Findings Citing § 200.502

2023-005 - Internal Control Over Compliance and Compliance – Reporting (Preparation of the Schedule of Expenditures of Federal Awards) Program- U.S. Department of Energy, National Forum for State and Territorial Chief Executives - HHS OA, Yr 10 and Yr 11, National Forum ALN: 93.528, Award #: 2U98OA09028, Award Year: 09/01/2022 – 09/29/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria – 2 CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with §200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. The financial management system of each non-federal entity must provide for the following: (1) Identification, in its accounts, of all federal awards received and expended and the federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each federal award or program in accordance with the reporting requirements set forth in §200.327 Financial Reporting and §200.328 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for federally-funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets. Condition – The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. During our testing of management’s preparation of the SEFA, it was determined that some federal award expenditures were excluded from the original SEFA provided by management. Management subsequently corrected the SEFA to reflect the inclusion of the federal expenditures. In addition, several versions were received from management prior to the final SEFA. Questioned Costs – None. Context – This is a condition identified per review of NGA Center’s compliance with specified requirements. Cause – NGA Center only prepares the SEFA once a year in conjunction with the annual audit. This annual process lends itself to less familiarity with the processes necessary to provide a complete SEFA reporting package and turnover in key personnel historically involved in the SEFA process negatively impacted the process. Effect – Failure to present the SEFA correctly can result in incorrect major program selection and incorrect reporting to federal agencies. The finding identified was not of a magnitude to impact BDO’s selection of major programs. Repeat Finding – This is not a repeat finding. Recommendation - We recommend management continue to focus on training for both preparer and reviewer of the SEFA to ensure the documented policies and procedures can be performed as prescribed to comply with Section §200.510(b). This will ensure that the SEFA provides all relevant information as prescribed. Views of Responsible Officials – NGA Center agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.

2023-005 - Internal Control Over Compliance and Compliance – Reporting (Preparation of the Schedule of Expenditures of Federal Awards) Program- U.S. Department of Energy, National Forum for State and Territorial Chief Executives - HHS OA, Yr 10 and Yr 11, National Forum ALN: 93.528, Award #: 2U98OA09028, Award Year: 09/01/2022 – 09/29/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria – 2 CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with §200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. The financial management system of each non-federal entity must provide for the following: (1) Identification, in its accounts, of all federal awards received and expended and the federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each federal award or program in accordance with the reporting requirements set forth in §200.327 Financial Reporting and §200.328 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for federally-funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets. Condition – The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. During our testing of management’s preparation of the SEFA, it was determined that some federal award expenditures were excluded from the original SEFA provided by management. Management subsequently corrected the SEFA to reflect the inclusion of the federal expenditures. In addition, several versions were received from management prior to the final SEFA. Questioned Costs – None. Context – This is a condition identified per review of NGA Center’s compliance with specified requirements. Cause – NGA Center only prepares the SEFA once a year in conjunction with the annual audit. This annual process lends itself to less familiarity with the processes necessary to provide a complete SEFA reporting package and turnover in key personnel historically involved in the SEFA process negatively impacted the process. Effect – Failure to present the SEFA correctly can result in incorrect major program selection and incorrect reporting to federal agencies. The finding identified was not of a magnitude to impact BDO’s selection of major programs. Repeat Finding – This is not a repeat finding. Recommendation - We recommend management continue to focus on training for both preparer and reviewer of the SEFA to ensure the documented policies and procedures can be performed as prescribed to comply with Section §200.510(b). This will ensure that the SEFA provides all relevant information as prescribed. Views of Responsible Officials – NGA Center agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.

2023-005 - Internal Control Over Compliance and Compliance – Reporting (Preparation of the Schedule of Expenditures of Federal Awards) Program- U.S. Department of Energy, National Forum for State and Territorial Chief Executives - HHS OA, Yr 10 and Yr 11, National Forum ALN: 93.528, Award #: 2U98OA09028, Award Year: 09/01/2022 – 09/29/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria – 2 CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with §200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. The financial management system of each non-federal entity must provide for the following: (1) Identification, in its accounts, of all federal awards received and expended and the federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each federal award or program in accordance with the reporting requirements set forth in §200.327 Financial Reporting and §200.328 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for federally-funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets. Condition – The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. During our testing of management’s preparation of the SEFA, it was determined that some federal award expenditures were excluded from the original SEFA provided by management. Management subsequently corrected the SEFA to reflect the inclusion of the federal expenditures. In addition, several versions were received from management prior to the final SEFA. Questioned Costs – None. Context – This is a condition identified per review of NGA Center’s compliance with specified requirements. Cause – NGA Center only prepares the SEFA once a year in conjunction with the annual audit. This annual process lends itself to less familiarity with the processes necessary to provide a complete SEFA reporting package and turnover in key personnel historically involved in the SEFA process negatively impacted the process. Effect – Failure to present the SEFA correctly can result in incorrect major program selection and incorrect reporting to federal agencies. The finding identified was not of a magnitude to impact BDO’s selection of major programs. Repeat Finding – This is not a repeat finding. Recommendation - We recommend management continue to focus on training for both preparer and reviewer of the SEFA to ensure the documented policies and procedures can be performed as prescribed to comply with Section §200.510(b). This will ensure that the SEFA provides all relevant information as prescribed. Views of Responsible Officials – NGA Center agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.

2023-005 - Internal Control Over Compliance and Compliance – Reporting (Preparation of the Schedule of Expenditures of Federal Awards) Program- U.S. Department of Energy, National Forum for State and Territorial Chief Executives - HHS OA, Yr 10 and Yr 11, National Forum ALN: 93.528, Award #: 2U98OA09028, Award Year: 09/01/2022 – 09/29/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria – 2 CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with §200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. The financial management system of each non-federal entity must provide for the following: (1) Identification, in its accounts, of all federal awards received and expended and the federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each federal award or program in accordance with the reporting requirements set forth in §200.327 Financial Reporting and §200.328 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for federally-funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets. Condition – The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. During our testing of management’s preparation of the SEFA, it was determined that some federal award expenditures were excluded from the original SEFA provided by management. Management subsequently corrected the SEFA to reflect the inclusion of the federal expenditures. In addition, several versions were received from management prior to the final SEFA. Questioned Costs – None. Context – This is a condition identified per review of NGA Center’s compliance with specified requirements. Cause – NGA Center only prepares the SEFA once a year in conjunction with the annual audit. This annual process lends itself to less familiarity with the processes necessary to provide a complete SEFA reporting package and turnover in key personnel historically involved in the SEFA process negatively impacted the process. Effect – Failure to present the SEFA correctly can result in incorrect major program selection and incorrect reporting to federal agencies. The finding identified was not of a magnitude to impact BDO’s selection of major programs. Repeat Finding – This is not a repeat finding. Recommendation - We recommend management continue to focus on training for both preparer and reviewer of the SEFA to ensure the documented policies and procedures can be performed as prescribed to comply with Section §200.510(b). This will ensure that the SEFA provides all relevant information as prescribed. Views of Responsible Officials – NGA Center agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.

2023-005 - Internal Control Over Compliance and Compliance – Reporting (Preparation of the Schedule of Expenditures of Federal Awards) Program- U.S. Department of Energy, National Forum for State and Territorial Chief Executives - HHS OA, Yr 10 and Yr 11, National Forum ALN: 93.528, Award #: 2U98OA09028, Award Year: 09/01/2022 – 09/29/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria – 2 CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with §200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. The financial management system of each non-federal entity must provide for the following: (1) Identification, in its accounts, of all federal awards received and expended and the federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each federal award or program in accordance with the reporting requirements set forth in §200.327 Financial Reporting and §200.328 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for federally-funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets. Condition – The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. During our testing of management’s preparation of the SEFA, it was determined that some federal award expenditures were excluded from the original SEFA provided by management. Management subsequently corrected the SEFA to reflect the inclusion of the federal expenditures. In addition, several versions were received from management prior to the final SEFA. Questioned Costs – None. Context – This is a condition identified per review of NGA Center’s compliance with specified requirements. Cause – NGA Center only prepares the SEFA once a year in conjunction with the annual audit. This annual process lends itself to less familiarity with the processes necessary to provide a complete SEFA reporting package and turnover in key personnel historically involved in the SEFA process negatively impacted the process. Effect – Failure to present the SEFA correctly can result in incorrect major program selection and incorrect reporting to federal agencies. The finding identified was not of a magnitude to impact BDO’s selection of major programs. Repeat Finding – This is not a repeat finding. Recommendation - We recommend management continue to focus on training for both preparer and reviewer of the SEFA to ensure the documented policies and procedures can be performed as prescribed to comply with Section §200.510(b). This will ensure that the SEFA provides all relevant information as prescribed. Views of Responsible Officials – NGA Center agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.

Finding 2023-02 – Preparation of SEFA (Material Weakness) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2022-2023 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly excluded expenditures from AL No. 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,533,398 and from AL No. 21.019 in the amount of $200,000 on its preliminary SEFA. Cause of Condition The Agencies’ existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $6,430,319; the final revised expenditures totaled $9,163,717. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency Office provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan Noted and management concurs. A few measures have begun to take place chief among which is that 3rd party organization(s) are no longer managing the budget for TCRTA. As of FY 2024-2025 (July 1, 2024) TCRTA will be managing its own internal finances and thus establish sufficient controls. This report will be shared with the Board of Directors, other stakeholders, and, Tulare County’s Treasury’s office in order to obtain resources toward the net goal of fulfilling these defects. With respect to this corrective action plan TCRTA has setup a meeting with the Tresury’s office to discuss what the County’s YE closing processes are so that TCRTA can mirror the same.

Finding 2023-02 – Preparation of SEFA (Material Weakness) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2022-2023 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly excluded expenditures from AL No. 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,533,398 and from AL No. 21.019 in the amount of $200,000 on its preliminary SEFA. Cause of Condition The Agencies’ existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $6,430,319; the final revised expenditures totaled $9,163,717. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency Office provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan Noted and management concurs. A few measures have begun to take place chief among which is that 3rd party organization(s) are no longer managing the budget for TCRTA. As of FY 2024-2025 (July 1, 2024) TCRTA will be managing its own internal finances and thus establish sufficient controls. This report will be shared with the Board of Directors, other stakeholders, and, Tulare County’s Treasury’s office in order to obtain resources toward the net goal of fulfilling these defects. With respect to this corrective action plan TCRTA has setup a meeting with the Tresury’s office to discuss what the County’s YE closing processes are so that TCRTA can mirror the same.

Finding 2023-02 – Preparation of SEFA (Material Weakness) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2022-2023 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly excluded expenditures from AL No. 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,533,398 and from AL No. 21.019 in the amount of $200,000 on its preliminary SEFA. Cause of Condition The Agencies’ existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $6,430,319; the final revised expenditures totaled $9,163,717. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency Office provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan Noted and management concurs. A few measures have begun to take place chief among which is that 3rd party organization(s) are no longer managing the budget for TCRTA. As of FY 2024-2025 (July 1, 2024) TCRTA will be managing its own internal finances and thus establish sufficient controls. This report will be shared with the Board of Directors, other stakeholders, and, Tulare County’s Treasury’s office in order to obtain resources toward the net goal of fulfilling these defects. With respect to this corrective action plan TCRTA has setup a meeting with the Tresury’s office to discuss what the County’s YE closing processes are so that TCRTA can mirror the same.

Finding 2023-02 – Preparation of SEFA (Material Weakness) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2022-2023 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly excluded expenditures from AL No. 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,533,398 and from AL No. 21.019 in the amount of $200,000 on its preliminary SEFA. Cause of Condition The Agencies’ existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $6,430,319; the final revised expenditures totaled $9,163,717. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency Office provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan Noted and management concurs. A few measures have begun to take place chief among which is that 3rd party organization(s) are no longer managing the budget for TCRTA. As of FY 2024-2025 (July 1, 2024) TCRTA will be managing its own internal finances and thus establish sufficient controls. This report will be shared with the Board of Directors, other stakeholders, and, Tulare County’s Treasury’s office in order to obtain resources toward the net goal of fulfilling these defects. With respect to this corrective action plan TCRTA has setup a meeting with the Tresury’s office to discuss what the County’s YE closing processes are so that TCRTA can mirror the same.

Finding 2023-02 – Preparation of SEFA (Material Weakness) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2022-2023 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly excluded expenditures from AL No. 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,533,398 and from AL No. 21.019 in the amount of $200,000 on its preliminary SEFA. Cause of Condition The Agencies’ existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $6,430,319; the final revised expenditures totaled $9,163,717. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency Office provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan Noted and management concurs. A few measures have begun to take place chief among which is that 3rd party organization(s) are no longer managing the budget for TCRTA. As of FY 2024-2025 (July 1, 2024) TCRTA will be managing its own internal finances and thus establish sufficient controls. This report will be shared with the Board of Directors, other stakeholders, and, Tulare County’s Treasury’s office in order to obtain resources toward the net goal of fulfilling these defects. With respect to this corrective action plan TCRTA has setup a meeting with the Tresury’s office to discuss what the County’s YE closing processes are so that TCRTA can mirror the same.

Finding 2023-02 – Preparation of SEFA (Material Weakness) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2022-2023 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly excluded expenditures from AL No. 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,533,398 and from AL No. 21.019 in the amount of $200,000 on its preliminary SEFA. Cause of Condition The Agencies’ existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $6,430,319; the final revised expenditures totaled $9,163,717. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency Office provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan Noted and management concurs. A few measures have begun to take place chief among which is that 3rd party organization(s) are no longer managing the budget for TCRTA. As of FY 2024-2025 (July 1, 2024) TCRTA will be managing its own internal finances and thus establish sufficient controls. This report will be shared with the Board of Directors, other stakeholders, and, Tulare County’s Treasury’s office in order to obtain resources toward the net goal of fulfilling these defects. With respect to this corrective action plan TCRTA has setup a meeting with the Tresury’s office to discuss what the County’s YE closing processes are so that TCRTA can mirror the same.

Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards (SEFA)) ALN: 10.170, Specialty Crop Block Grant ALN: 15.228, National Fire Plan ALN 10.767: Intermediary Relending Program (IRP) ALN 66.818: Brownfields RLF ALN 11.307: Economic Development Assistance RLF Criteria: The Code of Federal Regulations (CFR) Section §200.510(b) states in part: "The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended." The schedule must provide total Federal awards expended for each individual Federal program. CFR 200.302(b)(1) requires that the nonfederal entity must identify in its accounts and on the schedule of expenditures of federal awards all federal awards received and expended, as well as the federal programs under which they were received. Federal program and award identification must include, as applicable, the Assistance Listing program title and number, the federal award identification number and year, the name of the federal agency, and the name of the pass-through entity, if any. Condition: The Specialty Crop Block Grant was left off of the prepared SEFA. Amounts reported for the National Fire Plan grant, IRP, and Brownfields RLF did not agree to the accounting records. The amount reported for the Economic Development Assistance RLF was not calculated in accordance with the compliance supplement calculation formula. Context: There SEFA was understated or overstated by ALN as follows: • Understated by $14,123 for the omission of the Specialty Crop Block Grant; • Overstated by $1,942 for National Fire Plan grant; • Understated by $10,748 for IRP; • Understated by $25,902 for Brownfields RLF; and • Overstated by $101,804 for Economic Development Assistance RLF. The net effect was an overstatement of $52,973. Effect: The SEFA provided was not complete and fully accurate. Questioned Costs: None. Cause: The internal controls for the preparation of the SEFA and review of the SEFA were not present to ensure the SEFA was complete and accurate. Auditor Recommendation: We recommend the Organization prepare procedures on how to put together the SEFA and strengthen internal controls to ensure all federal awards are included on the SEFA. We also recommend that staff who administer federal funds review the SEFA for completeness and accuracy before providing it to the auditor. Organization Response: The organization disagrees with the reported deficiency related to the SEFA preparation on the basis that the task was an agreed nonattest service contracted to Douglas Wilson & Company, P.C. The noted modifications are outcomes of these services and are not indicative of control deficiencies. With respect to the nonattest services, the Organization has fulfilled the responsibilities stated in the engagement letter to assume all management responsibilities for the services; to have those services overseen by an individual with appropriate skills, knowledge, and experience; evaluate the adequacy of the services; and to accept responsibility for them. Since its inception, the organization’s auditors have prepared the SEFA under the same engagement letters executed with the auditor. The organization’s outsourced accounting firm, JCCS, also provides these nonattest services for their auditees and were operating under the same understanding of this service arrangement. Management reports that this finding is a result of a misunderstanding between Management, JCCS, and Douglas Wilson & Company, P.C. regarding which party would complete the SEFA. Based on the signed engagement letter, Management understood that completing the SEFA was part of the auditors’ nonattest services. Their outsourced accounting firm, JCCS, provided a draft SEFA to the auditors with communication that it was a draft and would need to be finalized. JCCS worked directly with the auditor in making the necessary changes and finalizing the SEFA. Management nor JCCS were aware that the auditor would be identifying this collaboration as a material weakness. Management strongly disagrees that this finding has anything to do with a deficiency in internal controls as they understood they had engaged the auditor to provide this nonattest service. Management reports a discussion with the auditor that such a misunderstanding presented as an internal control deficiency carries significant consequences for the organization's future Federal awards. It is important that the organization's Federal grantors understand the full context of this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.

Assistance Listing, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Pell Grant Program ALN 84.063, Federal Direct Student Loan Program ALN 84.268, Federal Supplemental Educational Opportunity Grant (SEOG) Program ALN 84.007, Federal Work Study (FWS) Program ALN 84.033, and Federal Perkins Loan Program ALN 84.038; TRIO Student Support Service (SSS) Grant Program ALN 84.042; and Corporation for National and Community Service AmeriCorps Vista Grant Program ALN 94.006 Federal Award Identification Number and Year - 2022-2023 Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of federal expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended, as determined in accordance with 200.502. Condition - The schedule of expenditures of federal awards (SEFA) was not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The SEFA provided did not include all expenditures of the FWS and TRIO SSS programs and no expenditures of the AmeriCorps Vista program. In addition, the SEFA did not include the correct outstanding Federal Perkins Loan Balance as of the beginning of the fiscal year. As a result, the SEFA was overstated by $1,220,928. In addition, we noted the SEFA was not fully reconciled to the related federal expenditures and grant revenue as of June 30, 2023 resulting in an overstatement of federal revenue of $209,446. Cause and Effect - Controls in place did not ensure the SEFA was completed in a timely manner and that it was complete and accurate. The above errors have been corrected on the SEFA as of June 30, 2023. Recommendation - The College should implement a process to ensure that the SEFA is prepared timely and that it is complete, accurate, and reconciled to the related federal revenue and expenditures. The College should also ensure all federal grants are appropriately classified as federal within the general ledger. Views of Responsible Officials and Corrective Action Plan - The Albion College Business Office has established revised procedures for SEFA funds, in tandem with the Financial Aid Office, in which all Federal Awards and Grants will be reconciled on a quarterly basis, to be completed no later than the end of the first proceeding month of the quarter. The procedures create a dual- control process for the drawdown, recordation, and reporting of SEFA funds. Additionally, in FY24, the Perkins portfolio was divested. The Perkins Close- out will be part of the FY24 Single Audit.

Assistance Listing, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Pell Grant Program ALN 84.063, Federal Direct Student Loan Program ALN 84.268, Federal Supplemental Educational Opportunity Grant (SEOG) Program ALN 84.007, Federal Work Study (FWS) Program ALN 84.033, and Federal Perkins Loan Program ALN 84.038; TRIO Student Support Service (SSS) Grant Program ALN 84.042; and Corporation for National and Community Service AmeriCorps Vista Grant Program ALN 94.006 Federal Award Identification Number and Year - 2022-2023 Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of federal expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended, as determined in accordance with 200.502. Condition - The schedule of expenditures of federal awards (SEFA) was not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The SEFA provided did not include all expenditures of the FWS and TRIO SSS programs and no expenditures of the AmeriCorps Vista program. In addition, the SEFA did not include the correct outstanding Federal Perkins Loan Balance as of the beginning of the fiscal year. As a result, the SEFA was overstated by $1,220,928. In addition, we noted the SEFA was not fully reconciled to the related federal expenditures and grant revenue as of June 30, 2023 resulting in an overstatement of federal revenue of $209,446. Cause and Effect - Controls in place did not ensure the SEFA was completed in a timely manner and that it was complete and accurate. The above errors have been corrected on the SEFA as of June 30, 2023. Recommendation - The College should implement a process to ensure that the SEFA is prepared timely and that it is complete, accurate, and reconciled to the related federal revenue and expenditures. The College should also ensure all federal grants are appropriately classified as federal within the general ledger. Views of Responsible Officials and Corrective Action Plan - The Albion College Business Office has established revised procedures for SEFA funds, in tandem with the Financial Aid Office, in which all Federal Awards and Grants will be reconciled on a quarterly basis, to be completed no later than the end of the first proceeding month of the quarter. The procedures create a dual- control process for the drawdown, recordation, and reporting of SEFA funds. Additionally, in FY24, the Perkins portfolio was divested. The Perkins Close- out will be part of the FY24 Single Audit.

Assistance Listing, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Pell Grant Program ALN 84.063, Federal Direct Student Loan Program ALN 84.268, Federal Supplemental Educational Opportunity Grant (SEOG) Program ALN 84.007, Federal Work Study (FWS) Program ALN 84.033, and Federal Perkins Loan Program ALN 84.038; TRIO Student Support Service (SSS) Grant Program ALN 84.042; and Corporation for National and Community Service AmeriCorps Vista Grant Program ALN 94.006 Federal Award Identification Number and Year - 2022-2023 Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of federal expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended, as determined in accordance with 200.502. Condition - The schedule of expenditures of federal awards (SEFA) was not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The SEFA provided did not include all expenditures of the FWS and TRIO SSS programs and no expenditures of the AmeriCorps Vista program. In addition, the SEFA did not include the correct outstanding Federal Perkins Loan Balance as of the beginning of the fiscal year. As a result, the SEFA was overstated by $1,220,928. In addition, we noted the SEFA was not fully reconciled to the related federal expenditures and grant revenue as of June 30, 2023 resulting in an overstatement of federal revenue of $209,446. Cause and Effect - Controls in place did not ensure the SEFA was completed in a timely manner and that it was complete and accurate. The above errors have been corrected on the SEFA as of June 30, 2023. Recommendation - The College should implement a process to ensure that the SEFA is prepared timely and that it is complete, accurate, and reconciled to the related federal revenue and expenditures. The College should also ensure all federal grants are appropriately classified as federal within the general ledger. Views of Responsible Officials and Corrective Action Plan - The Albion College Business Office has established revised procedures for SEFA funds, in tandem with the Financial Aid Office, in which all Federal Awards and Grants will be reconciled on a quarterly basis, to be completed no later than the end of the first proceeding month of the quarter. The procedures create a dual- control process for the drawdown, recordation, and reporting of SEFA funds. Additionally, in FY24, the Perkins portfolio was divested. The Perkins Close- out will be part of the FY24 Single Audit.

Assistance Listing, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Pell Grant Program ALN 84.063, Federal Direct Student Loan Program ALN 84.268, Federal Supplemental Educational Opportunity Grant (SEOG) Program ALN 84.007, Federal Work Study (FWS) Program ALN 84.033, and Federal Perkins Loan Program ALN 84.038; TRIO Student Support Service (SSS) Grant Program ALN 84.042; and Corporation for National and Community Service AmeriCorps Vista Grant Program ALN 94.006 Federal Award Identification Number and Year - 2022-2023 Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of federal expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended, as determined in accordance with 200.502. Condition - The schedule of expenditures of federal awards (SEFA) was not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The SEFA provided did not include all expenditures of the FWS and TRIO SSS programs and no expenditures of the AmeriCorps Vista program. In addition, the SEFA did not include the correct outstanding Federal Perkins Loan Balance as of the beginning of the fiscal year. As a result, the SEFA was overstated by $1,220,928. In addition, we noted the SEFA was not fully reconciled to the related federal expenditures and grant revenue as of June 30, 2023 resulting in an overstatement of federal revenue of $209,446. Cause and Effect - Controls in place did not ensure the SEFA was completed in a timely manner and that it was complete and accurate. The above errors have been corrected on the SEFA as of June 30, 2023. Recommendation - The College should implement a process to ensure that the SEFA is prepared timely and that it is complete, accurate, and reconciled to the related federal revenue and expenditures. The College should also ensure all federal grants are appropriately classified as federal within the general ledger. Views of Responsible Officials and Corrective Action Plan - The Albion College Business Office has established revised procedures for SEFA funds, in tandem with the Financial Aid Office, in which all Federal Awards and Grants will be reconciled on a quarterly basis, to be completed no later than the end of the first proceeding month of the quarter. The procedures create a dual- control process for the drawdown, recordation, and reporting of SEFA funds. Additionally, in FY24, the Perkins portfolio was divested. The Perkins Close- out will be part of the FY24 Single Audit.

Assistance Listing, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Pell Grant Program ALN 84.063, Federal Direct Student Loan Program ALN 84.268, Federal Supplemental Educational Opportunity Grant (SEOG) Program ALN 84.007, Federal Work Study (FWS) Program ALN 84.033, and Federal Perkins Loan Program ALN 84.038; TRIO Student Support Service (SSS) Grant Program ALN 84.042; and Corporation for National and Community Service AmeriCorps Vista Grant Program ALN 94.006 Federal Award Identification Number and Year - 2022-2023 Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of federal expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended, as determined in accordance with 200.502. Condition - The schedule of expenditures of federal awards (SEFA) was not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The SEFA provided did not include all expenditures of the FWS and TRIO SSS programs and no expenditures of the AmeriCorps Vista program. In addition, the SEFA did not include the correct outstanding Federal Perkins Loan Balance as of the beginning of the fiscal year. As a result, the SEFA was overstated by $1,220,928. In addition, we noted the SEFA was not fully reconciled to the related federal expenditures and grant revenue as of June 30, 2023 resulting in an overstatement of federal revenue of $209,446. Cause and Effect - Controls in place did not ensure the SEFA was completed in a timely manner and that it was complete and accurate. The above errors have been corrected on the SEFA as of June 30, 2023. Recommendation - The College should implement a process to ensure that the SEFA is prepared timely and that it is complete, accurate, and reconciled to the related federal revenue and expenditures. The College should also ensure all federal grants are appropriately classified as federal within the general ledger. Views of Responsible Officials and Corrective Action Plan - The Albion College Business Office has established revised procedures for SEFA funds, in tandem with the Financial Aid Office, in which all Federal Awards and Grants will be reconciled on a quarterly basis, to be completed no later than the end of the first proceeding month of the quarter. The procedures create a dual- control process for the drawdown, recordation, and reporting of SEFA funds. Additionally, in FY24, the Perkins portfolio was divested. The Perkins Close- out will be part of the FY24 Single Audit.

Assistance Listing, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Pell Grant Program ALN 84.063, Federal Direct Student Loan Program ALN 84.268, Federal Supplemental Educational Opportunity Grant (SEOG) Program ALN 84.007, Federal Work Study (FWS) Program ALN 84.033, and Federal Perkins Loan Program ALN 84.038; TRIO Student Support Service (SSS) Grant Program ALN 84.042; and Corporation for National and Community Service AmeriCorps Vista Grant Program ALN 94.006 Federal Award Identification Number and Year - 2022-2023 Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of federal expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended, as determined in accordance with 200.502. Condition - The schedule of expenditures of federal awards (SEFA) was not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The SEFA provided did not include all expenditures of the FWS and TRIO SSS programs and no expenditures of the AmeriCorps Vista program. In addition, the SEFA did not include the correct outstanding Federal Perkins Loan Balance as of the beginning of the fiscal year. As a result, the SEFA was overstated by $1,220,928. In addition, we noted the SEFA was not fully reconciled to the related federal expenditures and grant revenue as of June 30, 2023 resulting in an overstatement of federal revenue of $209,446. Cause and Effect - Controls in place did not ensure the SEFA was completed in a timely manner and that it was complete and accurate. The above errors have been corrected on the SEFA as of June 30, 2023. Recommendation - The College should implement a process to ensure that the SEFA is prepared timely and that it is complete, accurate, and reconciled to the related federal revenue and expenditures. The College should also ensure all federal grants are appropriately classified as federal within the general ledger. Views of Responsible Officials and Corrective Action Plan - The Albion College Business Office has established revised procedures for SEFA funds, in tandem with the Financial Aid Office, in which all Federal Awards and Grants will be reconciled on a quarterly basis, to be completed no later than the end of the first proceeding month of the quarter. The procedures create a dual- control process for the drawdown, recordation, and reporting of SEFA funds. Additionally, in FY24, the Perkins portfolio was divested. The Perkins Close- out will be part of the FY24 Single Audit.

Assistance Listing, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Pell Grant Program ALN 84.063, Federal Direct Student Loan Program ALN 84.268, Federal Supplemental Educational Opportunity Grant (SEOG) Program ALN 84.007, Federal Work Study (FWS) Program ALN 84.033, and Federal Perkins Loan Program ALN 84.038; TRIO Student Support Service (SSS) Grant Program ALN 84.042; and Corporation for National and Community Service AmeriCorps Vista Grant Program ALN 94.006 Federal Award Identification Number and Year - 2022-2023 Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of federal expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended, as determined in accordance with 200.502. Condition - The schedule of expenditures of federal awards (SEFA) was not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The SEFA provided did not include all expenditures of the FWS and TRIO SSS programs and no expenditures of the AmeriCorps Vista program. In addition, the SEFA did not include the correct outstanding Federal Perkins Loan Balance as of the beginning of the fiscal year. As a result, the SEFA was overstated by $1,220,928. In addition, we noted the SEFA was not fully reconciled to the related federal expenditures and grant revenue as of June 30, 2023 resulting in an overstatement of federal revenue of $209,446. Cause and Effect - Controls in place did not ensure the SEFA was completed in a timely manner and that it was complete and accurate. The above errors have been corrected on the SEFA as of June 30, 2023. Recommendation - The College should implement a process to ensure that the SEFA is prepared timely and that it is complete, accurate, and reconciled to the related federal revenue and expenditures. The College should also ensure all federal grants are appropriately classified as federal within the general ledger. Views of Responsible Officials and Corrective Action Plan - The Albion College Business Office has established revised procedures for SEFA funds, in tandem with the Financial Aid Office, in which all Federal Awards and Grants will be reconciled on a quarterly basis, to be completed no later than the end of the first proceeding month of the quarter. The procedures create a dual- control process for the drawdown, recordation, and reporting of SEFA funds. Additionally, in FY24, the Perkins portfolio was divested. The Perkins Close- out will be part of the FY24 Single Audit.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.

Finding 2023-003 – Material Weakness Award No.: Various Federal Grantor: Various Compliance Requirement: Other compliance requirements. Condition: The Schedule of Expenditures of Federal Awards (SEFA) was not complete, and expenditures reported on the SEFA were revised during the single audit. Criteria: 2 CFR Part 200, Subpart F (Uniform Guidance) Section 200.502 states, “The auditee should prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee’s financial statements.” Internal controls over the SEFA should be in place to ensure accrual basis expenses incurred under the federal program are properly reported as expenses on the SEFA and are properly reported as revenue in the financial statements prior to the start of the single audit. Cause: The SEFA was not fully reconciled and finalized until after the single audit began. Effect: The expenses included on the SEFA were revised during the single audit, which could have resulted in the auditor not selecting the correct major program or expenses for testing and could have resulted in the single audit not satisfying the requirements of the Uniform Guidance. Recommendation: We recommend additional review procedures be implemented to ensure the SEFA is complete and accurate when the single audit begins. Views of Responsible Officials and Planned Corrective Action: We agree with the finding and have implemented a new process during fiscal year 2023/24.

Criteria: “A non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity's fiscal year must have a single or program-specific audit conducted for that year in accordance with the provisions of the Uniform Guidance Part 2 CFR section 200.50 (a). In order to accomplish this, “The auditee must also prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502” per Part 2 CFR section 200.510 (b) of the Uniform Guidance. This guidance includes the requirement that the SEFA include the Assistance Listing Number (ALN) for each grant award included in the schedule . Condition: The amounts recorded as federal expenditures on the SEFA were not based on expenditures. The amounts recorded as expenditures and recognized as revenues were based on budget billings. Cause: Prior management lacked an understanding of what should be considered a grant (versus a contract) and how expenditures should be determined. Effect: The SEFA was not prepared correctly, which could have a direct and material effect on allowable costs, the financial statements, and annual audit. Questioned Costs: Expenditures on the SEFA are recorded on an incorrect basis and per finding 2023-003, were not properly supported. The major program, ALN 84.027 reported expenditures of $840,000. Although not tested as a major program, we determined for the same reason noted in this finding that the other federal reported expenditures on the SEFA are also considered questioned cost, totaling $508,600. Context: Federal programs and expenditures are not recognized consistent with the Uniform Guidance. Identification of Repeat Finding: 2020-001, 2021-001, 2022-001 Recommendation: We recommend that management develop policies and procedures to ensure all allowable grant expenditures are included on the SEFA and are accumulated, and recognized on the appropriate basis.

“A non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of the Uniform Guidance Part 2 CFR section 200.50 (a). In order to accomplish this, “The auditee must also prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502” per Part 2 CFR section 200.510 (b) of the Uniform Guidance. As noted in 2 CFR 200.303 – Internal Control, 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. The 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 of the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Community Council was not able to provide detail of expenditures recorded on the SEFA to facilitate sampling and testing. For most awards there were no invoices or other required audit evidence and required reporting of costs was not maintained. Cause: No detail of expenditures or supporting grant documents were maintained. Effect: Noncompliance with Federal regulations. Questioned Costs: See questioned cost indicated in finding 2023-001. Context: As part of the single audit testing of allowable cost included on the SEFA, we were unable to determine compliance due to the lack of records. Identification of Repeat Finding: 2020-003, 2021-003, 2022-003 Recommendation: We recommend that management develop policies and procedures to ensure that grant expenditures are appropriately captured based on federal regulations and are properly supported.

2023-004 Preparation of and Internal controls over Schedule of Expenditures of Federal Awards Preparation (Material Weakness) Federal Agency: U.S Department of Education Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Award Period: June 30, 2023 Criteria: According to 2 CFR 200, Subpart F, the District is required to prepare a schedule of federal expenditures, which must include the total federal awards expended as determined in accordance with §200.502. An effective internal control system exists if controls are effective in preventing or detecting material misstatements in the preparation of the schedule of federal expenditures of federal awards (the schedule). It provides reasonable assurance for the reliability of financial information and compliance with laws and regulations. Condition: We have determined that there was an inadequate design of internal control over the preparation of the schedule during the fiscal year ended June 30, 2023. The current financial reporting process does not ensure accuracy and completeness in the preparation of the schedule by the District, as required by Uniform Guidance. Cause: The District’s policies and procedures were not designed to ensure the District’s preparation of the schedule in conformity with Uniform Guidance. Effect: The District did not prepare a complete and accurate schedule in conformity with Uniform Guidance as significant modifications were required. This increases the likelihood of a material misstatement and noncompliance with laws and regulations. Recommendation: We recommend the Board of Education and management review the financial reporting process. Once this review is complete, the District should then perform a risk assessment to determine the best way to implement appropriate internal controls over financial reporting to ensure that the District prepares the schedule conformity with Uniform Guidance. Questioned Costs: None. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and plans to develop proper written policies and procedures for the internal control over compliance to ensure accuracy and completeness in the District’s preparation of the schedule as required by Uniform Guidance.

2 CFR Subpart F § 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the District’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the Schedule must: 1. List individual Federal programs by Federal agency. 2. For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. 3. Provide total Federal awards expended for each individual Federal program and the CFDA number or other identifying number when the CFDA information is not available. 4. Include the total amount provided to subrecipients from each Federal program. 5. For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. 6. Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The lack of effective controls over this compliance requirement resulted in the Schedule being understated $302,121. This was due to the Emergency Connectivity Grant and Coronavirus State Fiscal Recovery Funds being omitted from the Schedule in the amount of $193,280 and $138,836, respectively, an understatement in the Nutrition Cluster of $30,402 and an overstatement of the 21st Century Grant of $60,397. The audited Schedule has been adjusted to correct these items. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. The Treasurer should review reported federal expenditures to ensure accuracy of amounts reported. This will help ensure the Schedule is complete and accurate, and major federal programs are accurately identified for audit.