Findings Citing § 200.510

Criteria: Per 2 CFR 200.510(b), the auditee must include in the SEFA “the total Federal awards expended for each individual Federal program and the Assistance Listing number”. Statement of Condition: During our audit, we noted that expenditures reported for Assistance Listing 14.251 – Economic Development Initiative, Community Project Funding, and Miscellaneous Grants were understated by approximately $155,000 on the FY 2025 SEFA. This understatement resulted in the SEFA not accurately reflecting the total federal expenditures for this program as required. Cause: The understatement appears to be due to errors in compiling and reconciling federal expenditures during SEFA preparation. Effect or Potential Effect: An understated SEFA can result in: Federal expenditures being misclassified or omitted; Incorrect major program determination; Potential noncompliance with Uniform Guidance reporting requirements; and inaccurate reporting to the Federal Audit Clearinghouse. Questioned Costs: $- Recommendation: We recommend that management: Strengthen its SEFA preparation procedures to ensure all federal expenditures are captured, reconciled, and accurately assigned to the correct Assistance Listing; implement an internal review process verifying completeness of expenditures, including comparison of SEFA totals to the general ledger and grant-level schedules; and review all federal program totals prior to finalizing the SEFA to ensure compliance with 2 CFR 200.510(b). Management Response: See corrective action plan.

Schedule of Expenditures of Federal Awards Reporting Significant Deficiency - Community Development Block Grant Cluster Entitlement/Special Purpose Grants Federal Granting Agency: U.S. Department of Housing and Urban Development Federal Pass-through Entity: New York City Department of Youth and Community Development Assistance Listing Number: 14.218 Award Number: 99345B Award Year: July 1, 2024 – June 30, 2025 Criteria: OMB Uniform Guidance 2 CFR 200.510(b)(3) requires that the auditee provide the Federal awards expended for each individual Federal program on the Schedule of Expenditures of Federal Awards (“Federal Schedule”). In accordance with 2 CFR 200.502, the determination of when a Federal award is expended, and thereby reported on the Federal Schedule, is generally based on when the activity related to the Federal award occurs. Condition: The Community Development Block Grant Cluster Entitlement/Special Purpose Grants award is a cost reimbursement based grant that reimburses award recipients for expenditures incurred on this program, which seeks to address health inequities faced by members of New York City’s (NYC) priority populations with HIV and was first granted in July 2024. The Association did not include the expenditures incurred under this grant on the Federal Schedule in 2024, resulting in an understatement of the entire amount of the grant expenditures incurred in the prior year of $237,306. This has been corrected by management and is included in the 2025 Federal Schedule. There was no impact to our prior year major program determination. The cumulative amount of expenditures under this award are included in the 2025 Federal Schedule. Cause: When this grant was initially awarded in mid 2024, the project was not identified in the system as being federally funded at the time of grant setup and was, therefore, inappropriately excluded from the 2024 Federal Schedule. Effect: Failure to properly identify this grant as a federal award resulted in the underreporting of federal expenditures incurred in 2024 by $237,306. Questioned Costs: None Recommendation: We recommend management enhance their controls around identification of federal grants at the time of grant setup as well as enhance completeness controls as part of the preparation and review of the Federal Schedule. Repeat Finding in the Prior Year: No Management’s Views and Corrective Action Plan: Refer to Management’s View’s and Corrective Action Plan at the end of the report after the summary schedule of prior audit findings and status.

Finding #2025-002 – Reporting – Significant Deficiency and Other Noncompliance. Applicable federal program: Department of Treasury, Passed through Harris County, Texas, Assistance Listing #: 21.027 – COVID-19 – Coronavirus State and Local Fiscal Recovery Funds, Contract Number: SLFRFP1966, Contract Year: 10/31/24 – 12/31/26. Criteria: Schedule of Expenditures of Federal Awards (SEFA) – 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Section 200.203 requires recipients and subrecipients of federal funds to establish, document, and maintain effective internal controls over federal awards. Section 200.510 (b) requires the auditee to 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. Condition and context: MAM incurred qualifying construction expenditures that were properly recorded as CIP. However, MAM did not record government grant revenue or a related grants receivable for the qualifying expenditures incurred during the fiscal year and did not identify or include the qualifying expenditures incurred during the fiscal year on the SEFA. Cause: MAM does not have a system sufficient to ensure that all qualifying federal expenditures are captured and reported to ensure completeness and accuracy of expenditures reported on the SEFA. Effect: Failure to adequately establish and maintain a system of internal controls over preparation of the SEFA adversely affected MAM’s ability to correctly identify and summarize federal awards for reporting in accordance with the Uniform Guidance. Recommendation: Develop policies and procedures to identify and reflect all federal programs on the SEFA, reconcile the federal expenditures to the federal program revenue on a routine basis, and formalize the independent review process for the SEFA and grant billings. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS – ALL FEDERAL PROGRAMS 2025-001 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the City of South St. Paul, Minnesota (the City) prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended December 31, 2025, 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 City did not have sufficient controls in place to ensure the accurate preparation of the SEFA in compliance with this requirement. The City’s SEFA for fiscal 2025 was overstated by $749,656 in federal expenditures, due to the inclusion of costs that were incurred in the previous fiscal year. Questioned Costs – None. The 2025 SEFA was corrected when the misstatement was identified during the audit, and this would not have changed the determination that a Single Audit of federal awards expenditures was required for the 2024 fiscal year and would not have changed the risk assessment and major program testing for the 2024 fiscal year. Context – The City’s SEFA presented for audit for the year ended December 31, 2025 included $749,656 in two programs that should not have been included in this fiscal year. Cause – This was an oversight by city personnel. Repeat Finding – This is a current year finding. Effect – An inaccurate SEFA could result in incorrect major program determination for the Single Audit and could be considered a violation of federal award agreements. Recommendation – We recommend that the City review its internal control procedures over reporting and verify accuracy of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The City agrees with the finding. The City has separately issued a Corrective Action Plan related to this finding.

Assistance Listing Number, Federal Agency, and Program Name - ALN 15.916, Department of the Interior, Outdoor Recreation Acquisition, Development and Planning, Outdoor Recreation Acquisition, Development and Planning Grants, and ALN 66.468, Environmental Protection Agency, Drinking Water State Revolving Fund. Federal Award Identification Number and Year - All grants under ALN Pass through Entity - ALN 15.916, Colorado Department of Natural Resources, and ALN 66.468, Colorado Water Resources and Power Development Authority Finding Type - Material weakness Repeat Finding - Yes 2024 002 Criteria - Per 2 CFR Section 200.510(b), 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 determined in accordance with Section 200.502. Condition - The Outdoor Recreation Acquisition, Development and Planning program and the Drinking Water State Revolving Fund program expenditures on the schedule of expenditures of federal awards (SEFA) initially presented for audit were not complete and accurate. Questioned Costs - None If Questioned Costs are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not be Reported Not applicable Identification of How Questioned Costs Were Computed - Not applicable Context - The Outdoor Recreation Acquisition, Development and Planning program expenditures of $1,250,000 were omitted. The Drinking Water State Revolving Fund program was overstated by $76,884. The final SEFA has been corrected. Cause and Effect - Controls in place did not ensure the SEFA was complete and accurate, and, as a result, the SEFA was adjusted for two federal programs. This did impact major program determination for Outdoor Recreation Acquisition, Development and Planning. Recommendation - We recommend the City ensure the effectiveness of controls to ensure expenditures reported on the SEFA are complete and accurate. Views of Responsible Officials and Corrective Action Plan - The Finance Department recently hired a new Grants Manager after being without this critical position for almost a year. The Grants Manager, along with the Grant Specialist and the Financial Reporting team accountants, plan to work together to improve the tracking and reconciliation of grant activity. In addition, the City implemented eCivis Euna Grants, a grant application, tracking, and reporting system, in November of 2025. The Grants Team will be working with Departments to document the grants process formally for the City and this will ensure that all grants are accounted for and tracked in the Euna grants system. This renewed capacity and new initiatives, supported by the new administrative cost recovery framework and the City's grants management platform, reflects a broader commitment to managing external funding with the same discipline applied to locally generated revenues.

SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS – ALL FEDERAL PROGRAMS 2025-002 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the City prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended December 31, 2025, 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 City did not have sufficient controls in place to ensure the accurate preparation of the SEFA in compliance with this requirement. The City’s SEFA for fiscal 2025 was overstated by $147,700 in federal expenditures due to the inclusion of costs that were incurred in the previous fiscal year. Questioned Costs – None. The 2025 SEFA was corrected when the misstatement was identified during the audit, and this would not have changed the determination that a Single Audit of federal awards expenditures was not required for the 2024 fiscal year. Context – The City’s SEFA presented for audit for the year ended December 31, 2025 included $147,700 in one program that should not have been included in this fiscal year. Cause – This was an oversight by city personnel. Repeat Finding – This is a current year finding. Effect – An inaccurate SEFA could result in incorrect major program determination for the Single Audit and could be considered a violation of federal award agreements. Recommendation – We recommend that the City review its internal control procedures over reporting and verify accuracy of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The City agrees with the finding. The City has separately issued a Corrective Action Plan related to this finding.

Finding No. 2025 - 001: Federal Agency: Department of Health and Human Services Federal Program Title: Prevention of Disease, Disability, and Death through Immunization and Control of Respiratory and Related Diseases Federal Assistance Listing Number: 93.083 Award Period: January 1, 2025 through December 31, 2025 Pass-through Entity: Council of Medical Specialty Societies ("CMSS") Federal Award Identification Number and Year: Subaward No. 101 Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria In accordance with 2 CFR 200.510 (Financial Statements), an auditee must 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 2CFR 200.502. At a minimum, the schedule must include: All individual Federal programs by Federal agency. 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. Provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. Include the total amount provided to subrecipients from each Federal program. Condition The Organization had revisions to the SEFA and management’s review and approval process did not detect the following errors that were identified during the audit procedures performed: An incorrect de minimis indirect cost rate was used and charged to a federal award. Approximately $65,000 of federal expenditures were omitted from the initial SEFA. Subrecipient costs from the prior year were charged to the current year due to incomplete accruals in the prior year. As a result, the SEFA was not complete or accurate prior to submission for audit. Cause The Organization’s internal controls over the preparation and review of the SEFA were not operating effectively. Effect or Potential Effect Inadequate controls over the preparation of the SEFA could result in financial misstatements or potential noncompliance. Questioned Costs N/A Identification as a Repeat Finding This finding is not a repeat finding Recommendation We recommend the Organization strengthen its policies, procedures, and controls for the identification of federal awards to ensure a complete and accurate SEFA is prepared in a timely manner. Views of the Responsible Officials Management concurs with the finding and related recommendation. While the Organization completed its federal award activity in May 2025 and does not currently anticipate additional federal award activity, it recognizes the importance of compliance with grant reporting requirements, including the accurate preparation of the Schedule of Expenditures of Federal Awards. In response to this finding, the Organization has enhanced its procedures for determination of the appropriate indirect cost and strengthened its internal controls by implementing additional review and approval processes over grant expense reporting. These improvements, particularly in the review and approval functions, are designed to promote the timely and accurate reporting of grant activity, including SEFA preparation, should the Organization be subject to Single Audit requirements in the future. The Organization further has initiated repayment of indirect costs reported pursuant to the incorrect de minimis indirect cost rate, to the primary awardee.

Finding: 2025-001. Insufficient Controls Over Monitoring Federal Expenditures and SEFA Preparation Federal Agency: Federal Highway Administration Pass-through Agency: Texas Department of Transportation Assistance Listing Number: 20.205 Federal Program Name: Highway Planning and Construction Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR §200.303 requires entities to establish and maintain effective internal control over Federal awards that provides reasonable assurance the entity is managing the awards in compliance with Federal statutes, regulations, and the terms and conditions of the awards. 2 CFR §200.501 requires a Single Audit when a non-Federal entity expends $1,000,000 or more in Federal awards during the current fiscal year (or $750,000 during the prior year). 2 CFR §200.510(b) requires the preparation of a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Applicable GAAP requires recognition of grant revenue and related receivables when allowable expenditures are incurred. Condition: The City incurred reimbursable federal expenditures in the prior year but did not submit reimbursement requests or record the related receivable and revenue. As a result, certain federal expenditures were omitted from the SEFA, and total federal expenditures were understated below the $750,000 threshold for a Single Audit in the prior year. Cause: Grant administration is decentralized across multiple departments, and formal controls were not in place to reconcile grant expenditures to reimbursement requests or to monitor total federal expenditures and review the SEFA for completeness. Effect: Grant revenue and related receivables were understated, and the prior year SEFA was incomplete. As a result, the City did not include this grant award in the Single Audit in the prior year as required by Uniform Guidance. Questioned costs: N/A Context: N/A Repeat finding reference: N/A Recommendation: The City should strengthen oversight of federal grant activity by implementing procedures to monitor federal expenditures and ensure the SEFA is complete and accurate. This may include centralizing grant oversight within the finance function or designating a responsible grant administrator. Procedures should include periodic reconciliations of grant expenditures to reimbursement requests and a formal year-end review of total federal expenditures and the SEFA, with coordination between the finance function and departments administering federal programs. Personnel involved in grant administration should receive training on Uniform Guidance requirements. View of Responsible Officials Management’s response and corrective action plan are included in the accompanying corrective action plan.

Condition: The City has not adopted procedures (controls) to ensure compliance with 2 CFR 200 regarding the preparation and completion of the schedule of expenditures of federal awards and the accompanying notes and disclosures required by Uniform Guidance. Criteria: 2 CFR 200.510(b) Cause of Condition: Unfamiliarity with requirements stated in 2 CFR 200 of Uniform Guidance. Effect of Condition: Effect is potential errors in reporting and preparation of the schedule of expenditures of federal awards which could cause non-compliance with 2 CFR 200. Recommendation: Adopt and implement procedures (controls) to become compliant with Uniform Guidance.

Finding 2025-001 Controls over Revenue Recognition and Review / Preparation of the SEFA Finding Type Significant deficiency in internal control over financial reporting, other matters compliance finding, and significant deficiency in internal control over compliance. Criteria Organizations should maintain internal control to provide for the recognition of revenue in accordance with the provisions of U.S. Generally Accepted Accounting Principles (GAAP). In addition, Section 200.510(b) of 2 CFR Part 200 (the Uniform Guidance) requires recipients of federal awards to prepare a complete and accurate schedule of expenditures of federal awards (SEFA). Condition and Context During the audit, upon management’s completion of the final SEFA reconciliations, it was determined that an adjusting entry was required in order to reduce recognized federal awards revenue in the financial statements and expenditures on the SEFA for the year ended September 30, 2025 by $407,237. Cause ASTHO did not timely complete its final reconciliation of total federal award revenue to total federal award expenses. Effect Had the error not been corrected, Federal award revenue and the SEFA expenditures would have been overstated by $407,237. Repeat Finding No. Recommendation We recommend that ASTHO implement a procedure to provide for the reconciliation of total federal award revenue to the total federal award expenses on a monthly basis. This should reduce the likelihood of similar future errors. Views of Responsible Officials and Planned Corrective Action See attached corrective action plan. Questioned Costs None.

Assistance Listing, Federal Agency, and Program Name 93.247 Advanced Nursing Education Grant Program Federal Award Identification Number and Year 22T96HP45839 Pass through Entity N/A Finding Type Material weakness Repeat Finding Yes Criteria Per 2 CFR Section 200.510(b), "the auditee" must create a Schedule of Expenditures of Federal Awards (SEFA) if they expend more than $1 million in federal awards during their fiscal year. The schedule of expenditures of federal awards should include all expenditures associated with federal grants during the fiscal year. Per 2 CFR 200.400(d), the accounting practices of the recipient and subrecipient must be consistent with these cost principles and support the accumulation of costs as required by these cost principles, including maintaining adequate documentation to support costs charged to the Federal award. Condition The Organization lacked effective controls over the review of the SEFA to ensure that only federal expenditures were included for fiscal year 2025 and to ensure that expenditures were appropriately tracked and recorded to the correct grant period. Questioned Costs N/A If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed N/A Context The Organization lacked effective controls to ensure that expenditures were appropriately tracked to individual grants and recognized in the proper reporting period. Consequently, the original SEFA included nonfederal expenditures. Completeness testing identified approximately $120,000 of expenditures that did not pertain to current year federal awards, as well as approximately $65,000 of expenditures related to prior year activity that were inappropriately included on the SEFA. Cause and Effect The Organization does not have an award management system connected to its accounting software to appropriately track federal grants and their associated expenditures. This prevented the Organization from being able to implement effective controls to validate expenditures were applied to the proper grant in the proper period and to ensure that transactions were accounted for consistently between the financial statements and the SEFA. Recommendation We recommend that management implement procedures to perform a review at period end to ensure all payroll and accounts payable accruals are properly included on the SEFA and any amounts related to a future period (prepaid expenses) are excluded. We additionally recommend that management implement procedures to ensure only federal activity is reflected within the SEFA. Views of Responsible Officials and Planned Corrective Actions The Organization acknowledges certain errors in grant tracking and SEFA preparation resulting from the lack of an integrated award management system. The Organization will enhance its reviews around SEFA preparation and federal expenditure tracking to accommodate the lack of an integrated system as well as to ensure cut-off, completeness, and classification of federal expenditures.

Assistance Listing, Federal Agency, and Program Name - 93.045/93.053, Department of Health and Human Services, Aging Cluster Federal Award Identification Number and Year - N/A Pass through Entity - Area Aging on Aging 1C Finding Type - Material weakness Repeat Finding - No Criteria - Uniform Guidance at 2 CFR 200.510(b) requires the auditee to prepare a Schedule of Expenditures of Federal Awards (SEFA) that accurately reports total federal expenditures for each federal program. In addition, effective internal control over compliance, as required by 2 CFR 200.303, requires controls that ensure expenditures reported on the SEFA are complete, accurate, and properly reconciled to underlying accounting records and amounts billed to the funding agency. Condition - The County did not maintain effective internal control over the reconciliation of expenditures reported on the Schedule of Expenditures of Federal Awards to amounts billed to the funding agency. If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - None Identification of How Questioned Costs Were Computed - N/A Context - The SEFA is a key component of the Single Audit and serves as the primary basis for determining major programs subject to audit under the Uniform Guidance. As part of the SEFA preparation process, management compiles federal expenditures from multiple sources, including underlying accounting records and amounts billed to funding agencies. Accurate reconciliation of these sources is critical to ensure that federal expenditures are reported completely and accurately, and that major program determinations are appropriately made. As a result of the audit, it was identified that expenditures related to the Aging Cluster were understated by approximately $126,000 on the preliminary SEFA due to the omission of expenditures that had been billed to the funding agency but backed out of amounts reported on the SEFA during the reconciliation process. Management recorded an adjustment to correct the understatement prior to issuance of the final SEFA. Cause and Effect - The County’s SEFA preparation process did not include a sufficiently designed and implemented control to ensure the accuracy of reconciling items between expenditures reported on the SEFA to amounts billed to the funding agency. As a result of this deficiency, expenditures in the Aging Cluster were understated by approximately $126,000 on the preliminary SEFA. The correction of this error on the final SEFA increased total expenditures for the Aging Cluster, resulting in the program being classified as a Type A program rather than a Type B program for major program determination purposes. Because the deficiency resulted in a material misstatement of the SEFA that was not prevented or detected by internal control, it is considered a material weakness in internal control over compliance. Recommendation - We recommend that management design and implement effective controls over the preparation of the SEFA, including maintaining adequate support for adjustments and reconciling items. Such controls should be performed and reviewed by personnel independent of the SEFA preparation process to ensure the completeness and accuracy of federal expenditures reported. Views of Responsible Officials and Planned Corrective Actions - The County has established procedures for reconciling general ledger activity to supporting documentation and Federal Financial Reports (FFRs/FSRs) throughout the fiscal year, including additional reconciliation procedures performed at year end to capture late or adjusting entries. The condition was further impacted by timing differences between departmental reporting and subsequent adjusting entries, as well as the aggregation of adjustments across multiple programs without sufficient program-level detail at the time of review. While follow-up was initiated to obtain supporting breakdowns, the process did not require resolution of these items prior to final classification and inclusion in year-end reporting. The County is strengthening internal controls over grant-related financial activity and SEFA preparation by enhancing and enforcing requirements for accurate transaction recording, supporting documentation, and independent validation. Key improvements include: • Enhanced documentation and classification requirements for grant-related entries • Strengthened review and validation controls to ensure proper support and classification • Improved reconciliation and adjustment protocols, including postreporting revalidation • Control enforcement and escalation for unsupported or unresolved items • Training and guidance on federal compliance requirements

Finding 2025-002 – Incomplete Subrecipient Agreements and Inaccurate Subrecipient SEFA Reporting Federal Program: Violence Against Women Formula Grants Assistance Listing Number: 16.588 Compliance Requirement: Subrecipient Monitoring Internal Control Deficiency: Material Weakness - Insufficient controls over subaward agreement content and subrecipient reporting oversight Compliance Finding: Subaward agreements missing required elements; subrecipient failed to report pass-through funds on its SEFA Questioned Costs: None Criteria: Under 2 CFR § 200.332, pass-through entities must ensure that all subaward agreements contain specific federal award information, monitoring expectations, and required terms and conditions. Subrecipients must report federal expenditures on their SEFA in accordance with 2 CFR § 200.510(b). Condition: During our testing of subrecipient monitoring and federal reporting, we noted that subrecipient agreements did not include several elements required under 2 CFR § 200.332(b), (c), and (e)–(i). Specifically, the agreements reviewed were missing one or more of the following required components: • Federal award identification information, including unique entity identifier (UEI), Federal Award Identification Number (FAIN), ALN, award date, and other required identifiers. • Required access-to-records language granting the pass-through entity, auditors, and federal agencies the right to access pertinent records. • Subaward-level closeout requirements, including timelines and documentation expectations. In addition, during compliance testing we noted that the subrecipient did not include the pass-through funds received in its own SEFA, resulting in incomplete federal expenditure reporting. Cause: The deficiencies appear to result from the absence of a standardized subaward agreement template and insufficient review procedures to ensure all Uniform Guidance elements are included. The subrecipient’s SEFA omission appears to stem from a lack of communication and monitoring regarding reporting requirements. Effect: Incomplete subaward agreements increase the risk that subrecipients may not understand federal requirements, may apply incorrect cost principles, or may fail to comply with federal terms. Missing SEFA reporting by the subrecipient results in inaccurate federal expenditure reporting and may affect federal oversight, risk assessments, and audit coverage.Recommendation: Management should implement a standardized subaward agreement template that incorporates all elements required under 2 CFR § 200.332. If any of the required elements are missing, adding a short federal award information/Uniform Guidance appendix and an explicit records-access and closeout article would bring the contracts into compliance. Management should also strengthen monitoring procedures to ensure subrecipients understand and comply with SEFA reporting requirements, including verifying that pass-through funds are properly reported. Management’s Response and Corrective Action Plan is found on page 28-29.

Finding 2025-001 – Accuracy of Schedule of Expenditures of Federal Awards (SEFA) Compliance Requirement: Reporting Internal Control Deficiency: Significant Deficiency - Insufficient review over SEFA preparation Compliance Finding: SEFA reported incorrect Assistance Listing Numbers (ALNs) Questioned Costs: None Criteria: Per 2 CFR 200.510(b), auditees must prepare a SEFA that accurately identifies federal programs by the correct ALN. Condition: The SEFA submitted for the audit included incorrect ALNs for certain federal programs which misidentified a Type A program and omitted a major program. Cause: The errors appear to have resulted from inadequate procedures to verify ALNs against federal award documentation during SEFA preparation. Effect: Incorrect ALNs may result in inaccurate identification of federal programs and increase the risk of misidentification in major program determination, potentially affecting audit scope and compliance conclusions. Recommendation: Management should implement procedures to verify that ALNs reported on the SEFA agree to authoritative federal award documentation prior to finalization. Management’s Response and Corrective Action Plan is found on page 28-29.

Finding Number: 2025-003 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Agriculture Child Nutrition Cluster ALN: 10.553, 10.555, 10.559 and 10.582 Award #: 11131-028 Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: Office of the State Superintendent of Education (OSSE) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Federal Funding Accountability and Transparency Act (FFATA) Reporting Compliance: In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System (FSRS) or System for Award Management (sam.gov) website from March 8, 2025 onwards. FFATA reports are submitted no later than the month following the month in which this Federal award is made, and annually after that. In accordance with the requirements of 2 CFR Section 1402.300(b), the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR Part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR Part 170 Reporting Subaward and Executive Compensation Information. Schedule of Expenditures of Federal Awards (SEFA) Reporting Compliance: Requirements, Cost Principles, and Audit Requirements, 2 CFR Section 200.510(b) states 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 200.502. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. Condition – For one (1) subaward sample selected for FFATA testing, we noted that OSSE failed to submit the FFATA report within the required timeframe. Transactions tested - 8 Subaward not reported - 0 Report not timely - 1 Subaward amount incorrect - Not applicable – subaward amount was correct. Subaward missing key elements - Not applicable – no missing key elements. Dollar amount of tested 2025 subawards - $8,900,559 Subaward not reported - $ - Report not timely - $ 38,487 Subaward amount incorrect - Not applicable – subaward amount was correct. Subaward missing key elements - Not applicable – no missing key elements. Additionally, during our testing of the SEFA, we noted that OSSE incorrectly reported the value of subrecipient expenditures included within the subrecipient expenditure column. For the year ended September 30, 2025, OSSE incurred $25.7 million in subrecipient expenditures for this program and incorrectly reported that there were no subrecipient expenditures on the preliminary SEFA. While the subrecipient expenditure amount was not accurate, the total expenditures amount was accurately reported. The error in the subrecipient expenditures amount was subsequently identified and corrected as a result of the audit process. Questioned Costs – None. Context – This is a condition identified per review of OSSE’s compliance with reporting requirements. Effect – Failure to properly submit the FFATA report and failure to properly review and present expenditure can result in noncompliance with reporting requirements. Cause – OSSE did not have proper internal controls and policies and procedures in place to fulfill the FFATA reporting requirements. In addition, OCFO did not comply with their policies and procedures to ensure accuracy of the SEFA. Recommendation – We recommend that OSSE evaluate its Transparency Act reporting control procedures and update them as necessary to ensure they promote compliance with the Federal regulations. These procedures should include a supervisory review of the report to be submitted timely. In addition, we recommend that OCFO adhere to instituted policies and procedures to ensure accuracy of the SEFA. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – OSSE concurs with the auditor’s finding and recommendations related to this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-024 Prior Year Finding Number: 2024-030 Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Years: 09/30/2022 – 09/29/2025 09/30/2024 – 09/29/2027 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Federal Funding Accountability and Transparency Act (FFATA) Reporting Compliance: In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System (FSRS) or System for Award Management (sam.gov) website from March 8, 2025, onwards. FFATA reports are submitted no later than the month following the month in which this Federal award is made, and annually after that. In accordance with the requirements of 2 CFR Section 1402.300(b), the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR Part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR Part 170 Reporting Subaward and Executive Compensation Information. Schedule of Expenditures of Federal Awards (SEFA) Reporting Compliance: Requirements, Cost Principles, and Audit Requirements, 2 CFR Section 200.510(b) states 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 200.502. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. Condition – During our testing of the reporting compliance requirement, we noted the following: • FFATA Reporting Compliance: During our testing of FFATA reporting, it was noted that reports were submitted late by the DBH program management due to staffing shortage. The FFATA reporting for all nine subawards selected for testing was submitted late, i.e., beyond the deadline of within 30 days of the subaward or subaward modification date. • SEFA Reporting Compliance: During our testing of the SEFA, we noted that DBH incorrectly reported the value of subrecipient expenditures included within the subrecipient expenditure column. For the year ended September 30, 2025, DBH incurred $12.4 million in subrecipient expenditures for this program and incorrectly reported $11.7 million subrecipient expenditures on the preliminary SEFA. While the subrecipient expenditure amount was not accurate, the total expenditures amount was accurately reported. The error in the subrecipient expenditures amount was subsequently identified and corrected as a result of the audit process. Questioned Costs – None. Context – This is a condition identified per review of DBH’s compliance with specified reporting requirements using a statistically valid sample. Effect – Without proper internal controls and policies and procedures in place to ensure timely reporting and that correct amounts were reported and were properly reviewed as it relates to the Opioid STR program: • FFATA Reporting Compliance: Failure to submit FFATA reports within the deadline of 30 days of the subaward or subaward modification date results in noncompliance for the DBH program. • SEFA Reporting Compliance: The effect of the condition is that the SEFA was not accurately prepared. Cause – Management did not have proper internal controls and policies and procedures in place to ensure that FFATA reports were submitted timely and the amounts on the SEFA were properly reported. Recommendation – We recommend the following: • FFATA Reporting Compliance: We recommend DBH to strengthen its internal control and procedures to ensure submission of FFATA reports within the deadline of 30 days of the subaward or subaward modification date. • SEFA Reporting Compliance: We recommend DBH to ensure that agency personnel receive proper training on subrecipient versus vendor determination; as well as review existing policies and procedures for preparing the SEFA to ensure that it is complete and accurate. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – The DBH Office of the Chief Financial Officer (OCFO) concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-026 Prior Year Finding Number: 2024-036 Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Block Grants for Substance Use Prevention, Treatment, and Recovery Services ALN: 93.959 Award #: Various Award Years: 10/01/2022 – 09/30/2025; 09/01/2021 – 09/30/2025; 03/15/2021 – 03/14/2025 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Federal Funding Accountability and Transparency Act (FFATA) Reporting Compliance: In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System (FSRS) or System for Award Management (sam.gov) website from March 8, 2025, onwards. FFATA reports are submitted no later than the month following the month in which this Federal award is made, and annually after that. In accordance with the requirements of 2 CFR Section 1402.300(b), the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR Part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR Part 170 Reporting Subaward and Executive Compensation Information. Schedule of Expenditures of Federal Awards (SEFA) Reporting Compliance: Requirements, Cost Principles, and Audit Requirements, 2 CFR Section 200.510(b) states 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 200.502. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. Condition – During our testing of the reporting compliance requirement, we noted the following: • FFATA Reporting Compliance: During our testing of FFATA reporting, it was noted that reports were submitted late by the DBH program management due to staffing shortage. The FFATA reporting for all four subawards selected for testing was submitted late, i.e., beyond the deadline of within 30 days of the subaward or subaward modification date. • SEFA Reporting Compliance: During our testing of the SEFA, we noted that DBH incorrectly reported the value of subrecipient expenditures included within the subrecipient expenditure column. For the year ended September 30, 2025, DBH incurred $1.2 million in subrecipient expenditures for this program and incorrectly reported $1.4 million subrecipient expenditures on the preliminary SEFA. While the subrecipient expenditure amount was not accurate, the total expenditures amount was accurately reported. The error in the subrecipient expenditures amount was subsequently identified and corrected as a result of the audit process. Questioned Costs – None. Context – This is a condition identified per review of DBH’s compliance with specified reporting requirements using a statistically valid sample. Effect – Without proper internal controls and policies and procedures in place to ensure timely reporting and that correct amounts were reported and were properly reviewed as it relates to the Block Grants for Substance Use Prevention, Treatment, and Recovery Services program: • FFATA Reporting Compliance: Failure to submit FFATA reports within the deadline of 30 days of the subaward or subaward modification date results in noncompliance for the DBH program. • SEFA Reporting Compliance: The effect of the condition is that the SEFA was not accurately prepared. Cause – Management did not have proper internal controls and policies and procedures in place to ensure that FFATA reports were submitted timely and the amounts on the SEFA were properly reported. Recommendation – We recommend the following: • FFATA Reporting Compliance: We recommend DBH to strengthen its internal control and procedures to ensure submission of FFATA reports within the deadline of 30 days of the subaward or subaward modification date. • SEFA Reporting Compliance: We recommend DBH to ensure that agency personnel receive proper training on subrecipient versus vendor determination; as well as review existing policies and procedures for preparing the SEFA to ensure that it is complete and accurate. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – The DBH Office of the Chief Financial Officer (OCFO) concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-027 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Homeland Security COVID-19 – Disaster Grants - Public Assistance (Presidentially Declared Disasters) ALN: 97.036 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: Homeland Security and Emergency Management Agency (HSEMA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 200.302(a), Financial Management, states that each state must expend and account for the federal award in accordance with state laws and procedures for expending and accounting for the state’s own funds. In addition, the state’s and the other 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. Schedule of Expenditures of Federal Awards (SEFA) Reporting Compliance: Requirements, Cost Principles, and Audit Requirements, 2 CFR Section 200.510(b) states 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 200.502. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. Condition – During our testing of federal reporting and the Schedule of Expenditures of Federal Awards (SEFA), we noted that the cumulative federal expenditures reported on two (2) quarterly Federal Financial Report (SF-425) did not reconcile the total expenditures claimed on the SEFA for the life of the award. Specifically, the SF-425 submitted for the period ended September 30, 2025 reported a cumulative total of approximately $924 million, whereas the SEFA recorded lifetime expenditures of approximately $1.051 billion, resulting in an unreconciled variance of approximately $127 million. Additionally, during our testing of the SEFA, we noted that HSEMA incorrectly reported the value of subrecipient expenditures included within the subrecipient expenditure column. For the year ended September 30, 2025, HSEMA had a negative $0.7 million in subrecipient expenditures for this program and incorrectly reported $37.9 million subrecipient expenditures on the preliminary SEFA. While the subrecipient expenditure amount was not accurate, the total expenditures amount was accurately reported. The error in the subrecipient expenditures amount was subsequently identified and corrected as a result of the audit process. Questioned Costs – None. Context – This is a condition identified per review of HSEMA’s compliance with reporting requirements. Effect – Failure to properly review and present expenditures can result in noncompliance with reporting requirements. Cause – HSEMA did not comply with their policies and procedures to ensure accuracy of the SEFA and other reports necessary to meet compliance requirements. Recommendation – We recommend that HSEMA adheres to instituted policies and procedures to ensure the accuracy of the SF-425 and the SEFA. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – HSEMA agrees with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding No.: 2025-004 Federal Agency: Medicaid Cluster (93.778) Criteria Under 2 CFR §200.510(b), nonfederal entities that expend federal awards are required to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the entity’s financial statements. The SEFA must: • Include total federal expenditures for each federal program • Identify each federal program by Assistance Listing Number (ALN) • Include the name of the federal agency and pass-through entity, where applicable • Include pass-through identifying numbers • Disclose significant accounting policies used in preparing the SEFA • Reconcile, or be traceable, to the underlying accounting records Additionally, Government Auditing Standards require that internal controls over financial reporting and compliance be designed and implemented to ensure accurate reporting. Conditions Found The Organization did not prepare a complete and accurate SEFA for the year ended September 30, 2025. Certain federal expenditures were initially omitted from the SEFA. As a result, the SEFA required adjustment which resulted in a second major program for testing once the Organization corrected its SEFA. Cause The condition appears to be the result of inadequate internal controls over the identification, tracking, and reporting of federal awards. Specifically: • Lack of a formal process to identify all federal funding sources • Insufficient review controls over SEFA preparation • Limited understanding of SEFA reporting requirements under Uniform Guidance Effect The incomplete SEFA increases the risk that: • Federal expenditures may be understated or misstated • Major program determination could be impacted • Required disclosures under Uniform Guidance may not be met • Users of the financial statements may rely on inaccurate information Questioned Costs The Organization’s expenditures are similar amongst all programs and grants. At the onset of the audit, expenditures were not coded and reconciled to each grant individually; however, the Organization was able to identify, code and update the general ledger to properly identify the major program expenditures. We were able to determine there are no questioned costs. Context The SEFA omitted approximately $347,000 in federal expenditures in their SEFA provided during audit planning procedures, representing approximately 18% of total federal expenditures. Repeat Finding No Recommendation We recommend that the Organization strengthen internal controls over SEFA preparation and completeness by: • Implementing a comprehensive process to identify all federal awards, including pass-through funding • Maintaining a centralized listing of federal grants with ALNs and award information • Ensuring expenditures are tracked by federal program throughout the year • Performing a detailed review and reconciliation of the SEFA to the general ledger prior to issuance • Providing training to personnel responsible for SEFA preparation on Uniform Guidance requirements Views of Responsible Officials See attached corrective action plan.

Finding 2025-003: Significant Deficiency – SEFA reporting Federal grantor: All Federal Programs Condition: The SEFA was not complete and contained reporting errors. Specifically, the grant contract amendment numbers and award amounts reported in SEFA were inaccurate. Criteria: Per 2 CFR § 200.510(b), the SEFA must include a complete and accurate listing of federal awards expended during the fiscal year. Information reported in the SEFA should agree to supporting grant documentation and underlying accounting records. Cause: The issues appear to result from a lack of comprehensive review and reconciliation procedures during SEFA preparation. Effect: Inaccurate SEFA reporting results in noncompliance with Uniform Guidance requirements and increases the risk of errors in federal reporting, incorrect identification of federal awards, and inaccurate major program determination. Recommendation: CFILC should strengthen internal controls over SEFA preparation by implementing a formal review and reconciliation process to verify grant contract amendment numbers, award amounts, and other key grant information to executed grant agreements and supporting documentation prior to issuance. Response: CFILC agrees with the finding and is implementing enhanced review procedures to ensure the accuracy and completeness of SEFA reporting going forward.

Assistance Listing, Federal Agency, and Program Name 93.889, U.S. Department of Health and Human Services, National Bioterrorism Hospital Preparedness Program Federal Award Identification Number and Year DKT3LLBWFVL3 - 2025 Pass through Entity North Carolina Department of Health and Human Services Finding Type Material weakness Repeat Finding No Criteria WakeMed is responsible for identifying in its accounting records all federal awards received and expended and the federal programs under which they were received, including the Assistance Listing title and number, federal award identification number, award year, and federal agency or pass through entity, as applicable, in accordance with 2 CFR § 200.302(b)(1). In addition, 2 CFR § 200.510(b) requires WakeMed to prepare a schedule of expenditures of federal awards for the period covered by the financial statements that includes total federal awards expended and identifies individual federal programs by federal agency, including applicable Assistance Listing Numbers and pass through identifying information. Under 2 CFR § 200.331, the substance of the relationship is more important than the form of the agreement, and each agreement should be evaluated to determine whether the entity is acting as a subrecipient or contractor. Condition Management did not initially identify a contract with an awarding agency as a federal subaward, which resulted in ALN 93.889 being omitted from the SEFA. The amount was subsequently added to the SEFA. Questioned Costs N/A If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed N/A Context Management incorrectly identified that they were a contractor of funds received from the North Carolina Department of Health and Human services under ALN 93.889 rather than a subrecipient. As a result, the schedule of expenditures of federal awards reported for the year ended September 30, 2025 did not originally have this grant included and was understated by $485,737. Cause and Effect Controls in place did not ensure the SEFA was complete and accurate. The lack of controls resulted in an understatement of the schedule of expenditures of federal awards for the year ended September 30, 2025. There was no impact to major program determination for the year ended September 30, 2025. Recommendation Management should implement a process to ensure appropriate identification for agreements in which they are considered a subrecipient vs a contractor. Views of Responsible Officials and Corrective Action Plan Management concurs with the finding and has implemented a new grant governance committee and process for identifying grant components before entering into grant agreements. Management also created a new grant department with staff devoted to researching, applying for, monitoring, and reporting on all grants. The accounting function for grants will be done by this team as well but with continued oversight by the Executive Director, Accounting.

2025-001: SEFA Reporting Significant Deficiency - Ryan White HIV/AIDS Program Parts A and B Federal Agency: Department of Health and Human Services Pass-through Entity: New York City Department of Health and Mental Hygiene Program: Ending the HIV Epidemic: A Plan for America — Ryan White HIV/AIDS Program Parts A and B Assistance Listing #: 93.686 Grant Period: 3/1/21-2/28/26 Criteria OMB Uniform Guidance 2 CFR 200.510(b)(3) requires that the auditee provide the Federal awards expended for each individual Federal program on the Schedule of Expenditures of Federal Awards (“SEFA”). In accordance with 2 CFR 200.502, the determination of when a Federal award is expended, and thereby reported on the SEFA, is generally based on when the activity related to the Federal award occurs. Condition The Ryan White HIV/AIDS Program Parts A and B grant is a cost reimbursement based grant that reimburses award recipients for expenditures incurred on this program, which seeks to address health inequities faced by members of New York City’s (NYC) priority populations with HIV and was first granted in March 2021. Sunset Park has not included the expenditures incurred under this grant on the SEFA until FY2025 when it was first identified. As a result, the expenditures reported by Sunset Park on its SEFA from 2021-2024 were understated by the entire amount of the grant’s expenditures incurred in each respective year. This has been corrected by management in the 2025 SEFA included in this report. There was no impact to our prior year audit scoping given the expenditures in each respective year would not have changed the prior determination of major programs. The cumulative amount of expenditures under this award was included on the 2025 SEFA and included as a major program. Cause When this grant was initially awarded in early 2021, the Assistance Listing Number (ALN) was not identified at the time of grant setup, therefore, the award wasn’t identified as a federal award. During the annual preparation of the SEFA in the subsequent years, the award was omitted from the SEFA due to the fact that it was not identified as a federal grant within the grant listings. Effect Failure to properly identify this grant as a federal award resulted in the underreporting of federal expenditures incurred from 2021 through 2024 by $1,267,956. This was corrected in the 2025 SEFA included in this report, as such the entire cumulative expenditure amount previously underreported was reported in the current year SEFA. The major program determination and audit scoping for the 2025 audit resulted in this award being selected for testing as a major program. If the expenditures had been properly reported in each respective year’s SEFA, the major program determination and audit scoping would not have been impacted. This is not a repeat finding. Questioned Costs None Recommendation We recommend Sunset Park enhance their controls around identification of federal grants at the time of grant setup as well as enhanced completeness controls as part of the preparation and review of the SEFA. Management’s Views and Corrective Action Plan Refer to Management’s View’s and Corrective Action Plan at the end of the report.

Criteria: In accordance with 2 CFR section 200.510(b) (Uniform Guidance), “the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. The schedule must include the total Federal awards expended as determined in accordance with § 200.502.” Condition: The College did not have controls in place to ensure the Schedule of Expenditures of Federal Awards (SEFA) was accurately reconciled with the general ledger. As a result, there were discrepancies between the amounts reported on the SEFA and the actual expenditures in the College’s accounting records. Cause: The College does not have a process in place to reconcile the SEFA to the general ledger to ensure accurate records. Expense entries (expenditures) are posted by several people across the campus when funds are spent. Revenue entries (drawdowns) are posted by the business office, however there is no process to ensure these drawdowns are the same as the amounts expended. Revenue is also not deferred to the appropriate period when necessary as part of a SEFA reconciliation process. Effect: Without proper reconciliation procedures, there is an increased risk that the SEFA may be materially misstated. The current year SEFA contained net adjustments of $209,443 made by the auditors to reconcile to the general ledger and award letters. Repeat Finding from Prior Year: Yes Recommendation: We recommend management establish an informal procedure to reconcile grant funds received with funds expended on a regular basis. We also recommend management implement a formal procedure to reconcile the SEFA with the general ledger at year end. Views of Responsible Officials: The Comptroller will reconcile this report on a monthly basis making sure that all grants and other Federal / State expenditures are on the SEFA and that the two numbers reconcile with the general ledger. This will be kept in a notebook and the calendar kept in the Comptroller’s desk. The Comptroller will also create a folder in the business office folder on the server and input the current SEFA in this folder and show any discrepancies on a monthly basis and every time this report is run for drawdowns. This process will start immediately. The Comptroller will also make sure at year end that all items are on this report and they have been reconciled with the general ledger. This process will also be in the notebook and calendar within the desk of the Comptroller

SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs July 31, 2025 Comment #2025-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE-OUT, AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED GENERAL (Repeat) Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Agency. The preparation of these financial statements in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The close-out process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. While there has been improvements, we noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, deferred revenue, and other close-out procedures accurately and in a timely manner. This resulted in adjustments necessary to present the financial statements and disclosures of the Agency as of July 31, 2025. We also noted significant weaknesses in internal controls over payroll and recording various journal entries related to payroll transactions and fringe benefits. Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425, DHS’s reports for LIHEAP, etc.). The systemic cause appears to be the change in the accounting staff and continuing education and training in grant accounting. Policies and procedures are not up-dated and followed consistently throughout the year. Context: Review of internal control structure of the organization in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.328 Financial reporting and §200.329. (Continued) Effect: Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes. Cause: Turnover of key staff, change in the accounting system, limited personnel with knowledge and/or the ability to assist and provide needed information to aid in financial statement preparation. Recommendation: The degree to which the preparation of the financial statements and related disclosures are prepared by the independent auditor is a control deficiency as determined by the knowledge, skills and experience of those in the organization who are charged with the responsibility of its financial reporting. The Agency's chief financial officer (CFO) should require the grant accountant and a general ledger accountant to receive annual training by professionals in the field of grant accounting and reporting. The payroll clerk should receive proper training in processing journal entries for all areas of payroll. All accounting staff should have the adequate skills, knowledge and experience to oversee and/or perform the necessary accounting functions each month. Policies and procedures should be updated to adequately address the challenges and dynamics of the community action agency. We believe that the CFO with the supporting staff and general ledger accountant should have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner so as to eliminate the risk of significant errors occurring. Budget-to-actual schedules should be an integral part of the grant accountant’s basic responsibilities. Program directors should be involved in the closing process. We further recommend that training be provided to all staff engaged in the financial reporting, allocations and reconciliation functions to ensure that a complete and accurate financial statements close-out process is achieved each month and annually. Accounting policies and procedures must be updated and implemented. Views of Responsible Officials and Planned Corrective Actions: Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Agency’s financial funding sources, the Agency will require additional specialize training for fiscal staff and improve in the segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. The CFO will take lead in financial reporting to ensure that all reporting meet GAAP and GAS requirements and to provide informative reports for Board and Management. All enhancements will be implemented by June 30, 2026.

2025-002 SEFA Presentation Error – Prior Year Program Name/Assistance Listing Number: 93.788 Opioid STR Federal Agency: Department of Health and Human Services Type of Finding: Significant Deficiency Compliance Requirement: Reporting Criteria: Uniform Guidance (2 CFR §200.510(b)) requires that the Schedule of Expenditures of Federal Awards (SEFA) accurately present all federal awards, including the correct identifying numbers assigned by pass-through entities for each award. Accurate reporting is essential to ensure compliance with funding requirements and enable proper tracking and monitoring of federal awards. Condition: During the current year audit, it was noted that the prior year’s SEFA contained an underreporting of $206,206.41 related to Grant ID 2401119 – Think Act and Live 2.0. While the total expenditures under the correct Assistance Listing Number (ALN) were accurate, the amounts assigned to this specific Grant ID were misclassified or omitted. Cause of Condition: The error occurred due to insufficient review procedures over SEFA preparation, specifically related to the accuracy of pass-through identifying numbers and grant-level allocations. Potential Effect of Condition: Although the error did not impact major program determination or the prior year audit opinion, it led to an incomplete and inaccurate SEFA presentation, which could affect tracking and monitoring of specific awards. Questioned Cost: Not applicable – the expenditures were allowable but misclassified. Recommendation: We recommend that management strengthen SEFA preparation and review controls by the following: a. Performing a detailed verification of grant-specific information, including Grant IDs, pass through numbers, and related allocations. b. Implementing a formal review process to ensure accuracy and completeness of the SEFA prior to submission. Description of the Nature and Extent of Issues Reported: During the current year audit, all misclassified expenditures related to Grant ID 2401119 – Think Act and Live 2.0 in the prior year SEFA were identified. The total underreported amount is $206,206.41, which exceeds both the program-level materiality threshold of $91,000 (based on a 5% benchmark of total awards expended for the major program 93.788) and the $25,000 SEFA reporting threshold under 2 CFR §200.516(a)(3). Management Response: Management concurred with the finding. The Organization has implemented the necessary internal controls to ensure that the grant reporting accurately reflects the expenditures for each of the respective grants.

Assistance Listing Number, Federal Agency, and Program Name ALN 14.251, U.S. Department of Housing and Urban Development, Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Federal Award Identification Number and Year B 23 CP CO 0287 (2024) and B 23 CP WY 1616 (2024) Pass through Entity None Finding Type Material weakness Repeat Finding No Criteria The Organization should report its federal expenditures in the schedule in accordance with Uniform Guidance 2 CFR 200.510(b). Condition The 2025 schedule was initially overstated to include federal awards relating to ALN 14.251, Economic Development Initiative, Community Project Funding, and Miscellaneous Grants, expended during the year ended June 30, 2024. Questioned Costs None If Questioned Costs Are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported N/A Identification of How Questioned Costs Were Computed N/A Context During audit testing over ALN 14.251, Economic Development Initiative, Community Project Funding, and Miscellaneous Grants, auditors identified $666,783 of expenditures related to fiscal year 2024 that were improperly included in the fiscal year 2025 schedule. The Organization subsequently amended the fiscal year 2025 schedule to exclude the fiscal year 2024 expenditures. Cause and Effect The Organization did not identify certain expenditures relating to fiscal year 2024 that were improperly included on the schedule during fiscal year 2025. The initial schedule provided to the auditors was overstated by $666,783, which impacted the initial major program determination. Recommendation We recommend the Organization evaluate its accounting policies to ensure federal awards are properly recognized in the schedule in the year of expenditure in accordance with Uniform Guidance 2 CFR 200.510(b). Views of Responsible Officials and Corrective Action Plan Food Bank of the Rockies, Inc. received a reimbursement grant for vehicles from the Department of Housing and Urban Development (HUD). While we purchased the vehicles in fiscal year 2024, we could not file the claim for reimbursement until fiscal year 2025. Guidance on the HUD claims process was greatly delayed for multiple reasons. We posted the cost and asset when ordered, following accounting principles generally accepted in the United States (GAAP). However, we did not include the funding on the 2024 schedule, as we had not yet filed the reimbursement claims, nor been given assurance they would be paid. Instead, we included it in the fiscal year 2025 schedule, as that was when the claims were filed and we had confirmation they would be paid in full. We understand now that, per Uniform Guidance 2 CFR 200.51(b), those funds should have been shown in the fiscal year 2024 schedule. With this understanding, moving forward we will include in the schedule amounts that have been spent for which we have an agreement for reimbursement, regardless of timing of the claim being filed or level of certainty of reimbursement.

Assistance Listing Number, Federal Agency, and Program Name - N/A, Schedule of Expenditures of Federal Awards (SEFA) Reporting Federal Award Identification Number and Year - N/A Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Uniform Guidance (2 CFR 200.510(b)) requires a schedule of expenditures of federal awards (SEFA) that must provide total federal awards expended for the period covered by the auditee's financial statements. Federal awards expended in accordance with §200.502 should be based on when the underlying activity related to the federal award occurs. Condition - During our review of the schedule of expenditures of federal awards, we noted that certain federal program expenditures were included in the SEFA for the fiscal year ended June 30, 2025 even though the underlying activity occurred in 2024. The College did not have adequate controls in place to ensure the SEFA was prepared to include appropriate expenditures for the Economic Development Cluster in the proper period. Questioned Costs - N/A Identification of How Questioned Costs Were Computed - N/A Context - During our review of the College's SEFA, we noted expenditures of $318,814 that were improperly included within the Economic Development Cluster in 2025. Based on review of underlying expenditures on vendor pay applications, expenditures should have been included on the SEFA in 2024. Cause and Effect - The College did not have adequate processes and internal control structure in place to ensure SEFA expenditures were recorded in the appropriate period. As a result, the SEFA is overstated by $318,814 in 2025. If the SEFA does not accurately reflect federal expenditures for the audit period, this could lead to misinterpretation of compliance requirements and inaccurate reporting to federal agencies. Recommendation - We recommend management implement procedures to ensure the SEFA preparation is based on the timing of the underlying activity rather than payment dates. Views of Responsible Officials and Planned Corrective Actions - The College will establish the proper controls to ensure that the SEFA is prepared based on the timing of the underlying activity rather than payment dates.

The City is required to have internal controls in place that enable it to prepare complete financial statements, including the schedule of expenditure of federal awards in accordance with generally accepted accounting standards and in accordance with the Uniform Guidance at 2 CFR 200.510(b).

Assistance Listing Number, Federal Agency, and Program Name - ALN 66.202, U.S. Environmental Protection Agency - Congressionally Mandated Projects Federal Award Identification Number and Year - CG-00E03697-0, 2024 Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.510(b), the auditee must 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 2 CFR 200.502. While not required, the auditee may choose to provide information requested by federal awarding agencies and pass through entities to make the schedule easier to use. Condition - Controls were not in place to ensure that the schedule of expenditures of federal awards (SEFA) was complete and accurate. Questioned Costs - None If Questioned Costs are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - In fiscal year 2025, the Village expended approximately $935,000 of federal funding from various federal agencies. The Village accumulates the financial data and other required information to complete the SEFA. Expenditures under grant ALN 66.202, Congressionally Mandated Projects, were originally overstated by $40,088 due to duplication of costs. No controls were in place to identify incompleteness or inaccuracy of the SEFA. Cause and Effect - No review or other control was in place to ensure the SEFA was complete and accurate. As a result, ALN 66.202, Congressionally Mandated Projects, expenditures were overstated by $40,088. This error has been corrected on the SEFA as of June 30, 2025. Recommendation - The Village should implement controls to ensure the SEFA is reviewed for completeness and accuracy. Views of Responsible Officials and Planned Corrective Actions - The Village has hired an outside contractor to assist with review of audit documents.

Management acknowledged its responsibility to establish and maintain effective internal controls to reasonably assure compliance with federal statutes, regulations and terms and conditions of federal awards and controls relating to preparing the Schedule of Expenditures of Federal Awards (the Schedule), as required by Uniform Guidance (2 CFR § 200.303(a)), in the audit engagement letter. Furthermore, Uniform Guidance (2 CFR Subpart F § 200.510(b)) requires the auditee prepare 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. Due to insufficient controls over the monitoring of grant activity, the District did not retain appropriate support on the dates of the determination to charge prior year costs to the American Rescue Plan Elementary and Secondary School Emergency Relief Fund (ARP ESSER) grant in the amount of $678,544. The grant award was for $1,019,060, which had a grant period spanning calendar years 2020 through 2024. Lack of maintaining such documentation could result in expenditures determined to be unallowable under grant guidelines and funds required to be returned. Ineffective internal controls related to federal grants could lead to noncompliance with program requirements. Additionally, the determination of unallowable costs could have an adverse effect on future grant awards by the awarding agency or agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit. District management should implement a system to review the Schedule for errors and omissions as well as a method to monitor the related internal controls over compliance with federal grant requirements. This will help ensure the Schedule is complete and accurate, major federal programs are accurately identified for audit, and internal controls over compliance requirements are implemented and operating effectively.

Finding 2025-003 – Misreporting of Pass-Through Grant Expenditures in SLFRF Compliance Report Criteria: Per Uniform Guidance (2 CFR 200.331 and 2 CFR 200.510), pass-through entities must clearly identify federal awards to subrecipients, including the source of funding, applicable federal requirements, and the Assistance Listing number (21.027 for SLFRF). Subrecipients are required to report only those federal expenditures they directly administer on their Schedule of Expenditures of Federal Awards (SEFA), and not those administered by the pass-through entity. Expenditures of federal pass-through funds should be reported by the pass-through entity (e.g., OWRB) and not by the subrecipient (the City of Sand Springs). Condition: During review of the ARPA Funds Project Spending for March 2025, it was identified that the City of Sand Springs reported $2,392,701.84 in current period expenditures for project #479952 in the SLFRF Compliance report. However, only $1,109,205.41 should have been reported. The discrepancy resulted from the mistaken inclusion of expenditures from the OWRB Grant (a federal pass-through grant from ARPA) in the City of Sand Springs's SLFRF report. Cause and Effect: The Finance Director was unaware that the City of Sand Springs was utilizing OWRB funds (ARPA pass-through) first, followed by direct ARPA funds. As a result, expenditures from the OWRB Grant were incorrectly included in the City of Sand Springs's SLFRF Compliance report, rather than being reported by OWRB as the pass-through entity. The City of Sand Springs's SLFRF Compliance report overstated federal expenditures by $1,283,496.43 for the period. This misreporting could result in inaccurate federal reporting, potential questioned costs, and noncompliance with Uniform Guidance and SLFRF requirements. It also constitutes a significant deficiency in internal controls over federal award reporting. Recommendation: We recommend that the City of Sand Springs implement procedures to ensure that only expenditures of direct federal awards are reported in the SLFRF Compliance report. Expenditures from federal pass-through grants should be tracked separately and reported by the appropriate pass-through entity. Staff responsible for federal reporting should receive training on the distinction between direct and pass-through federal funds and related reporting requirements. Management Response: Management concurs with the finding. The Finance Department will update its procedures to ensure that only direct ARPA funds are reported in the SLFRF Compliance report. Expenditures from OWRB pass-through grants will be tracked separately and excluded from the City of Sand Springs's SLFRF reporting. Staff will receive additional training on federal grant reporting requirements. The City of Sand Springs will coordinate with OWRB to ensure proper reporting of pass-through funds.

Federal Agency: Department of Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Wood County ADAMH Board Award Period: May 8, 2024 – September 29, 2026 Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Matter Criteria or Specific Requirement: Uniform Guidance (2 CFR Part 200.510) provides requirements over procurement and suspension & debarment for grantees when entering into contracts funded by federal programs. Questioned Costs: None Condition: No suspension and debarment exclusion check was performed for one of the two contractors paid with funds under the federal program. Cause: No formal procurement and suspension and debarment policies were in place for the year under audit. Context: Of the two contracts entered into for the program, suspension and debarment checks were not performed for one of the two contractors. Effect: Federal funds could have been paid to a federally suspended and debarred entity. Per review of the federal suspension and debarred list, both entities contracted with under the grant are not suspended or debarred. Repeat Finding: No Recommendation: Implementation of a formal procurement and suspension and debarment policy that includes procedures over review of the federal suspension and debarred listing, that is in compliance with the Uniform Guidance. Procurement policy should include general procurement standards as described by the Uniform Guidance, that include standards on conduct covering conflicts of interest; method of procurement for micro-purchases, small purchases, sealed bids, and proposals; and all other criteria as outlined in 2CFR 200.318 through 200.327. Views of Responsible Officials and Planned Corrective Actions: Management will develop and implement a procurement policy that is in compliance with the Uniform Guidance.

2025-003 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • The SEFA incorrectly included match expenditures, requiring an reduction to the federal expenses of $324,936. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County did not have comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with the Uniform Guidance (2 CFR 200.502 and .510) accrual-basis requirements.

Condition: The SEFA was inaccurately prepared and did not fully reconcile to the general ledger. Cause: Insufficient reconciliation and review procedures over SEFA preparation. Effect: Federal expenditures may be misstated, resulting in noncompliance with reporting requirements. Criteria: 2 CFR 200.510(b) and 200.302 require the SEFA to be accurate and supported by underlying accounting records. Recommendation: Implement documented reconciliation and review procedures to ensure the SEFA agrees to the general ledger prior to issuance.

SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Reference Number: 2025-001 Schedule of Expenditures of Federal Awards Presentation Significant Deficiency and Noncompliance Condition The audit found that the City did not include a Federal Emergency Management Agency (FEMA) award, assistance listing number 97.036, totaling $101,355, on the Schedule of Expenditures of Federal Awards (SEFA). The FEMA funds were obligated during fiscal year 2025, after the related expenditures had been incurred and approved, so they should have been reported on the SEFA for the June 30, 2025 year-end audit according to the Office of Management and Budget Compliance Supplement. Consequently, the total federal expenditures were initially reported as less than the actual amount. Criteria All federal awards, including those provided by FEMA, must be reported on the SEFA. According to 2 CFR Section 200.510 (b) of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”), the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements. This schedule must include all federal awards expended as defined in 2 CFR section 200.502. Excluding federal awards from this reporting may result in noncompliance with federal regulations and audit requirements. Cause The exclusion of the FEMA award from the SEFA was due to a misrepresentation of the reporting requirements for federal disaster assistance. Effect or Potential Effect Omitting any federal awards from the SEFA can result in the failure to recognize when a single audit is required, potentially leading to the City missing this crucial audit. Without a complete SEFA and the associated single audit, there is a heightened risk of noncompliance with federal regulations, which may jeopardize the City’s eligibility for future federal funding. Additionally, the absence of a single audit increases the likelihood that mismanagement or misuse of federal funds remain undetected. Federal agencies may also respond by imposing sanctions or demanding repayment of any costs deemed questionable due to incomplete reporting and lack of proper oversight. Recommendation It is recommend that the City: Review and update policies and procedures for identifying, recording, and reporting all federal awards, including disaster assistance. Implement a formal review process to ensure completeness and accuracy of the SEFA prior to submission and annual audit engagement. Consult with external auditors or grant specialists when uncertainty exists regarding the inclusion of specific awards. Management’s Response The expenditure occurred in calendar year 2020 and 2021. Since these funds were emergency funds, no deferred revenue was accrued since staff was uncertain of whether costs would be eligible for reimbursement. Final revenues of $101,355 were received in FY2025, and staff recorded the revenue received on the SEFA, but not the expenditure. Going forward, staff will report expenditures on the SEFA when eligible expenditures are approved by FEMA.

2025-013: Improve Financial Management of Federal Grants Applicable to: Department of Wildlife Resources Assigned Topic: Federal Grants Management Prior Finding Number: N/A Finding Type: Internal Control and Compliance Finding Severity: Material Weakness Financial Statement Finding: No Federal Awards Finding: Yes ALPT - ALN: Sport Fish Restoration - 15.605; Wildlife Restoration and Basic Hunter Education and Safety - 15.611; Enhanced Hunter Education and Safety - 15.626 Federal Award ID (Year): F20AF10048 (2020); F20AF11897 (2020); F21AF02409 (2021); F22AF01121 (2022); F23AF00654 (2023); F23AF03173 (2023); F23AF03185 (2023); F24AF02770 (2024); F24AF02896 (2024); F24AF02903 (2024) Federal Agency: U.S. Department of the Interior Compliance Requirement: Allowable Costs/Cost Principles - 2 CFR § 200.302; 2 CFR § 200.303(a); 2 CFR § 200.305; 2 CFR § 200.510(b); 31 CFR § 205.33 Known Questioned Costs: $0 The Department of Wildlife Resources (Wildlife Resources) should improve its financial management of federal grants and documentation of internal controls to ensure compliance with state and federal requirements. Wildlife Resources has experienced recent turnover in its grants staff positions. Wildlife Resources has hired new staff; however, there was no transition period with the previous staff, and the previous grants staff did not sufficiently document internal controls over the federal programs. Staff have started documenting desk procedures, but agency-wide policies and procedures remain lacking. As such, grants staff did not appear to have sufficient knowledge of statewide policies and procedures to adequately perform the federal grants management processes in accordance with federal regulations and the Commonwealth Accounting Policies and Procedures (CAPP) Manual. We identified the following issues: Wildlife Resources should amend its procedures to comply with CAPP Manual requirements for cash management of federal funds. CAPP Manual Topic 20605 states that two methods of recording "split" funded expenses are acceptable. The method preferred by the State Comptroller is to establish procedures to "split code" the expenses by allocating the disbursement between a state fund and the federal fund at the matching ratio prescribed by the grant or contract. A second, and temporary, funding method allows the agency to charge the original expense to a state fund and subsequently, within seven business days, prepare and submit a general ledger journal in the Commonwealth’s accounting and financial reporting system to charge the federal fund for the federal portion of the original expense, referencing the original voucher in the journal reference line for transparency. If a state agency cannot comply, the agency must request approval from the State Comptroller. Wildlife Resources follows the temporary funding method to record its federal expenses. Wildlife Resources spends from state funds and then performs journal entries to move transactions to the federal fund in bulk with some journal entries representing hundreds of individual transactions, which does not allow for transparency regarding the nature of Wildlife Resources federal expenses. Further, our analysis found that Wildlife Resources enters journal entries for federal drawdowns up to three months after the original transaction date which is not consistent with the seven-day requirement in CAPP Manual Topic 20605. Per 2 Code of Federal Regulations (CFR) § 200.302, a recipient must comply with state laws and procedures for expending and accounting for the State's funds. Additionally, the untimely performance of these extensive journal entries may result in Wildlife Resources recording journal entries in the wrong fiscal year, which could result in inaccurate information within the Commonwealth’s Annual Comprehensive Financial Report. Wildlife Resources does not maintain adequate support for its journal entries. CAPP Manual Topic 20405 requires the agency to retain sufficient supporting documentation to provide auditable records containing evidence of required coding elements for journal entries. Wildlife Resources’ journal entries lack documentation related to changes in coding. Further, Wildlife Resources does not maintain supporting documentation for journal entries in one accessible location which would allow for sufficient supervisory review. Not maintaining adequate supporting documentation over journal entries increases the risk of inaccurate or fraudulent transactions. Wildlife Resources also does not have policies and procedures in place that detail how it creates the journal entries, what type of documentation to retain to support journal entries, or how Wildlife Resources ensures it only moves allowable costs to the federal fund. Title 2 CFR § 200.303(a) requires recipients to establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. During fiscal year 2025, in response to our Office’s 2024 Internal Control Questionnaire Review, Wildlife Resources established a bimonthly drawdown and journal entry schedule to ensure timely drawdown of federal funds to reimburse expenses originally incurred within state funds and to assist in remediation of its cash flow issues. Per 31 CFR § 205.33, a state must minimize the time between the drawdown of federal funds from the federal government and their disbursement for federal program purposes in accordance with the actual, immediate cash requirements of the state. The timing and amount of funds transfers must be as close as is administratively feasible to a state's actual cash outlay for direct program costs and the proportionate share of any allowable indirect costs. However, based on our analysis of drawdowns, while Wildlife Resources has made progress in the rate of drawdowns since the previous review, due to staff shortages, Wildlife Resources has not fully followed its drawdown schedule to ensure timely drawdowns of federal funds, which could exacerbate the agency’s cash flow issues. Specifically, the drawdown schedule included twenty planned drawdowns, however Wildlife Resources completed only eleven (55%) in accordance with that schedule. Furthermore, Wildlife Resources does not have policies and procedures in place over the completion of drawdowns as required by 2 CFR § 200.302, which requires a recipient to have written procedures to implement the requirements of 2 CFR § 200.305 regarding federal drawdowns. Wildlife Resources did not record program income revenue of approximately $2.3 million in the correct fiscal year for the Fish and Wildlife Cluster. Wildlife Resources recorded the program income received in fiscal year 2025 in a suspense account and did not distribute the income to the proper revenue account until fiscal year 2026. CAPP Manual Topic 20205 requires recording of all state receipts in the Commonwealth’s accounting and financial reporting system in a timely manner within three business days of the deposit. Additionally, the Department of Accounts (Accounts) Fiscal Year-End Closing Procedures require agencies to certify that they properly distributed balances to the correct accounts before final close of Commonwealth’s accounting and financial reporting system. By not properly recording program income, Wildlife Resources may misrepresent financial information to the federal government and report information that does not agree with its accounting records. Wildlife Resources reported federal expenses on its Schedule of Expenditures of Federal Awards (SEFA), a schedule that details Wildlife Resources’ federal expenses for fiscal year 2025, that did not agree to its underlying accounting records. Wildlife Resources reported federal expenses in the SEFA that it recorded as state funds in the Commonwealth’s accounting and financial reporting system due to considering journal entries that they did not record in the system until the next fiscal year. Due to these issues and preparation of the SEFA by a member of management on long-term leave who was not available during the audit, Wildlife Resources could not support amounts totaling over $660,000 in its SEFA. Additionally, Wildlife Resources does not have documented procedures outlining its process for preparing the SEFA in accordance with 2 CFR § 200.510(b), which states that the auditee must 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 2 CFR § 200.502. Accounts’ Office of the Comptroller’s Directive No. 1-25 (Comptroller’s Directive) also provides specific directions for compiling the SEFA and supporting schedules to support its preparation of the Commonwealth’s SEFA and related disclosures. Furthermore, the Comptroller’s Directive states that an agency must ensure that it has internal controls in place to avoid material misstatements and/or misclassifications in the attachments and other financial information submitted to Accounts for inclusion in the Commonwealth’s Single Audit. By not implementing adequate internal controls over financial reporting, Wildlife Resources cannot provide reasonable assurance that the financial information it submits to Accounts for inclusion in the Commonwealth’s Single Audit is free of material misstatements. Because of the scope of the matters and errors noted above, we consider this finding to be a material weakness in internal control. Wildlife Resources should improve its financial management of federal funds and documentation of internal controls to ensure compliance with state and federal requirements. The need for strong internal controls is especially important given that Wildlife Resources is exploring additional federal funding opportunities. Wildlife Resources should work with Accounts to develop and implement a federal grants management process that complies with the CAPP Manual. Wildlife Resources should improve its process and controls related to federal fund drawdowns to ensure timely reimbursement of expenses within federal limitations. Further, Wildlife Resources should also improve its controls and procedures related to journal entry processing to ensure it retains adequate support for all entries and enters the entries timely. Additionally, Wildlife Resources should perform a thorough review of its SEFA before submitting it to Accounts and retain supporting documentation to support the SEFA. Finally, Wildlife Resources should develop policies and procedures over all federal grants processes including all compliance requirements. These improvements combined are necessary to ensure accurate accounting and financial reporting in accordance with the CAPP Manual, the Code of Federal Regulations, the Comptroller’s Directives, and applicable accounting standards. Views of Responsible Officials: The views of responsible officials are included in the report related to their organization, which can be found at www.apa.virginia.gov and, in summary, do not express disagreement with the finding.

Finding 2025-003: Preparation of the Schedule of Expenditures of Federal Awards Material weakness/other matter noncompliance Federal Agency: U.S. Department of Homeland Security Program Name: Transit Security Grant Programs ALN Number: 97.075 Award Number: 97.075 Award Year: 2025 Criteria: The Uniform Guidance (2 CFR 200.510b) requires that the auditee (typically a non-federal entity receiving federal funds) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by its financial statements which must include the total Federal Awards expended as determined in accordance with 2 CFR 200.502. Condition: The SEFA for the year ended June 30, 2025, included $2,385,715 in expenditures that were incurred in the year ended June 30, 2024, overstating the total expenditures reported for the federal awards for ALN 97.075 Rail and Transit Security Grant Program. Cause: The existing internal control procedures for processing funding source reclassifications are not structured to fully support the SEFA reporting cutoff deadline. While a process is in place, it does not fully incorporate all necessary stakeholders early enough in the cycle to ensure timely communication, coordinated review, and approval of reclassifications leading to expenditures being included in the incorrect reporting cycle Effect: Not in compliance with the Uniform Guidance (2 CFR 200.510b). There could be impacts on future funding. Questioned costs: None. Context: As a result of the inclusion of fiscal year ended 2024 expenditures, total federal awards for ALN 97.075, Rail and Transit Security Grant Program, were overstated by $2,385,715. Repeat Finding: Yes. This repeat finding designation results from the identification of the $2,385,715 timing difference, which affected SEFA reporting for both fiscal year 2024 and fiscal year 2025. Findings for both fiscal years were evaluated and communicated to management in 2026. Recommendation: We recommend that the Authority review the schedule of expenditures of federal awards prior to issuance. Views of responsible officials and planned corrective actions: Management agrees with the finding and acknowledges that internal control procedures should be strengthened to ensure adherence to the SEFA reporting cutoff deadline. To address this issue, the Authority will implement a verification checklist as required supporting documentation for all funding source reclassification journal entries, ensuring that all relevant departments have reviewed and approved the entries prior to being posted. The Authority will also establish a cutoff date for Program Offices to submit current-year reclassification requests, allowing adequate time for eligibility review and fiscal year-end reporting. In addition, Accounting Policies and Procedures Manual will be updated to include guidelines limiting reclassifications of expenditures incurred in prior fiscal years. The Authority will communicate policy updates incorporate these changes to ensure consistent application across departments.

Assistance Listing, Federal Agency, and Program Name - ALN 14.218, Department of Housing and Urban Development, Community Development Block Grants and ALN 21.027, Department of the Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - B24MC260070 2025 and CW 5912A 2026 2021 Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR Section 200.510(b), cities and other non federal entities must create a Schedule of Expenditures of Federal Awards (SEFA) if they expend more than $1 million in federal awards during their fiscal year. Condition - The City did not accurately prepare a SEFA that included all federal expenditures in fiscal year 2025, which resulted in a increase of approximately $7.6 million. Questioned Costs - N/A If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - The City did not accurately prepare a SEFA based on the activity for the year ended June 30, 2025. Cause and Effect - Improper recognition of federal awards which includes the grant agreement periods and the amount of expenditures originally provided created issues with the amounts reported to the auditors and led to the correction of the SEFA by an amount of $7.6 million from the amounts that were originally provided. Recommendation - The City should assign an individual to prepare the SEFA, along with another individual to approve it to ensure that it is properly recorded. Views of Responsible Officials and Planned Corrective Actions - The City will ensure that all future expenditures of federal awards are included on the SEFA by assigned staff to prepare and review the SEFA and track the amounts throughout the year.

Program: Various, including 21.027 – COVID-19 Coronavirus State and Local Fiscal Recovery Funds; 10.555 – National School Lunch Program – Reporting Grant Number & Year: Various, including SLFRP1965, March 3, 2021, through December 31, 2024; 253NE308N1099, FFY 2025 Federal Grantor Agency: Various, including U.S. Department of the Treasury and U.S. Department of Agriculture Criteria: A good internal control plan requires adequate procedures to ensure the Schedule of Expenditures of Federal Awards (SEFA) is presented properly. 2 CFR § 200.510(b) (January 1, 2024, and January 1, 2025) states that the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements that includes the total Federal awards expended, the total Federal awards expended for each individual Federal program, and the total amount provided to subrecipients from each Federal program. Neb. Rev. Stat. § 81-1111(1) (Reissue 2024) states, in part, the following: Subject to the supervision of the Director of Administrative Services, the Accounting Administrator shall have the authority to prescribe the system of accounts and accounting to be maintained by the state and its departments and agencies, develop necessary accounting policies and procedures, coordinate and approve all proposed financial systems, and manage all accounting matters of the state’s central system. EnterpriseOne is the official accounting system of the State. Condition: Several programs did not have expenditures or the amount provided to subrecipients reported accurately on the SEFA. We notified the Department of Administrative Services (Administrative Services) of the errors, and the SEFA was subsequently adjusted. A similar finding has been noted for several years. Repeat Finding: 2024-030 Questioned Costs: None Statistical Sample: No Context: Administrative Services is responsible for managing the accounting matters of the State and certifies the data collection form for the Statewide Single Audit. Administrative Services compiles the SEFA from information provided by the individual agencies and submits it to the auditor. During our review, we noted 12 programs for various State agencies needed correction. This included overreporting AL 21.027 by $4,254,865 and underreporting AL 10.555 by $4,757,669. Additionally, a program was originally included on the SEFA for over $16 million that was initially selected as a major program; however, it was determined subsequently that the program should not have been reported on the SEFA. The total expenditures and amounts provided to subrecipients, as both originally reported and per the final SEFA, were as follows: See Schedule of Findings and Questioned Costs for chart/table. Cause: Administrative Services did not have adequate procedures to ensure the accuracy of amounts not pulled directly from the accounting system. Administrative Services established a specific account code for aid to subrecipients, but not all agencies utilized this account code. Effect: Increased risk for the SEFA to be inaccurate, which could lead to Federal sanctions or programs not audited that should be. Recommendation: We recommend Administrative Services improve procedures to ensure the SEFA is complete and accurate. Management Response: We will continue agency training, review of chart of accounts setup, review of object account usage, and working with State employees to help ensure the SEFA is accurate and complete.

Finding 2025-003: Schedule of Expenditures of Federal Awards (Significant Deficiency) Information on the Federal Program: 93.243 - U.S. Department of Health and Human Services. See Finding 2025-002. Finding 2024-003 is a significant deficiency in internal control over compliance in addition to noncompliance related to the Reporting compliance area. There were no questioned costs related to the preparation of the SEFA. This is a repeat finding.Finding 2025-002: Schedule of Expenditures of Federal Awards (Significant Deficiency) Criteria or Specific Requirement: Management is responsible for the complete and fair presentation of the financial statements, including any supplementary information that is presented in relation to the financial statements, such as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section 200.510 (b)(2), the Council is required to include all direct and pass-through Federal awards expended during the fiscal year in the SEFA. Condition: During the audit, it was noted that pass-through awards from American Academy of Addiction Psychiatry totaling $240,938 for the year ended June 30, 2025, had not been included on the SEFA. In addition, certain adjustments were made to the initial SEFA that was provided. As a result, management provided a revised SEFA after audit testing had begun. Cause: Since this is a repeat finding, the omission of the pass-through awards appears to be an oversight due to the transition in the finance team. However, the adjustments made to the SEFA are related to Finding 2025-001. Effect or Potential Effect: The SEFA was missing Federal expenditures of $240,938 at the start of the audit. The expenditures in the SEFA were adjusted due to the issues with account reconciliations per Finding 2025-001. When the SEFA is not accurately prepared, it could have an effect on the auditor's determination of major programs and on the auditor's sample selections.Recommendation: We recommend that the Council enhance its procedures related to the preparation of the SEFA to ensure all required amounts are included. Repeat Finding: This is a repeat finding.

Material Weakness in Internal Control Over Compliance Information on the Federal Program: Assistance Listing Number 14.157 – Section 202 Supportive Housing for the Elderly, U.S. Department of Housing and Urban Development Criteria: The regulations in 2 CFR 200.510 requires the auditee to prepare a schedule of expenditures of Federal awards which includes the Federal awards expended for each individual Federal program and in total. Condition: For the year June 30, 2025, the unadjusted schedule of expenditures of Federal awards did not report the correct Federal awards expended for this Federal program. Cause: Management does not have internal control over preparation of the schedule of expenditures of Federal awards or reconciliation of the reported expenditures to source documentation. Effect or Potential Effect: Material misstatements of the schedule of expenditures of Federal awards could be undetected and determination of major program(s) could be based on inaccurate information. Questioned Costs: None Context: This finding relates to the schedule of expenditures of federal awards. It is a repeat finding, #2024-002 from the June 30, 2024 audit, which was not corrected by management. Recommendation: We recommend that management develop and implement internal controls over the preparation of the schedule of expenditures of Federal awards. At a minimum, they should require identification of Federal award source documentation and documentation of how the expenditure amount reported for each was calculated. Views of Responsible Official: The new policy was discussed during the fiscal year for identifying federal awards. The written memo detailing the new policy was updated on September 30, 2025. This is the policy in place to be followed when preparing the schedule of expenditures of federal awards.

Finding 2025-002: Significant Deficiency – Internal Control Over Federal Award Reporting (ESSER III) Type of Finding: Internal Control Federal Program: Education Stabilization Fund - ARP-ESSER ALN: 84.425U Federal Award Year: 2021 Federal Agency: Department of Education Pass-thru entity: PA Department of education Pass-thru nos: 223-21-0422 Questioned Costs: None Repeat Finding: No Type of Compliance Requirement: Reporting Criteria: 2 CFR 200.510(b) requires the Schedule of Expenditures of Federal Awards (SEFA) to fairly present total federal expenditures for each federal program in the period in which they are incurred. Condition: During testing of ESSER III, we noted that the District had unspent funds remaining after reconciling the grant expenditures to the Final Expenditure Report (FER). Upon further review of the FER and discussions with District staff, we determined that expenditures related to the Federal Set-Aside awards had been mistakenly included in the FER for ESSER III, despite the use of separate source codes for each. The District believed the Set-Aside funds were part of the ESSER III award, and therefore included the Set-Aside expenditures when preparing the FER for ESSER III. Because the District’s reports for ESSER III were including the Set-Aside expenditures, the District believe ESSER III had been fully expended when, in fact, allowable ESSER III expenditures remained unreported. During the current fiscal year, the District subsequently identified certain allowable ESSER III expenditures incurred during the 2023-24 fiscal year that were coded to non-federal sources and reclassified them as ESSER III expenditures for that year. These expenditures were not identified as ESSER III expenditures in the prior fiscal year and were not included in the SEFA until they were identified during the current fiscal year. As a result, the SEFA for the year ended June 30, 2024 understated ESSER III expenditures. Cause: The District misunderstood the structure of the ESSER III and Federal Set-Aside awards and believed that the Set-Aside funds were part of the ESSER III allocation. As a result of the misunderstanding, the District included the expenditures for the Set-Asides with the ESSER III expenditures when submitting the FER for ESSER III. Effect: Federal expenditures for ESSER III were understated on the District’s SEFA for the year ended June 30, 2024. A correction was made in the current fiscal year to properly report the expenditures in the period in which they were incurred. Context: The expenditures identified were allowable costs that were incurred during fiscal year 2023-24. The issue did not involve unallowable costs, eligibility violations, or misuse of federal funds. Rather, the finding resulted from misunderstanding the structure of ESSER III and the Federal Set-Aside awards, which led to miscoding and reporting errors. Once identified, the District worked with the auditors to correct the error and properly report the expenditures. Recommendation: We recommend the District provide additional training to staff responsible for federal grant accounting to ensure a clear understanding of grant award structures to facilitate proper grant tracking and reporting. View of Responsible Officials: The District agrees with the finding and the recommendation and will take steps to ensure the staff responsible are properly trained and educated on each grant received by the District.

Research and Development Cluster—Reporting in the Schedule of Expenditures of Federal Awards Background: The Department of Administration (DOA) State Controller’s Office (SCO) is responsible for coordinating with other state agencies to prepare the State of Wisconsin Schedule of Expenditures of Federal Awards (SEFA). The SEFA, which is required to be published in the State of Wisconsin single audit report, is a listing of all federal programs administered by an entity. The SEFA includes the total expenditures for the reporting period and identifies any amounts provided to subrecipients for each federal program. Each state agency prepares a SEFA for the federal programs it administers. For federal programs administered by UW System Administration and UW institutions, UW System Administration staff work with UW institution staff to compile the UW System SEFA. The UW System SEFA is provided to DOA, which compiles the agency-level SEFAs into the statewide SEFA. During our FY 2023-24 single audit (report 25-04), we found that UW System Administration did not have formal written procedures to accurately compile federal expenditures for submission to DOA. We recommended that UW System Administration develop written procedures to improve its SEFA reporting and accurately identify grant expenditures for reporting for the Research and Development Cluster, and provide training to UW institutions on the documented procedures (Finding 2024 712). Criteria: Under 2 CFR s. 200.510 (b), the State is required to prepare a SEFA for the period covered by the State’s financial statements, and the SEFA must include the total federal awards expended and include the total amount provided to subrecipients from each federal program. In addition, for federal awards received as a subrecipient, the name of the pass-through entity is required to be identified in the SEFA. Condition: In our review of the FY 2024 25 SEFA prepared by UW System Administration, we continued to identify multiple errors in the presentation of Research and Development Cluster expenditures. We found UW System Administration incorrectly included a total of $24.4 million in expenditures for 26 other grant programs as part of the Research and Development Cluster in the FY 2024 25 SEFA. For example, $1.2 million in funding provided by the Department of Health Services under the Epidemiology and Laboratory Capacity for Infectious Diseases grant program was reported incorrectly by UW System Administration as part of the Research and Development Cluster. We also identified a similar error in SEFA reporting for this same program in FY 2023-24. In addition, UW System Administration did not meet timelines established by SCO to provide a draft of the UW System SEFA. Context: UW System Administration reported $1.9 billion in federal financial assistance in FY 2024-25. We reviewed the UW System SEFA to assess the reported expenditures. We inquired of UW System Administration regarding its procedures for preparation of the SEFA, and we contacted UW institutions, as needed, to understand the recording of federal grant expenditures. Questioned Costs: None. Effect: UW System Administration is not assured that its SEFA reporting accurately reflects its expenditure of federal assistance. Errors such as those we identified are noncompliant with federal requirements. Cause: UW System Administration is responsible for the SEFA compilation, and it relies on some manual processes. Because UW institutions were permitted to record federal grants in multiple ways within UW System’s accounting system during FY 2024 25, UW System Administration was unable to perform queries of UW System’s accounting system to compile federal expenditure information in sufficient detail without obtaining assistance from UW institutions. The manual processes used introduced the potential for errors, inaccurate reporting, and required additional time to compile the SEFA information. UW System Administration did not develop formal written procedures for compiling the SEFA during FY 2024 25. UW System Administration’s procedures for preparing the SEFA were insufficient to detect and correct potential SEFA errors that related to grant funds passed through to UW institutions from state agencies, which resulted in UW System Administration incorrectly reporting certain expenditures in the Research and Development Cluster instead of reporting them correctly with the grant programs to which they were related. Although UW institutions classified activities under an agreement with other state agencies as research related in its accounting system, neither UW System Administration nor UW institutions adequately researched whether the federal grant program identified in the agreements with other state agencies should be reported in the SEFA as a grant program other than a Research and Development Cluster program. In February 2026, UW System Administration provided the written procedures it prepared after it compiled the SEFA for FY 2024-25. These procedures identify the division of responsibilities between UW System Administration and UW institutions and the need to assess whether certain research activities should be reported as other federal programs in the SEFA. However, it will be important for UW System Administration to provide training to UW institutions to ensure SEFA reporting requirements are understood and UW institutions can accurately differentiate federal expenditures between the Research and Development Cluster programs and other federal grant programs in a timely manner. In July 2025, UW System implemented a new accounting system that UW System Administration will use to compile the FY 2025-26 UW System SEFA. UW System Administration should ensure that grant activity is recorded in sufficient detail to accurately identify Research and Development Cluster expenditures and classify federal expenditures related to agreements with other state agencies for FY 2025-26. Finally, UW System Administration should ensure that its SEFA compilation process can be completed in a timely manner to meet SCO submission deadlines. Recommendation: We recommend the University of Wisconsin (UW) System Administration: -provide training to UW institutions on its new procedures and on its data requirements for preparing the Schedule of Expenditures of Federal Awards (SEFA) to ensure that UW institutions accurately record, identify, and classify Research and Development Cluster expenditures within the new accounting system; -implement procedures to review whether federal expenditures related to agreements with other state agencies that specify the relevant assistance listing number are properly classified in the SEFA; and -revise and document its procedures by June 30, 2026, to specify how federal grants activities will be compiled accurately and in a timely manner for the FY 2025 26 SEFA using the new accounting system. Finding 2025-702: Research and Development Cluster—Reporting in the Schedule of Expenditures of Federal Awards Research and Development Cluster (various Assistance Listing numbers) Award Numbers Award Years Various Various Questioned Costs: None Dairy Business Innovation Initiatives (Assistance Listing number 10.176) Award Numbers Award Years 21DBIWI1006 2021 AM21DBIWI1010 2022 AM22DBIWI1014 2022 23DBIWI1019 2023 Questioned Costs: None Disability Innovation Fund (Assistance Listing number 84.421) Award Numbers Award Years H421C210018 2021 H421F240107 2024 H421F240111 2024 H421F240139 2024 H421F240143 2024 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the University of Wisconsin System Administration: UW System Administration agrees with the audit finding and recommendations.

(2025-030) Title: Internal control over Health Disparities program SEFA reporting needs improvement Prior Year Findings: None State Department: Administrative and Financial Services State Bureau: Health and Human Services Service Center Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises Assistance Listing Number: 93.391 Federal Award Identification Number: See E-65 to E-66 Compliance Area: Reporting Type of Finding: Material weakness Material noncompliance Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.510 The Department must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the State’s financial statements which must include the total Federal awards expended. At a minimum, the SEFA must provide total Federal awards expended for each individual Federal program and the Assistance Listing Number and include the total amount provided to subrecipients from each Federal program. Condition: The Department of Health and Human Services’ Service Center must complete and submit exhibits and related schedules to the Office of the State Controller (OSC) at the close of each fiscal year to report Federal award information for inclusion on the State’s SEFA. OSC is responsible for compiling this information on behalf of the State. The Office of the State Auditor reviewed amounts reported on the SEFA for the Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (Health Disparities) program and identified a $1.2 million revenue transfer incorrectly reported as a reduction to expenditures. As a result, the initial amount reported on the SEFA was understated by $1.2 million. Context: In fiscal year 2025, Health Disparities program expenditures totaled $6.7 million. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • Inaccurate reporting of expenditure amounts on the SEFA, which is submitted to the Federal government, may result in inaccurate information used for programmatic, policy, or statistical purposes. • Noncompliance with Federal regulations Recommendation: We recommend that the Department implement policies and procedures to ensure expenditures are appropriately reported on the SEFA. Corrective Action Plan: See F-19 Management’s Response: The DHHS and the DHHS Financial Service Center agree with this finding. The Service Center will update policies and procedures to ensure expenditures are appropriately reported on the SEFA by August 2026. Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626 (State Number: 25-1123-01)

(2025-037) Title: Internal control over PDG SEFA reporting needs improvement Prior Year Findings: None State Department: Health and Human Services Education Administrative and Financial Services State Bureau: Office of Child and Family Services Office of Teaching and Learning Health and Human Services Service Center Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Every Student Succeeds Act/Preschool Development Grants Assistance Listing Number: 93.434 Federal Award Identification Number: See E-65 to E-66 Compliance Area: Reporting Type of Finding: Material weakness Material noncompliance Questioned Costs: None Criteria: 2 CFR.303; 2 CFR 200.510 The Department must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the State’s financial statements which must include the total Federal awards expended. At a minimum, the SEFA must provide total Federal awards expended for each individual Federal program and the Assistance Listing Number and include the total amount provided to subrecipients from each Federal program. Condition: The Every Student Succeeds Act/Preschool Development Grants (PDG) program assists states in helping low-income and disadvantaged children enter kindergarten prepared and ready to succeed in school, and helps improve the transitions from the early care and education setting to elementary school. PDG is administered by the Department of Health and Human Services’ (DHHS) Office of Child and Family Services. DHHS has a memorandum of understanding in place with the Department of Education (DOE) to assist in administering PDG. The DHHS Service Center (SC) and DOE must complete and submit exhibits and related schedules to the Office of the State Controller (OSC) at the close of each fiscal year to report Federal award information for inclusion on the State’s SEFA. OSC is responsible for compiling this information on behalf of the State. The Office of the State Auditor (OSA) reviewed amounts reported on the SEFA for PDG and identified both DHHS SC and DOE incorrectly reported direct expenditures and amounts provided to subrecipients. As a result, the initial amount reported on the SEFA was overstated by $2.6 million. In addition, OSA identified $436,074 incorrectly reported as amounts provided to subrecipients that should have been reported as direct expenditures for the program. OSC subsequently corrected the SEFA for all errors identified by OSA. Context: In fiscal year 2025, PDG expenditures totaled $11.5 million. Cause: • Lack of supervisory oversight • Lack of adequate policies and procedures Effect: • Inaccurate reporting of expenditure amounts on the SEFA, which are submitted to the Federal government, may result in incorrect information used for programmatic, policy, or statistical purposes. • Noncompliance with Federal regulations Recommendation: We recommend that the Departments increase oversight and implement policies and procedures to ensure expenditures are appropriately classified and reported on the SEFA. Corrective Action Plan: See F-21 Management’s Response: The DHHS, the DOE and the DHHS Financial Service Center agree with this finding. The Departments will update policies and procedures to ensure expenditures are appropriately reported on the SEFA. Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626 (State Number: 25-1122-01)

(2025-063) Title: Internal control over Medicaid SEFA reporting needs improvement Prior Year Findings: None State Department: Administrative and Financial Services State Bureau: Health and Human Services Service Center Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Medicaid Cluster Assistance Listing Number: 93.775, 93.777, 93.778 Federal Award Identification Number: See E-65 to E-66 Compliance Area: Reporting Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.510 The Department must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the State’s financial statements which must include the total Federal awards expended. At a minimum, the SEFA must include the total amount provided to subrecipients from each Federal program. Condition: The Department of Health and Human Services’ Service Center must complete and submit exhibits and related schedules to the Office of the State Controller (OSC) at the close of each fiscal year to report Federal award information for inclusion on the State’s SEFA. OSC is responsible for compiling this information on behalf of the State. The Office of the State Auditor reviewed amounts reported on the SEFA and identified $11.8 million of Federal expenditures incorrectly reported as amounts provided to subrecipients that should have been reported as direct expenditures. OSC subsequently corrected the SEFA. Context: In fiscal year 2025, Federal Medicaid expenditures totaled $3.4 billion. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: Inaccurate reporting of expenditure amounts on the SEFA, which is submitted to the Federal government, may result in incorrect information used for programmatic, policy, or statistical purposes. Recommendation: We recommend that the Department implement policies and procedures to ensure expenditures are appropriately classified and reported on the SEFA. Corrective Action Plan: See F-31 Management’s Response: The DHHS and the DHHS Financial Service Center agree with this finding. The DHHS Financial Service Center will update policies and procedures to ensure expenditures are appropriately classified and reported on the SEFA by February 2026. Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626 (State Number: 25-1106-03)

Finding 2025-006 – Internal Control Deficiency in Financial Reporting – Untimely Recording of Grant Program Expenditures Cluster: Not applicable Sponsoring Agency: United States Agency for International Development (USAID) Award Name: USAID Foreign Assistance for Programs Overseas Award Number: 7200AA19CA00018, 7200AA21LE00003 Assistance Listing Title: USAID Foreign Assistance for Programs Overseas Assistance Listing Number: ALN 98.001 Award Year: 2024-2025 Pass-through entity: Not applicable Compliance Requirement: Schedule of Expenditure of Federal Awards Reporting and Period of Performance Criteria or Specific Requirement Under 2 CFR 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the same reporting period as its audited financial statements. The SEFA must present the total federal awards expended during that period, as defined in 2 CFR 200.502. The auditee is responsible for ensuring that the SEFA is accurate, complete, and prepared in accordance with all applicable Uniform Guidance requirements. Identified Condition Across three campuses, we noted that one (1) campus converted to a new financial system effective January 1, 2024. As a result of the conversion, subaward advance balances were migrated into new system project codes using expenditure type 140200 – Subaward Advances, and recording the related advance liquidations (i.e., payment for certain expenditure invoices) were delayed. We noted delays in recording ranging from 4 to 12 months. As a result, certain fiscal year (FY) 2024 expenditures were not properly recorded in the FY 2024 SEFA, but instead recorded and reported in the FY 2025 SEFA as follows: Award Numbers: 7200AA19CA00018; 7200AA21LE00003 | Campus-FY2024 Expenditures: $3,498,905 | Campus-Portion Related to Subawardees: $3,477,528 | Campus-% of Total Program FY2025 Expenditures: 41% | % of Total Program FY2025 Expenditures: 32% Cause This condition resulted from delays in processing liquidations of migrated subaward advance balances in the new system until reconciliation of the individual projects set-up for each sub awardee was completed. As a result, there was a significant backlog in processing. Effect The delay in recording the expenditures and liquidating the advances resulted in FY2024 expenditures being incorrectly recorded in fiscal year 2025 for SEFA reporting purposes. Lack of timely recording increases the risk that that expenditures are charged beyond the awards’ authorized periods of performance. Questioned Costs None. Recommendation We recommend that the campus strengthen internal controls over financial reporting to ensure timely reconciliations of subaward account balances and recording such that amounts are allocated, liquidated, and reported in the proper period. This will help ensure timely and accurate financial reporting. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

Finding Reference 2025-02 Assistance Listing Number 21.027 Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency Department of Treasury Type of Finding Material Weakness on Internal Control and Noncompliance Condition During the audit, management initially provided a Schedule of Expenditures of Federal Awards (SEFA) that required revision because the total federal expenditures reported for Program 21.027, Coronavirus State and Local Fiscal Recovery Funds, were incomplete. Specifically, expenditures totaling $1,084,942 that had already been reported to the pass-through entity were omitted from the SEFA, resulting in an understatement of total federal awards expended under the program. A similar condition was reported in the prior year’s single audit as finding No. 2024-05. Criteria In accordance with 2 CFR § 200.510(b) (Financial Statements and SEFA Requirements), the auditee must: 1. Prepare an accurate SEFA that includes the total federal awards expended for the period under audit. 2. Ensure the SEFA is complete, accurate, and properly classified by fiscal year. 3. Provide sufficient information to allow auditors to test compliance with federal requirements. Cause The errors in the preparation of the SEFA indicate deficiencies in internal controls over the financial reporting process related to federal awards. Specifically, management did not implement sufficient oversight and reconciliation procedures to ensure that all federal expenditures were accurately identified, classified, and reported within the appropriate fiscal year. In addition, the review process over the SEFA prior to submission to the auditors was not adequately designed or executed to detect and correct reporting omissions and misstatements. Effect As a result of the deficiencies in internal controls over SEFA preparation, the Schedule of Expenditures of Federal Awards was initially misstated and required revision to properly reflect total federal awards expended under Assistance Listing No. 21.027. The omission of expenditures increased the risk of material misstatement in the SEFA and could have resulted in an inaccurate representation of federal funding expended by the Authority. Additionally, the failure to initially prepare a complete and accurate SEFA resulted in noncompliance with 2 CFR § 200.510(b), which requires the auditee to provide a full and accurate accounting of federal expenditures for the period under audit. Questioned Costs No questioned costs were identified, as the issue relates to the misclassification and misstatement of expenditures, rather than the allowability of costs. Recommendation To ensure compliance with 2 CFR § 200.510(b) and improve internal controls over SEFA preparation, we recommend that the Authority: 1. Implement a formal review and reconciliation process to ensure federal expenditures are accurately reported in the correct fiscal year. 2. Enhance communication between finance and grant administration personnel to improve accuracy in expenditure classification. 3. Provide additional training to staff responsible for SEFA preparation on Uniform Guidance requirements for federal reporting. 4. Require a final, documented supervisory review of the SEFA before submission for audit to prevent reporting inaccuracies. Views of Responsible Officials Refer to Management’s unaudited corrective action plan.

Criteria or Specific Requirement: Entities receiving federal awards must identify in its accounts all federal awards expended and report those amounts on the Schedule of Expenditures of Federal Awards for the period the federal award was expensed. Specifically, in accordance with Uniform Administrative Requirements outlined in 2 CFR 200, the guidance states: • Per 2 CFR 200.502, the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. • Per 2 CFR 200.303, entities must establish and maintain internal controls which provide reasonable assurance that federal award expenditures are in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. • In addition, per 2 CFR 200.510, the Schedule of Expenditures of Federal Awards (SEFA) must be prepared to reflect the awards for the period covered by the auditee’s financial statements. 2 CFR 200.510 also states that for costs to be allowable, they should be determined in accordance with generally accepted accounting principles (with exceptions provided in that part). Condition: The University’s year-end cutoff controls allowed for certain costs from Fiscal Year 2023 and Fiscal Year 2024 to be reported in the Fiscal Year 2025 SEFA. Context: During our testing of 40 payroll transactions, we found 1 instance of payroll related expenses that were incurred during Fiscal Year 2023 being charged to the federal program in Fiscal Year 2025 and 12 instances of payroll related expenses that were incurred during Fiscal Year 2024 being charged to the federal program in Fiscal Year 2025. Questioned Costs: Known amounts of Fiscal Year 2023 costs included in the Fiscal Year 2025 SEFA was $813 and known amounts of Fiscal Year 2024 costs included in the Fiscal Year 2025 SEFA was $23,838. Cause: Per the University, the cause for the 13 exceptions was due to the University improperly identifying the awards as State funded at inception. During Fiscal Year 2025, the University discovered that the award through the State of Oregon was Federally funded and re-indexed costs previously recorded on the State award indexes to Federal award indexes. During the re-indexing of these costs, the transaction dates of costs that were incurred during Fiscal Year 2023 and Fiscal Year 2024 were recorded with dates in Fiscal Year 2025 causing them to be included in the Fiscal Year 2025 SEFA. Effect: The University was out of compliance as it relates to identifying and reporting federal costs in the period incurred. Repeat Finding: No Recommendation: We recommend that the University evaluate its cutoff procedures to ensure that federal costs are identified and reported in the correct fiscal year. We also recommend that the University evaluate its internal controls to ensure that federal awards are properly identified as such at inception. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding.

Criteria: Management is responsible for the preparation and fair presentation of the financial statements in accordance with U.S. generally accepted accounting principles (GAAP), including the proper timing of revenue recognition for costreimbursement grants in accordance with Accounting Standards Codification (ASC) 958. In addition, 2 CFR 200.303 – Internal Controls requires nonfederal entities to establish and maintain effective internal control over financial reporting and compliance to provide reasonable assurance that transactions are recorded in the proper accounting period. Further, 2 CFR 200.510(b) requires the auditee to prepare a Schedule of Expenditures of Federal Awards (SEFA) that accurately reflects federal expenditures for the fiscal year. Condition: During the audit, it was identified that cash received from federal granting agencies under cost-reimbursement grants prior to year-end were appropriately recorded as refundable advances; however, reimbursable expenditures incurred prior to year-end were not fully recognized as contribution revenue and federal expenditures in the appropriate fiscal year. As a result, audit adjustments were required to recognize contribution revenue and federal expenditures related to costs incurred prior to year-end and to update the SEFA to reflect the corrected expenditures. The updated SEFA resulted in an additional federal program being identified as a major program subject to audit. Cause: Internal controls were not sufficiently designed to ensure that reimbursement requests submitted to federal granting agencies were evaluated and incorporated into the revenue recognition and SEFA preparation process. Specifically, while cash received in advance was properly recorded as refundable advances, management did not have a control in place to identify reimbursable expenditures incurred prior to year-end and convert refundable advances to contribution revenue and federal expenditures in the appropriate fiscal period. Effect: Failure to recognize reimbursable grant revenue and federal expenditures in the proper fiscal year resulted in the understatement of contribution revenue and federal expenditures, including amounts reported on the SEFA, prior to audit adjustments. This condition affected the determination of major programs and increased the risk that federal awards may not be accurately reported for audit purposes. Questioned Costs: None. Recommendation: We recommend that management strengthen internal controls over cost-reimbursement grant accounting by implementing procedures to ensure that reimbursable expenditures are identified, reviewed, and recorded in the appropriate fiscal year. This should include reconciliation of reimbursement requests, refundable advances, recorded revenue, and amounts reported on the SEFA, along with documented supervisory review of year-end cutoff procedures. Views of Responsible Officials: Management acknowledges the above finding and will continue to enhance its year-end grant review and reconciliation procedures. During the year ended June 30, 2025, management implemented enhanced grant accounting practices, including engaging an outsourced accounting firm. Management also clarified roles and responsibilities related to federal reporting requirements and implemented additional oversight and training. Management remains committed to the ongoing improvement of internal controls over federal grant reporting and compliance.