Findings Citing § 200.329

Finding 2025-013 – Noncompliance with Reporting Over Major Federal Program - Coronavirus State and Local Fiscal Recovery Funds (Repeat Finding – 2023-013, 2024-013) PASS-THROUGH GRANTOR: Direct Grant FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTING: 21.027 FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds FEDERAL AWARD YEAR: 2021 CONTROL CATEGORY: Reporting QUESTIONED COSTS: $-0- Condition: During the test of 100% of expenditures for the Coronavirus State and Local Fiscal Recovery Funds, totaling $5,176,520, thirty (32) expenditures totaling $2,780,668, were not accurately reported in the proper period on the quarterly reports, and two expenditures to subrecipients totaling $121,362, were improperly classified as “Revenue Replacement” expense instead of using the “Infrastructure” expense category as required by the Reporting compliance requirement. Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal expenditures are made in accordance with federal compliance requirements. Effect of Condition: This condition resulted in noncompliance with grant requirements. Recommendation: OSAI recommends the County design and implement a system of internal controls to ensure the accuracy and completeness of reports and to ensure compliance with federal requirements. Management Response: Chairman of the Board of County Commissioners: The Board of County Commissioners will take measures to ensure future compliance with all requirements of federal grants. Criteria: Accountability and stewardship should be overall goals in management’s accounting of federal funds. Internal controls should be designed to monitor compliance with laws and regulations pertaining to grant contracts. Title 2 CFR § 200.303(a) Internal Controls reads (a) reads as follows: The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should 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 Controls Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds (10. Reporting.) reads as follows: All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. In addition, where appropriate, your organization needs to establish controls to ensure completion and timely submission of all mandatory performance and/or compliance reporting. Further, 2 CFR § 200.329 Monitoring and Reporting Program Performance (c)(1) reads as follows The non-Federal entity must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Intervals must be no less frequent than annually nor more frequent than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes. Reports submitted annually by the non-Federal entity and/or pass-through entity must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. Alternatively, the Federal awarding agency or pass-through entity may require annual reports before the anniversary dates of multiple year Federal awards. The final performance report submitted by the non-Federal entity and/or pass-through entity must be due no later than 120 calendar days after the period of performance end date. A subrecipient must submit to the pass-through entity, no later than 90 calendar days after the period of performance end date, all final performance reports as required by the terms and conditions of the Federal award. See also § 200.344. If a justified request is submitted by a non-Federal entity, the Federal agency may extend the due date for any performance report.

Finding 2025-014 – Noncompliance with Reporting Over Major Federal Program – Coronavirus State and Local Fiscal Recovery Funds (Repeat Finding – 2022-014, 2023-014, 2024-014) PASS-THROUGH GRANTOR: Direct Grant FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTING: 21.027 FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds FEDERAL AWARD YEAR: 2021 CONTROL CATEGORY: Reporting QUESTIONED COSTS: $0 Condition: During the test of sixty-five (65) expenditures for the Coronavirus State and Local Fiscal Recovery Funds, totaling $4,254,839, seventeen (17) expenditures, totaling $1,280,024, were not accurately reported in the proper period on the quarterly reports as required by the program. Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal expenditures are properly reported in accordance with federal compliance requirements. Effect of Condition: This condition resulted in noncompliance with grant requirements. Recommendation: OSAI recommends the County design and implement a system of internal controls to ensure the accuracy and completeness of reports and to ensure compliance with federal requirements. Management Response: Chairman of the Board of County Commissioners: The Board of County Commissioners have hired a grant administrator to assist with the reporting process. We will ensure that the reports are accurate and reported in the proper period. Criteria: GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.23 states in part: Objectives of an Entity – Compliance Objectives Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements. Title 2 CFR § 200.303(a) Internal Controls reads (a) reads as follows: The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds (10. Reporting.) reads as follows: 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. In addition, where appropriate, your organization needs to establish controls to ensure completion and timely submission of all mandatory performance and/or compliance reporting. See Part 2 of this guidance for a full overview of recipient reporting responsibilities. Further, 2 CFR § 200.329 Monitoring and Reporting Program Performance (c)(1) reads as follows: The non-Federal entity must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Intervals must be no less frequent than annually nor more frequent than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes. Reports submitted annually by the non-Federal entity and/or pass-through entity must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. Alternatively, the Federal awarding agency or pass-through entity may require annual reports before the anniversary dates of multiple year Federal awards. The final performance report submitted by the non-Federal entity and/or pass-through entity must be due no later than 120 calendar days after the period of performance end date. A subrecipient must submit to the pass-through entity, no later than 90 calendar days after the period of performance end date, all final performance reports as required by the terms and conditions of the Federal award. See also § 200.344. If a justified request is submitted by a non-Federal entity, the Federal agency may extend the due date for any performance report.

Health Center Program Cluster – Assistance Listing Nos. 93.224 and 93.527 U.S Department of Health and Human Services Award No. 5 H80CS00681-23-07, June 1, 2024 – May 31, 2025 Award No. 6 H80CS00681-24-04, June 1, 2025 – May 31, 2026 Criteria or Specific Requirement – Reporting – 2 CFR 200.329 Condition – The Organization is required to prepare and submit an annual Uniform Data System (UDS) for each calendar year for the Health Center Program Cluster. This report is to be prepared using accurate financial information. Cause – The Organization was unable to provide supporting documentation that agreed to the line items tested on the report. Effect or potential effect– Potential errors were made on the annual UDS report. Questioned Costs – None Context – The Organization’s annual UDS report was selected for testing. Of the ten inputs tested, four exceptions were noted related to the annual UDS report. Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – The Organization should revise polices and procedures over federal reporting to ensure reports are prepared using accurate information and supporting documentation for federal grant reports should be maintained. Views of Responsible Officials and Planned Corrective Actions – Management Response - Management concurs with the auditor's finding. The Organization acknowledges that a mistake was made on Table 9E-Other Revenue, where grant income, from the Early Childhood Development (ECD) grant, was listed in the incorrect location. The ECD grant should have been listed under Federal Grants: UHI Grant Revenue. Additionally, the Organization's UDS preparer, completed a transposition error when entering a salary amount in Table 8A. Corrective Action Planned - Management has engaged with an independent 3rd party accounting firm to review current processes, assist with strengthening internal controls and month-end/year-end closing procedures, and provide assistance in completing the Organization's annual UDS report. Completion Date - Completed 1/1/2026 Responsible Contact Person - Margret Guy, Director of Revenue; Julie Brilley, CEO

Federal agency: Federal Aviation Administration Federal program title: Airport Improvement Program Assistance Listing Number: 20.106 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2024 to June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Criteria: Federal Aviation Administration (FAA) guidelines require Airport Improvement Program recipients to submit periodic financial reports, including SF-425 (Federal Financial Report), Form 5100-127 (Operating and Financial Summary), Form 5100-126 (Financial Government Payment Report), Form 5370-1 (Construction Progress and Inspection Report), and Form SF-271 (Requests for Reimbursement) in accordance with 2 CFR §200.328 and §200.329. Condition: During our testing, we noted that 3 of the 5 grants tested for SF-425 were not submitted for Fiscal year ended June 30, 2025. Questioned costs: None Context: Three of the five SF-425 reports selected for testing that were required to be submitted during the fiscal year were not prepared by the County and, therefore, were not submitted to the grantor agency. As a result, these reports were unavailable for audit. Cause: The Aviation Department continued working through a backlog of previously unsubmitted grant reports. The Department has been coordinating with the FAA to address historical non‑submission and ensure all required reports are submitted. While progress has been made, the volume of prior‑year reports and ongoing staffing constraints have contributed to delays in completing and submitting the remaining backlog. Effect: The County’s failure to submit all the required reports for each of its three Airport Improvement Program grants resulted in noncompliance with FAA reporting requirements under 2 CFR §200.328 and §200.329. This lack of reporting may impact the County’s ability to demonstrate proper stewardship of federal funds, delay reimbursement processing, and potentially affect future grant eligibility or funding decisions. Repeat Finding: Finding is a repeat finding from the prior year (2024-006). Recommendation: CLA recommends that the County continue providing staff with training related to identifying and complying with grant reporting requirements. In addition, CLA recommends that the County maintain and enhance tracking procedures, such as a monitoring checklist, to ensure all required grant reports including those related to prior‑year activity are submitted accurately and in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.

Finding No: 2025-006 – Internal control deficiencies over accounting for federal funds received Federal Programs ALN 97.036, Disaster Grants - Public Assistance (Presidentially Declared Disasters) ALN 21.027, Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency ALN 21.027, Coronavirus State and Local Fiscal Recovery Funds Category U.S. Department of Treasury U.S. Department of Homeland Security Compliance Requirement Activities Allowed/Unallowed, Allowable Costs/Cost Principles, Period of Performance, Project Accounting. Criteria 2 CFR Part 200 Subpart D Subsection 200.302 states the following: The recipient's and subrecipient's financial management system must provide for the following: 1. Identification of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number, year the Federal award was issued, and name of the Federal agency or pass-through entity. 2. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. When a federal agency or pass-through entity requires reporting on an accrual basis from a recipient or subrecipient that maintains its records other than on an accrual basis, the recipient or subrecipient must not be required to establish an accrual accounting system. This recipient or subrecipient may develop accrual data for its reports based on an analysis of the documentation on hand. Puerto Rico Ports Authority (A Component Unit of the Commonwealth of Puerto Rico) Schedule of Findings and Questioned Costs – (Continued) Year Ended June 30, 2025 - 102 - Part III – Federal Award Findings and Questioned Costs – (continued) Finding No: 2025-006 – Internal control deficiencies over accounting for federal funds received Criteria – (continued) 3. Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. 4. Effective control over and accountability for all funds, property, and assets. The recipient or subrecipient must safeguard all assets and ensure they are used solely for authorized purposes. See § 200.303. 5. Comparison of expenditures with budget amounts for each Federal award. 6. Written procedures to implement the requirements of § 200.305. 7. Written procedures for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. In addition, the 2 CFR Compliance Supplement states the following under Special Test and Provisions – Project Accounting: For large projects, the recipient is required to make an accounting to Federal Emergency Management Agency (FEMA) of eligible costs. Similarly, the subrecipient must make an accounting to the recipient. In submitting the accounting, the entity is required to certify that reported costs were incurred in performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, all grant conditions were met, and that payments for that project were made in accordance with the applicable payment provisions. For improved and alternate projects, if the total cost of the projects does not equal or exceed the approved eligible costs, then the auditor should expect to see an adjustment to reduce eligible costs (44 CFR section 206.205). For Small Projects, FEMA does not adjust estimated costs to the actual incurred amount. The Subrecipient must certify that they completed the approved SOW, and the Recipient must certify that they made all payments in accordance with the FEMA-State/Territory/Tribe agreement. This is typically completed on a Small Project Completion Certification. Puerto Rico Ports Authority (A Component Unit of the Commonwealth of Puerto Rico) Schedule of Findings and Questioned Costs – (Continued) Year Ended June 30, 2025 - 103 - Part III – Federal Award Findings and Questioned Costs – (continued) Finding No: 2025-006 – Internal control deficiencies over accounting for federal funds received Condition During our procedures over the Authority’s funds received from FEMA we noticed the following: 1. Return of interest earned on FEMA-related funds totaling approximately $211,853 was not timely recorded in the general ledger and was subsequently recorded through a post-closing entry dated January 26, 2026. 2. Management initially misclassified approximately $6 million received under the Coronavirus State and Local Fiscal Recovery Funds as state funds rather than federal awards. As a result, the amount was originally excluded from the Schedule of Expenditures of Federal Awards (the Schedule). Cause The condition was caused by the Authority's lack of personnel on the federal funds management office which has been present during prior audit periods, the early retirement program established under Act No. 80 of August 3, 2020 – “Law for Incentivized Retirement Program and Justice for Our Servants” (Act No. 80), and the resignation of some personnel from their occupied position and left the Authority willingly as stated in finding 2025-004 are the main causes for the condition. Effect Inadequate accounting and controls over federal funds can cause incorrect revenue recognition as capital advances are recognized as revenue when used appropriately and not when received. In addition, this can cause amounts to be included on the Schedule incorrectly as some of the activities received as capital advances have not actually occurred. It also creates risk of allocating funds in the incorrect federal awards as some of these have similar uses and assistance listing numbers. Also, the Authority could be subject to penalties or sanctions from the Federal Grantor. Puerto Rico Ports Authority (A Component Unit of the Commonwealth of Puerto Rico) Schedule of Findings and Questioned Costs – (Continued) Year Ended June 30, 2025 - 104 - Part III – Federal Award Findings and Questioned Costs – (continued) Finding No: 2025-006 – Internal control deficiencies over accounting for federal funds received Context The Authority recognized as federal award revenue of $6 million approximately, as contributions from the Commonwealth of Puerto Rico and therefore were originally not included in the Schedule. Also, $211,853 on the bank accounts where FEMA funds were deposited had to be returned since the funds cannot be deposited in an interest-bearing account. Journal entry recognizing this return was subsequently recorded through a post-closing entry dated January 26, 2026. Identification of repeat finding This is a repeat finding from the immediate previous audit, Finding 2025-006 Questioned costs None as adjustments were made during the audit to correct the misstatement. Recommendation We recommend the Authority’s Federal Funds Management Office (FFMO) and finance department coordinate with the external consultant who handles federal funds received from FEMA to better identify and classify funds received. In addition, we recommend the Authority to address the FFMO personnel limitations by hiring additional personnel for the Authority, re-shifting task between current personnel or by relaying on outsourced third party providers. Views of responsible officials and planned corrective actions We agreed with the auditors’ finding and recommendation. See further details regarding this matter within the Corrective Action Plan provided on pages 108-114.

Finding 2025-015 – Noncompliance with Reporting Over Major Federal Program – Coronavirus State and Local Fiscal Recovery Funds PASS-THROUGH GRANTOR: Direct Grant FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTING: 21.027 FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds FEDERAL AWARD YEAR: 2021 CONTROL CATEGORY: Reporting QUESTIONED COSTS: $-0- Condition: During the test of 100% of expenditures for the Coronavirus State and Local Fiscal Recovery Funds totaling $10,706,312, reflected five (5) expenditures totaling $10,182,497, were not accurately reported in the proper period on the quarterly reports as required by the Reporting compliance requirement. Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal expenditures are properly reported in accordance with federal compliance requirements. Effect of Condition: This condition resulted in noncompliance with grant requirements. Recommendation: OSAI recommends the County design and implement a system of internal controls to ensure the accuracy and completeness of reports and to ensure compliance with federal requirements. Management Response: Chairman of the Board of County Commissioners: The BOCC will ensure that the reports are accurate and reported in the proper period. Criteria: GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.23 states in part: Objectives of an Entity – Compliance Objectives Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements. 2 CFR § 200.303 Internal Controls (a) reads as follows: The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds (10. Reporting.) reads as follows: All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. In addition, where appropriate, your organization needs to establish controls to ensure completion and timely submission of all mandatory performance and/or compliance reporting. Further, 2 CFR § 200.329 Monitoring and Reporting Program Performance (c)(1) reads as follows: The non-Federal entity must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Intervals must be no less frequent than annually nor more frequent than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes. Reports submitted annually by the non-Federal entity and/or pass-through entity must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. Alternatively, the Federal awarding agency or pass-through entity may require annual reports before the anniversary dates of multiple year Federal awards. The final performance report submitted by the non-Federal entity and/or pass-through entity must be due no later than 120 calendar days after the period of performance end date. A subrecipient must submit to the pass-through entity, no later than 90 calendar days after the period of performance end date, all final performance reports as required by the terms and conditions of the Federal award. See also § 200.344. If a justified request is submitted by a non-Federal entity, the Federal agency may extend the due date for any performance report.

Reporting Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster (CNC) State Administering Department: California Department of Education ALN: 10.553, 10.555, 10.556, 10.559, 10.582 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 247CACA3N1199; October 1, 2023 – September 30, 2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Title 2 – Federal Financial Assistance 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. § 200.303 - Internal controls (2 CFR 200.303): The recipient and subrecipient 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). § 200.302 – Financial management (b) The recipient's and subrecipient's financial management system 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 in §§ 200.328 and 200.329. (3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Title 2 – Federal Financial Assistance Subtitle A – Office of Management and Budget Guidance for Grants and Agreements Chapter I – Office of Management and Budget Government-Wide Guidance for Federal Financial Assistance Part 170 – Reporting Subaward and Executive Compensation Information Subpart A – General § 170.105 Applicability (a) Applicability in general. This part applies to a Federal agency’s Federal financial assistance as defined in § 170.300. This part applies to all recipients and subrecipients of Federal awards who meet the reporting requirements of paragraph (c) of this section, unless exempt under Federal statute or by paragraph (d) of this section. Appendix A to Part 170—Award Term I. Reporting Subawards and Executive Compensation (a) Reporting of first-tier subawards — (1) Applicability. Unless the recipient is exempt as provided in paragraph (d) of this award term, the recipient must report each subaward that equals or exceeds $30,000 in Federal funds for a subaward to an entity or Federal agency. The recipient must also report a subaward if a modification increases the Federal funding to an amount that equals or exceeds $30,000. All reported subawards should reflect the total amount of the subaward. (2) Reporting Requirements. (i) The recipient must report each subaward described in paragraph (a)(1) of this award term to the Federal Funding Accountability and Transparency Act (FFATA) subaward reporting functionality (formerly FSRS and now reported through SAM.gov) at http://www.fsrs.gov. (ii) For subaward information, report no later than the end of the month following the month in which the subaward was issued. (c) Reporting of total compensation of subrecipient executives — (1) Applicability. Unless a first-tier subrecipient is exempt as provided in paragraph (d) of this appendix, the recipient must report the executive total compensation of each of the subrecipient's five most highly compensated executives for the subrecipient's preceding completed fiscal year, if: (i) The total Federal funding authorized to date under the subaward equals or exceeds $30,000; (ii) In the subrecipient's preceding fiscal year, the subrecipient received: (A) 80 percent or more of its annual gross revenues from Federal procurement contracts (and subcontracts) and Federal awards (and subawards) subject to the Transparency Act; and, (B) $25,000,000 or more in annual gross revenues from Federal procurement contracts (and subcontracts), and Federal awards (and subawards) subject to the Transparency Act; and (iii) The public does not have access to information about the compensation of the executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986 after receiving this subaward. (To determine if the public has access to the compensation information, see the U.S. Security and Exchange Commission total compensation filings at http://www.sec.gov/answers/execomp.htm.) (2) Reporting Requirements. Subrecipients must report to the recipient their executive total compensation described in paragraph (c)(1) of this appendix. The recipient is required to submit this information to the Federal Funding Accountability and Transparency Act (FFATA) subaward reporting functionality (formerly FSRS and now reported through SAM.gov) at http://www.fsrs.gov no later than the end of the month following the month in which the subaward was made. As of March 2025, this functionality has been migrated to SAM.gov, which now serves as the system of record for FFATA subaward reporting. Condition: Audit procedures included testing FFATA reporting submissions for 40 subrecipients to evaluate compliance with federal reporting requirements and the design and implementation of internal controls over the FFATA reporting process. Our testing identified that FFATA reports for 40 of the 40 subrecipients were not submitted within the required reporting timeframe. Although the reports were ultimately submitted and the information reported was complete and accurate, the submissions were delayed following the federal government's transition from the FFATA Subaward Reporting System (FSRS.gov) to the SAM.gov Subaward Reporting platform. The transition eliminated the bulk upload functionality previously used by the Department, significantly increasing the manual effort required to complete FFATA reporting while the Department worked to implement the new reporting process. Questioned costs: None Context: See “Condition.” Cause: During fiscal year 2024-25, the U.S. General Services Administration (GSA) transitioned FFATA reporting from FSRS.gov to the SAM.gov Subaward Reporting system. As part of this transition, the bulk upload functionality previously utilized by the Department was not initially available in the new system, significantly increasing the resources needed to prepare and submit FFATA reports. The increased reporting burden, coupled with staffing constraints and technical challenges encountered during implementation of the new reporting platform, contributed to delays in submitting FFATA reports within federally required timeframes. Effect: As a result of the elimination of the bulk upload process, staffing limitations, and implementation challenges associated with the federal reporting system transition, FFATA reports for 40 of 40 subrecipients were not submitted within the federally required reporting deadlines, resulting in noncompliance with FFATA reporting requirements. However, all required reports were ultimately submitted and contained complete and accurate information. Repeat finding: No Recommendation: The Department should evaluate staffing and resource needs associated with FFATA reporting and establish contingency procedures to address significant changes in federal reporting processes. Management should continue to monitor federal system changes, document implementation challenges, and maintain communication with federal agencies when external system limitations affect reporting timeliness. Additionally, the Department should identify and implement process improvements, including available automated reporting solutions and workarounds, to mitigate the impact of future system changes and help ensure FFATA reports are submitted within required timeframes. Views of responsible officials: Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.

Reporting Federal Agency: U.S. Department of Agriculture Federal Program Title: Summer Electronic Benefit Transfer Program for Children State Administering Department: California Department of Social Services (CDSS) ALN: 10.646 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 257CDSS7N1175; October 1, 2024 - September 30, 2025 257CDSS6N1803; October 1, 2024 - September 30, 2025 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Title 2 – Federal Financial Assistance 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. § 200.303 - Internal controls (2 CFR 200.303): The recipient and subrecipient 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). § 200.302 – Financial management (b) The recipient's and subrecipient's financial management system 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 in §§ 200.328 and 200.329. §200.328 Financial reporting (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 semiannually must be due no later than 30 calendar days after the reporting period. (d) The final financial report submitted by the recipient must be due no later than 120 calendar days after the conclusion of the period of performance. A subrecipient must submit a final financial report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. Title 7 – Agriculture Subtitle B - Regulations of the Department of Agriculture Chapter II - Food and Nutrition Service, Department of Agriculture Subchapter C - Supplemental Nutrition Assistance and Food Distribution Program Part 274 – Issuance and Use of Program Benefits § 274.1 Issuance system approval standards (a) Basic issuance requirements. State agencies shall establish issuance and accountability systems which ensure that only certified eligible households receive benefits; that Program benefits are timely distributed in the correct amounts; and that benefit issuance and reconciliation activities are properly conducted and accurately reported to FNS. § 274.4 Reconciliation and reporting (c) Required reports. The State agency shall review and submit the following reports to FNS on a monthly basis: (1) Form FNS-46, Issuance Reconciliation Report, shall be submitted by each State agency operating an issuance system. The report shall be prepared at the level of the State agency where the actual reconciliation of posted benefits and the master issuance file occurs. (i) The State agency shall identify and report the number and value of all issuances which do not reconcile with the master issuance file. All unreconciled issuances shall be identified as specified on this reporting document. (ii) The report shall be received by FNS no later than 90 days following the end of the report month. Condition: Audit procedures included a review of 3 FNS-46 reports selected from a population of 12 reports submitted during the audit period to determine whether reports were filed in accordance with federal reporting deadlines. Of the 3 reports tested, 2 were not submitted within the required timeframe. Specifically, the reports were submitted 23 and 38 days after the applicable federal due dates. As a result, the Department did not consistently comply with federal reporting requirements for timely submission of FNS-46 reports. Questioned costs: None Context: See “Condition.” Cause: The Department did not maintain sufficiently precise internal controls to ensure FNS-46 reports were prepared, reviewed, and submitted in accordance with federally established reporting deadlines. Specifically, monitoring and supervisory review procedures were not designed or operating at a level of precision sufficient to identify and correct delays in report preparation and submission before the applicable due dates. As a result, late submissions were not detected and resolved in a timely manner. Effect: Failure to submit FNS-46 reports in a timely manner delays federal oversight of S-EBT issuance activity and increases the risk that reconciliation issues, including improper or unsupported issuances, are not promptly identified and resolved. Continued delays may result in noncompliance with federal reporting requirements and reduce the usefulness of reported information for program oversight. Repeat finding: No Recommendation: We recommend that the Department implement controls to ensure timely submission of FNS-46 reports, including establishing a formal reporting calendar aligned with the 90-day requirement, assigning clear responsibility for report preparation and review, and implementing monitoring procedures to track progress and escalate delays. Controls should operate with sufficient precision to ensure all required reports are completed and submitted within prescribed deadlines. Views of responsible officials: Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.

Reporting Federal Agency: U.S. Department of Labor Federal Program Title: Unemployment Insurance State Administering Department: Employment Development Department (EDD) ALN: 17.225 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: UI347022055A6; April 1, 2020 – June 30, 2025 UI387882255A6; April 1, 2022 – May 22, 2025 23A60UR000018; January 1, 2023 – September 30, 2025 23A55UD000003; February 27, 2023 – September 30, 2025 23A60UB000081; April 1, 2023 – May 22, 2025 23A55UD000007; April 27, 2023 – April 26, 2026 24A55UT000026; October 1, 2023 – September 30, 2024 24A60UD000027; February 19, 2024 – February 19, 2027 25A55UE000010; July 1, 2024 – December 31, 2025 25A60UD000072; January 8, 2025 – January 8, 2028 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Material Weakness in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Title 2 – Federal Financial Assistance 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. § 200.303 - Internal controls (2 CFR 200.303): The recipient and subrecipient 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). § 200.302 – Financial management (b) The recipient's and subrecipient's financial management system 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 in §§ 200.328 and 200.329. (3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Subtitle B – Federal Agency Regulations for Grants and Agreements Chapter XXIX – Department of Labor Part 2900 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D – Post Federal Award Requirements § 2900.14 – Financial reporting In addition to the guidance set forth in 2 CFR 200.328, for Federal awards from the Department of Labor, the DOL awarding agency will prescribe whether the report will be on a cash or an accrual basis. If the DOL awarding agency requires reporting on an accrual basis and the recipient's accounting system is not on the accrual basis, the recipient will not be required to convert its accounting system, but must develop and report such accrual information through best estimates based on an analysis of the documentation on hand. ETA-9130 Reporting Requirements 1) Submission of the ETA-9130 is required on a quarterly basis. Reporting quarter end dates shall correspond to the following calendar quarter end dates: March 31, June 30, September 30, and December 31. A final quarter ETA-9130 is required at the completion of the quarter, encompassing the grant award end date, or at the completion of the quarter in which all funds have been expended, whichever comes first. 2) Quarterly reports, including the final quarter report, are required to be submitted no later than 45 calendar days after the end of each specified reporting period. The reporting due dates are: May 15, August 15, November 15, and February 15. The deadlines for ETA-9130 submissions do not change, even in instances when the reporting due date falls on a weekend or holiday. The e-reporting system is available 24 hours a day, 7 days a week, and reports can be submitted in advance of the due date. 3) All financial data is required to be reported cumulative from grant inception, through the end of each reporting period. Expenditure data is required to be reported on an accrual basis. 4) A separate ETA-9130 is required for each program and each fund source (subaccount) awarded to a grant recipient. 5) All sections of the report must be completed unless otherwise noted in the grant agreement Condition: Audit procedures included a review of the entire population of Form 9130 reports for administrative expenses, consisting of 22 reports. Our testing identified that certain reported amounts did not agree to the underlying general ledger for 12 reports, resulting in a total variance of $32,843,139. Additionally, audit procedures identified that internal controls over reporting were not operating effectively to ensure the timely and accurate submission of reports. Specifically, six reports were not submitted by the required due dates, and 12 reports contained inaccuracies at the time of submission, and controls were not performed with sufficient precision to verify that reported information was complete and accurate in accordance with federal reporting requirements. Questioned costs: None Context: See “Condition.” Cause: The controls over the preparation and review of Form 9130 reports that were not performed with sufficient precision to identify and resolve discrepancies between reported amounts and the underlying general ledger. Specifically, controls were not designed or operating at a level precise enough to ensure that reported data was accurate, reconciled, and submitted in a timely manner in accordance with federal requirements. As a result, variances and reporting errors were not detected or corrected prior to submission. Effect: The lack of a robust and thorough reconciliation process between Form 9130 reports and the Administrative Fund (870) general ledger may lead to inaccurate reporting. Repeat finding: Yes – 2024-003 Recommendation: Management should establish a formal reconciliation process to ensure that Form 9130 administrative expense reports align with the general ledger. This process should include assigning responsibility to a designated finance team member for performing and documenting reconciliations, implementing a monthly reconciliation schedule, and promptly investigating and resolving any variances with documented approvals. Additionally, financial reporting policies should be updated to incorporate reconciliation requirements, and staff should receive training on compliance and reconciliation procedures to strengthen internal controls and reduce the risk of reporting inaccuracies. Views of responsible officials: Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.

Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster State Administering Department: California Department of Aging ALN: 93.044, 93.045, 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2401CAOACM; October 1, 2023 – September 30, 2025 2401CAOAHD; October 1, 2023 – September 30, 2025 2401CAOANS; October 1, 2023 – September 30, 2025 2401CAOASS; October 1, 2023 – September 30, 2025 2501CAOACM; October 1, 2024 – September 30, 2026 2501CAOAHD; October 1, 2024 – September 30, 2026 2501CAOANS; October 1, 2024 – September 30, 2026 2501CAOASS; October 1, 2024 – September 30, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Title 2 – Federal Financial Assistance 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. § 200.303 - Internal controls (2 CFR 200.303): The recipient and subrecipient 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). § 200.302 – Financial management (b) The recipient's and subrecipient's financial management system 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 in §§ 200.328 and 200.329. (3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Title 2 – Federal Financial Assistance Subtitle A – Office of Management and Budget Guidance for Grants and Agreements Chapter I – Office of Management and Budget Government-Wide Guidance for Federal Financial Assistance Part 170 – Reporting Subaward and Executive Compensation Information Subpart A – General § 170.105 Applicability (a) Applicability in general. This part applies to a Federal agency’s Federal financial assistance as defined in § 170.300. This part applies to all recipients and subrecipients of Federal awards who meet the reporting requirements of paragraph (c) of this section, unless exempt under Federal statute or by paragraph (d) of this section. Appendix A to Part 170—Award Term I. Reporting Subawards and Executive Compensation (a) Reporting of first-tier subawards — (1) Applicability. Unless the recipient is exempt as provided in paragraph (d) of this award term, the recipient must report each subaward that equals or exceeds $30,000 in Federal funds for a subaward to an entity or Federal agency. The recipient must also report a subaward if a modification increases the Federal funding to an amount that equals or exceeds $30,000. All reported subawards should reflect the total amount of the subaward. (2) Reporting Requirements. (i) The recipient must report each subaward described in paragraph (a)(1) of this award term to the Federal Funding Accountability and Transparency Act (FFATA) subaward reporting functionality (formerly FSRS and now reported through SAM.gov) at http://www.fsrs.gov. (ii) For subaward information, report no later than the end of the month following the month in which the subaward was issued. (c) Reporting of total compensation of subrecipient executives — (1) Applicability. Unless a first-tier subrecipient is exempt as provided in paragraph (d) of this appendix, the recipient must report the executive total compensation of each of the subrecipient's five most highly compensated executives for the subrecipient's preceding completed fiscal year, if: (i) The total Federal funding authorized to date under the subaward equals or exceeds $30,000; (ii) In the subrecipient's preceding fiscal year, the subrecipient received: (A) 80 percent or more of its annual gross revenues from Federal procurement contracts (and subcontracts) and Federal awards (and subawards) subject to the Transparency Act; and, (B) $25,000,000 or more in annual gross revenues from Federal procurement contracts (and subcontracts), and Federal awards (and subawards) subject to the Transparency Act; and (iii) The public does not have access to information about the compensation of the executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986 after receiving this subaward. (To determine if the public has access to the compensation information, see the U.S. Security and Exchange Commission total compensation filings at http://www.sec.gov/answers/execomp.htm.) (2) Reporting Requirements. Subrecipients must report to the recipient their executive total compensation described in paragraph (c)(1) of this appendix. The recipient is required to submit this information to the FFATA subaward reporting functionality (formerly FSRS and now reported through SAM.gov) at http://www.fsrs.gov no later than the end of the month following the month in which the subaward was made. As of March 2025, this functionality has been migrated to SAM.gov, which now serves as the system of record for FFATA subaward reporting. Condition: Audit procedures included a review of 60 FFATA reporting submissions associated with subrecipients. During this review, we assessed compliance with federal reporting requirements and evaluated the adequacy of internal controls over the FFATA reporting process. Of the 60 subrecipients examined, we identified that FFATA reporting was not performed timely for 31 subrecipients. Additionally, audit procedures further determined that reporting was only being performed once annually for all sampled subrecipients, rather than on an ongoing basis as required. The department lacked documented procedures and monitoring mechanisms to ensure timely and accurate reporting, including verification that subrecipient data was submitted in accordance with federal requirements. Questioned costs: None Context: See “Condition.” Cause: Procedures to perform the required FFATA reporting were not established by the Department. The absence of documented policies, assigned responsibilities, and monitoring mechanisms create an environment which may result in noncompliance with federal reporting. Effect: The lack of established procedures and internal controls for FFATA reporting resulted in noncompliance, with 31 out of 60 subrecipients not reported timely as required. Repeat finding: Yes, 2024-013 Recommendation: The Department should implement a robust process and related internal controls to ensure timely and accurate FFATA reporting. These controls should include developing written policies and procedures that outline the steps for collecting subrecipient data, preparing reports, and submitting them within required timelines; assigning accountability by designating specific personnel responsible for compliance; and implementing a monitoring and review process to verify completion and accuracy of reporting. Additionally, training programs should be established to ensure staff understand reporting requirements, and automated tracking tools or checklists should be utilized to provide transparency and reduce the risk of missed submissions. By introducing these internal controls, the Department can strengthen its compliance framework, mitigate the risk of federal funding repercussions, and enhance overall operational integrity. Views of responsible officials: Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.

Subrecipient Monitoring Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Epidemiology and Laboratory Capacity for ProgramInfectious Diseases (ELC) State Administering Department: California Department of Public Health ALN: 93.323 Pass-Through Agency: Heluna Health Pass-Through Number(s): 95-2557063 Award Number and Period: NU50CK000539; August 1, 2019 – July 31, 2027 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Title 2 – Federal Financial Assistance 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. § 200.303 - Internal controls (2 CFR 200.303): The recipient and subrecipient 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). § 200.302 – Financial management (b) The recipient's and subrecipient's financial management system 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 in §§ 200.328 and 200.329. (3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. § 200.332 – Requirements for pass-though entities A pass-through entity must: (b) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information provided below. A pass-through entity must provide the best available information when some of the information below is unavailable. A pass-through entity must provide the unavailable information when it is obtained. Required information includes: (1) Federal award identification. (i) Subrecipient's name (must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated in the subaward; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity, including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity; (xii) Assistance Listings title and number; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at the time of disbursement; (xiii) Identification of whether the Federal award is for research and development; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is used in accordance with § 200.414). Condition: Audit procedures included a review of eleven subrecipient agreements to determine whether the pass-through entity included the information required to be communicated to subrecipients in accordance with Uniform Guidance. Of the eleven agreements tested, all eleven (100%) did not contain one or more required federal award identification elements. Specifically, the agreements omitted the subrecipient’s Unique Entity Identifier (UEI), the Federal Award Identification Number (FAIN), the Federal award date, the applicable Assistance Listing Number (ALN), identification of whether the award was designated as research and development (R&D), and the applicable indirect cost rate for the federal award, including whether the de minimis indirect cost rate authorized under 2 CFR §200.414 was being used. As a result, the subrecipient agreements did not include all information required to be provided to subrecipients under 2 CFR §200.332(b). Questioned costs: None Context: See “Condition.” Cause: Controls designed to ensure the inclusion of all federally required award identification information in subrecipient agreements were not operating with sufficient precision to identify and prevent the omission of required elements prior to execution of the agreements. As a result, agreements were issued without all information required under 2 CFR §200.332(b), including the UEI, FAIN, Federal award date, ALN, identification of whether the award was designated as R&D, and the applicable indirect cost rate. Effect: The omission of required federal award information from subrecipient agreements may limit subrecipients' understanding of applicable federal award requirements and increase the risk of noncompliance with federal regulations. Incomplete award information may also result in inaccurate or inconsistent administration, monitoring, and reporting of federal awards by subrecipients and the pass-through entity. Repeat finding: Yes – 2024-009 Recommendation: Public Health should ensure every subaward includes all requirements imposed on the subrecipient so that the federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the federal award. Views of responsible officials: Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.

Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Foster Care Title IV-E State Administering Department: California Department of Social Services (CDSS) ALN: 93.658 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2501CAFOST; October 1, 2024- September 30, 2025 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Title 2 – Federal Financial Assistance 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. § 200.303 - Internal controls (2 CFR 200.303): The recipient and subrecipient 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). § 200.302 – Financial management (b) The recipient's and subrecipient's financial management system 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 in §§ 200.328 and 200.329. (3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Title 2 – Federal Financial Assistance Subtitle A – Office of Management and Budget Guidance for Grants and Agreements Chapter I – Office of Management and Budget Government-Wide Guidance for Federal Financial Assistance Part 170 – Reporting Subaward and Executive Compensation Information Subpart A – General § 170.105 Applicability (a) Applicability in general. This part applies to a Federal agency’s Federal financial assistance as defined in § 170.300. This part applies to all recipients and subrecipients of Federal awards who meet the reporting requirements of paragraph (c) of this section, unless exempt under Federal statute or by paragraph (d) of this section. Appendix A to Part 170—Award Term I. Reporting Subawards and Executive Compensation (a) Reporting of first-tier subawards — (1) Applicability. Unless the recipient is exempt as provided in paragraph (d) of this award term, the recipient must report each subaward that equals or exceeds $30,000 in Federal funds for a subaward to an entity or Federal agency. The recipient must also report a subaward if a modification increases the Federal funding to an amount that equals or exceeds $30,000. All reported subawards should reflect the total amount of the subaward. (2) Reporting Requirements. (i) The recipient must report each subaward described in paragraph (a)(1) of this award term to the Federal Funding Accountability and Transparency Act (FFATA) subaward reporting functionality (formerly FSRS and now reported through SAM.gov) at http://www.fsrs.gov. (ii) For subaward information, report no later than the end of the month following the month in which the subaward was issued. (c) Reporting of total compensation of subrecipient executives — (1) Applicability. Unless a first-tier subrecipient is exempt as provided in paragraph (d) of this appendix, the recipient must report the executive total compensation of each of the subrecipient's five most highly compensated executives for the subrecipient's preceding completed fiscal year, if: (i) The total Federal funding authorized to date under the subaward equals or exceeds $30,000; (ii) In the subrecipient's preceding fiscal year, the subrecipient received: (A) 80 percent or more of its annual gross revenues from Federal procurement contracts (and subcontracts) and Federal awards (and subawards) subject to the Transparency Act; and, (B) $25,000,000 or more in annual gross revenues from Federal procurement contracts (and subcontracts), and Federal awards (and subawards) subject to the Transparency Act; and (iii) The public does not have access to information about the compensation of the executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986 after receiving this subaward. (To determine if the public has access to the compensation information, see the U.S. Security and Exchange Commission total compensation filings at http://www.sec.gov/answers/execomp.htm.) (2) Reporting Requirements. Subrecipients must report to the recipient their executive total compensation described in paragraph (c)(1) of this appendix. The recipient is required to submit this information to the FFATA subaward reporting functionality (formerly FSRS and now reported through SAM.gov) at http://www.fsrs.gov no later than the end of the month following the month in which the subaward was made. As of March 2025, this functionality has been migrated to SAM.gov, which now serves as the system of record for FFATA subaward reporting. Condition: Audit procedures included a review of the entire population of 58 FFATA subaward submissions for the Foster Care program reported in SAM.gov during the year ended June 30, 2025, and a comparison of those submissions to the related funding actions. Testing identified that all 58 subawards, representing 100 percent of the population, were reported after the required reporting deadline. Based on inquiry and review of supporting documentation, CDSS prepared and submitted the FFATA reporting file; however, certain submitted records were rejected by the reporting system and required correction and resubmission. Because the submission and review process was performed too close to the applicable reporting deadline, there was insufficient time to identify, resolve, and successfully resubmit the rejected records before the deadline. As a result, FFATA subaward information was not reported within the timeframe required by federal reporting requirements. The results of testing indicate that controls over FFATA reporting did not operate with sufficient precision to ensure submitted records were timely reviewed, validated, and accepted prior to applicable reporting deadlines. Accordingly, FFATA reporting was not consistently completed in a timely manner in accordance with federal requirements. Questioned costs: None Context: See “Condition.” Cause: CDSS did not maintain controls over the FFATA reporting process that operated with sufficient precision to ensure subaward submissions were completed, validated, and accepted before applicable federal reporting deadlines. Specifically, FFATA reports were submitted too near the reporting deadline to allow sufficient time to identify, investigate, and correct rejected submissions. In addition, CDSS did not have monitoring procedures to review submission status, follow up on system-generated rejection notices, and verify that all submitted records had been successfully accepted in SAM.gov before the reporting deadline. As a result, submission errors were not resolved timely, resulting in late reporting of all reportable subawards. Effect: Untimely reporting reduced the timeliness, transparency, and reliability of publicly available federal spending information and limited the ability of federal agencies, oversight bodies, and the public to promptly monitor the distribution of federal funds to subrecipients. In addition, the lack of controls to timely identify and resolve rejected submissions increases the risk that future FFATA reporting deadlines may not be met. Repeat finding: No Recommendation: We recommend that CDSS strengthen its department-wide controls over FFATA reporting to ensure reportable subawards are identified, reviewed, and submitted within required federal reporting deadlines. Specifically, CDSS should establish and implement centralized procedures to track subaward actions, amendments, allocation changes, and other reportable funding events; monitor applicable FFATA reporting deadlines; and maintain documentation demonstrating that reportable subawards have been evaluated and reported timely. In addition, CDSS should implement review controls that operate with sufficient precision to verify that all reportable subawards have been identified, reporting deadlines have been met, and FFATA submissions are complete, accurate, and supported by underlying award documentation prior to submission in SAM.gov. These procedures should include documented supervisory review, reconciliation of reportable subaward activity to source documentation, and periodic monitoring to identify and resolve untimely or omitted submissions. Views of responsible officials: Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report. Response to views of responsible officials: We acknowledge CDSS's position that an initial FFATA submission was made on November 27, 2024, and that only two records required correction and resubmission. However, CDSS did not provide sufficient documentation to support the asserted November 27 submission date, such as submission confirmations, systemgenerated reports, audit logs, or other contemporaneous evidence demonstrating that the subaward information was successfully submitted before the reporting deadline. The audit evidence available for inspection reflected a submission date after the required deadline for all 58 Foster Care subawards. Although CDSS indicated that only two records failed during the original upload process, documentation supporting that assertion and the cause of the upload failure was not provided for audit review. Accordingly, based on the evidence available, we were unable to verify that FFATA reporting requirements were met by the applicable deadline. Therefore, we continue to conclude that the finding is valid as presented.

Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Child Care and Development Block Grant/Child Care Mandatory and Matching Funds of the Child Care and Development Fund State Administering Department: California Department of Social Services (CDSS) ALN: 93.575, 93.596 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2101CACDC6; October 1, 2020 – September 30, 2024 2334CACCDD; October 1, 2022 – September 30, 2025 2334CACCDF; October 1, 2022 – September 30, 2025 2334CACCDM; October 1, 2022 – September 30, 2025 2434CACCDD; October 1, 2023 – September 30, 2026 2434CACCDF; October 1, 2023 – September 30, 2026 2434CACCDM; October 1, 2023 – September 30, 2025 2534CACCDD; October 1, 2024 – September 30, 2027 2534CACCDF; October 1, 2024 – September 30, 2027 2534CACCDM; October 1, 2024 – September 30, 2026 2534CACCDY; December 21, 2024 – September 30, 2028 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Material Weakness in Internal Control over Complianceand Material Noncompliance Criteria or specific requirement: Title 2 – Federal Financial Assistance 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. § 200.303 - Internal controls (2 CFR 200.303): The recipient and subrecipient 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). § 200.302 – Financial management (b) The recipient's and subrecipient's financial management system 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 in §§ 200.328 and 200.329. (3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. §200.328 Financial reporting (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 semiannually must be due no later than 30 calendar days after the reporting period. (d) The final financial report submitted by the recipient must be due no later than 120 calendar days after the conclusion of the period of performance. A subrecipient must submit a final financial report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. § 200.329 Monitoring and reporting program performance (a) Monitoring by the recipient and subrecipient The recipient and subrecipient are responsible for the oversight of the Federal award. The recipient and subrecipient must monitor their activities under Federal awards to ensure they are compliant with all requirements and meeting performance expectations. Monitoring by the recipient and subrecipient must cover each program, function, or activity. See also § 200.332. Title 45 – Public Welfare Subtitle A – Department of Health and Human Services Subchapter A – General Administration Part 98 – Child Care and Development Fund Subpart G – Financial Management § 98.60 – Availability of funds (d) The following obligation and liquidation provisions apply to States and Territories: (1) Discretionary Fund allotments shall be obligated in the fiscal year in which funds are awarded or in the succeeding fiscal year. Unliquidated obligations as of the end of the succeeding fiscal year shall be liquidated within one year. (2)(i) Mandatory Funds for States requesting Matching Funds per § 98.55 shall be obligated in the fiscal year in which the funds are granted and are available until expended. (4) Both the Federal and non-Federal share of the Matching Fund shall be obligated in the fiscal year in which the funds are granted and liquidated no later than the end of the succeeding fiscal year. (5) Determination of whether funds have been obligated and liquidated will be based on State or local law or, if there is no applicable State or local law, the regulation at 2 CFR 200.1, Expenditures and Obligations. § 98.65 Audits and financial reporting (a) Each Lead Agency shall have an audit conducted after the close of each program period in accordance with 2 CFR part 200, subpart F, and the Single Audit Act Amendments of 1996. (b) Lead Agencies are responsible for ensuring that subgrantees are audited in accordance with appropriate audit requirements. (c) Not later than 30 days after the completion of the audit, Lead Agencies shall submit a copy of their audit report to the legislature of the State or, if applicable, to the Tribal Council(s). Lead Agencies shall also submit a copy of their audit report to the HHS Inspector General for Audit Services, as well as to their cognizant agency, if applicable. (d) Any amounts determined through an audit not to have been expended in accordance with these statutory or regulatory provisions, or with the Plan, and that are subsequently disallowed by the Department shall be repaid to the Federal government, or the Secretary will offset such amounts against any other CCDF funds to which the Lead Agency is or may be entitled. (e) Lead Agencies shall provide access to appropriate books, documents, papers and records to allow the Secretary to verify that CCDF funds have been expended in accordance with the statutory and regulatory requirements of the program, and with the Plan. (f) The audit required in paragraph (a) of this section shall be conducted by an agency that is independent of the State, Territory or Tribe as defined by generally accepted government auditing standards issued by the Comptroller General, or a public accountant who meets such independent standards. (g) Lead Agencies shall submit financial reports, in a manner specified by ACF, quarterly for each fiscal year until funds are expended. (h) At a minimum, a State or territorial Lead Agency's quarterly report shall include the following information on expenditures under CCDF grant funds, including Discretionary (which includes realloted funding and any funds transferred from the TANF block grant), Mandatory, and Matching Funds (which includes redistributed funding); and State Matching and Maintenance-of- Effort (MOE) Funds: (1) Child care administration; (2) Quality activities, including any sub-categories of quality activities as required by ACF; (3) Direct services for both grant or contracted slots and certificates; (4) Non-direct services, including: (i) Establishment and maintenance of computerized child care information systems; (ii) Certificate program cost/eligibility determination; (iii) All other non-direct services; and (5) Such other information as specified by the Secretary. § 98.67 – Fiscal requirements (c) Fiscal control and accounting procedures shall be sufficient to permit: (1) Preparation of reports required by the Secretary under this subpart and under subpart H; and (2) The tracing of funds to a level of expenditure adequate to establish that such funds have not been used in violation of the provisions of this part. Condition: Audit procedures included a review of the entire population of ACF-696 financial reports submitted for the CCDF Cluster. Our testing identified that certain reported amounts did not agree or reconcile to the underlying general ledger, resulting in a total variance of $491,119,535. Additionally, audit procedures identified that internal controls over reporting were not operating effectively to ensure the accurate submission of reports. Specifically, certain reports contained inaccuracies at the time of submission, and controls were not performed with sufficient precision to verify that reported information was complete and accurate in accordance with federal reporting requirements. Questioned costs: None Context: See “Condition.” Cause: The controls over the preparation and review of ACF-696 reports were not performed with sufficient precision to identify and resolve discrepancies between reported amounts and the underlying general ledger. Specifically, controls were not designed or operating at a level precise enough to ensure that reported data was accurate, reconciled, and submitted in a timely manner in accordance with federal requirements. As a result, variances and reporting errors were not detected or corrected prior to submission. Effect: Without a documented reconciliation between the ACF-696 reports and the general ledger, the Department cannot demonstrate that reported expenditures were accurate, complete, and supported by accounting records. This increases the risk that expenditures, obligations, liquidations, unobligated balances, or expenditure categories reported to ACF may be misstated. Inaccurate ACF-696 reporting may affect ACF’s ability to monitor compliance with CCDF spending, obligation, liquidation, and availability requirements. Repeat finding: Yes – 2024-015 Recommendation: Management should establish a formal reconciliation process to ensure that ACF-696 expense reports align with the general ledger. This process should include assigning responsibility to a designated finance team member for performing and documenting reconciliations, implementing a monthly reconciliation schedule, and promptly investigating and resolving any variances with documented approvals. Additionally, financial reporting policies should be updated to incorporate reconciliation requirements, and staff should receive training on compliance and reconciliation procedures to strengthen internal controls and reduce the risk of reporting inaccuracies. Views of responsible officials: Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report. Response to views of responsible officials: We acknowledge management's explanation that variances between the ACF-696 reports and the general ledger resulted from timing differences associated with subsequent cost allocations, accruals, and other adjustments. However, the issue identified during the audit was not the existence of timing differences, but that the reconciliation process did not adequately identify, explain, and support significant variances. Audit testing identified unreconciled variances totaling $491,119,535 between the ACF-696 reports and the general ledger. Although management indicated that adjustments were reported in subsequent quarters, documentation supporting a complete and accurate reconciliation was not available at the time of report preparation and submission. As a result, controls did not operate with sufficient precision to ensure reported amounts were accurate, complete, and supported by the Department's accounting records. Accordingly, we continue to conclude that the finding is valid as presented. We appreciate management's planned corrective actions to formalize the reconciliation process and strengthen oversight of ACF-696 reporting.

Reporting Federal Agency: U.S. Department of Health and Human ServicesFederal Program Title: Child Care and Development Block Grant/Child Care Mandatory and Matching Funds of the Child Care and Development Fund State Administering Department: California Department of Social Services (CDSS) ALN: 93.575, 93.596 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2534CACCDD; October 1, 2024 – September 30, 2027 2534CACCDF; October 1, 2024 – September 30, 2027 2534CACCDM; October 1, 2024 – September 30, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Title 2 – Federal Financial Assistance 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. § 200.303 - Internal controls (2 CFR 200.303): The recipient and subrecipient 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). § 200.302 – Financial management (b) The recipient's and subrecipient's financial management system 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 in §§ 200.328 and 200.329. (3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Title 2 – Federal Financial Assistance Subtitle A – Office of Management and Budget Guidance for Grants and Agreements Chapter I – Office of Management and Budget Government-Wide Guidance for Federal Financial Assistance Part 170 – Reporting Subaward and Executive Compensation Information Subpart A – General § 170.105 Applicability (a) Applicability in general. This part applies to a Federal agency’s Federal financial assistance as defined in § 170.300. This part applies to all recipients and subrecipients of Federal awards who meet the reporting requirements of paragraph (c) of this section, unless exempt under Federal statute or by paragraph (d) of this section. Appendix A to Part 170—Award Term I. Reporting Subawards and Executive Compensation (a) Reporting of first-tier subawards — (1) Applicability. Unless the recipient is exempt as provided in paragraph (d) of this award term, the recipient must report each subaward that equals or exceeds $30,000 in Federal funds for a subaward to an entity or Federal agency. The recipient must also report a subaward if a modification increases the Federal funding to an amount that equals or exceeds $30,000. All reported subawards should reflect the total amount of the subaward. (2) Reporting Requirements. (i) The recipient must report each subaward described in paragraph (a)(1) of this award term to the Federal Funding Accountability and Transparency Act (FFATA) subaward reporting functionality (formerly FSRS and now reported through SAM.gov) at http://www.fsrs.gov. (ii) For subaward information, report no later than the end of the month following the month in which the subaward was issued. (c) Reporting of total compensation of subrecipient executives — (1) Applicability. Unless a first-tier subrecipient is exempt as provided in paragraph (d) of this appendix, the recipient must report the executive total compensation of each of the subrecipient's five most highly compensated executives for the subrecipient's preceding completed fiscal year, if: (i) The total Federal funding authorized to date under the subaward equals or exceeds $30,000; (ii) In the subrecipient's preceding fiscal year, the subrecipient received: (A) 80 percent or more of its annual gross revenues from Federal procurement contracts (and subcontracts) and Federal awards (and subawards) subject to the Transparency Act; and, (B) $25,000,000 or more in annual gross revenues from Federal procurement contracts (and subcontracts), and Federal awards (and subawards) subject to the Transparency Act; and (iii) The public does not have access to information about the compensation of the executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986 after receiving this subaward. (To determine if the public has access to the compensation information, see the U.S. Security and Exchange Commission total compensation filings at http://www.sec.gov/answers/execomp.htm.) (2) Reporting Requirements. Subrecipients must report to the recipient their executive total compensation described in paragraph (c)(1) of this appendix. The recipient is required to submit this information to the FFATA subaward reporting functionality (formerly FSRS and now reported through SAM.gov) at http://www.fsrs.gov no later than the end of the month following the month in which the subaward was made. As of March 2025, this functionality has been migrated to SAM.gov, which now serves as the system of record for FFATA subaward reporting. Condition: Audit procedures included a review of 60 FFATA subaward submissions for the CCDF Cluster reported in SAM.gov and a comparison of those submissions to underlying agreements and funding allocations applicable to FY 2024–25. Our testing identified that CDSS did not consistently perform or retain a documented evaluation of whether agreements constituted subawards or procurement contracts in accordance with 2 CFR § 200.331 prior to FFATA reporting. FFATA submissions did not align with the timing and structure of funding communicated through Child Care Bulletins, including allocation amendments and contract modifications, and all submissions tested contained errors in key data elements, including subrecipient identification and linkage to the prime award. In addition, CDSS included agreements in FFATA reporting without documented support that the substance of the relationship met the definition of a subaward, while agreements with subaward characteristics were not consistently identified and reported, resulting in reported amounts that did not consistently reflect underlying funding actions. Accordingly, controls over FFATA reporting were not performed with sufficient precision to ensure that agreements were appropriately classified and that reported information was complete and accurate in accordance with federal reporting requirements. Questioned costs: None Context: See “Condition.” Cause: The condition occurred because CDSS has not established an effective, centralized process to identify, evaluate, track, and report first-tier subawards subject to FFATA across its federal programs. CDSS did not maintain a complete reporting workflow that links funding actions, allocation amendments, agreement modifications, subrecipient classifications, and SAM.gov reporting deadlines. As a result, FFATA reporting relied on manual program-level processes that did not consistently ensure reportable subawards were identified, supported, reviewed, and submitted by the required deadline. Effect: Failure to timely and accurately report FFATA subaward information results in noncompliance with federal reporting requirements and reduces the transparency and reliability of publicly available federal spending data. Late, incomplete, or inaccurate reporting limits the ability of federal agencies, oversight bodies, and the public to determine how federal funds were passed through to subrecipients. Because similar FFATA deficiencies were identified across multiple CDSS-administered programs, there is an increased risk that reporting errors may continue or affect other federal programs unless CDSS implements a department-wide corrective action. Repeat finding: Yes – 2024-014 Recommendation: We recommend that CDSS revise its department-wide FFATA reporting procedures to address errors resulting from reliance on manual tracking, decentralized spreadsheets, and program-level processes that do not consistently capture funding actions, allocation amendments, agreement modifications, reporting deadlines, and SAM.gov submission status. Revised procedures should require program-specific review of each federal program’s funding structure and supporting documentation to determine whether agreements, allocations, amendments, or other funding actions are reportable subawards or procurement contracts, and whether new or updated FFATA reporting is required. CDSS should also require documented review before submission to verify that reported subrecipient information, award amounts, Assistance Listing numbers, prime award linkages, and reporting dates agree to underlying award documents, allocation letters, amendments, and agreements. These controls should help ensure FFATA submissions are accurate, timely, supported, and aligned with the unique funding structure of each CDSS-administered federal program. CDSS should consider utilizing a grant management solution to manage the full grant lifecycle more efficiently and ensure compliance with federal reporting requirements. The solution should support centralized tracking of awards, subawards, amendments, reporting deadlines, supporting documentation, review responsibilities, automated reminders, and submission status. This would reduce reliance on manual tracking and decentralized spreadsheets, improve accountability over responsible personnel, and strengthen CDSS’s ability to complete FFATA reporting accurately and timely. Views of responsible officials: Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.

Special Tests and Provisions Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Child Care and Development Block Grant/Child Care Mandatory and Matching Funds of the Child Care and Development Fund State Administering Department: California Department of Social Services (CDSS) ALN: 93.575, 93.596 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2434CACCDD; October 1, 2023 - September 30, 2026 2434CACCDF; October 1, 2023 - September 30, 2026 2434CACCDM; October 1, 2023 - September 30, 2025 2534CACCDD; October 1, 2024 - September 30, 2027 2534CACCDF; October 1, 2024 - September 30, 2027 2534CACCDM; October 1, 2024 - September 30, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Title 2 – Federal Financial Assistance 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. § 200.303 - Internal controls (2 CFR 200.303): The recipient and subrecipient 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). § 200.329 Monitoring and reporting program performance (a) Monitoring by the recipient and subrecipient The recipient and subrecipient are responsible for the oversight of the Federal award. The recipient and subrecipient must monitor their activities under Federal awards to ensure they are compliant with all requirements and meeting performance expectations. Monitoring by the recipient and subrecipient must cover each program, function, or activity. See also § 200.332. Title 45 – Public Welfare Subtitle A – Department of Health and Human Services Subchapter A – General Administration Part 98 – Child Care and Development Fund Subpart B – General Application Procedures § 98.11 – Administration under contracts and agreements Lead Agencies have broad authority to administer and operate the CCDF program through other governmental, nongovernmental, or public or private local agencies; however, the Lead Agency must retain overall responsibility for the administration of the program and ensure that administrative and implementation responsibilities undertaken by agencies other than the Lead Agency are governed by written agreements specifying the mutual roles and responsibilities of the Lead Agency and other agencies in meeting CCDF requirements. The approved FFY 2025–2027 CCDF State Plan identifies CDSS as the Lead Agency and states that activities performed by agencies other than CDSS are governed through written agreements, including contracts and grant award notifications, that include required elements such as tasks to be performed, schedules for completing tasks, budgets, and performance measures. The State Plan further describes CDSS’s monitoring process for contractors, including standard review instruments, corrective action follow-up, fiscal and program reporting, and contractor review requirements. Condition: Audit procedures included testing a sample of 60 CCDF contractors to determine whether CDSS performed on-site monitoring visits in accordance with the contractor review cycle specified in the approved State Plan and related monitoring procedures. Of the 60 contractors tested, 2 contractors did not receive an on-site monitoring visit within the required review period. Specifically, the contractors had not received an on-site visit within four years, although the State Plan and related monitoring procedures require contractor reviews to be performed within a three-year cycle. As a result, CDSS did not consistently perform required monitoring procedures within the timeframe established for oversight of CCDF contractors. Questioned costs: None Context: See “Condition.” Cause: CDSS did not maintain internal controls that operated with sufficient precision to ensure all CCDF contractors were scheduled for and received required on-site monitoring visits within the established review cycle. Specifically, monitoring controls were not designed or performed at a level sufficient to identify overdue contractor reviews, track the status of required visits, and ensure timely completion of on-site monitoring for all applicable contractors. Effect: Failure to perform timely on-site monitoring visits reduces CDSS’s ability to determine whether contractors are operating in accordance with written agreements, State Plan requirements, and applicable CCDF program requirements. Untimely monitoring increases the risk that contractor noncompliance, performance deficiencies, or unsupported program activities are not identified and corrected promptly, which may affect CDSS’s ability to retain effective oversight and overall responsibility for the CCDF program. Repeat finding: No Recommendation: We recommend that CDSS strengthen internal controls over CCDF contractor monitoring by implementing procedures to ensure all contractors are scheduled for and receive required on-site monitoring visits within the review cycle established in the approved State Plan and related monitoring procedures. These procedures should include maintaining a complete monitoring schedule, tracking the date of each contractor’s last review, identifying upcoming and overdue reviews, and requiring documented supervisory review to ensure monitoring visits are completed timely. CDSS should also establish a process to periodically reconcile the monitoring schedule to the population of active CCDF contractors and promptly follow up on overdue reviews. These controls should help ensure CDSS performs contractor oversight consistently, documents compliance with written agreement monitoring requirements, and retains effective responsibility for CCDF administration. Views of responsible officials: Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report. Response to views of responsible officials: We acknowledge CDSS's response regarding resource constraints, risk-based prioritization, and its interpretation of the "as resources permit" language in Title 5, California Code of Regulations, Section 18023(b). However, the approved State Plan and related monitoring procedures in effect during the audit period established a three-year review cycle for contractor monitoring. Audit testing identified that 2 of 60 CCDF contractors did not receive an on-site monitoring visit for more than four years. While CDSS employed a risk-based approach to prioritize monitoring activities, the required reviews were not completed within the established review cycle for the contractors identified in our testing. Accordingly, the finding is based on CDSS's failure to consistently perform monitoring reviews within the established review cycle and the lack of controls to ensure overdue reviews were identified, tracked, and completed timely. Therefore, we continue to conclude that the finding is valid as presented.

Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Social Services Block Grant State Administering Department: California Department of Social Services (CDSS) ALN: 93.667 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2501CASOSR; October 1, 2024 - September 30, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Title 2 – Federal Financial Assistance 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. § 200.303 - Internal controls (2 CFR 200.303): The recipient and subrecipient 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). § 200.302 – Financial management (b) The recipient's and subrecipient's financial management system 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 in §§ 200.328 and 200.329. (3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Title 2 – Federal Financial Assistance Subtitle A – Office of Management and Budget Guidance for Grants and Agreements Chapter I – Office of Management and Budget Government-Wide Guidance for Federal Financial Assistance Part 170 – Reporting Subaward and Executive Compensation Information Subpart A – General § 170.105 Applicability (a) Applicability in general. This part applies to a Federal agency’s Federal financial assistance as defined in § 170.300. This part applies to all recipients and subrecipients of Federal awards who meet the reporting requirements of paragraph (c) of this section, unless exempt under Federal statute or by paragraph (d) of this section. Appendix A to Part 170—Award Term I. Reporting Subawards and Executive Compensation (a) Reporting of first-tier subawards — (1) Applicability. Unless the recipient is exempt as provided in paragraph (d) of this award term, the recipient must report each subaward that equals or exceeds $30,000 in Federal funds for a subaward to an entity or Federal agency. The recipient must also report a subaward if a modification increases the Federal funding to an amount that equals or exceeds $30,000. All reported subawards should reflect the total amount of the subaward. (2) Reporting Requirements. (i) The recipient must report each subaward described in paragraph (a)(1) of this award term to the Federal Funding Accountability and Transparency Act (FFATA) subaward reporting functionality (formerly FSRS and now reported through SAM.gov) at http://www.fsrs.gov. (ii) For subaward information, report no later than the end of the month following the month in which the subaward was issued. (c) Reporting of total compensation of subrecipient executives — (1) Applicability. Unless a first-tier subrecipient is exempt as provided in paragraph (d) of this appendix, the recipient must report the executive total compensation of each of the subrecipient's five most highly compensated executives for the subrecipient's preceding completed fiscal year, if: (i) The total Federal funding authorized to date under the subaward equals or exceeds $30,000; (ii) In the subrecipient's preceding fiscal year, the subrecipient received: (A) 80 percent or more of its annual gross revenues from Federal procurement contracts (and subcontracts) and Federal awards (and subawards) subject to the Transparency Act; and, (B) $25,000,000 or more in annual gross revenues from Federal procurement contracts (and subcontracts), and Federal awards (and subawards) subject to the Transparency Act; and (iii) The public does not have access to information about the compensation of the executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986 after receiving this subaward. (To determine if the public has access to the compensation information, see the U.S. Security and Exchange Commission total compensation filings at http://www.sec.gov/answers/execomp.htm.) (2) Reporting Requirements. Subrecipients must report to the recipient their executive total compensation described in paragraph (c)(1) of this appendix. The recipient is required to submit this information to the FFATA subaward reporting functionality (formerly FSRS and now reported through SAM.gov) at http://www.fsrs.gov no later than the end of the month following the month in which the subaward was made. As of March 2025, this functionality has been migrated to SAM.gov, which now serves as the system of record for FFATA subaward reporting. Condition: Audit procedures included a review of FFATA subaward submissions for the Social Services Block Grant reported in SAM.gov and a comparison of those submissions to funding actions applicable to FY 2024–25. Our testing identified that no subawards were reported within the required timeframe. Questioned costs: None Context: See “Condition.” Cause: The condition occurred because CDSS has not established an effective, centralized process to identify, evaluate, track, and report first-tier subawards subject to FFATA across its federal programs. CDSS did not maintain a complete reporting workflow that links funding actions, allocation amendments, agreement modifications, subrecipient classifications, and SAM.gov reporting deadlines. As a result, FFATA reporting relied on manual program-level processes that did not consistently ensure reportable subawards were identified, supported, reviewed, and submitted by the required deadline. Effect: Failure to timely and accurately report FFATA subaward information results in noncompliance with federal reporting requirements and reduces the transparency and reliability of publicly available federal spending data. Late, incomplete, or inaccurate reporting limits the ability of federal agencies, oversight bodies, and the public to determine how federal funds were passed through to subrecipients. Because similar FFATA deficiencies were identified across multiple CDSS-administered programs, there is an increased risk that reporting errors may continue or affect other federal programs unless CDSS implements a department-wide corrective action. Repeat finding: No Recommendation: We recommend that CDSS revise its department-wide FFATA reporting procedures to address errors resulting from reliance on manual tracking, decentralized spreadsheets, and program-level processes that do not consistently capture funding actions, allocation amendments, agreement modifications, reporting deadlines, and SAM.gov submission status. Revised procedures should require program-specific review of each federal program’s funding structure and supporting documentation to determine whether agreements, allocations, amendments, or other funding actions are reportable subawards or procurement contracts, and whether new or updated FFATA reporting is required. CDSS should also require documented review before submission to verify that reported subrecipient information, award amounts, Assistance Listing numbers, prime award linkages, and reporting dates agree to underlying award documents, allocation letters, amendments, and agreements. These controls should help ensure FFATA submissions are accurate, timely, supported, and aligned with the unique funding structure of each CDSS-administered federal program. CDSS should consider utilizing a grant management solution to manage the full grant lifecycle more efficiently and ensure compliance with federal reporting requirements. The solution should support centralized tracking of awards, subawards, amendments, reporting deadlines, supporting documentation, review responsibilities, automated reminders, and submission status. This would reduce reliance on manual tracking and decentralized spreadsheets, improve accountability over responsible personnel, and strengthen CDSS’s ability to complete FFATA reporting accurately and timely. Views of responsible officials: Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.

Reporting Federal Agency: Federal Emergency Management Agency Federal Program Title: Disaster Grants - Public Assistance State Administering Department: Governor’s Office of Emergency Services ALN: 97.036 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 4407DRCAP00000001; November 12, 2018 – September 30, 2022 4431DRCAP00000001; May 1, 2019 – September 30, 2022 4482DRCAP00000001; January 20, 2020 – September 30, 2025 4558DRCAP00000001; August 24, 2021 – September 30, 2025 4683DRCAP00000001; December 27, 2022 – September 30, 2025 4699DRCAP00000001; April 3, 2023 – September 30, 2025 4750DRCAP00000001; August 19, 2023 – September 30, 2025 4769DRCAP00000001; January 31, 2024 – September 30, 2025 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Title 2 – Federal Financial Assistance 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. § 200.303 - Internal controls (2 CFR 200.303): The recipient and subrecipient 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). § 200.302 – Financial management (b) The recipient's and subrecipient's financial management system 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 in §§ 200.328 and 200.329. (3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Title 2 – Federal Financial Assistance Subtitle A – Office of Management and Budget Guidance for Grants and Agreements Chapter I – Office of Management and Budget Government-Wide Guidance for Federal Financial Assistance Part 170 – Reporting Subaward and Executive Compensation Information Subpart A – General § 170.105 Applicability (a) Applicability in general. This part applies to a Federal agency’s Federal financial assistance as defined in § 170.300. This part applies to all recipients and subrecipients of Federal awards who meet the reporting requirements of paragraph (c) of this section, unless exempt under Federal statute or by paragraph (d) of this section. Appendix A to Part 170—Award Term I. Reporting Subawards and Executive Compensation (a) Reporting of first-tier subawards — (1) Applicability. Unless the recipient is exempt as provided in paragraph (d) of this award term, the recipient must report each subaward that equals or exceeds $30,000 in Federal funds for a subaward to an entity or Federal agency. The recipient must also report a subaward if a modification increases the Federal funding to an amount that equals or exceeds $30,000. All reported subawards should reflect the total amount of the subaward. (2) Reporting Requirements. (i) The recipient must report each subaward described in paragraph (a)(1) of this award term to the Federal Funding Accountability and Transparency Act (FFATA) subaward reporting functionality (formerly FSRS and now reported through SAM.gov) at http://www.fsrs.gov. (ii) For subaward information, report no later than the end of the month following the month in which the subaward was issued. (c) Reporting of total compensation of subrecipient executives — (1) Applicability. Unless a first-tier subrecipient is exempt as provided in paragraph (d) of this appendix, the recipient must report the executive total compensation of each of the subrecipient's five most highly compensated executives for the subrecipient's preceding completed fiscal year, if: (i) The total Federal funding authorized to date under the subaward equals or exceeds $30,000; (ii) In the subrecipient's preceding fiscal year, the subrecipient received: (A) 80 percent or more of its annual gross revenues from Federal procurement contracts (and subcontracts) and Federal awards (and subawards) subject to the Transparency Act; and, (B) $25,000,000 or more in annual gross revenues from Federal procurement contracts (and subcontracts), and Federal awards (and subawards) subject to the Transparency Act; and (iii) The public does not have access to information about the compensation of the executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986 after receiving this subaward. (To determine if the public has access to the compensation information, see the U.S. Security and Exchange Commission total compensation filings at http://www.sec.gov/answers/execomp.htm.) (2) Reporting Requirements. Subrecipients must report to the recipient their executive total compensation described in paragraph (c)(1) of this appendix. The recipient is required to submit this information to the FFATA subaward reporting functionality (formerly FSRS and now reported through SAM.gov) at http://www.fsrs.gov no later than the end of the month following the month in which the subaward was made. As of March 2025, this functionality has been migrated to SAM.gov, which now serves as the system of record for FFATA subaward reporting. Condition: Audit procedures included testing 60 FFATA reporting submissions related to subrecipients to evaluate compliance with federal reporting requirements and the design and implementation of internal controls over the FFATA reporting process. Our testing identified that FFATA reports for 36 of the 60 subrecipients were not submitted timely in accordance with federal requirements. While the reports were ultimately complete and accurate, controls over the reporting process were not performed with sufficient precision to ensure timely submission. Questioned costs: None Context: See “Condition.” Cause: During the fiscal year, the Department revised its procedures for performing FFATA reporting; however, the updated procedures and related controls were not consistently implemented across all subrecipient reporting activities. As a result, certain reports were processed outside of the revised control framework, contributing to delays in timely submission. Effect: The lack of established procedures and internal controls for FFATA reporting resulted in noncompliance, with 36 out of 60 subrecipients not reported timely as required. Repeat finding: Yes – 2024-020 Recommendation: The Department should strengthen controls over FFATA reporting by ensuring that revised procedures are fully implemented and consistently applied to all subrecipient reporting activities. This should include establishing clear protocols to identify all reports subject to FFATA requirements, monitoring compliance with reporting deadlines, and performing periodic reviews to verify that controls are operating with sufficient precision to ensure timely submission. Additionally, the Department should provide training and communication to relevant personnel on updated procedures and implement supervisory review controls to detect and remediate untimely filings. Views of responsible officials: Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.

Finding 2025-005 Late Reporting and Noncompliance with Reporting Requirements Federal Agency: U.S. Department of Commerce Federal Program: Economic Development Cluster ALN: 11.307 Award Numbers: ED23SEA0G0012 Award Year: 2025 Type of Finding: Significant deficiency and noncompliance. Criteria: All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. The nonfederal entity must submit performance reports at the interval required by the federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity as outlined in 2 CFR 200.329. Condition and context: The City did not adhere to the program requirement of submitting the financial and performance report by the deadlines set forth in the grant award. Cause: The City was not able to provide the necessary reporting documents in the required time frames set forth in the grant award. Effect: The City is not in compliance with reporting requirements. Questioned Costs: None noted. Repeat finding: This is not a repeat finding. Recommendation: The City needs to improve processes for preparing and submitting financial information timely. Management’s Response: Management concurs with the finding. See Corrective Action Plan.

Criteria: Under the terms and conditions of the CARES Act Coronavirus Relief Fund awards and federal reporting guidelines (2 CFR 200.328 / 2 CFR 200.329), non-federal entities are required to submit quarterly financial and performance reports within ten days following the end of each reporting quarter. Additionally, the Cash on Hand quarterly reports must be submitted within thirty days after each quarter-end. Condition: During our audit of the County’s CARES Act funds for the fiscal year, we noted the required quarterly compliance and reporting submissions were not filed. Additionally, two Cash on Hand quarterly reports were not submitted within 30 days of the end of the quarter. Context: See above condition. Cause: Management oversight. Effect: The County was not in compliance with reporting requirements. Recommendation: We recommend that the County establish procedures to ensure proper reporting in a timely manner. Views of Responsible Official and Planned Corrective Action: We concur. We will establish procedures to ensure timely submission of all required reports.

Federal Program: ALN 93.600-Head Start Category: Compliance/Internal control significant deficiency Compliance Requirement: Reporting Criteria: In accordance with 2 CFR §§ 200.328(c) and 200.329(a), recipients are required to submit reports required by the Federal award within the prescribed timeframes and maintain adequate monitoring procedures to ensure compliance with all applicable Federal requirements. In accordance with 45 CFR § 75.343, non-Federal entities are required to submit reports at least annually on the status of real property in which the Federal Government retains an interest. Accordingly, Head Start grantees, including those with no covered real property to report, are required to submit the SF-429 Real Property Status Report and SF-429 Attachment A annually by the due date. Condition: The SF-429 Real Property Status Report was not submitted within the required due date. Cause: Turnover of key personnel responsible for preparing and/or reviewing the report. Questioned cost: No real property was included under the Head Start award 02CH012049; therefore, no questioned costs were identified. Effect or potential effect: The reports being submitted late and in non-compliance with reporting requirements. Recommendation: We recommend that BGCPR enhance onboarding and transition procedures for key personnel, including formal training, documented reporting processes, and automated deadline tracking, to ensure timely submission of required reports Views of officials responsible: Due to the BCPR’s transition period, the reports were submitted late. After the new Finance Director started in June 25, 2025. On January 30, 2026, we received system access, all reports were submitted on February 4, 2026. This matter was presented in the most recent focus Area II monitoring by the Agency, with no complaints noted. We will request additional system access for reporting purposes in case the person responsible is unavailable. Anticipated completion date: September 30, 2026

Coronavirus State and Local Fiscal Recovery Funds Assistance Listing No. 21.027 U.S. Department of Treasury Missouri Primary Care Association Criteria or specific requirement – Reporting (2 CFR 200.329) Condition – The Organization’s internal controls over compliance were not able to ensure progress reporting required to be submitted to the pass-through entity was completed timely. Cause – The Organization does not have internal controls over compliance in place to ensure all grant reporting requirements are satisfied timely. Effect or potential effect – The Organization did not submit the required quarterly and annual performance reports in a timely manner. Questioned costs – None Context – The Organization is required to submit quarterly status reports and an annual performance report to the pass-through entity in a timely manner. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – The Organization should consider implementing a grant reporting calendar for all grants with reporting requirements.

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

Criteria: Per CFR 200.329(c)(1) The recipient or subrecipient must submit performance reports as required by the Federal award. Intervals must be no less frequent than annually nor more frequent than quarterly except if specific conditions are applied. 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 semiannually must be due no later than 30 calendar days after the reporting period. Alternatively, the Federal agency or pass-through entity may require annual reports before the anniversary dates of multiple-year Federal awards.” Per the executed grant agreements, the grants require a quarterly report to be submitted within 30 days of the conclusion of each quarter and an annual report within 60 days at the conclusion of each calendar year. Condition: During our testing of the Organization’s compliance with the reporting requirements, we noted no quarterly or annual reports were submitted to Hamilton County. Only Final Reports were submitted once Hamilton County reached out. Cause: Controls were not in place to ensure required reports were submitted due to a lack of understanding the reporting requirements within the grant agreement. Effect: The untimely submission of the reports prevents the pass-through entity from effectively monitoring the progress of the funded project and making informed decisions. Additionally, consistent failure to meet reporting requirements could negatively impact the Organization’s ability for future federal awards. Questioned Costs: None Context: This is not a systemic problem. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Organization establish procedures for the preparation, review and timely submission of all reporting requirements. This can include implementing a system to track reporting deadlines and timely submission as well as designating individuals with the responsibilities of preparation, review, and submission of reports. Additionally, we recommend the Organization designate someone to review the grant documents for all compliance requirements to ensure nothing is missed. Management Response: The Advancement and Finance teams will create an updated Grants Management process. The Grants Management process will be documented and clearly define roles for Advancement and Finance staff. Additionally, a flowchart will be created to define what type of grant has been awarded (conditional vs. unconditional). The process will ensure all awarded grants are reviewed for all performance, outcomes, invoicing, and reporting requirements. The process will define who sets up calendar reminders for grant milestones (i.e., reporting) and how Program staff will be selected to receive these calendar reminders.

Criteria: Per CFR 200.329(c)(1) The recipient or subrecipient must submit performance reports as required by the Federal award. Intervals must be no less frequent than annually nor more frequent than quarterly except if specific conditions are applied. 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 semiannually must be due no later than 30 calendar days after the reporting period. Alternatively, the Federal agency or pass-through entity may require annual reports before the anniversary dates of multiple-year Federal awards.” Per the executed grant agreements, the grants require a quarterly report to be submitted within 30 days of the conclusion of each quarter and an annual report within 60 days at the conclusion of each calendar year. Condition: During our testing of the Organization’s compliance with the reporting requirements, we noted no quarterly or annual reports were submitted to Hamilton County. Only Final Reports were submitted once Hamilton County reached out. Cause: Controls were not in place to ensure required reports were submitted due to a lack of understanding the reporting requirements within the grant agreement. Effect: The untimely submission of the reports prevents the pass-through entity from effectively monitoring the progress of the funded project and making informed decisions. Additionally, consistent failure to meet reporting requirements could negatively impact the Organization’s ability for future federal awards. Questioned Costs: None Context: This is not a systemic problem. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Organization establish procedures for the preparation, review and timely submission of all reporting requirements. This can include implementing a system to track reporting deadlines and timely submission as well as designating individuals with the responsibilities of preparation, review, and submission of reports. Additionally, we recommend the Organization designate someone to review the grant documents for all compliance requirements to ensure nothing is missed. Management Response: The Advancement and Finance teams will create an updated Grants Management process. The Grants Management process will be documented and clearly define roles for Advancement and Finance staff. Additionally, a flowchart will be created to define what type of grant has been awarded (conditional vs. unconditional). The process will ensure all awarded grants are reviewed for all performance, outcomes, invoicing, and reporting requirements. The process will define who sets up calendar reminders for grant milestones (i.e., reporting) and how Program staff will be selected to receive these calendar reminders.

VA Supportive Services for Veteran Families Program FFAL #64.033, 20-SD-136-23, 10/1/2022 – 3/1/2024 FFAL #64.033, 20-SD-136-24, 10/1/2023 – 12/31/2024 Reporting Material Weakness in Internal Control over Compliance 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: No review and approval processes are in place over quarterly progress reports. Cause: Management did not have review procedures and processes in place over the quarterly progress reports. Effect: Without review procedures and processes in place over reporting, demonstrating the program complies with laws, regulations, and other compliance requirements is difficult. Additionally, not having an oversight process over reporting could result in a reasonable possibility reports that are inaccurate or incomplete could be submitted. Questioned Costs: None reported Context/Sampling: Included under the two award letters of the federal program, one annual financial report and one quarterly progress report was reviewed in the Organization’s fiscal year. In addition, two monthly HMIS reports were reviewed in the Organization’s fiscal year. There was a total of 18 reports filed. Repeat Finding from Prior Year: No Recommendation: We recommend management implement procedures and control processes to incorporate an independent review and approval over reporting and retain documentation to support the review was performed. Views of Responsible Officials: Management is in agreement.

VA Supportive Services for Veteran Families Program FFAL #64.033, 20-SD-136-23, 10/1/2022 – 3/1/2024 FFAL #64.033, 20-SD-136-24, 10/1/2023 – 12/31/2024 Reporting Material Weakness in Internal Control over Compliance 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: No review and approval processes are in place over quarterly progress reports. Cause: Management did not have review procedures and processes in place over the quarterly progress reports. Effect: Without review procedures and processes in place over reporting, demonstrating the program complies with laws, regulations, and other compliance requirements is difficult. Additionally, not having an oversight process over reporting could result in a reasonable possibility reports that are inaccurate or incomplete could be submitted. Questioned Costs: None reported Context/Sampling: Included under the two award letters of the federal program, one annual financial report and one quarterly progress report was reviewed in the Organization’s fiscal year. In addition, two monthly HMIS reports were reviewed in the Organization’s fiscal year. There was a total of 18 reports filed. Repeat Finding from Prior Year: No Recommendation: We recommend management implement procedures and control processes to incorporate an independent review and approval over reporting and retain documentation to support the review was performed. Views of Responsible Officials: Management is in agreement.

FINDING 2024-004 Subject: Water and Waste Disposal Systems for Rural Communities - Reporting Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listings Number: 10.760 Federal Award Number and Year (or Other Identifying Number): FY2024 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-003. Condition and Context As part of sound management of the federal award, the Town was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The Town had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The Town was required to submit the following reporting to the Department of Agriculture annually: • Statement of Budget, Income, and Equity (Form RD 442-2) • Balance Sheet (Form RD 442-3) INDIANA STATE BOARD OF ACCOUNTS 21 TOWN OF PAOLI SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The Form RD 442-2 covers financial operations relating to the Town's wastewater utility and the Form RD 442-3 presents the financial status of the wastewater utility. In both instances, a borrower may submit the financial data on other forms, provided the forms are in a similar format and signed and dated by the organization's official to certify the correctness of the information. Alternatively, an annual audit may be submitted in lieu of the forms. The Town did not submit the Form RD 442-2 during the audit period as required. The Town submitted the Form RD 442-3 reporting 2023 data in 2024 as required. However, this report is intended to be a comparative balance sheet as described in the USDA Rural Utilities Service Borrower's Guide. The Town did not include comparative data for 2022 in the report. There was also no documentation or other evidence of an oversight, review, or approval process for the report that was filed. 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. . . ." 7 CFR 1780.47 states in part: "(a) Borrowers are required to provide RUS an annual audit or financial statements. . . . (e) Borrowers exempt from audits. All borrowers who are exempt from audits, will, within 60 days following the end of each fiscal year, furnish the RUS with annual financial statements, consisting of a verification of the organization's balance sheet and statement of income and expense by an appropriate official of the organization. Forms RD 442-2, 'Statement of Budget, Income and Equity,' and 442-3 may be used. INDIANA STATE BOARD OF ACCOUNTS 22 TOWN OF PAOLI SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (f) Management reports. These reports will furnish management with a means of evaluating prior decisions and serve as a basis for planning future operations and financial strategies. In those cases where revenues from multiple sources are pledged as security for an RUS loan, two reports will be required; one for the project being financed by RUS and one combining the entire operation of the borrower. In those cases where RUS loans are secured by general obligation bonds or assessments and the borrower combines revenues from all sources, one management report combining all such revenues is acceptable. The following management data will be submitted by the borrower to the processing office. These reports at a minimum will include a balance sheet and income and expense statement. . . . (2) Annual management reports. Prior to the beginning of each fiscal year the following will be submitted to the processing office. (If Form RD 442-2 is used as the annual management report, enter data in column three only of Schedule 1, and complete all of Schedule 2.) (i) Two copies of the management reports and proposed 'Annual Budget'. (ii) Financial information may be reported on Form RD 442-2 which includes Schedule 1, 'Statement of Budget, Income and Equity' and Schedule 2, 'Projected Cash Flow' or information in similar format. (iii) A copy of the rate schedule in effect at the time of submission. . . ." Cause The Clerk-Treasurer was only in her first year of her first term in office when these were due. As such, she was unfamiliar with the reporting requirements of the grant. Effect Without a proper system of internal controls in place that operated effectively, the Town did not file one of the two required reports, and the report that was filed was incomplete. As a result, material noncompliance occurred and remained undetected. By not reporting the comparative data, all information needed to determine the true financial status of the Town was not readily available. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Town's management establish a proper system of internal controls and develop and implement reporting policies and procedures to ensure that all required reports are filed timely, accurately, and contain all the required information. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Reporting Type of Finding - Noncompliance and material weakness in internal control over compliance Program: Coronavirus Relief Fund Assistance Listing Number: 21.019 Federal Agency: U.S. Department of Treasury Criteria - In accordance with 2 CFR 200.303 subrecipients must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the subrecipient is managing the federal award in compliance and federal statutes, regulations and the terms and conditions of the federal award. In accordance with 2 CFR 200.329 subrecipients must submit performance reports as required by the federal award. Reports submitted semiannually are due no later than 30 calendar days after the reporting period. Condition - Total expenditures reported on the semiannual reports due April 30, 2024 and October 31, 2024 did not agree to related support. The semiannual report due on October 31, 2024 was not submitted timely. Cause - The reports were prepared on a cash basis and the reports were not being monitored for timely submission. Effect - The Association submitted reports that were not on the accrual basis which caused expenditures to be reported in the incorrect period and submitted one report untimely. Questioned costs - No questioned costs. Context - The Association is required to report to the City of Topeka, Kansas semiannually. We tested both reports due during 2024. The report due April 30, 2024 covered the period October 1, 2023 through March 31, 2024 and reported cash expenditures of $19,675. Internal records of the Organization supported accrual expenditures of $29,678 during the same time period. Expenditures were under-reported by $10,003 on the report due April 30, 2024. The report due October 30, 2024 covered the period April 1, 2024 through September 30, 2024 and reported cash expenditures of $60,902. Internal records of the Organization supported accrual expenditures of $54,726 during the same time period. Expenditures were over-reported by $6,176 on the report due October 30, 2024. This same report was submitted February 25, 2025 when the due date was October 30, 2024. Identification as a repeat finding - This is a repeat finding. See 2023-002. Recommendation - We recommend that management review reporting requirements and internal procedures to ensure expenses are reported accurately, completely, and timely using an accrual basis. There should be a review of the reports prior to submission that includes a comparison to internal accrual-based records and monitoring to ensure the reports are submitted timely. Views of responsible official - Management concurs with the finding. The Organization is reviewing its reporting procedures and providing education on requirements to those involved. See the corrective action plan.

Federal Agency: U.S. Department of Health & Human Services Federal Program Name: Refugee and Entrant Assistance Voluntary Agency Programs Assistance Listing Number: 93.576 Federal Award Identification Number and Year: 2024 Pass-Through Agency: Church World Services, Inc. Pass-Through Number: CWS-2024-04-015 2024 Award Period: 10/1/2023-9/30/2024 Compliance Requirement Affected: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: Non-federal entities may be required to submit performance reports at least annually but not more frequently than quarterly, except in unusual circumstances, using a form or format authorized by OMB (2 CFR section 200.329). They also may be required to submit special reports as required by the terms and conditions of the federal award. Condition: For one programmatic report did not have a program manager's review and approval that could be verified. Context: A nonstatistical sample of 5 out 11 Programmatic reports were selected for testing for the Refugee and Entrant Assistance Voluntary Agency Programs program. The condition noted above was identified during our procedures over ODI's Reporting Federal compliance requirements. Effect: ODI did not retain documentation of the programmatic report approval, which could result in inaccuracies in reports remitted to the Federal grantor. Cause: ODI has a control designed to review and approve Federal Programmatic reports changes. However, documentation of approval could not be provided. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that ODI strengthen its current policies and procedures to ensure that documentation is retained for review and approval of all Programmatic Reports, prior to submission to the grantor. Management’s Views: Management takes responsibility for the finding and believes that in future years, they will be able to implement proper controls to mitigate this finding.

Criteria: Per CFR 200.329(c)(1) The recipient or subrecipient must submit performance reports as required by the Federal award. Intervals must be no less frequent than annually nor more frequent than quarterly except if specific conditions are applied. 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 semiannually must be due no later than 30 calendar days after the reporting period. Alternatively, the Federal agency or pass-through entity may require annual reports before the anniversary dates of multiple-year Federal awards.” Per the executed grant agreements, the grants require a quarterly report to be submitted within 30 days of the conclusion of each quarter and an annual report within 60 days at the conclusion of each calendar year. Condition: During our testing of the Organization’s compliance with the reporting requirements, we noted no quarterly or annual reports were submitted to Hamilton County. Only Final Reports were submitted once Hamilton County reached out. Cause: Controls were not in place to ensure required reports were submitted due to a lack of understanding the reporting requirements within the grant agreement. Effect: The untimely submission of the reports prevents the pass-through entity from effectively monitoring the progress of the funded project and making informed decisions. Additionally, consistent failure to meet reporting requirements could negatively impact the Organization’s ability for future federal awards. Questioned Costs: None Context: This is not a systemic problem. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Organization establish procedures for the preparation, review and timely submission of all reporting requirements. This can include implementing a system to track reporting deadlines and timely submission as well as designating individuals with the responsibilities of preparation, review, and submission of reports. Additionally, we recommend the Organization designate someone to review the grant documents for all compliance requirements to ensure nothing is missed. Management Response: The Advancement and Finance teams will create an updated Grants Management process. The Grants Management process will be documented and clearly define roles for Advancement and Finance staff. Additionally, a flowchart will be created to define what type of grant has been awarded (conditional vs. unconditional). The process will ensure all awarded grants are reviewed for all performance, outcomes, invoicing, and reporting requirements. The process will define who sets up calendar reminders for grant milestones (i.e., reporting) and how Program staff will be selected to receive these calendar reminders.

Criteria: Per CFR 200.329(c)(1) The recipient or subrecipient must submit performance reports as required by the Federal award. Intervals must be no less frequent than annually nor more frequent than quarterly except if specific conditions are applied. 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 semiannually must be due no later than 30 calendar days after the reporting period. Alternatively, the Federal agency or pass-through entity may require annual reports before the anniversary dates of multiple-year Federal awards.” Per the executed grant agreements, the grants require a quarterly report to be submitted within 30 days of the conclusion of each quarter and an annual report within 60 days at the conclusion of each calendar year. Condition: During our testing of the Organization’s compliance with the reporting requirements, we noted no quarterly or annual reports were submitted to Hamilton County. Only Final Reports were submitted once Hamilton County reached out. Cause: Controls were not in place to ensure required reports were submitted due to a lack of understanding the reporting requirements within the grant agreement. Effect: The untimely submission of the reports prevents the pass-through entity from effectively monitoring the progress of the funded project and making informed decisions. Additionally, consistent failure to meet reporting requirements could negatively impact the Organization’s ability for future federal awards. Questioned Costs: None Context: This is not a systemic problem. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Organization establish procedures for the preparation, review and timely submission of all reporting requirements. This can include implementing a system to track reporting deadlines and timely submission as well as designating individuals with the responsibilities of preparation, review, and submission of reports. Additionally, we recommend the Organization designate someone to review the grant documents for all compliance requirements to ensure nothing is missed. Management Response: The Advancement and Finance teams will create an updated Grants Management process. The Grants Management process will be documented and clearly define roles for Advancement and Finance staff. Additionally, a flowchart will be created to define what type of grant has been awarded (conditional vs. unconditional). The process will ensure all awarded grants are reviewed for all performance, outcomes, invoicing, and reporting requirements. The process will define who sets up calendar reminders for grant milestones (i.e., reporting) and how Program staff will be selected to receive these calendar reminders.

VA Supportive Services for Veteran Families Program FFAL #64.033, 20-SD-136-23, 10/1/2022 – 3/1/2024 FFAL #64.033, 20-SD-136-24, 10/1/2023 – 12/31/2024 Reporting Material Weakness in Internal Control over Compliance 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: No review and approval processes are in place over quarterly progress reports. Cause: Management did not have review procedures and processes in place over the quarterly progress reports. Effect: Without review procedures and processes in place over reporting, demonstrating the program complies with laws, regulations, and other compliance requirements is difficult. Additionally, not having an oversight process over reporting could result in a reasonable possibility reports that are inaccurate or incomplete could be submitted. Questioned Costs: None reported Context/Sampling: Included under the two award letters of the federal program, one annual financial report and one quarterly progress report was reviewed in the Organization’s fiscal year. In addition, two monthly HMIS reports were reviewed in the Organization’s fiscal year. There was a total of 18 reports filed. Repeat Finding from Prior Year: No Recommendation: We recommend management implement procedures and control processes to incorporate an independent review and approval over reporting and retain documentation to support the review was performed. Views of Responsible Officials: Management is in agreement.

VA Supportive Services for Veteran Families Program FFAL #64.033, 20-SD-136-23, 10/1/2022 – 3/1/2024 FFAL #64.033, 20-SD-136-24, 10/1/2023 – 12/31/2024 Reporting Material Weakness in Internal Control over Compliance 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: No review and approval processes are in place over quarterly progress reports. Cause: Management did not have review procedures and processes in place over the quarterly progress reports. Effect: Without review procedures and processes in place over reporting, demonstrating the program complies with laws, regulations, and other compliance requirements is difficult. Additionally, not having an oversight process over reporting could result in a reasonable possibility reports that are inaccurate or incomplete could be submitted. Questioned Costs: None reported Context/Sampling: Included under the two award letters of the federal program, one annual financial report and one quarterly progress report was reviewed in the Organization’s fiscal year. In addition, two monthly HMIS reports were reviewed in the Organization’s fiscal year. There was a total of 18 reports filed. Repeat Finding from Prior Year: No Recommendation: We recommend management implement procedures and control processes to incorporate an independent review and approval over reporting and retain documentation to support the review was performed. Views of Responsible Officials: Management is in agreement.

FINDING 2024-004 Subject: Water and Waste Disposal Systems for Rural Communities - Reporting Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listings Number: 10.760 Federal Award Number and Year (or Other Identifying Number): FY2024 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-003. Condition and Context As part of sound management of the federal award, the Town was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The Town had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The Town was required to submit the following reporting to the Department of Agriculture annually: • Statement of Budget, Income, and Equity (Form RD 442-2) • Balance Sheet (Form RD 442-3) INDIANA STATE BOARD OF ACCOUNTS 21 TOWN OF PAOLI SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The Form RD 442-2 covers financial operations relating to the Town's wastewater utility and the Form RD 442-3 presents the financial status of the wastewater utility. In both instances, a borrower may submit the financial data on other forms, provided the forms are in a similar format and signed and dated by the organization's official to certify the correctness of the information. Alternatively, an annual audit may be submitted in lieu of the forms. The Town did not submit the Form RD 442-2 during the audit period as required. The Town submitted the Form RD 442-3 reporting 2023 data in 2024 as required. However, this report is intended to be a comparative balance sheet as described in the USDA Rural Utilities Service Borrower's Guide. The Town did not include comparative data for 2022 in the report. There was also no documentation or other evidence of an oversight, review, or approval process for the report that was filed. 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. . . ." 7 CFR 1780.47 states in part: "(a) Borrowers are required to provide RUS an annual audit or financial statements. . . . (e) Borrowers exempt from audits. All borrowers who are exempt from audits, will, within 60 days following the end of each fiscal year, furnish the RUS with annual financial statements, consisting of a verification of the organization's balance sheet and statement of income and expense by an appropriate official of the organization. Forms RD 442-2, 'Statement of Budget, Income and Equity,' and 442-3 may be used. INDIANA STATE BOARD OF ACCOUNTS 22 TOWN OF PAOLI SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (f) Management reports. These reports will furnish management with a means of evaluating prior decisions and serve as a basis for planning future operations and financial strategies. In those cases where revenues from multiple sources are pledged as security for an RUS loan, two reports will be required; one for the project being financed by RUS and one combining the entire operation of the borrower. In those cases where RUS loans are secured by general obligation bonds or assessments and the borrower combines revenues from all sources, one management report combining all such revenues is acceptable. The following management data will be submitted by the borrower to the processing office. These reports at a minimum will include a balance sheet and income and expense statement. . . . (2) Annual management reports. Prior to the beginning of each fiscal year the following will be submitted to the processing office. (If Form RD 442-2 is used as the annual management report, enter data in column three only of Schedule 1, and complete all of Schedule 2.) (i) Two copies of the management reports and proposed 'Annual Budget'. (ii) Financial information may be reported on Form RD 442-2 which includes Schedule 1, 'Statement of Budget, Income and Equity' and Schedule 2, 'Projected Cash Flow' or information in similar format. (iii) A copy of the rate schedule in effect at the time of submission. . . ." Cause The Clerk-Treasurer was only in her first year of her first term in office when these were due. As such, she was unfamiliar with the reporting requirements of the grant. Effect Without a proper system of internal controls in place that operated effectively, the Town did not file one of the two required reports, and the report that was filed was incomplete. As a result, material noncompliance occurred and remained undetected. By not reporting the comparative data, all information needed to determine the true financial status of the Town was not readily available. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Town's management establish a proper system of internal controls and develop and implement reporting policies and procedures to ensure that all required reports are filed timely, accurately, and contain all the required information. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Reporting Type of Finding - Noncompliance and material weakness in internal control over compliance Program: Coronavirus Relief Fund Assistance Listing Number: 21.019 Federal Agency: U.S. Department of Treasury Criteria - In accordance with 2 CFR 200.303 subrecipients must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the subrecipient is managing the federal award in compliance and federal statutes, regulations and the terms and conditions of the federal award. In accordance with 2 CFR 200.329 subrecipients must submit performance reports as required by the federal award. Reports submitted semiannually are due no later than 30 calendar days after the reporting period. Condition - Total expenditures reported on the semiannual reports due April 30, 2024 and October 31, 2024 did not agree to related support. The semiannual report due on October 31, 2024 was not submitted timely. Cause - The reports were prepared on a cash basis and the reports were not being monitored for timely submission. Effect - The Association submitted reports that were not on the accrual basis which caused expenditures to be reported in the incorrect period and submitted one report untimely. Questioned costs - No questioned costs. Context - The Association is required to report to the City of Topeka, Kansas semiannually. We tested both reports due during 2024. The report due April 30, 2024 covered the period October 1, 2023 through March 31, 2024 and reported cash expenditures of $19,675. Internal records of the Organization supported accrual expenditures of $29,678 during the same time period. Expenditures were under-reported by $10,003 on the report due April 30, 2024. The report due October 30, 2024 covered the period April 1, 2024 through September 30, 2024 and reported cash expenditures of $60,902. Internal records of the Organization supported accrual expenditures of $54,726 during the same time period. Expenditures were over-reported by $6,176 on the report due October 30, 2024. This same report was submitted February 25, 2025 when the due date was October 30, 2024. Identification as a repeat finding - This is a repeat finding. See 2023-002. Recommendation - We recommend that management review reporting requirements and internal procedures to ensure expenses are reported accurately, completely, and timely using an accrual basis. There should be a review of the reports prior to submission that includes a comparison to internal accrual-based records and monitoring to ensure the reports are submitted timely. Views of responsible official - Management concurs with the finding. The Organization is reviewing its reporting procedures and providing education on requirements to those involved. See the corrective action plan.

Federal Agency: U.S. Department of Health & Human Services Federal Program Name: Refugee and Entrant Assistance Voluntary Agency Programs Assistance Listing Number: 93.576 Federal Award Identification Number and Year: 2024 Pass-Through Agency: Church World Services, Inc. Pass-Through Number: CWS-2024-04-015 2024 Award Period: 10/1/2023-9/30/2024 Compliance Requirement Affected: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: Non-federal entities may be required to submit performance reports at least annually but not more frequently than quarterly, except in unusual circumstances, using a form or format authorized by OMB (2 CFR section 200.329). They also may be required to submit special reports as required by the terms and conditions of the federal award. Condition: For one programmatic report did not have a program manager's review and approval that could be verified. Context: A nonstatistical sample of 5 out 11 Programmatic reports were selected for testing for the Refugee and Entrant Assistance Voluntary Agency Programs program. The condition noted above was identified during our procedures over ODI's Reporting Federal compliance requirements. Effect: ODI did not retain documentation of the programmatic report approval, which could result in inaccuracies in reports remitted to the Federal grantor. Cause: ODI has a control designed to review and approve Federal Programmatic reports changes. However, documentation of approval could not be provided. Repeat Finding: The finding is not a repeat finding. Recommendation: We recommend that ODI strengthen its current policies and procedures to ensure that documentation is retained for review and approval of all Programmatic Reports, prior to submission to the grantor. Management’s Views: Management takes responsibility for the finding and believes that in future years, they will be able to implement proper controls to mitigate this finding.

Type of Finding: Significant Deficiency in Internal Control over Compliance and Instance of Noncompliance Federal Agency: U.S. Department of Defense Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations Assistance Listing Number: 12.005 Federal Award Identification Number and Year: H79TI083313 - 2020 Award Period: September 28, 2020 through September 27, 2025 Criteria or specific requirement: 2 CFR 200.329(c)(1) states that “the non-federal entity must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity”. Per the award agreement for contract W912DW-20-2-0003, "Recipient shall submit to the Agreement Administrator progress reports on a quarterly basis. Reports are due no later than 30 days following the end of each reporting period”. Condition: One of two quarterly performance progress reports (SF-PPR) tested was not submitted timely. The report was due within 30 days of June 30, 2024, but was not submitted until August 14, 2024. Questioned costs: None. Context: CLA tested two of four SF-PPRs due during the audit period. One of these reports was submitted 14 days after the submission due date. Cause: Late filing is due to a lack of adherence to the due dates as defined within the contract terms. The Organization does not have adequate controls in place to ensure timely report submissions. Effect: Not filing reports on a timely basis can present risks, such as outdated and unreliable information or the inability to detect potential fraud or irregularities. In addition, delayed reports can impede regulatory authorities' ability to monitor compliance, detect patterns or trends, and assess risks in a timely manner. Repeat finding: The finding is a repeat of a finding in the immediate prior year. The prior year finding number was 2023-004. Recommendation: CLA recommends for the Organization to place emphasis on stronger controls around the timely filing of required reports, such as retaining a monthly checklist of required reconciliations and reports. Views of responsible officials: There is no disagreement with the audit finding.

FINDING 2024-002 Subject: Economic Development Cluster - Reporting Federal Agency: Department of Commerce Federal Program: Economic Adjustment Assistance Assistance Listings Number: 11.307 Federal Award Number and Year (or Other Identifying Number): 06-79-06420 Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls was not in place at the City in order to ensure compliance with the grant agreement and the reporting compliance requirement. The grant agreement for the City's construction project states that the City is to submit a Federal Financial Report (SF-425) on a semi-annual basis. The SF-425 report includes, among other line items: cash receipts, cash disbursements, cash on hand, total federal funds authorized, and total recipient share required. Both of the submitted SF-425 reports were tested. Additionally, the City was required to submit progress reports on a quarterly basis. Two of the quarterly reports were selected for testing. Both the SF-425 reports and the quarterly progress reports were prepared and submitted by one employee of the City. Evidence of an established internal control over the reports tested was not available for audit. The data submitted in the SF-425 report submitted by the City for the reporting period ending on September 30, 2024, contained the following errors:  Cash receipts were understated by $1,037,155. INDIANA STATE BOARD OF ACCOUNTS 19 CITY OF KOKOMO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued)  Cash disbursements were understated by $1,037,155. The lack of internal controls and noncompliance was isolated to the award 06-79-06420, EDA-Davis Road construction project. 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 (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 set forth in §§ 200.328 and 200.329. If a Federal awarding agency requires reporting on an accrual basis from a recipient that maintains its records on other than an accrual basis, the recipient must not be required to establish an accrual accounting system. This recipient may develop accrual data for its reports on the basis of an analysis of the documentation on hand. . . . (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. . . ." Cause Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the City's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. The errors were due to federal reimbursements not being included as cash receipts and cash disbursements in the SF-425 reports. INDIANA STATE BOARD OF ACCOUNTS 20 CITY OF KOKOMO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls over reporting, the City could not ensure that the reports submitted were accurate. In addition, not meeting the Economic Development Cluster reporting requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of federal awards. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City design and implement a proper system of internal controls, including policies and procedures, to ensure that the City provides the Department of Commerce with complete and accurate information for the SF-425 and quarterly reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 2024 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/ Cost Principles, Period of Performance Audit Findings: Material Weakness, Other Matters Condition and Context As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The City had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. Prior to the receipt of direct COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF), all eligible entities were required to execute a Financial Assistance Agreement (Agreement), which included the Award Terms and Conditions that recipients must comply with in carrying out the objectives of their award. Per the Agreement, the City was responsible for the effective administration of the federal award, as well as the application of sound management practices and administration of federal funds in a manner consistent with program objectives and terms and conditions of the award. Recipients may use SLFRF funds for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act, as added by section 9901 of the American Rescue Plan Act of 2021. The SLFRF program provides substantial flexibility for each recipient to meet local needs within four separate eligible use categories. Recipients may use SLFRF funds to: • Respond to the COVID-19 public health emergency and its negative economic impacts; • Respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of eligible employers that have eligible workers who are performing essential work; • Provide government services, to the extent COVID-19 caused a reduction in revenues collected in the most recent full fiscal year of the recipient; and • Make necessary investments in water, sewer, or broadband infrastructure. The City elected to receive the standard revenue loss allowance, allowing it to claim its total SLFRF allocation of $3,821,386 as revenue loss to use for government services. The allocated funds may only be used to cover costs incurred from the period beginning on March 3, 2021, and ending on December 31, 2024. Obligations for costs incurred are required to be liquidated no later than December 31, 2026. INDIANA STATE BOARD OF ACCOUNTS 18 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) During the audit period, the City completed one transfer of SLFRF funds from the Coronavirus State and Local Fi fund to the Grant Stipends fund in the amount of $30,000. The transfer was described as a reimbursement for stipends paid to essential workers. There was no documentation provided for audit to determine if the transfer was for allowable activities, met the cost objectives of the award, or that the associated expenditures were within the period of performance. The Grant Stipends fund was established in 2022, with total expenditures from the fund from 2022, 2023, and 2024 of only $28,009. Additionally, the transfer of SLFRF funds was commingled with other receipts into the Grant Stipends fund. Because the $30,000 transfer of SLFRF funds exceeded the total disbursements out of the Grant Stipends fund and because the City did not have an appropriate system in place to account for the federal expenditures separately from other grant and operating expenditures, we were unable to determine what, if any, expenditures from the Grant Stipends fund should be included in the population of federal expenditures under the award. Without a complete population of expenditures, we were unable to determine the City's compliance with the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. As such, the $30,000 transferred from the Coronavirus State and Local Fi fund is considered questioned costs. The City also did not have written procedures for determining the allowability of costs in accordance with subpart E of 2 CFR 200. The lack of effective internal controls and noncompliance were isolated to the situations described above. 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 200.300(b) states in part: "The non-Federal entity is responsible for complying with all requirements of the Federal award. . . ." 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. . . . INDIANA STATE BOARD OF ACCOUNTS 19 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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. . . . (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 200.403 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. . . . (g) be adequately documented. . . ." Cause A proper system of internal controls over the SLFRF expenditures was not designed by management of the City to ensure the SLFRF funds were being used appropriately. The City did not have policies and procedures in place to ensure that expenditures of federal awards were allowable and occurred within the period of performance. The City initiated a transfer of SLFRF funds from the grant fund to another fund without proper supporting documentation. The City was unable to differentiate expenditures made from federal and nonfederal funds within its ledger for the Grant Stipends fund. Effect Without the proper implementation of an effectively designed system of internal controls, a population of expenditures associated with the Grant Stipends fund could not be determined. As such, the City cannot ensure nor can we determine that expenditures of the grant were not unallowable, within the proper period, and adhered to established practices and policies. As a result, noncompliance in the form of questioned costs occurred and remained undetected. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. INDIANA STATE BOARD OF ACCOUNTS 20 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs Questioned costs in the amount of $30,000 were identified as noted in the Condition and Context. Recommendation We recommended the City's management establish a proper system of internal controls and develop policies and procedures to ensure that expenditures of federal awards are allowable and occur within the period of performance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 2024 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The City had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. Recipients are required to submit an initial interim report and quarterly or annually submit Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The City was classified as a city with a population below 250,000 residents that was allocated less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF). As such, an annual P&E report, covering one calendar year from April 1, 2023 to March 31, 2024, was prepared and submitted by the Clerk-Treasurer to the Treasury by April 30, 2024. The P&E report data to be submitted included, but was not limited to, current period and total cumulative obligations and current period and total cumulative expenditures. We were unable to trace the annual P&E report to the City's records. The errors identified were as follows:  Total cumulative obligations were overstated by $1,732,149.  Current period obligations were understated by $2,089,238.  Current period expenditures and total cumulative expenditures were both overstated by $38,398. In addition, the P&E report required obligations and expenditures to be reported by project. The City completed the report utilizing total amounts for all projects. There were 11 projects appropriated using the SLFRF award. 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: INDIANA STATE BOARD OF ACCOUNTS 23 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal 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. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds, . . ." Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds, page 13, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." Cause The City officials appropriated the entire SLFRF award in May 2022 and reported the entire award amount as obligated in the P&E reports completed in 2023 and 2024. City officials were not aware that appropriating the funds alone does not constitute obligations of the award. Additionally, correcting adjustments made after the report was submitted partially contributed to the differences noted in expenditures. City officials were also not aware that obligations and expenditures could not be reported in total but should be reported by project. Effect Without a proper system of internal controls in place that operated effectively, the City did not file an accurate annual P&E report as required under the federal award. As such, the City did not accurately report current period obligations, cumulative obligations, current period expenditures, and cumulative expenditures when filing the P&E report for the period April 1, 2023 to March 31, 2024. As a result, material noncompliance occurred and remained undetected. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. INDIANA STATE BOARD OF ACCOUNTS 24 CITY OF VINCENNES SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a proper system of internal controls and develop and implement reporting policies and procedures to ensure that all required reports are complete and accurate when submitted. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

2 CFR 1000.10 gives regulatory effect to the Department of Treasury for 2 CFR part 200. 2 CFR 200.302 states, in part, the 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 Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.302 further states, in part, the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosures of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. Additionally, the Ohio Department of Development (ODOD) Water and Wastewater Infrastructure Program Grant Agreement provides in Exhibit II that "Program reports must be submitted on a quarterly basis. Program reports must be submitted by close of business, on the second Friday at the end of each quarter". Due to deficiencies in the Village’s internal controls over reporting, the Village did not submit quarterly program reports for any quarter in 2024. Failure to submit required quarterly program reports could result in the Village not receiving the reimbursements that it is entitled to. The Village should implement internal controls to ensure that reports are submitted by the required deadlines per reporting requirements.

2024-004 Corporation for National and Community Service Federal Financial Assistance Listing #94.012, 22BIICA001 10/1/2022 – 9/30/2025, 23BIACA001 10/1/2023 – 9/30/2026, 23BIFNY001 10/1/2023 – 9/30/2026 Americorps September 11th National Day of Service and Remembrance Grants Reporting Material Weakness in Internal Controls 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. 2 CFR Part 170 establishes requirements for recipients’ reporting of information on subawards as required by the Federal Funding Accountability and Transparency Act of 2006 (FFATA). Condition: Reporting of information on subawards as required by the Federal Funding Accountability and Transparency Act of 2006 (FFATA) was not completed for each of the four subrecipients in which pass through funds exceeded $30,000. Cause: There was a misunderstanding with management over reporting requirements surrounding amounts passed through to subrecipients. Effect: Not having a clear understanding of FFATA reporting requirements lead to required information not being reported. Questioned Costs: None reported. Context/Sampling: There was a total of six federal financial reports, of which 2 were selected for testing. There were a total of four FFATA reports, of which 2 were selected for testing. Repeat Finding from Prior Year: Yes, prior year finding 2023-005. Recommendation: We recommend that management review procedures and control processes to ensure they comply with the federal requirements noted above. Views of Responsible Officials: Management is in agreement.

Federal Program: Crime Victim Assistance – ALN 16.575, National Family Caregiver Support, Title III, Part E – ALN 93.052, Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Heath or Healthcare Crises – ALN 93.391, Hospital Preparedness Program (HPP) Ebola Preparedness and Response Activities – ALN 93.817, Block Grants for Prevention and Treatment of Substance Abuse – ALN 93.959, Non-Profit Security Program – ALN 97.008 Federal Agency: U.S. Department of Justice, U.S Department of Health and Human Services, U.S. Department of Homeland Security Federal Award Year: Various Criteria or Requirement: Per 2 CFR 200.328, 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 semiannually must be due no later than 30 calendar days after the reporting period. Per 2 CFR 200.329, The recipient or subrecipient must submit performance reports as required by the Federal award. Intervals must be no less frequent than annually nor more frequent than quarterly except if specific conditions are applied (See § 200.208). 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 semiannually must be due no later than 30 calendar days after the reporting period. A subrecipient must submit a final performance report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. Per the 2024 Compliance Supplement, non-federal entities may be required to submit special reports as required by the terms and conditions of the federal award. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal controls 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. Condition found, including facts that support the deficiency identified in the finding and information to provide proper perspective for judging the prevalence and consequences of the finding: Of 20 financial reports tested, 9 were either not submitted timely or documentation was not available to substantiate when the report was submitted. Of 23 performance reports tested, 12 were either not submitted timely or documentation was not available to substantiate when the report was submitted. Of 9 special reports tested, 6 were either not submitted timely or documentation was not available to substantiate when the report was submitted. Cause and possible asserted effect: The Health System does not have an effective process and control to ensure timely submission of required reports per the terms and conditions of federal awards and applicable regulations and retainage of evidence of control operation (i.e. evidence of report submission). Identification of questioned costs and how they were computed: None Whether the sampling was a statistically valid sample: The sample was not intended to be, and was not, a statistically valid sample. Identification of whether the audit finding is a repeat of a finding in the immediately prior audit and if so, the applicable prior year finding number: No. This finding was not a finding in the immediate prior year audit. Recommendations: We recommend that the Health System review and enhance its current procedures to ensure that all required reporting applicable to federal awards is accurately identified, submission deadlines are met, and documentation of submissions is properly retained. Views of responsible officals: Management acknowledges the audit finding regarding timely submission of reports and retaining documentation of submissions. We will implement a new combined monitoring and record retention internal control process for financial, performance, and special reporting requirements, to ensure timely submission and retention of supporting documentation for required sponsor reporting. This process will be implemented by December 31, 2025.

FINDING 2024-004 Subject: Water and Waste Disposal Systems for Rural Communities - Reporting Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listings Number: 10.760 Federal Award Numbers and Years (or Other Identifying Numbers): 92-02, 92-03, 92-04, 92-05 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The City had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The City was required to submit two annual data reports to the Department of Agriculture. The Statement of Budget, Income and Equity (Form RD 442-2) report data to be submitted included, but was not limited to, current income and expenditures and budgeted amounts. The Balance Sheet (Form RD 442-3) report data to be submitted included, but was not limited to, current year assets and liabilities. Per the USDA Rural Utilities Service Borrower's Guide, both reports also required inclusion of comparative information for the prior year. Both reports were selected for testing. We were unable to trace either report to the City's records, nor could we verify the accuracy and completeness of either report. The following errors were identified: • The Form RD 442-2, which covered calendar year 2023, reported total income and expenses of $3,792,018 and $1,615,582, respectively. However, the City's ledger for the same period had total income and expenses of $3,985,851 and $3,740,788, respectively. This resulted in net income being overstated by $2,319,039. Additionally, only one amount was reported as comparative data for prior year activity. We were unable to determine what this amount represented and were unable to verify it to the prior period report or to the City's records. • The Form RD 442-3, which covered calendar year 2023, reported total assets and liabilities of $18,229,653 and $10,503,419, respectively. However, the City's records for the same period had total assets and liabilities of $39,216,648 and $12,758498, respectively. Additionally, no comparative amounts from the prior year were reported. 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. . . ." 7 CFR 1780.47 states in part: "(a) Borrowers are required to provide RUS an annual audit or financial statements. . . . (e) Borrowers exempt from audits. All borrowers who are exempt from audits, will, within 60 days following the end of each fiscal year, furnish the RUS with annual financial statements, consisting of a verification of the organization's balance sheet and statement of income and expense by an appropriate official of the organization. Forms RD 442-2, 'Statement of Budget, Income and Equity,' and 442-3 may be used. (f) Management reports. These reports will furnish management with a means of evaluating prior decisions and serve as a basis for planning future operations and financial strategies. In those cases where revenues from multiple sources are pledged as security for an RUS loan, two reports will be required; one for the project being financed by RUS and one combining the entire operation of the borrower. In those cases where RUS loans are secured by general obligation bonds or assessments and the borrower combines revenues from all sources, one management report combining all such revenues is acceptable. The following management data will be submitted by the borrower to the processing office. These reports at a minimum will include a balance sheet and income and expense statement. . . . (2) Annual management reports. Prior to the beginning of each fiscal year the following will be submitted to the processing office. (If Form RD 442-2 is used as the annual management report, enter data in column three only of Schedule 1, and complete all of Schedule 2.) • The Form RD 442-3, which covered calendar year 2023, reported total assets and liabilities of $18,229,653 and $10,503,419, respectively. However, the City's records for the same period had total assets and liabilities of $39,216,648 and $12,758498, respectively. Additionally, no comparative amounts from the prior year were reported. 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. . . ." 7 CFR 1780.47 states in part: "(a) Borrowers are required to provide RUS an annual audit or financial statements. . . . (e) Borrowers exempt from audits. All borrowers who are exempt from audits, will, within 60 days following the end of each fiscal year, furnish the RUS with annual financial statements, consisting of a verification of the organization's balance sheet and statement of income and expense by an appropriate official of the organization. Forms RD 442-2, 'Statement of Budget, Income and Equity,' and 442-3 may be used. (f) Management reports. These reports will furnish management with a means of evaluating prior decisions and serve as a basis for planning future operations and financial strategies. In those cases where revenues from multiple sources are pledged as security for an RUS loan, two reports will be required; one for the project being financed by RUS and one combining the entire operation of the borrower. In those cases where RUS loans are secured by general obligation bonds or assessments and the borrower combines revenues from all sources, one management report combining all such revenues is acceptable. The following management data will be submitted by the borrower to the processing office. These reports at a minimum will include a balance sheet and income and expense statement. . . . (2) Annual management reports. Prior to the beginning of each fiscal year the following will be submitted to the processing office. (If Form RD 442-2 is used as the annual management report, enter data in column three only of Schedule 1, and complete all of Schedule 2.)• The Form RD 442-3, which covered calendar year 2023, reported total assets and liabilities of $18,229,653 and $10,503,419, respectively. However, the City's records for the same period had total assets and liabilities of $39,216,648 and $12,758498, respectively. Additionally, no comparative amounts from the prior year were reported. 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. . . ." 7 CFR 1780.47 states in part: "(a) Borrowers are required to provide RUS an annual audit or financial statements. . . . (e) Borrowers exempt from audits. All borrowers who are exempt from audits, will, within 60 days following the end of each fiscal year, furnish the RUS with annual financial statements, consisting of a verification of the organization's balance sheet and statement of income and expense by an appropriate official of the organization. Forms RD 442-2, 'Statement of Budget, Income and Equity,' and 442-3 may be used. (f) Management reports. These reports will furnish management with a means of evaluating prior decisions and serve as a basis for planning future operations and financial strategies. In those cases where revenues from multiple sources are pledged as security for an RUS loan, two reports will be required; one for the project being financed by RUS and one combining the entire operation of the borrower. In those cases where RUS loans are secured by general obligation bonds or assessments and the borrower combines revenues from all sources, one management report combining all such revenues is acceptable. The following management data will be submitted by the borrower to the processing office. These reports at a minimum will include a balance sheet and income and expense statement. . . . (2) Annual management reports. Prior to the beginning of each fiscal year the following will be submitted to the processing office. (If Form RD 442-2 is used as the annual management report, enter data in column three only of Schedule 1, and complete all of Schedule 2.) (i) Two copies of the management reports and proposed 'Annual Budget'. (ii) Financial information may be reported on Form RD 442-2 which includes Schedule 1, 'Statement of Budget, Income and Equity' and Schedule 2, 'Projected Cash Flow' or information in similar format. (iii) A copy of the rate schedule in effect at the time of submission. . . ." Cause The Clerk-Treasurer had served in the position for less than two years when the reports for 2024 were due and was inexperienced with the reporting requirements of the award. As a result, the Clerk-Treasurer did not properly prepare the reports. Additionally, the Clerk-Treasurer was solely responsible for preparing and submitting the reports with no oversight, review, or approval process that would have allowed for prevention, or detection and correction, of the noncompliance. Effect Without a proper system of internal controls in place that operated effectively, the City did not file an accurate and complete report for either annual report required under the federal award. As a result, material noncompliance occurred and remained undetected. By not reporting the comparative data, all information needed to determine the financial status of the City was not readily available. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a proper system of internal controls and develop and implement reporting policies and procedures to ensure that all required reports are filed timely, accurately, and contain all the required information. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-006 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 2024 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The City had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The City was required to submit an annual Project and Expenditure (P&E) report to the U.S. Department of the Treasury. The P&E report data to be submitted included, but was not limited to, current period and total cumulative obligations and current period and total cumulative expenditures. We were unable to trace the annual P&E report to the City's records. The errors identified were as follows: • Total cumulative obligations were overstated by $23,337. • Total cumulative expenditures were understated by $171,136. • Current period expenditures were understated by $163,789. 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. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds, . . ." Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guidance, page 10, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." Cause The Clerk-Treasurer had served in the position for two years when the report for 2024 was due and was inexperienced with the reporting requirements of the award. As a result, the Clerk-Treasurer did not properly prepare the report. Additionally, the Clerk-Treasurer was solely responsible for preparing and submitting the report with no oversight, review, or approval process that would have allowed for prevention, or detection and correction, of the noncompliance. Effect Without a proper system of internal controls in place that operated effectively, the City did not file an accurate annual P&E report as required under the federal award. As a result, material noncompliance occurred and remained undetected. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a proper system of internal controls and develop and implement reporting policies and procedures to ensure that all required reports are complete and accurate when submitted. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

2024-002 Improve Controls Over Reporting Federal Program Information Federal Agency: Department of Health and Human Services Award Name(s): Child Care and Development Block Grant Assistance Listing Number(s): 93.575 Award Year: 2022 Compliance Requirement: Reporting Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement 2 CFR 200.329 requires non-Federal entities to submit performance reports as required by the Federal awarding agency or pass-through entity in a timely manner as specified in the terms and conditions of the award. Program guidance for the Child Care and Development Block Grant requires that quarterly project progress reports be submitted by specified deadlines unless a formal extension is granted by the awarding agency. SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS (CONTINUED) 2024-002 Improve Controls Over Reporting (Continued) Condition and Context During our audit, we tested a sample of two quarterly project progress reports under the Child Care and Development Block Grant. The Organization submitted both quarterly project progress reports after the required submission deadlines. There was no documentation of a formal extension granted by the awarding agency. Cause The Organization’s internal controls did not ensure timely preparation and submission of required performance reports in accordance with federal program requirements, or ensure that an extension was requested. Effect or Potential Effect Late submission of required reports increases the risk of noncompliance with federal award requirements and may negatively affect the Organization’s ability to demonstrate progress on program objectives. No questioned costs are reported as the requirement is procedural in nature. Recommendation The Organization should implement procedures to ensure that all required performance reports are submitted timely in accordance with federal program requirements or have policies in place regarding formal documentation and approval of extension requests. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.

2 CFR § 1000.10 gives regulatory effect to Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, set forth at 2 CFR part 200 for the Department of Treasury. 2 CFR 200.329(c)(1) states that non-Federal entities must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Reports submitted quarterly must be due no later than 30 calendar days after the reporting period. 31 CFR 35.4(c) requires recipients, in part, during the period of performance, to provide the Secretary of the U.S. Department of Treasury periodic reports providing detailed accounting of the uses of funds, modifications to a State or Territory's tax revenue sources, and such other information as the Secretary may require for the administration of this section. The U.S. Department of Treasury provided supplementary information on reporting requirements in its interim final rule for State and Local Fiscal Recovery Funds for 31 CFR Part 35 and provided further guidance in its Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guide. The County submitted the required SLFRF Project and Expenditure Reports; however possibly due to the failure of an existing control(s), the expenditures reported on four out of the four (one hundred percent) did not agree to the accounting records with differences ranging from $104,513 to $602,647. The County submitted only three of the four (seventy-five percent) of the SLFRF Project and Expenditure Reports during 2024 to the Ohio Department of Development. Reporting errors could adversely affect future grant awards. An additional control(s) and/or additional procedure(s) should be implemented to help ensure accuracy of the reports.

Criteria or specific requirement: 2 CFR Section 200.329(b) requires the entity to submit performance reports with the applicable information no less than quarterly. Condition: 1 out of 2 quarterly reports tested was not submitted. Questioned costs: Unknown. Context: During our test of performance reporting requirements, we noted the Organization did not file one of the quarterly reports. Cause: Policies and procedures are not in place to ensure reports are submitted. Effect: Required performance report not submitted. Repeat Finding: No. Recommendation: We recommend the Organization create and or update policies and procedures to ensure all required reports are submitted timely and accurately. Views of responsible officials: There is no disagreement with the audit finding.

Finding Number: 2024-004 Assistance Listing Number and Title: AL # 14.251 Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Federal Award Identification Number / Year: B-22-CP-OH-0726 Federal Agency: U.S. Department Of Housing And Urban Development Compliance Requirement: Reporting Pass-Through Entity: N/A Repeat Finding from Prior Audit? No Prior Audit Finding Number: N/A Noncompliance and Material Weakness 2 CFR 2400 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR 200.329 which provides the recipient and subrecipient are responsible for the oversight of the Federal award. The recipient and subrecipient must monitor their activities under Federal awards to ensure they are compliant with all requirements and meeting performance expectations. Monitoring by the recipient and subrecipient must cover each program, function, or activity. Grant Agreement No. B-22-CP-OH-0726 Article VI Program-Specific Reporting Requirement states that in addition to the general reporting requirements that apply under provisions of this Agreement, the following program-specific reporting requirements apply to the grantee: A. The Grantee must submit a performance report in DRGR on a semi-annual basis and must include a completed Federal financial report as an attachment to each performance report in DRGR. Performance reports shall consist of a narrative of work accomplished during the reporting period. During the Period of Performance, the Grantee must submit these reports in DRGR no later than 30 calendar days after the end of the 6-month reporting period. The first of these reporting periods begins on the first of January or June (whichever occurs first) after the date this Grant Agreement is signed by HUD. B. The performance report must contain the information required for reporting program performance under 2 CFR 200.329(c)(2) and (d), including a comparison of actual accomplishments to the objectives of the Project as described in Article III, section A of this Grant Agreement, the reasons why established goals were not met, if appropriate, and additional pertinent information including, when appropriate, analysis and explanation of cost overruns or high unit costs. • The County submitted a semi-annual performance report for the time period ending June 30, 2024 for the Economic Development Initiative AL# 14.251 B-22-CP-OH-0726 indicating total funds expended of $0. The County accounting records for the time period ending June 30, 2024 had expenditures of $537,015, resulting in a variance of $537,015. • The County submitted a semi-annual performance report for the time period ending December 31, 2024 for the Economic Development Initiative AL# 14.251 B-22-CP-OH-0726 indicating current expenditures of $0. The County accounting records for the time period ending December 31, 2024 had expenditures of $2,129,368, resulting in a variance of $2,129,368. The failure to submit accurate amounts was due to insufficient controls and could result in action taken by the grantor. The County anticipates contacting HUD after the end of the federal shutdown to amend these reporting errors. Additional controls should be implemented to help ensure accuracy of the reports.

Finding Number: 2024-003 Assistance Listing Number and Title: AL # 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number / Year: 2022-AR-CVI-1159 Federal Agency: U.S. Department Of Treasury Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Public Safety Repeat Finding from Prior Audit? No Prior Audit Finding Number: N/A Noncompliance and Material Weakness 2 CFR § 1000.10 gives regulatory effect to Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, set forth at 2 CFR part 200 for the Department of Treasury. 2 CFR 200.329 provides the recipient and subrecipient are responsible for the oversight of the Federal award. The recipient and subrecipient must monitor their activities under Federal awards to ensure they are compliant with all requirements and meeting performance expectations. Monitoring by the recipient and subrecipient must cover each program, function, or activity. The Office of Criminal Justice Service (OCJS) Standard Subgrant Conditions Handbook provides all OCJS projects are required to submit Quarterly Subgrant Reports. This report must show actual expenditures, describe progress towards achieving objectives, and include supporting documentation (such as purchase orders, vouchers, invoices, payroll allocation reports, payroll summaries, time sheets, etc.) for expenditures. The reports shall be submitted no later than the last day of the month following the calendar quarter end. A report must be submitted every quarter, even when there has been zero expenditure or when a payment is not being requested. • The County submitted the quarterly report for the quarter ending March 31, 2024 for the COVID-19: Coronavirus State and Local Fiscal Recovery Funds AL# 21.027 Washington County Violence Interruption Project 2022ARCVI1159 with current expenditures of $63,918. Washington County accounting records for quarter ending March 31, 2024 had expenditures of $58,069, resulting in a variance of $5,849. • The County submitted the quarterly report for the quarter ending June 30, 2024 for the COVID-19: Coronavirus State and Local Fiscal Recovery Funds AL# 21.027 Washington County Violence Interruption Project 2022ARCVI1159 with current expenditures of $0. Washington County accounting records for quarter ending June 30, 2024 had expenditures of $30,140, resulting in a variance of $30,140. • The County submitted the quarterly report for the quarter ending September 30, 2024 for the COVID-19: Coronavirus State and Local Fiscal Recovery Funds AL# 21.027 Washington County Violence Interruption Project 2022ARCVI1159 with current expenditures of $242,219. Washington County accounting records for quarter ending September 30, 2024 had expenditures of $41,604, resulting in a variance of $200,615. • The County submitted the quarterly report for the quarter ending December 31, 2024 for the COVID-19: Coronavirus State and Local Fiscal Recovery Funds AL# 21.027 Washington County Violence Interruption Project 2022ARCVI1159 with current expenditures of $37,086. Washington County accounting records for Quarter ending December 31, 2024 had expenditures of $23,653, resulting in a variance of $13,433. The failure to submit accurate amounts was due to insufficient controls and could result in action taken by the pass-through entity. Additional controls should be implemented to help ensure accuracy of the reports.