Findings Citing § 200.430

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

FINDING 2025-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2023-2024, 2024-2025 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 16 LINTON-STOCKTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation did not have adequate procedures in place to ensure that allocation of costs related to compensation and fringe benefits of the food service director was appropriately documented. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430 states in part: ". . . Compensation for personal services includes all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the Federal award, including but not necessarily limited to wages and salaries. Compensation for personal services may also include fringe benefits . . . (i) Standards for Documentation of Personal Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; INDIANA STATE BOARD OF ACCOUNTS 17 LINTON-STOCKTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); (iv) Encompass federally-assisted and all other activities compensated by the non- Federal entity on an integrated basis but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause The School Corporation's Management had not developed nor implemented a system of internal controls that would have ensured that the allocation of costs are appropriately documented, and made available for audit, as it related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation did not retain and provide appropriate supporting documentation to ensure compliance with allowable cost and cost principles requirements. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's Management establish an effective system of internal controls and develop policies and procedures to ensure the allocation of costs are appropriately documented, which are to be maintained and made available for audit as related to the Allowable Cost/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

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

2025-002. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Education Stabilization Funds COVID 19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430, which requires that records accurately reflect the approved and authorized work performed, and support the distribution of compensation among activities. Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employees work on more than one Federal award, or a Federal award and non-Federal award. The preparation of payroll verification forms, or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, it was noted that in one instance, the District’s payroll verification form was not reviewed or signed by either the supervisor or employee that was charged to the grant in order to comply with Subpart I, 2 CFR §200.430. Cause: Employee payroll verification forms should accurately reflect time and effort, as described in Subpart I, 2 CFR §200.430, to support salaries and other forms of compensation charged to a federal program. During our audit testing, we noted that one of the District’s payroll verification forms was not signed off by either the supervisor or employee. Effect: Payroll verification forms that are not signed or approved could result in compliance risk due to unsupported salaries and wages not being reviewed and charged to Federal awards correctly. Questioned Costs: The dollar amount was undetermined as the payroll verification form was not signed by the supervisor or employee. Context: For Education Stabilization Funds, based on a sample of nineteen (19) payroll transactions, we noted one (1) payroll transaction did not have a payroll verification form that was signed by either the supervisor or employee. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should prepare, maintain, and have the proper employee signoffs and supervisor approvals for the appropriate documentation to support salaries and wages charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR §200.430. Views of Responsible Officials of Auditee: The District acknowledges the finding and will thoroughly review and maintain the payroll verification forms to ensure each employee’s salary, or other forms of compensation are properly approved and signed off by both the supervisor and employee to comply with Subpart I, 2 CFR §200.430.

2025-003. Payroll and Disbursement (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Special Education Cluster: Special Education Grants to States: IDEA Part B ALN: 84.027 Education Stabilization Funds COVID 19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U Criteria: Ensure that costs charged to federal awards are allowable, reasonable, and allocable in accordance with terms and conditions of the federal award and the approved grant budget, and maintain a financial management system that provides accurate, current, and complete disclosure of expenditures charged to federal awards prescribed by Subpart E, 2 CFR §200.403 through §200.405 and §200.430, and Subpart D, 2 CFR §200.302. Condition: As required under Subpart E, 2 CFR §200.403 through §200.405 and §200.430, and Subpart D, 2 CFR §200.302, which require a financial management system to provide effective control over accountability for federal funds, and to identify the source and application of funds. During the year, we noted that the District recorded journal entries transferring payroll and disbursement related expenditures from the General Fund to the Special Aid Fund under the Special Education Cluster and Education Stabilization Funds grant codes. These journal entries lacked adequate supporting documentation to demonstrate approvals and if the costs were allowable and allocable to the applicable federal awards. Consequently, we were unable to obtain sufficient appropriate audit evidence to conclude whether the journalized transactions were properly charged to the federal programs in order to comply with Subpart E, 2 CFR §200.403 through §200.405 and §200.430, and Subpart D, 2 CFR §200.302. Cause: All journalized transactions should include adequate supporting documentation to substantiate the transfer of funds, especially when recorded to federal awards, as prescribed in Subpart E, 2 CFR §200.430 and Subpart D, 2 CFR §200.302. During the current year, we noted the District did not consistently retain or attach original source documentation to journal entries reallocating General Fund expenditures to the Special Aid Fund. Additionally, internal controls were not in place to ensure that such journal entries were reviewed to confirm allowability, reasonableness, allocability, and compliance with the approved budgets for the Special Education Cluster and Education Stabilization Funds prior to being posted, as required by Subpart E, 2 CFR §200.403 through §200.405 and §200.430, and Subpart D, 2 CFR §200.302. Effect: Due to the lack of supporting documentation and approvals, there is an increased risk that unallowable or unsupported costs may have been charged to the Special Education Cluster and Education Stabilization Funds and included in reimbursement requests. As a result, the District could be subject to disallowed costs and potential repayment to the grantor agencies, if costs are determined to be unallowable. Questioned Costs: The dollar amount was undetermined at the time of the audit due to insufficient documentation to support the allowability of the journalized expenditures. Context: For the Special Education Cluster and the Education Stabilization Funds, based on a sample of journal entries, we noted instances where supporting documentation was insufficient. For the Special Education Cluster, one (1) of three (3) journal entries lacked adequate documentation for payroll-related transactions, as original timesheets were not available to verify the employee’s work activity or confirm alignment with the grant’s approved budget. Similarly, for the Education Stabilization Funds, two (2) of three (3) journal entries lacked sufficient supporting documentation. The District did not provide time and effort records for payroll-related transactions or supporting invoices for disbursement transactions, limiting the ability to confirm that these costs were properly documented and consistent with grant requirements. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should implement procedures to ensure all journal entries made that reallocate payroll and disbursement expenditures charged to federal grants are supported by complete and adequate documentation and approvals, including time and effort documentation for payroll, and supporting invoices for disbursements as support for the journal entries in accordance with the requirements of Uniform Guidance at Subpart E, 2 CFR §200.403 through §200.405 and §200.430, and Subpart D, 2 CFR §200.302. Views of Responsible Officials of Auditee: The District acknowledged the finding and noted that procedures have been implemented to prevent recurrence. These procedures are intended to ensure all journal entries contain adequate supporting documentation and approvals, including time and effort records for payroll, and supporting invoices for disbursements. Additionally, documentation will be consistently maintained and reviewed for all payroll and disbursement expenditures reallocated through journal entries and charged to federal grants in compliance with Subpart E, 2 CFR §200.403 through §200.405 and §200.430, and Subpart D, 2 CFR §200.302.

2025-012: Strengthen Controls Over Payroll Costs Charged to Federal Grants Applicable to: Department of Energy Assigned Topic: Federal Grants Management Prior Finding Number: N/A Finding Type: Internal Control and Compliance Finding Severity: Material Weakness Financial Statement Finding: No Federal Awards Finding: Yes ALPT - ALN: Abandoned Mine Land Reclamation (AMLR) - 15.252 Federal Award ID (Year): S24AF00004 (2022); S24AF00039 (2023); S24AF00050 (2024) Federal Agency: U.S. Department of the Interior Compliance Requirement: Activities Allowed or Unallowed - 2 CFR § 200.430(g) Known Questioned Costs: $0 The Department of Energy (Energy) does not have sufficient controls to ensure employee compensation (payroll costs) charged to the Abandoned Mine Land Reclamation (AMLR) federal grant program accurately reflects actual work employees perform. Energy allocates and charges payroll costs to the AMLR grant program based on predetermined percentages assigned to each position. Energy’s management establishes these percentages at the beginning of each grant during the budget development process. However, Energy does not perform and document after-the-fact reviews or reconciliations to verify the allocation methodology reasonably reflects employees’ actual activities related to the federal program. Title 2 Code of Federal Regulations (CFR) § 200.430(g)(1) requires management to maintain records supporting charges to federal awards be supported by a system of internal control that provides reasonable assurance the charges are accurate, allowable, and properly allocated. In addition, when payroll costs are charged to a federal award based on budget estimates, 2 CFR § 200.430(g)(1)(vii) requires an entity’s system of internal control to include processes to review after-the-fact interim charges and adjust the final amounts charged, as necessary. Energy has not established formal written policies or procedures governing the allocation of payroll costs it charges to federal programs, nor has it implemented processes to periodically validate whether payroll charges based on management’s budget estimates are consistent with actual work employees perform due to resource restrictions. As a result, management cannot ensure payroll costs it charges to the AMLR federal grant program are accurate, allowable, and properly allocated. Due to the pervasiveness of this condition and the absence of complementary controls, we consider this deficiency to be a material weakness in internal control. Additionally, because payroll costs are approximately 21 percent of Energy’s total expenses charged to the AMLR grant program, this condition represents material noncompliance with the provisions of 2 CFR § 200.430. Because Energy does not maintain sufficient documentation to demonstrate payroll costs it charges to the AMLR program reflect actual work employees perform, we determined that known questioned costs exist related to employee compensation. However, we cannot determine the dollar amount of questioned costs, as Energy allocated payroll charges based on predetermined percentages without after-the-fact validation, which prevents us from quantifying and reporting known questioned costs for this finding. Energy management should allocate the necessary resources to establish and implement written policies and procedures, supported by an adequate system of internal control, to ensure payroll costs it charges to the AMLR program reflect actual work employees perform in compliance with the requirements of 2 CFR § 200.430. Views of Responsible Officials: The views of responsible officials are included in the report related to their organization, which can be found at www.apa.virginia.gov and, in summary, do not express disagreement with the finding.

2025-023: Strengthen Internal Controls over Payroll Processes Applicable to: Department for Aging and Rehabilitative Services Assigned Topic: Federal Grants Management Prior Finding Number: N/A Finding Type: Internal Control and Compliance Finding Severity: Significant Deficiency Financial Statement Finding: No Federal Awards Finding: Yes ALPT - ALN: Social Security Disability Insurance - 96.001 Federal Award ID (Year): 04-2404VADI00 (2024); 04-2504VADI00 (2025) Federal Agency: U.S. Social Security Administration Compliance Requirement: Allowable Costs/Cost Principles - 2 CFR § 200.303(a); 2 CFR 200.430(g)(1)(i) Known Questioned Costs: $0 Aging and Rehabilitative Services’ Finance Division is not maintaining adequate internal control over several of its key payroll processes. During fiscal year 2025, Aging and Rehabilitative Services spent approximately $213 million in federal funds, of which about $85 million (40%) was for personal service expenses. We identified the following specific weaknesses: Aging and Rehabilitative Services’ Finance Division does not have written, agency-specific payroll policies and procedures governing all critical payroll processes, including payroll reconciliations and payroll certifications. The Department of Accounts’ (Accounts) Commonwealth Accounting Policies and Procedures (CAPP) Manual Topic 10305 requires agencies to develop and maintain their own written policies over critical processes, including payroll, rather than relying solely on system guidance or the CAPP Manual. Aging and Rehabilitative Services’ Finance Division was unable to provide documentation supporting the completion and review of payroll (pay period) reconciliations for five out of the five (100%) payroll (pay period) reconciliations selected. CAPP Manual Topic 50905 requires agencies to complete payroll (pay period) reconciliations to ensure payroll transactions are accurate, complete, and properly reviewed. Aging and Rehabilitative Services’ Finance Division relies on the Accounts’ Cardinal Human Capital Management (HCM) materials and CAPP Manual provisions to support its payroll activities. While the use of Accounts’ guidance provides a foundation for internal control, it is not intended to be a substitute for the agency’s own internal policies and procedures. The absence of documented internal policies and procedures limits consistency, accountability, and management oversight and increases the risk that Aging and Rehabilitative Services will not prevent and/or detect errors or discrepancies in a timely manner. Title 2 CFR § 200.303(a) requires that federal grant recipients 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. Further, 2 CFR 200.430(g)(1)(i) states that charges to federal awards for salaries and wages must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Aging and Rehabilitative Services’ Finance Division experienced staffing shortages during the period under review because of turnover and was unable to devote the resources necessary to establish internal controls over several of its key payroll processes. Aging and Rehabilitative Services’ management should devote the necessary resources to establish and maintain proper internal control over its payroll processes. Views of Responsible Officials: The views of responsible officials are included in the report related to their organization, which can be found at www.apa.virginia.gov and, in summary, do not express disagreement with the finding.

Criteria: 2 CFR, section 200.430 states, in part: (i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (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. 2 CFR, section 200.303 states, in part: The non- Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CSAM Procedure 905 states, in part: Periodic (Semiannual) Certification Employees who work solely on a single federal award or cost objective need only complete a periodic certification. The periodic certification must:  Be prepared at least semiannually.  Be signed by the employee or the supervisory official having firsthand knowledge of the work performed by the employee.  State the employee worked solely on that single federal program or cost objective during the period covered by the certification. Where multiple employees work on the same cost objective, a blanket certification may be used as the documentation for all employees who worked on the cost objective. Personnel Activity Report Except as provided in “Substitute Systems for Time Accounting” … employees who work on multiple activities or cost objectives of which at least one is federal must complete a personnel activity report (PAR) or equivalent documentation. A PAR may be as detailed as a document that identifies the employee’s activity daily by hours, or it may be as simple as a report of the total hours or percentage of hours spent in each categorical program or cost objective. The level of detail can generally be determined by the diversity and variation of the employee’s work activities. The safest approach is to provide more documentation rather than less. Condition: The District has five employees who must complete PARs on a monthly basis. Upon review of the PARs the following deficiencies were noted.  PARs were not filled out properly from April 2025 through June 2025, which required amendment.  Due to errors on the PARs from April 2025 through June 2025, the Districts year end entries to charge salaries and benefits to Title I were incorrect. Context: Exceptions are recurring among the five employees who are required to fill out PAR forms. Questioned Costs: The net overcharge to Title I, Part A was $29,675 for all five employees. Cause: District personnel do not follow the established procedures as to when and how PAR forms must be prepared. In addition, there is a lack of oversight to ensure that PAR forms are collected after the end of each month, filled out accurately, and signed by the employee as well as their supervisor. Effect: Estimated questioned cost of $29,675 for the 2024-25 fiscal year. Recommendation: The District should provide training to employees regarding how to complete PAR forms and enforce timelines. In conjunction, the District should assign an employee who is responsible for reviewing and ensuring that all PAR forms have been collected and signed by the employee and supervisor. Lastly once it has been verified that the PAR form is complete, a copy should be forwarded to Fiscal Services so that they may ratify the salaries and benefits charged to Title I to reflect the percentage noted on the PAR form. Views of Responsible Officials: The District recognizes the finding and is committed to ensuring that all federal time accounting requirements are properly followed for staff funded through Title I programs. The District understands that accurate and complete Personnel Activity Reports (PARs) are necessary to support appropriate salary and benefit charges to federal resources. To address this, the District will reinforce expectations through additional training and support for employees and supervisors on the correct preparation and monthly submission of PAR forms. The District will also strengthen internal review procedures by assigning responsibility for confirming that PARs are completed accurately, collected on time, and signed by both the employee and the supervising administrator. In addition, the District will ensure PAR documentation is consistently forwarded to Fiscal Services to allow for timely review and necessary adjustments so that payroll expenditures align with the actual percentage of time worked on Title I activities.

Finding Number: 2025-004 Federal Program: Title I Federal Award Identification Number and Year: 2025 Assistance Listing Number (ALN): 84.010A Federal Awarding Agency: U.S. Department of Education Pass-through Entity: Ohio Department of Education and Workforce Compliance Requirements: Allowable Costs/Allowable Activities Repeat Finding: No Significant Deficiency/ Noncompliance – Time & Effort Criteria: 2 CFR § 3474.1 gives regulatory effect to the Office of Management Budget guidance in 2 CFR § 200 for the Department of Education. 2 CFR § 200 Subpart E which states, in part, costs must be adequately documented in order to be considered allowable. 2 CFR § 200.430(g)(1)(i) states, in part, 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 Ohio Department of Education and Workforce’s Grants Manual states, in part, semi-annual certifications are allowed when an employee’s compensation is funded by only one federal grant and works solely on a single cost objective. An employee funded by a federal grant and the general fund would fall under this category. Finding Number: 2025-004 (Continued) Significant Deficiency/ Noncompliance – Time & Effort (Continued) Criteria (continued): The Ohio Department of Education and Workforce’s Grants Management Guidance 2014-002 states, in part, employees who meet [the criteria to use semi-annual certifications] are not required to maintain time and-effort records if their job description clearly shows the employee is assigned 100% to the program or single cost objective. Each employee must certify in writing, at least semi-annually, that he/she worked solely on the program or single cost objective for the period covered by the certification. The certification is signed by the employee or by the supervisor having first-hand knowledge. Charges to the grant must be supported by these semi-annual certifications. The semi-annual certification is executed after the work has been completed, and not before. Condition: We performed a test of controls and compliance over allowable costs/cost principles for payroll expenditures charged during fiscal year 2025. Semi-annual certifications were not completed for one semiannual period for two employees. Cause: Error when completing the semi-annual certifications. Effect: Although we did not identify any unallowable costs, the lack of controls over the time and effort documentation subjects the School District to an increased risk of unallowable costs being charged to the federal programs. Recommendation: We recommend the School District review the individuals paid out of the federal funds to ensure the amounts are allowable. After this review, the School District should ensure the proper time and effort documentation exists in accordance with the requirements above. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.

Name: Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and COVID-19 Airport Programs; ASL#: 20.106; Federal Grantor: U.S. Department of Transportation; Pass Through Entity: State Department of Transportation; Award No.: 3-06-0193-017, 3-06-0193-019, 3-06-0193-020, 3-06-0193-021; Year: 2024/2025; Compliance Requirement: Allowable Costs/Cosst Principles; Criteria: According to 2CFR 200.430(i)(1) (Standards for Documentation of Personal Expenses), charges to Federal Awards for salaries and wages must be based on records that accurately reflect the work performed. For employees that work on multiple activities or cost objectives (e.g., FAA grant and non-grant activities), documentation must support the distribution of their time.; Condition: During testing of payroll expenditures, we reviewed the one employee’s time that was charged to the FAA grant (ALN 20.106). We noted that the City did not maintain itemized, signed timesheet detailing the specific hours worked on FAA project tasks versus other projects or administrative duties.; Cause: The City did not have established control procedures to ensure that employees working on multiple projects maintained detailed, itemized timesheets tracking time to specific grant and non-grant projects.; Effect: The City is not in compliance with 2CFR 200.430. The lack of proper documentation results in questioned costs, as the federal program may have been charged for time spent on non-federal activities.; Questioned Cost: $9,004.46 (Total payroll charged to 20.106 for the sampled employee during the period); Context: Our sample testing included the payroll charged to the grant for the one employee included in the payroll expenditures for the grant.; Repeat Finding: This is not a repeat finding.; Recommendation: We recommend that the City implement a reporting system that requires all employees paid with federal funds to complete itemized, signed timesheets detailing the specific hours worked on each grant or project on a daily or weekly basis. These timesheets must be reviewed and approved by a supervisor with firsthand knowledge of the work performed.; Views of Responsible Officials and Planned Corrective Action Plan: Refer to separate Management’s Corrective Action Plan for views of responsible officials and management’s responses.

Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing Number: 93.323 Award Period: NU50CK000346 (8/1/2024 – 7/31/2029) (93.323) Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Per CFR §200.430 Compensation – personal services, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing we noted for one of twenty-five samples tested, the employee’s wages were improperly allocated to the program. The employee did not work for the program during the sampled period and the timesheet’s project ID had not been updated accordingly. Management was able to properly adjust the error to the correct program. Questioned Costs: None Cause: Lack of management oversight. Effect: Auditor noted instances of noncompliance. Noncompliance results in possible under or over charges to the grants. Repeat Finding: No Recommendation: We recommend the Department provide additional training to ensure supervisors properly review employees’ time and verify that time worked is allocated to the appropriate federal award. Agency Response: The Department acknowledges this finding and provides the following corrective action plan to prevent future findings. The Department agrees that the procedures in place to ensure accuracy can be improved. Newly imposed supervisory review of the bi-weekly payroll correction process will ensure that miscoded employees are detected. Discrepancies will be addressed immediately. The Department is working on remediation of this finding and anticipates completion before June 30, 2026. Responsible Persons: Division Finance Directors, Program Grant Administrators, and Federal Grants Director.

Reference # and title: 2025-004 Internal Control over Allowable Costs Federal program and specific federal award identification: AL # Grant Year FEDERAL GRANTOR/ PASS-THROUGH GRANTOR/PROGRAM NAME Passed through Louisiana Department of Education Child Nutrition Cluster: School Breakfast Program 10.553 2025 National School Lunch Program 10.555 2025 Summer Food Program 10.559 2025 Criteria or specific requirement: 2 CFR section 200.430(g) requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must 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 a non-Federal award. Condition found: No time certification was completed by Child Nutrition Supervisor for six months of the year. The Child Nutrition Supervisor retired in December 2024. Context: There was no documentation of time spent on the Child Nutrition Program by the Supervisor when the payroll expenditures were tested. Possible asserted effect (cause and effect): Cause: The auditor was unable to determine the cause. Effect: Unallowable costs may have been paid by federal program. Known questioned costs: The known questioned amount of unallowable cost for salary and benefits is $62,078. Known questioned costs were taken from employee’s payroll history for salary and benefits charged to federal program. Recommendation to prevent future occurrences: Monthly and semi-annual certifications of time spent on a federal program should be maintained and verified by program supervisors. Origination date and prior year reference (if applicable): This finding originated in the fiscal year ended June 30, 2025. View of responsible official: See Corrective Action Plan.

Reference # and title: 2025-001 Untimely Completion of Time Certifications Federal program and specific federal award identification: AL Number Award Year FEDERAL GRANTER/ PASS THROUGH GRANTOR/PROGRAM NAME United States Department of Agriculture; passed through Louisiana Department of Education Child Nutrition Cluster: School Breakfast Program 10.553 National Lunch Program 10.555 2025 2025 Criteria or specific requirement: Federal regulations require that salaries and wages charged to federal programs be supported by time and effort documentation that accurately reflects the work performed and is completed in a timely manner, in accordance with 2 CFR §200.430. Condition found: In testing a sample of Child Nutrition payroll, it was noted for all eleven employees tested, the Child Nutrition Program did not complete required time certifications in a timely manner. Several certifications were completed after an extensive amount of time, resulting in noncompliance with federal documentation requirements. Context: This finding appears to be systemic. Possible asserted effect (cause effect): Cause: The School Board did not have an sufficient procedures or monitoring controls to ensure that time certifications for Child Nutrition Program employees are completed timely and in accordance with federal requirements. Effect: The School Board’s internal controls over allowable costs were weakened. Recommendations to prevent future occurrences: The School Board should implement written procedures to ensure all Child Nutrition Program employees complete time certifications timely and in accordance with federal requirements. Management should also establish a review and monitoring process to verify certifications are completed accurately and retained on file prior to charging payroll costs to the program. Origination date and prior year reference (if applicable): This finding originated fiscal year ended June 30, 2025. View of responsible official: The School Board agrees and will comply with the recommendations.

Program: AL 21.027 – COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – Subrecipient Monitoring Grant Number & Year: SLFRP1965, March 3, 2021, through December 31, 2024 Federal Grantor Agency: U.S. Department of the Treasury Criteria: 2 CFR § 200.332 (January 1, 2024) states, in relevant part, the following: All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. * * * * (ii) Subrecipient’s unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date . . . . * * * * (x) Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings title and number; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at the time of disbursement; * * * * (5) A requirement that the subrecipient permit the pass-through entity and auditors to access the subrecipient’s records and financial statements for the pass-through entity to fulfill its monitoring requirements; and (6) Appropriate terms and conditions concerning the closeout of the subaward. * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the passthrough entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the passthrough entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by §200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward . . . . * * * * (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in §200.501. 2 CFR § 200.318 (January 1, 2024) states, in relevant part, the following: (a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity’s documented procurement procedures must conform to the procurement standards identified in §§200.317 through 200.327. * * * * (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR § 180.300 (January 1, 2024) requires that the pass-through entity take specific steps to document that subrecipients are not suspended or debarred, as outlined below: When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM.gov Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. 2 CFR § 200.430(i) (January 1, 2024) states the following in relevant part: (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: * * * * (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE’s definition of IBS); * * * * (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. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards[.] Good internal controls and sound business practices require policies and procedures to ensure that adequate monitoring is performed to verify that subrecipients are using funds in accordance with all Federal and grant requirements. Condition: The State lacked procedures to ensure that: • Subrecipient use of funds was monitored to ensure compliance with all Federal and grant requirements. • Subrecipients obtained audits required by Federal requirements, and those audits were obtained and reviewed in a timely manner. Repeat Finding: No Questioned Costs: None Statistical Sample: No Context: The State paid $172,943,444 to subrecipients for 143 subawards during the fiscal year ended June 30, 2025. We selected 17 subrecipients to test. Additionally, we reviewed the single audit tracking procedures for all State agencies acting as pass-through entities. We noted the following: Insufficient Subrecipient Monitoring Procedures For 5 of 17 subawards tested, the APA noted that subrecipient monitoring was insufficient to ensure that the subrecipient complied with all Federal and grant requirements. Additionally, for one of the subawards tested, the APA noted that the pass-through entity did not have documentation on file to support it verified the subrecipient was not suspended or otherwise debarred. Deficiencies noted included the following: • One $86,650,000 subaward tested was issued by the Military Department (Military) to the University of Nebraska Board of Regents (University). During testing, the APA noted that the only monitoring performed by the Military was a review of the University’s single audit for fiscal year ended June 30, 2024. A total of $47,533,117 was paid to the University for the fiscal year ended June 30, 2025. • During our audit, we observed that for two subawards, one issued by the Department of Natural Resources (DNR) and one by the Department of Health and Human Services (DHHS), each valued at $2,000,000 for capital riverfront improvements and the construction of a youth activity center, respectively, significant disbursements were used to cover construction costs. However, neither pass-through entity could provide documentation supporting that subrecipient monitoring performed or planned included adequate procedures to ensure that the subrecipient had followed its written procurement policies, and procurement procedures were adequately documented. These subrecipients were paid $1,362,909 and $841,446, respectively, during the fiscal year ended June 30, 2025. • For one subaward tested, issued by the Department of Correctional Services (Corrections) for $1,505,826 to implement a transitional living and vocational skills program for former inmates, the APA did not observe any documentation supporting that Corrections had verified the subrecipient was not suspended or otherwise debarred from receiving Federal funds. Additionally, the APA noted that the subaward included significant costs for subrecipient payroll and benefit costs. For those salaried employees who had only a portion of their payroll coded to the grant, Corrections relied on budget estimates submitted at the beginning of the subaward to ensure the cost allocation was proper. The APA observed that six salaried employees had payroll costs coded to the grant, ranging from 2% - 98% of their total salaries. During the fiscal year ended June 30, 2025, the total paid to the subrecipient for this subaward was $204,302. • For one subaward issued by DHHS for $4,000,000 to be used towards increasing childcare license capacity, the APA noted that DHHS failed to perform the subrecipient monitoring procedures outlined in their monitoring policy. The monitoring policy for the subaward indicated that 10% of all expenses would be reviewed. DHHS claimed to have reviewed 10% of all reimbursements between July 2023 – April 2024; however, the APA observed $628,610 of reimbursed costs after April 2024, all of which was disbursed in August 2024 for which no review was performed. Additionally, the APA noted DHHS did not obtain appropriate documentation to support $387 of payroll costs coded to the grant. A total of $627,110 was paid to this subrecipient during the fiscal year ended June 30, 2025. Failure to Communicate all Required Subaward Information During our review of subrecipient monitoring, the APA noted that, for 4 of 17 subawards tested, the subaward did not contain all required information or contained erroneous information, as follows: • In two instances of subawards issued by DHHS, the subaward listed the Federal Award Identification Number (FAIN) as SLFRP3145; however, the primary CLSFRF award to the State of Nebraska was SLFRP1965, while the SLFRP3145 award merely passed through the State to various Non-Entitlement Units (NEU’s) in the State that were the primary recipients. • One subaward issued by DNR and one subaward issued by Corrections lacked required information, as noted below. Neither department could provide documentation showing that this information had otherwise been communicated to the subrecipient. See Schedule of Findings and Questioned Costs for chart/table. Single Audit Tracking Procedures During our review of single audit tracking procedures implemented by the State, we noted the following: • DNR and the Department of Labor (DOL) lacked procedures for determining if subrecipients were required to have a single audit or obtain and review such audits. DOL had 10 subrecipients who had received cumulative payments as of June 30, 2025, ranging from $1,000 to $318,669. DNR had 13 subrecipients that received cumulative payments as of June 30, 2025, ranging from $12,557 to $32,256,022. Three of DNR’s subrecipients have received payments over $750,000 as of June 30, 2025. In reviewing the Federal Audit Clearinghouse (FAC), two of these subrecipients had single audits for the subrecipients’ fiscal year 2024, which listed CSLFRF (ALN 21.027) as a major program and reported no findings. • During testing, the APA identified three instances of DHHS failing to obtain and review subrecipient single audits due to errors in that agency’s tracking procedures. The three subrecipients had received $2,209,137 in CSLFRF funds as of June 30, 2025. The APA obtained the fiscal year 2024 single audits for all three subrecipients from the FAC and noted that ALN 21.027 was listed as a major program on all three audits. None of the audits noted any program-related findings. Cause: Inadequate procedures to ensure that subrecipients complied with all Federal and grant requirements or to ensure that subrecipients obtained single audits when required. Effect: Without adequate monitoring and review procedures, there is an increased risk of Federal awards being used for unallowable costs. Recommendation: We recommend the State strengthen procedures to ensure that subrecipient monitoring is designed properly to ensure compliance with all Federal and grant requirements. We also recommend the State strengthen procedures to ensure that subrecipient single audit requirements are tracked properly, and all single audits are reviewed in a timely manner. Management Response: Military Department The Department of Military disagrees with this finding. The subrecipient submitted an independent audit on 4/1/2025. The independent auditor employed auditing standards generally accepted in the United States (GAAS). Major federal programs included COVID-19, Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing Number 21.027. The independent auditor concluded there were no significant deficiencies or material weaknesses. The auditee was deemed “low risk.” In NEMA’s risk evaluation, it considers two separate University of Nebraska offices whose responsibility includes work to monitor and ensure compliance with Federal regulations. When determining risk appetite and risk tolerance, the “…cost of internal control should never exceed anticipated benefits. Thus, an entity must accept a certain level of risk.” Findings by the independent auditor and Auditor of Public Accounts exceed any benefit that might have been gained by additional subrecipient monitoring. In October 2025, the Agency formally adopted the Subrecipient Monitoring policy and procedure it has informally used the last several years. APA Response: 2 CFR § 200.332(d)(4) (January 1, 2024) requires pass-through entities to perform subrecipient monitoring, which includes obtaining and reviewing subrecipient Single Audit reports. Subsection (d)(4) of this regulation states: If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient’s cognizant audit agency or cognizant oversight agency to perform audit follow-up . . . . Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. Department of Natural Resources While DNR conducted general subrecipient monitoring activities, documentation did not sufficiently demonstrate that monitoring procedures included a review of subrecipient procurement practices for compliance. DNR communicated the required federal award information to the subrecipient through other means, it was not consistently incorporated into the formal subaward agreement as required. While DNR does require Single Audits per their contracts, they did not have formalized, written procedures to consistently determine whether subrecipients met the Single Audit threshold, to ensure timely receipt and review of Single Audit reports when required. The Department acknowledges that documented procedures are necessary to ensure compliance with applicable federal regulations and to strengthen subrecipient oversight. Department of Health and Human Services Agency agrees with finding. Department of Correctional Services Management agrees with the finding.

U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553 AND 10.555 PASS-THROUGH NUMBER 0406 AUDIT PERIOD - YEAR ENDED JUNE 30, 2025 Allowable Costs/Cost Principles Criteria or specific requirement: In accordance with 2 CFR 200.430(g)(1)(iii), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100% of compensated activities. Condition: An Administrative Review for Siloam Springs School District was completed by the Arkansas Division of Elementary and Secondary Education, Child Nutrition Unit (DESE, CNU) in December 2025. The review noted that time certifications were not prepared for Child Nutrition employees for the year ended June 30, 2025. Cause: Lack of internal controls and management oversight. Effect: Bi-annual time certifications were not prepared to properly document personnel expenses. Questioned costs: No questioned costs noted. Context: Results of an Administrative Review by the DESE, CNU. Identification as a repeat finding: No Recommendation: The District should follow the guidelines outlined by the USDA regarding documentation of personnel expenses. Views of responsible officials: The Siloam Springs School District was instructed to submit a time certification for all employees paid from the nonprofit food service account to Arkansas Department of Education, Division of Elementary and Secondary Education, Nutrition Services by January 16, 2026. The District received a letter from the Arkansas Department of Education, Nutrition Servies dated January 9, 2026 informing the District’s corrective action submitted was accepted and therefore, the review was officially closed.