Findings Citing § 200.430

Program: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Assistance Listing No.: 10.557 Federal Grantor: U.S. Department of Agriculture Passed-through: California Department of Public Health Award No.: 22-10307 Award Year: 2022 Compliance Requirement: Activities Allowable or Unallowed and Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awardsfor 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: For one (1) of sixty-five (65) expenditures tested, we noted one timecard where the employee’s timecard was not approved by a supervisor. Cause: The County’s procedures did not consistently ensure that the review of timecards was documented. Effect: Lack of review for personnel hours could lead to unallowable activities and costs to be charged to the Federal program. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of sixty-five (65) out of one thousand ninety-two (1,092) expenditures were tested, totaling $164,654 out of $4,553,367 of the federal program expenditures. Repeat Finding from Prior Years: Yes. Finding 2024-003. Recommendation: We recommend that the County modify and/or strengthen its current policies and procedures to ensure that all timecards consistently document evidence of supervisor approval. The procedures should also address the compensating controls for circumstances where obtaining the supervisor’s approval is not possible. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.

Criteria or Specific Requirement: Per Uniform Guidance § 200.430(g), "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed." This includes a requirement that records are "supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated." Condition: One employee's pay rate used was not updated to reflect the increased board-approved rate for the 2024-2025 school year. Questioned Costs: $88 – known questioned costs. Likely questioned costs are not included as they are under $25,000 Context: Identified two out of 40 samples selected in which the incorrect pay rate was used to calculate the employee's gross wages for the pay period. Both underpayments were related to the same employee, and therefore determined to be isolated. Cause: Upon Board approval of annual salary schedules, the HRIS System Specialist loads the approved schedules into the B+ payroll system. A secondary review is then performed by HR to verify that affected employee pay assignments align with the approved rates prior to the first payroll of the fiscal year (July 1). The underpayment resulted from an isolated human error in which the secondary verification step was not completed for this employee prior to the July 1, 2024, payroll. This occurred during a period of operational disruption within the HR department, including temporary remote operations, limited system access, and leadership transition. Director of Human Resources reviewed all other program-paid employees to verify no others were affected by the same human error during the affected pay period. CLA's testing deemed to be sufficient corroboration, as CLA tested every program-paid employee, except for one (92%), for at least one pay period. This breakdown was not representative of standard practice. Effect: Incorrect payments paid to employees, which results in noncompliance with Uniform Guidance standards for documentation of personnel expenses. Repeat Finding: No Recommendation: CLA recommends implementing a stronger system of review for ensuring all changes in employee payroll are properly implemented and approved. Views of Responsible Officials: There is no disagreement with the audit finding.

Findings and Questioned Costs Related to Federal Awards Finding Number: 2025‐001 Repeat Finding: Yes, 2024‐002 Program Name/Assistance Listing Title: Indian School Equalization Program Assistance Listing Number: 15.042 Federal Agency: U.S Department of Interior Federal Award Number: A24AV00758 Pass‐Through Agency: Bureau of Indian Education Questioned Costs: $2,279 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Criteria According to Uniform Guidance 2 CFR 200.430, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition Employees were not always paid in accordance with contracts. Cause The School lacked adequate internal controls over payroll. The School's process did not include a review of that payroll data entered into the system and did not include a review of the payroll register before the pay was processed. Effect The School’s internal controls over payroll were not adequate to ensure employees are paid in accordance with their contracts. Context For two of 40 employees reviewed, employees were not paid in accordance with their approved contracts resulting in a net overpayment of $1,811. One employee was overpaid $2,279, and the second employee was underpaid $468. Recommendation The School should implement review procedures and controls to ensure employees are paid in accordance with their contracts. Views of Responsible Officials See Corrective Action Plan.

2025-001 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 Material Weakness in Internal Controls over Compliance and Compliance Finding Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Semi-annual time and effort certifications were not maintained for grant employees whose salaries and wages were not supported by detailed time records. Cause: The School did not follow their policies and procedures for time and effort certifications. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $77,838 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Views of Responsible Official: Management agrees with the finding.

Criteria Payroll costs charged to Federal awards must be allowable, allocable, and supported by records that accurately reflect the work performed, in accordance with 2 CFR 200.430(i). Non-Federal entities are required to establish and maintain effective internal controls to provide reasonable assurance that payroll charges comply with Federal requirements. Specific requirements for Research and Development involve ensuring payroll costs were reasonable and necessary for performance of the R&D effort identified in the applicable award. Condition The College’s documented control design requires review and approval of employee timesheets (hourly employees) or effort percentage reports (salaried employees) by the Principal Investigator (PI) or an immediate supervisor to evidence that time charged to R&D awards reflects actual work performed. However, this control was not operating effectively, as 18 out of the 40 samples selected lacked evidence of required review. Cause The condition occurred because the College’s designed control requiring PI or direct supervisor review of employee timesheets or effort percentage reports was not operating effectively in practice. While the control was intended to be performed through the Kronos timekeeping system, system and workflow limitations prevented consistent requirement of PI or supervisor approvals within the system during the audit period. Additionally, the College did not have compensating procedures in place to detect or remediate missing required approvals when Kronos approval evidence was not obtained. As a result, the control was not consistently operating for employees charging time to R&D awards. Possible Asserted Affect The lack of Principal Investigator (PI) or supervisor review of timesheets increases the risk that payroll costs charged to Federal Awards may not be supported or reflect actual work performed on the sponsored projects. This condition may result in noncompliance with 2 CFR 200.430(i) and limits the College’s ability to demonstrate that payroll expenditures charged to Federal awards were incurred for allowable activities and in accordance with the terms and conditions of the awards. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be, and was not a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Recommendation We recommend that the College ensure consistent documentation of PI or supervisor review of employee timesheets and/or effort percentage reports charged to Federal R&D awards by formalizing procedures and configuring the timekeeping system to require and retain evidence of approval. The College should also implement monitoring controls to identify missing approvals and ensure compliance with Federal award requirements. Views of Responsible Officials The identified conditions related to timesheets for hourly student employees. To mitigate the risk of missing approval documentation for payroll charged to Federal R&D awards, the College is formalizing procedures requiring PI or supervisor review of applicable timesheets, configuring the approval workflow in Workday to require and retain evidence of approval, and implementing periodic monitoring to identify and correct missing approvals. These corrective actions are being implemented in fiscal year 2026.

FINDING 2025-005 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-005. INDIANA STATE BOARD OF ACCOUNTS 22 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The COVID-19 - Education Stabilization Fund (ESF) grant was established by the Coronavirus Aid, Relief and Economic Security (CARES) Act to respond to the Coronavirus outbreak and assist schools in creating healthy learning environments, return students to classrooms, and address local needs. The ESF grant was further funded by the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and the American Rescue Plan (ARP) Act. The School Corporation did not have effective internal controls in place over the Allowable Costs/Cost Principles compliance requirement. A sample of 13 payroll claims paid from the School Corporation's ESF grant were selected for testing. Of the sample, 6 employee pay rates could not be verified to a School Board-approved, allowable hourly pay rate for a high dosage tutor position. High dosage tutors were paid anywhere from $20 to $77 an hour. The School Corporation was unable to provide documentation that the School Board approved a pay rate for the high dosage tutor positions during the audit period. The total amount paid to high dosage tutors during the audit period was $472,354, which were considered questioned costs. In addition, the School Corporation paid a consulting firm to provide general support to the finance department. The expenditures were deemed unallowable as there was no documentation available that the consultants were assisting the School Corporation in preventing, preparing for, and responding to COVID-19. The total amount expended to the consultant during the audit period was $514,156, which were considered questioned costs. The lack of internal controls and noncompliance were isolated to the costs noted above for the ESSER II and ESSER III grants. 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 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the recipient or subrecipient. (d) Be accorded consistent treatment. For example, a cost must not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for State and local governments and Indian Tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing requirements of any other federally-financed program in either the current or a prior period. See § 200.306(b). (g) Be adequately documented. See §§ 200.300 through 200.309. (h) Administrative closeout costs may be incurred until the due date of the final report(s). If incurred, these costs must be liquidated prior to the due date of the final report(s) and charged to the final budget period of the award unless otherwise specified by the Federal agency. All other costs must be incurred during the approved budget period. At its discretion, the Federal agency is authorized to waive prior written approvals to carry forward unobligated balances to subsequent budget periods. See § 200.308(g)(3). 2 CFR 200.430(i)(1) 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: (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 (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. . . ." INDIANA STATE BOARD OF ACCOUNTS 24 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.404 states: "A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non- Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm's-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award. (c) Market prices for comparable goods or services for the geographic area. (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, 134 Stat. 1924 (2020) states in part: "For an additional amount for "Education Stabilization Fund".to remain available through September 30, 2022, to prevent, prepare for, and respond to coronavirus, domestically, or internationally . . ." Cause Payroll records were incomplete as the School Corporation was unable to provide documentation that all rates of pay were approved by the School Board. The School Corporation did not include the consultants above in the budget submitted as part of the grant application, and so the School Corporation did not get the required prior approval for the purchases. Effect Without proper documentation, the allowability of the ESF grant expenditures cannot be substantiated, creating a risk that unallowable costs may be charged to the federal grant. Additionally, we could not determine how the expenditures met the purpose of the program. Questioned Costs We identified $986,510 in known questioned costs as described above in the Condition and Context. INDIANA STATE BOARD OF ACCOUNTS 25 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommend that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure rates of pay are approved by the School Board and adequately documented and that costs are allowable. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Significant Deficiency 2025-001. Allowable Costs/Cost Principles United States Department of Education, Passed Through New York State, Department of Education: Title I Grants to Local Educational Agencies ALN: 84.010A Criteria: Salaries and wages charged to federal awards must be supported by documentation that meets the standards prescribed by the Uniform Guidance Subpart E, 2 CFR §200.430. Condition: Subpart E, 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 employee works 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, the District prepared periodic certification equivalents, but it did not comply with the documentation standards prescribed in Subpart E, 2 CFR §200.430; the amount of one employee’s actual payroll charged to the Title I federal award was less than the allocation percentage on the periodic certification reports that were signed by the employee’s supervisor. Cause: The staff who was responsible for maintaining records that accurately reflect the work performed, as described in Subpart E, 2 CFR §200.430, to support salaries charged to federal awards, prepared semi-annual periodic certification reports using a different full time equivalent (FTE) allocation than what was reflected in the employee’s actual payroll records. The District’s internal procedures did not identify the discrepancy. Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the federal award. Questioned Costs: Dollar amount undetermined. Context: The District maintains time records for employees charged to federal awards using a different FTE allocation than the employee’s actual payroll allocation. A total of 18 employees’ wages were charged to the Title I grant. Audit samples selected based on payroll transactions covered 9 of the employees. Condition was noted on payroll transactions for one of the 9 employees in the audit sample. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should revise its procedures to prepare documentation to support actual salaries and wages charged to federal awards after the work was performed in accordance with the requirements of the Uniform Guidance at Subpart E, 2 CFR §200.430. Views of Responsible Officials of Auditee: The District will adopt procedures to ensure appropriate documentation will be prepared to comply with Subpart E, 2 CFR §200.430.

2025-007: Federal Awards – Allowable Costs Federal Agency: U.S. Department of Housing and Urban Development CFDA No.: 14.218 Federal Program: Community Development Block Grants/Entitlement Grants Federal Award Year: 2025 Control Category: Allowable Costs Known Questioned Costs: $17,375 (sample) Projected Questioned Costs: $217,355 (projected) Condition During our testing of payroll expenditures, we noted that employee salaries and wages were charged to the federal program using predetermined allocation percentages rather than actual time recorded on employee timesheets or activity reports. Employees working on multiple programs did not maintain documentation identifying the actual hours worked on each program during the pay period. Instead, payroll costs were distributed across funding sources using fixed percentages established by management. Criteria 2 CFR 200.430(i), Standards for Documentation of Personnel Expenses, states, in part: “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed…” Charges must “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;…” And “budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Cause The City's payroll system charges time for employees each pay period based on an allocation rather than actual hours documented on the employee’s timesheet. Effect Because payroll costs were not supported by records reflecting the actual work performed, the City cannot demonstrate that salary and wage costs charged to the federal program were accurate and properly allocable. As a result, payroll expenditures charged to the program may be unallowable under federal cost principles, and there is an increased risk that federal funds could be misallocated among programs.Questioned Costs There were known questioned costs in the amount of $17,375 from the sample tested and $217,355 of projected questioned costs from projections. These costs are unsupported due to inadequate time documentation, not necessarily unallowable.

2025-008: Federal Awards – Allowable Costs Federal Agency: U.S. Department of Housing and Urban Development CFDA No.: 14.871 Federal Program: Housing Choice Voucher Program Federal Award Year: 2025 Control Category: Allowable Costs Known Questioned Costs: $29,924 (sample) Projected Questioned Costs: $214,045 (projected) Condition During our testing of payroll expenditures, we noted that employee salaries and wages were charged to the federal program using predetermined allocation percentages rather than actual time recorded on employee timesheets or activity reports. Employees working on multiple programs did not maintain documentation identifying the actual hours worked on each program during the pay period. Instead, payroll costs were distributed across funding sources using fixed percentages established by management. Criteria 2 CFR 200.430(i), Standards for Documentation of Personnel Expenses, states, in part: “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed…” Charges must “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;…” And “budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Cause The City's payroll system charges time for employees each pay period based on an allocation rather than actual hours documented on the employee’s timesheet. Effect Because payroll costs were not supported by records reflecting the actual work performed, the City cannot demonstrate that salary and wage costs charged to the federal program were accurate and properly allocable. As a result, payroll expenditures charged to theprogram may be unallowable under federal cost principles, and there is an increased risk that federal funds could be misallocated among programs. Questioned Costs There were known questioned costs in the amount of $29,924 from the sample tested and $214,045 of projected questioned costs from projections. These costs are unsupported due to inadequate time documentation, not necessarily unallowable. Recommendation We recommend that the City charge time to the program based on actual hours worked per the employees' timesheets.

Finding 2025-003 - U.S. Department of Education (USD), TRIO Programs (Significant Deficiencies): Information on the federal program – Student Support Services, FAL No. 84.042A, June 30, 2025; Ronald McNair Program, FAL No. 84.217A, June 30, 2025. a) Cash Management/Drawdown Supporting Documentation and Recordkeeping Criteria – Under 2 CFR 200.305, non-Federal entities must request Federal funds only for allowable program costs that have been incurred, and must maintain contemporaneous supporting documentation demonstrating: 1. Actual, allowable expenditures existed at the time Federal funds were drawn; and 2. Records supporting the nature and timing of those expenditures were on file and readily available. These requirements ensure that drawdowns reflect immediate cash needs supported by verifiable program expenditures. Condition – During our testing of cash drawdowns, we noted in four (3) of the four (4) drawdowns tested, the College did not maintain adequate supporting documentation to substantiate that allowable expenditures had been incurred at the time of the drawdowns. Additionally, although drawdowns exceeded recorded expenditures at certain points during the year, the College did not have Federal cash on hand at year-end. Additionally, two (2) of these four (4) unsupported transactions lacked evidence of required approval, such as documented review or authorization prior to requesting Federal funds. Cause – The condition resulted from insufficient internal controls over the drawdown and documentation retention processes, including the absence of a timely reconciliation between recorded expenditures and drawdown requests. Effect – Requesting Federal funds without maintaining adequate documentation of actual expenditures increases the risk of noncompliance with Federal cash management requirements and may result in temporary use of Federal funds for unallowable purposes. As a result, questioned costs totaling $52,159 were identified. Questioned Costs – $52,159 Program Title FAL No. Questioned Costs Ronald McNair Program 84.217A $ 32,684 Student Support Services 84.042A 19,475 Total Questioned Costs $ 52,159 Auditor’s Perspective – Although no Federal cash was on hand at year-end and funds were ultimately applied to allowable TRIO costs, the absence of adequate support at the time of the drawdowns constitutes a compliance deviation. Without contemporaneous documentation, the accuracy and allowability of drawdown requests cannot be assured. Repeat Finding – No. Auditor's Recommendation – We recommend the College strengthen controls over the cash drawdown process by: • Ensuring that reimbursement requests are supported by complete and readily available documentation at the time of submission; and Requiring contemporaneous reconciliations between expenditures and drawdown requests; • Implementing improved supervisory review procedures prior to requesting funds. View of Responsible Officials – The College now mandates that G5 drawdown requests include approved documentation stored on the accounting drive, effective July 31, 2025. b) Time and Effort Reporting & Grant Salary Accuracy Criteria – (Compensation – Personnel Services Documentation Requirements): Under 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and such records must: • Be supported by a system of internal controls providing reasonable assurance that the charges are accurate, allowable, and properly allocated; • Reflect 100% of the employee’s compensated activities, both Federal and non-Federal; • Be incorporated into the official records of the non-Federal entity; and • Be completed and documented in a timely and consistent manner. For TRIO programs, personnel costs must be supported by complete and accurate documentation demonstrating the portion of time dedicated to allowable TRIO activities Condition – During our testing of time and effort reporting and salaries charged to the TRIO programs, we identified the following exceptions: 1. Incorrect Salary Charge – For one (1) of the nine (9) time and effort reports tested, the salary expense charged to the McNair grant did not agree with the employee’s documented distribution of time. As a result, $24,947 of personnel costs charged to the grant were not supported by the corresponding time and effort report. 2. Incomplete Time and Effort Reports – Two (2) of the nine (9) reports tested, (both were for the same employee noted in the error above), were incomplete and did not reflect the employee’s full allocation of time across both restricted (grant-funded) and unrestricted activities. These omissions resulted in incomplete documentation to support the distribution of payroll costs. The College corrected the documentation after our inquiry; however, the corrections were not in place at the time of testing. Cause – The condition resulted from inconsistent application of time and effort reporting procedures and insufficient review controls to verify the completeness and accuracy of time distribution records prior to charging payroll costs to TRIO programs. Effect – Charging salaries without accurate, complete, and timely time and effort documentation increases the risk of unallowable personnel costs being charged to the program. As a result, questioned costs totaling $24,947 were identified for unsupported salary charges. Additionally, incomplete reports undermine the reliability of payroll allocations used to support Federal expenditures. Questioned Costs – Ronald McNair Program, FAL No. 84.217A: $24,947. Auditor’s Perspective – Although the College corrected the incomplete reports after our inquiry, corrections made after the fact do not demonstrate compliance at the time costs were charged. Accurate and complete time and effort reporting is essential to ensuring that salary costs charged to TRIO programs are allowable and properly supported. Repeat Finding – No. Auditor’s Recommendation – We recommend the College strengthen internal controls over time and effort reporting for TRIO programs by: • Ensuring all reports reflect 100% of compensated activities for each employee; • Implementing a supervisory review process to confirm accuracy before payroll is allocated to the grant; • Providing refresher training to staff responsible for preparing and approving time and effort documentation; and • Maintaining documentation that is complete, accurate, and contemporaneous with the period of performance. Views of Responsible Officials – Time and Effort reports must be submitted monthly with supervisor sign-off before reaching the Office of Sponsor Programs, showing 100% time allocation. Any changes will require a Personnel Action Form and administrative signatures of approval.

Payroll Federal Program and Specific Federal Award Identification CFDA Title and Number 84.031 Higher Education Institution Aid Federal Award Year June 30, 2025 Federal Agencies U. S. Department of Education Pass-Through Entity Not applicable Criteria In accordance with Uniform Guidance § 200.430, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and must be supported by a system of internal controls, including alignment with personnel documentation. Conditions and Contexts Out of twenty-five (25) payroll transactions tested: • Five (5) salary amounts, as calculated per labor distribution reports, did not agree to the approved personnel action forms; and • Two (2) time and effort report percentages did not agree to the percentages reflected on the personnel action forms. Cause The University lacked adequate controls to ensure that payroll charges were consistent with approved personnel action forms and supporting time and effort documentation. Questioned Costs For the purposes of this condition, I have not questioned any costs. Effect Payroll costs charged to the federal program may be inaccurate or unsupported, increasing the risk of unallowable costs. Repeat Finding No. Recommendation The University should strengthen controls over payroll processing and review to ensure that salary charges and time and effort reporting agree with approved personnel action forms. Management should also perform periodic reconciliations and supervisory reviews. Management’s Response The University acknowledges the finding related to discrepancies between payroll charges, personnel action forms, and time and effort reporting. We understand the requirement that all salary and wage charges to federal awards must be supported by accurate records and internal controls in accordance with Uniform Guidance §200.430. Corrective Actions 1. Alignment of Personnel Actions and Payroll Distribution: The University will implement additional review steps to ensure that labor distribution reports match the approved personnel action forms before payroll is charged to the grant. Any discrepancies must now be corrected before processing. 2. Strengthened Time and Effort Verification: Time and effort reports must now be reviewed and reconciled against the percentages authorized on personnel action forms. Reports that do not match will be returned to departments for correction before certification. 3. Enhanced Internal Controls and Documentation: A standardized monthly reconciliation process will be established to ensure consistency between personnel records, effort reporting, and payroll charges. 4. Staff Training: Training will be provided to fiscal managers, the Office of Research and Sponsored Programs, human resources, and payroll personnel on Uniform Guidance requirements, proper effort reporting, and documentation standards. 5. Periodic Monitoring: Supervisory reviews will be conducted to ensure continued compliance and to identify discrepancies proactively. The University believes these corrective measures will strengthen internal controls and ensure that payroll charges to federal programs are accurate, allowable, and properly documented.

2025-005 Allowability of Payroll Expenditures U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Continuum of Care Program—Assistance Listing No. 14.267 Hennepin County Contract HS00001366; Grant Period – Year ended June 30, 2025 Material Weakness in Internal Control over Compliance, Noncompliance Other Matter Criteria: 2 CFR 200.430(g)(1)(i) states charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Refer to financial statement finding 2025-002 for further context. Condition: Payroll controls were not adequately designed or implemented to accurately account for payroll expenditures charged to the Continuum of Care Program for the first half of fiscal year 2025 (July 1, 2024 through December 31, 2024). In addition, supporting payroll documentation was missing or incomplete for certain individual payroll allocations charged to the program during this period. Refer to financial statement finding 2025-002 for further context. Cause: Refer to financial statement finding 2025-002. Effect: Refer to financial statement finding 2025-002. Context: A statistically valid sample of 41 payroll entries by employee totaling $67,977 was selected for testing from a population of more than 250 individual payroll entries totaling $208,015. The audit identified nine instances in which payroll controls were not followed. Refer to Financial Statement Finding 2025-002 for further context. Extrapolated likely questioned costs total $16,525, representing 2.9% of total payroll costs allocated to this program. Known Questioned Costs: Total known questioned costs of $4,940. Identification of Repeat Finding: 2024-001 - Lack of Documentation in Personnel Files Recommendation: Refer to financial statement finding 2025-002. Views of Responsible Officials and Planned Corrective Actions: Refer to financial statement finding 2025-002.

Material Weakness in Internal Controls over Compliance and Noncompliance Condition: The Organization could not provide documentation to support that personnel costs were charged to the federal awards based on actual costs and time spent on the federal program. Criteria: Per §200.430(g)(1) of the Code of Federal Regulations, charges to Federal awards for personnel costs must be based on records that accurately reflect the work performed. These records must support the distribution of employees’ salary among specific activities or cost objectives and must not exceed the actual time worked. Per § 200.303 of the Code of Federal Regulations, recipients must establish, document, and maintain internal controls over Federal awards that provides reasonable assurance that the recipient is managing the Federal Award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Cause: Due to staff transitions during the year, the Organization could not provide documentation to support the amount of personnel costs charged to federal awards. While staff reported time spent on work performed under the federal awards, no review of the reported time was documented and no allocation documentation could be provided to trace the amount of personnel costs charged to federal awards to the time reported by staff. Effect: Federal expenditures on the Schedule of Federal Awards (SEFA) could be overstated resulting in noncompliance with federal cost principles and unallowable cost. Context: During our testing of payroll transactions charged to the federal program, we selected a sample of four out of 26 payroll periods to test. In all four payroll periods tested, the amount charged to the federal program could not be supported by documentation of actual personnel costs incurred for time spent on program activities. Documentation of the review of time spent on program activities reported by staff also could not be provided. Questioned costs total $436,615, which is the total amount of personnel costs reported under the major program grants for the year. Recommendation: We recommend the Organization implement written policies and procedures to ensure that payroll charges to federal awards are based on actual costs incurred. Employees should prepare time and effort documentation reflecting actual hours worked on the federal program activities for each payroll period. This documentation should be reviewed, and evidence of this review should be maintained. This documentation should be used to determine the amount of personnel costs to charge to the federal award, and documentation of this allocation should be maintained. Views of Responsible Officials: Management agrees with the finding.

2025-006 – Allowable Costs/Cost Principles Federal program information: Funding agency: U.S. Department of Health and Human Services Title: Rural Health Outreach and Rural Network Development Program Assistance listing numbers: 93.912 Award year: 7/1/2024 – 6/30/2025 Criteria: According to 2 CFR Part 200.403, to be allowable under federal awards, costs must be adequately documented, be necessary and reasonable for the performance of the federal award, and be allocable thereto under the principles in 2 CFR Part 200, Subpart E. Additionally, according to 2 CFR Part 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and comply with established accounting policies and practices of the entity. Condition: For the months of May and June 2025, SFRC allocated 100% of the payroll costs of two employees to two separate grants of this program. This resulted in the program being charged twice for the same payroll costs in these months. This error also increased the direct cost base of the program, which also caused indirect costs to be over-charged to the program. Context: Two of ten employees tested in this program. Questioned Costs: Payroll costs of $12,409 and indirect costs of $3,944. Cause: SFRC allocates payroll costs to its federal programs using journal entries. These journal entries are not being independently reviewed and approved prior to posting. Effect: The program was over-charged for payroll costs and indirect costs in fiscal year 2025. Auditor’s Recommendation: SFRC should implement a review and approval process for the journal entries posted to allocate payroll costs to its federal programs. Management’s Response: This was a one-time error when the checks and balances process did not take place because of the timing of notification of an extended grant. The May and June 2025 period was an overlap due to this extension, and normal processes were not followed. Management developed processes accepted by government funders, conducted training to a small group, and began implementation. Accounting staffing was not sufficient to fully train and implement. Contractors have been tasked with training and implementation during fiscal year 2026. Revised accounting staff structure will provide better on-going implementation and monitoring compliance.

Federal programs Research and Development Cluster – National Institutes of Health – Drug Abuse and Addiction Research Programs AL #: 93.279 Award Year: 2024/2025 Type of finding Significant Deficiency and Noncompliance Compliance requirement Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria Under 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is reasonable for the services rendered and conforms to the established written policies and practices, follows an appointment made in accordance with non-federal entities rules and written policies, and is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition We noted one out of forty judgmentally selected payroll transactions included cost for an employee that did not relate to services performed in relation to the grant. Questioned costs $625 Context A portion of an employee’s benefits was improperly charged to the grant. Cause When the University changed their timekeeping platform an academic affairs employees’ compensation was improperly set up in the system which incorrectly allocated their vacation time to this grant. Effect The employee’s vacation time that occurred after the change in the University’s timekeeping platform in March 2025 until the discovery after year end was incorrectly included as compensation and benefits expense within the grant. Repeat finding No Recommendations We recommend that the University ensure controls are in place to adequately review all benefits pay charged to grants to ensure appropriate. View of responsible officials To safeguard from future errors and ensure data accuracy, Human Resources partnered with Enterprise Application Services department to develop an automated process that populates earnings codes and project account codes based on employee, job record and earnings code. This enhancement streamlines data entry by consolidating it into a single interface, reducing the risk of manual entry errors. Additionally, the HR Technology Manager has implemented a new monitoring report to track employees with multiple salary distribution accounts as a part of payroll process. The biweekly report will be automatically generated and sent via email to HR’s HRIS Consultants for review. The HRIS Consultants will analyze the report, resolve any discrepancies and escalate any issues to the HR Technology Manager or Lead Application Consultant as necessary. These processes will be routinely reviewed, with adjustments made as needed.

Item 2025-005 - Activities Allowed and Unallowed Costs - U.S. Department of Health and Human Services, Health Center Program Cluster (Assistance Listing Number 93.224/93.527) Notice of Award Number 6 H80CS00505-23-04, 6 H2ECS45602-02-04, 1 H8LCS50772-01-00 and 6 H8HCS46163-03-01 - (Material Weakness) Criteria: Per 2 CFR §200.430(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. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, reflect actual time worked on specific federal programs and be incorporated into the official records of the non-federal entity. Statement of Condition: During our audit, we noted that LBUCC charged salaries to the Section 330 grant based on pre-determined allocations or budget rather than actual hours worked. LBUCC utilized timesheets that reflect the allocations as its time and effort documentation. Cause: LBUCC has not implemented a time and effort reporting system that captures actual hours worked on federal programs. Effect: Failure to maintain and monitor time and effort based on actual hours worked may lead to disallowed costs. Questioned Costs: None. Although salaries charged were based on allocations or budget, we determined that only one employee was charged to two grant-funded programs during one pay period. All other employees’ salaries were charged to one grant-funded program for each pay period during the year. For the employee whose salary was charged to more than one grant-funded program, we verified that the total of the employee’s salaries charged to each grant-funded program did not exceed 100% of her total salaries for the pay period. Context: LBUCC’s management meets monthly to discuss if the budgeted or allocated salaries per program for the month was reflective of actual hours worked. During this discussion, management ascertains if there is a need to adjust the budgeted or allocated salaries. However, this discussion and the approval of the final budget or salaries is not documented. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that LBUCC implement a time and effort reporting system that tracks actual hours worked on each program or grant. We recommend that they require supervisors to review and approve the actual time spent on grant activities and that such review and approval be documented. Management Response: Management agrees with the finding and will implement these steps to ensure compliance with the federal cost principles, strengthen internal controls, and reduce the risk of questioned costs.

2025-001: U.S. Department of Health and Human Services, National Institutes for Health Research and Development Cluster, Cancer Control, Assistance Listing #93.399; Lack of Required Written Policies Condition Montana Cancer Consortium (the Consortium) does not have written policies and procedures in place as required by 2 CFR § 200.302 and § 200.313. Specifically, the Consortium lacks documented policies for: • The timing of federal cash draws; • The allowability of costs charged to federal awards; and • Documentation of time-and-effort for personal services. Criteria 2 CFR § 200.302(b)(6)–(7) requires nonfederal entities to have written procedures for: (a) cash drawdowns and (b) determining cost allowability. § 200.305 requires written cash-management procedures that minimize the time between draw and disbursement. § 200.430 requires a written policy that is consistently applied to both federal and nonfederal activities for documentation of compensation for personal services. Context At the time of completion of the audit for the year ended May 31, 2025, the written policies were not in place. We noted that the policies were implemented on December 1, 2025, which was after the fiscal year under audit had ended. Cause The Consortium has not yet developed or adopted the required written policies due to limited administrative capacity and reliance on informal practices. Effect The absence of written policies increases the risk of noncompliance with federal requirements, mismanagement of federal funds, and audit findings in future periods. It may also impair the Consortium’s ability to consistently apply federal cost principles and properly safeguard assets. Recommendation We recommend that the Consortium develop and implement written policies and procedures that comply with the requirements of Uniform Guidance. Management Response See Corrective Action Plan.

Finding 2025-008 – Allowable Costs/Cost Principles and Matching, Level of Effort, and Earmarking Information on the federal program: Federal awarding agency: United States Department of Education (ED) Federal program: School Safely National Activities, Assistance Listing No. 84.184X Award year: 2024‐2025 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that a 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 and 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: The University did not have effective internal controls over the timely preparation and approval of employees’ time and effort certifications. Cause: The University did not execute their internal controls for the timely preparation and approval of employees’ time and effort certifications on a timely basis. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program due to the delay in the preparation and approval of the time and effort certifications. Level of effort per grant award notification and grant proposal documents may not be met as required for the applicable employees with level of effort requirements, the program director/principal investigator and co-investigators, for the School Safely National Activities Program. Questioned costs: None. Context: It is the University’s policy to have time and effort certifications prepared and approved for grant employees on a semesterly basis. For 9 of 14 payroll expenditures selected for testing, the University’s employees prepared their time and effort certifications between 4 and 10 months after the applicable semester ended, with approvals made after that time. The grant documents provide for level of effort requirements for the program for five employees, including the program director/principal investigator with a level of effort of 25% and 4 co-investigators with level of effort of 2.5%. The University’s total School Safely National Activities program expenditures were $1,310,305 for the year ended May 31, 2025. Of this amount, $209,270 related to payroll expenditures, including fringe benefits. Identification of a repeat finding: Not applicable. Recommendation: We recommend the University execute its internal controls to provide for the preparation and approval of employees’ time and effort certifications on a timely basis after the end of each semester. Views of responsible officials: Management agrees with the finding and has developed a corrective action plan in which the University updated the time and effort reporting form and the Grants Accounting Office will ensure the forms are completed timely. The corrective action was implemented by February 6, 2026.

. Finding 2025-004 (Material Weakness) Program: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Department of Treasury AL #: 21.027 Federal Award Identification Number and Year: Various – See SEFA Pass-through Entity: N/A Type of Compliance Finding: A) Activities Allowed or Unallowed and B) Allowable Costs/Cost Principles Criteria Recipients may use SLFRF payments for any eligible expenses subject to the restrictions set forth in sections 602 / 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, codified at 42 USC sections 802 and 803, and as amended by the 2023 CAA. Per 2 CFR 200.430(g)(1) Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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 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. Condition Management did not provide sufficient evidence to support the charges for salaries and wages for five of the seven employee samples who work solely on one cost objective or multiple cost objectives. Cause Management does not have controls and processes in place to ensure that required documentation is maintained to support federal award charges for salaries and wages. Effect Unallowable salary expenses were charged to the federal award, which could result in the City not receiving federal assistance or repayment of grant funds. Questioned Costs $11,480 Context The total salaries and wages were $1,036,364 and likely questioned costs are $252,797. Is the finding a repeat finding No Recommendations We recommend management establish a process to ensure required documentation is maintained to support federal award salaries and wages. Views of Responsible Officials/ Planned Corrective Actions Management agrees with the finding. See Corrective Action Plan on Organization’s letterhead.

2025-002 - Lack of Written Federal Program Policies. Type: Material Weakness. Condition: The Village does not have documented policies and procedures specific to the administration of the Coronavirus State and Local Fiscal Recovery Funds program. This includes the absence of written guidance on key compliance areas such as payments, procurement, allowability of costs charged to federal programs, compensation, and travel costs under Uniform Guidance. Criteria: Per 2 CFR 200.303 and 200.331 of the Uniform Guidance, non-federal entities are required to establish and maintain effective internal controls and written policies to ensure compliance with federal statutes, regulations, and the terms and conditions of federal awards. These policies should be tailored to the specific requirements of each federal program. Cause: The entity has not developed formal written policies and procedures for the Coronavirus State and Local Fiscal Recovery Funds program, possibly due to reliance on informal practices or general administrative policies that do not address federal-specific requirements. Effect: Without documented policies, there is an increased risk of noncompliance with federal requirements, inconsistent program administration, and lack of accountability. This may result in questioned costs, audit findings, or potential repayment of federal funds. Recommendation: We recommend that the Village develop and implement written policies and procedures specific to the Coronavirus State and Local Fiscal Recovery Funds program. These should include: - Payments in accordance with §200.302 (6), - Procurement in accordance with §200.318, - Allowability of costs charged to federal programs in accordance with §200.302 (7), - Compensation in accordance with §200.430 and §200.431, - Travel costs in accordance with §200.474. Training should also be provided to staff responsible for administering the program to ensure consistent application of these policies. Views of Responsible Officials: Management acknowledges the auditor’s finding regarding the absence of formally documented federal program policies. We recognize the importance of maintaining written procedures to ensure consistent compliance with Uniform Guidance requirements and to strengthen internal controls over federal awards. While informal practices have historically guided our federal program administration, we agree that formalizing these policies will enhance transparency, accountability, and operational efficiency. Management is currently in the process of developing written policies covering key areas such as procurement, allowable costs, subrecipient monitoring, and cash management. We anticipate completing this documentation and implementing the policies by February 28, 2026. We are committed to continuous improvement and appreciate the auditor’s recommendations as part of our efforts to maintain strong compliance and stewardship of federal funds.

2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.

2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.

2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.

2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.

2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.

2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.

2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.

2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.

2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.

Criteria or Specific Requirement: Federal regulations (45 CFR 1635.4(a) and 2 CFR 200.430), state that federal award recipients must base allocations of salaries and wages costs to grants on records that accurately reflect the work performed. Federal regulations (45 CFR 1630.5 and 2 CFR 200.403) state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities. Condition: During our testing we noted:  Payroll transactions: Eleven instances of errors totaling a net amount of $2,009 (an absolute value amount of $2,009) where the incorrect percentages were utilized in the allocation of the employee's pay, the incorrect employee's time was used in the allocation of the employee's pay, or there were unsupported amounts added to the allocation of the employee’s pay, and  Payroll transactions: Seven instances of errors totaling a net amount of $109 (an absolute value amount of $4,405) where an unsupported allocation percentage was used to allocate the employee's pay to the grant - typically, employee salaries are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund.  Fringe-benefit transactions: Two instances of an error totaling $91 where an unsupported allocation percentage was used to allocate employer-paid employee insurance costs to the grant - typically, costs are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund.  Fringe-benefit transactions: Two instances of errors totaling $275 where employer-paid employee insurance and HSA contribution deductions per the employee's pay stub were allocated to the grant at a rate of 100%.  Non-payroll and fringe transactions: one instance of an error totaling $884 where an unsupported allocation percentage was used to allocate general costs to the grant - typically, costs are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund. Additionally, we noted inconsistency in the general fund (LSC and two other private grants) allocation basis used during the year - grant hours and projected revenue were both utilized at different times during the year. Additionally, we noted that allocations in the general fund are done using projected revenue. However as revenue was recognized as expenses were incurred for the general fund the allocation based on revenue approximated an allocation method based on costs. As such, the costs mentioned above were allocated in an inconsistent manner to other grant costs and were not fully representative of the employees’ time and effort. However, we noted a lower frequency of differences in sample selections that occurred during the last several months of the year after management implemented a change to its allocation processes in response to the prior year audit. 2024 – 002: Cost Allocation of Expenses to LSC Grants (Continued) Questioned Costs: A net amount of $3,150 of allocated salary expense described above, which is related to Assistance Listing Number 09.706060. Context: These 23 instances were noting during testing of 55 disbursements. Cause: The Organization’s cost allocation methodology is primarily based on time and effort records, and periodic calculations of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund, but it often includes manual adjustments based on review of individual time records, expense and other data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations. Effect: The inclusion of frequent manual adjustments in the Organization’s cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities and in a manner where costs are not applied uniformly to both LSC (or, federally)-funded and non-LSC (of, federally) -funded activities. Repeat Finding: The finding is a repeat of findings in the immediately prior year. The prior year finding numbers were 2023-003 and 2023-004. Recommendation: We recommend that the Organization consider updating its cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations that are calculated in a consistent manner that ensure costs are applied uniformly to respective benefited activities, and that are reflective on employees’ time and effort records Views of responsible officials: Management partially agrees with this finding. First, 45 CFR Part 1635 codifies the timekeeping requirement. CLS keeps track of every case and time dedicated by staff in strict compliance with this requirement. Additionally, the distribution of expenses in the general fund, which includes LSC and two other funding sources, represents a fair method and allocation. Regarding the questioned costs, CLS disagrees with the finding of material weakness given the extremely low total dollar value. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. Federal regulations state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.

Criteria or Specific Requirement: Federal regulations (45 CFR 1635.4(a) and 2 CFR 200.430), state that federal award recipients must base allocations of salaries and wages costs to grants on records that accurately reflect the work performed. Federal regulations (45 CFR 1630.5 and 2 CFR 200.403) state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities. Condition: During our testing we noted:  Payroll transactions: Eleven instances of errors totaling a net amount of $2,009 (an absolute value amount of $2,009) where the incorrect percentages were utilized in the allocation of the employee's pay, the incorrect employee's time was used in the allocation of the employee's pay, or there were unsupported amounts added to the allocation of the employee’s pay, and  Payroll transactions: Seven instances of errors totaling a net amount of $109 (an absolute value amount of $4,405) where an unsupported allocation percentage was used to allocate the employee's pay to the grant - typically, employee salaries are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund.  Fringe-benefit transactions: Two instances of an error totaling $91 where an unsupported allocation percentage was used to allocate employer-paid employee insurance costs to the grant - typically, costs are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund.  Fringe-benefit transactions: Two instances of errors totaling $275 where employer-paid employee insurance and HSA contribution deductions per the employee's pay stub were allocated to the grant at a rate of 100%.  Non-payroll and fringe transactions: one instance of an error totaling $884 where an unsupported allocation percentage was used to allocate general costs to the grant - typically, costs are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund. Additionally, we noted inconsistency in the general fund (LSC and two other private grants) allocation basis used during the year - grant hours and projected revenue were both utilized at different times during the year. Additionally, we noted that allocations in the general fund are done using projected revenue. However as revenue was recognized as expenses were incurred for the general fund the allocation based on revenue approximated an allocation method based on costs. As such, the costs mentioned above were allocated in an inconsistent manner to other grant costs and were not fully representative of the employees’ time and effort. However, we noted a lower frequency of differences in sample selections that occurred during the last several months of the year after management implemented a change to its allocation processes in response to the prior year audit. 2024 – 002: Cost Allocation of Expenses to LSC Grants (Continued) Questioned Costs: A net amount of $3,150 of allocated salary expense described above, which is related to Assistance Listing Number 09.706060. Context: These 23 instances were noting during testing of 55 disbursements. Cause: The Organization’s cost allocation methodology is primarily based on time and effort records, and periodic calculations of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund, but it often includes manual adjustments based on review of individual time records, expense and other data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations. Effect: The inclusion of frequent manual adjustments in the Organization’s cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities and in a manner where costs are not applied uniformly to both LSC (or, federally)-funded and non-LSC (of, federally) -funded activities. Repeat Finding: The finding is a repeat of findings in the immediately prior year. The prior year finding numbers were 2023-003 and 2023-004. Recommendation: We recommend that the Organization consider updating its cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations that are calculated in a consistent manner that ensure costs are applied uniformly to respective benefited activities, and that are reflective on employees’ time and effort records Views of responsible officials: Management partially agrees with this finding. First, 45 CFR Part 1635 codifies the timekeeping requirement. CLS keeps track of every case and time dedicated by staff in strict compliance with this requirement. Additionally, the distribution of expenses in the general fund, which includes LSC and two other funding sources, represents a fair method and allocation. Regarding the questioned costs, CLS disagrees with the finding of material weakness given the extremely low total dollar value. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. Federal regulations state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.

Criteria or Specific Requirement: Federal regulations (45 CFR 1635.4(a) and 2 CFR 200.430), state that federal award recipients must base allocations of salaries and wages costs to grants on records that accurately reflect the work performed. Federal regulations (45 CFR 1630.5 and 2 CFR 200.403) state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities. Condition: During our testing we noted:  Payroll transactions: Eleven instances of errors totaling a net amount of $2,009 (an absolute value amount of $2,009) where the incorrect percentages were utilized in the allocation of the employee's pay, the incorrect employee's time was used in the allocation of the employee's pay, or there were unsupported amounts added to the allocation of the employee’s pay, and  Payroll transactions: Seven instances of errors totaling a net amount of $109 (an absolute value amount of $4,405) where an unsupported allocation percentage was used to allocate the employee's pay to the grant - typically, employee salaries are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund.  Fringe-benefit transactions: Two instances of an error totaling $91 where an unsupported allocation percentage was used to allocate employer-paid employee insurance costs to the grant - typically, costs are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund.  Fringe-benefit transactions: Two instances of errors totaling $275 where employer-paid employee insurance and HSA contribution deductions per the employee's pay stub were allocated to the grant at a rate of 100%.  Non-payroll and fringe transactions: one instance of an error totaling $884 where an unsupported allocation percentage was used to allocate general costs to the grant - typically, costs are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund. Additionally, we noted inconsistency in the general fund (LSC and two other private grants) allocation basis used during the year - grant hours and projected revenue were both utilized at different times during the year. Additionally, we noted that allocations in the general fund are done using projected revenue. However as revenue was recognized as expenses were incurred for the general fund the allocation based on revenue approximated an allocation method based on costs. As such, the costs mentioned above were allocated in an inconsistent manner to other grant costs and were not fully representative of the employees’ time and effort. However, we noted a lower frequency of differences in sample selections that occurred during the last several months of the year after management implemented a change to its allocation processes in response to the prior year audit. 2024 – 002: Cost Allocation of Expenses to LSC Grants (Continued) Questioned Costs: A net amount of $3,150 of allocated salary expense described above, which is related to Assistance Listing Number 09.706060. Context: These 23 instances were noting during testing of 55 disbursements. Cause: The Organization’s cost allocation methodology is primarily based on time and effort records, and periodic calculations of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund, but it often includes manual adjustments based on review of individual time records, expense and other data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations. Effect: The inclusion of frequent manual adjustments in the Organization’s cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities and in a manner where costs are not applied uniformly to both LSC (or, federally)-funded and non-LSC (of, federally) -funded activities. Repeat Finding: The finding is a repeat of findings in the immediately prior year. The prior year finding numbers were 2023-003 and 2023-004. Recommendation: We recommend that the Organization consider updating its cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations that are calculated in a consistent manner that ensure costs are applied uniformly to respective benefited activities, and that are reflective on employees’ time and effort records Views of responsible officials: Management partially agrees with this finding. First, 45 CFR Part 1635 codifies the timekeeping requirement. CLS keeps track of every case and time dedicated by staff in strict compliance with this requirement. Additionally, the distribution of expenses in the general fund, which includes LSC and two other funding sources, represents a fair method and allocation. Regarding the questioned costs, CLS disagrees with the finding of material weakness given the extremely low total dollar value. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. Federal regulations state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.

Significant deficiency in internal control over compliance and noncompliance related to allowable costs/cost principles compliance requirements. Federal Agency: U.S. Department of Treasury Pass-Through Entity: City and County of Denver Program Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number: 202474319 Criteria Nonfederal entities must follow the standards for documentation of personnel expenses set out at 2 CFR section 200.430(i). Under those standards, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Additionally, those standards require that the records a) reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, not exceeding 100% of compensated activities; b) 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 nonfederal 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; and c) budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards. Budget estimates may be used for interim account purposes, provided that a) The system for establishing the estimates produces reasonable approximations of the activity performed; b) significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and c) the recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated Condition and Context The Organization maintains a timekeeping and payroll system for charges to federal awards that documents approved wage and salary rates, time and effort certification, hours, and actual amounts paid to employees. The Organization is allocating payroll costs to federal programs for individual employees using budget estimates of time and effort on different activities. The Organization maintains after-the-fact review documentation of time spent for each employee to support the allocation in the form of “Time and Effort” certifications that are signed by all employees and supervisors to verify actual time spent on major program. During our testing we noted two pay-periods for one employee where the Organization did not maintain the “Time and Effort” certification. Section III - Reportable Findings and Questioned Costs for Federal Awards Cause The Organization’s management noted that the missing certifications were due to the employee leaving employment before the certifications were completed for the two pay periods. The Organization did not have a process in place to ensure alternate certification documentation was created and retained in the situation of terminated employees. Effect The effect is that the Organization is not in compliance with the requirements of 2 CFR section 200.430(i) for the two pay periods for this employee. For two pay-periods for one employee the payroll costs charged to the major program were not supported by documentation of after-the-fact review evidencing that those costs reasonably reflect the work actually performed on the activity. Questioned Costs The expenditures for the two pay periods for the one employee totaled of $8,846. Repeat Finding This is not a repeat finding. Recommendation We recommend management update its internal control process for employees who depart or are unable to certify their timesheets to ensure all time spent on federal programs is certified by employees and their supervisors. Views of Responsible Official and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.

Finding 2024-002 Payroll Information on the Federal Programs: 93.421 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Per 2 CFR 200.430(i) of the Uniform Guidance, 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 employees’ salaries among specific activities or cost objectives as required. Condition: During our review of payroll charges to Federal awards, we noted that BCHC did not use timesheets from January 2024 to August 2024 and recorded salaries based on budgeted allocations. In August 2024, timesheets were implemented but we noted that the time recorded in the general ledger did not coincide with the allocation on the actual timesheets. Cause: BCHC relied on predetermined budget estimates for payroll allocation rather than using timesheets that reflected actual hours worked. Effect or Potential Effect: There is a risk that payroll costs charged to Federal programs may not accurately represent the true level of effort, potentially resulting in unallowable costs being charged to Federal awards. Questioned Costs: Indeterminate-The questioned costs relate to salary and wage expenditures charged to Federal programs without the required time and effort documentation in accordance with 2 CFR §200.430. Specifically, employees whose compensation was allocated to Federal awards did not maintain timesheets or equivalent records reflecting actual time worked on specific Federal activities. Due to the absence of these records, we were unable to determine the portion of personnel costs that may be unallowable under Uniform Guidance. Accordingly, the questioned costs are considered indeterminate. Context: We sampled 40 payroll transactions. All transactions were based on budgeted amounts. This issue was observed across all departments receiving Federal funds. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: While BCHC now maintains timesheets, we recommend ensuring that payroll costs charged to Federal awards are based on the actual time recorded, rather than budgeted estimates. The timesheet data should be used to support allocations in accordance with Uniform Guidance, and adjustments should be made as needed to reflect the actual effort expended on Federal programs.

Finding 2024-002 Payroll Information on the Federal Programs: 93.421 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Per 2 CFR 200.430(i) of the Uniform Guidance, 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 employees’ salaries among specific activities or cost objectives as required. Condition: During our review of payroll charges to Federal awards, we noted that BCHC did not use timesheets from January 2024 to August 2024 and recorded salaries based on budgeted allocations. In August 2024, timesheets were implemented but we noted that the time recorded in the general ledger did not coincide with the allocation on the actual timesheets. Cause: BCHC relied on predetermined budget estimates for payroll allocation rather than using timesheets that reflected actual hours worked. Effect or Potential Effect: There is a risk that payroll costs charged to Federal programs may not accurately represent the true level of effort, potentially resulting in unallowable costs being charged to Federal awards. Questioned Costs: Indeterminate-The questioned costs relate to salary and wage expenditures charged to Federal programs without the required time and effort documentation in accordance with 2 CFR §200.430. Specifically, employees whose compensation was allocated to Federal awards did not maintain timesheets or equivalent records reflecting actual time worked on specific Federal activities. Due to the absence of these records, we were unable to determine the portion of personnel costs that may be unallowable under Uniform Guidance. Accordingly, the questioned costs are considered indeterminate. Context: We sampled 40 payroll transactions. All transactions were based on budgeted amounts. This issue was observed across all departments receiving Federal funds. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: While BCHC now maintains timesheets, we recommend ensuring that payroll costs charged to Federal awards are based on the actual time recorded, rather than budgeted estimates. The timesheet data should be used to support allocations in accordance with Uniform Guidance, and adjustments should be made as needed to reflect the actual effort expended on Federal programs.

Finding 2024-002 Payroll Information on the Federal Programs: 93.421 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Per 2 CFR 200.430(i) of the Uniform Guidance, 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 employees’ salaries among specific activities or cost objectives as required. Condition: During our review of payroll charges to Federal awards, we noted that BCHC did not use timesheets from January 2024 to August 2024 and recorded salaries based on budgeted allocations. In August 2024, timesheets were implemented but we noted that the time recorded in the general ledger did not coincide with the allocation on the actual timesheets. Cause: BCHC relied on predetermined budget estimates for payroll allocation rather than using timesheets that reflected actual hours worked. Effect or Potential Effect: There is a risk that payroll costs charged to Federal programs may not accurately represent the true level of effort, potentially resulting in unallowable costs being charged to Federal awards. Questioned Costs: Indeterminate-The questioned costs relate to salary and wage expenditures charged to Federal programs without the required time and effort documentation in accordance with 2 CFR §200.430. Specifically, employees whose compensation was allocated to Federal awards did not maintain timesheets or equivalent records reflecting actual time worked on specific Federal activities. Due to the absence of these records, we were unable to determine the portion of personnel costs that may be unallowable under Uniform Guidance. Accordingly, the questioned costs are considered indeterminate. Context: We sampled 40 payroll transactions. All transactions were based on budgeted amounts. This issue was observed across all departments receiving Federal funds. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: While BCHC now maintains timesheets, we recommend ensuring that payroll costs charged to Federal awards are based on the actual time recorded, rather than budgeted estimates. The timesheet data should be used to support allocations in accordance with Uniform Guidance, and adjustments should be made as needed to reflect the actual effort expended on Federal programs.

Finding 2024-002 Payroll Information on the Federal Programs: 93.421 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Per 2 CFR 200.430(i) of the Uniform Guidance, 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 employees’ salaries among specific activities or cost objectives as required. Condition: During our review of payroll charges to Federal awards, we noted that BCHC did not use timesheets from January 2024 to August 2024 and recorded salaries based on budgeted allocations. In August 2024, timesheets were implemented but we noted that the time recorded in the general ledger did not coincide with the allocation on the actual timesheets. Cause: BCHC relied on predetermined budget estimates for payroll allocation rather than using timesheets that reflected actual hours worked. Effect or Potential Effect: There is a risk that payroll costs charged to Federal programs may not accurately represent the true level of effort, potentially resulting in unallowable costs being charged to Federal awards. Questioned Costs: Indeterminate-The questioned costs relate to salary and wage expenditures charged to Federal programs without the required time and effort documentation in accordance with 2 CFR §200.430. Specifically, employees whose compensation was allocated to Federal awards did not maintain timesheets or equivalent records reflecting actual time worked on specific Federal activities. Due to the absence of these records, we were unable to determine the portion of personnel costs that may be unallowable under Uniform Guidance. Accordingly, the questioned costs are considered indeterminate. Context: We sampled 40 payroll transactions. All transactions were based on budgeted amounts. This issue was observed across all departments receiving Federal funds. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: While BCHC now maintains timesheets, we recommend ensuring that payroll costs charged to Federal awards are based on the actual time recorded, rather than budgeted estimates. The timesheet data should be used to support allocations in accordance with Uniform Guidance, and adjustments should be made as needed to reflect the actual effort expended on Federal programs.

Finding 2024-002 Payroll Information on the Federal Programs: 93.421 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Per 2 CFR 200.430(i) of the Uniform Guidance, 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 employees’ salaries among specific activities or cost objectives as required. Condition: During our review of payroll charges to Federal awards, we noted that BCHC did not use timesheets from January 2024 to August 2024 and recorded salaries based on budgeted allocations. In August 2024, timesheets were implemented but we noted that the time recorded in the general ledger did not coincide with the allocation on the actual timesheets. Cause: BCHC relied on predetermined budget estimates for payroll allocation rather than using timesheets that reflected actual hours worked. Effect or Potential Effect: There is a risk that payroll costs charged to Federal programs may not accurately represent the true level of effort, potentially resulting in unallowable costs being charged to Federal awards. Questioned Costs: Indeterminate-The questioned costs relate to salary and wage expenditures charged to Federal programs without the required time and effort documentation in accordance with 2 CFR §200.430. Specifically, employees whose compensation was allocated to Federal awards did not maintain timesheets or equivalent records reflecting actual time worked on specific Federal activities. Due to the absence of these records, we were unable to determine the portion of personnel costs that may be unallowable under Uniform Guidance. Accordingly, the questioned costs are considered indeterminate. Context: We sampled 40 payroll transactions. All transactions were based on budgeted amounts. This issue was observed across all departments receiving Federal funds. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: While BCHC now maintains timesheets, we recommend ensuring that payroll costs charged to Federal awards are based on the actual time recorded, rather than budgeted estimates. The timesheet data should be used to support allocations in accordance with Uniform Guidance, and adjustments should be made as needed to reflect the actual effort expended on Federal programs.

Finding 2024-002 Payroll Information on the Federal Programs: 93.421 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Per 2 CFR 200.430(i) of the Uniform Guidance, 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 employees’ salaries among specific activities or cost objectives as required. Condition: During our review of payroll charges to Federal awards, we noted that BCHC did not use timesheets from January 2024 to August 2024 and recorded salaries based on budgeted allocations. In August 2024, timesheets were implemented but we noted that the time recorded in the general ledger did not coincide with the allocation on the actual timesheets. Cause: BCHC relied on predetermined budget estimates for payroll allocation rather than using timesheets that reflected actual hours worked. Effect or Potential Effect: There is a risk that payroll costs charged to Federal programs may not accurately represent the true level of effort, potentially resulting in unallowable costs being charged to Federal awards. Questioned Costs: Indeterminate-The questioned costs relate to salary and wage expenditures charged to Federal programs without the required time and effort documentation in accordance with 2 CFR §200.430. Specifically, employees whose compensation was allocated to Federal awards did not maintain timesheets or equivalent records reflecting actual time worked on specific Federal activities. Due to the absence of these records, we were unable to determine the portion of personnel costs that may be unallowable under Uniform Guidance. Accordingly, the questioned costs are considered indeterminate. Context: We sampled 40 payroll transactions. All transactions were based on budgeted amounts. This issue was observed across all departments receiving Federal funds. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: While BCHC now maintains timesheets, we recommend ensuring that payroll costs charged to Federal awards are based on the actual time recorded, rather than budgeted estimates. The timesheet data should be used to support allocations in accordance with Uniform Guidance, and adjustments should be made as needed to reflect the actual effort expended on Federal programs.

2024-001 Twenty-First Century Community Learning Centers – Assistance Listing No. 84.287 Material Weakness in Internal Control Over Compliance and Noncompliance – Inadequate Payroll Documentation B. Allowable Costs/Cost Principles 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 and are supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. As part of the Organization’s internal controls, time and effort documentation—such as timecards—should be reviewed and approved by the employee to confirm accuracy. Condition and Context: We selected 40 individuals paid in randomly selected pay periods for testing. Our sample was not statistically valid. During our testing of payroll expenses charged to the federal program, we noted that 2 out of 40 of the employee timecards selected for review were not signed or electronically certified by the respective employee. Without employee attestation, the accuracy of the reported time cannot be verified in accordance with Uniform Guidance requirements. This resulted in total questioned costs of $763. Based on an error rate of 3.23%, the likely questioned costs for the full payroll population are projected to be $14,578. Additionally, we identified 10 instances where the number of hours reported on employee timecards did not match the hours recorded in the payroll system and charged to the federal award. The total questioned costs for these discrepancies were $569. Based on an error rate of 2.41%, the likely questioned costs for the full payroll population are projected to be $10,878. This is a repeat finding of 2023-003. Cause and Effect: The lack of employee signatures appears to be due to inconsistent enforcement of timecard approval procedures. The discrepancies in the number of hours charged to the federal award appear to be due to a lack of effective reconciliation procedures between timekeeping and payroll records. As a result of these items noted above, the Organization charged unsubstantiated payroll costs to the federal award. Recommendation: We recommend that management ensure all employee timecards are signed or electronically certified by the employee in a timely manner. We also recommend a process is implemented to reconcile time charge to federal award to underlying payroll report. Internal controls should be reinforced to verify that no payroll costs are charged to federal programs without appropriate documentation and approval. Views of Responsible Officials and Planned Corrective Action: We agree with the recommendation and updated our written policy in 2024. The policy was reviewed by the Finance Committee and approved by the full Board of Directors in December 2024.

2024-001 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Funding Agency: Department of Agriculture ALNs: 10.565, 10.568 & 10.569 Criteria Internal controls and other compliance knowledge should prevent the incorrect coding of employee hours worked. Per 2 CFR 200.430(g)(1), "charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed" and "be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated." Condition Internal controls and adherence to compliance were not followed with regards to an appropriate level of approval of management that is charged to the Coronavirus State and Local Recovery Funds program and the Food Cluster Program. Questioned costs Total questioned cost of $2,822 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Coronavirus State and Local Recovery Fund grant (ALN 21.027). Total questioned cost of $3,475 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Food Cluster Program (ALNs 10.565, 10.568, & 10.569). Context During our payroll testing, of the six executive director timesheets tested, none of them indicated a review or approval from the board president. Cause The error was caused by not applying an adequate number of controls necessary for the executive director's timesheet. Effect The Coronavirus State and Local Recovery Funds program and Food Cluster program and other federal programs could be incorrectly charged with unreasonable wages.Repeat Finding No. Auditor's Recommendation We recommend that the board president or other board member designee review the executive director's timesheet prior to submitting the wages for reimbursement from federal grants.

2024-001 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Funding Agency: Department of Agriculture ALNs: 10.565, 10.568 & 10.569 Criteria Internal controls and other compliance knowledge should prevent the incorrect coding of employee hours worked. Per 2 CFR 200.430(g)(1), "charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed" and "be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated." Condition Internal controls and adherence to compliance were not followed with regards to an appropriate level of approval of management that is charged to the Coronavirus State and Local Recovery Funds program and the Food Cluster Program. Questioned costs Total questioned cost of $2,822 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Coronavirus State and Local Recovery Fund grant (ALN 21.027). Total questioned cost of $3,475 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Food Cluster Program (ALNs 10.565, 10.568, & 10.569). Context During our payroll testing, of the six executive director timesheets tested, none of them indicated a review or approval from the board president. Cause The error was caused by not applying an adequate number of controls necessary for the executive director's timesheet. Effect The Coronavirus State and Local Recovery Funds program and Food Cluster program and other federal programs could be incorrectly charged with unreasonable wages.Repeat Finding No. Auditor's Recommendation We recommend that the board president or other board member designee review the executive director's timesheet prior to submitting the wages for reimbursement from federal grants.

2024-001 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Funding Agency: Department of Agriculture ALNs: 10.565, 10.568 & 10.569 Criteria Internal controls and other compliance knowledge should prevent the incorrect coding of employee hours worked. Per 2 CFR 200.430(g)(1), "charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed" and "be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated." Condition Internal controls and adherence to compliance were not followed with regards to an appropriate level of approval of management that is charged to the Coronavirus State and Local Recovery Funds program and the Food Cluster Program. Questioned costs Total questioned cost of $2,822 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Coronavirus State and Local Recovery Fund grant (ALN 21.027). Total questioned cost of $3,475 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Food Cluster Program (ALNs 10.565, 10.568, & 10.569). Context During our payroll testing, of the six executive director timesheets tested, none of them indicated a review or approval from the board president. Cause The error was caused by not applying an adequate number of controls necessary for the executive director's timesheet. Effect The Coronavirus State and Local Recovery Funds program and Food Cluster program and other federal programs could be incorrectly charged with unreasonable wages.Repeat Finding No. Auditor's Recommendation We recommend that the board president or other board member designee review the executive director's timesheet prior to submitting the wages for reimbursement from federal grants.

2024-001 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Funding Agency: Department of Agriculture ALNs: 10.565, 10.568 & 10.569 Criteria Internal controls and other compliance knowledge should prevent the incorrect coding of employee hours worked. Per 2 CFR 200.430(g)(1), "charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed" and "be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated." Condition Internal controls and adherence to compliance were not followed with regards to an appropriate level of approval of management that is charged to the Coronavirus State and Local Recovery Funds program and the Food Cluster Program. Questioned costs Total questioned cost of $2,822 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Coronavirus State and Local Recovery Fund grant (ALN 21.027). Total questioned cost of $3,475 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Food Cluster Program (ALNs 10.565, 10.568, & 10.569). Context During our payroll testing, of the six executive director timesheets tested, none of them indicated a review or approval from the board president. Cause The error was caused by not applying an adequate number of controls necessary for the executive director's timesheet. Effect The Coronavirus State and Local Recovery Funds program and Food Cluster program and other federal programs could be incorrectly charged with unreasonable wages.Repeat Finding No. Auditor's Recommendation We recommend that the board president or other board member designee review the executive director's timesheet prior to submitting the wages for reimbursement from federal grants.

2024-001 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Funding Agency: Department of Agriculture ALNs: 10.565, 10.568 & 10.569 Criteria Internal controls and other compliance knowledge should prevent the incorrect coding of employee hours worked. Per 2 CFR 200.430(g)(1), "charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed" and "be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated." Condition Internal controls and adherence to compliance were not followed with regards to an appropriate level of approval of management that is charged to the Coronavirus State and Local Recovery Funds program and the Food Cluster Program. Questioned costs Total questioned cost of $2,822 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Coronavirus State and Local Recovery Fund grant (ALN 21.027). Total questioned cost of $3,475 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Food Cluster Program (ALNs 10.565, 10.568, & 10.569). Context During our payroll testing, of the six executive director timesheets tested, none of them indicated a review or approval from the board president. Cause The error was caused by not applying an adequate number of controls necessary for the executive director's timesheet. Effect The Coronavirus State and Local Recovery Funds program and Food Cluster program and other federal programs could be incorrectly charged with unreasonable wages.Repeat Finding No. Auditor's Recommendation We recommend that the board president or other board member designee review the executive director's timesheet prior to submitting the wages for reimbursement from federal grants.

2024-001 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Funding Agency: Department of Agriculture ALNs: 10.565, 10.568 & 10.569 Criteria Internal controls and other compliance knowledge should prevent the incorrect coding of employee hours worked. Per 2 CFR 200.430(g)(1), "charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed" and "be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated." Condition Internal controls and adherence to compliance were not followed with regards to an appropriate level of approval of management that is charged to the Coronavirus State and Local Recovery Funds program and the Food Cluster Program. Questioned costs Total questioned cost of $2,822 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Coronavirus State and Local Recovery Fund grant (ALN 21.027). Total questioned cost of $3,475 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Food Cluster Program (ALNs 10.565, 10.568, & 10.569). Context During our payroll testing, of the six executive director timesheets tested, none of them indicated a review or approval from the board president. Cause The error was caused by not applying an adequate number of controls necessary for the executive director's timesheet. Effect The Coronavirus State and Local Recovery Funds program and Food Cluster program and other federal programs could be incorrectly charged with unreasonable wages.Repeat Finding No. Auditor's Recommendation We recommend that the board president or other board member designee review the executive director's timesheet prior to submitting the wages for reimbursement from federal grants.

2024-001 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Funding Agency: Department of Agriculture ALNs: 10.565, 10.568 & 10.569 Criteria Internal controls and other compliance knowledge should prevent the incorrect coding of employee hours worked. Per 2 CFR 200.430(g)(1), "charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed" and "be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated." Condition Internal controls and adherence to compliance were not followed with regards to an appropriate level of approval of management that is charged to the Coronavirus State and Local Recovery Funds program and the Food Cluster Program. Questioned costs Total questioned cost of $2,822 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Coronavirus State and Local Recovery Fund grant (ALN 21.027). Total questioned cost of $3,475 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Food Cluster Program (ALNs 10.565, 10.568, & 10.569). Context During our payroll testing, of the six executive director timesheets tested, none of them indicated a review or approval from the board president. Cause The error was caused by not applying an adequate number of controls necessary for the executive director's timesheet. Effect The Coronavirus State and Local Recovery Funds program and Food Cluster program and other federal programs could be incorrectly charged with unreasonable wages.Repeat Finding No. Auditor's Recommendation We recommend that the board president or other board member designee review the executive director's timesheet prior to submitting the wages for reimbursement from federal grants.

2024-001 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Funding Agency: Department of Agriculture ALNs: 10.565, 10.568 & 10.569 Criteria Internal controls and other compliance knowledge should prevent the incorrect coding of employee hours worked. Per 2 CFR 200.430(g)(1), "charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed" and "be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated." Condition Internal controls and adherence to compliance were not followed with regards to an appropriate level of approval of management that is charged to the Coronavirus State and Local Recovery Funds program and the Food Cluster Program. Questioned costs Total questioned cost of $2,822 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Coronavirus State and Local Recovery Fund grant (ALN 21.027). Total questioned cost of $3,475 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Food Cluster Program (ALNs 10.565, 10.568, & 10.569). Context During our payroll testing, of the six executive director timesheets tested, none of them indicated a review or approval from the board president. Cause The error was caused by not applying an adequate number of controls necessary for the executive director's timesheet. Effect The Coronavirus State and Local Recovery Funds program and Food Cluster program and other federal programs could be incorrectly charged with unreasonable wages.Repeat Finding No. Auditor's Recommendation We recommend that the board president or other board member designee review the executive director's timesheet prior to submitting the wages for reimbursement from federal grants.

2024-001 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Funding Agency: Department of Agriculture ALNs: 10.565, 10.568 & 10.569 Criteria Internal controls and other compliance knowledge should prevent the incorrect coding of employee hours worked. Per 2 CFR 200.430(g)(1), "charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed" and "be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated." Condition Internal controls and adherence to compliance were not followed with regards to an appropriate level of approval of management that is charged to the Coronavirus State and Local Recovery Funds program and the Food Cluster Program. Questioned costs Total questioned cost of $2,822 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Coronavirus State and Local Recovery Fund grant (ALN 21.027). Total questioned cost of $3,475 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Food Cluster Program (ALNs 10.565, 10.568, & 10.569). Context During our payroll testing, of the six executive director timesheets tested, none of them indicated a review or approval from the board president. Cause The error was caused by not applying an adequate number of controls necessary for the executive director's timesheet. Effect The Coronavirus State and Local Recovery Funds program and Food Cluster program and other federal programs could be incorrectly charged with unreasonable wages.Repeat Finding No. Auditor's Recommendation We recommend that the board president or other board member designee review the executive director's timesheet prior to submitting the wages for reimbursement from federal grants.

2024-001 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Treasury ALN: 21.027 Funding Agency: Department of Agriculture ALNs: 10.565, 10.568 & 10.569 Criteria Internal controls and other compliance knowledge should prevent the incorrect coding of employee hours worked. Per 2 CFR 200.430(g)(1), "charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed" and "be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated." Condition Internal controls and adherence to compliance were not followed with regards to an appropriate level of approval of management that is charged to the Coronavirus State and Local Recovery Funds program and the Food Cluster Program. Questioned costs Total questioned cost of $2,822 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Coronavirus State and Local Recovery Fund grant (ALN 21.027). Total questioned cost of $3,475 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Food Cluster Program (ALNs 10.565, 10.568, & 10.569). Context During our payroll testing, of the six executive director timesheets tested, none of them indicated a review or approval from the board president. Cause The error was caused by not applying an adequate number of controls necessary for the executive director's timesheet. Effect The Coronavirus State and Local Recovery Funds program and Food Cluster program and other federal programs could be incorrectly charged with unreasonable wages.Repeat Finding No. Auditor's Recommendation We recommend that the board president or other board member designee review the executive director's timesheet prior to submitting the wages for reimbursement from federal grants.