual counts. For all four Claims tested, there were differences between the Claims submitted and the School Corporation's detail meal count reports, resulting in over and under reporting and reimbursement. The Claims tested contained the following errors:  The October 2023 claim reported 27 less meals served (11 breakfast and 16 lunch) than the eligible meals per the School Corporation's detail meal count reports, which resulted in an underclaimed reimbursement totaling $100. The School Corporation also overclaimed snacks by 5, which resulted in over reimbursement of $6.  The November 2023 claim reported 2 less lunch meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in an underclaimed reimbursement totaling $9.  The June 2024 claim reported 666 more breakfast meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in an overclaimed reimbursement totaling $1,946. The claim also reported 527 less lunch meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in an underclaimed reimbursement totaling $2,704. The net of the errors was $758 underclaimed. INDIANA STATE BOARD OF ACCOUNTS 28 SCHOOL CITY OF EAST CHICAGO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)  The May 2025 claim reported 10 less meals served (5 breakfast and 5 lunch) than the eligible meals per the School Corporation's detail meal count reports, which resulted in an underclaimed reimbursement totaling $37. The School Corporation also overclaimed snacks by 10, which resulted in over reimbursement of $12. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." Cause The School Corporation did not have effective internal control procedures in place over the Claims submitted. The Claims contained evidence of an oversight or review process in place; however, they did not prevent, or detect and correct, errors. The Claims were prepared based upon summary sheets prepared by the FSMC employees and were not verified back to the source records. Effect The lack of effective internal controls caused a total of $894 not to be claimed for reimbursement, which projected to a loss of funding of $6,272. Noncompliance with the grant agreement and the compliance requirement could result in the loss or repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls to ensure compliance with requirements related to reporting. INDIANA STATE BOARD OF ACCOUNTS 29 SCHOOL CITY OF EAST CHICAGO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-008 Subject: COVID-19 - Education Stabilization Fund - Condition of Records Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U, 84.425W Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013, S425W210015 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Equipment and Real Property Management; Matching, Level of Effort, Earmarking; Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding numbers were 2023-007 and 2023-009 over the compliance requirements Equipment and Real Property Management and Special Tests and Provisions - Wage Rate Requirements, respectively. Condition and Context The School Corporation received reimbursements totaling $30,316,384 from the COVID-19 - Education Stabilization Fund (ESF) federal awards during the audit period. The reimbursements were associated with three separate federal awards, each of which was required to be accounted for in a separate fund within the School Corporation's financial management system. Expenditures were to be made in accordance with the approved grant applications and budgets, with reimbursement requests subsequently submitted to the Indiana Department of Education (IDOE). The School Corporation was responsible for maintaining detailed disbursement ledgers for each grant fund to support the amounts claimed for reimbursement. As is typical with reimbursement-based grants, the ending cash and investment balances of each grant fund were expected to reflect overdrawn balances until the subsequent reimbursements were received from the IDOE. The $30,316,384 received in ESF funds during the audit period was based on 28 reimbursement requests for expenditures incurred between June 1, 2023 through December 13, 2024. Based on our review of grant fund records and inquiry with management, we identified the following deficiencies:  The detailed disbursement ledger for the period of June 1, 2023 through December 13, 2024, excluding June 2024 for Grant #S425U210013 as no reimbursement request was submitted, reflected total expenditures of $23,051,334. This resulted in $7,265,050 in reimbursements that were not adequately supported by detailed records. INDIANA STATE BOARD OF ACCOUNTS 33 SCHOOL CITY OF EAST CHICAGO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)  A review of the submitted reimbursement requests indicated that $1,069,865 was reimbursed for indirect costs; however, a disbursement from the grant funds to other operating funds was not recorded within the School Corporations records.  Of the 28 reimbursement requests submitted, only 5 were supported by detailed disbursement ledgers that agreed with the dates and amounts claimed. The remaining 23 reimbursement requests could not be directly reconciled to the supporting documentation provided. Upon further inquiry with management, additional records were provided; however, these records lacked sufficient detail, such as fund number, fund name, check numbers, dates, and vendor names to be useable.  Reimbursements received were not posted to each grant fund properly. This resulted in the ARP EESER III fund receipts to be understated by $4,297,935 and the ESSER II and GEER PD funds receipts to be overstated by $4,174,376 and $123,560, respectively.  Since this is a reimbursement-based grant, the ending cash and investment balances of each grant fund should either be zero or overdrawn while awaiting reimbursement. However, as of June 30, 2025, the ESSER II and Geer PD funds reported positive cash and investment balances of $5,047,932 and $404,653, respectively. Due to the deficiencies noted above, the School Corporation was unable to provide sufficient appropriate evidence for us to determine populations, and, therefore, audit and base an opinion on the compliance requirements subject to audit that were determined to have a direct and material effect on the program. As a result, the $30,316,384 in reimbursements received during the audit period were considered questioned costs. The lack of internal controls and noncompliance were material and systemic 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 200.302 states in part: "(a) . . . the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. See also § 200.450. INDIANA STATE BOARD OF ACCOUNTS 34 SCHOOL CITY OF EAST CHICAGO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) The financial management system of each non-Federal entity must provide for the following (see §§ 200.334, 200.335, 200.336, and 200.337): (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income, and interest and be supported by source documentation. (4) Effective control over, and accountability, for all funds, property, and assets. The non- Federal entity must adequately safeguard all assets and ensure that they are used solely for authorized purposes. See § 200.303. (5) Comparison of expenditures with budget amounts for each Federal award. (6) Written procedures to implement the requirements of § 200.305. (7) Written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award." 2 CFR 200.1 states in part: ". . . Questioned cost means a cost that is questioned by the auditor because of an audit finding: (1) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds; (2) Where the costs, at the time of the audit, are not supported by adequate documentation; or (3) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances. (4) Questioned costs are not an improper payment until reviewed and confirmed to be improper as defined in OMB Circular A-123 appendix C. (See also the definition of Improper payment in this section)." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. INDIANA STATE BOARD OF ACCOUNTS 35 SCHOOL CITY OF EAST CHICAGO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." 29 CFR 5.5 states in part: "(a) Required contract clauses. The Agency head will cause or require the contracting officer to require the contracting officer to [sic] insert in full, or (for contracts covered by the Federal Acquisition Regulation (48 CFR chapter 1)) by reference, in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the laws referenced by § 5.1, the following clauses . . . (1) Minimum wages— (i) Wage rates and fringe benefits. All laborers and mechanics employed or working upon the site of the work (or otherwise working in construction or development of the project under a development statute), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of basic hourly wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Records and certified payrolls— (ii) Certified payroll requirements— INDIANA STATE BOARD OF ACCOUNTS 36 SCHOOL CITY OF EAST CHICAGO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (A) Frequency and method of submission. The contractor or subcontractor must submit weekly, for each week in which any DBA- or Related Acts-covered work is performed, certified payrolls to the [write in name of appropriate Federal agency] if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the certified payrolls to the applicant, sponsor, owner, or other entity, as the case may be, that maintains such records, for transmission to the [write in name of agency]. . . ." 2 CFR 200 Appendix II to Part 200 states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, 'Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction'). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause The School Corporation experienced turnover in key personnel over the federal program, which contributed to the lack of appropriate supporting records. A proper system of internal controls was not designed to ensure continuity of policies, procedures, and records when personnel transitions occurred. Effect Noncompliance with the grant agreement and the compliance requirements could result in the repayment of federal funds. Questioned Costs We identified $30,316,384 in known questioned costs as noted in the Condition and Context. Recommendation We recommended that the School Corporation's management develop policies and procedures to ensure continuity of school records during a personnel change and that all reimbursement requests are properly supported by detail records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Finding 2025-002: Reporting Federal Program: Building an Inclusive Workforce: Lifting Underrepresented Communities Assistance Listing Number: 17.289 Federal Agency: U.S. Department of Labor Federal Award Number(s): 24A60CP000157-01-04 Type of Finding: Significant Deficiency in Internal Control over Compliance and Non-compliance Criteria: In accordance with 2 CFR §200.303, non-Federal entities are required to establish and maintain effective internal control over Federal awards to provide reasonable assurance that the entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Such internal controls should be consistent with the Standards for Internal Control in the Federal Government or the COSO Internal Control—Integrated Framework, including controls designed to ensure timely submission of required reports. Additionally, 2 CFR §200.328(c) states that "the recipient or subrecipient must submit financial reports as required by the Federal award." Condition: During the audit, we noted that one required report selected for testing was not submitted in accordance with the reporting deadline established in the terms and conditions of the Federal award. Cause: This condition resulted from management oversight related to monitoring and tracking report due dates. Effect or Potential Effect: The failure to submit required reports timely increases the risk of noncompliance with Federal reporting requirements and may result in delayed oversight by the Federal awarding agency, potential sanctions, or increased scrutiny in future monitoring or audits. Questioned Costs: None. Context: 1 of 2 financial reports were not submitted timely. The sample is representative of the population. Identification as a Repeat Finding, if Applicable: 2024-001 Recommendation: We recommend that the Coalition implement formal procedures to ensure timely submission of all required Federal reports. Such procedures may include the use of an automated tracking or calendar system to notify responsible personnel of upcoming reporting deadlines, as well as documented review and approval of reports prior to submission.

Finding Reference 2025-006 Federal Agency: U.S. Department of Health and Human Services Federal Program Title and ALN: Child Care and Development Block Grant (CCDF Cluster) (ALN 93.575) Compliance Requirement: Reporting – Financial Reporting (L) (MW) Type of finding: Material Weakness in Internal Control (MW), Instance of Noncompliance (NC) Statement of Condition During our audit procedures, we noted that the Program did not maintain an adequate set of accounting records that present the financial position and results of its operations of the program. In addition, required financial reports were not submitted within the established reporting deadlines. CriteriaTitle 2 U.S. Code of Federal Regulations (CFR) 200.328 and 200.329 require subrecipients to submit accurate, complete, and timely performance and financial reports in accordance with the terms and conditions of the Federal award. Additionally, 2 CFR 200.303 requires non-Federal entities to establish and maintain effective internal control over Federal programs to provide reasonable assurance that Federal awards are managed in compliance with Federal statutes, regulations, and the terms and conditions of the award. Additionally, the subaward agreement and reporting guidelines issued by the pass-through entity (ACUDEN) also establish specific reporting deadlines and require that reported financial information be supported by the subrecipient’s accounting records. Cause of Condition The program staff faced performance challenges due to a lack of staff which caused the accounting records to be delayed. Effect of Condition As a result of the inadequate maintenance of accounting records and untimely preparation of financial reports, the Municipality failed to submit the required report within the 30 calendar days required by the regulation, which leads to the noncompliance of the reporting requirement. Recommendation We recommend that management strengthen internal controls over financial reporting by: • Ensuring accounting records are maintained current and reconciled on a monthly basis; • Establishing formal written reporting procedures with clear timelines; • Assigning personnel responsible for report preparation and review; and • Implementing supervisory review procedures to verify that reports agree with underlying accounting records prior to submission. Questioned Costs None Prior-Year Finding This is a new finding. View of Responsible Official and Planned Corrective Action Plan The Municipality agrees with the finding and stated that it will implement corrective actions to improve compliance with reporting requirements. Management plans to formalize reporting procedures, assign responsible personnel, and require reconciliations between reported amounts and accounting records prior to submission of reports to ACUDEN, along with enhanced supervisory review. Implementation Date: July 1, 2026 Responsible Person: Mr. Luis A. Velez Rivera, Finance Director

Section III – Major Federal Award Program Findings and Questioned Costs Finding Reference 2025-005 Federal Agency: U.S. Department of Homeland Security Pass-through Agency: P.R. Central Office for Recovery, Reconstruction and Resiliency (COR3) Program: Disaster Grants - Public Assistance (Presidentially Declared Disasters (Assistance Listing No. 97.036) Compliance Requirement: Reporting (L) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) Statement of Condition In our Reporting Test, we evaluated the Quarterly Progress Reports of a total of seven (7) projects for two quarters of fiscal year 2024-2025. During our audit procedures, we identified that the reports did not agree with the accounting records. During our audit procedures, we identified that the reports noted that the reports did not agree with the accounting records. Criteria 2 CFR 200.302 (a) states that the states’ and other non-Federal entities’ financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Also, 2 CFR 200.302 (b) (2) states that the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. Cause of Condition The Municipality’s accounting controls and procedures fail to ensure accurate, current and complete disclosure of the financial results of federal assisted activities. Effect of Condition The expenses reported in the Quarterly Progress Reports do not agree with the accounting records. Recommendation We recommend the Program Administrators reconcile the differences between the quarterly report and the accounting records before the following submissions to the pass-through entity. Questioned Cost None. Prior Year Finding No. Views of Responsible Officials and Planned Corrective Action We concur with the finding. Adopted Measures • Expense Synchronization: A protocol will be implemented requiring contracted consultants to record and report incurred expenses only when a validated disbursement voucher is available, thereby ensuring the integrity of the financial flow. • Reconciliation: The office will conduct a detailed comparison between the draft quarterly report and the general ledger to identify and correct any discrepancies prior to final submission. • Compliance Timeline: An internal deadline will be established for the submission of the report, ensuring attainment of the minimum percentage required under the Quality Activities category through accurate financial data. Expected Outcome To ensure that all financial information submitted is complete, accurate, and fully aligned with the Municipality’s accounting records, thereby eliminating the risk of audit findings. Implementation Date: March 2026. Responsible persons: • Person responsible for the implementation: Mr. Carlos Flores, Federal Program’s Subdirector • Person responsible for the supervision: Mrs. Yolanda Maldonado, Federal Program’s Director

2025-002 Improve Internal Controls and Compliance with Reporting Requirements Federal Program(s) Information Federal Agency: U.S. Department of Labor Award Name: WIOA Dislocated Worker National Reserve Demonstration Grants, Community Project Funding/Congressionally Directed Spending Assistance Listing Number: 17.280, 17.289 Award Year: 2025 Compliance Requirement: Reporting Type of Finding Compliance Internal Control Over Compliance – Significant Deficiency Criteria or Specific Requirement Uniform Guidance (2 CFR §200.328) and federal award terms for assistance listing numbers 17.280 and 17.289 require recipients to submit accurate financial and performance reports on a quarterly basis, within 45 calendar days following the quarter end. Reports must reflect actual financial activity for the period and agree to the underlying records of the Organization. Condition and Context We tested two quarters of financial and performance reports for each award. For the quarter ending June 30, 2025, the required reports were not submitted within the deadline of 45 calendar days after quarter end for both awards. Additionally, the report submitted for the 17.280 grant for the same quarter did not agree to the underlying accounting records. Cause The Organization did not have effective controls to ensure timely submission of required quarterly reports and did not perform adequate review to reconcile the 17.280 grant report to the accounting records prior to submission. Effect or Potential Effect Untimely submission and lack of reconciliation of reports increases the risk of inaccurate reporting, and constitutes noncompliance with federal requirements. No questioned costs are reported as these issues are administrative in nature. Recommendation The Organization should strengthen internal controls to ensure timely submission of all required financial and performance reports, and implement procedures to verify that reports reconcile to the underlying accounting records prior to submission. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.

Criteria: Per 2 CFR 200.328 and the Cooperative Agreement with the US Army, the Reporting Requirements state that (a) interim performance reports must be submitted in electronic form, (b) contain detailed technical progress to date and report on all problems, technical issues, or major developments that arose during the reporting period, and (c) be submitted quarterly within 30 days after completion of the reporting period throughout the term of the agreement. Condition: During the process of performing our audit, we noted that the interim performance report for one of two quarters selected during the period July 1, 2024 – June 30, 2025 was not submitted within 30 days after completion of the reporting period. Questioned costs: None noted Prior year finding reference: This was reported as finding number 2024-002 in the period July 1, 2023 through June 30, 2024. Effect: The auditor must report late submission of interim performance reports as audit findings in a schedule of findings and questioned costs. The Association is not in compliance with the interim performance reporting deadline. Cause: The interim performance report for the quarter ended March 31, 2025 was submitted on October 16, 2025, which is not in compliance with the interim performance reporting deadline of thirty days. Recommendation: We recommend that the Association monitor reporting compliance by understanding the reporting requirements and establishing controls and processes to complete the timely filing of the interim performance reporting package by the due date. Management’s Corrective Action Plan: Management has indicated that they have put certain procedures in place as detailed in the Corrective Action Plan located in Appendix A.

Section III – Major Federal Award Program Findings and Questioned Costs Finding Reference 2025-003 Federal Agency: U.S. Department of Homeland Security Pass-through Agency: Central Office of Recovery, Reconstruction and Resiliency of Puerto Rico (COR3) Federal Emergency Management Agency (FEMA) Program: Disaster Grants – Public Assistance (Presidentially Declared Disaster) (ALN 97.036) Compliance Requirement: Reporting (L) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) Statement of Condition: In our Reporting Test, we evaluated the Quarterly Progress Reports of a total of four (4) projects for two quarters of fiscal year 2024-2025. During our audit procedures, we noted that the reports did not agree with the accounting and project records. Criteria: 2 CFR 200.302 (a) states that the states’ and other non-Federal entities’ financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Also, 2 CFR 200.302 (b) (2) states that the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. Cause of Condition: The Municipality’s accounting controls and procedures fail to ensure accurate, current and complete disclosure of the financial results of federal assisted activities. Effect of Condition: The expenses reported in the Quarterly Progress Reports do not agree with the accounting records. Recommendation: We recommend the Program Administrators reconcile the differences between the quarterly report and the accounting records before the submission to the pass-through entity. Questioned Costs: None. Prior Year Findings: Yes. This finding is similar to prior-year finding 2024-003 and 2023-003. Views of Responsible Officials and Planned Corrective Actions: We concur with the findings. During the past year, the Corrective Action Plan (PAC) has been implemented and expense reconciliation efforts have been ongoing. Currently, we are in the process of collecting all supporting documentation related to work performed for projects funded by FEMA. It is expected that the reconciliation of expenses will be completed over the next few quarters, and that expense reporting will continue during the quarters in which payments are made. Implementation Date: Fiscal Year 2025-2026. Responsible Person: José A. Torres Otero Program Accountant

Condition: The Organization did not report unliquidated financial obligations on the final federal financal report SF-425. Criteria: In accordance with 2 CFR Section 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, the Organization must file federal financial reports (Section 200.328). Effect: The Organization did not file accurate information on the federal financial report SF-425, and thus was not in compliance with reporting requirements under 2 CFR Section 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Cause: The Organization had no internal control structure in place to ensure accurate reporting under 2 CFR Section 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Recommendation: The Organization should create an internal control structure in place to ensure accurate reporting under 2 CFR Section 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and comply with such requirements. Repeat Finding: No Views of Responsible Officials: Management of Challenger Learning Center of Northwest Indiana, Inc. acknowledges the findings identified in the audit and is in agreement with the condition as stated. We recognize that certain deficiencies were identified related to donor-restricted grants, and federal grant compliance requirements. As this was the Organization’s first experience managing federal funding, some compliance requirements were not fully understood at the time; however, all actions taken were in good faith and with the intent to appropriately steward funds. Management is committed to strengthening internal controls and ensuring full compliance moving forward. Corrective actions have already been initiated, including the liquidation of remaining federal funds in accordance with grant requirements and the development of formalized policies and procedures to address procurement, financial tracking, and documentation practices.

REPORTING Reference Number: 2025-004 (2024-006) Category of Finding: Reporting Type of Finding: Material Noncompliance and Material Weakness State Administering Department: Homeland Security and Emergency Management Assistance Listing Number: 93.036 Federal Program Title: Disaster Grants – Public Assistance Federal Award Numbers and Years: 5184DRNMP5SNM500 4529DRNMP5SNM500 4625DRNMP5SNM500 5281DRNMP5SNM500 5430DRNMP5SNM500 4795DRNMP5SNM500 4843DRNMP5SNM500 5461DRNMP5SNM500 Assistance Listing Number: 93.039 Federal Program Title: Hazard Mitigation Grant Program Federal Award Numbers and Years: 5184FMNMP5SNM500 4529FMNMP5SNM500 4625FMNMP5SNM500 5281FMNMP5SNM500 5430FMNMP5SNM500 4795FMNMP5SNM500 4843FMNMP5SNM500 5461FMNMP5SNM500 Assistance Listing Number: 93.042 Federal Program Title: Emergency Management Performance Grant Federal Award Numbers and Years: EMT2023EP00002; 2023 EMT2024EP05014; 2024 Assistance Listing Number: 93.067 Federal Program Title: Homeland Security Grant Program Federal Award Numbers and Years: EMW2023SS00015; 2023 EMW2024SS05231; 2024 Criteria Title 2 - Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D - Post Federal Award Requirements, Standards for Financial and Program Management, §200.328 Financial Reporting (2 CFR 200.328):(c) The recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semi-annually must be due no later than 30 calendar days after the reporting period. Title 2 - Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D - Post Federal Award Requirements, Standards for Financial and Program Management, §200.302 Financial Management (2 CFR 200.302): (a) Each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State's funds. All recipient and subrecipient financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award Condition The Department did not submit the required SF-425 financial status reports by the required submission date, 30 calendar days from the end of the reporting period as follows: • 97.036 Disaster Grants Public Assistance, 4 of 8 reports sampled were not submitted timely. • 97.039 Hazard Mitigation Grant Program, 2 of 8 reports sampled were not submitted timely. • 97.042 Emergency Management Performance Grants, 2 of 4 reports sampled were not submitted timely. • 97.067 Homeland Security Grant Program, 3 of 5 reports sampled were not submitted timely. Management made some progress. Identification as a Repeat Finding Finding 2024-006 is repeated and modified. Cause The Department experienced a high level of turnover in financial division personnel, during which time the processes in place did not allow for the timely preparation and submission of required quarterly SF-425 Financial reports. Effect Untimely report submissions can result in ineffective oversight by the federal oversight agency. Questioned Costs Questioned costs were not identified. Context The Department is required to submit financial status reports quarterly for all federal grant programs. The turnover in staffing resulted in delayed submissions for approximately half of the fiscal year, primarily impacting reporting periods ended March 31, 2025 and June 30, 2025. Recommendation The Department should ensure that as part of the revisions to policies and procedures over the financial reporting of the Department’s federal grants, there are practices in place that provide for alternate personnel that can compile, review and submit financial status reports in the event of unexpected vacancies or absences from the positions designated primary reporting responsibilities.

Untimely Submission of Report Federal Programs Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Federal Agency U.S. Department of Treasury (DOT) Compliance Requirement Reporting Finding Type Significant deficiency in Internal Control over Compliance and Other Matter Criteria As required by 2 CFR 200.328 and 31 CFR section 35.4(c) on an annual basis, the Government of Puerto Rico is required to submit a performance report detailing the progress and impact of the use of CSFRF funds. This Recovery Plan Performance Report will include descriptions of the projects funded and information on the performance indicators and objectives of each award, helping local residents understand how their governments are using the substantial resources provided by Coronavirus State and Local Fiscal Recovery Funds program. As per CSFRF Motion Picture and Video Industry in Puerto Rico Program Guidelines, to ensure timely reporting, the Government of Puerto Rico requires the Recipients to adhere to the following reporting frequency: •On a biweekly basis, the recipients will be required to submit financial reports using the reporting template provided by the Program. Upon program close, recipients will be required to submit a comprehensive final financial reconciliation report detailing the use of program funds. Condition: We found that the report that was required to be submitted on 07/05/2024, was submitted late on 07/16/2024 after a notification from AAFAF. Context From a sample of eight (8) performance reports submitted during the fiscal year ended on June 30, 2025, one (1) was filled late. Cause The condition was caused by deficiencies in internal control over compliance. Management did not establish adequate monitoring procedures to ensure required reports were prepared and submitted by the applicable deadlines. Specifically, no formal tracking mechanism or compliance calendar was maintained to monitor reporting due dates. Effect Lack of report submission or a delay on report submission may cause the Government of Puerto Rico to not have updated information to comply with report requirements. Questioned Costs None. Identification as a Repeated Finding This is not a repeat finding from the immediate previous audit. Recommendation We recommend that management strengthen internal controls over the preparation and submission of required reports to ensure compliance with applicable reporting deadlines. Specifically, the Department should establish formal procedures to monitor reporting requirements, including the development of a reporting calendar that identifies all required reports, responsible personnel, and applicable submission deadlines. In addition, management should implement supervisory review and monitoring procedures to verify that reports are prepared timely, reviewed for accuracy, and submitted in accordance with program requirements. The Department should also ensure that personnel responsible for compliance reporting receive adequate training on program reporting requirements and that responsibilities are clearly assigned to promote accountability. Views of responsible officials and planned corrective actions Management of the Department agrees with this finding. Refer to the corrective action plan on pages 114-119.

Criteria: Health centers receiving federal funding under the Health Center Program (93.224) and Ryan White Part C (93.918) are required to maintain and consistently apply a sliding fee discount program in accordance with federal regulations and program guidance. Specifically, 42 CFR §51c.303(f) requires health centers to have a schedule of fees and discounts based on patients’ ability to pay and to apply the schedule consistently. The HRSA Health Center Program Compliance Manual, Chapter 9, mandates documented eligibility determinations, defined timeframes for eligibility reassessment, proper application of the sliding fee scale, and retention of documentation. Similarly, the Ryan White HIV/AIDS Program Part C Manual requires eligibility determinations and fee assessments consistent with approved policies and program requirements. Additionally, federal standards under 2 CFR §200.303 require non-federal entities to establish and maintain effective internal controls over federal awards, 2 CFR §200.302(b) requires financial management systems to adequately identify and document eligibility determinations, and 2 CFR §200.328 requires accurate programmatic reporting and monitoring. Condition: During testing of the sliding fee discount program for the fiscal year ended June 30, 2025, we identified multiple instances of noncompliance with established policies and federal program requirements. Specifically, patient financial information was updated over prior evaluations, which eliminated historical tracking and resulted in files not being properly closed in accordance with the health center’s policies. Effect: As a result of these deficiencies, NeoMed Center Inc. is at increased risk of improper fee discounts being applied to patients who may not meet eligibility requirements, noncompliance with federal and program-specific requirements, inaccurate financial reporting related to patient service revenue, lack of proper and accurate collection of services provided and potential loss of federal funds awards. Cause: The noncompliance is caused by inadequate implementation of internal controls policies and procedures designed over the sliding fee program. Also, it caused by lack of appropriate staff training and missing standardized monitoring policies and procedures, as well as inadequate supervisory review of eligibility determinations and documentation. Recommendations: We recommend that the Institution implement the following corrective actions: 1. Review current policies and procedures to improve and establish robust internal controls to ensure that patient financial information is updated without overwriting prior evaluations, preserving historical tracking and maintaining properly closed files. 2. Provide training to staff responsible for eligibility determinations and fee assessments to ensure consistent application of the sliding fee scale and compliance with federal program requirements. 3. Implement standardized monitoring and supervisory review procedures to verify that eligibility determinations, fee assessments, and documentation are accurate, complete, and retained in accordance with program requirements. 4. Implement and perform, on a recurrent basis, audit and/or review of patient files to ensure ongoing compliance, timely reassessment, and proper application of the sliding fee discount program. 5. Maintain clear records and documentation to support all eligibility determinations and fee discounts, ensuring the entity can demonstrate compliance during internal reviews or external audit

Federal Agency: 84 – Department of Education Federal Program Title: Higher Education Institutional Aid Assistance Listing Number: 84.031 Award Period: July 1, 2024, through June 30, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: In accordance with 2 CFR §200.328, non‑Federal entities must submit required performance reports in accordance with the terms and conditions of the Federal award and include all information required by the Federal awarding agency. Performance reports must be submitted in the form, manner, and frequency prescribed in the award agreement. Additionally, 2 CFR §200.303 requires non‑Federal entities to establish and maintain effective internal control over Federal awards, including controls to ensure required reports are reviewed, approved, documented, and submitted in accordance with award requirements. Condition/Context: During our testing of Reporting, we selected a sample of 5 Higher Education Institutional Aid performance reports. This major program includes 5 award agreements, of which 2 agreements have quarterly reporting requirements, 2 agreements have semi‑annual reporting requirements, and 4 agreements have annual reporting requirements. The following exceptions were noted: • For 2 of the 5 reports tested, the reports were prepared; however, evidence supporting submission was not provided, and documentation could not be provided to demonstrate that the reports were reviewed and approved prior to submission. As a result, evidence of management review and report submission could not be verified. Questioned Costs: None. Effect: Failure to retain documentation supporting report submission and management review limits the UEC’s ability to demonstrate compliance with Federal reporting requirements and increases the risk that required reports are not reviewed or submitted in accordance with award terms. Cause: The UEC’s internal controls were not designed or implemented to consistently ensure that required performance reports are reviewed, approved, and submitted in accordance with Federal award requirements, and that documentation is retained to support evidence of review and submission. Repeat Finding: No. Recommendation: We recommend the UEC strengthen its reporting procedures to ensure required performance reports are reviewed and approved prior to submission and that documentation is retained to support evidence of management review and report submission in accordance with Federal award requirements. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding.

Finding No: 2025-003– Internal control deficiencies over accounting and identification of federal funds received from the Federal Emergency Management Agency (FEMA) that should be included on SEFA Federal Programs ALN 97.036, Disaster Grants - Public Assistance (Presidentially Declared Disasters) Name of Federal Agency U.S. Department of Homeland Security (Pass-through program from The Central Office of Recovery, Reconstruction and Resiliency) Category Internal Control; Compliance. Compliance Requirement Activities Allowed/Unallowed, Allowable Costs/Cost Principles, Period of Performance, Project Accounting. Criteria 2 CFR Part 200 Subpart D Subsection 200.302 states the following: The recipient's and subrecipient's financial management system must provide for the following: 1. Identification of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number, year the Federal award was issued, and name of the Federal agency or pass-through entity. 2. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. When a federal agency or pass-through entity requires reporting on an accrual basis from a recipient or subrecipient that maintains its records other than on an accrual basis, the recipient or subrecipient must not be required to establish an accrual accounting system. This recipient or subrecipient may develop accrual data for its reports based on an analysis of the documentation on hand. 3. Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. 4. Effective control over and accountability for all funds, property, and assets. The recipient or subrecipient must safeguard all assets and ensure they are used solely for authorized purposes. See § 200.303. 5. Comparison of expenditures with budget amounts for each Federal award. 6. Written procedures to implement the requirements of § 200.305. 7. Written procedures for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. Condition During our procedures concerning the Administration’s funds received from FEMA we noticed that the reimbursement funds received from FEMA were not recognized as income during the year ended June 30, 2025. Cause The Administration recognized the reimbursement as an accrual and not as income during the year ended June 30, 2025. They have recognized only the amount that they disbursed during the year at their discretion. This accounting is correct when the funds received are capital advances. Effect This can result in amounts not to be included in the Schedule of Expenditures and Federal Awards in the correct period and understate SEFA. Also, the Administration could be subject to penalties or sanctions from the Federal Grantor. Context The Administration identified $6,543 as federal expenditures from prior years capital advances of FEMA awards but did not identify as expended the amount of $11,063 from advances. In addition, the Administration received reimbursements of $1,413,451 in the fiscal year, however management did not identify this amount as federal expenditures until the audit procedures was performed. Identification of repeat finding None. Questioned costs None, as adjustments were made during the audit to correct the misstatement. Recommendation We recommend validating, with the staff in charge of Engineering, the type of funds received from FEMA, if they are reimbursements or capital advances. When the funds received are reimbursements they should be recognized as income in the year received. If the funds are capital advances they should be recognized as unearned revenue and as income in the year in which they are disbursed. Views of responsible officials and planned corrective actions We agreed with the auditors’ finding and recommendation. See further details regarding this matter within the Corrective Action Plan.

Finding Number: 2025-015 State/Educational Agency(s): Arkansas Department of Commerce – Arkansas Economic Development Commission Pass-Through Entity: Not applicable AL Number(s) and Program Title(s): 21.029 – Coronavirus Capital Project Funds Federal Awarding Agency: U.S. Department of the Treasury Federal Award Number(s): CPFFN0186 Federal Award Year(s): 2022 Compliance Requirement(s) Affected: Reporting Type of Finding: Noncompliance Repeat Finding: Not applicable Criteria: All recipients of federal funds must complete financial, performance, and compliance reporting as required by the Grant Agreement, 2 CFR § 200.328 – 329, and as outlined in Part 2 of Coronavirus Capital Projects Fund Compliance and Reporting Guidance. In accordance with Coronavirus Capital Projects Fund Compliance and Reporting Guidance, Capital Project Fund recipients are responsible for reporting on subawards in the Federal Subaward Reporting System (FSRS). A Project and Expenditure Report must be completed for each project included in an approved Program Plan. The Project and Expenditure Report provides information on projects funded, obligations, expenditures, project status, outputs, performance indicators, and other information. Condition and Context: ALA reviewed the Q2 2025 Project and Expenditure Report for five of the 20 projects to determine expenditure and obligation amounts used for matching requirements were accurately reported to the U.S. Department of the Treasury. ALA noted the cumulative obligations for two of the five projects contained errors. The cumulative obligations for one of the projects was overstated by $2,569,790 and understated by $574,066 for the other project. Statistically Valid Sample: Not a statistically valid sample Questioned Costs: None Cause: Arkansas State Broadband Office (ASBO) management did not adequately review amounts submitted to the U.S. Department of the Treasury for accuracy. Effect: Failure to accurately report project obligations and expenditures to the U.S. Department of the Treasury could result in noncompliance with federal laws and regulations. Recommendation: ALA staff recommend the Agency management ensure all amounts submitted on Project and Expenditure Reports are accurate. Views of Responsible Officials and Planned Corrective Action: ASBO acknowledges the auditor’s observation regarding cumulative obligation amounts reported for two projects in the Q2 2025 Project and Expenditure Report submitted to the U.S. Department of the Treasury. The variances identified were the result of an administrative reporting error within a quarterly submission spreadsheet and did not reflect improper expenditures, questioned costs, or misuse of funds. The Agency identified the discrepancy during its internal review process and submitted corrected information to Treasury. By the time of audit review, the corrected reporting had already been provided. This issue was isolated to a specific reporting period and did not impact the underlying financial integrity of the projects. Anticipated Completion Date: June 30, 2026 Contact Person: Glen Howie State Broadband Director Arkansas State Broadband Office 1 Commerce Way Little Rock, AR 72202 (501) 683-6000 broadband@arkansas.gov

FINDING 2025-004 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Participation of Private School Children Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014, S010A240014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Test and Provisions - Participation of Private School Children Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation did not provide supporting documentation for the amounts disbursed for Participation of Private School Children. No time sheets or logs were provided to support the hours paid to employees for working with the private school children. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . INDIANA STATE BOARD OF ACCOUNTS 22 METROPOLITAN SCHOOL DISTRICT OF SOUTHWEST ALLEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." Cause The School Corporation had not developed a system of internal controls that would have ensured that records were maintained and made available for audit related to the Special Tests and Provisions - Participation of Private School Children compliance requirement. Effect The lack of appropriate documentation prevented the determination of the School Corporation's compliance with the Special Tests and Provisions - Participation of Private School Children compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the Special Test and Provisions - Participation of Private School Children compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FEDERAL AWARD FINDING: 2025-101 The County did not develop internal control procedures over program reporting and cash management requirements, increasing risk of report errors to awarding agencies and wrongly receiving monies Cluster name: Workforce Innovation and Opportunity Act (WIOA) Cluster Assistance Listings number(s) and name(s): 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Worker Formula Grants Award number(s) and year(s): IGA DI23-002389 July 1, 2023 through June 28, 2028 IGA DI21-002286 July 1, 2024 through June 30, 2025 Federal agency: U.S. Department of Labor Pass-through grantor(s): Arizona Department of Economic Security Compliance requirement(s): Reporting Questioned costs: Not applicable Assistance Listings number(s) and name(s): 21.027 COVID-19—Coronavirus State and Local Fiscal Recovery Funds Award number(s) and year(s): 1505-0271 March 3, 2021 through December 31, 2024 CT-FM-22-149 October 1, 2024 through September 30, 2025 SLFRFP1962 January 5, 2023 through December 31, 2026 CTR069300 January 1, 2024 through December 30, 2026 GTAW-FM-23*123 October 3, 2022 through July 3, 2026 ACJC-VC-25-001A July 1, 2024 through December 31, 2024 Federal agency: U.S. Department of the Treasury Pass-through grantor(s): Stratford Art Works; Arizona Supreme Court; Arizona Housing Coalition, Inc.; Arizona Criminal Justice Commission Compliance requirement(s): Reporting Questioned costs: Not applicable Assistance Listings number(s) and name(s): 93.268 Immunization Cooperative Agreements Award number(s) and year(s): CTR062571 July 1, 2022 through June 30, 2025 CTR059891 July 1, 2022 through June 30, 2027 Federal agency: U.S. Department of Health & Human Services Pass-through grantor(s): Arizona Department of Health Services Compliance requirement(s): Cash management and reporting Questioned costs: Not applicable Condition Contrary to federal regulation, the County’s Grants Management and Innovation Department (Department) did not develop, document, or implement internal control procedures to monitor compliance with the programs’ reporting and/or cash management requirements for the Workforce Innovation and Opportunity Act (WIOA) Cluster, Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program, and Immunization Cooperative Agreements (ICA) programs. Specifically, for 13 of 17 reports we tested, we found the Department did not perform an independent review and approval of reports prior to submitting them to the federal agency or pass-through grantor to ensure the reported expenditures were accurate, agreed to the County’s records, and contained only allowable expenditures for: • 9 of 9 WIOA monthly reconciliation reports we tested. • 3 of 4 SLFRF quarterly project and expenditure reports we tested. • 1 of 4 ICA quarterly contract expenditure reports (CER) we tested. These reports are also used to request reimbursement from the federal agency. For the same 3 SLFRF reports identified above and submitted during fiscal year 2025, we found the Department did not retain documentation, such as system reports, screenshots, or queries, to support the information it reported. Despite lacking internal control procedures, we did not identify inaccurate program information for WIOA and ICA reported to the federal agency or pass-through grantor, and we did not identify any ICA costs incurred prior to requesting reimbursement. In addition, the Department did not prepare and submit timely ICA program information to the federal agency for monitoring. Specifically, for award CTR062571—the Immunization Bridge Access program, the Department failed to submit 3 quarterly CERs by their required due dates in fiscal year 2025 and instead, on August 2, 2025, submitted 1 report that contained information covering all quarterly information for fiscal year 2025. Effect Without effective internal control procedures in place, there is an increased risk that the Department may not prevent or detect and correct errors on reports it submits to federal agency and pass-through agencies, which rely on them to effectively monitor the program administration, including its compliance with program requirements, ability to prevent and detect fraud, and to evaluate the programs’ success. There is also an increased risk that the Department could receive federal monies to which it is not entitled. Further, the Department is at risk that this finding applies to other federal programs it administers. Cause The Department’s management reported that it had sometimes performed independent reviews and approvals of reports but did not maintain documentation of these independent reviews because the Department did not have a formal policy requiring a documented review and approval of its reports. In addition, the Department’s management reported that policies and procedures were not followed to retain documentation for the SLFRF reports. Further, the Department’s management reported it did not have a process to track when each ICA report was required to be completed and did not verify that reports were submitted by the designated due dates. Criteria Federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). This would include developing, documenting, and implementing internal control procedures to monitor compliance with federal agency guidelines requiring the Department to report accurate and complete information for the WIOA monthly reconciliation reports, SLFRF quarterly financial reports, and ICA quarterly contract expenditure reports. Also, federal regulation and Department retention policies require the Department to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report (2 CFR §200.334). Further, federal regulation requires the Department to submit financial reports as required by the federal award. Reports submitted quarterly are due no later than 30 calendar days after the reporting period (2 CFR §200.328). Recommendations to the Department 1. Perform and document an independent review and approval of federal program reports before submitting the reports to the federal agency to ensure the reported expenditures were accurate, agreed to the County’s records, and contained only allowable expenditures. 2. Retain detailed documentation, such as system reports, screenshots, or queries related to submitted reports to ensure accurate and complete program information is reported to the federal agency or pass-through grantor for each federal program. 3. Submit ICA reports by their quarterly due dates. 4. Follow its retention policies and procedures and federal regulation requirements to retain all records relating to a federal award for a period of 3 years from the date of its submission of the reports. Develop, document, and implement policies and procedures to monitor compliance with the programs’ reporting requirements to: 5. Perform and document an independent review and approval of federal program reports before submitting the reports to the federal agency or pass-through grantor to ensure reports are accurate, agree to County records, and contain only allowable expenditures for the applicable fiscal year. 6. Create a tracking mechanism to ensure reports are completed and submitted by their due dates. This finding is similar to prior-year finding 2024-104 that was initially reported in fiscal year 2024. Views of responsible officials County management concurs with this finding. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials regarding these recommendations. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.

Finding 2025-002 – U.S. Department of Education (ED), TRIO Programs (material weakness): Information on Federal Programs – TRIO Upward Bound Assistance Listing, FAL No. 84.047, June 30, 2025 Criteria – Federal regulations require that at least two-thirds (67%) of participants served by the TRIO Upward Bound Program be low-income and first-generation college students. 20 U.S.C. § 1070a-11 34 CFR § 645.3 (Definitions); 34 CFR § 645.11 (Participant eligibility and selection). In addition, recipients are required to maintain accurate eligibility documentation and report complete and reliable participant data in the annual performance report in accordance with 2 CFR § 200.303 and 2 CFR § 200.328. Condition – The TRIO Upward Bound Program did not meet the federally required two-thirds first-generation/low-income participant threshold. The annual performance report reflected that only 51% of participants were identified as first-generation and/or low-income. During testing of participant eligibility documentation, the participant roster reflected that only 58% of participants met the first-generation and/or low-income eligibility requirement. Cause – The condition appears to be the result of insufficient internal controls over participant eligibility determination and monitoring, including: a) inadequate review procedures to ensure eligibility requirements were met prior to participant enrollment; b) lack of ongoing monitoring to ensure continued compliance with the two-thirds eligibility requirement throughout the program year and c) insufficient reconciliation between eligibility documentation and performance reporting data. Effect – Failure to meet the statutory eligibility threshold places the program out of compliance with federal requirements and may result in: a) questioned eligibility of program participants, b) increased risk of enforcement actions, including corrective action plans or repayment of federal funds.; c) possible loss or reduction of future funding and d) risk of program eligibility. Repeat Finding – Yes. Although this is a repeat finding for Upward Bound, Student Support Services was resolved in the current year. Questioned Costs – Questioned costs could not be reasonably determined for this finding due to the inability to directly associate program expenditures with individual ineligible participants. Auditor’s Perspective – From the auditor’s perspective, this finding represents material noncompliance with federal eligibility and reporting requirements for the TRIO Upward Bound Program. Federal statutes and regulations require that at least two-thirds (67%) of program participants be low-income and first-generation college students. The program’s failure to meet this threshold both in reported data (51%) and in tested eligibility documentation (58%) demonstrates a systemic breakdown in compliance, rather than an isolated or clerical error. The discrepancy between eligibility documentation and the annual performance report further indicates weaknesses in internal controls over compliance, as required by 2 CFR § 200.303. Accurate eligibility determination is a core program requirement, directly tied to the program’s statutory purpose and funding authorization. Noncompliance with this requirement undermines assurance that federal funds were used to serve the intended population. Auditor’s Perspective – (continued) Because eligibility compliance affects the allowability of participant-related costs, the inability to demonstrate that the required proportion of participants met eligibility criteria creates an elevated risk of questioned or disallowed costs. While questioned costs could not be reasonably quantified, the scope and pervasiveness of the condition support classification of this finding as material. Absent corrective action, the program remains exposed to continued noncompliance, increased federal oversight, and potential enforcement actions by the U.S. Department of Education. Strengthening eligibility controls, monitoring, and reporting reconciliation is necessary to restore compliance and reduce future audit risk. Auditor’s Recommendation – We recommend that management: a) strengthen internal controls over participant eligibility determination, including documented review and approval procedures; b) implement periodic monitoring to ensure the two-thirds first-generation/low-income require-ment is met throughout the program year; c) Ensure accurate and consistent reporting between eligibility records and annual performance reports and d) provide staff training on federal eligibility requirements for the TRIO Upward Bound Program. View of Responsible Officials – The correct 2/3 requirement percentage from the 2024-2025 TRIO Upward Bound APR is 63%; the referenced 51% was from the 2023-2024 APR. The TRIO Upward Bound Program’s fiscal year for 2024-2025 was September 1, 2024, to August 31, 2025, which is different from the College’s fiscal year. A roster was requested and submitted reflecting TRIO Upward Bound participants during the College’s fiscal year, July 1, 2024 -June 30, 2025. The submitted roster did not reflect the participants for the Program’s 2024-2025 fiscal year. Failure to meet the 2/3 requirement stems from ongoing challenges in recruiting Program participants. Recruitment has been and continues to be a challenge for TRIO Programs nationwide since the pandemic. The TRIO Upward Bound Staff are very knowledgeable about Program eligibility and documentation requirements. A thorough review of eligibility is completed to ensure applicants meet at least one (and preferably both) eligibility criteria PRIOR TO acceptance. The TRIO Upward Bound Program received funding for FY2025 (September 1, 2025, - August 31, 2026) in the full amount of $550,864.00. The receipt of a Non-Competing Continuation (NCC) Grant Award Notice means the U.S. Department of Education is giving approval to allow the Paine College TRIO Upward Bound Program to continue serving students without any stipulations to the Program or College. The Program is operating under normal terms and conditions. Program Staff is working diligently to recruit more students to ensure compliance with the 2/3 eligibility requirement for the 2025-2026 program/fiscal year.

CFDA Number: 93.224 Federal Program or Cluster: Health Center Program Cluster Grantor Agency: U.S. Department of Health and Human Services Federal Award Identification: H8FCS41177 Compliance Requirements: Reporting Type of Finding: Noncompliance/Material Weakness in Internal Control over Compliance Quiestioned Costs: None Criteria: 2 CFR Part 200, Section 200.302 Financial management requires that the Organization's financial management system must provide for the following: 1) Identification of all Federal awards received and expended and the Federal programs under which they were received..; and 2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in Sections 200.328 and 200.329. Section 200.328 Financial reporting states that the required financial reporting consists of the Federal Financial Report (SF-425). Condition: The SF-425 Federal Financial Report filed by the Organization for the H8FCS41177 Federal award reported that cash disbursements of $2,675,250, the total amount of the Federal award, had been made. However, $1,248,456 of those cash disbursements were determined during our audit to not be allowable due to not being obligated and/or liquidated by the period of performance deadlines. The cash disbursements reported on the SF-425 were not readily determinable from the Organization's general ledger accounts. Cause: Organization personnel were not aware of the period of performance with respect to this federal award. The Organization's previous CEO retired approximately May 31, 2024. Per inquiry of the Organizaton's CFO, their understanding was that the deadline to obligate for this federal award was December 31, 2024, and the deadline to expend or liquidate was December 31, 2026. The Organizaton's chart of accounts and general ledger do not include separate and distinct accounts or classes to which federal award expenditures are recorded. Effect or Potential Effect: The SF-425 Federal Financial Report filed by the Organization included cash disbursements of $1,248,456 that were not chargeable to the Federal award because they were not obligated before the period of performance end date and/or the payment was not made before the deadline to liquidate obligations. Context: We requested detail of expenditures for the Federal award and were provided with manual spreadsheets lacking all the transactional details needed. Information from the general ledger did not agree with cash disbursements reported on the SF-425. The general ledger information indicated $1,185,164 of the Federal award had not yet been disbursed at the time the SF-425 was filed. Repeat Finding: No Recommendation: We recommend that the Organization provide grants management training to all its financial staff and management covering the Uniform Guidance/OMB Guidance for Federal Financial Assistance. We also recommend that the Organization develop and implement policies and procedures for financial and performance report preparation to ensure information is supported by proper documentation and agrees with the general ledger. These policies and procedures should also include a requirement that all reports are reviewed by a member of management who is not involved in the preparation of the reports. Views of Responsible Officials: We agree with the finding. We have never received proper training. See Corrective Action Plan for Reference 2025-007.

Criteria: 2 CFR §200.327 and §200.328 requires recipients of federal awards to submit accurate and timely financial reports as required by the terms and conditions of the award. The Federal Financial Report (FFR) must be submitted by the due date specified in the grant agreement and must reflect accurate financial data. Condition and Context: During our audit of the Community Health Centers Cluster, we noted the entity failed to submit the required FFRs by the established deadlines for two annual reports. Additionally, two submitted reports contained inaccuracies, including expenditures that did not agree to amounts reported on the 2024 Schedule of Expenditures of Federal Awards and/or underlying supporting financial records. In one instance the report was filed 107 days late. In the second instance the report was filed 33 days late. Since this is a repeat finding, this is considered to not be an isolated instance and appears to be more indicative of a systemic problem. Effect: Failure to submit timely and accurate financial reports may result in noncompliance with federal regulations, potential withholding of future funding, and increased risk of questioned costs or audit findings. Cause: The delays and inaccuracies were attributed to inadequate internal controls over the financial reporting process, including lack of review procedures and insufficient training of staff responsible for preparing the reports. Recommendation: We recommend the entity strengthen its internal controls over the financial reporting process by implementing formal review procedures, providing staff training on federal reporting requirements, and establishing a calendar system to ensure timely submissions.

U.S. Department of Health and Human Services Federal Financial Assistance Listing 93.423 1332 State Innovation Waivers Reporting Significant Deficiency in Internal Control in Federal Compliance Criteria: Recipients of federal funds must submit financial reports as required by the Federal award. Reports submitted annually by the recipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period, in accordance with CFR § 200.328(c). Condition: The Association’s existing controls over their reporting processes, to ensure reports were submitted timely, were not functioning in such a way that ensured reports were submitted on time. Cause: The Association didn’t set a reminder or have a pre-arranged schedule that notified management a report was due. Effect: 1 quarterly report was submitted 3 days late. 1 quarterly report was submitted 2 days late. Questioned Costs: None reported Context/Sampling: Sampling was not used. 100% of the reports submitted during the year were tested. Repeat Finding from Prior Year(s): No Recommendation: Management should have a control in place to ensure they are notified that a report is coming due so they are able to compile and submit it on time. If information required to be included in the report is not available at the time the report is due, management should have a control in place to request an extension for the delayed submission of the report. Views of Responsible Officials: Management of the Association agrees with the finding.

Department of Transportation Federal Financial Assistance Listing 20.106; Awards AIP3-46-0050-59, AIP3-46-0050-62, AIP3-46-0050-63, and AIP3-46-0050-64. COVID-19 Airport Improvement Program Reporting Material Weakness in Internal Control over Compliance; Material Noncompliance Criteria - 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controls over the federal awards that provide assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with the program requirements. Condition - The SF-425 annual report dated September 30, 2024, for award AIP3-46-0050-64 underreported the federal share of expenditures by $23,588, while the FAA Form 5100-127 annual report dated December 31, 2023, for all awards underreported the total capital expenditures and construction in progress by $2,729,962. Cause - The Authority does not have an internal control structure designed to ensure amounts reported on SF-425 and FAA Form 5100-127 reports are adequately reviewed and agree to underlying accounting records. Effect - Lack of compliance with designed internal controls over reporting could result in the Authority reporting incorrect or incomplete information. Questioned Costs - None reported. Context/Sampling - A nonstatistical sample of 7 reports out of 27 reports. Repeat Finding from Prior Year – Yes, prior year finding 2023-002 Recommendation - Management should determine and formalize reporting responsibilities between the Airport and the State and establish review processes to ensure that amounts included in SF-425 and FAA Form 5100-127 reports agree with the underlying accounting records. Views of Responsible Officials - Management agrees with the finding.