Findings Citing § 200.430

Finding Number: 2025 001 Finding Type: Immaterial noncompliance and significant deficiency in internal controls over compliance related to allowable costs Information on the Federal Program: Program Name: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) (ALN 93.224) Federal Awards Project Title: Health Center Program Award Period: June 1, 2024 – May 31, 2025 Award Number: H80CS00640 Agency: U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) Criteria: Under 2 CFR §200.430(c)(2), compensation charged to federal awards must comply with the Executive Level II salary limitation established by the Office of Personnel Management (OPM). Salary costs allocated to the Health Center Program may not exceed this cap, and only the allowable portion up to the Executive Level II rate may be charged to the federal award. Condition: During testing of payroll allocated to the federal program, 1 of the 25 employees tested had salary charges which exceeded the Executive Level II compensation cap. Upon further review of the full population, a total of 3 employees were identified whose salary charges to the federal program exceeded the cap. Cause: The Organization relied on an informal, manual process to identify employees at or near the Executive Level II compensation cap. This process was not supported by documented policies, defined thresholds, or supervisory review controls. Effect: Unallowable salary amounts were initially charged to the grant. However, the Organization was able to identify other allowable expenditures sufficient to support the total amount of grant funds drawn. Questioned Costs: None Repeat Finding: No Recommendation: We recommend the Organization implement a formalized internal control process to monitor and enforce compliance with the Executive Level II compensation cap. This should include documented procedures for identifying employees subject to the cap, periodic monitoring of compensation charged to federal programs, and evidence of supervisory review to help ensure amounts in excess of the cap are excluded from allowable costs and appropriately allocated to nonfederal funding sources. Views of a Responsible Official and Corrective Action Plan: Management agrees with the finding. The Organization has implemented procedures to formally identify employees whose compensation is at or near the Executive Level II cap and to monitor compensation charged to federal programs on an ongoing basis. Management will document these procedures, establish defined review thresholds, and require supervisory review of compensation allocations to ensure amounts in excess of the applicable cap are excluded from federal charges. Any unallowable amounts identified will be adjusted in a timely manner. Management expects these controls to be fully implemented for the current fiscal year.

Finding 2025-002 – Time and Effort Documentation Type of Finding: Significant Deficiency and Compliance Federal Grant Name and ALN: TRIO Cluster: TRIO Educational Talent Search (84.044A) and TRIP Upward Bound (84.047A) Federal Agency: U.S. Department of Education (Grant ID P-044A210563-23 and P047A221356-24) Compliance Requirement: B. Allowable Costs/Costs Principles Repeat Finding: No Criteria: 2 CFR 200.430 (g)(vi) requires that charges to Federal Awards for salaries and wages be based on records that accurately reflect the work performed and that the records support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: The College complies with 2 CFR 430 (g)(vi) by requiring employees to complete time and effort form reflecting the employees’ duties within the grant. The forms are signed by the employees as well as a supervisor having firsthand knowledge of the employees’ duties. Two (2) forms from our sample of 40 were not signed when requested. Cause: Due to an administrative oversight, these forms were overlooked. Effect: Without completed time and effort forms, the College could risk unallowable employees to the TRIO Cluster. Questioned Cost: None. Context During our tests of federal payroll, we selected a sample of 40 from a population of 853. Two (2) employees from our sample did not have signed time and effort records until requested by the auditors. Recommendation: The College should review all charges, both planned and actual, against grant documents and time and effort forms to ensure that the planned expenditures conform to the grant application and that the actual charges are for employees working in the federal program. Views of Responsible Officials: The College agrees with the finding and recommendation and has prepared a corrective action plan.

U.S. Department of Justice/Passed-Through Texas Office of the Governor Crime Victim Assistance Federal Assistance Listing Number: 16.575 – Common Thread - Texas Award Number: 3853406 Award Year: September 1, 2024 – October 31, 2025 Criteria or Specific Requirement: Matching – Under 2 CFR § 200.306, cost sharing/matching must be allowable, verifiable, properly valued, within the period of performance, and adequately documented. 2 CFR § 200.302 requires accurate, current, complete financial records. 2 CFR § 200.430 requires records that support compensation and time worked. Texas Office of the Governor's (OOG) program guidance further requires set rates, timekeeping, and preconditions when employee on‑call is used as in‑kind (not the same or similar duties; voluntary participation). Condition: BCFS HHS did not comply with matching requirements. Reported match included (1) unpaid employee on‑call hours without required timekeeping and (2) over‑valued volunteer/intern hours, including some ineligible activities. Subsequent discussions with OOG indicate approximately $850,000 of match is unallowable and will require correction through repayments and/or budget reductions. Cause: The prior program executive director deviated from using the in-kind match plan that had been previously approved by the public safety officer (PSO) – utilizing exempt personnel; taking “on-call” (answering phones) after hours, performing duties different from their normal work duties, could be considered as volunteer hours and count towards in-kind match. During 2022 (COVID-19 pandemic), PSO waived match requirements, the program executive director hired overnight on-call workers, believed to be due to increase in call volume. Following the pandemic, the PSO discontinued the match wavier in October 2024. The program executive director failed to reassign the on-call workers, resulting in a compromise of the in-kind match plan. BCFS HHS’ documentation and valuation practices in place during the period were not fully aligned with the specific documentation, rate‑setting, and classification requirements outlined in Office of the Governor’s (OOG) monitoring guidance. Effect or Potential Effect: Reported match was overstated, requiring budget and reporting corrections in the E-grants system, and may result in repayment or additional local match to cure the deficit. Questioned Costs: $853,982. Calculated from OOG’s identification of disallowed/questioned match related to on‑call, volunteer, and intern match; and BCFS HHS’ internal calculation of anticipated corrections, including indirect cost adjustments and the expected reclassification of mileage and training amounts. Context: Match claimed on FSRs for period 10/1/2024–8/31/2025 under Grant 3853406; OOG review covered 10/1/2024–2/28/2025 with extrapolation through August for cash match. Repeat Finding: None. Recommendation: We recommend BCFS HHS 1) Implement a board‑approved on‑call policy that complies with OOG and Uniform Guidance; 2) Re‑value all in‑kind hours using approved rates; 3) Remove or reclassify any unallowable match; 4) Obtain pass‑through approval for unrecovered indirect used as match; and 5) Strengthen internal controls over timekeeping, valuation, and reporting. Views of Responsible Officials and Corrective Action: Management concurs with the finding and is working with the OOG on an approved remediation plan that includes application of unrecovered indirect, and reduction of other allowable costs to cure the match deficit. See further information on the corrective action plan provided by management.

Finding 2025-002: Reportable finding considered a significant deficiency - Noncompliance with Payroll Allocation Controls Program name: Headstart Cluster Assistance Listing: 93.600 Federal awarding agency: U.S. Department of Health and Human Services Award identification numbers: 03CH012075-04-00, 03CH012075-05-00, 03CH012317-02-00, 03CH012317-03-00 Award Years: 2024/2025 Criteria: Under 2 CFR § 200.430(g)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The records must also support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: Certain employees allocate time to the various projects within the headstart cluster, however, incorrect allocations resulted in payroll costs being charged to Federal awards using the wrong allocation percentages for approximately six months before the error was detected. The errors were mostly identified and corrected by the Organization; however, this correction occurred roughly six months after the incorrect allocation began. Management processed correcting entries such that the total payroll costs charged to the Head Start Federal awards for the fiscal year were corrected in the accounting records. Cause: The error resulted from a combination of data entry errors when setting up the allocation in the payroll allocation system; and insufficient review and monitoring controls over payroll allocation setup and ongoing allocations, including the lack of a documented, periodic review to confirm that allocations continue to reflect actual time and effort and the relative benefits received by Head Start and other programs. As a result, an incorrect allocation remained in place for several months before being identified and corrected. Effect: For approximately six months, payroll costs were allocated among the various Head Start awards and other programs using incorrect allocation percentages. This resulted in a control deficiency in the Organization’s internal control over compliance with Federal requirements for payroll and payroll allocations, including the requirement for effective control over and accountability for all funds in 2 CFR § 200.302(b)(4) and periods during which costs charged to the Head Start Federal awards were not aligned with the relative benefits received by the program, which is inconsistent with the allocability requirements of 2 CFR § 200.405(a). Although management corrected the year-end totals charged to the Head Start Federal awards, the delayed detection of the error indicates that similar errors could occur and remain undetected, potentially resulting in unsupported or unallowable payroll charges in future periods. Management’s response and corrective action plan (unaudited): See corrective action plan. Repeat finding: This is not a repeat finding. Questioned costs: None identified, as the expenditure appeared otherwise allowable. However, the control deficiency presents a risk for future noncompliance. Perspective: In our original sample of 40 payroll allocation transactions related to the Head Start program (ALN 93.600), we noted 5 errors impacting 2 employees. We did not increase our sample size because the error was pervasive across multiple employees. Additional testing over compliance was performed and noted that the errors were materially corrected by management during the year. Recommendation: We recommend that the Organization: • Strengthen payroll allocation setup and review controls by implementing and documenting a review and approval process (by someone independent of the preparer) for new or modified payroll allocation setups in the payroll system for employees whose salaries are charged in whole or in part to Head Start. • Implement periodic after-the-fact reviews of payroll allocations for employees whose salaries are allocated to Head Start and other programs to confirm that allocations remain consistent with actual time and effort and the relative benefits received by each program, and that necessary adjustments are recorded timely. • Enhance documentation and training related to payroll allocations, including: o Written procedures describing how allocations affecting Head Start are established, reviewed, and monitored; and o Training for staff responsible for entering and reviewing payroll allocations on the requirements of 2 CFR § 200.302, § 200.405, and § 200.430, and the importance of timely identification and correction of errors. These actions should help ensure that payroll costs charged to the Head Start Federal award are accurate, properly supported, and allocable in accordance with Federal requirements.

FINDING 2025-001 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2025 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Significant Deficiency, Other Matters Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 200.430 states in part: (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the activities allowed or unallowed and allowable costs/cost principle compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: $5,476 (Known questioned costs) Context: During testing of allowable activities and costs, it was observed that the School Corporation allocated payroll and benefit expenses to the school lunch fund for the employee overseeing the food service management company. Five payroll transactions totaling $5,476 were selected for testing. For each transaction tested, the School Corporation allocated 18% of the employee’s time to the school lunch fund. Although the employee completed an annual self-certification estimating time spent on food service duties, there was no detailed time and effort log to support actual hours worked. Additionally, no internal control existed to provide a documented secondary review of the self-certification for accuracy and completeness. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2024-003. Recommendation: We recommend management ensure that time and effort logs are maintained for all employees not charged at 100% to support work performed and charged to the grant awards. We recommend management establish a documented review by management of time and effort logs to ensure time charged to grant awards is allowable and allocable based on work performed in accordance with grant requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

ALN 84.027, 84.173, and 84.424 - Special Education Cluster Grants, and Title IV -Grant # 240450, 250450, 250460, 240750, and 250750 - Grants Ending September 30, 2024 and September 30, 2025 Condition and Criteria: 2 CFR 200.430 of the Uniform Guidance mandates that personnel compensation charged to federal awards must be based on records that accurately reflect the work performed. When an employee works on multiple cost objectives (e.g., multiple awards or activities), this often necessitates the use of personnel activity reports or similar timekeeping documents to accurately allocate salaries and wages. During the audit, we found that proper personnel activity reports were not being maintained for multiple cost objective employees charged to Title IV and to the Special Education Cluster. While we were able to support that the amounts charged to the grants were reasonable, through review of the employee’s Outlook calendars, daily schedules, etc., the documentation required by federal guidance was not available. Effect: The District is not consistently maintaining the required time and effort reporting documentation for employees being charged to federal grants as required. Cause: There has been significant turnover in staffing and management at the District, and the requirements regarding time and effort reporting were not understood by the new Grant's Director. Context: The FER and all final trial balances for the fiscal years included in the grant were reviewed and evaluated in total. Only the ESSER I FER included overages over 10%. Questioned Costs: $0 - While we were able to support that the amounts charged to the grants were reasonable, through review of the employee’s Outlook calendars, daily schedules, etc., the documentation required by federal guidance was not available. Auditors' Recommendation: We recommend that management provide training to all multiple cost objective employees on how to properly document their time and then to implement oversite procedures requiring that those personnel activity reports be submitted to management for review on a monthly basis. Views of Responsible Officials and Planned Corrective Actions: The District understands the situation and will ensure that all proper time and effort reporting documentation is maintained moving forward. Please see the attached Corrective Action Plan prepared by the District.

Finding 2025-001: Head Start Cluster Semi-Annual Certification Procedures U.S. Department of Education Type of Finding: Control Pass-through agency: Michigan Department of Education Assistance Listing Number: 93.600 Award numbers: 05CH011882-04, 05CH011882-05 Award year ends: November 30, 2024 and November 30, 2025 Specific Requirement: Allowable Costs/Cost Principles Criteria: Section 200.430 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations (CFR) Part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires charges to federal award for salaries and wages to be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal controls which provide reasonable assurance that charges are accurate, allowable and properly allocated, (2) reasonably reflect total activity for which the employee is compensated, (3) encompass both federally assisted and all other activities compensated by the entity, (4) support the distribution of the employee’s wages among specific cost objectives if the employee works on more than one federal award, (5) be reconciled with payroll budget estimates with necessary adjustments made to accounting records to ensure that excess costs are not charged to federal programs. Appendix B to 2 CFR, Part 225—Selected Items of Cost indicates that where employees are expected to work solely on a single Federal award or cost objective, charges for their salaries and wages will be supported by periodic certifications that the employees worked solely on that program for the period covered by the certification. These certifications will be prepared at least semi-annually and will be signed by the employee or supervisory official having first-hand knowledge of the work performed by the employee. Questioned Costs: None. Condition: During our detailed testing of time-and-effort reporting for the Head Start Cluster programs, we noted that semi-annual certifications were prepared to comply with federal time and effort requirements. However, the reports were not timely prepared or timely reviewed by the program supervisors with documented approval. Context: Thirteen employees working in the federal program were eligible for semi-annual certifications because their payroll costs were fully allocated to a single federal program or cost objective. Separate semi-annual certifications were prepared for each six-month period during the fiscal year. While all certifications contained the proper components, including documented supervisor approval, they inadvertently excluded two eligible employees from each report originally. These reports were later re-prepared to include these two employees, however, they were not prepared timely as the forms were completed and certified at least two months after the six-month period ending dates. The sample was not a statistically valid sample. This appears to be an isolated condition. Effect: Failure to timely prepare and review time-and-effort reporting could allow improper payroll expenses to be charged to the School District’s federal programs. As a result, payroll compensation and fringe benefits charged for these employees could be disallowed, or there could be missed opportunities for reimbursement. Cause: The School District program personnel inadvertently excluded two employees from the list of 100% eligible Head Start employees who are required to complete semi-annual certifications. Although these reports were later fixed, they were not timely reviewed and approved. As a result, semi-annual certifications were not reviewed and approved for these employees during the required timeframes. Repeat Finding: This is not a repeat finding. Recommendation: The School District should provide training to educate all employees working in federal programs of the requirements for verifying program employee listings are complete under Uniform Guidance, and the School District should require proper time-and-effort documentation to be timely reviewed and approved by the appropriate program supervisor. Views of Responsible Officials: The School District agrees with this finding.

Assistance Listing, Federal Agency, and Program Name - 84.027, 84.173, Department of Education, Special Education Cluster Federal Award Identification Number and Year - 250450 2425, 250493 2425 Pass through Entity - Michigan Department of Education Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.430, costs charged to federal awards must be allowable, allocable, and reasonable for the performance of the award. Payroll costs must be supported by appropriate documentation and reflect work performed for the federal program. Condition - The fiscal year 2025 schedule of federal expenditures of federal awards (SEFA) that was initially provided to the auditors included payroll and fringe expenses that were incorrectly coded to the grant. Questioned Costs - None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - Within the Special Education Cluster, prior to submission of reimbursement requests, three employee's time was coded to the Special Education Cluster when these employees were not eligible to be covered by the grant funds. Additionally, one employees' time that should have been coded to the grant based on qualifications was not coded to the grant. Cause and Effect - Although identified prior to submission of request for reimbursement from the granting agency, the Agency did not perform a timely reconciliation of the listing of grant eligible employees to those employees that were being coded to the Special Education Cluster in the general ledger, causing expenses for the Special Education Cluster to be misstated on the on the draft SEFA initially provided to the auditors. Recommendation - The Agency should put in place processes to ensure that a timely reconciliation of the listing of grant eligible employees to those employees that were being coded to the Special Education Cluster in the general ledger is performed during reviews of each reimbursement request. Views of Responsible Officials and Corrective Action Plan - The Agency agrees with the recommendations above and will implement a process to ensure that a reconciliation of the listing of grant eligible employees to those employees that were being coded to the Special Education Cluster in the general ledger is performed.

SIGNIFICANT DEFICIENCY 2025-001 - Allowable Activities/Allowable Costs Federal Program Information: Department of Education: CFDA - 84.010 - Title I Criteria: The following CFR(s) apply to this finding: 2 CFR 200.303), 2 CFR section 200.430(g). Condition: During audit procedures, it was identified that the Unit’s controls over allowable Activities/Allowable Costs were not working adequately for the payroll process. Cause: The Unit does not have the necessary internal controls over compliance. Effect: The Unit’s inadequate controls over coding enables an inherent risk of noncompliance of allowable activities/allowable costs by allowing employees to be incorrectly paid from the wrong account. Lack of contracts from private school employees creates a risk of supplanting funding rather than supplementing. Identification of Questioned Costs: None identified. Context: Eighty payroll charges were tested, results are as follows: timesheets do not include the program code or program name the time should be charged to. Unit has to rely on correct input of coding when the employee is set up in the system and external notes for employees who work in more than one program. No additional check and balance was noted and one non Title I employee was incorrectly paid out of the program, which was corrected during audit. Timesheet program did not have the same employment position as the contracted position for two of the employees reviewed, eight of the employees positions were inconsistent on the timesheets. Contracts or form of employment and wage documentation was not required from the private school for the Title I employees which could result in unallowable costs or supplanting private funds with federal funding. Eighty payroll charges were tested. This is not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit implement internal control processes and procedures to ensure that only Allowable Activities/Allowable Costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Maine School Administrative District No. 1.

Finding Number: 2025-001 Finding Type: Immaterial noncompliance and significant deficiency in internal controls over compliance related to allowable costs Information on the Federal Program: Program Name: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) (ALN 93.224/93.527) Federal Awards Project Title: Health Center Program Award Period: June 1, 2024 – May 31, 2025 and June 1, 2025 – May 31, 2026 Award Number: H80CS00508 Agency: U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) Criteria: Under 2 CFR §200.430(c)(2), compensation charged to federal awards must comply with the Executive Level II salary limitation established by the Office of Personnel Management (OPM). Salary costs allocated to the Health Center Program may not exceed this cap, and only the allowable portion up to the Executive Level II rate may be charged to the federal award. Condition: During testing of payroll charges, 3 of the 25 employees tested had salary charges which exceeded the Executive Level II cap. Upon further review of the full population, a total of 4 employees were identified whose salary charges to the grant exceeded the cap. Although the Organization calculated the capped allowable salaries for each employee, the allocations entered into the payroll system reflected full gross wages rather than the capped amounts, resulting in the excess salaries. Cause: The Organization did not have a system of internal controls that included verification of accurate entry of salary allocations into the payroll system. Effect: Unallowable salary amounts were initially charged to the grant. However, the Organization was able to identify other allowable expenditures sufficient to support the total amount of grant funds drawn. Questioned Costs: None Repeat Finding: No Recommendation: We recommend the Organization update its policies and procedures to include an independent review of payroll allocations entered into the payroll system to ensure they agree to the calculated capped amounts. Additionally, periodic reconciliation of salary charges to the Executive Level II limitation should be performed to prevent similar errors in the future. Views of a Responsible Official and Corrective Action Plan: Management agrees with the finding and will update payroll policies and procedures to include verification of salary allocations charged to federal awards. An independent review process and periodic reconciliations to the Executive Level II limitation will be implemented to prevent recurrence.

Noncompliance with Documentation, Approval, and Time Reporting Requirements for Grant Expenditures Finding Type. Material Noncompliance; Material Weakness in Internal Control over Compliance (Activities Allowed and Unallowed, and Allowable Costs/Cost Principles) Federal program(s). U.S. Department of Education - Title I, Part A - Improving Basic Programs (ALN 84.010); passed through the Michigan Department of Education; All project numbers. Criteria. Per 2 CFR §200.303, the recipient must establish, document, and maintain effective internal controls over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200, Subpart E, the District is required to ensure that grant funds are used in compliance with regulatory provisions and spent only for the reasonable and necessary costs of the program. Expenditures charged to grants for purchased services should be supported by documents that demonstrate that services were received for the benefit of the program, in accordance with approved agreements with those vendors providing the services. The District should ensure that payment is supported by details of services provided (by whom, when, and how much). Per 2 CFR §200.430, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition. During testing, we identified 1 instance out of 40 disbursement selections tested in which the District was unable to provide supporting documentation for charges incurred under the grant. Additionally, we noted 15 instances out of 40 samples tested where the District could not provide evidence of review and approval for grant expenditures. Finally, we identified 3 instances out of 40 samples tested where the hours reported on timesheets did not agree with the hours charged to the grant. Cause. The District did not have the proper controls in place to ensure that documentation of services provided were being reviewed prior to payment of related invoices. The District also did not maintain a strong system of financial record-keeping during the year which made it difficult for the District to provide invoices in a timely fashion when requested. Finally, the District did not have a system in place to properly review time sheet entry against hours actually charged to the grant. This condition was the result of a lack of internal controls for both payroll and disbursements in place to ensure that expenditures under the grant are independently approved before expenditures are incurred, proper records are maintained and grants are properly charged. Effect. The District’s failure to maintain supporting documentation for certain grant expenditures, provide evidence of review and approval, and accurately report time charged to the grant increases the risk of noncompliance with federal requirements under 2 CFR Part 200. These deficiencies create an increased risk of questioned costs which could ultimately lead to disallowed costs and the potential repayment of grant funds to the granting agency. Additionally, inaccurate reporting and weak internal controls diminish the reliability of financial information submitted to the grantor, reduce accountability, and heighten the risk of errors or fraudulent activity. Questioned Costs: None reported insofar as questioned costs are only required to be disclosed when known or likely questioned costs exceed the threshold of $25,000 established by the Uniform Guidance. Recommendation. We recommend that the District review its written policies and procedures over federal awards to ensure that controls are in place that will require that all expenditures for either payroll or disbursements have the appropriate documentation and evidence of review and approval prior to payment. View of Responsible Officials. The District will review its written policies and procedures over federal awards to ensure that all expenditures have the appropriate documentation and evidence of review and approval prior to payment.

Reference Number: 2025-005 Program Name: Special Education Cluster Description: Allowable Costs Condition: During our testing of six individuals, we noted that the District was unable to demonstrate that the amount of time charged to the grant was supported by adequate documentation for one support staff. Criteria: 2 CFR 200.430(i) requires that the District demonstrate the amount of time charged to the grant is at least the amount of actual time the position worked on the grant’s objectives. Cause: The District was unaware that this position required time and effort documentation. Effect: Without time and effort support for this position, the District may overcharge or undercharge the grant. Questioned Costs: $56,218. Identification of a Repeat Finding: This is not a repeat finding. Auditors’ Recommendation: We recommend that the District review the Allowable Costs for IDEA memo released by the Wisconsin Department of Public Instruction. Views of Responsible Officials: See attachment for District’s corrective action plan.

Finding 2025-001 – Allowable Costs Federal Award & Specific Award Identification U.S. Department of Education Passed through the New York State Department of Education Program Name: Migrant Education – State Grant Program Assistance Listing: 84.011 SIGNIFICANT DEFICIENCY Reporting Criteria The Office of Management and Budget (OMB) Uniform Guidance, specifically 2 CFR § 200.430(i), requires that charges for salaries and wages to federal awards be based on records that accurately reflect the work performed. For employees working on multiple activities, including federal and non-federal projects, time must be supported by Personal Activity Reports (PARs) or other equivalent documentation that accounts for 100% of the employees time. Statement of Condition During our audit, we selected a sample of personnel costs charged to the Migrant Education – State Grant Program. A review of these personnel files revealed that staff members who worked on multiple cost objectives did not have Personnel Activity Reports (PARs) or equivalent documentation. Cause The BOCES lacked adequate internal controls and documented procedures to ensure proper tracking and certification of time spent by employees working on multiple cost objectives. Effect The BOCES is in non-compliance with the Uniform Guidance. Uncertified salary expenses charged to the federal grant may be disallowed by the granting agency. Questioned Costs There were no questioned costs.Context The BOCES employees staff members who were not charged 100% to the grant did not have PARS or other certifications, that accounted for 100% of their time. There have been no previous instances of non-compliance. This is not a repeat finding. Recommendation We recommend that the BOCES establish and implement written policies and procedures for reporting time and effort in compliance with 2 CFR § 200.430. This process should include: •Requiring all employees working on multiple cost objectives to complete and certify PARs or equivalent documentation. •Ensure PARs account for 100% of the employee’s compensated time. •Mandating that PARs or other certifications be prepared and signed at least semi-annually (or monthly, depending on the employee’s schedule). •Reconciling reported time and effort to payroll records. View of Responsible Individuals The BOCES acknowledges that they did not meet the PARS requirement for the Migrant Education – State Grant Program.

Finding 2025-001 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period 11987 PREV King County Public Health 3/1/2024–2/28/2025 13548 PREV King County Public Health 3/1/2025–2/28/2026 Location: Virginia Mason Medical Center, Bailey-Boushay House (Bailey-Boushay House) Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303 (a) requires that a non-federal entity must “(a) establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected the work performed. These records must: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Condition: Bailey-Boushay House did not have effective internal controls addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430, including consistent approval of employees’ timecards. Cause: Bailey-Boushay House’s management did not execute their intended corrective action to implement internal controls in response to the prior year finding. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: None. Context: For 2 of 8 payroll expenditures selected for testing, Bailey-Boushay House’s management did not properly approve the employee timecard for time charged to the grant. Total payroll expenditures, including fringe benefits, for Bailey-Boushay House were approximately $1.1 million and represent 29% of the total HIV Emergency Relief Project Grants expenditures of approximately $3.8 million. Identification of a repeat finding: This is a repeat finding – Findings 2024-001, 2023-003, 2022-007, and 2021-008. Recommendation: We recommend management at Bailey-Boushay House execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Views of responsible officials: Management agrees with the finding. Corrective action over timecard approval will be implemented in January 2026.

Finding: 2025-001 Time/Salary Allocations (Significant Deficiency) Federal Agency(ies): United States Department of Agriculture Federal Program(s): Partnerships for Climate-Smart Commodities Assistance Listing Number(s): 10.937 Pass-through Entity (if applicable): N/A Award Identification Number and Year: NR233A750004G045 (2023) Criteria or Specific Requirement: CFR §200.430 Compensation—personal services. States; (g) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: During our audit of CIF’s compensation practices, we noted that salaries and benefits charged to Federal programs were allocated using predetermined estimates rather than contemporaneous records reflecting actual time spent. These allocations were not supported by detailed documentation, such as timekeeping records or personnel activity reports. Cause: CIF has not implemented a system for documenting time and effort in a manner that complies with Federal requirements. The current process relies on estimates rather than actual, verifiable work performed. Effect or Potential Effect: Without accurate and documented time and effort reporting, there is a risk that Federal awards are either overcharged or undercharged for salaries and benefits. This creates the potential for noncompliance with Federal cost principles, and could lead to disallowed costs in the event of a monitoring or program audit. For this program under audit, we identified $522,374 in questioned costs, representing the total amount of unsupported salary charges to this program. Such deficiencies could also impair the Organization's eligibility for future Federal funding. Questioned Costs: $522,374 (all salaries and benefits changed to ALN #10.937) Context: We tested a statistically valid sample of employee salaries charged to Federal awards. The deficiencies noted were consistent across the sample population, indicating a systemic issue rather than isolated exceptions. Identification as a Repeat Finding, if Applicable: Yes, repeat of Finding 2024-001Recommendation: We recommend that CIF strengthen its payroll allocation procedures to ensure compliance with 2 CFR §200.430. Specifically, we advise the following steps: 1. Implement Time and Effort Reporting: All employees whose salaries are charged in whole or in part to Federal awards should complete project-specific timesheets that record actual time spent on each cost objective or funding source. 2. Certifications and Approvals: Timesheets should be signed by the employee and reviewed and certified by their direct supervisor to confirm accuracy. 3. Allocate Based on Actual Time: Salaries and benefits should be allocated to funding sources based on the proportion of actual time worked, as indicated in approved timesheets, rather than based on estimates. 4. Incorporate into Internal Controls: These procedures should be incorporated into CIF’s internal control system and formally documented in its accounting policies and procedures manual. 5. Training and Oversight: Staff responsible for managing payroll allocations and Federal reporting should receive training on Federal time and effort requirements. Periodic internal reviews should be conducted to ensure adherence. By implementing these practices, CIF will significantly reduce the risk of questioned costs, improve compliance with Federal grant requirements, and strengthen the reliability of its financial reporting.

Criteria: Under Uniform Guidance (2 CFR §200.302, §200.303, §200.305, §200.318–§200.326, and §200.430), a non-federal entity must establish, document, and maintain written policies and procedures for the management of federal awards. Effective internal control over federal awards provides reasonable assurance that the entity is managing the award in compliance with federal statutes, regulations, and the terms and conditions of the awards. Condition: The Town did not have written policies and procedures required by Uniform Guidance (2 CFR 200) for the administration of its federal programs. Specifically, the Town has not formally documented policies and procedures addressing key areas required under the Uniform Guidance, including but not limited to allowable and unallowable costs and cost principles, procurement standards, suspension and debarment, conflicts of interest, cash management, and reporting and record retention requirements. While informal processes exist, they are not sufficiently documented to ensure consistent application or compliance with federal requirements. Cause: The Town has not developed or formally adopted written federal grant management policies and procedures. Effect: Without formal written policies and procedures, there is an increased risk of noncompliance with federal program requirements. This condition exposes the Town to potential noncompliance with federal regulations, increases the risk of unallowable costs being charged to federal awards, and may affect the Town’s ability to properly administer, monitor, and report federal program activity. Additionally, the lack of documentation may impair continuity of compliance in the event of change in key personnel. Recommendation: The Town should develop, formally adopt, and implement written policies and procedures to comply with Uniform Guidance (2 CFR 200). The policies should address all major compliance areas, including but not limited to allowable and unallowable costs and cost principles, procurement standards, suspension and debarment, conflicts of interest, cash management, and reporting and record retention requirements. The Town should ensure that staff responsible for federal grant administration are properly trained to ensure adherence to these policies and that the policies are reviewed periodically and updated as needed. Views of responsible officials: See management’s responses to findings on Page 78.

Finding 2025-001 – Allowable Costs Federal Award & Specific Award Identification U.S. Department of Education Passed through the New York State Department of Education Program Name: Special Education Cluster Assistance Listing: 84.027 and 84.173 SIGNIFICANT DEFICIENCY MATERIAL NONCOMPLIANCE Reporting Criteria The Office of Management and Budget (OMB) Uniform Guidance, specifically 2 CFR § 200.430(i), requires that charges for salaries and wages to federal awards be based on records that accurately reflect the work performed. For employees working on multiple activities, including federal and non-federal projects, time must be supported by Personal Activity Reports (PARs) or other equivalent documentation that accounts for 100% of the employees time. Statement of Condition During our audit, we selected a sample of personnel costs charged to the Special Education Grant. A review of these personnel files revealed that staff members who worked on multiple cost objectives did not have Personnel Activity Reports (PARs) or equivalent documentation. Cause The District lacked adequate internal controls and documented procedures to ensure proper tracking and certification of time spent by employees working on multiple cost objectives. Effect The District is in non-compliance with the Uniform Guidance. Uncertified salary expenses charged to the federal grant may be disallowed by the granting agency. Questioned Costs There were no questioned costs. Context The District employees staff members who were not charged 100% to the grant and did not have PARS or other certifications, that accounted for 100% of their time. There have been no previous instances of non-compliance. This is not a repeat finding. Recommendation We recommend that the District establish and implement written policies and procedures for reporting time and effort in compliance with 2 CFR § 200.430. This process should include: •Requiring all employees working on multiple cost objectives to complete and certify PARs or equivalent documentation. •Ensure PARs account for 100% of the employee’s compensated time. •Mandating that PARs or other certifications be prepared and signed at least semi-annually (or monthly, depending on the employee’s schedule). •Reconciling reported time and effort to payroll records. View of Responsible Individuals The District acknowledges that they did not meet the PARS requirement for the special education cluster grants.

Finding No. 2025-001 - Activities Allowed or Unallowed and Allowable Costs/Cost Principles - Significant Deficiency Name of Federal Agency: U.S. Department of Education Federal Program Name and Assistance Listing Number: Title I Grants to Local Educational Agencies (LEAs) - ALN #84.010 Federal Award Identification Number and Year: 0021-24-4555 2025 Name of Pass-through Entity: New York State Department of Education Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition During the year ended June 30, 2025, the Academy had insufficient support for the review and of time and effort spent on the allowable activities related to the Title I grant. Cause Approval signature was not documented on Semi-Annual Time Certification Form. This lack of approval therefore did not demonstrate that any review had been performed over salary allocations using Title I grant revenue. Effect or Potential Effect As a result of the lack of review, the teachers' salaries allocated to the Title I grant may not be accurate. Questioned Costs None Context We selected 8 employees charged to the Title I grant to test for controls over time and effort. The Academy did not have evidence of review of the Title I teachers' time and effort for any of the 8 employees tested. Identification as a Repeat Finding This is not a repeat finding. Recommendation The School should have written documentation for each teacher's time and effort related to allowable activities for Title I grant. The School should also review this time and effort report on a periodic basis and include a review process to ensure the policy is followed. Reporting Views of Responsible Officials We agree with the finding and will develop and implement procedures to address the finding.

Finding 2025-001 – Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Significant Deficiency Name of Federal Agency: U.S. Department of Education Federal Program Name and Assistance Listing Number: Title I Grants to Local Educational Agencies (LEAs) - ALN #84.010 Federal Award Identification Number and Year: 0000000279-00 12060-20679-2025-82070- 170002 and 2025 Name of Pass-through Entity: Connecticut State Department of Education Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition During the year ended June 30, 2025, the Academy had insignificant support for the review and of time and effort spent on the allowable activities related to the Title I grant. Cause Approval signature was not documented on Semi-Annual Time Certification Form. This lack of approval therefore did not demonstrate that any review had been performed over salary allocations using Title I grant revenue. Effect of Potential Effect As a result of the lack of review, the teachers' salaries allocated to the Title I grant may not be accurate. Questioned Costs None Context We selected four employees charged to the Title I grant to test for controls over time and effort. The Academy did not have evidence of review of the Title I teachers' time and effort for any of the four employees tested. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation The Academy should have written documentation for each teacher's time and effort related to allowable activities for Title I grant. The Academy should also review this time and effort report on a periodic basis and include a review process to ensure the policy is followed. Views of Responsible Officials We agree with the finding and will develop and implement procedures to address the finding.

Finding 2025-001 – Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Significant Deficiency Name of Federal Agency: U.S. Department of Education Federal Program Name & Assistance Listing Number: Title I Grants to Local Educational Agencies (LEAs) – ALN #84.010 Federal Award Identification Number & Year: 0000000279-00 12060-20679-2025-82070- 170002 and 2025 Name of Pass-through Entity: Connecticut State Department of Education Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition During the year ended June 30, 2025, the Academy had insufficient support for the review and of time and effort spent on the allowable activities related to the Title I grant. Cause Approval signature was not documented on Semi-Annual Time Certification Form. This lack of approval therefore did not demonstrate that any review had been performed over salary allocations using Title I grant revenue. Effect or Potential Effect As a result of the lack of review, the teachers' salaries allocated to the Title I grant may not be accurate. Questioned Costs None Context We selected four employees charged to the Title I grant to test for controls over time and effort. The Academy did not have evidence of review of the Title I teachers' time and effort for any of the four employees tested. Identification as a Repeat Finding This is not a repeat finding. Recommendation The Academy should have written documentation for each teacher's time and effort related to allowable activities for Title I grant. The Academy should also review this time and effort report on a periodic basis and include a review process to ensure the policy is followed. Reporting Views of Responsible Officials We agree with the finding and will develop and implement procedures to address the finding.

A. Finding on Internal Control over Compliance Finding Reference: 2025-001 Federal Agency: U.S. Department of Education Federal Program: IDEA – Part B, Section 611 (84.027) IDEA – Part B, Section 619 (84.173) Compliance Requirement: Activities Allowed or Unallowed Type of Finding: a) Significant Deficiencies in Internal Control Over Compliance b) Compliance Finding Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget’s Uniform Grant Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; b) Be incorporated into the official records of the non-Federal entity; c) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity; d) Encompass both federally assisted and all other activities compensated by the non-Federal entity; e) Support the distribution of the employee’s salary or wages amount specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: District employees whose time was being charged to the grants, who were working both 100% and less than 100% of the time in the federal award program, were required to complete semi-annual or monthly certifications of the percentage of time they worked in each federal award program however, they were not completed timely and not completed by all employees whose time was charged to the grants. In one instance, an employee’s percent of time charged to the grant was greater than the percentage certified. Cause: The School District did not have adequate internal controls in place to ensure that the semi-annual or monthly certifications were being completed by each employee working in the federal award programs timely and accurately. Effect: Without adequate internal controls over the employee’s time being charged to the grant and the certification requirement, the School District cannot ensure that federal funds are paid in accordance with allowable costs and the time worked in the grant. Additionally, they cannot easily monitor the amount of funds that can be charged to the grant for salaries and benefits. Payments that do not agree with the time worked are unallowable and subject to recovery by the grantor. Identification of a Repeat Finding: This is a repeat finding for IDEA, Section 611 (84.027), Section 619 (84.173) from the immediate previous audit, 2024-001. Questioned Costs: The employees’ certifications in questions were reviewed and after reviewing the allocation of each employees’ time it was determined that the time being charged to the grant was appropriate. Additionally, for the one employee whose time charged to the grant was greater than percent of time certified, we determined that the actual time and effort was greater than that charged to the grant and determined that there were no questioned costs. Recommendation: We recommend that the District have proper internal controls in place to ensure that the employees working in the grants are certifying their actual percent of time and effort that is being spent working in the federal award program and completed timely. Monthly certifications should be completed if less than 100% of time is being worked in the federal award program or semiannually if 100% of time is being spent. Internal controls should also be in place to ensure that only those employees who are working in the grant are being charged to the grant. Management Response: The District agrees with the finding and will implement adequate checks and balances to ensure that this problem does not recur. Please refer to the corrective action plan on the following page.

2025-001. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Special Education Cluster: Special Education Grants to States: IDEA Part B ALN: 84.027 Special Education Preschool Grants: IDEA Preschool ALN: 84.173 Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430, which requires records that accurately reflect the work performed and reasonably support the distribution of compensation among specific activities or cost objectives. Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employees work on more than one Federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PAR) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, it was noted that in some instances, the District’s PARs were not signed by the employees. In addition, PARs for employees not charged 100% to a single grant were prepared retrospectively after year end rather than periodically throughout the year. Cause: Employee PAR forms should accurately reflect time and effort, as described in Subpart I, 2 CFR §200.430, to support salaries, and other forms of compensation charged to a federal program. During our audit, based on sample testing and inquiries, we noted the District’s procedures did not require the preparation and review of PARs, or equivalent documentation, on a periodic basis during the year. As a result, time and effort documentation was completed retrospectively after year end rather than contemporaneously with the work performed. Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal awards. Questioned Costs: Dollar amount undetermined as some PARs were not completed timely or signed by the employee. Context: For the Special Education Cluster, based on a sample of five (5) employees, we noted that three (3) of the five (5) PARs were not signed by the employee, and in two (2) instances we noted PARs were distributed only after year end, rather than periodically throughout the year for those employees who are not charged 100% to a grant. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should establish procedures to ensure that PARs, or equivalent time-and-effort documentation, are prepared periodically for employees working on multiple cost objectives and comply with the requirements of Subpart I, 2 CFR §200.430 of the Uniform Guidance. In addition, the District should ensure all PAR forms are properly completed, signed by the employee, and subject to timely supervisory review. Views of Responsible Officials of Auditee: The District acknowledges the finding and will enhance its procedures related to federal PARS to ensure that employee’s salary, or other forms of compensation charged to federal awards, are properly signed off by the employee. In addition, the District will implement procedures to ensure that PARs, or equivalent time-and-effort documentation, are prepared more than once throughout the year for employees who are not charged 100% to a single federal grant in compliance with Subpart I, 2 CFR §200.430.

Performance-Based Compensation Requirements Criteria – Performance-based compensation charged to federal awards must be paid in accordance with program requirements and applicable policies. Compensation costs must be reasonable, allocable, and supported by documentation that accurately reflects compensation earned, in accordance with 2 CFR 200.430 and the terms and conditions of the federal award. Condition – During the testing of performance-based stipends and related benefits to the state assessment results, it was noted that while eligible current employees were paid correctly, two former employees who earned the compensation prior to separation from employment did not receive their earned performance stipends. Cause – The School Board did not have adequate internal controls to ensure that performance-based incentive compensation earned by employees prior to separation was identified, approved, and paid timely. Effect – Earned performance-based compensation was not paid to two former employees, resulting in noncompliance with program requirements and questioned costs. Questioned Costs - $3,761 Recommendation – The School Board should strengthen program oversight to ensure that all employees whether current or former employees receive the earned performance-based stipend.

Finding 2025-002 Federal Agency: U.S. Department of Education Passthrough Entity: Missouri Department of Elementary and Secondary Education Assistance Listing Number and Federal Program: 84.027 Special Education Grants to States Compliance Requirement: B. Allowable Costs Criteria: Per 2 CFR 200.430(g)(1)(i), the District is required to have records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The District uses semi-annual certifications to determine if the salaries and/or employee benefits of its employees are allowable for the grant. These certifications are to be completed after each semi-annual period by the Special Education program director. These certifications show that the teachers’ time was spent under the Special Education program, and their salaries and benefits are allowable for the Special Education program. Condition: During the course of our audit, we reviewed semi-annual certifications for all teachers whose salaries and/or employee benefits are allocated to the Special Education program, as required. These certifications are used to verify that employees spent all or a portion of their time working on these programs. Per requirements, these certifications should be completed for all teachers whose salaries and/or employee benefits are allocated to the Special Education program. During our testing, we noted that one of the teachers selected for testing was not included on the semi-annual certifications. Cause: There is a lack of oversight in this area. The program director should ensure that applicable teachers have semi-annual certifications completed for their time spent on the Special Education program during each semi-annual period. Also, a second party should be reviewing the signed certifications to ensure the program requirements are followed to avoid any noncompliance issues and consequences. Effect: Semi-annual certifications are listed under the Allowable Costs/Cost Principles compliance requirement. In order to apply expenditures to the Special Education program, the program director needs to certify that all teachers whose salaries and/or benefits that are going to be applied to the program are spending all or a portion of their time on that program. Without this certification, it is not clear that the amounts reported as Special Education expenditures are indeed eligible expenditures. Questioned Costs: No questioned costs noted. Perspective Information: This appears to be an isolated problem as further review of the semi-annual certifications show that all other teachers whose salaries and/or employee benefits applied to the Special Education program had semi-annual certifications for their time spent on the program. Identification of Repeat Findings: Not a repeat finding. Recommendation: We recommend that the District implement stronger oversight in this area by assigning a review of the certifications after they are completed. Once the certifications are signed by the program director, they should be forwarded to a second party for their review and signature. This review should occur to ensure each Special Education teacher has a semi-annual certification completed for their time spent on the program. Review of the certifications should also have due dates of twice per year to ensure they are done timely and are not overlooked.

Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: “ (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i). Title I: During our review of a sample of thirty (30) payroll expenditures, we noted the following exceptions: 1. One (1) employee’s timesheet reflected an inconsistency between the hours submitted and the records in SAP. The SAP recorded fifty-four (54) regular work hours instead of the accurate sixty (60) regular work hours. The six (6) hours variance was incorrectly classified as full pay illness instead of regular time pay. The District subsequently corrected this discrepancy. 2. One (1) timesheet amounting to $613 was not signed by the employee and contained a supervisor’s signature that was obtained after the submission deadline. Perkins: During our review of a sample of thirty (30) payroll expenditures, we identified three (3) timesheets contained supervisor’s signatures that were obtained after the submission deadline. The total amount of payroll expenditures associated with these exceptions was $20,067. Cause and Effect The discrepancies occurred due to inadequate review and verification of employee timesheets prior to payroll processing, as well as a lack of timely completion of required authorization signatures. Failure to ensure the accuracy and completeness of timesheet records increases the risk of payroll misstatements, improper classification of labor costs, and potential noncompliance with internal control and documentation requirements under Federal grant regulations. Questioned Costs There were no questioned costs identified as a result of the discrepancy in hours reported, as there was no difference in the amount of pay between regular time pay and full pay illness. Likewise, there were no questioned costs related to the missing or untimely signatures on timesheets, as the payroll costs incurred were still considered allowable under the respective programs (Title I and Perkins), despite the timing and documentation issues. Recommendation We recommend that the District strengthen and reinforce internal controls over the preparation, review, and approval of employee timesheets to ensure the accuracy and completeness of payroll records. This should include implementing procedures to reconcile timesheet data with system records (e.g., SAP) prior to payroll processing, ensuring that hours worked and pay classifications are correctly reported. In addition, the District should enforce policies requiring all timesheets to be signed by employees and approved by supervisors prior to the submission deadline. The review and approval process should be adequately documented to provide evidence of compliance with established payroll and Federal grant requirements.

Criteria Per the compliance supplement for the Title I program, “For an employee who works on multiple activities or cost objectives (e.g., in part on a Federal program whose funds have not been consolidated in a consolidated schoolwide pool and in part on Federal programs supported with funds consolidated in a schoolwide pool or on activities that are not part of the same cost objective), an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: (i)The Federal program or cost objective; and (ii)Each other program or cost objective supported by consolidated Federal funds or other revenue sources. Condition Solen Public School District No. 3 had substitute teachers filling in positions that were not Title-I funded positions but were paid with Title I funds. Questioned Costs $86,171 Cause The District is subject to size and budget constraints. Time and effort for the substitute teachers was recorded using an estimated percentage of their time towards the Title I grant. However, due to the nature of the substitute teacher position, it would be more appropriate to complete daily logs as the day-to-day duties of a substitute teacher and allowable time spent towards a Title I grant would depend on the position that they would be filling each day. Effect The District had unallowable payroll costs charged to the grant. Recommendation We recommend the District track the time and effort of substitute teachers using daily logs. Views of Responsible Officials and Planned Corrective Actions This finding was resolved in FY2025 through a joint agreement between the District and NDDPI. The questioned costs of $86,171, that were discovered during a separate NDDPI monitoring process, were all returned to the state before the beginning of the 2025 audit. This issue is resolved. Indication of Repeat Finding This is a new finding in the current year.

Assistance Listing Number(s): 14.239 and 21.027 Name of Federal Program or Cluster: Home Investment Partnerships Program and COVID-19 Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency: Department of Housing and Urban Development and Department of the Treasury Name of Pass-Through Entity: Milwaukee County Department of Health and Human Services Criteria or Specific Requirement: Subparts D and E of 2 CFR Part 200 require a nonfederal entity to establish written policies, procedures, and standards of conduct, including procedures to implement the cash management requirements of 2 CFR section 200.305, procedures that comply with the procurement standards of 2 CFR sections 200.318 through 200.326, and procedures for determining the allowability of costs in accordance with Subpart E of 2 CFR Part 200. Specifically, 2 CFR sections 200.430, 200.431, and 200.475 require written policies concerning compensation for personal services, fringe benefits, and travel costs, respectively. Condition: Policies and procedures with requirements in accordance with 2 CFR Part 200 for cash management, procurement, compensation, including fringe benefits, and travel were not maintained. Cause: The Agency is not aware of the requirements of Subparts D and E of 2 CFR Part 200 for written policies, procedures, and standards of conduct. Effect or Potential Effect: A lack of written policies, procedures, and standards of conduct may result in noncompliance with the requirements of federal programs and/or disallowed costs. Repeat Finding: No Recommendation: The Agency should become familiar with the requirements of Subparts D and E of 2 CFR Part 200 and establish appropriate written policies, procedures, and standards of conduct. Views of Responsible Officials: Management has established written policies and procedures after year end that were the policies and procedures followed during the year under audit and meets the requirements of Subparts D and E of 2 CFR Part 200.

U.S. Department of Labor (DOL) AL No. 17.258, 17.259, 17.278 Workforce Innovation and Opportunity Act (WIOA) Cluster Significant Deficiency in Internal Controls and Noncompliance over Activities Allowed or Unallowed and Allowable Costs/Cost Principles (Payroll) Repeat Finding: No Condition: For 4 of out 40 payroll transactions selected for testing, there was no evidence of supervisory review of costs charged to the program. Criteria: In accordance with 2 CFR 200.430: (i) Standards for Documentation of Personnel Expenses (1) Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. According to AM 413-60, Grant Documentation, Grant Manager/Program Manager/Director conducts ongoing monitoring and control of all reimbursement receipts and deposits until grant ends; as well as all program and sub-recipient (when applicable) documentation, to include: (1) program documentation; (2) timesheets; (3) deliverables; (4) activities; (5) vendor payments; (6) program data/charts/numbers; and (7) financial and compliance report. Cause: The City did not have proper controls in place to ensure that costs charged to federal programs were appropriately reviewed. Effect: Unallowed payroll costs could be charged to the grant. Questioned Costs: Unknown. Recommendation: We recommend the City establish and implement controls to maintain compliance with activities allowed and allowable costs. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.

Finding 2025-001: Direct Costs – Compensation Grantor: Department of Health and Human Services Award Name: High Impact HIV Prevention and Surveillance Programs; Research and Development Assistance Listing Number: 93.940; 93.838 Assistance Listing Title: HIV Prevention Activities Health Department Based; Lung Diseases Research Award Year: 07/1/2024 – 06/30/2025 Award Number: CP4043 and CP5043 (2220536); OT2HL161847-01 Pass-through: Not applicable Criteria 2 CFR part 200.430 addresses compensation charges. The regulations note that compensation charges should be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated and comply with the established accounting policies and practices of the nonFederal entity. Children’s Hospital of Philadelphia has implemented an employee time reporting system in which effort is reviewed to ensure the effort charged to the grant is accurate and is based on the actual effort devoted to the various functional and programmatic activities to which the salary and wage costs are charged. Additionally, in order to ensure the effort charged to grants is appropriate, the Hospital has a policy in place that defines the period by which the effort certification process should be complete. Per Hospital policy, the effort reports are required to be completed and certified within 90 days of the reporting period end date, which occurs every quarter. Condition Out of 39 effort reports selected for compensation testing, 3 effort reports were not certified within 90 days of the effort reporting period in accordance with Children’s Hospital of Philadelphia policy. Although the effort reports were not certified timely, there were no questioned costs related to the costs charged. Cause The delay in certification was primarily due to personnel not consistently adhering to the established effort reporting framework. There was a lack of awareness regarding deadlines. Questioned Costs There were no questioned costs related to this finding as payroll charges were allowable. Effect Effort reports may contain inaccuracies that remain uncorrected for a period of time if effort related to grants is not certified in a timely manner.. Repeat finding in the Prior Year No Recommendation We recommend the Hospital continue to enhance the execution of the effort reporting policy to ensure all effort reports are certified in a timely manner. As part of these enhancements, we recommend additional training for the individuals in the effort reporting process, including notifications of effort reporting deadlines.

Finding 2025-001: Allowable Costs/Cost Principles (Material Weaknesses and Noncompliance) Federal Agency: Department of Commerce Assistance Listing Number and Title: 11.034 - MBDA Capital Readiness Program Criteria: Per 2 CFR §200.430, Compensation - personal services, (i) Standards for Documentation of Personnel Expenses, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among other requirements, these records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; • Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis; and • Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that the award recipient’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates, and that all necessary adjustments be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: For this program, there was no evidence that actual employee time was tracked, reviewed and approved, or that the actual time spent was used as a basis for allocating personnel charges to the grant before payroll period ending February 28, 2025. Questioned Costs: None. Context: For our direct labor allowable costs sample, management was unable to provide attestations of timesheets or other effort tracking for all payroll expenditure selections before payroll period ending February 28, 2025, totaling $66,474 (20 of 25 selections). There was no evidence that a subsequent review of budget estimates was performed for all the impacted selections. Cause: Before payroll period ending February 28, 2025, policies and procedures did not require documented timekeeping by employees working on the grant program, which is appropriately reviewed, approved and used as a basis for charges to the grant. Effect: Personnel costs charged to federal awards without appropriate documentation may be subject to disallowance. Repeat Finding: No Recommendation: Policies and procedures should be implemented to ensure that employee timekeeping, as well as the salary and wage allocations to the grant, are appropriately documented and accurately reflect the work performed. Views of Responsible Officials: Management notes the details of this finding and the resulting material weakness. Management implemented processes and controls outlined in our Corrective Action Plan to correct this deficiency before payroll period ending February 28, 2025.

Significant Deficiency in Internal Controls over Compliance for Allowable Costs/Cost Principles U.S. Department of Health and Human Services Passed through Nebraska Department of Health and Human Services Social Services Block Grant AL #93.667 Award #: 2401NETANF, 2501NETANF Criteria: 2 CFR 200.430(g) requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; and be incorporated into the official records of the recipient or subrecipient. Condition: The Organization did not maintain documentation to support payroll timesheet approvals. Cause: During the year, the Organization switched payroll systems. After the switch, the Organization was not able to obtain historical records which included time sheet approval for payroll charged to the award during the year. Policies and procedures were not sufficiently designed to ensure timecard approval reports were retained. Effect or Potential Effect: The Organization did not maintain full documentation to support payroll costs allocated to the grant which may be inaccurate, unallowable, or unsupported. Questioned Costs: None Context: A nonstatistical sample of 6 payroll transactions out of a population of 24 pay periods during the year were reviewed. Repeat Finding: No Recommendation: Management should implement policies and procedures to ensure payroll timecard approval reports are saved.Views of Responsible Official: Management agrees with this finding. During the year, the Organization switched payroll systems and in the process of the switch, the Organization did not realize that documentation for payroll timecard approval would not be able to be accessed after the transition. Going forward, payroll procedures will be updated to incorporate this process and the Organization will maintain documentation of payroll timecard approval to support payroll amounts allocated to the federal award.

Finding 2025-002: Significant Deficiency – Error in Payroll Charge Federal Program: Research & Development Cluster Assistance Listing Number: 12.630, Award Number: W911NF-16-2-0092 U.S. Army Research Institute - Basic, Applied and Advanced Research in Science and Engineering Grant Year: 2025 Criteria: Per 2 CFR § 200.430(g), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During testing of payroll charges to the federal awards, we identified an overcharge resulting from an error in the allocation of one employee’s time. The employee’s payroll was charged to the grant for hours that were not supported by time and effort documentation. Context: The Consortium implemented a new payroll and time keeping system during 2025 and was unaware that employees could amend their time after the cost was posted. Effect: The federal award was overcharged by $1,387. Cause: An employee adjusted their allocation of hours subsequent to the posting of the expense to the cost center. The finance department was unaware that this had occurred. Questioned costs: $1,387. Perspective: Statistical sampling was not used, however, samples were determined using AICPA approved guidelines. Repeat finding: This is not a repeat finding. Recommendation: The Consortium should remit payment to the agency in the amount of $1,387 and adjust the settings in the timekeeping module to not allow adjustments after time has been posted. Management’s response (unaudited): See Management’s Corrective Action Plan.

Significant Deficiency in Internal Control over Compliance Compliance Requirement: Internal Controls (2 CFR §200.303) Criteria: Uniform Guidance (2 CFR §200.303) requires non-Federal entities to establish and maintain effective internal control over Federal awards, including policies and procedures that provide reasonable assurance of compliance with applicable Federal requirements. Condition: The Organization does not maintain formal, written policies and procedures addressing key Uniform Guidance compliance areas, including compensation and fringe benefits (2 CFR §200.430-§200.431). While certain procedures are performed in practice, controls are informal and not documented. Cause: Due to the Organization’s size and reliance on informal processes, management has not formalized compliance procedures into written policies. Effect: The absence of written policies increases the risk that Uniform Guidance requirements may be applied inconsistently, particularly in the event of staff turnover, and increases the likelihood that noncompliance may occur and not be detected timely. Questioned Costs: None. Statistical Sampling: Not applicable. Repeat Finding: No. Recommendation: We recommend the Organization update the accounting policy manual to include written policies surrounding compensation and fringe benefits in accordance with Uniform Guidance. Organization’s Response: The Organization’s response is included in their corrective plan.

Finding Number: 2025-003 Federal Program: Title I Federal Award Identification Number and Year: 2025 Assistance Listing Number (ALN): 84.010A Federal Awarding Agency: U.S. Department of Education Pass-through Entity: Ohio Department of Education and Workforce Repeat Finding: No Material Weakness/Material Noncompliance – Payroll Expenses Criteria: Uniform Guidance §200.430(i)(1) requires that charges to federal awards for salaries and wages be based on records that accurately reflect the work performed and be supported by a system of internal controls providing reasonable assurance that charges are accurate, allowable, and properly allocated. Additionally, Title I, Part A funds may only be used for allowable costs that directly support eligible Title I activities in accordance with the approved application and applicable cost principles under 2 CFR Part 200, Subpart E.Finding Number: 2025-003 (Continued) Material Weakness/Material Noncompliance – Payroll Expenses (Continued) Condition/Context: During testing of payroll expenditures, we noted the following issues: • Unallowable disbursements were made for athletic supplemental salaries for two employees, resulting in questioned costs of $20,751. • One employee was paid for committee meetings at an incorrect pay rate, resulting in questioned costs of $45. • One employee was paid at the incorrect pay rate due to being placed on the incorrect salary step schedule, resulting in questioned costs of $6,583. • One employee whose salary was approved to be allocated between Title I and the General fund, however the actual allocation did not match the approved allocation. This issue resulted in questioned costs of $1,699. Questioned Costs: In our testing we identified total known questioned costs of $29,078 and projected questioned costs of $105,870. Identification of How Questioned Costs Were Computed: Questions costs were computed by comparing the actual recorded value to the calculated audit value and identifying the known questioned costs. The known costs were used to calculate the percentage of the total recorded amounts impacted in testing and applied to the remaining untested population to identify the projected questioned costs. Effect: Payments of salaries resulted in identified questioned costs that were improperly charged to federal funds. The School District’s internal controls related to the review and approval of the respective expenditures failed to prevent or detect the payments being improperly charged. Recommendation: We recommend the School District implement procedures to ensure expenditures are for allowable purposes prior to disbursement. Management should implement steps for review and approval of all grant related disbursements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.

Finding 2025-002 – Inadequate Documentation of Timesheet Approval for Payroll Costs Charged to the Grant – Significant Deficiency in Internal Control over Compliance Federal Program: U.S. Department of Health and Human Services Health Center Program Cluster (Federal Assistance Listing # 93.224/93.527) and Substance Abuse and Mental Health Services Projects of Regional and National Significance (Federal Assistance Listing # 93.243) Federal Agency: U.S. Department of Health and Human Services Award Year: 2024-2025 Criteria: Per 2 CFR 200.430(i) and LifeLong’s internal timekeeping policies, charges to federal awards must be supported by records that accurately reflect the work performed and must be reviewed and approved by an appropriate supervisor to ensure allowability, allocability, and reasonableness of labor costs. Condition: During our allowability testing of payroll costs charged to the Health Center Program Cluster and Substance Abuse and Mental Health Services Projects of Regional and National Significance, it was identified that timesheets for hourly employees lacked evidence of supervisory approval. For 4 out of 40 hourly employee samples tested, management was unable to provide documentation demonstrating that the related timesheets were reviewed and approved prior to payroll processing. Potential effect: Without documented supervisory approval, the internal control over payroll costs charged to the federal program may not be adequately supported. This represents a significant deficiency in the operation of internal controls that is important enough to merit the attention of those charged with governance. Questioned costs: No questioned costs are reported because payroll hours worked could be substantiated through alternative documentation; while not an instance of material noncompliance, the lack of approval documentation represents a significant deficiency in internal control over timekeeping requirements. Context: We selected a sample of 80 employee pay periods from a statistically valid population of employees eligible for payroll disbursement under the expenditures of federal awards during the fiscal year ended June 30, 2025, of which 40 employees are hourly employees. In 4 out of 40 samples tested, LifeLong was unable to provide documentation demonstrating that the related timesheets were reviewed and approved prior to payroll processing. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that LifeLong implements a standardized process requiring supervisory review and documented approval of all employee timesheets prior to payroll processing. This process should include clear guidelines for supervisors on timely review and approval, as well as retention of approved timesheets as supporting documentation. Additionally, periodic internal audits or spot checks could be conducted to verify adherence to these procedures and promptly address any discrepancies. Views of responsible officials: LifeLong concurs with the finding. LifeLong is working on strengthening its timekeeping and payroll approval controls to ensure that all hourly employees’ timesheets include documented supervisory approval prior to processing payroll or charging costs to any federal award.

Finding 2025-001: Payroll Allocations Information on the Federal Program: 93.073 - Centers for Disease Control and Prevention: Birth Defects and Developmental Disabilities, Prevention and Surveillance. Criteria or Specific Requirement: Under Uniform Guidance (2 CFR Part 200), specifically § 200.430 (Compensation – Personal Services), labor costs must be allocated to programs based on actual time worked by employees on those specific programs. The guidance also mandates that overtime pay must be allocated in proportion to the time worked across the different programs. Failure to properly allocate employee time and overtime costs could result in non-compliance with Federal grant requirements, misreporting of program costs, and inaccurate financial statements. Condition: During the audit for the fiscal year ended June 30, 2025, it was found that employee time worked, including overtime hours, was not being properly allocated to the various programs. Specifically, overtime hours worked by employees were not included in the program allocations, resulting in the misallocation of labor costs. In several cases, overtime worked by employees on specific programs was omitted or incorrectly allocated, leading to a misrepresentation of actual program costs. Cause: Overtime hours were excluded from program allocations entirely. Effect or Potential Effect: Due to incorrect allocation of hours, including overtime, the financial statements inaccurately reflect the costs of various programs or projects. Many programs, especially those funded by grants or other restricted funding sources, require accurate reporting of labor costs. The failure to allocate overtime to the appropriate programs could result in non-compliance with the terms of those grants or funding agreements, potentially leading to audits, penalties, or the loss of funding. Questioned Costs: None. Context: CHADD misallocated time to programs for any employee that worked overtime for the fiscal year ending June 30, 2025. Identification as a Repeat Finding, if Applicable: Yes (2024-001). Recommendation: The payroll system should be updated to automatically calculate and allocate overtime hours to the correct program or project. This should be integrated with the standard time allocation processes, ensuring that overtime pay is properly distributed across programs.

Criteria: According to 2 CFR §200.430(i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Specifically. employees whose time is split among multiple activities must maintain time and effort reports reflecting actual hours worked in a manner consistent with 2 CFR §200.430(g)(vi)and must be supported by appropriate documentation that complies with the federal cost principles. Condition: There were variances in the amounts charged to the grant between the expenditures billed and the expenditures recorded in the general ledger as supported by timesheets coded to specific programs. Cause: Employees may not be properly trained on time coding and the review of supervisors were likely focused on hours worked, rather than job codes. The differences occurred as a result of adjustments made in the billing review process. The reason for the adjustments was not documented. Possible effect: Amounts charged to grants could be misstated. Questioned cost: N/A

Section III – Federal Award Findings and Questioned Costs Finding Reference Number: 2025-006 Federal Agency: Department of Health and Human Services (DHHS) Program Name: Research and Development Cluster ALN: 93.778 Award Number: GSA 22-630-8000-0015 Federal Award Year: 2024-2025 Compliance Requirement: Allowable Costs Condition: During our testing over allowable fringe expenditures, we identified a transaction in which the fringe expenditure charged to the grant was incorrectly calculated resulting in the overstatement of fringe expenditures. Specifically, we tested 40 fringe samples and noted 1 sample in which the FICA expense was incorrectly calculated resulting in an overstatement of FICA expenditures charged to the grant of $1,245.93. Criteria: Per 2 CFR section 200.430(a), costs of compensation for personal services are allowable to the extent the total compensation for individual employee is reasonable for the services rendered and conforms to the established written policy of the recipient or subrecipient consistently applied to both federal and nonfederal activities. Per 2 CFR § 200.303 requires the recipient of federal funds to 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. Effect: UNM claimed and received payment on an unallowable expenditure under the grant agreement of $1,245.93. Cause: While management’s review over payroll adjustments ensures reversals were fully offsetting against the original payroll entry in total, the review did not properly ensure that reversals were fully offsetting against the original payroll entry at the index-account level (individual grants are tracked via index accounts). Questioned Costs: $1,245.93. Represents the difference between the actual FICA expenditure charged to the grant and that calculated using the gross pay allocated to the grant and the applicable FICA rate. Repeat Finding: No Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Auditor’s Recommendation: We recommend that UNM revise its’ procedures related to the review of payroll and fringe adjustments to ensure that reversing entries are completely and accurately reversed at the index-account level as opposed to performing the review in aggregate.

Allowable Costs/Cost Principles Federal agency: U.S. Department of Health and Human Services Federal program title: Social Services Block Grant Assistance Listing Numbers: 93.667 Award Period: January 1, 2024 – June 30, 2027 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR §200.405 and §200.430, costs must be allocable to a particular federal award in proportion to the benefits received, and payroll charges must be supported by underlying records that accurately reflect the work performed. Condition: During testing of payroll and other expense transactions, it was noted that the Organization does not have an appropriate or reasonable cost allocation plan. Nonpayroll related costs are not material to the grant, but if a cost required allocation among various grants, the proper methodology is not in place to ensure that happens. In addition, no contemporaneous time records or supporting allocation documentation were maintained to substantiate the payroll expenditures charged to the grant. Questioned costs: No questioned costs Context: The Organization charged costs based upon the budget, rather than in proportion to the benefits received to the programs. While costs in excess of this grant award were incurred for this program during the year, the proper controls are not in place to ensure compliance with federal regulations. Cause: Staff were not trained in the requirement to maintain accurate time and effort documentation. Effect: Due to the lack of supporting documentation, there is a risk that federal programs were charged for costs that did not directly benefit them, which could ultimately lead to potential questioned costs and repayments obligations. Repeat Finding: No Recommendation: If management were to allocate costs to various programs benefited, we recommend that they update and revise the cost allocation plan annually to reflect actual program usage including the board of directors approval. They should implement a time and effort reporting system for all shared staff and provide training to ensure compliance with federal requirements. This should include proper review and approval of all costs, explicitly documented. Views of Responsible Officials: Management agrees with the finding.

Criteria – The Code of Federal Regulations Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Allowable Costs/Cost Principles, and Audit Requirements for Federal Awards, 2 CFR section 200.430(i)(1)(vii) - Audit Requirements, requires and auditee to maintain documentation of time and effort records for an employee who works on multiple activities or cost objectives. Condition - The District did not maintain records for staff who were split funded and worked under the Special Education (IDEA) program cluster. Cause - Internal controls in place did not ensure staff costs charged to the program aligned with compliance requirements to maintain complete and accurate time and effort documentation. Effect or Potential Effect - The District was not in compliance with Allowable Costs/Cost Principle compliance requirements to maintain appropriate documentation of time and effort for employees who work on multiple activities or cost objectives to support time spent in Federal programs. Questioned Costs – Estimated and actual questioned costs equal $33,459. Recommendations - We highly recommend that the District enhance internal controls to ensure those staff who are split funded with costs being applied to federal programs maintain appropriate and accurate documentation of time and effort requirements when applicable to the federal program. Views of Responsible Officials and Planned Corrective Actions - Management agrees with this finding. Management will properly apply internal controls to ensure the District maintains complete and accurate time and effort documentation of split funded employees charged to applicable Federal programs.

Allowable Costs Federal Program Information Funding Agency: U.S. Department of Education Title: 21ST Century Community Learning Centers AL Number: 84.287 Criteria Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. (2 CFR section 200.430(g)) Condition The Cooperative had two transactions that did not have adequate support. Questioned Costs None. Context We noted one transaction had subrecipient time sheets that were not reviewed by the site monitor and the subrecipient reimbursement check was not approved by the Cooperative’s board. We also noted one instance of a subrecipient reporting hours based on estimated hours instead of actual hours worked. Effect The Cooperative did not properly monitor the subrecipients’ supporting documentation, which could lead to noncompliance. Cause During our testing of the Cooperative’s internal controls, it was noted that proper controls were not in place. Repeat Finding This is not a repeat finding. Recommendation The Cooperative should ensure controls are in place to properly review and monitor subrecipients’ reimbursement support. Management’s Response The Cooperative agrees with the recommendation and will ensure controls are in place to properly review and monitor subrecipients.

2025-003 – Material Weakness in Internal Controls over Compliance – Activities Allowed or Unallowed and Allowable Costs/Cost Principles US Department of Agriculture / Oregon Department of Human Services Federal Assistance Listing Number: 10.565, 10.568, 10.569, 10.182 Federal Program Name: Food Distribution Cluster, Local Food Purchase Agreements Criteria – 2 CFR §200.430(g) – Standards for Documentation of Personnel Expenses require that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that charges are accurate, allowable, and properly allocated. Estimates determined before services are performed do not qualify as support. Condition/context –The Organization allocates personnel expenses to federal awards using estimates, not records that accurately reflect the work performed. The Organization estimates how much time each employee spends on activities allowable for each grant, but these estimates are not supported by records that reflect the work performed. The Organization has an electronic timekeeping system, but the system does not track the activities an employee performs. Employees are not required to complete certifications or Personnel Activity Reports (PARs) to support the hours worked on allowable activities. Total payroll costs charged to grants were $1,722,096. Management was able to substantiate $1,111,400 of payroll costs charged to these grants as 100% of personnel in this group worked 100% on food movement related work, which was backed up by job descriptions, employee attestations signed at year-end, and timesheets that show total hours worked. Remaining questioned costs of $610,696 relate to employees with time allocated across programs that were not substantiated with timecards that track which activities were performed. Questioned costs – ALN 10.568 - $533,410, ALN 10.182 - $77,286 Total questioned costs for all programs – $610,696, which is the payroll expenditures for employees who had allocated estimates charged to the food distribution cluster grants. Cause/effect – The Organization has not developed a system of internal control which provides reasonable assurance that charges are accurate, allowable, and properly allocated. Personnel expenses charged to federal awards are not supported by records that reflect the work performed. Repeat finding – Yes, prior year finding 2024-003. Recommendation – We recommend the Organization establish a system of time and effort reporting that meets the standards for documentation of personnel expenses, and a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Views of responsible officials and planned corrective actions – Oregon Food Bank acknowledges this repeat finding and agrees with the auditors' assessment. Ben Ardell, Director of Finance, is the party responsible. Since the prior audit period, management has taken steps to develop and implement a time and effort reporting system that meets federal documentation standards, such as activating the electronic timekeeping system to track actual work performed and testing adoption of reporting procedures across departments and teams. Finance will continue implementing the corrective actions necessary to establish an effective and compliant time and effort reporting system, including providing training for employees and regularly monitoring for effective system utilization. These actions will strengthen internal controls and ensure personnel costs are accurately recorded and appropriately allocated. The anticipated completion date remains June 30, 2027.

FA 2025-001 Strengthen Controls over Employee Compensation Compliance Requirement: Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 84.027 – Special Education Grants to States 84.173 – Special Education Preschool Grants Federal Award Numbers: H027A230073 (Year: 2024), H027A240073 (Year: 2025), H173A240081 (Year: 2025) Questioned Costs: $1,283 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over the employee compensation process as it relates to the Special Education Cluster. Background: The Special Education Cluster (SEC), which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was authorized under the Individuals with Disabilities Education Act (IDEA). Special Education Cluster funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities. SEC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. SEC funds totaling $2,769,220.76 were expended and reported on the Lowndes County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2025. Criteria: As a recipient of federal awards, the School District is required to establish, document, and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “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, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the recipient or subrecipient… (g) Be adequately documented…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs of compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the recipient or subrecipient consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with recipient’s or subrecipient’s laws, rules, or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (g)…, [as follows:] (g) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient…” Condition: A sample of 16 employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if internal controls were properly functioning, and applicable compliance requirements were met. The following deficiencies were noted: • For two employees, the amount paid did not agree to supporting documentation and resulted in underpayments totaling $4,378. • For one employee, the amount paid did not agree to board-approved salary scales and resulted in the overpayment of salary and benefit amounts by a total of $1,283. Questioned Costs: Upon testing a sample of $195,182 in personnel services expenditures, known questioned costs of $1,283 were identified for payroll charges exceeding documented federal program activities, including $743 in salaries and $540 in associated benefits. Using the total personnel services expenditure population of $1,806,992 (excluding benefits payments), we project the likely questioned costs to be approximately $6,882. Cause: The identified variances resulted from isolated payroll processing errors during position changes and pay scale updates for specific positions resulting in data-entry and reconciliation discrepancies. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to pay employees associated with Special Education Cluster the appropriate amount and/or maintain documentation supporting these payments could result in the expenditure of funds for unallowable purposes. This may also expose the School District to unnecessary financial strains and shortages within the Special Education Cluster fund as ED or GaDOE may require the School District to return funds associated with unallowable or improperly documented expenditures. Recommendation: The School District should evaluate their internal control processes related to the documentation and review of employee compensation payments. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that Special Education Cluster employees are paid appropriately. Furthermore, management should develop and implement a monitoring process to ensure that these procedures are functioning properly. Views of Responsible Officials: We concur with this finding.

Finding 2025-002: Time/Salary Allocations (Significant Deficiency) Federal Agency: United States Department of Health and Human Services. Federal Program: Unaccompanied Children Program. Assistance Listing Number: 93.676 Pass-through Entity, if applicable: Not applicable. Award Identification Number and Year: All awards and all of 2025 fiscal year. Criteria or Specific Requirement (including Statutory, Regulatory, or Other Citation): CFR §200.430 Compensation—personal services. States; (g) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (vii) Support the distribution of the employee’s Salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: During our audit of Everstand’s compensation practices, we noted that certain salaries and benefits charged to Federal programs were allocated using predetermined estimates rather than contemporaneous records reflecting actual time spent. These allocations were not supported by detailed documentation, such as timekeeping records or personnel activity reports. Cause: Everstand has not implemented a system for documenting time and effort in a manner that complies with Federal requirements. The current process relies on estimates rather than actual, verifiable work performed. Effect or Potential Effect: Without accurate and documented time and effort reporting, there is a risk that Federal awards are either overcharged or undercharged for salaries and benefits. This creates the potential for noncompliance with Federal cost principles, and could lead to disallowed costs in the event of a monitoring or program audit. Questioned Costs: Without a system to track actual time and effort, the determination of questioned costs is not available. Context: We tested a statistically valid sample of employee salaries charged to Federal awards. The deficiencies noted were isolated to those employees working on multiple programs at a time. Identification as a Repeat Finding, if applicable: Not a repeat finding. Recommendation: We recommend improvements to the controls around time and effort reporting that identifies and allocates time based on actual level of effort. Additionally, we recommend periodic trainings for key personnel that discusses the requirements and importance of compliance with the Federal regulation.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Community Project Funding/Congressionally Directed Spending ‐ Construction Assistance Listing Number: 93.493 Federal Award Identification Number and Year: 6-CE1HS52375-07 - 2023 Award Period: September 30, 2023, through September 29, 2026 Type of Finding: • Material Weakness in Internal Control over Compliance – Allowable Costs • Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.430 specifies that charges to federal awards for salaries or wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: Evidence of review and approval of timesheets was not available for all seven samples selected for testing. Questioned costs: None. Context: Of the seven samples selected for testing, we noted that none of them had documented the review or approval of timesheets. Cause: The Association did not have internal controls in place to ensure documentation of proper review and approval of timesheets. Effect: The Association could expend federal funding for unallowable activities and costs related to payroll. Funding could be used by employees in ways that are incompatible with program goals and compliance requirements. Repeat Finding: N/A. Recommendation: We recommend that the Association implement formal policies and procedures requiring timesheets to be reviewed and approved, with such review and approval clearly documented. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Community Project Funding/Congressionally Directed Spending ‐ Construction Assistance Listing Number: 93.493 Federal Award Identification Number and Year: 6-CE1HS52375-07 - 2023 Award Period: September 30, 2023, through September 29, 2026 Type of Finding: • Significant Deficiency in Internal Control over Compliance – Allowable Costs • Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.430 specifies that charges to federal awards for salaries/wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During testing, we identify payroll charges that were unsupported by timesheets. The error identified during testing indicates that timesheets were not adequately reviewed and approved prior to payroll processing. Questioned costs: None. Context: Of the seven samples selected for testing, we noted that one sample had a variance between the hours reported on the timesheet compared to the hours paid out on the payroll register. Cause: The Association did not have effective internal controls in place to ensure that payroll charges were supported by actual hours worked. Effect: The Association could expend federal funding for unallowable activities and costs related to payroll. Funding could be used by employees in ways that are incompatible with program goals and compliance requirements. Repeat Finding: N/A. Recommendation: We recommend that the Association implement formal policies and procedures requiring timesheets and payroll registers to be reviewed and approved, with such review and approval clearly documented. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: US Department of Agriculture and US Department of Interior Federal Program Name: Abandoned Mine Land Reclamation Program Cooperative Forestry Assistance Program Assistance Listing Number: 15.252, 10.664 Federal Award Identification Number and Year: SF21AR10064-08, 2022 23-DG-11030000-005, 2023 Award Period: 7/1/2021-6/30/2025 5/8/2023-12/31/2026 Type of Finding:  Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Per 2 CFR §200.430 Compensation-Personal Services, charges to Federal awards for salaries and wages must be based on records that comply with the established accounting policies and procedures of the non-Federal entity; be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; and reasonably reflect the total activity for which the employee is compensated by the non_x0002_Federal entity. Condition: During single audit testwork over payroll, the following issues were noted which are detailed by ALN: ALN 15.252  During our single audit testing over payroll, we identified 1 out of 16 employees tested in which the employee wages charged to the grant did not reflect the hours worked on the grant. This error totaled approximately $1,238.60. ALN 10.664:  For 1 out of 11 samples tested, the Department incorrectly calculated gross wages, resulting in an overpayment of $98.81 related to overtime hazard pay. Questioned costs: $1,337.41 Context: This was identified as we tested payroll. The sample described above were statistically valid samples. Cause: The Department did not maintain internal controls sufficient to reasonably ensure compliance with applicable Federal laws, regulations, program requirements, and internal policies. During the year, the program requested a reclassification of certain payroll expenditures to the general fund; however, the entry was not processed, resulting in noncompliance. Effect: Noncompliance with applicable regulations and Department policy, possible overcharges to the Federal grants. Recommendation: We recommend that the Department conduct a review of personnel costs charged to the grant to verify that only positions listed in the Administrative Staff Allocation section of the grant budget narrative have been appropriately charged. For any costs that may be questioned, we further recommend that the Department engage with the federal awarding agency to determine the appropriate resolution.

Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Information on the Major Federal Program: Federal agency: National Science Foundation (NSF) and Department of Health and Human Services – National Institute of Health (HHS-NIH) Assistance listing number: 47.076 and 93.859 Assistance listing name and award number: NSF Indigenous Climate Journalism - #42-10059-24006 and Biomedical Research and Research Training - #45-14000-24002 Award year: NSF: 09/01/2023 - 04/25/2025 HHS-NIH: 07/20/2023 - 06/30/2028 Criteria – The Uniform Guidance in 2 CFR Section 200.303, Internal Control requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1)Is reasonable for the services rendered and conforms to the establish written policy of thenon-Federal entity consistently applied to both Federal and non-Federal activities; (2)Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules orwritten policies and meets the requirements of Federal statute, where applicable; and (3)Is determined and supported as provided in paragraph (i) of this section, Standards forDocumentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430 (g): “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i)Be supported by a system of internal control that provides reasonable assurance that thecharges are accurate, allowable, and properly allocated; (ii)Be incorporated into the official records of the recipient or subrecipient; (iii)Reasonably reflect the total activity for which the employee is compensated by the recipientor subrecipient, not exceeding 100 percent of compensated activities; (iv)Encompass federally-assisted and all other activities compensated by the recipient orsubrecipient on an integrated basis but may include the use of subsidiary records as definedin the recipient's or subrecipient's written policy; (v)Comply with the established accounting policies and procedures of the recipient orsubrecipient; (vi)Support the distribution of the employee's salary or wages among specific activities or costobjectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirectactivities allocated using different allocation bases; or an unallowable activity and a direct orindirect cost activity. (vii)Budget estimates (i.e., estimates determined before the services are performed) alone donot qualify as support for charges to Federal awards.” Condition – During the fiscal year ended June 30, 2025, the Organization allocated payroll expenditures charged to the Research and Development Program (major program) based on estimated percentages of personnel time dedicated to the grant. Management did not maintain documentation evidencing that the allocation methodology and resulting payroll distributions were reviewed and approved on a timely basis during the fiscal year. Compensating controls and audit results noted include: (i) payroll costs were budgeted by program and program budgets were approved, (ii) payroll charges were reconciled to the general ledger and reviewed, and (iii) substantive testing of payroll costs charged to the major program identified no exceptions in a sample of 10 payroll transactions tested. Cause – Although the Organization has established policies and procedures intended to support and evidence review and approval of payroll allocations charged to the major program, these procedures were not performed and/or retained in a timely manner during the fiscal year. As a result, management did not maintain contemporaneous documentation supporting that payroll allocation percentages and resulting payroll distributions were reviewed and approved in accordance with the Organization’s established guidelines and applicable regulations. Effect – The lack of timely documented review and approval of payroll allocation support increases the risk that payroll costs could be inaccurately allocated to the federal award and therefore not comply with 2 CFR 200.430 requirements for documentation of personnel expenses. However, based on compensating controls and our substantive testing (no exceptions noted in a sample of 10 transactions), there are no known or likely questioned costs and no misallocations were identified in the items tested. Questioned Costs – There are no known or likely questioned costs. Context – This is a condition identified per review of the Organization’s compliance with specified requirements of the Uniform Guidance. The prevalence of this finding is detailed in the condition section above. Repeat Finding – This is not a repeat finding. Recommendation – We recommend that management ensure established policies and procedures for the timely review and approval of payroll allocation methodologies and payroll expenditures charged to the major program are consistently performed. Management should also retain documentation evidencing the review and approval (including reviewer, date, and scope of review) to demonstrate compliance with 2 CFR 200.430. Views of Responsible Officials – Management agrees with the finding. Please see appendix A for Management’s Corrective Action Plan.

FINDING 2025-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2023-2024, 2024-2025 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 16 LINTON-STOCKTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation did not have adequate procedures in place to ensure that allocation of costs related to compensation and fringe benefits of the food service director was appropriately documented. 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 200.403 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. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430 states in part: ". . . Compensation for personal services includes all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the Federal award, including but not necessarily limited to wages and salaries. Compensation for personal services may also include fringe benefits . . . (i) Standards for Documentation of Personal Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; INDIANA STATE BOARD OF ACCOUNTS 17 LINTON-STOCKTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); (iv) Encompass federally-assisted and all other activities compensated by the non- Federal entity on an integrated basis but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause The School Corporation's Management had not developed nor implemented a system of internal controls that would have ensured that the allocation of costs are appropriately documented, and made available for audit, as it related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation did not retain and provide appropriate supporting documentation to ensure compliance with allowable cost and cost principles requirements. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's Management establish an effective system of internal controls and develop policies and procedures to ensure the allocation of costs are appropriately documented, which are to be maintained and made available for audit as related to the Allowable Cost/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

2025-001. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Special Education Cluster: Special Education Grants to States: IDEA Part B ALN: 84.027 Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430, which requires that records accurately reflect the work performed and support the distribution of compensation among activities. Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if employees work on more than one Federal award, or a Federal award and non-Federal award. The preparation of payroll verification forms, or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, it was noted that in some instances, the District’s payroll verification forms did not accurately reflect the actual allocation that was charged to the grant in order to comply with Subpart I, 2 CFR §200.430. Cause: Employee payroll verification forms should accurately reflect time and effort, as described in Subpart I, 2 CFR §200.430, to support salaries, and other forms of compensation charged to a federal program. During our audit testing, we noted that some of the District’s payroll verification forms did not indicate the correct amount or percentage allocation for the employee that was charged to the grant. Effect: Inadequate documentation could result in incorrect amounts for salaries and wages being charged to Federal awards. Questioned Costs: The dollar amount was undetermined as some payroll verification forms were not aligned to the grant budget amount. Context: For the Special Education Cluster, based on a sample of twenty-four (24) payroll transactions, we noted that nine (9) payroll transactions were not supported with payroll verification forms that reflected the amount charged to the grant. Identification of a Repeat Finding: This is a repeat finding from the previous audit referenced 2024-001, related to the Special Education Cluster. Recommendation: The District should prepare and maintain the appropriate documentation to support salaries and wages charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR §200.430. Views of Responsible Officials of Auditee: The District acknowledges the finding and will thoroughly review and maintain all payroll verification forms to ensure the amount charged to the grant corresponds to the federal program to which the employees’ earnings were allocated, based on time and effort, in compliance with Subpart I, 2 CFR §200.430.