Findings Citing § 200.328

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.

#2025-003 – Major Federal Award Finding – Reporting Nature of Finding: Compliance Finding Reporting and Significant Deficiency in Internal Controls over Compliance Criteria/Condition: Federal regulations 2 CFR 200.328 - 200.329 provide that required reporting under the federal program must be completed timely and accurately. The federal award agreement includes specific report filing due dates. We noted during testing of 12 different required reports, including both financial and performance reports, that 2 of these reports tested were not filed in a timely manner. Cause/Context: Controls were not in place to ensure timely reporting. Two performance reports tested were submitted one day late. Effect: A lack of controls could result in late or missed reporting. Recommendation: We recommend the Organization establish procedures and controls to ensure financial and performance reports are filed timely. Views of Responsible Officials and Planned Corrective Actions: The Organization’s program leadership is playing a more active role in reporting and compliance and is actively involving directors of programs in the process of reporting.

Finding No.: 2025-002 Federal Agency: Environmental Protection Agency AL No. and Title: 66.039 Diesel Emission Reduction Act (DERA) National Grants 98T31601 Federal Award No.: Area: Reporting Criteria: 2 CFR 200.302(a) states that 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 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. 2 CFR 200.328(c) states that recipient must submit financial reports as required by the Federal award. Condition: For one grant award during fiscal year 2025, the Authority did not submit the required federal financial report (SF-425) due on December 30, 2024. Cause: The Authority did not maintain an internal monitoring of financial reports required to be submitted during the fiscal year. Effect or potential effect: The Authority failed to submit the required federal financial report during the year and was not in compliance with applicable reporting requirements. Questioned costs: None Finding No.: 2025-002, continued Federal Agency: Environmental Protection Agency AL No. and Title: 66.039 Diesel Emission Reduction Act (DERA) National Grants 98T31601 Federal Award No.: Area: Reporting Context: The Authority did not submit one of the two required SF-425 during the year ended September 30, 2025. The Authority has not incurred any expenditure as of the report submission due date. Recommendation: The Authority should enforce monitoring controls over compliance with applicable reporting requirements. Responsible personnel should maintain a monitoring of financial reports required to be submitted for each grant award. Views of responsible officials: The Authority agrees to the finding. Refer to the corrective action plan.

Finding 2025-001: Finding Type: Noncompliance and significant deficiency in internal control Federal Department: U.S. Department of Health and Human Services Identification of the Federal Program: Assistance Listing Number 93.297 – Teenage Pregnancy Prevention Program, United States Department of Health and Human Services (HHS) Award Number: 5 TP1AH000315-02-00 Compliance Requirements: Matching, Level of Effort, and Earmarking and Reporting Criteria Per 2 CFR 200.303 (Internal Controls), non-federal entities must establish and maintain effective internal control over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Effective internal controls should ensure these requirements are consistently met. Per 2 CFR 200.306 (Cost Sharing), cost-sharing contributions, including third-party in-kind contributions, must be properly documented and allowable. Per 2 CFR 200.328 (Financial Reporting), financial reports must be accurate and complete. The SF-425 Federal Financial Report (FFR) instructions require recipients to report recipient share of expenditures (including cost matching or cost sharing). The Notice of Funding Opportunity #AH-TP1-23-001 for Advancing Equity in Adolescent Health through Evidence-Based Teen Pregnancy Prevention Programs and Services issued by HHS states at section D.3.b.1.s: “For awards that do not require matching or cost sharing by statute or regulation, where ‘cost sharing’ refers to costs of a project in addition to Federal funds requested that you voluntarily propose in your budget, if your application is successful, we will include this non-federal cost sharing in the approved budget and you will be held accountable for the non-federal cost-sharing funds as shown in the Notice of Award (NOA). Failure to meet a cost sharing or matching obligation that is part of the approved project budget on the NOA may result in the disallowance of federal funds. If you are funded, you will be required to report cost sharing or matching funds on your quarterly Federal Financial Reports.” Condition The Fund did not formally track or record the in-kind contribution required for federal award #5 TP1AH000314-02-00 for budget period July 1, 2024 through June 30, 2025. The Fund did not report the recipient share of expenditures on the quarterly SF-425 Federal Financial Reports (FFR) during fiscal year 2025. Through review of supporting documentation compiled subsequent to fiscal year 2025, the auditor verified that the Fund received third-party in-kind contributions via donated services performed during the budget period of July 1, 2024 through June 30, 2025 of $1,119,156, which is $22,521 less than the required cost share per the NOA. However, the Fund submitted a grant amendment to HHS on February 28, 2025 via the Grant Solutions system to reduce the Project Director's effort from 100% to 25% (because she was reassigned to another federal program), which would have reduced the required cost share amount to $1,039,482. Had the Fund's grant amendment request been approved, the Fund would have met and exceeded the required in-kind cost share. The Fund has made numerous attempts to contact HHS to obtain resolution regarding the outstanding grant amendment approval request, to no avail. As of May 29, 2026, the grant amendment has yet to be approved by HHS, and it appears as "in progress" in the Grant Solutions system. Therefore, the auditor was unable to determine whether the in-kind cost share was fully met. Cause When applying for the New York City Teens Connection Expansion project funds for budget period July 1, 2024 through June 30, 2025, the Fund included a voluntary non-federal cost share amount of $1,141,677 in their proposed budget. Upon receiving the federal award, HHS included the $1,141,677 cost share on the NOA as a requirement of the federal award. The Fund was aware of the required cost share, but did not formally track or report the donated services provided toward the cost share requirement during fiscal year 2025 because they thought that voluntary cost share amounts are not required to be formally tracked or reported on the FFR. Effect The Fund’s internal controls did not ensure that #93.297 in-kind contributions were formally documented and reported in accordance with Uniform Guidance requirements during fiscal year 2025. Recipient share of expenditures on the quarterly FFRs was underreported and the federal awarding agency may not have been able to verify the Fund’s compliance with matching requirements. Questioned Costs None. Recommendation We recommend that the Fund implement internal control procedures whereby someone reviews NOAs for any specified cost sharing or matching amounts, including those which are voluntary, and ensure that compliance with such requirements are formally tracked and reported over the life of the award. View of Responsible Officials Management agrees with the recommendation. The Organization’s corrective action plan is on page 45.

The Uniform Guidance, 2 CFR 200.328, requires nonfederal entities to submit financial reports as required by the Federal award. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. We tested four (4) quarterly Federal Financial Reports (SF-425) and identified two (2) instances where the Alabama Law Enforcement Agency (ALEA) did not submit the report within 30 days of the end of the reporting period. ALEA did not have adequate procedures in place to ensure SF-425 quarterly reports were submitted within the required reporting period. As a result, ALEA did not comply with the reporting requirements of the grant which prevented the Federal awarding agency from actively monitoring the program.

Reference Number: 2025-003 Late submission of Project and Expenditure Reports ALN 21.027 Coronavirus State and Local Fiscal Recovery Fund Federal Award Agreement Number: 74-6002544 Award Year: 2024-2025 Federal Agency: U.S. Department of Treasury Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.328 and 31 CFR section 35.4 (c), states metropolitan cities and counties with a population below 250,000 residents that are allocated more than $10 million in SLFRF funding are required to submit quarterly Project and Expenditure Reports. Condition Found: During our review of the quarterly reporting process, CRI identified two quarterly reports that were not submitted timely, ranging from 6 to 10 days late. Cause: Timely submission regarding Q1 and Q3 2025 project and expenditure reports were not maintained. Effect: The Department of Treasury uses the reports internally for oversight purposes and to fulfill Treasury’s transparency and legal obligations. The results of the City not submitting a report timely could lead to a finding of non-compliance, which could result in development of corrective action plan or other consequences. Questioned Cost: $0 Recommendation: We recommend the City to document and maintain all proper controls and review of all quarterly reports that are submitted through the portal to ensure complete and timely reports. Views of Responsible Officials: Management agrees with the findings. See corrective plan beginning on page 11.

Finding F2025-003 – Untimely Submission of Reports Assistance Listing Number: 93.526 Assistance Listing Program Title: Grants for Capital Development in Health Centers Federal Agency: U.S. Department of Health and Human Services – Health Resources and Services Administration (HRSA) Pass Through Entity: Not applicable Federal Award Number: C8ECS44046-01-06 Federal Award Year: September 15, 2021 to September 30, 2025 Compliance Requirement: Reporting Criteria Per 2 CFR §200.328, non-Federal entities must submit accurate and complete Federal Financial Reports (FFRs) in accordance with program requirements. HRSA requires timely submission of financial and program reports as specified in the Notice of Award (NOA), typically within 90 or 120 days after the end of the reporting period. Condition In performing reporting compliance testwork, we noted that the federal financial report (FFR) for the grant reporting period for the year ended September 30, 2025 was not submitted by the required due date. The FFR is due on January 28, 2026. The FFR was submitted 8 days late. Cause The delay resulted from an internal oversight by grant program personnel during the award closeout process. While HRSA granted a time extension for El Proyecto to complete and submit required closeout documentation, management’s efforts were primarily directed towards meeting the extended closeout requirement due date. The annual FFR due date, which is separate from the closeout documentation deadline, was not separately granted an extension by HRSA. Due to the internal oversight and lack of formal monitoring of grant program submission dates, the FFR was submitted beyond the submission due date. Effect Late submission of required grant reports will result in noncompliance with federal grant reporting requirements and may impact future grant funding. Questioned Costs Not applicable. Recommendation We recommend that El Proyecto strengthen its controls to ensure compliance with grant reporting requirements, as specified in the award documents. We recommend that El Proyecto develop a tracking schedule for grant report submission due dates, maintain formal documentation of reports submitted, increase management oversight, monitoring, and review procedures, and perform additional staff training, as needed, regarding federal grants reporting requirements. Views of Responsible Officials and Planned Corrective Actions Management acknowledges the finding. El Proyecto has implemented corrective actions, including tracking the FFR submission due dates separately from any closeout documentation submission due dates to help ensure both requirements are monitored and completed within the required timeframes. Person Responsible: Ricardo Ornelas Position of Responsible Party: Chief Financial Officer Completion Date: June 1, 2026

Untimely Submission of Federal Financial Reports (SF-425) - Reporting - Assistance Listing Numbers: 93.224 & 93.527 Consolidated Health Cluster Type of Finding: Significant Deficiency in Internal Control over Compliance Condition: Federal Financial Reports (SF-425) were submitted after the required 90 day reporting deadline, indicating that controls over the timely submission of required federal reports were not operating effectively. Criteria: Title 2 CFR §200.328 requires non-Federal entities to submit required financial reports no later than 90 calendar days after the end of the reporting period, unless otherwise specified in the terms and conditions of the federal award. Effect: Failure to submit SF-425 reports timely increases the risk of noncompliance with federal reporting requirements and may result in delayed monitoring, enforcement actions, or other adverse consequences by the awarding agency. Context: During audit testing, instances were identified where SF-425 reports related to the major federal program were submitted after the applicable 90-day deadline. Questioned Costs: None. Cause: Controls and procedures designed to ensure timely preparation, review, and submission of required federal financial reports were not consistently followed, resulting in delayed submission of SF-425 reports. View of Responsible Officials: Management agrees with the finding. Recommendation: We recommend that the Organization strengthen internal controls over federal financial reporting by implementing procedures to monitor reporting deadlines, including maintaining a formal tracking mechanism or compliance calendar for SF-425 due dates, assigning clear responsibility for report preparation and submission, and performing supervisory review to ensure SF-425 reports are submitted in accordance with federal requirements.

Finding 2025-001 – Allowable Costs Requirement – Time and Effort Reporting for Salaries Federal Program: Crime Victim Assistance - ALN 16.575 Consolidated And Technical Assistance Grant Program to Address Children and Youth Experiencing Domestic and Sexual Violence and Engage Men and Boys as Allies – ALN 16.888 Federal Grantor: U.S. Department of Justice Pass-Through Entity / Award: NYS Office of Victim Services (OVS), Contract OVS01-C11248GG – ALN 16.575 Criteria – 2 CFR 200.430(g) requires that charges to a federal award for salaries and wages be based on records that accurately reflect the work performed, supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and that the records reasonably reflect the total activity for which the employee is compensated. Under 2 CFR 200.403, costs must be adequately documented to be allowable, and under 2 CFR 200.405 costs must be allocable to the award based on the relative benefit received. 2 CFR 200.328 requires that financial reports submitted to the pass-through entity be supported by the entity's records. Condition – During the year under audit, the Organization did not consistently apply time and effort reporting that met the requirements of the federal cost principles for all grants. Cause – The Organization did not have an effective internal control system in place for monitoring and documenting wages and salaries charged to federal awards. Effect – Without an effective process to document, review, and reconcile time and effort, the Organization may not have sufficient support that payroll costs charged to federal awards reflect the work actually performed. This increases the risk that personnel costs are allocated incorrectly, unsupported costs are included in federal award expenditures, and federal programs are not charged in accordance with Uniform Guidance allowability and documentation requirements. Questioned Costs – None. After year-end, the Executive Director reviewed salaries and asserted that the amounts charged were reported correctly. Context – ALN 16.575 – In 21 out of 40 tested transactions, timesheets and underlying allocation support did not match to amounts charged to the program. ALN 16.888 – In 17 out of 40 tested transactions, timesheets and underlying allocation support did not match amounts charged to the program. Repeat Finding – No Recommendation – We recommend the Organization formalize the after the fact time and effort process. Views of Responsible Officials – See Corrective Action Plan.

2025-004 Reporting Cluster: Other major program referenced below Sponsoring Agency: Department of Labor Award Names: RETAIN Demonstration Projects Award Numbers: 1947RTN2-02B Assistance Listing Title: Disability Employment Policy Development Assistance Listing Number: 17.720 Award Year: 2024-2025 Pass-through entity: Vermont Department of Labor Criteria 2 CFR 200.328 requires non-Federal entities to submit financial reports as required by the Federal award. Per the award agreement, quarterly financial reports detailing all expenses to date under the award are due no later than the fifteenth of the month being reported. Condition During testing of reporting requirements for award 17.720, we noted that monthly financial reports were submitted to the sponsoring agency; however, the required standard quarterly financial reports were not submitted. Based on communication from the sponsoring agency, although the information required for the quarterly reports was included within the monthly reports, the sponsoring agency clarified that separate quarterly reports were still required. Cause The Dartmouth Health System misunderstood the reporting requirements under the award and thought the quarterly reporting requirements were satisfied by the monthly reports submitted. Effect The Dartmouth Health System did not submit the quarterly financial reports required per the award agreement and was not in compliance with reporting requirements. Questioned Costs None noted. Repeat Finding No Recommendation The Dartmouth Health System should ensure that submission of reports is performed as stated within agreed-upon award agreements and should retroactively submit the quarterly reports that were not submitted. Management’s Views and Corrective Action Plan Management’s Views and Corrective Action Plan is included at the end of this report after the summary schedule of prior audit findings and status.

Material Weakness in Internal Control over Compliance and Material Instance of Noncompliance (Scope Limitation) Federal Agency: U.S. Department of Health and Human Services Federal Program: Centers for Independent Living Assistance Listing Number: 93.432 Direct Award Numbers: 2322CAILCL-00 and 2338CAILCL-00 Pass-Through Entity: California Department of Rehabilitation Grant Identifying Number: 32594 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance – Payroll Expenditures, Cash Management and Reporting Criteria: Pursuant to 2 CFR §200.303, the Organization is required to establish and maintain effective internal control over the federal award that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Under 2 CFR §200.403 and 2 CFR §200.405, costs charged to the Federal award must be allowable, allocable, reasonable, and adequately documented. Under 2 CFR §200.403(h) and 2 CFR §200.309, costs must be incurred within the approved period of performance. Under 2 CFR §200.305, for cash management using the reimbursement method, the Organization must maintain records sufficient to support amounts requested for reimbursement and demonstrate that reimbursement requests are based on allowable program expenditures. Under 2 CFR §200.328 (financial reporting) and §200.329 (performance reporting) recipients are responsible for monitoring activities under federal awards and must submit required performance and financial reports at the intervals required by the federal award, which may be no more frequent than quarterly and no less frequent than annually. Condition and Context: The Organization did not have adequately designed internal controls over the review and approval of allowable payroll activities and payroll expenditures, cash management activities and federal reporting requirements. Specifically, there were no documented review and approval procedures or supervisory controls in place to ensure the accuracy and completeness of time and effort tracking of payroll expenditures, reimbursement requests or financial reports under the federal program. Additionally, sufficient appropriate audit evidence was not available to support compliance with the Activities Allowed or Unallowed and Allowable Costs/Cost Principles-Payroll Expenditures, Cash Management and Reporting compliance requirements. The lack of documentation and supporting records resulted in a scope limitation that prevented the auditors from performing necessary procedures to determine whether the Organization complied with applicable federal requirements related to allowed or unallowed payroll activities and allowable costs/cost principles for payroll expenditures, cash management transactions and financial reporting submissions for the population selected for testing. The condition affected the administration of the Centers for Independent Living federal program for the fiscal year ended September 30, 2025.Cause: Management did not design and implement documented internal controls requiring supervisory review and approval of allowable payroll activities and payroll expenditures, cash management activities and federal financial reporting. In addition, management did not maintain adequate supporting documentation to demonstrate compliance with federal requirements. Effect: The lack of effective internal controls increased the risk that errors, omissions, or noncompliance related to allowed or unallowed payroll activities and allowable costs/cost principles for payroll expenditures, cash management and reporting could occur and not be detected in a timely manner. Furthermore, because sufficient appropriate audit evidence was unavailable, the auditors were unable to determine whether the auditee complied with applicable federal compliance requirements related to - allowable payroll activities and payroll expenditures, cash management and reporting. Questioned Costs: Questioned costs could not be determined due to the scope limitation. Repeat Finding: No Recommendation: We recommend that management design and implement formal internal controls over - allowable payroll activities and payroll expenditures, cash management and reporting activities, including documented supervisory review and approval procedures for all time and effort tracking of payroll expenditures, federal reimbursement requests and financial reports. Management should also establish policies and procedures to ensure adequate supporting documentation is retained and readily available to support compliance with federal program requirements and facilitate audit testing. This should include comprehensive training for staff involved in federal program administration, regular monitoring to ensure controls are consistently applied, and periodic internal audits to assess the effectiveness of compliance systems. Views of Responsible Officials: Management Position: Management agrees with this finding. Adequate internal controls over payroll, cash management, and federal reporting were not in place during FY2025 as a direct result of inconsistencies in procedures and internal controls.Corrective Actions:  Accountability & Role Clarity: The Executive Director and Program Manager have mapped compliance requirements for each federal award—including expenditure review, reporting, receivables, and deliverables—and assigned clear ownership across management positions to eliminate single points of failure and reinforce segregation of duties.  Training & Ongoing Monitoring: All management staff will receive annual training on federal grant requirements (allowable/unallowable costs, period of performance, cash management, and reporting) at the start of each fiscal year. Monthly monitoring meetings among the Executive Director, Program Manager, and Accountant will precede Finance Committee meetings to review grant spending. Periodic internal reviews and a final year-end reconciliation will be conducted. Documentation & Continuity: All grant-related records will be maintained on a shared organizational drive accessible to all responsible staff. Formal onboarding and off boarding procedures for federal grant management will be developed to ensure continuity regardless of personnel changes. The Finance Manual will be updated to reflect all procedures.  Hood & Strong has been retained suggests proper internal controls necessary to achieve full federal compliance. All federal award information will be regularly reported to the Board of Directors.

Finding No. 2025-001 – Late Report Filling Federal Program Health Center Program Cluster ALN 93.224 Name of Federal Agency U.S. Health and Human Services Compliance Requirement Reporting Type of Finding: Significant deficiency in internal control over compliance Criteria Title 2 CFR §200.328(a) requires the Federal Financial Report (SF-425). Payment Management System (PMS) HRSA require 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 calendars days. Condition During our review of the SF-425 submitted reports, we noted that one of the reports was submitted after the 90-day requirement. Context From a sample of two (2) financial reports submitted during the fiscal year ended September 30, 2025, one was filed 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 and ensure timely preparation, review, and submission of required reports. Effect Lack of report submission or a delay on report submission may result in regulatory penalties and or additional administrative costs. Questioned Costs There were no questioned costs associated with this finding. 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 filing process by establishing formal procedures to monitor reporting deadlines, assign responsibility for preparation and review activities, and ensure required filings are submitted in a timely manner. Management should also implement a tracking mechanism, such as a compliance calendar or automated reminders, to improve oversight and prevent future delays. Views of responsible Officials (Unaudited) Refer to the corrective action plan on pages 47-50.

Finding 2025-002: Insufficient Documentation of Management Review of Section 3 Quarterly and Annual Reporting Audit Finding: Significant Deficiency Federal Program: Community Development Block Grant Mitigation Program Citywide Drainage Improvements (Assistance Listing 14.228) Compliance Requirement: Reporting and Special Tests and Provisions – Section 3 Requirements Criteria: In accordance with Title 2 of the Code of Federal Regulations (2 CFR) § 200.303, the City must establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of the award. Additionally, 2 CFR § 200.328 requires the City to ensure that reports submitted to the pass-through entity are accurate, complete, and supported by adequate review and oversight. The U.S. Department of Housing and Urban Development’s (HUD) Section 3 regulations at 24 CFR Part 75 require recipients to prepare and submit quarterly and cumulative annual Section 3 reports documenting efforts to provide employment, training, and contracting opportunities to low- and moderate-income persons and businesses within the project area. Condition: The City’s grant administrator is responsible for preparing and submitting the required quarterly and annual Section 3 reports to the Texas General Land Office on behalf of the City. However, there is no documentation demonstrating that City management reviews or approves these reports prior to and after submission. Cause: The City has not established procedures requiring City management to review and document approval of the Section 3 reports prepared and submitted to the Texas General Land Office. Effect: Without documentation of City management review and approval of the Section 3 reports prepared and submitted by the grant administrator, there is an increased risk that reports submitted to the passthrough entity may be inaccurate, incomplete, or not fully compliant with federal reporting requirements. Questioned Costs: None noted. Repeat Finding: This finding is related to the prior year finding 2024-002. Recommendation: The City should strengthen internal controls over federal reporting by establishing and documenting procedures to ensure City management reviews and approves all Section 3 reports prepared and submitted by the grant administrator. Evidence of this review, such as sign-offs or approval correspondence, should be retained in the grant files to demonstrate compliance with Uniform Guidance and HUD Section 3 reporting requirements. View of Responsible Officials: Management concurs with the recommendation. Please refer to the Corrective Action Plan for additional details.

Congressional Directives Assistance Listing Number 93.493 U.S. Department of Health and Human Services Criteria or Specific Requirement – Performance and Financial Monitoring and Reporting, 2 CFR Section 200.328-329 Condition – The annual Federal Financial Report was not submitted timely and required performance reporting was not completed during the year. Cause – Management turnover caused uncertainty in assigned responsibilities, including this reporting requirement. Effect or Potential Effect – The Medical Center did not comply with federal reporting requirements. Questioned costs – N/A Context – The Federal Financial Report for the reporting period ended September 29, 2025 was due December 28, 2025; however, this was not submitted until May 19, 2026. Additionally, a performance report was due during the year; however, it was not completed. The performance report for the period September 30, 2024–March 31, 2025 was due April 30, 2025. Identification as a Repeat Finding, if applicable – N/A Recommendation – The Medical Center should review reporting requirements in grant award documents for all federal awards to ensure compliance. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding. The issue was identified in May 2026 and the required reporting was completed and submitted. Going forward management has established a protocol by which reports for federal funding shall be submitted timely.

SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2025 Comment #2025-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE-OUT, AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED GENERAL (Repeat) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The close-out process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. While there has been improvements, we noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and other close-out procedures accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2025. We also noted significant weaknesses in internal controls over payroll and recording various journal entries related to payroll transactions and fringe benefits. Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). The systemic cause appears to be the change in the accounting staff and continuing education and training in grant accounting. Policies and procedures are not up-dated and followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] 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 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency's chief financial officer (CFO) should require the grant accountant and a general ledger accountant to receive annual training by professionals in the field of grant accounting and reporting. The payroll clerk should receive proper training in processing journal entries for all areas of payroll. All accounting staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will require additional specialize training for fiscal staff and improve in the segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The CFO will take lead in financial reporting to ensure that all reporting meet GAAP and GAS requirements and to provide informative reports for Board and Management. All enhancements will be implemented by June 30, 2026.

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