Findings Citing § 200.430

_ Federal Program Information: Funding Agency: U.S. Department of Health and Human Services Title: Substance Abuse and Mental Health Services Projects of Regional and National Significance Assistance Listing Number: 93.243 Award Number: 5H79SM087568 Award Period: 12/31/2022 – 09/29/2026 Criteria: Per 2 CFR 200.403, costs charged to a federal award must be necessary, reasonable, and allocable to the award. Per 2 CFR 200.430(g), charges for salaries and wages must be based on records that accurately reflect the work performed. Such records must be supported by a system of internal control that provides reasonable assurance the charges are accurate, allowable, properly allocated and be incorporated into official records. Budget estimates alone do not qualify as support for charges to federal awards; where budget estimates are used for interim charging purposes. The system must produce reasonably accurate results and significant changes in work distribution must be identified and entered into the records in a timely manner. Condition: During our testwork, we noted one payroll transaction of the forty two disbursements tested where the individual performed multiple cost objectives that are not exclusively attributable to the SAMHSA award. The time charged to the SAMHSA award was based on a budgeted allocation percentage rather than a record reflecting actual effort performed on the award. No follow up certification or reconciliation of actual to budgeted effort was identified. Cause: UVNR does not have a reporting system that captures actual activity for employees who work across multiple functions or cost objectives. Effect: UVNR charged labor costs for at least one position that are not adequately supported under 2 CFR 200.430, creating risk that the amount charged to the SAMHSA award for that position's time does not reasonably reflect actual effort on the program. Recommendation: UVNR should Implement a time-and-effort reporting system compliant with Uniform Guidance for any employee whose duties are not funded 100% by a single cost objective. At minimum, this should include periodic personnel activity reports or equivalent documentation reflecting actual work performed, reviewed and approved by an appropriate official, with budgeted estimates trued up to actual activity. Management Response: Management agrees with the finding and recognizes the importance of maintaining accurate time-and-effort documentation to support personnel costs allocated across multiple programs and funding sources in compliance with Uniform Guidance. During 2026, UVNR has begun strengthening its timekeeping procedures by adding program-specific account codes to its existing Timesheets.com software, which serves as UVNR's primary time-and-effort reporting system. These codes allow employees to record actual hours worked by program or cost objective when checking in and out, providing a more accurate basis for allocating personnel expenses across funding sources. In addition, UVNR is utilizing Airtable as a supplemental tool to document and review employee work performance and program-level activities. These records provide additional supporting documentation of work performed under each program and are reviewed during monthly supervision meetings to assess alignment between employees' reported activities, assigned responsibilities, and time allocations. UVNR will further formalize its procedures to require documented supervisory review and approval of timesheets. Management will regularly reconcile actual hours recorded in Timesheets.com against payroll distributions and funding allocations, with Airtable records serving as supplementary documentation to support verification of work performed. Any discrepancies between budgeted personnel allocations and actual time worked will be reviewed, documented, and adjusted accordingly. Management will continue monitoring compliance with these procedures and retaining supporting documentation for personnel expenses charged to federal awards.

Department of Veteran Affairs FFAL #64.033, 20-SD-136-25, 10/1/2024 – 12/31/2025 FFAL #64.033, 20-SD-136-26, 10/1/2025 – 9/30/2026 VA Supportive Services for Veteran Families Program Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria: The Center is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(g) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. Charges must be based on records that accurately reflect the work performed with the records meeting the following standards: 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 office records of the non-Federal entity. c. Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. d. 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. e. Comply with the established accounting policies and practices of the non-Federal entity. f. Support the distribution of the employee’s salary or wages among specific activities or cost objectives. g. Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: In our sample of expenditures selected for testing, we noted the following items: a) Calculation errors for payroll expenses allocated to the grant based upon review of supporting timesheets, payroll documentation and management’s true-up calculations to allocate actual costs rather than budgeted costs (5 instances). b) Identification of benefits not being allocated in a similar manner as salaries and wages (1 employee impacted). c) Grant was overcharged as it relates to a travel reimbursement (1 instance). Cause: Calculation errors were made during the year due to management’s true-up payroll calculation spreadsheet not being updated appropriately for employee payrate increases and including incorrect inputs based upon supporting payroll documentation. Additionally, management was unaware of the requirement of allocating payroll benefits in a similar manner to the allocation salaries and wages. In addition, individuals with key roles over financial and compliance reporting were not involved in the Organization’s financial and compliance reporting activities for the full year. Effect: The Organization’s controls did not detect or correct the errors identified, which results in a reasonable possibility that the Organization could submit disallowed costs under the federal awards and would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: No questioned costs greater than $25,000. Context: A total non-statistical sample of 60 payroll and nonpayroll transactions out of more than 250 payroll and nonpayroll transactions were selected for testing, which accounted for approximately $73,700 of approximately $1,702,000 of direct payroll and nonpayroll program expenditures. Repeat Finding from Prior Year: No Recommendation: We recommend management review the procedures and control processes involving allocating payroll related expenses and ensuring expenses allocated to the grant are supported by documentation to ensure compliance with the federal grant. Views of Responsible Officials: Management is in agreement.

Finding 2025-001: Allowable Costs/Cost Principles - Time and Effort Reporting (Material Weakness) Federal Agency: U.S. Department of Labor Program Name (ALN): WIOA Cluster (17.258, 17.259, 17.278) Federal Award Identification Number and Year: Contract# 906006 for FY2025, Contract# 2025WDC005 for FY2025 Pass-through entities: New York City Department of Youth and Community Development, Workforce Development Corporation Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform 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: (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. Condition: We noted that personnel attestations were not timely prepared by staff members and not timely reviewed by a supervisory official for 6 out of the 7 selected samples. Cause: Procedures and controls to ensure compliance with the requirements of the Uniform Guidance were not effective. Effect or Potential Effect: Personnel expenses may not accurately reflect the work performed and/or unallowable expenses may be charged to the federal program. Questioned Costs: N/A Context: From a population of 9, we selected 7 salary transactions charged to the federal program to test controls over compliance for allowable costs/activities allowed. Out of the 7 transactions tested, we noted 6 instances where the personnel attestations were not timely prepared by staff member and not timely reviewed by a supervisory official. Identification as a Repeat Finding: This finding is not a repeat finding. Recommendation: We recommend that management implement policies, controls, and procedures to ensure that time and effort is recorded based on actual effort and approval by appropriate individuals is documented at least monthly to comply with applicable cost principles. Responsible Official's Response: Management agrees with the finding and has implemented policies and procedures to ensure that employee time and effort charged to federally funded and other restricted programs is supported by contemporaneous documentation reflecting the actual effort performed. Employee time is recorded through the organization’s established timekeeping process and is reviewed and approved by the employee’s immediate supervisor on a payroll-period basis. This control is performed every pay period and therefore occurs more frequently than the minimum monthly review and approval standard referenced in the finding. Supervisory approval is intended to provide reasonable assurance that recorded time and effort is accurate, supported, and consistent with the employee’s actual work performed and the applicable funding requirements. Management will continue to monitor compliance with these procedures and will reinforce the requirement that time and effort records be accurately maintained and appropriately approved in accordance with organizational policies and applicable federal cost principles. The New Jewish Home will also retain the applicable timekeeping and approval documentation as evidence of the control’s operation.

Type of Finding: Material weaknesses in internal control over compliance and material noncompliance. Criteria: Internal control procedures should be in place to ensure the payroll accounting system is maintained to be able to accurately record payroll transactions. Payroll transactions should be supported by approved pay rates. 2 CFR 200.430 requires charges for services and wages coded to federal awards to be based on records that accurately reflect the work performed. Internal controls over the payroll system should provide reasonable assurance that transactions are properly approved, accurate, and properly allocated. Condition and Context: Auditors reviewed a random sample of six transactions (10% of total population) from the program’s payroll population. During our testing of internal controls over payroll, we noted that two of the six payroll transactions did not contain evidence of the required approvals. In addition, on all six transactions the related timesheets and approval forms indicated that the employee’s wages were to be coded to the General Fund, not the IHBG program fund. Cause: Lack of internal controls over payroll related to monitoring of accuracy of individual transactions charged to the IHBG program. Effect: Lack of internal controls over payroll could result in incorrect amounts being paid to employees and the improper allocation of payroll expenses charged to grants, increasing the risk of unallowable activities. Questioned Costs: Known questioned costs were $9,519 and likely questioned costs amounted to $93,138 (100%) of the payroll and related expenditures coded to the IHBG program. Recommendation: The Tribal Council should strengthen internal controls over the payroll system. Transactions should be reviewed and approved by supervisors for amount and coding, and that review should be documented. Proper time sheet documentation should be kept that supports the coding of the hours worked and charged to the related grant or fund. Management’s Response: Management concurs with this finding. See Corrective Action Plan.

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: Allowable Costs/Cost Principles – Compensation for Personal Services (Significant Deficiency) Federal Agency(ies): United States Agency for International Development (USAID) Federal Program(s): Adv HIV & AIDS Epidemic Control (AHEC) Activity Assistance Listing Number(s): N/A – Federal Contract Pass-through Entity (if applicable): N/A Award Identification Number and Year: 72066821C00001 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to 2 CFR §200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Effective internal controls over payroll include documented supervisory review and approval of employee timesheets to ensure that time charged to Federal programs is complete, accurate, and properly authorized. Condition: During our testing of payroll expenditures at the headquarters level, we identified two instances in which employee timesheets lacked documented evidence of supervisory review and approval. Cause: The condition appears to be a result of termination of responsible employees, due to cost reduction measures in response to the stop-work orders issued by the Federal Government. Effect or Potential Effect: Without documented supervisory review and approval of timesheets, IntraHealth lacks sufficient evidence that payroll costs charged to Federal awards are accurate, properly allocated, and allowable. This increases the risk that unallowable or inaccurately allocated payroll costs could be charged to Federal programs and may result in noncompliance with Federal cost principles. Questioned Costs: N/A, as no misallocations were noted according to the timesheet. Context: The exceptions were identified through our testing of payroll transactions charged to Federal awards across multiple locations and were not isolated to a single location or individual. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend that management strengthen controls over payroll processing by requiring timely documented supervisory review and approval of all employee timesheets prior to processing payroll charges to Federal awards. Management should implement procedures to ensure approvals are retained and periodically monitored for compliance. Reinforcing this control will provide reasonable assurance that payroll costs charged to Federal programs are accurate, properly supported, and compliant with 2 CFR §200.430.

In accordance with 2 CFR 200.430 charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed.

2025-001 – Payroll Timecard Approvals – PHIG and WIC Programs Federal Program: (“WIC”) Special Supplemental Food Program for Women, Infants, and Children Federal Assistance Listing Number: 10.557 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000805600001 Federal Program: Public Health Infrastructure Grant (“PHIG”) – CDC Collaboration with Academia to Strengthen Public Health Federal Assistance Listing Number: 93.967 Pass-Through Agency: Texas Department of State Health Services Pass-Through Grantor Number: HHS001313000001 Criteria: Per the District’s Pay and Compensation Policy, Supervisors and/or Directors are required to approve employee time in Paycom no later than 10 a.m. on the Monday prior to Human Resources processing payroll. Paycom is the District’s electronic payroll and timekeeping system used to record employee hours and facilitate supervisor approval of timecards before payroll processing. Timely approval of timecards is an internal control designed to ensure accurate and allowable payroll charges to federal awards, consistent with 2 CFR §200.430 and applicable cost principles. Condition: During testing of payroll timecards:  PHIG grant: 3 employees across 4 payroll periods had timecard hours charged to grant not approved by the Supervisor/Director in Paycom.  WIC grant: 3 employees from a sample of 40 had timecard hours charged to grant not approved by the Supervisor/Director in Paycom. Cause: Supervisors/Directors did not consistently follow the District’s payroll approval policy, resulting in deviations from the required approval workflow. Effect: Payroll hours charged to the federal programs may not have been properly reviewed for accuracy and allowability prior to processing. This represents a control deficiency and a risk of noncompliance with federal award requirements. NORTHEAST TEXAS PUBLIC HEALTH DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2025 Recommendation: Management should reinforce the timecard approval process and ensure supervisors review and approve all employee timecards in Paycom prior to payroll processing. Additional monitoring procedures may include periodic internal audits or system alerts to prevent recurrence. Questioned Costs: Based on review of the timecards, no dollar amounts were questioned, as all hours appear reasonable and were properly supported. Total Questioned Costs: $0

2025-001 Aging Cluster-Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers- Assistance Listing No. 93.044. Special Programs for the Aging, Title III, Part C, Nutrition Services- Assistance Listing No. 93.045. Nutrition Services Incentive Program- Assistance Listing No. 93.053 Criteria: 2 CFR 200.430(g)(I) states, "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…” Condition: Out of forty payroll transactions tested, we noted 14 instances where part-time employees did not have their timecard approved by their supervisor. We consider this condition to be a material weakness relating to the Allowable Costs/Cost Principles compliance requirement. Statistical sampling was not used in making sample selections. Cause and effect: Without proper review of hours worked, there may be portions of pay charged to a federal award where the employee did not work or did not work on the program for the related federal award. Questioned Costs: N/A Recommendation: We recommend that DuPage Senior Citizens Council reviews their policies and procedures to ensure all hourly employees have their timecards reviewed and approved by individuals who work closely with the individual and would be aware of the hours worked. Views of Responsible Officials: Management agrees with this Single Audit Finding and response is included in the Corrective Action Plan.

Finding 2025.001: Allowable Costs/Activities Allowed or Unallowed - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program Grants for New and Expanded Services under the Health Center Program COVID-19 - Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS11299 - 2024 and 2025, Q8MCS49109 - 2024, H2ECS45512 - 2024 and H8LCS51634 - 2024 Criteria In accordance with 2 CFR, Part 200.430I(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 nonfederal entity; and (iii) reasonably reflect the total activity for which the employee is compensated by the nonfederal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.40.3(g). Condition Charges to federal awards for salaries and wages were not supported by properly approved allocations. Cause The Organization's internal controls over payroll were not consistently followed to ensure allocations were approved. Effect or Potential Effect Failure to ensure accurate wage and allocation of employees' time across programs could result in noncompliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 40 payroll transactions charged to the federal program for testing. Out of the 40 transactions tested, we noted 26 instances where there was no formal approval of allocation to the federal program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Organization consistently enforce its internal controls over payroll to ensure that the allocations are reviewed and approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review.

PAYROLL CONTROLS Federal Agency: NIH, Department of Defense and Department of Health and Human Services. Award Name: Research and Development Cluster. Program Year: 2025. Assistance Listing Number: 12.420, 93.113, 93.350, 93.837, 93.838, 93.840, 93.846, 93.855, 93.859, 93.865, 93.866, 93.103, 93.084, 93.117, 93.145, 93.243. Criteria: In accordance with the documentation standards of 2 CFR section 200.430(a), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is reasonable for the services rendered, conforms to the established written policy of the recipient or subrecipient and is determined and supported as provided in 2 CFR section 200.430(g), which states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: Payroll testing was completed for a sample of 40 individuals for which time and expenses were charged to R&D grants. Within that selection, we noted instances where payroll controls did not function properly in regard to percentage of time allocated to a grant, proper pay code inclusion, fringe benefit calculation and timely and supervisor level review of time sheets. Context: Management was able to isolate the time allocation error to 20 employees for which the time and costs charges to the grants were in excess of actual time allocation. This resulted in $87,831.53 in excess charged to the grants. Additional control deficiencies did not result in significant improper grant expenditures. Cause: A new payroll system was implemented in fiscal 2025. Grant allocation percentages were not accurately established in the payroll system upon conversion. Effect: Time charged to grant efforts by certain individuals exceeded actual time worked. Questioned Costs: $87,831.53. Recommendation: Review controls should be enhanced to ensure grant expenditures accurately reflect payroll costs. Views of Responsible Parties: Management acknowledges the control deficiencies identified related to payroll allocations within the newly implemented payroll system. These issues were identified early following implementation and were promptly investigated. Management isolated the issue to a population of 20 employees with unique circumstances and quantified the associated impact. Corrective actions have since been implemented to strengthen controls and ensure payroll charges to grant awards accurately reflect actual time worked. These actions include updates to grant allocation setup procedures within the payroll system, enhanced review and approval processes for time reporting, and additional oversight of payroll and grant charging activities. Management believes these enhancements mitigate the risk of similar errors occurring in the future.

BETH ISRAEL LAHEY HEALTH, INC. AND AFFILIATES Schedule of Findings and Questioned Costs Year ended September 30, 2025 Criteria: Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Section 200.430(a) states that 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. Costs of compensation are allowable to the extent the compensation 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; follows an appointment made in accordance with the recipient's or subrecipient's laws, rules, or written policies and meets the requirements of Federal statute, where applicable; and is determined and supported by records that accurately reflect the work performed. 2 CFR 200.403(b) further states costs must meet the criteria of conforming to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items to be allowable under Federal awards. This includes the auditor to determine if the awards contain any negotiated wage or salary rates, or contain any restrictions on salaries and wages, such as the NIH restriction on the amount that may be charged for individual salaries (https://grants.nih.gov/grants/policy/salcap_summary.htm). Additionally, 2 CFR 200.400(d) requires the accounting practices of the recipient and subrecipient to be consistent with the cost principles and support the accumulation of costs as required by the cost principles, including maintaining adequate documentation to support costs charged to the Federal award. Furthermore, 2 CFR 200.403 states the factors affecting allowability of costs. These factors include the cost to (a) be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principes and (g) be adequately documented to meet the criteria to be allowable under Federal awards. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Condition: During our testing of payroll for Beth Israel Deaconess Medical Center (BIDMC), an affiliate of Beth Israel Lahey Health, Inc., management did not consistently adhere to the specific award conditions set forth in the Notice of Award (NOA) related to salary limitations for 1 out of 12 of our samples related to our testing. The control operator applied an erroneous National Institutes of Health (NIH) Salary Cap limit when calculating the payroll allocation for an individual’s time allocated to a specific NIH grant selected for testing. As a result, the portion of the individual’s salary charged to the federal grant exceeded the maximum allowable NIH Salary Cap, resulting in an unallowable cost of $41 charged to the award. Furthermore, Joslin Diabetes Center (the Center), an affiliate of Beth Israel Lahey Health, Inc., manually matches purchase orders to the corresponding invoice once received. During our testing for 1 out of 25, we identified an invoice that was incorrectly matched to the purchase order for the Federal award selected for testing. This invoice was processed for payment and subsequently included in the monthly reimbursement draw. At the time of testing, the correct invoice corresponding to the valid purchase order for the selected grant had not yet been received by the Center. This resulted in the expenditure in the amount of $14 being BETH ISRAEL LAHEY HEALTH, INC. AND AFFILIATES Schedule of Findings and Questioned Costs Year ended September 30, 2025 allocated to the incorrect Federal award as well as the Federal award charged not being supported by adequate documentation. Cause: The conditions results from a lack of effective operation of internal controls over the allowability of costs related to Federal awards; specifically, ensuring the cost conforms to any limitations set forth in the Federal award as to the amount of cost items at BIDMC as well as ensuring the cost is allocable to the Federal grant and is adequately documented at the Center. Possible Asserted Effect: Failure to maintain sufficient internal controls to ensure a cost is allowable to a Federal award may result in unallowable costs being charged to Federal awards. Questioned Costs: None. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding was a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that BILH enhance its internal controls over Federal award expenditures to ensure, where applicable, all costs charged to Federal awards conform to any limitations or salary caps set forth in the Federal award agreement, are accurately allocated to the correct grant and are adequately documented.

Finding 2025-002 – Allowable costs – payroll Assistance Listing #: 93.671, 14.267 Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated. The Uniform Guidance allows for use of budget estimates on an interim basis. When using budget estimates on an interim basis, grantees must reconcile estimates against actual time or effort on a regular basis to ensure that estimates conform to actual staff activity. Grantees must make adjustments in the payroll distribution to align with actual time. Condition: As noted in the prior year, MSP charges payroll costs to the federal award programs using a set percentage based on budget and not based on employee’s actual time or effort amongst various programs. Cause: Individual payroll amounts were allocated to grant awards based on internally developed budgets of employees' time. Management continues to work on a solution that will capture costs across the various programs for those employees who work in multiple programs. Effect: The salary costs charged to the federal programs may have been under or over reported based on the actual level of effort. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted previously, we recommend MSP make changes overall its timekeeping processes to ensure that payroll costs accurately reflect the work performed and if budget estimates are utilized, that they are reconciled and trued up on a consistent basis. Response: Management continues to work with ADP to modify the existing time card structure. They will assist MSP with creating time cards that will allow employees to sign in to any designated work department therefore the hours will be appropriately broken out by department/grant. The enhancement is still a work in progress and should be in effect no later than May 31, 2026.

SCHEDULE OF FINDINGS AND QUESTIONED COSTS AND CORRECTIVE ACTION PLAN Federal Award Findings and Questioned Costs September 30, 2025 Comment #2025-001 COMPENSATION METHODOLOGY SHOULD BE REVIEWED FOR INCENTIVE PAYMENTS COMMUNITY SERVICES BLOCK GRANT AND LOW INCOME HOME ENERGY ASSISTANCE PROGRAM FAL #93.569 and 93.568 (Questioned Costs - Undetermined) Condition: During our testing of payroll, we reviewed controls over the calculation and recording of payroll per the general ledger. For two selected employees, we compared annual wages for the calendar years 2024 and 2025 to approved wages per the Personnel Action Forms (PAF). We noted that there were significant variances between the annual wages reported on their Forms W-2 and the annual salary amounts documented on their Personnel Action Forms (PAFs). The differences appear to relate to additional wage payments paid during the year. Per discussion with management these funds are based on availability of grant funds and staff performance, and generally provided to all employees. 2 CFR 200.430(f) requires that incentive compensation is allowable only when the overall compensation is reasonable, and payments are made according to an agreement entered into in good faith before services are rendered, or payments follow an established plan that is consistently applied. While incentive payments are allowable, we did not see any evidence of staff or performance evaluations, and the payments seem to be more related to the availability of funds this practice affects the accuracy and reliability of the Agency’s budgeting process. Because incentive payments are not documented, pre-authorized, or tied to a formal plan, management cannot reliably estimate personnel costs during grant budgeting. This increases the risk that budgets submitted to funders do not reflect actual compensation practices, may misstate projected personnel expenditures, and may not comply with the internal control requirements of 2 CFR 200.303, which require effective controls over budgeting, financial management, and compliance with federal award terms. Context: Review of the internal controls related to payroll charges made to LIHEAP, CSBG, and the administrative cost pool in accordance with Government Auditing Standards, COSO, Greenbook, and Uniform Guidance. Criteria: Incentive compensation to employees based on cost reduction, efficient performance, suggestion awards, or safety awards is allowable to the extent that the overall compensation is determined to be reasonable and such costs are paid or accrued according to an agreement entered into in good faith between the recipient or subrecipient and the employees before the services were rendered, or according to an established plan followed by the recipient or subrecipient so consistently as to imply, in effect, an agreement to make such payment. [2 CFR 200.430(f)] The recipient and subrecipient must 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 200.303(a)] Effect: The agency provides incentive-type payments based on available grant funds and general staff performance; however, there is no written incentive policy, no documented performance evaluations, and no consistent method for authorizing or calculating these payments. Cause: Implemented and approved policies governing incentive compensation appear not to have been updated or maintained. Recommendation: We recommend that management establish and document a formal incentive compensation policy that complies with 2 CFR 200.430(a) and the internal control requirements of 2 CFR 200.303. Specifically, the policy should define the criteria for awarding incentive payments, establish a written incentive plan, and document performance evaluations, and reflect compensation arrangement in personnel records, such as the PAF. Alternatively, with increased workflow and activity, an addendum to the PAF based on the contract amendment can be documented and authorized for the contract period based on established policy in lieu of a performance based pay arrangement. The administrative pool should also be reviewed to determine if costs and the rate should increase based on actual trends. Implementing these steps will help ensure that compensation arrangements are allowable, properly authorized, consistently applied, and supported by adequate internal controls, in accordance with 2 CFR 200.430, 2 CFR 200.303, and the COSO/Green Book principles governing payroll authorization and compensation practices. Views of Responsible Officials and Planned Corrective Actions: Management concurs with the recommendation. FACAA updated its Incentive Compensation Policy, which was approved by the Board of Directors, in accordance with 2 CFR 200.430 and 2 CFR 200.303. The policy establishes the methodology for incentive payments, and all incentive payments have been documented and supported by appropriate records to ensure compliance with applicable federal requirements.

Information on the federal program: United States Airforce, Assistance listing # 12.840 Civil Air Patrol Program Criteria: 2 CFR 200.430(g)(1)(vi) states, "Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on a Federal award and non-Federal award." Condition: A review of all non-Federal travel costs identified six instances in which non-Federal payroll expenses were incorrectly charged to Federal funding. Additionally, one employee hired in the fourth quarter should have received a standard non-Federal payroll allocation but did not, while another employee hired during the same period received this allocation in error. The related unallowable costs totaled $13,800. These issues were communicated to management, who plan to fully reimburse the Federal Government by June 30, 2026. Cause: Time allocation procedures were not consistently followed at the employee level. Effect: Non-Federal activities were charged to Federal funding. Repeat Finding: No Questioned Costs: None reported. Recommendation: Procedures around time allocation should be examined for potential automation based on non-Federal expenditures postings and regular communications of time allocation requirements to employees should be increased. A review of regular payroll allocations should be performed quarterly to ensure they agree to the current duties and responsibilities of employees. This review should be performed and documented by someone other than the preparer. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan included at the end of the report.

Finding 2025-001- Allowable Activities/Costs and Period of Performance Significant Deficiency in Internal Control over Compliance Federal Assistance Listing Number: 97.036 – COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Award Identification Number: 4528DR-MS (2020) Federal Agency: U.S. Department of Homeland Security Pass-through Entity: Mississippi Emergency Management Agency Criteria: Per 2 CFR 200.430(i), personnel costs charged to federal grants are required to be supported by documentation including time records. Per 2 CFR 200.303, a non-federal entity must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Condition: Our audit procedures over contracted personnel services disclosed that timesheets supporting the invoices from independent contractors were not reviewed and approved by a supervisor at the Hospital. Cause: The absence of proper approval for the timesheets tested appears to be lack of management oversight. Effect: Since the timesheet is the support for the invoices charged by the independent contractors, unauthorized charges can result from undocumented reviews and approvals. Questioned Costs: No questioned costs were identified due to finding only being a deficiency in internal control with no noncompliance. Perspective: Four timesheets in a sample of fifty-nine timesheets were not approved by management. The sample was not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Hospital enforce their policy requiring supervisory review and approval for timesheets to ensure time recorded by independent contractors is valid and accurate for work performed. View of Responsible Officials: See management’s response to the finding in the accompanying Corrective Action Plan.

Finding Number: 2025-020 Prior Year Finding Number: 2024-023 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Foster Care – Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.405, a cost is allocable to a Federal award if it is assignable to that award in accordance with the relative benefits received. In addition, under 2 CFR Section 200.403, allowable costs must be adequately documented. Per 2 CFR Section 200.430, 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 must be incorporated into the official records of the recipient or subrecipient. The regulation also allows certain alternative approaches when properly documented and approved by the appropriate Federal agency or cognizant agency, as applicable. Based on CFSA’s Human Resources Administration Issuance: HR-06-1 dated May 12, 2006, staff must seek and receive advance written approval prior to working overtime. It also indicates that in emergency situations requiring an immediate response, the employee shall make every reasonable attempt to obtain advance approval by an appropriate manager or supervisor. Per District Personnel Issuance No. 2018-00 (Annual Leave) effective April 21, 2018 “Using Annual Leave” - An employee may use accrued annual leave at any time during the leave year if they receive approval from their immediate supervisor or the agency head responsible for the employee’s timesheet. If an employee wishes to use their accrued annual leave, they must: 1. Submit a request in advance to use annual leave to their manager or supervisor. 2. Receive approval from the manager or supervisor; and 3. Record the approved leave taken on their timesheet in PeopleSoft. Per CFSA’s guidelines dated May 15, 2021, employees must file a written request within agency’s prescribed time limits to use sick leave. Employees should consult their agency for specific guidelines on how to request sick leave. If no specific guidelines exist, employees should submit their leave requests through PeopleSoft. For doctor’s appointment, employees must make sick leave requests at least 24 hours in advance for medical, dental, or eye examinations or treatments. Employees should also be prepared to submit supporting evidence of the appointment according to their agency’s policy. CFSA uses a Random Moment Study (RMS) to allocate the administrative costs to the Foster Care program. The study entails selecting a sample of social workers on a quarterly basis to participate in the RMS study where the social workers are required to notate what they were doing at the sample moment. Subsequently, the supervisors of these social workers review and validate their responses. Validation of the responses adds an extra layer of reliability to the data collected. It ensures that the information provided by social workers is accurate and reflective of their actual activities. This validation process helps maintain the integrity of the study and ensures that the results are trustworthy in making decisions when determining the RMS percentage utilization in the allocation of the administrative costs. Condition – The following issues were observed: 1. During our review of the Activities Allowed or Unallowed and Allowable Costs/Cost Principles, we noted that CFSA was unable to provide sufficient supporting documentation to substantiate the allocation methodology for three (3) of the sixty (60) non-payroll expenditure samples selected for testing. 2. During our review of the payroll process regarding the review and approval of time and attendance, we noted the following in our sample of sixty (60) payroll items: • For two (2) samples, CFSA failed to provide documentation evidencing the approval of overtime paid. • For thirteen (13) samples, CFSA failed to provide documentation evidencing the approval of scheduled sick leave and annual leave taken. In addition one (1) of the thirteen (13) samples was coded as scheduled sick leave; however, per documentation provided, it was indicated that the timesheet should have coded the time as military leave. BDO did not receive documentation showing approval for either military leave or scheduled sick leave. • For two (2) samples, the employee's response to the RMS moment sample was not validated by the supervisor. Questioned Costs – Not determinable. Context – This is a condition identified per review of CFSA’s compliance with specified requirements using a statistically valid sample. Effect – Without sufficient documentation to support the cost allocation methodology, CFSA cannot demonstrate that costs charged to the Foster Care program were allowable and properly allocated, increasing the risk of unallowable costs being charged to the federal award. Additionally, without adequate internal controls and procedures for record maintenance, there is a risk of disputes between the agency and its employees regarding the accuracy of pay, leave and overtime. Furthermore, supervisor validation was not completed and documented for two of the moments selected for testing. Although CFSA’s control of over-assigning moments mitigates the risk of not meeting the aggregate 10% validation requirement, the two deviations noted reduce assurance that the 10% validation requirement was met. Cause – CFSA did not have proper internal controls and policies and procedures in place to ensure that documentation supporting the cost allocation methodology was retained and readily available for review. Additionally, CFSA did not have proper internal controls and policies and procedures in place to ensure that authorization forms evidencing the preapproval of overtime, scheduled sick leave and annual leave were maintained. Furthermore, although CFSA maintains an established validation process, supervisor validation was not completed for two of the moments selected for testing. Recommendation - We recommend that CFSA strengthen its policies, procedures, and controls to ensure that costs are accurately reported and claimed, and that documentation supporting the cost allocation methodology is maintained and readily available to substantiate the amounts allocated to the Foster Care program. We also recommend that pre-authorization of overtime, scheduled sick leave and annual leave is maintained. Furthermore, we recommend that CFSA ensure that the validation control is consistently performed for all moments selected for validation. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – CFSA concurs with the findings of Condition 1 and Condition 2. For Condition 1, although CFSA provided documents (including invoices) requested by and provided by the Office of the Chief Information Officer (OCTO) for the sampled items referenced, OCTO was unable to provide the specific documentation requested by the auditors documenting the allocation methodology of the expenditures assigned to CFSA and used for Title IV-E claiming purposes. For Condition 2, bullet 3, CFSA would simply note that, as is denoted in our federally approved cost allocation plan, CFSA adheres to HHS’ requirements for statistical significance in its entire RMS operation. The standard for supervisor validation of random moments is 10% of all accepted moments. CFSA’s internal controls involve oversampling moments requiring validation, and it consistently hits the 10% validation requirement in the aggregate. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

2025-002 Significant Deficiency in Internal Controls Over Noncompliance and Noncompliance over Major Programs Criteria Internal controls and other compliance knowledge should support the wages billed to the federal award. Per 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" and "be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated." Condition Internal control and adherence to compliance were not followed with regards to records that accurately reflect the work performed. Questioned costs Total questioned cost of $1,277 based on the payroll transactions tested for one employee that were not accurately supported with records that reflected the work performed. Context During our payroll testing, of the ten payroll transactions we tested, one employee had two payroll transactions that indicated the wages billed to the federal award were not accurately supported by the employee's timesheet. We expanded our payroll testing and sampled four additional transactions for this employee. Of the six total payroll transactions tested for this employee, none of them were accurately supported by their timesheet for hours worked on the federal award. Cause The error was caused by not applying adequate number of controls necessary for billing wage expenses to the federal award. Effect The Federal award was incorrectly charged with unreasonable wages. Repeat Finding No. Auditor's Recommendations We recommend that Chamber implement stronger internal controls over billing wage expenses to the federal award.

Coronavirus State and Local Fiscal Recovery Funds; ALN 21.027; U.S. Department of Treasury Finding Type: Material Weakness Condition: There were no formal documented federal policies and procedures in place for the year ended September 30, 2025 for Allowability of Costs, Compensation, and Procurement. Criteria: The Uniform Guidance requires a non-federal entity that has expended federal awards for a grant awarded on or after December 26, 2014 to have written policies and pertaining to various areas, including: 1) Allowability of costs charged to federal programs (§200.302 (7)), 2) Procurement (including bidding) and 3) Compensation (§200.430-431). Cause: Documented federal policies and procedures were not created and implemented by Saginaw-Shiawassee Habitat for Humanity. Effect: As a result of this condition, Saginaw-Shiawassee Habitat for Humanity did not fully comply with the Uniform Guidance applicable to all recipients of federal awards. Recommendations: We recommend that Saginaw-Shiawassee Habitat for Humanity prepare required written policies and procedures that are promulgated by 2 CFR 200. Organization’s Response: Saginaw-Shiawassee Habitat for Humanity concurs with the facts of this finding and is putting procedures in place to mitigate the lack of documented written policies and procedures.

2025-001: ACTIVITIES ALLOWED OR UNALLOWED/ALLOWABLE COST PRINCIPLES Type: Considered a significant deficiency in internal control over compliance/noncompliance Program: ALN 93.696 - Certified Community Behavioral Health Clinic Expansion Grants; Grant Number H79SM087001-01 ALN 93.788 - Opioid STR; Grant Number H79TI087831 Criteria: As detailed by 2 CFR 200.430(g)(1)(vii), “Budget estimates (meaning, 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: (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: During testing, it was noted that payroll was allocated to the grants based on budget estimates because the payroll system used did not allow staff to document their hours across multiple programs in real-time. However, after-the-fact reviews of charges made to the Federal awards were not done to ensure that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Cause/Effect: This condition appears to be the result of a misunderstanding of personal services documentation requirements. Questioned Cost: Indeterminable Recommendation: We recommend that the CMHSP review payroll procedures to ensure that after-the-fact reviews of payroll allocations are performed to support the assertion that final payroll amounts charged to the Federal award are accurate, allowable, and properly allocated.

Finding 2025-001: Lack of Supervisory Approval Over Employee Timesheets (Significant Deficiency) Federal Agency: National Highway Traffic Safety Administration Federal Programs: State and Community Highway Safety and National Priority Safety Program Assistance Listing Number(s): 20.600 / 20.616 Pass-Through Entity Name(s): Various Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Per 2 CFR §200.430(i), 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 controls that provide reasonable assurance that the charges are accurate, allowable, and properly allocated. Such records should be reviewed and approved by a responsible supervisory official having firsthand knowledge of the work performed. Condition: During our testing of payroll transactions, we noted that a sample of employee timesheets charged to Federal awards did not evidence documented supervisory review or approval. In these instances, while the timesheets were prepared by employees, there was no indication that a supervisor reviewed and approved the recorded hours prior to payroll processing or cost allocation. Cause: The Organization did not have adequate procedures or controls in place to ensure that all employee timesheets were consistently reviewed and approved by supervisory personnel. Effect or Potential Effect: Without documented supervisory approval, there is an increased risk that payroll costs charged to Federal awards may not be accurate, properly supported, or allowable. This deficiency could result in questioned costs and noncompliance with Federal regulations governing compensation charged to awards Questioned Costs: None noted. Context: During our testing of payroll, we selected a sample of 40 employee timesheets for the period under audit. Of the items tested, 9 timesheets lacked evidence of supervisory review and approval. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization implement and enforce a policy requiring documented supervisory review and approval of all employee timesheets prior to payroll processing. Procedures should include periodic monitoring to ensure compliance with this requirement.

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

2025-001 Timeliness of Effort Certification Cluster: Research and Development (also applies to other major programs referenced below) Sponsoring Agency: All research and development cluster sponsoring agencies and Department of Health and Human Services (for the other major program referenced below) Award Names: All research and development cluster awards and Doorway for Substance Use-Related Supports and Services Award Numbers: All research and development cluster awards, Cheshire Medical Center 05-95-920510-7040000 Assistance Listing Title: All research and development cluster assistance listing titles and Opioid STR Assistance Listing Number: All research and development cluster assistance listing numbers and 93.788 Award Year: 2024-2025 Pass-through entity: All research and development cluster pass-through entities and New Hampshire Department of Health and Human Services Criteria 2 CFR 200.430 contains the federal regulatory requirements for internal controls over certifying time expended on sponsored projects. The Dartmouth Health System’s practice is to utilize after-the-fact effort reports to certify that compensation costs charged to federal awards, are reasonable and consistent with the work performed. Actual effort expended on each federal award is certified by a responsible person with suitable means of verification that the work was performed at the end of the specified reporting period. The Dartmouth Health System’s effort certification policy outlines the required deadlines for certifying effort reports related to federal awards. Condition In testing internal controls over effort certifications, we noted the following: · Research and development- 14 effort reports totaling $43.1k of 17 selected effort reports totaling $51.7k were certified/approved outside of allowable timeframe defined by the effort certification policy. Certifications were on average 150 days late. · 93.788- 3 effort reports totaling $8.8k of 16 selected effort reports totaling $36.5k did not include a certification/approval date to determine whether the related effort was attested within the timeframe required by the entity’s effort certification policy. Cause Individuals required to complete quarterly effort certifications did not understand the policy requirements to certify effort in a timely manner. Effect The lack of timely effort certification could result in compensation expenditures charged to federal awards that are not accurate. Questioned Costs None noted. Repeat Finding Yes. This is a repeat of finding 2024-002. Recommendation We recommend that the Dartmouth Health System recommunicate its effort certification policy and provide training to all individuals required to certify effort for federal awards to ensure that the timely approval expectations are understood and adhered to. Management’s Views and Corrective Action Plan Management’s Views and Corrective Action Plan is included at the end of this report after the summary schedule of prior audit findings and status.

2025-04 Activities Allowed or Unallowed, Allowable Costs/Cost Principles - Significant Deficiency Federal agency: Department of State Assistance Listing Number: 19.015 Program: Cultural, Technical and Educational Centers Criteria: Per 2 CFR §200.430(g)(1)(i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our audit, we noted that benefit charges were not consistent with approved benefit rates. Of the forty (40) payroll samples selected for testing, there was one (1) instance in which the approved benefit rates per the employee records did not agree to the amounts allocated and charged to the federal program. Cause: During an update to benefit rates in the payroll system, the revised long-term disability rate was inadvertently entered as the life insurance rate, and the long-term disability rate was not updated. Effect: Payroll related benefit costs charged to the appropriation were not based on approved rates, resulting in an overcharge for life insurance benefits and an undercharge for long-term disability benefits. $ -- Identification as a Repeat Finding, if applicable: Not applicable. Recommendation: The Center should strengthen its controls over payroll and benefit rate updates to ensure that changes are accurately entered and applied within the payroll system. The Center should implement a review and verification process whereby all updates to benefit rates are independently reviewed and reconciled to approved rates prior to processing payroll. Additionally, the Center should perform periodic monitoring of payroll calculations and benefit allocations to confirm that amounts charged to federal programs are consistent with approved rates and supporting documentation. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and the recommendation. See Part IV Corrective Action Plan.

Finding No. 2025-003: Activities Allowed or Unallowed and Allowable Costs/Cost Principles –Significant Deficiency in Internal Control over Compliance (Payroll) Federal Program Name: All Pass-through Entity: All Federal Assistance Listing Number: All Criteria In accordance with 2 CFR §200.430(i), charges to federal awards for salaries and wages are required to be based on records that accurately reflect the work performed. These records must support the distribution of the employee’s salary or wages among specific activities or cost objectives. Condition The Organization allocates employees’ payroll costs to grants based on an estimate. Although the payroll allocation is periodically reviewed and revised, differences from actual time and effort can result due to an estimate being used. Questioned Costs Unknown. Context The Organization allocated payroll costs to multiple funding sources based on estimates during the audit period and did not maintain formal documentation to support allocations based on actual time and effort. Effect The employee time and payroll costs that are charged to the grant could differ from the actual time and payroll costs expended in support of the grant activities. Cause The Organization does not have established procedures to ensure that salaries and wages charged to federal awards are supported by records that accurately reflect the work performed. Documentation of personnel expenses should 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. Repeat Finding Yes Recommendation We recommend that management strengthen processes over payroll cost allocations to ensure amounts charged to funding sources are supported by documented actual time and effort. This may include implementing a formal methodology for allocating payroll costs, establishing procedures for employees to track or otherwise document time spent by program or funding source, and performing periodic reviews and adjustments based on actual activity. In addition, management should ensure that sufficient documentation is maintained to support how payroll costs are allocated and that such processes are consistently applied. Management’s Response/View of Responsible Officials Management agrees with this finding, see the Corrective Action Plan.

Agency: U.S. Department of Education and U.S. Department of the Treasury Federal Assistance Listing Number: 84.215N Innovative Approaches to Literacy; Promise Neighborhoods; Full-Service Community Schools; and Congressionally Directed Spending for Elementary and Secondary Education Community Projects; 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award Year: 2025 Pass-Through Entity: State of Connecticut Judicial Branch Office, City of Hartford, State of Connecticut Department of Public Health, State of Connecticut Department of Social Services, State of Connecticut Department of Mental Health and Addiction Services, State of Connecticut Department of Children and Families, State of Connecticut Department of Housing Repeat finding and prior year finding number: 2024-002 Criteria: In accordance with 2 CFR §200.430(i) of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), compensation for personal services charged to federal awards must be based on records that accurately reflect the work performed. When budget estimates are used for interim accounting purposes, they must: produce reasonable approximations of the activity actually performed, be reconciled to actual effort on a regular basis, and be adjusted in a timely manner to reflect significant changes in work activity. Documentation may include timesheets, effort certifications, payroll distribution reports, and other personnel activity records, and must be reviewed and approved by authorized personnel. Condition and Context: During our testing of payroll costs charged to the major federal programs, we selected 51 payroll transactions and noted that a documented hindsight review comparing actual employee effort to budgeted payroll allocations was not completed for any of the 51 selections tested. While the required hindsight review was not completed for the selections tested, there was evidence that the employees performed work on the applicable federal awards, and the amounts allocated were generally consistent with budgeted allocations. The sample was statistically valid. Questioned Costs: We were unable to quantify an amount of questioned costs. While a time and effort reporting was lacking for the items included in our sample, there was evidence of work performed on the grants and the amounts allocated aligned closely to the budget. Therefore, we were unable to quantify the amount of questioned costs. Cause: The Medical Center changed its procedures for documenting employee time allocations; however, formal processes were not established to document and regularly reconcile actual hours worked to budgeted allocations. As a result, hindsight reviews were not formally maintained to verify that payroll allocations were supported by employees' actual work performed. Effect: The lack of documentation of hindsight review increases the risk of inaccurate payroll cost allocations and potential noncompliance with federal grant requirements. Recommendation: The Medical Center should update its policies and procedures to require and document a formal hindsight review of employee working hours. This review should verify that actual hours worked align with budgeted hours, particularly in cases where payroll costs are allocated across multiple grants. The updated procedures should include clear guidelines for conducting and retaining evidence of such reviews to support accurate cost allocations and ensure compliance with federal grant requirements.

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.

2025-003 Time & Effort and Semi-Annual Certifications Type of Finding: Significant Deficiency in Internal Control Over Compliance New or Repeat Finding: Repeat; see prior year finding #2024-007. Federal Program: Special Education Cluster (ALNs 84.027, 84.173); Head Start Cluster (ALN 93.600) Federal Agency: U.S. Department of Education (Special Education Cluster); U.S. Department of Health and Human Services (Head Start Cluster) Pass-through Entity(ies): Special Education Cluster - Texas Education Agency (246600010849086600, 256600010849086600, 246610010849086610, 256610010849086610, 66002406); Head Start Cluster - N/A Compliance Requirement: B - Allowable Costs / Costs Principles Criteria: Under 2 CFR 200.430(g), when employees work solely on a single federal award or cost objective, charges for their salaries must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. One allowable method is through completion of semi-annual certifications signed by the employee or a supervisory official with firsthand knowledge. These certifications provide assurance that salary costs charged to the federal program reflects the total activity for which the employee is compensated by the District, not exceeding 100% of compensated activities. Condition: The District was not able to provide in a timely manner the required time & effort and semiannual certifications for employees who worked on the Special Education and Head Start clusters. These certifications, which confirm that the employee worked 100% on the program for the period covered, were not completed timely, but were ultimately provided prior to conclusion of the audit. Cause: The District was in the process of implementing the corrective action plan from the previous fiscal year's audit, which consisted of procedures to ensure the forms were prepared, signed, and retained in accordance with federal requirements. Effect or Potential Effect: Without semi-annual certifications, the District would lack the required documentation to fully support salary costs charged to the grant. This raises the risk that unallowable or unsupported personnel costs were charged to the program, even if employees were appropriately assigned. Questioned Costs: No questioned costs were identified, as the District ultimately provided audit evidence to support the time worked on the grant. In addition, the personnel records of the employees sampled contained approval of the employee to be hired into the appropriate job duties to be funded by their appropriate grant-funded position. Context: The District was unable to provide timely the required semi-annual certifications for 2 out of 5 employees selected in our sample for testing for the Special Education Cluster. The District was unable to provide timely the required semi-annual certifications for 39 out of 39 employees selected in our sample for testing for the Special Education Cluster. Ultimately, semi-annual certifications were provided for all employees in our sample that remained charged to their respective grant for fiscal year 2025. Recommendation: We recommend that the District continue to implement procedures to ensure that semi-annual certifications are prepared, signed, and retained for all employees working solely on federal programs. The District should provide training to finance and program staff to ensure continued compliance with federal documentation requirements. Views of Responsible Officials: District officials agree with the finding. The District has implemented new procedures in fiscal year 2026 to ensure semi-annual certifications are completed appropriately.

Significant Deficiency in Internal Control for Allowable Costs/Cost Principles Health Center Program Cluster AL No. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. H80CS00438 Criteria: Under 2 CFR 200.430, payroll expenses must be based on records that accurately reflect the work performed and supported by a system of internal control that provides reasonable assurance that charges are accurate, allowable, and properly allocated. Condition: During the testing performed, it was noted that the Organization transferred payroll costs between programs, however, no time and effort certification or equivalent documentation was updated to reflect the changes. Additionally, the transfer of payroll costs between grants was not properly reflected within the accounting system records by grant. Cause: During the year the Organization had new grants, but the payroll system was not updated to reflect the changes. Effect: Allocation of payroll costs to the federal award program may be inaccurate or not properly documented. Questioned costs: n/a Context: The Organization did not maintain supporting documentation for payroll costs that were reallocated to a new grant. These costs were reallocated from the Health Center Program to the new award. Repeat Finding: Yes, 2024-004 Recommendation: The Organization should add the new grant to the payroll software for separate tracking and update their allocations within the general ledger to accurately reflect payroll costs incurred by grant. Additionally, the Organization should provide training to staff on grant tracking and documentation. Views of Responsible Officials: Management agrees with this finding. Due to the timing of when the prior year audit was completed and issues identified, this issue was in progress towards the end of the current year. Staff will be trained to ensure future changes in payroll costs are updated timely within the system and documentation maintained.

Finding 2025-001– Allowable Costs – Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Federal Program: COVID-19 – Disaster Grants – Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Agency: U.S. Department of Homeland Security Award Year: 2025 Criteria – Pursuant to 2 CFR §200.403 and 2 CFR §200.430, costs charged to federal awards must be accurate, allowable, properly supported, and based on records that accurately reflect the work performed. Payroll costs charged to a federal award must be based on the actual compensation rates applicable during the period in which the services were performed. Condition – During our testing of the allowable costs compliance requirements of the COVID-19 – Disaster Grants – Public Assistance (Presidentially Declared Disasters) Program, we noted LAJH used subsequent employee pay rates when calculating payroll reimbursement requests submitted under the grant rather than the contemporaneous pay rates in effect during the applicable period of performance. In addition, there were duplicate entries included in this population, leading to an overstatement of allowable costs. Cause – LAJH did not have adequate internal controls in place to ensure payroll reimbursement calculations were based on accurate payroll records and pay rates applicable to the period during which grant-related services were performed. Effect – As a result, payroll expenditures charged to the federal program were overstated, resulting in questioned costs totaling $79,825. In addition, LAJH was not in compliance with federal allowable cost requirements. Questioned costs – $79,825 Context – The exception was identified through testing of payroll expenditures charged to the federal program. The error related to the methodology used to calculate reimbursable payroll costs for employees whose compensation rates changed after the grant performance period as well as a lack of overall review of the expenditures included in this grant. Identification as a repeat finding, if applicable – This is not a repeat finding. Recommendation – We recommend that LAJH strengthen its internal controls over payroll reimbursement calculations to ensure that amounts charged to federal awards are supported by contemporaneous payroll records and the actual pay rates in effect during the applicable service period. In addition, LAJH should implement a comprehensive review process to verify that all expenditures included in reimbursement requests are appropriate, complete, and free of duplicate entries. Management should also review all payroll-related reimbursement requests submitted under the program and adjust previously claimed amounts, as necessary. Views of responsible officials – Management agrees with the finding. During the preparation of payroll reimbursement calculations for the FEMA Public Assistance Program, subsequent employee pay rates were inadvertently used rather than the contemporaneous pay rates applicable during the grant performance period. Management has reviewed the calculation methodology and acknowledges that this resulted in questioned costs of $79,825.

Federal Agency: United States Department of Housing and Urban Development Pass-Through Entity: Texas Department of Housing and Community Affairs Assistance Listing Number: 14.231 Federal Program Name: Emergency Solutions Grants Program (“ESG”) Subrecipient Contract Number: 42246070038 Award Number: E24-DC-48-0001 Type of Finding: Allowable Costs/Cost Principles – Significant Deficiency in Internal Control over Compliance Criteria In accordance with 2 CFR §200.403 and §200.430, costs charged to federal awards must be allowable, allocable, and properly documented. Compensation for personnel services must be supported by records that accurately reflect the work performed and must be allocated to benefiting programs based on actual activity. In addition, the ESG contract requires that personnel costs charged to the grant be supported by accurate time distribution records that reflect actual time worked and allocate costs by specific program and funding source. Condition During testing of transactions charged to the ESG program, we noted that employee timesheets were not properly allocated by program. Payroll and related benefits charged to the program were not supported by documentation reflecting actual time spent on grant activities. While the Center maintains budget-based allocations in its accounting system, such allocations do not replace the requirement to allocate payroll costs based on actual time worked by program. Cause The payroll processing company used by the Center does not have the functionality to allocate employee time by program, and management did not implement compensating controls to ensure compliance with federal time-and-effort requirements. Effect As a result, payroll and related benefit costs charged to the ESG program were not properly supported or allocable in accordance with 2 CFR Part 200, resulting in questioned costs. These costs are subject to potential disallowance by the awarding agency and possible repayment from the Center. Questioned Costs and Likely Questioned Costs Based on the specific exceptions identified in our sample, known questioned costs totaled $4,662 for the period tested. Using the results of the sample and projecting the errors to the applicable population of transactions, we estimate likely questioned costs of $234,582 for the program. Recommendation We recommend that management strengthen internal controls over payroll and timekeeping allocation, including requiring detailed time tracking by program, enhanced supervisory review, and periodic internal monitoring. Management should also implement a review and approval process to ensure personnel costs charged to the program comply with contract terms and federal cost principles prior to reimbursement.

Federal Agency: United States Department of Justice Pass-Through Entity: Texas Office of the Governor Assistance Listing Number: 16.575 Federal Program Name: Victims of Crime Act (“VOCA”) Contract Number: 285706 and 285707 Federal Award Number: 15POVC-23-GG-00468-ASSI Type of Finding: Allowable Costs/Cost Principles – Significant Deficiency in Internal Control over Compliance Criteria In accordance with 2 CFR §200.403 and §200.430, costs charged to federal awards must be allowable, allocable, and properly documented. Compensation for personnel services must be supported by records that accurately reflect the work performed and must be allocated to benefiting programs based on actual activity. Condition During testing of transactions charged to the VOCA program, we noted that employee timesheets were not properly allocated by program. Payroll and related benefits charged to the program were not supported by documentation reflecting actual time spent on grant activities. While the Center maintains budget-based allocations in its accounting system, such allocations do not replace the requirement to allocate payroll costs based on actual time worked by program. Cause The payroll processing company used by the Center does not have the functionality to allocate employee time by program, and management did not implement compensating controls to ensure compliance with federal time-and-effort requirements. Effect As a result, payroll and related benefit costs charged to the VOCA program were not properly supported or allocable in accordance with 2 CFR Part 200, resulting in questioned costs. These costs are subject to potential disallowance by the awarding agency and possible repayment from the Center. Questioned Costs and Likely Questioned Costs Based on the specific exceptions identified in our sample, known questioned costs totaled $2,406 for the period tested. Using the results of the sample and projecting the errors to the applicable population of transactions, we estimate likely questioned costs of $178,546 for the program. Recommendation We recommend that management strengthen internal controls over payroll and timekeeping allocation, including requiring detailed time tracking by program, enhanced supervisory review, and periodic internal monitoring. Management should also implement a review and approval process to ensure personnel costs cha

Criteria or specific requirement: Title 2, Code of Federal Regulations (CFR), Part 200.430(g) requires that charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. This includes time and effort documentation that is supported by a system of internal controls and, for employees working on a single federal program, certifications that are prepared at least semi‑annually and signed by the employee or a supervisory official with first‑hand knowledge of the work performed. Condition: The District did not complete time and effort certifications for the teachers whose salaries and benefits were charged to the grant during the year. Questioned costs: None Context: There were no formal procedures in place surrounding time and effort certifications for teachers under the ESSER grant. Cause: The District did not have formal procedures in place to ensure time and effort certifications were completed for all teachers charged to the ESSER grant. Effect: Without properly signed time and effort certifications, the District cannot adequately support that salary and benefit costs charged to federal programs are allowable and accurately allocated. Repeat Finding: No Recommendation: We recommend the District implement written procedures that require timely preparation and retention of documentation supporting the work performed and allocation methodology and supervisory review/approval consistent with the District's policies. Views of responsible officials: [There is no disagreement with the audit finding.] Action taken in response to finding: The district will ensure we are completing time and effort logs for staff who are federally funded. Name of the contact person responsible for corrective action: Stacy Rodriguez Director of Finance Planned completion date for corrective action plan: September 2025

Criteria:Chargestofederalawardsforpersonalservicesmustbesupportedbydocumentationreflectingactualwork performed (2 CFR 200.430). Condition: Payroll costs charged to the program were not supported by adequate time and effort documentation. Cause: Management did not maintain time and effort records for staff paid from the program. Effect: Payroll charges to the program could not be fully supported.

Finding 2025-002: Payroll Costs Not Supported by Actual Time and Effort - Material Weakness Federal Agency: Department of Education Federal Program Title: Education Innovation and Research Federal Assistance Listing Number: 84.411 Compliance Requirement: Allowable Costs/Cost Principles Criteria 2 CFR §§ 200.403 and 200.405 require that costs charged to a federal award be adequately documented and allocable to the award. Under 2 CFR § 200.430(i), charges for salaries and wages must be based on records that accurately reflect the work performed, supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Where an employee works on multiple awards or activities, the records must support the distribution of the employee's salary or wages among those activities. Budget estimates alone are not sufficient to support charges to a federal award. Additionally, 2 CFR § 200.303 requires the Organization to establish and maintain effective internal control over federal awards. Condition We tested 60 payroll transactions totaling approximately $589,000 charged to the Education Innovation and Research Program and identified 12 exceptions totaling approximately $6,600. The exceptions were related to payroll costs allocated among multiple funding sources that were not supported by documentation accurately reflecting actual time and effort performed. Specifically, the Organization allocated payroll costs using methodologies that were not supported by after-the-fact records demonstrating the actual work performed, as required by federal regulations. Context Payroll costs charged to the program were approximately $589,000, or 60% of total federal expenditures of $981,559. Exceptions were identified in 12 of 60 payroll transactions tested, with known questioned costs of approximately $6,600. Cause Management did not establish, implement, and maintain an effective system of internal control over payroll expenditures charged to federal awards. Specifically, management did not ensure that payroll allocation methodologies were adequately documented, consistently reviewed, or verified against actual work performed. Supervisory review procedures designed to validate payroll distributions and supporting documentation were either not established or were not performed consistently throughout the audit period. In addition, periodic reconciliations between payroll records, general ledger activity, and amounts charged to federal programs were not performed in a timely manner. Management also did not implement sufficient monitoring activities to identify, investigate, and correct payroll allocation errors before costs were charged to federal awards. As a result, control deficiencies were not detected or corrected timely, increasing the risk that unallowable, unsupported, or inaccurately allocated payroll costs would be charged to federal programs. Effect As a result of the control deficiencies, payroll costs charged to the federal program could not be relied upon to be accurate, allowable, or adequately supported. The deficiencies resulted in material noncompliance with federal requirements governing allowable costs and cost principles. Questioned costs Known questioned costs of $6,600 were identified through audit testing. Identification of a repeat finding This is not a repeat finding. Recommendation The Organization should establish and implement formal policies and procedures governing payroll costs charged to federal awards. The procedures should identify the required supporting documentation, payroll allocation methodologies, review and approval responsibilities, reconciliation requirements, and monitoring activities necessary to ensure compliance with federal requirements. Management should require periodic supervisory review of payroll distributions and reconciliations between payroll records and amounts charged to federal programs. In addition, management should promptly investigate and correct identified discrepancies and provide ongoing training to personnel responsible for payroll processing and grant administration to ensure payroll costs charged to federal awards are accurate, allowable, and adequately supported. Views of responsible officials Management agrees with the finding and acknowledges that improvements are needed in the design and operation of internal controls over payroll costs charged to federal awards. The Organization will establish formal written procedures for payroll allocations, documentation requirements, supervisory review, reconciliation processes, and compliance monitoring activities. Management will assign responsibility for reviewing payroll costs charged to federal programs and performing periodic reconciliations between payroll records, accounting records, and federal reimbursement requests. The Organization will also provide training to personnel responsible for payroll processing and grant administration to strengthen understanding of Uniform Guidance requirements.

Finding 2025-001: Lack of Time and Effort Documentation and Review Federal Program: Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Number (ALN): 21.027 Federal Agency: U.S. Department of the Treasury Type of Finding: Significant deficiency in internal control over compliance Criteria: Per 2 CFR 200.430(i), 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 providing reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition and context: We reviewed all salary charges for one of the seven months included in the grant period. For the selected month, timecards were available to support the salary charges. Of the five employees reviewed, four spent 100% of their time on this grant’s allowable activities. One employee tested did allocate time to the grant based on the allocation as stated in the budget. There was no written evidence of supervisory review of the allocation percentages. Although the allocation methodology was based on budget, we verified that all employees charged to the grant had job titles and responsibilities consistent with allowable grant activities. No evidence was found of unallowable or inappropriate salary charges during our testing of the selected month. Cause: As most employees spend the entirety of their time on activities allowable under the grant, there was no process in place to ensure the timecard allocations for the one employee who split their time among multiple activities was reconciled to the amount charged to the grant.. Effect: Lack of written review and reconciliation increases the risk that salary costs may not be allocated accurately, potentially resulting in noncompliance with allowable cost principles under Uniform Guidance (2 CFR 200.430). Recommendation: We recommend the entity implement a process to ensure written supervisory review and after-the-fact certification of salary allocations to grants, in compliance with Uniform Guidance requirements. Views of Responsible Officials: Management concurs with the finding and will address the issue as outlined in the corrective action plan included in this report

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.