Findings Citing § 200.510

Finding 2024-001: 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: 2024 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, 2024 excluded $2,385,715 in expenditures incurred from 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 eligible expenditures being omitted. Effect: Not in compliance with the Uniform Guidance (2 CFR 200.510b). There could be impacts on future funding. Context: As a result of the omission of eligible expenditures, total federal awards for ALN 97.075, Rail and Transit Security Grant Program, were understated by $2,385,715 due to the exclusion of expenditures. This understatement caused the major program determination to be improperly calculated and resulted in a missed major program. Question Costs: None Repeat Finding: No Recommendation: We recommend that the Organization 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, Management will implement a verification checklist as required supporting documentation for all funding source reclassification journal entries and vouchers, 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 yearend 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 21.027, Department of the Treasury, COVID 19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year SLFRP 0127 2024 Pass through Entity EHDMMWJY1735 Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per 2 CFR 200.510(2), for Federal awards received as a subrecipient, the name of the pass through entity and identifying number assigned by the pass through entity must be included. Condition The City did not report federal expenditures as pass through on the orginial issuance of the June 30, 2024 single audit report. 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 $723,526 of federal expenditures orginally reported as direct should have been classified as pass through expenditures. Cause and Effect The City did not have a control to ensure the pass through awards were properly identified on the Schedule of Expenditures of Federal Awards. As a result, the original report was incorrect and $723,526 were reclassified from direct awards to pass through awards in the reissued report. Recommendation We recommend that an internal process be put in place to track awards that are pass through. Views of Responsible Officials and Planned Corrective Actions The City will ensure that all future awards under this program are in compliance and separately reported on the Schedule of Expenditures of Federal Awards. All pass-through expenditures will be reconciled to ensure accuracy going forward.

Assistance Listing, Federal Agency, and Program Name ALN 21.027, Department of the Treasury, COVID 19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year SLFRP 0127 2024 Pass through Entity EHDMMWJY1735 Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per 2 CFR 200.510, 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 200.502(a)(1), expenditure/expense transactions associated with grants, cooperative agreements, cost reimbursement contracts under the FAR, compacts with Indian Tribes, and direct appropriations are included. Condition The City did not report certain federal expenditures on the Schedule of Expenditures of Federal Awards (SEFA). 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 City is utilizing several sources of funding to improve their utility systems. The amount expended was not orginally classified as a federal expenditure for the year ended June 30, 2024, and therefore was not included on the SEFA. However, it should have been reported as an expenditure of ARPA funds. Cause and Effect The City did not have a control to place to properly identifiy expenditures of federal awards on the SEFA. As a result, the orginal expenditures for APRA were understated by $1,180,649. Recommendation We recommend that the City review award agreements and track expenditures associated with awards for proper inclusion on SEFA. Views of Responsible Officials and Planned Corrective Actions The City will ensure that all future expenditures are tracked and reported to the proper periods and recorded appropriately.

Federal Program(s): SEFA Reporting (all programs) Compliance Area: Reporting (SEFA completeness and accuracy) Type of Finding: Material Weakness in Internal Control over Financial Reporting and Compliance Criteria 2 CFR §200.510(b) requires the auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) that includes the total federal awards expended for the period, identified by federal agency, pass-through entity (as applicable), assistance listing number (ALN), and other required elements. 2 CFR §200.303 requires the auditee to establish and maintain effective internal controls over federal awards to provide reasonable assurance of compliance with statutes, regulations, and the terms and conditions of federal awards. Under GAGAS and Uniform Guidance, internal controls should ensure that federal expenditures are properly accumulated, reconciled, reviewed, and reported in the SEFA. Condition Our audit of the SEFA for the year ended June 30, 2024, federal expenditures totaling approximately $6,048,485 were omitted from the SEFA initially prepared by management. The omitted amount represented approximately 54% of total federal expenditures for the year and included activity under the CoronaVirus Capital Project Fund, ALN 21.029. The SEFA was subsequently adjusted to include these expenditures. Our audit of the SEFA for the year ended June 30, 2024, federal expenditures totaling approximately $2,786,421 were omitted from the SEFA initially prepared by management. The omitted amount represented approximately 55% of total federal expenditures for the year and included activity under the CoronaVirus State and Local Fiscal Recovery Program, ALN 21.027. The SEFA was subsequently adjusted to include these expenditures. Cause The entity’s SEFA preparation process did not include sufficient procedures to ensure completeness. Specifically: • The SEFA was prepared using incomplete grant tracking reports that were not reconciled to the general ledger and grant agreements. • There was no formal secondary review by personnel independent of the preparer. • Subrecipient and pass-through activity (as applicable) was not fully captured in the SEFA compilation. Effect The omission resulted in an initially materially misstated SEFA and noncompliance with SEFA reporting requirements under 2 CFR §200.510(b). The deficiency required significant auditor proposed adjustments to correct the SEFA. This control deficiency constitutes a material weakness because it indicates that the entity’s internal controls over SEFA preparation were not effective to prevent or detect a material misstatement on a timely basis. In addition, the incomplete SEFA could lead to inaccurate reporting to oversight agencies and may affect risk assessments for program compliance. Questioned Costs None. (Reporting finding only; no direct noncompliant costs identified. Perspective Information This issue reflects a systemic control deficiency affecting the SEFA as a whole rather than a single program. The magnitude of the omitted expenditures indicates a pervasive weakness in reporting controls. Identification as a Material Weakness We consider this deficiency a material weakness in internal control over financial reporting and compliance related to SEFA preparation because it resulted in a material misstatement of the SEFA and required significant auditor intervention to correct. Recommendation 1. Comprehensive Reconciliation: Reconcile federal grant activity (drawdowns, expenditures, indirect costs) to the general ledger, grant agreements, and agency/portal records. 2. Program Inventory & Certifications: Maintain a centralized inventory of all federal awards (by ALN, pass-through, award number) with program manager certifications of completeness at year-end. 3. Formal Review Workflow: Establish a documented secondary review by finance leadership independent of the preparer, with checklists covering ALNs, pass-throughs, subrecipient disclosures, notes to SEFA, and indirect cost treatment. 4. Subrecipient & Pass-Through Controls: Implement procedures to capture and verify all subrecipient amounts, pass-through activity, and required subrecipient disclosures on the SEFA. 5. Close Calendar & Training: Adopt an annual SEFA close calendar with milestones and provide training on Uniform Guidance reporting requirements to staff involved in SEFA compilation and review. Views of Responsible Officials and Planned Corrective Action (2 CFR §200.511(c)) Management Response: Management agrees with the finding. The omission resulted from incomplete reconciliation of grant activity and insufficient review controls.

Late Submission of the Single Audit Reporting Package/Preparation of the Schedule of Expenditures of Federal Awards Material Weakness/Non-compliance ALN: All programs Condition The organization did not complete and submit the single audit reporting package to the federal audit clearinghouse within the required timeframe and did not prepare a Schedule of Expenditures of Federal Awards (SEFA). Criteria In accordance with 2 CFR §200.512(a)(1) and §200.512(a)(2), a non-federal entity that expends $750,000 or more in federal awards during a fiscal year is required to submit the Single Audit reporting package to the Federal Audit Clearinghouse (FAC) no later than the earlier of 30 calendar days after receipt of the auditor’s reports or nine months after the end of the audit period. In addition, in accordance with 2 CFR §200.510(b), a SEFA must also be prepared. Cause This condition primarily resulted from the Organization’s limited prior experience with federal awards and the related Single Audit requirements, including preparation of the SEFA and submission of the reporting package to the Federal Audit Clearinghouse. Additionally, the Organization was not initially aware that certain grant funds received were federal in nature, which contributed to delays in identifying applicable reporting requirements. Effect or Potential Effect Failure to prepare a SEFA and submit the Single Audit reporting package timely may result in increased oversight by federal awarding agencies or pass-through entities and may affect the organization’s compliance status that could ultimately lead to loss of federal grant funding. Questioned Costs No questioned costs. Repeat finding This is not a repeat finding. Recommendation We recommend the Organization implement internal controls to monitor and reconcile federal grant awards for preparation of a complete and accurate SEFA within the requirements of 2 CFR §200.510(b). Additionally, we recommend the Organization evaluate federal grants during the yearend close process to ensure if single audit thresholds are met (federal expenditures in excess of $750,00 through June 30, 2025 and $1 million subsequent) a single audit is performed and submitted within regulation deadlines. Management’s Response We agree with auditors finding and have implemented internal controls to track the expenditures of federal awards to ensure the SEFA is prepare correctly and future single audits are conducted timely and submissions of the single audit reporting package are done within the required timeframe under Uniform Guidance.

Finding Reference: 2024-004 – Other finding – SEFA Preparation Federal Program Information Federal Agencies: Department of Treasury Awards: Assistance Listing 21.027 – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award Periods: July 1, 2023 – December 31, 2026 Description: Preparation of Schedule of Expenditures of Federal Awards Criteria The Uniform Guidance 2 CFR section 200.303 states, “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” The Uniform Guidance 2 CFR section 200.510 states, “(b) Schedule of expenditures of Federal awards. The auditee must also prepare the Schedule 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 Basis for determining Federal awards expended.” Condition The Corporation did not have appropriately designed internal controls in place to determine the correct amount of federal expenditures to be included on the Schedule. The Corporation omitted the expenditures related to the Assistance Listing Number 21.027 – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds as well as expenditures related to seven other assistance listing numbers. Cause The Corporation did not design internal controls to completely and accurately report expenditures within the Schedule. Effect or potential effect The Schedule prepared by the Corporation was misstated but was subsequently corrected. A misstated Schedule could result in the improper selection of federal award major programs or an incorrect percentage of coverage being calculated resulting in a restatement of a previously issued Uniform Guidance report. Questioned costs None. Identification of a repeat finding This is a repeat finding of Finding 2023-002. Context Expenditures for Assistance Listing 21.027 of approximately $339,000 were excluded from the Schedule. In addition, expenditures totaling approximately $261,000 for seven other assistance listing numbers were also excluded from the Schedule. Recommendation The Corporation should update its policies and procedures and internal controls to ensure accurate reporting of the Schedule as required by the Uniform Guidance. View of responsible officials There is no disagreement with the audit finding.

State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Health and Human Services (USDHHS) Program Name: Temporary Assistance for Needy Families, Child Care and Development Fund (CCDF) Cluster ALN and Program Expenditures: 93.558 ($583,126,272), 93.575/93.596 ($747,612,292) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: Cannot be determined Compliance Requirement: Activities Allowed/Unallowed, Allowable Costs/Cost Principles Finding 2024-006: Inadequate Process for Monitoring Interagency Program Expenditures Condition Found: IDHS does not have an adequate process for monitoring interagency expenditures claimed under or used to meet maintenance of effort (MOE) requirements of the Temporary Assistance for Needy Families (TANF) and CCDF Cluster (CCDF) programs. Federal and State expenditures under the TANF and CCDF Cluster programs are comprised of programs operated by various State agencies. As the State agency responsible for administering these programs, IDHS has executed interagency agreements with each of the State agencies expending federal and/or State program funds. The interagency agreements require periodic reporting of a summary of the agency’s “allowable” expenditures to IDHS for preparation of the financial reports required for each program. As the State agencies expending program funds do not determine under which program IDHS reports their expenditures, IDHS is responsible for establishing procedures to ensure the expenditures reported by the expending State agencies meet the specific requirements applicable to the federal program. During the year ended June 30, 2024, IDHS reported expenditures from other agencies that were claimed for reimbursement or used to meet MOE requirements as follows: "See Table in the Audit Report" IDHS’ procedures to monitor other State agencies expending program funds reported by IDHS include the following: • Interagency agreements were reviewed and updated (where necessary) to include all State programs claimed under or used to meet MOE requirements of the TANF and CCDF Cluster programs in its interagency agreement. • Program questionnaires were updated where necessary and distributed to each of the State agencies to assist in documenting the nature of the expenditures provided to IDHS and the internal controls established to ensure compliance with the applicable federal regulations. • Quarterly certification reports were collected from each of the State agencies to support amounts reported in the federal reports required for each federal program. • Expenditure details were obtained from each of the State agencies and were reconciled to the quarterly certifications. However, during our test work over the documentation of the monitoring procedures discussed above, we noted the following deficiencies: • Program questionnaires describing internal control procedures for the CCDF program were not obtained by IDHS from the Illinois Student Assistance Commission, Illinois Board of Higher Education, and Illinois Community College Board. Rather, a more limited questionnaire was obtained in the State's Grant Accountability and Transparency Act (GATA) Audit Report Review Management System (ARRMS) which is used to complete risk assessments procedures for the State’s subrecipients. • Quarterly certification reports were not prepared during the period for the CCDF program by the Illinois Student Assistance Commission, Illinois Board of Higher Education, and Illinois Community College Board. IDHS did not perform a detailed review of costs claimed from expenditures reported by any of the other State agencies to ensure they met the specific program requirements. The other State agencies do not necessarily know which federal program or maintenance of effort requirement the costs they are providing to IDHS will be claimed or used and are not able to assess whether the costs are allowable. Further, IDHS did not assess whether the expenditures reported by other State agencies were paid during State fiscal year 2024 to ensure the amounts reported to the Illinois Office of Comptroller (IOC) and used to prepare the schedule of expenditures of federal awards (SEFA) were cash basis expenditures. • During our detailed testing over CCDF funds expended by the Illinois Student Assistance Commission and Illinois Community College Board, we noted the amounts passed through to ISAC that were initially reported on the final expenditure questionnaire received for audit did not reconcile to the amount of expenditures on a cash basis for SEFA reporting. Further, we noted the amounts were reported as subrecipient expenditures, however, ultimately were reclassified as beneficiary payments, resulting in a SEFA error. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statement which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to subrecipients from each Federal program. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the SEFA and to other State agencies, where applicable. Cause: In discussing these conditions with IDHS officials, management stated the current monitoring process was not adequate to ensure interagency expenditures and MOE of federal monies from other State agencies met applicable program regulations as they relate to TANF and CCDF. Possible Asserted Effect: Failure to properly monitor interagency expenditures may result in claiming of expenditures that are inconsistent with the objectives of the federal program and federal funds being expended for unallowable purposes. Repeat Finding: A similar finding was reported in the prior year audit as finding number 2023-017. (Finding Code 2024-006, 2023-017) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS review its current process for identifying and reporting interagency expenditures and implement monitoring procedures to ensure that federal and state expenditures expended by other State agencies meet the applicable program regulations. Views of IDHS Officials: IDHS accepts the recommendation. IDHS will establish additional controls to ensure expenditures related to federal grants (including those made by other agencies and those made to subrecipients) are accurately reported. IDHS will implement additional monitoring procedures over interagency expenditures to include sampling and review of supporting documentation to ensure the expenditures meet federal program requirements.

State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Health and Human Services (USDHHS) Program Name: Supplemental Nutrition Assistance Program Cluster, Special Supplemental Nutrition Program for Women, Infants, and Children, Food Distribution Cluster, Rehabilitation Services – Vocational Rehabilitation, Temporary Assistance for Needy Families Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse, Disability Insurance/SSI Cluster ALN and Program Expenditures: 10.551/10.561 ($4,687,993,367), 10.557 ($181,526,312), 10.565/10.568/10.569 ($67,875,839), 84.126A ($138,992,957), 93.558 ($583,126,272), 93.575/93.596 ($747,612,292), 93.667 ($55,634,435), 93.959 ($114,897,412), 96.001/96.006 ($75,260,007) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Compliance Requirement: None Finding 2024-014: Inaccurate Reporting of Federal Expenditures Condition Found: IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under the Supplemental Nutrition Assistance (SNAP) Cluster, Supplemental Nutrition for Women, Infants, and Children (WIC) programs, Food Distribution Cluster (FDC), Vocational Rehabilitation (VR), Temporary Assistance for Needy Families (TANF), Child Care Development Funds (CCDF) Cluster, Social Services Block Grants (SSBG), Block Grants for Prevention and Treatment of Substance Abuse (SAPT), and Disability Insurance/SSI (SSDI) Cluster.Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program for the year ended June 30, 2024: "See Table in the Audit Report" The following differences were also identified relative to amounts provided to subrecipients for the following major programs: "See Table in the Audit Report" Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2024, were erroneously reported as cash basis expenditures for the year ended June 30, 2024: "See Table in the Audit Report" We also noted the interagency expenditures provided by IDHS for our audit procedures included out of period expenditures. These same amounts were reported to the IOC and were used to prepare the SEFA. Specifically, we noted TANF Emergency Assistance (EA) payments which were claimed in fiscal year 2024 but reported in fiscal year 2023 totaling $14,275,633, and we noted EA payments which were claimed in fiscal year 2025 but were reported in fiscal year 2024 totaling $14,742,262. The net impact is an overstatement of TANF expenditures of $466,629 for the year ended June 30, 2024. Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statement which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to subrecipients from each Federal program. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the SEFA and to other State agencies, where applicable. Cause: In discussing these conditions with IDHS officials, management stated that the differences in the amounts of federal expenditures in IDHS’ records compared to the IDHS SEFA were due to inclusion of accrued expenditures in IDHS’ records and some slight differences related to vouchers in transit at the end of the fiscal year. Differences in the amounts passed through to subrecipients were also related to vouchers in transit at the end of the fiscal year, and IDHS’ records for one federal grant program did not initially include non-cash expenditures which had been included on the IDHS SEFA. Possible Asserted Effect: Failure to accurately report federal expenditures hinders the completion of an audit in accordance with the Uniform Guidance which may result in the suspension of federal fund Repeat Finding: A similar finding was reported in the prior year audit as finding number 2023-012. (Finding Code 2024-014, 2023-012, 2022-010) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC. Views of IDHS Officials: The Department accepts the recommendation. IDHS will establish additional procedures to ensure federal expenditures (including subrecipient expenditures) are accurately reported.

State Agency: Illinois Student Assistance Commission (ISAC) Federal Agency: U.S. Department of Health and Human Services (USDHHS) Program Name: Child Care and Development Fund (CCDF) Cluster ALN and Program Expenditures: 93.575/93.596 ($747,612,292) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Compliance Requirement: None Finding 2024-028: Inaccurate Reporting of Federal Expenditures Condition Found: ISAC did not accurately report Federal expenditures, including amounts passed-through to subrecipients, under the CCDF Cluster. Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA), did not agree to ISAC’s financial records provided for audit. Specifically, we noted the following differences between amounts provided for audit by ISAC and the amounts passed through to subrecipients of the CCDF Cluster program reported to the IOC for the SEFA for the year ended June 30, 2024: "See Table in the Audit Report" Finally, we noted ISAC’s controls over reporting federal expenditures, including amounts passed-through to subrecipients, were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to subrecipients from each Federal program.Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures, including amounts passed-through to subrecipients, are accurately reported on the SEFA and to other State agencies, where applicable. Cause: In discussing these conditions with ISAC management, they stated they presented these beneficiary payments as amounts passed through to subrecipients in accordance with guidance provided by parties responsible for the State’s financial reporting process. Possible Asserted Effect: Failure to accurately report federal expenditures impedes the completion of an audit in accordance with the Uniform Guidance which may result in the suspension of federal funding. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2024-028) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend ISAC establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC. Views of ISAC Officials: ISAC accepts the finding. During the year ended June 30, 2024, payments totaling $79,103,694 were made to educational institutions for the direct benefit of eligible beneficiaries, as reflected in ISAC’s internal accounting records for the same fiscal year. ISAC believes federal expenditures were appropriately made to beneficiaries who were determined to have qualified under the program and that the amount of the total expenditures was correct. The classification of these amounts on the SEFA for the year ended June 30, 2024, was done using the same methodology applied in the prior fiscal year based on reporting guidance received for that fiscal year. ISAC maintained the established reporting framework, in preparing the SEFA for the fiscal year ended June 30, 2024. ISAC agrees that the amounts should not have been reported as payments to subrecipients on the SEFA for the fiscal year ended June 30, 2024. ISAC continues to maintain adequate internal controls designed to ensure federal expenditures are accurately recorded in its accounting records and are properly presented in accordance with the applicable guidance within 2 CFR 200.

State Agency: Illinois Department of Employment Security (IDES) Federal Agency: U.S. Department of Labor (USDOL) Program Name: Unemployment Insurance Program ALN and Program Expenditures: 17.225 ($2,329,354,603) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Compliance Requirement: None Finding 2024-033: Inaccurate Reporting of Federal Expenditures Condition Found: IDES did not accurately report Federal expenditures under the Unemployment Insurance (UI) program. Federal expenditures reported to the Illinois Office of Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did not agree to IDES’s financial records provided for audit. Specifically, we noted the following difference between amounts provided for audit by IDES and the SEFA amounts reported to the IOC for the Unemployment Insurance program for the year ended June 30, 2024: "See Table in the Audit Report" Finally, we noted IDES’s controls over reporting federal expenditures were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 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 compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the SEFA. Cause: In discussing these conditions with IDES officials, they stated the cause of the difference was the result of a large audit adjustment related to return of debit cards from a third party bank who sopped serving the program in December 2021. Possible Asserted Effect: Failure to accurately report federal expenditures inhibits the completion of an audit in accordance with the Uniform Guidance which may result in the suspension of federal funding. Repeat Finding: A similar finding was reported in prior year audit as finding number 2023-042. (Finding Code 2024-033, 2023-042) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDES establish procedures to accurately report federal expenditure used to prepare the SEFA to the IOC. Views of IDES Officials: The Agency accepts the recommendation and will adjust for returned debit cards in accordance with the final resolution determined in consultation with the Comptroller and financial statement auditors for State fiscal year 2024 if this situation should arise again.

Finding 2024-001: Preparation of the Schedule of Expenditures of Federal Awards – Significant Deficiency in Internal Control Over Compliance Federal Program: Medicaid cluster (Assistance Listing No. 93.778) Federal Agency: U.S. Department of Health and Human Services Award Year: 2023-2024 Criteria: The Uniform Guidance (2 CFR 200) Section200.303(a) states that the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. In addition, 2 CFR 200.510 requires an auditee to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements that, at a minimum, lists all individual Federal programs by Federal agency and provides total Federal awards expended for each individual Federal program. In accordance with the Uniform Guidance, the Organization is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition / Context: During audit procedures over expenditures of federal awards for the year ended June 30, 2025, we noted that California Advancing & Innovating Medi-Cal Providing Access and Transforming Health Initiative: Capacity and Infrastructure Transition, Expansion, and Development (PATH CITED) grant Federal funding in the amount of $2,692,789 was not included in the SEFA for the year ended June 30, 2024. The Organization did not have sufficient controls to ensure the SEFA included all expenditures that qualified as an expenditure of a federal award during the period. Cause and Effect: At the time the PATH CITED program was implemented and expenditures were incurred during fiscal year 2023, the grant agreements and publicly available documentation from the California Department of Health Care Services (DHCS) did not identify the funding as federal passthrough assistance and did not include the related Assistance Listing Number or other federal award identification elements typically required under Uniform Guidance. Based on the information available at that time, the Organization did not identify the PATH CITED program as federal funding subject to SEFA reporting requirements and reasonably treated the funding as non-federal. As a result, total expenditures of Federal awards were understated for the year ended June 30, 2024 by $2,692,789. During audit procedures over expenditures of federal awards for the year ended June 30, 2025, DHCS provided the Organization’s management with information that the PATH CITED program expenditures contained Federal awards. Management has restated the 2024 SEFA to include $2,692,789 PATH CITED expenditures for the year ended June 30, 2024. Questioned costs: $0 Repeat Finding: Yes, Finding Number 2023-001. Recommendation: We recommend management strengthen existing policies and procedures and improve the effectiveness of related internal controls to confirm existence of federal assistance within all contracts, and strengthen the existing periodic review throughout the year to ensure compliance with SEFA reporting requirements as outlined in the Uniform Guidance. Views of Responsible Officials and Planned Corrective Action: Management acknowledges the omission of PATH CITED expenditures from the SEFA for the year ended June 30, 2024. Management notes that the federal nature of the PATH CITED program was not identified in the original grant documentation or publicly available information provided by DHCS at the time the funding was awarded. Upon confirmation in 2025 that the program includes federal pass-through funding, the Organization worked to restate the SEFA and include the appropriate federal expenditures.

Finding 2024-002: Preparation of the Schedule of Expenditures of Federal Awards (SEFA) Condition At the beginning of the audit, Home Start, Inc. did not provide a properly completed Schedule of Expenditures of Federal Awards (SEFA). Certain programs administered by the Organization were funded through a combination of federal and non-federal sources. The Organization had not identified the portion of expenditures attributable to federal awards prior to the commencement of audit fieldwork. As a result, the identification of federal expenditures and the amounts to be included in the SEFA occurred during the audit process rather than prior to the start of the audit. This resulted in delays in determining the complete population of federal expenditures and the programs subject to audit under the Uniform Guidance. Criteria Under 2 CFR §200.510(b) of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), auditees are responsible for preparing a Schedule of Expenditures of Federal Awards for the period covered by the financial statements. The SEFA must accurately present total federal expenditures for each federal program, including the Assistance Listing number and pass-through identifying information, where applicable. Cause The Organization does not have a formalized process to identify and track the federal portion of expenditures for programs funded through multiple sources during the fiscal year. As a result, management had not compiled or finalized the SEFA prior to the start of the audit. Effect The absence of a completed SEFA at the commencement of the audit delayed the auditor’s ability to determine the population of federal expenditures and identify major programs for testing under the Uniform Guidance. This resulted in additional time required during fieldwork to determine the appropriate amounts to include in the SEFA. Recommendation We recommend that management implement procedures to identify and track federal expenditures by Assistance Listing number throughout the year, particularly for programs with mixed funding sources. Management should prepare and review a complete and accurate SEFA prior to the start of the audit, including identification of federal funding components within blended funding streams. Establishing formal procedures for the preparation and review of the SEFA will help ensure compliance with 2 CFR §200.510(b) and support timely completion of the annual Single Audit.

Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards (SEFA)) ALN: 93.866, Aging Research: The Role of Methylation-Sensitive PP2A Isoforms in Regulating the Pathological Response to Tau ALN: 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Fund, American Rescue Plan Act (ARPA) Criteria: The Code of Federal Regulations (CFR) Section 200.510(b) states in part: The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section 200.502 Basis for determining Federal awards expended. The schedule must provide total Federal awards expended for each individual Federal program. CFR 200.302(b)(1) requires the nonfederal entity to identify in its accounts and on the schedule of expenditures of federal awards all federal awards received and expended, as well as the federal programs under which they were received. Federal program and award identification must include, as applicable, the Assistance Listing program title and number, the federal award identification number and year, the name of the federal agency, and the name of the pass-through entity, if any. Condition: The Role of Methylation-Sensitive PP2A Isoforms in Regulating the Pathological Response to Tau grant included amounts that were not Federal expenditures. Investigating the Role of Long-Term Latent Herpes Simplex Virus Infection on APOE4-Associated Alzheimer’s Disease Pathogenesis Grant and COVID-19 Coronavirus State and Local Fiscal Recovery Fund, American Rescue Plan Act (ARPA) grant were left off the prepared SEFA. Context: The SEFA was understated or overstated by ALN as follows: • Overstated by $12,757 for The Role of Methylation-Sensitive PPA Isoforms in Regulating the Pathological Response to Tau grant; and • Understated by $150,000 for the omission of COVID-19 Coronavirus State and Local Fiscal Recovery Fund, American Rescue Plan Act (ARPA) grant. Effect: The SEFA provided was not complete and accurate. Questioned Costs: None. Cause: The overstated grant amount of $12,757 was a misinterpretation of contract costs being included as Federal Expenditures after the grant had ended. The omission of $150,000 was a misinterpretation of the Federal source of the grant. Recommendation: We recommend McLaughlin Research Institute for Biomedical Sciences, Inc. strengthen internal controls over the preparation of the SEFA by having staff familiar with the federal funds review the prepared SEFA for completeness and accuracy prior to providing it to the auditor.

2024-006 - Preparation of the Schedule of Expenditures of Federal Awards Finding Type: Material weakness in internal control over compliance. Criteria: The Uniform Guidance (2 CFR 200.302 and 2 CFR 200.510(b)) requires that non-Federal entities maintain records that adequately identify the source and application of Federal awards and prepare a Schedule of Expenditures of Federal Awards (SEFA) that is complete and accurate. Condition: The City did not prepare a Schedule of Expenditures of Federal Awards (SEFA) for the fiscal year ended June 30, 2024. A complete and accurate SEFA was prepared by the external auditor during the audit process. Cause: This condition is the result of the City’s lack of procedures and internal controls to identify, track, and report Federal award activity necessary to prepare the SEFA. Effect: As a result of this condition, the City did not maintain adequate internal control over compliance related to Federal reporting requirements and was not able to ensure that all Federal expenditures were identified and reported in accordance with Uniform Guidance. Recommendation: The City should implement procedures to identify and track Federal awards and expenditures and prepare a complete and accurate SEFA in accordance with Uniform Guidance requirements. Management Response: See Corrective Action Plan.

Finding 2024-002 – Untimely and Inaccurate Preparation of the Schedule of Federal Awards (SEFA) (Sig-nificant Deficiency) Financial Reporting / Internal Control Over Compliance CFDA Title and Number: 97.036 Public Assistance Program – Disaster Grants Name of Federal Agency: Federal Emergency Management Agency (FEMA Internal Control over Compliance: Skills Knowledge and Education (SK&E) CFDA Title and Number: 66.202 Wastewater Treatment Plant Name of Federal Agency: U. S. Environmental Protection Agency Internal Control over Compliance: Skills Knowledge and Education (SK&E) Criteria: The Uniform Guidance (2 CFR §200.510(b)), requires the auditee to prepare a Schedule of Federal Ex-penditures of Federal Awards (SEFA) that accurately reports federal expenditures for each federal award, including the Assistance Listing number, federal agency, pass-through entity (if any), and amount expended for the fiscal year. In addition, (2 CFR §200.302(b)), requires financial management systems that provide for accurate, current, and complete disclosure of federal award expenditures and support reliable financial reporting and reconciled to the general ledger. Condition: The auditee did not timely or accurately prepare the Schedule of Expenditures of Federal Awards. Specifically: • The initial SEFA provided to auditors was significantly later than the requested date, and required signifi-cant auditor inquiry and assistance to complete. • Management did not demonstrate an understanding of the dates and amounts of federal expenditures to be reported on the SEFA. • The SEFA provided to auditors did not include all federal awards. • Required Assistance Listing numbers were not included for federal programs. • The format of the SEFA was not easily reconcilable to the general ledger, and required auditor-identified corrections and adjustments in order to fairly present federal expenditures in accordance with federal re-quirements. Cause: The condition resulted from: • An insufficient understanding of SEFA preparation requirements, including which expenditures to report and how federal awards should be presented; and • Inadequate internal controls over the preparation, review, and reconciliation of the SEFA to the accounting records. Effect or Potential Effect: As a result of these conditions: • There was an increased risk that federal expenditures were incomplete, inaccurate, or improperly reported. • Management’s ability to determine total federal expenditures, for the fiscal year, including evaluation of Single Audit applicability, was impaired. • The entity relied on auditor assistance to identify omitted awards, reconcile amounts and bring the SEFA into compliance with federal reporting requirements, indicating a lack of effective internal controls over federal financial reporting. Questioned Cost: None noted here. Repeat of a Prior-Year Finding: No Recommendation: We recommend the entity strengthen its internal controls over federal financial reporting by: • Developing and documenting procedures for the timely preparation of the SEFA, including identification of all federal awards, correct Assistance Listing numbers, and determination of reportable expenditures. • Establish a process to reconcile the SEFA to the general ledger and to supporting records to ensure com-pleteness and accuracy. • Providing training to appropriate personnel regarding Uniform Guidance SEFA requirements and the de-termination of federal expenditures for reporting and audit threshold purposes. • Establish cutoff procedures to capture year-end accruals/deferred items and ensure completeness of ex-penditures for the SEFA. Views of Responsible Officials: Port of Brookings Harbor acknowledges this finding. Management recognizes that it did not fully understand SEFA reporting requirements. Management is committed to enhancing its under-standing of federal reporting requirements and strengthening internal controls to ensure future SEFA’s are prepared accurately, completely, and in a timely manner. Corrective Action Plan: _________________________ (To be developed by Port of Brookings Harbor and sub-mitted for final report) Planned Implementation Date: ________________ Responsible Persons: District Financial Management, Port of Brookings Harbor

FINDING REFERENCE NUMBER 2024-035 (See Finding Reference Number 2024-014) FEDERAL PROGRAM ALL FEDERAL PROGRAMS ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AWARD NUMBER ALL AWARDS COMPLIANCE REQUIREMENT REPORTING – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS TYPE OF FINDING INTERNAL CONTROL AND COMPLIANCE – MATERIAL WEAKNESS AND MATERIAL NONCOMPLIANCE CRITERIA 2 CFR §200.510 Financial Statements, (b) 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. At a minimum, the schedule must: (1) list individual Federal Programs by Federal agency, (2) for Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included, (3) provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available, (4) Include the total amount provided to subrecipients from each Federal program, (5) for loan or loan guarantee programs identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total Federal awards expended for loan or loan guarantee programs in the schedule. STATEMENT OF CONDITION During our audit procedures of the Schedule of Expenditures of Federal Awards (SEFA) prepared by the PRDF, we noted significant deficiencies related to the schedule preparation as follows: • The expenditures for some Federal programs were not accurately reported. To reconcile amounts in the SEFA with the audited financial accounts, the PRDF agree with the suggested auditor adjustments and posted them to the SEFA. • The PRDF Management does not have an adequate internal control system in place to quickly detect and accurately document the expenditures incurred under each Federal programs. This situation led to delays and errors in the preparation of the schedule and the amounts initially submitted for the SEFA. • The initial SEFA submitted for audit procedures contained the following deficiencies because of inadequate internal controls: o There are no safeguards in place to keep an accurate and comprehensive list of Notice of Agreements (NOAs). As a result, the different versions of the SEFA that were received contain incorrect and incomplete information. o Expenditures related to COVID-19 appropriations for different Federal programs were not separately disclosed in the SEFA. For ALN 14.231 the amount of $3,119,131.54 was not separately presented, in addition for ALN 93.671 the distribution between COVID and regular funds was incorrectly presented by $2,075,855.34. o For ALN 93.558 expenditures were included that do not correspond to the program as follows: a total amount of $20,364,480 of programs expenditures correspond to ALN 93.560 and a total amount of $9,140,245.62 corresponds to ALN 93.667. The incorrect presentation of these amounts could affect the correct identification of the programs as Type A and Type B for major program determination. o For ALN 93.671 a total amount of $712,602.44 were included as program expenditure but those expenditures correspond to ALN 93.497. o During the fiscal year, reimbursements of expenses incurred related to ALN 97.036 were received in the amount of $2,828,481.01; however, for the initial SEFA submitted, no validation was performed on the amount of expenses of those reimbursements that should be included in the schedule. After the validation is completed, all the amounts should be included in the schedule as expenditure. PERSPECTIVE INFORMATION This is a systemic deficiency. The PRDF was unable to provide an accurate Schedule of Expenditures of Federal Awards (SEFA), and related supporting documentation in order to apply required audit procedures. The PRDF is composed of five (5) Administrations that manage federal funds. The Office of Secretariat is responsible for coordinating the work of the administrations, but there are no established procedures for coordinating the collection of information when preparing the SEFA for audit purposes. STATEMENT OF CAUSE The PRDF does not have an adequate procedure established to collect, organize, and validate the information necessary for the preparation of the SEFA in accordance with Federal regulations. POSSIBLE ASSERTED EFFECT The PRDF may fail to include all Federal programs and total expenditures in the SEFA causing misstatements in the SEFA submitted to Auditors. It also leads to inaccurate Major Program Determination multiple times made by the auditors because of the different versions of the SEFA submitted, affecting the execution of the Single Audit in a reasonable time. IDENTIFICATION OF REPEAT FINDING This is a repeat of a finding reported in the prior audit as Finding Numbers 2023-019/2023-047. RECOMMENDATIONS We recommend the PRDF establish adequate procedures to coordinate the collection, organization, and validation of the required information to prepare the SEFA from each of the Administrations in a timely manner to ensure that all Federal programs/transactions are properly recorded and included in the schedule.

Inaccurate Grant Reporting (Material Weakness) Assistance Listing: 10.766 Federal Program: Community Facilities Loans and Grants Condition: During our audit, the City did not identify and report federal expenditures related to Community Facilities Loans and Grants (Assistance Listing 10.766) on the originally issued SEFA for the year ended June 30, 2024. As a result, the SEFA did not include the expenditures associated with Assistance Listing 10.766, which affected the completeness of the SEFA and the related major program determination. The underlying loan and loan activity were properly recorded and disclosed in the basic financial statements. The deficiency was limited to the identification and reporting of the federal award on the SEFA, which in turn affected major program determination for single-audit purposes. Criteria: In accordance with 2 CFR §200.510(b) and 2 CFR §200.518, the City is responsible for preparing a complete and accurate SEFA that includes all federal awards expended during the fiscal year, including loan programs, and for identifying federal programs and determining which programs are major for purposes of the Uniform Guidance single audit. Cause: Management’s SEFA preparation and review procedures were not sufficiently designed and/or operating effectively to: 1) identify all federal programs and Assistance Listings applicable to the City’s activities, including loan programs; and 2) ensure amounts recorded in the general ledger and related financial statement balances were appropriately evaluated for federal award classification and SEFA inclusion (including evaluating whether activity recorded as loans payable/receivable or related loan activity represented federal awards expended for SEFA reporting). Effect: The omission of Assistance Listing 10.766 from the originally issued SEFA caused: 1) total federal expenditures reported on the SEFA to be understated; and 2) an error in the identification and reporting of the City’s federal award activity, which could affect the auditor’s understanding of the City’s federal award universe and the overall major program risk assessment and determination under Uniform Guidance. Questioned Cost: None Repeat Finding: Yes Recommendation: We recommend that the City strengthen internal control over compliance related to SEFA preparation and Uniform Guidance single-audit reporting by implementing procedures to ensure all federal programs are identified and properly reported on the SEFA, including loan programs. Such procedures should include at a minimum: 1) maintaining a complete listing of all federal programs (by Assistance Listing, awarding agency/pass-through entity, and award/loan identifiers) applicable to the fiscal year; 2) performing a formal annual SEFA planning process that includes inquiry of finance and program personnel and review of grant/loan agreements and communications from federal/pass-through entities to identify all federal awards; 3) incorporating targeted procedures to identify federal loan programs and related expenditures/loan balances that must be included on the SEFA, including reconciliation of loan activity and balances to SEFA amounts and required SEFA disclosures; and 4) performing an independent review of the draft SEFA and the major program determination to confirm completeness and accuracy prior to issuance. Response: The City will strengthen internal controls over SEFA identification and preparation to ensure compliance with Uniform Guidance single-audit requirements. The City will also implement enhanced review and communication procedures with external auditors, as the condition was significantly impacted by deficiencies in the auditors’ evaluation and classification of major programs during the audit process.

Finding 2024-004 – Inadequate Schedule of Expenditures of Federal Awards (SEFA) (Material Weakness) Federal Program: 21.027 American Rescue Plan - ARPA Name of Federal Agency: U.S. Department of Treasury Compliance/Internal Control over Compliance: Auditee Responsibilities Criteria: CFR §200.508, CFR Part 200.510, requires that the auditee prepare a Schedule of Expenditures of Fed-eral Awards (SEFA) for the period covered by the entity’s financial statements. The SEFA must include, at a min-imum, the total Federal awards expended by Federal agency, pass-through entity, Assistance Listing (AL) number, and other required identifying information. The SEFA must be complete, accurate, and reconcile to the underlying accounting records. Condition: During the audit, we noted that the SEFA prepared by the organization was incomplete, and inaccu-rate. Specifically, federal revenue amounts were shown instead of expenditures, and not all Federal awards were listed and amounts shown were not reconciled to the underlying accounting records. In addition, Grant funds were drawn (requested and received) for the same underlying expenditures in two different fiscal years, resulting in du-plicate reimbursement. Cause: The inaccuracies appear to be due to inadequate procedures and controls over the identification, tracking, and reporting of federal awards. Management did not implement a formal process to compile and review SEFA information for completeness and accuracy. Effect: An inaccurate or incomplete SEFA increases the risk of noncompliance with federal reporting requirements and may result in misreporting of major programs, affecting the audit process. It also increases the risk of missed audit coverage for major programs. Questioned Cost: None noted. Context: The auditee did not provide a complete and accurate SEFA that included all federal expenditures that reconciled to the general ledger for Federal Awards, and did not list all federal awards. Specifically: • Management did not initially provide a SEFA for the audit period, it was not provided until late in the au-dit process. • During the audit procedures, the auditor identified additional federal expenditures that were not provided by the client, and not included in the original SEFA. • The SEFA submitted by management contained material errors, including incorrect expenditures amounts (revenues instead of expenditures), and inconsistencies with the general ledger (grant revenues from prior year expenditures included as expenditures again). • The SEFA required multiple revisions and significant auditor assistance due to incomplete data and report-ing errors. This condition demonstrates that management did not have sufficient processes in place to identify, accumulate, and report federal expenditures, and did not provide accurate information for the SEFA preparation. Repeat of a Prior-Year Finding: No, prior year did not require a Single Audit. Recommendation: We recommend that The Town of Lakeview establish policies and procedures to ensure that all Federal awards are identified and reported accurately on the SEFA. Internal controls should be designed to pre-vent, detect, or correct errors in a timely manner by performing periodic reconciliations of the SEFA information to the general ledger throughout the fiscal year. The Town of Lakeview should provide appropriate training to staff who are assigned to prepare and review the SEFA. Client's Response: The Town of Lakeview concurs with the recommendation and will work through the Correc-tive Action Plan to improve or solve the deficiency. Corrective Action Plan: __________________To be developed by Town of Lakeview. Planned Implementation Date: In progress. Responsible Person: Town of Lakeview Mayor.

Finding 2024-002: Preparation of the Schedule of Expenditures of Federal Awards Material weakness/other matter noncompliance Federal Agency: U.S. Department of Education Pass-through Agency: Illinois State Board of Education Program Name: Education Stabilization Fund: COVID-19: American Rescue Plan - Elementary and Secondary School Emergency Relief ALN Number: 84.425 Award Number: 24-4998-E3 Award Year: 2024 Criteria: The Uniform Guidance (2 CFR 200.510b) requires that the auditee 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, 2024 excluded $2,592,649 in expenditures incurred for the Education Stabilization Fund: COVID-19: American Rescue Plan - Elementary and Secondary School Emergency Relief federal program (ALN 84.425U). Cause: The existing internal control procedures for reviewing amounts on the SEFA failed to detect an incorrect amount was reported for the program. While a process is in place, the final review failed to detect the error. Effect: The SEFA was materially misstated. Also, lack of a robust review process could result in misstatements in future years. Context: As a result of the omission of eligible expenditures, total federal awards and amounts for ALN 84.425, COVID-19: Education Stabilization Fund were understated by $2,592,649 due to the use of the cash draw amount instead of program expenditures. This understatement did not impact the major program determination. Question Costs: None Repeat Finding: No Recommendation: We recommend the District thoroughly review the schedule of expenditures of federal awards prior to issuance. Views of responsible officials: Management will review its year-end processes and its grant-related internal controls with a specific focus on accrual-basis auditing requirements to ensure that such errors do not occur in the future.

Finding No: 2024-101 Strengthen controls for capturing and reporting transactions on the SEFA State Agency: Oklahoma Department of Health Federal Agency: United States Department of Health and Human Services Assistance Listing Number: 10.557 Federal Program Name: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Federal Award Number: 6OK700505 Federal Award Year: 2023, 2024 Compliance Category: Reporting Questioned Costs: Unknown Criteria: The Schedule of Expenditures of Federal Awards (SEFA – GAAP Package Schedule Z) should be accurately captured, reconciled, and reviewed by the Oklahoma State Department of Health (the “Department”). Adequate documentation of procedures performed, as well as evidence of thorough reviews, should be in place. According to GAAP, expenditures should be recognized in the period services are performed or goods are received. In accordance with the modified accrual basis of accounting, federal grant revenues should be recognized when applicable eligibility requirements, including reimbursement, time requirements, and other eligibility requirements, are met and the resources are available. Revenues are considered available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. In accordance with the State of Oklahoma’s Annual Comprehensive Financial Report, the State considers revenues to be available if they are collected within sixty days of the end of the fiscal year. Lastly, the Uniform Guidance (2 CFR 200.510) requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statement [that] … at a minimum shall … list individual Federal programs by Federal agency … [and] provide total Federal awards expended for each individual Federal program … [and] include the total amount provided to subrecipients for each Federal program.” In accordance with Uniform Guidance, the Department is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Furthermore, the State of Oklahoma’s Schedule Z SEFA Conversion Package states, “The amount reported as provided by the primary recipient to state agencies should be entered in the ‘Amount Transferred to State Agencies’ column. This amount should be included in the Federal revenue but not in expense columns of the primary recipient.” The Government Accountability Office (GAO) Standards for Internal Control in the Federal Government 10.03 states, in part, “Management designs appropriate types of control activities for the entity’s internal control system. Control activities help management fulfill responsibilities and address identified risk responses in the internal control system.” Additionally, GAO Standards for Internal Control in the Federal Government 10.03 states, in part, “Transactions are promptly recorded to maintain their relevance and value to management in controlling operations and making decisions. This applies to the entire process or life cycle of a transaction or event from its initiation and authorization through its final classification in summary records. In addition, management designs control activities so that all transactions are completely and accurately recorded.” Condition: The Department was unable to provide support that recorded transactions agree to the federal revenues reported in Schedule Z. Cause and Effect: The Department does not have appropriate internal procedures for capturing and reporting the federal expenditures and revenues on the SEFA in accordance with the Uniform Guidance (2 CFR 200200.510). Revenues are recorded by the Department on a cash basis and deposits are not recorded in the general ledger (GL) with a unique identifier to indicate which fiscal year in which the matching expenditures reside. Also, batched cash deposits containing sources of revenues from differing fiscal years cannot be appropriately allocated to the year in which the revenue was earned. Batched deposits are recorded as a single GL transaction regardless of the year in which the related deposit was earned and contain revenues for which the related expenditures were recorded in differing fiscal years. As a result, the Department’s GL does not possess sufficient detail to accurately account for the required modified accrual basis conversions. The Department has not ensured that the transactional data recorded provides enough detail to accurately report the federal activity in Schedule Z. Recommendation: We recommend the Department review and document the current procedures and implement the necessary changes to ensure adequate reporting of program financial information in the SEFA. Specifically, we recommend the Department continue to review its cash reporting and decipher batch deposits by fiscal year, with a unique identifier recorded at the GL transaction level. Additionally, we recommend retaining evidence that adequate reviews of the SEFA occurred. We also recommend the Department establish procedures to timely reconcile federal revenues to its federal expenditures to ensure completeness of its related federal reporting. Views of Responsible Official(s) Contact Person: Ryon Fields, Interim CFO Anticipated Completion Date: 6/30/26 Management Response: The Oklahoma State Department of Health agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report.

FINDING NO: 2024-039 (Repeat 2023-056) Strengthen Internal Controls Over SEFA Reconciliations STATE AGENCY: State of Oklahoma and Office of Management and Enterprise Services (OMES) FEDERAL AGENCY: U.S. Department of the Treasury ALN: 21.027 FEDERAL PROGRAM NAME: Coronavirus State And Local Fiscal Recovery Funds (CSLFRF) FEDERAL AWARD NUMBER: N/A FEDERAL AWARD YEAR: 2024 CONTROL CATEGORY: Reporting QUESTIONED COSTS: $0 Condition and Context: The State of Oklahoma had twenty-two (22) state agencies report CSLFRF expenditures on the Schedule of Expenditures of Federal Awards (SEFA) for SFY 2024. The state created class fund 488 (ARPA Advance Grants) for administrative costs to run the grant, and class fund 497 (Statewide Recovery Fund) to facilitate the transfer of CSLFRF funds to agencies. Class fund 488 only applies to State of Oklahoma OMES - Grants Management Office (GMO) and class fund 497 applies to all agencies. For the thirteen (13) state agencies audited by the State Auditor’s Office, we noted the following SEFA exceptions: • Three agencies (055, 060, 585) did not include, but should have reported expenditures for, AL #21.027 CSLFRF on their SEFA • Five agencies (452, 670, 800, 830, 835) included AL #21.027 CSLFRF on their SEFA but did not accurately report their expenditures Based on testwork performed by the State Auditor’s Office on CSLFRF state agency SEFA expenditures for SFY 2024, we determined the state agencies reported $126,453,915 in modified accrual expenditures; and the correct SEFA total should have been $132,349,844. Further, when including outside audits of state agency CSLFRF funds, we determined total modified accrual federal expenditures reported were $174,998,951; however, the correct CSLFRF SEFA total for SFY 2024 should have been $180,894,880. Cause: The State of Oklahoma had no controls in place to ensure a SEFA was completed for each agency receiving CSLFRF funds. State agencies (055, 060, 452, 585, 670, 800, 830, 835) lacked adequate controls to ensure SEFA expenditures for AL #21.027 were reported correctly. State agencies (055, 060, 452, 585, 670, 800, 830) did not review the Summary of Receipts and Disbursements (SRD) report for class fund 497 (Statewide Recovery Fund) to ensure all federal expenditures were included on their SEFA. State agency (835) recorded cash transfers erroneously as expenditures. Cash transfers of $167,173,545 were erroneously recorded as total modified accrual expenditures on the SEFA. We were able to support $46,452,859 of actual expenditures incurred during the period; therefore, we determined this to only be a control deficiency. However, the agency did overstate their actual SEFA expenditures by $711,718 by recording expenditures in SFY 2024, that should have been recorded in the prior year. This overstatement was a part of the overall SEFA variance listed in the Effect below. Effect: The State of Oklahoma under-reported SEFA expenditures by $5,895,929 for SFY 2024. Recommendation: We recommend OMES ensure that state agencies strengthen controls over their SEFA process to ensure accurate reporting of CSLFRF expenditures, including a review of the SRD for class fund 497. Further, we recommend the State of Oklahoma review the SRD for class fund 497 for the agencies that transferred CSLFRF funds to ensure those with expenditures complete a SEFA. In addition, we recommend the State of Oklahoma reconcile state agency SEFAs to the SRD for class fund 497 to ensure expenditures are reported accurately. Lastly, for agency 835, we recommend all expenditures be recognized in the period the liability is incurred. Criteria: Per 2 CFR § 200.303, “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” 2 CFR § 200.502(a) states in part, “Determining Federal awards expended. The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs.” 2 CFR § 200.510(b) states in part, “Schedule of expenditures of Federal awards. 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. … (3) 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.” Management Response Contact Person: OMES: Elizabeth Base; 055: April Kowardy; 060: Chris Wadsworth; 452: Chad Carden; 585: Brittany Stroud; 670: Erik Paulson & Darrell Green; 800: Lisa Batchelder; 830: Lindsey Kanaly; 835: Jerri Hargis Anticipated Completion Date: Completed Corrective Action Planned: The Office of Management Enterprise Services – Grants Management Office agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report.

Finding No: 2024-102 (Repeat 2023-206) Strengthen controls for capturing and reporting transactions on the SEFA State Agency: Oklahoma Department of Health Federal Agency: United States Department of Health and Human Services Assistance Listing Number: 93.268 Federal Program Name: Immunizations Cooperative Agreements Federal Award Number: NH23IP922575-01-02, NH23IP922575-02-00, NH23IP922575-02-06, NH23IP922575- 03-00, NH23IP922575-04-00, NH23IP922575-05-06, NH23IP922575-05-13 Federal Award Year: 2021, 2022, 2023, 2024 Compliance Category: Reporting Questioned Costs: Unknown Criteria: The Schedule of Expenditures of Federal Awards (SEFA – GAAP Package Schedule Z) should be accurately captured, reconciled, and reviewed by the Oklahoma State Department of Health (the “Department”). Adequate documentation of procedures performed, as well as evidence of thorough reviews, should be in place. According to GAAP, expenditures should be recognized in the period services are performed or goods are received. In accordance with the modified accrual basis of accounting, federal grant revenues should be recognized when applicable eligibility requirements, including reimbursement, time requirements, and other eligibility requirements, are met and the resources are available. Revenues are considered available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. In accordance with the State of Oklahoma’s Annual Comprehensive Financial Report, the State considers revenues to be available if they are collected within sixty days of the end of the fiscal year. Lastly, the Uniform Guidance (2 CFR 200.510) requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statement [that] … at a minimum shall … list individual Federal programs by Federal agency … [and] provide total Federal awards expended for each individual Federal program … [and] include the total amount provided to subrecipients for each Federal program.” In accordance with Uniform Guidance, the Department is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Furthermore, the State of Oklahoma’s Schedule Z SEFA Conversion Package states, “The amount reported as provided by the primary recipient to state agencies should be entered in the ‘Amount Transferred to State Agencies’ column. This amount should be included in the Federal revenue but not in expense columns of the primary recipient.” The Government Accountability Office (GAO) Standards for Internal Control in the Federal Government 10.03 states, in part, “Management designs appropriate types of control activities for the entity’s internal control system. Control activities help management fulfill responsibilities and address identified risk responses in the internal control system.” Additionally, GAO Standards for Internal Control in the Federal Government 10.03 states, in part, “Transactions are promptly recorded to maintain their relevance and value to management in controlling operations and making decisions. This applies to the entire process or life cycle of a transaction or event from its initiation and authorization through its final classification in summary records. In addition, management designs control activities so that all transactions are completely and accurately recorded.” Condition: The Department was unable to provide support that record transactions agree to the federal revenues reported in Schedule Z. Cause and Effect: The Department does not have appropriate internal procedures for capturing and reporting the federal expenditures and revenues on the SEFA in accordance with the Uniform Guidance (2 CFR 200.510). Revenues are recorded by the department on a cash basis and deposits are not recorded in the general ledger (GL) with a unique identifier to indicate which fiscal year in which the matching expenditures reside. Also, batched cash deposits containing sources of revenues from differing fiscal years cannot be appropriately allocated to the year in which the revenue was earned. Batched deposits are recorded as a single GL transaction regardless of the year in which the related deposit was earned and contain revenues for which the related expenditures were recorded in differing fiscal years. As a result, the Department’s GL does not possess sufficient detail to accurately account for the required modified accrual basis conversions. The Department has not ensured that the transactional data recorded provides enough detail to accurately report the federal activity in Schedule Z. Recommendation: We recommend the Department review and document the current procedures and implement the necessary changes to ensure adequate reporting of program financial information in the SEFA. Specifically, we recommend the Department continue to review its cash reporting and decipher batch deposits by fiscal year, with a unique identifier recorded at the GL transaction level. Additionally, we recommend retaining evidence that adequate reviews of the SEFA occurred. We also recommend the Department establish procedures to timely reconcile federal revenues to its federal expenditures to ensure completeness of its related federal reporting. Views of Responsible Official(s) Contact Person: Ryon Fields, Interim CFO Anticipated Completion Date: 6/30/26 Management Response: The Oklahoma State Department of Health agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report.

Finding No: 2024-103 (Repeat 2023-207) Strengthen controls for capturing and reporting transactions on the SEFA State Agency: Oklahoma Department of Health Federal Agency: United States Department of Health and Human Services Assistance Listing Number: 93.323 Federal Program Name: Epidemiology and Laboratory Capacity for Infectious Diseases Federal Award Numbers: NU50CK000535-01-11, NU50CK000535-02-03, NU50CK000535-02-06, NU50CK000535-03-00, NU50CK000535-03-01, NU50CK000535-03-02, NU50CK000535-04-00, NU50CK000535-05-00, NU50CK000535-05-07, NU50CK000535-05-08, NU50CK000535-05-12 Federal Award Year: 2020, 2021, 2022, 2023, 2024 Compliance Category: Reporting Questioned Costs: Unknown Criteria: The Schedule of Expenditures of Federal Awards (SEFA – GAAP Package Schedule Z) should be accurately captured, reconciled, and reviewed by the Oklahoma State Department of Health (the “Department”). Adequate documentation of procedures performed, as well as evidence of thorough reviews, should be in place. According to GAAP, expenditures should be recognized in the period services are performed or goods are received. In accordance with the modified accrual basis of accounting, federal grant revenues should be recognized when applicable eligibility requirements, including reimbursement, time requirements, and other eligibility requirements, are met and the resources are available. Revenues are considered available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. In accordance with the State of Oklahoma’s Annual Comprehensive Financial Report, the State considers revenues to be available if they are collected within sixty days of the end of the fiscal year. Lastly, the Uniform Guidance (2 CFR 200.510) requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statement [that] … at a minimum shall … list individual Federal programs by Federal agency … [and] provide total Federal awards expended for each individual Federal program… [and] include the total amount provided to subrecipients for each Federal program” In accordance with Uniform Guidance, the Department is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Furthermore, the State of Oklahoma’s Schedule Z SEFA Conversion Package states, “The amount reported as provided by the primary recipient to state agencies should be entered in the ‘Amount Transferred to State Agencies’ column. This amount should be included in the Federal revenue but not in expense columns of the primary recipient.” The Government Accountability Office (GAO) Standards for Internal Control in the Federal Government 10.03 states, in part, “Management designs appropriate types of control activities for the entity’s internal control system. Control activities help management fulfill responsibilities and address identified risk responses in the internal control system.” Additionally, GAO Standards for Internal Control in the Federal Government 10.03 states, in part, “Transactions are promptly recorded to maintain their relevance and value to management in controlling operations and making decisions. This applies to the entire process or life cycle of a transaction or event from its initiation and authorization through its final classification in summary records. In addition, management designs control activities so that all transactions are completely and accurately recorded.” Condition: The Department was unable to provide support that details of record transactions agree to the federal revenues reported in Schedule Z. Cause and Effect: The Department does not have appropriate internal procedures for capturing and reporting the federal expenditures and revenues on the SEFA in accordance with the Uniform Guidance (2 CFR 200.510). Revenues are recorded by the Department on a cash basis and deposits are not recorded in the general ledger (GL) with a unique identifier to indicate which fiscal year in which the matching expenditures reside. Also, batched cash deposits containing sources of revenues from differing fiscal years cannot be appropriately allocated to the year in which the revenue was earned. Batched deposits are recorded as a single GL transaction regardless of the year in which the related deposit was earned and contain revenues for which the related expenditures were recorded in differing fiscal years. As a result, the Department’s GL does not possess sufficient detail to accurately account for the required modified accrual basis conversions. The Department has not ensured that the transactional data recorded provides enough detail to accurately report the federal activity in Schedule Z. Recommendation: We recommend the Department review and document the current procedures and implement the necessary changes to ensure adequate reporting of program financial information in the SEFA. Specifically, we recommend the Department continue to review its cash reporting and decipher batch deposits by fiscal year, with a unique identifier recorded at the GL transaction level. Additionally, we recommend retaining evidence that adequate reviews of the SEFA occurred. We also recommend the Department establish procedures to timely reconcile federal revenues to its federal expenditures to ensure completeness of its related federal reporting. Views of Responsible Official(s) Contact Person: Ryon Fields, Interim CFO Anticipated Completion Date: 6/30/26 Management Response: The Oklahoma State Department of Health agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report.

FINDING NO: 2024-042 (Partial Repeat 2023-008 & 2023-009) Strengthen Internal Controls Over Review and Approval of the Schedule of Expenditures of Federal Awards (SEFA) STATE AGENCY: Oklahoma Health Care Authority (the Authority) FEDERAL AGENCY: United States Department of Health and Human Services ALN: 93.767; 93.778 FEDERAL PROGRAM NAME: Children’s Health Insurance Program; Medicaid Cluster FEDERAL AWARD NUMBER: 2305OK5021 and 2405OK5021; 2305OK5MAP and 2405OK5MAP FEDERAL AWARD YEAR: 2023 and 2024 CONTROL CATEGORY: Reporting QUESTIONED COSTS: $0 Condition and Context: The SEFA is required by the Office of Management and Enterprise Services (OMES) to be prepared according to instructions and forms which are contained in the GAAP Conversion Manual (OMES Form Z- 1). Based upon testwork performed on the GAAP Package Z – Schedule of Expenditures of Federal Awards, we noted the following: • The Medicaid Total Federal Expenditures were recorded at $6,768,237,101. However, based on a recording error, the Medicaid Total Federal Expenditures amount should have been $6,774,069,774. • The CHIP (Covid) Total Federal Expenditures were recorded at ($595,297). However, based on a recording error, the CHIP (Covid) Total Federal Expenditures amount should have been ($844,885). • The CHIP Total Federal Expenditures were recorded at $248,368,556. However, based on a calculation error, the CHIP Total Federal Expenditures amount should have been $239,977,890. Cause: We noted the following: • The Medicaid Total Federal Expenditures were incorrectly calculated on the “CAFR Package Z Federal Expenditures” worksheet to the GAAP Package Z. The variance occurred because the administrative portion of the Medicaid Total Federal Expenditures for the Q.E. 6/30/24 inadvertently included an amount from the prior year instead of the current year figure. • The CHIP (Covid) Total Federal Expenditures were incorrectly calculated on the “Package Z Fed Exp Rev Admin” worksheet to the GAAP Package Z. The variance occurred because the Soon-to-be-Sooners portion of the CHIP (Covid) Total Federal Expenditures for the Q.E. 12/31/23 was updated on a supporting worksheet but not carried forward to the SEFA. • The CHIP Total Federal Expenditures were incorrectly calculated on the “64.21 Totals” worksheet to the GAAP Package Z. The variance occurred because the CHIP Net Expenditures for the Q.E. 03/31/24 & 06/30/24 were not reduced by the 64.21 “Line 4 collections”. Effect: The errors on the GAAP Package Z resulted in Medicaid Total Federal Expenditures being understated by $5,832,673, CHIP (Covid) Total Federal Expenditures being overstated by $249,588 and CHIP Total Federal Expenditures being overstated by $8,390,666. Recommendation: We recommend the Authority strengthen its SEFA review and approval process to ensure the accuracy of data reported for GAAP Package Z. Criteria: 2 CFR §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…” A basic objective of Generally Accepted Accounting Principles is to provide accurate and reliable information. A component objective of an effective internal control system is to ensure accurate and reliable information through a proper review and approval process. Management Response Contact Person: Calvin Cole, OHCA Director Financial Accountability & Compliance, Susan Crooke, OHCA Senior Director Accountability & Compliance Anticipated Completion Date: December 31, 2026 Corrective Action Planned: The Oklahoma Health Care Authority agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report.

FINDING NO: 2024-094 Strengthen Internal Controls Over SEFA Reporting STATE AGENCY: Oklahoma Department of Emergency Management FEDERAL AGENCY: Department of Homeland Security - Federal Emergency Management Agency (FEMA) ALN: 97.036 FEDERAL PROGRAM NAME: Disaster Grants – Public Assistance (Presidentially Declared Disasters) FEDERAL AWARD NUMBER: 4222-PA, 4299-PA, 4315-PA, 4438-PA, 4453-PA, 4530-PA, 4575-PA, 4587-PA, 4706-PA, 4721-PA, 4776-PA FEDERAL AWARD YEAR: 2024 CONTROL CATEGORY: Reporting QUESTIONED COSTS: $0 Condition and Context: In auditing the GAAP Package Z – Schedule of Expenditures of Federal Awards (SEFA) for the Public Assistance (#97.036) grant for SFY 2024, we noted the following variances when reconciling to the data per the Statewide Accounting System (SAS): Category on SEFA Reported Total Total per SAS Federal Expenditures $89,489,594 $92,273,127 Federal Revenue $103,468,303 $92,451,686 Cause: The Agency Business Services (ABS) division within the Office of Management and Enterprise Services (OMES) prepared the SEFA, and OEM staff did not implement management review controls designed to ensure all required data elements were accurate and included on the SEFA. Additionally, OEM did not maintain supporting documentation for the revenues and expenditures reported on the SEFA and was unable to obtain the information from ABS during our audit. Effect: The amounts reported on OEM’s SFY 2024 SEFA for ALN 97.036 overstated Federal Revenue by $11,016,617 and understated Federal Expenditures by $2,783,533. Additionally, due to the lack of a detailed review of the SEFA performed by OEM, there is an insufficient level of assurance as to the accuracy of the SEFA, diminishing the reliability of the report and increasing the risk of material noncompliance. Recommendation: We recommend the OEM strengthen its management review controls to ensure GAAP Packages are accurately completed and reported to OMES, and that all supporting documentation is properly obtained and retained. We further recommend OEM assess and address training needs for staff responsible for reviewing the SEFA: staff should have a clear understanding of the SEFA reporting elements and how those requirements relate to the underlying expenditure or revenue data. Criteria: 2 CFR §3002.10 - Adoption of 2 CFR Part 200 States in part “the Department of Homeland Security adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the Department.” 2 CFR §200.303 - Internal controls states in part, “The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” 2 CFR §200.502 (a) states, “Determining Federal awards expended. The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards including grants, cost reimbursement contracts under the FAR, compacts with Indian Tribes, cooperative agreements, and direct appropriations; the disbursement of funds to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property; the receipt of surplus property; the receipt or use of program income; the distribution or use of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest subsidy; and the period when insurance is in force.” 2 CFR §200.510 (b) states, “Schedule of expenditures of Federal awards. 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. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. For example, the National Institutes of Health is a major subdivision in the Department of Health and Human Services. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. For a cluster of programs also provide the total for the cluster. … (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total Federal awards expended for loan or loan guarantee programs in the schedule. (6) Include notes that describe that significant accounting policies used in preparing the schedule, and note whether or not the auditee elected to use the 10% de minimis cost rate as covered in § 200.414.” Management Response: The agency concurs with the finding. Please see the corrective action plan located in the corrective action plan section of this report.

FINDING NO: 2024-020 (Partial Repeat 2023-092, 2022-028) Develop and Implement Internal Controls Over Reporting Requirements STATE AGENCY: State of Oklahoma, Office of Management and Enterprise Services (OMES) FEDERAL AGENCY: US Department of Treasury ALN: 21.023 FEDERAL PROGRAM NAME: Emergency Rental Assistance FEDERAL AWARD NUMBER: ERAE0259 FEDERAL AWARD YEAR: 2024 CONTROL CATEGORY: Reporting QUESTIONED COSTS: $0 Condition and Context: During the prior year audit periods we noted that the State considers amounts expended as soon as they have left the State's coffers and have been distributed to the subrecipients rather than reporting actual expenditures for program assistance. However, according to Treasury guidance, funds will not be considered obligated based solely on the fact they are subject to an agreement that provides for another entity to administer assistance on the Grantee's behalf, and actual amounts expended for rent and utility assistance, administrative costs and housing stability costs must be reported each quarter. During the SFY24 audit period, no ERA 1 Quarterly Reports were due and four ERA 2 Quarterly Reports were due and submitted. The ERA 2 Quarterly reports include cumulative expenditures and current period expenditures. In order to determine if the actual expenditures were appropriately included in the ERA 2 reports submitted during the current audit period, we compared the cumulative amounts reported on the ERA 2 Quarterly reports to the underlying expenditure data and noted the following: • Quarterly Report for period ending 6/30/2023 (due July 17, 2023) : The State reported 100% ($168,458,520) of ERA 2 funds as expended, $0 in current period expenditures showing a cash balance of $0; however, the underlying expenditure data shows $147,808,373 in cumulative expenditures, $3,643,241 in current period expenditures, and a cash balance of $20,650,147 which results in a material variance of 13.97% ([$168,458,520 - $147,808,373] /$147,808,373 = 13.97%). • Quarterly Report for period ending 9/30/2023 (due Oct 16, 2023) : The State reported 100% ($168,458,520) of ERA 2 funds as expended, $0 in current period expenditures showing a cash balance of $0, however, the underlying expenditure data shows $150,976,869 in cumulative expenditures, $3,168,496 in current period expenditures and a cash balance of $17,481,651 which results in a material variance of 11.58% ([$168,458,520 - $150,976,869]/ $150,976,869 = 11.58%). • Quarterly Report for period ending 12/31/2023 (due Jan 15, 2024): The State reported cumulative expenditures of $154,961,559, -$13,496,960 in current period expenditures and reported a cash balance of $13,496,960. The underlying expenditure data shows $153,465,932 in cumulative expenditures, $2,489,063 in current period expenditures and a cash balance of $14,992,588 which results in an immaterial variance of 0.97% ([$154,961,559 - $153,465,932]/ $153,465,932 = 0.97%). • Quarterly Report for period ending 3/31/2024 (due Apr 15, 2024): The State reported cumulative expenditures of $154,067,719, -$893,840 in current period expenditures and reported a cash balance of $14,390,800. The underlying expenditure data shows $154,151,421 in cumulative expenditures, $685,489 in current period expenditures and a cash balance of $14,307,099 which results in an immaterial variance of - 0.05% ([$154,067,719-154,151,421]/$154,151,421 = -0.05%). Based on our review, it appears that the State did not report actual cumulative and current expenditures for the first two ERA 2 Quarterly reports submitted during the audit period. The State did adjust the report for the period ending 12/31/2023 to materially reflect actual cumulative and current expenditures and the report for the period ending 3/31/2024 appears to be materially correct. During our review of the State of Oklahoma state fiscal year 2024 Schedule of Expenditures of Federal Awards (SEFA), we observed AL #21.023 (ERA) was omitted from the report. However, one subrecipient returned $126,626 which should have been reported as revenue on the SEFA. Cause: OMES did not timely take corrective action to address prior year findings from the SFY 21 - SFY 23 audits. OMES did not timely take corrective action to ensure quarterly reports were completed accurately and amounts reported agree to the underlying expenditure transactions. The required corrective action would have included transferring administration of the ERA grant to the GMO office or other personnel with the experience and expertise to administer Federal grant funds before the majority of the ERA funds were expended by the subrecipient. During the audit period, OMES fully relied on the subrecipients to administer the program and meet reporting requirements with little guidance. Effect: OMES is at risk for inaccurate and/or incomplete reporting to Treasury, which prevents OMES from demonstrating the completeness and accuracy of subaward activity, and may impair oversight and monitoring of subrecipient expenditures. The State of Oklahoma under-reported revenue by $126,626 on the SFY24 SEFA. Recommendation: SAI acknowledges that beginning in FY25, oversight of the ERA program was transferred to the Grants Management Office (GMO). The GMO has two staff members on the team with 20+ years of combined federal grant specific experience. The GMO entered into a subrecipient agreement that does not expire to monitor CFO’s duties and processes. GMO also required CFO to return the remaining ERA 2 program funds to ensure that proper oversight and review of ERA expenditures is performed. The GMO has implemented a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For the ERA Program, OMES-GMO conducts biweekly monitoring meetings with CFO and is currently reviewing documentation provided by CFO to ensure all current ERA projects are eligible under the ERA guidelines and that CFO is exercising the proper oversight over their subrecipients; therefore, we recommend that the OMES GMO continue implementing the corrective action plan established in FY 2025 to provide proper oversight and monitoring of ERA program expenditures. We recommend OMES continue to implement policies and procedures to ensure reports contain the required information and are accurate. Criteria: 2 CFR § 200.502(a) states in part, “Determining Federal awards expended. The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs.” 2 CFR § 200.510(b) states in part, “Schedule of expenditures of Federal awards. 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.…” 1. (3) 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.” 2 CFR § 200.303 – Internal Controls states in part, “The Non-Federal entity must; (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” The US Department of Treasury Emergency Rental Assistance Reallocation Guidance (as of 9/6/2022) states, “Grantees are encouraged to partner with local nonprofit organizations and governmental agencies to expedite the obligation process and delivery of assistance to eligible households. However, Grantees may not use subrecipient agreements with these entities to avoid meeting the statutory obligation deadlines, and funds will not be considered obligated based solely on the fact they are subject to an agreement that provides for another entity to administer assistance on the Grantee’s behalf.” The US Department of Treasury Emergency Rental Assistance: Reporting Guidance states in part, “Total Dollar Amount of ERA Award Funds Approved (Obligated) to or for Participating Households in the Reporting Period Definition: The total dollar amount of the ERA award the ERA Recipient (and entities to which it has issued subawards or contract, as applicable) approved (obligated) for payment to participant households in the reporting period for rent; rental arrears; utility/home energy costs arrears; and other housing expenses in the reporting period.” Management Response Contact Person: Brandy Manek, OMES Director of Budget, Policy and Gaming Compliance Anticipated Completion Date: Completed Corrective Action Planned: The Oklahoma Office of Management and Enterprise Services (OMES) concurs with the finding. See corrective action plan located in the corrective action plan section of this report.

Awarding Agency: U.S. Department of Health and Human Services, Pass-through from Community Health Councils, Inc. U.S Department of the Treasury, Pass-through from County of Los Angeles Department of Public Health Federal Program: Community Health Worker Outreach Initiative Coronavirus State and Local Fiscal Funds Assistance Listing Number: 93.323 and 21.027 Grant Period: July 2023 through June 2024 and July 2023 through December 31, 2024. Criteria: 2 CFR 200.510(a) requires an entity subject to a Single Audit to submit and certify its audit package and Data Collection Form within nine months of its fiscal year-end. Condition: The Organization did not submit and certify its Data Collection Form to the Federal Audit Clearinghouse within nine months of fiscal year-end. Cause and Perspective: In May 2020, SEA experienced the unexpected departure of its Chief Financial Officerduring a period of global operational disruption. As a result, SEA encountered challenges in timely fiscal year-end close due to difficulties in identifying and hiring qualified replacement staff, which contributed to delays in completing subsequent audits. Effect: The Organization has been in contact with the agency on the progress of the projects and late submission appears to have no effect at the current date on the projects or the Organization receiving new awards subsequently. Questioned Cost: None Context: Audit was started late. Repeat finding: Yes, 2022, 2023, 2024, 2025 Recommendation: We recommend that the entity continue to strive for an effective method of completing the financial information within a time frame that allows both the entity and the auditors to navigate and complete the audit within 9 months. Views of Responsible Officials: The Organization concurs with the finding. The Organization will prevent future delays of the report by now having more accounting personnel to assist in meeting the filing deadline.

A. Internal control 2024-001 – Material Difference Between Federal Expense Detail and Federal Expenses Reported Repeat Finding: No Criteria: Management is responsible for preparing an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with 2 CFR § 200.508(b), which requires the auditee to prepare financial statements including the SEFA in accordance with 2 CFR § 200.510, and 2 CFR § 200.510(b), which requires the SEFA to include total federal awards expended for each individual federal program. Amounts reported on the SEFA should be supported by underlying accounting records and detailed expenditure documentation. Federal expenditures reported for each program should be complete, accurate, and agree to the supporting detail. Condition: During the audit, the detailed expenditure support for Special Programs for the Aging, Title III, Part C, Nutrition Services (“Title III C”), ALN 93.045 federal expenditures did not agree to the original expenditures disclosed on the original SEFA. As a result, a journal entry in the amount of $34,005 was needed to reduce Title III C federal expenditures to agree the SEFA to the supporting expenditure detail. This deficiency is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Accordingly, we consider this matter to be a significant deficiency. The expenditure detail for Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers, ALN 93.044, and the Nutrition Services Incentive Program, ALN 93.053, both included in the Aging Cluster, agreed to the respective expenditure detail without material exception. Questioned Costs: None noted. Cause and Effect: Due to improper reconciliations of grant expenditures details to the amounts reported on the transmittal report to Areawide Aging Agency (AAA), the agency the funds were passed through, the original SEFA overstated Title III C expenditures by $34,005. Inaccurate reporting of federal expenditures on the SEFA may affect the accuracy of the federal awards presented for audit purposes and may impact audit planning, major program determination, and compliance reporting if not identified and corrected Recommendation: We recommend that management strengthen its SEFA preparation and review procedures to ensure that all federal expenditures reported on the SEFA are reconciled to the underlying accounting records and detailed expenditure support before the SEFA is provided for audit. This review should include documented verification of expenditures by program and Assistance Listing number, timely investigation of variances, and approval of any necessary adjustments prior to finalizing the SEFA. Management Response: Management concurs with the finding. Management will implement procedures to reconcile grant expenditure detail to the general ledger, SEFA, and transmittal reports by program and Assistance Listing number prior to submission for audit. The reconciliation will be reviewed and approved by management, and any variances will be investigated and corrected timely. Implementation is expected by July 30, 2026, and the responsible party is Tammy Vaughn, Executive Director.

Material Weakness/Noncompliance – Schedule of Expenditures of Federal Awards 2 CFR § 200.510(b) states, in part, 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 §200.502 Basis for determining Federal awards expended. At a minimum, the schedule must: 1) List individual federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. 2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. 3) Provide total Federal awards expended for each individual Federal program and the Assistance Listing Number or other identifying number when the Assistance Listings information is not available. For a cluster of programs also provide the total for the cluster. 4) Include the total amount provided to subrecipients from each Federal program. 5) For loan or loan guarantee programs described in §200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total Federal awards expended for loan or loan guarantee programs in the schedule. 6) Include notes that describe that significant accounting policies used in preparing the schedule, and note whether or not the auditee elected to use the 10% de minimis cost rate as covered in §200.414. A component of internal controls is to monitor individual programs throughout the year and to properly track and report the related amounts on the Schedule of Expenditures of Federal Awards. The School District did prepare a Schedule of Expenditures of Federal Awards; however, due to inadequate policies and procedures, total federal expenditures were understated by $744,309. Adjustments were made to the Schedule of Expenditures of Federal Awards. Inaccurate completion of the Schedule of Expenditures of Federal Awards could lead to inaccurate reporting of federal expenditures by the School District and could jeopardize future federal funding. We recommend the School District review/update their current policies and procedures, including, prior to submitting the federal schedule to the auditors, a second review of data, support and amounts be reported, to help ensure accurate information is provided. Officials' Response: See Corrective Action Plan

2024-002: Schedule of Expenditures of Federal Awards (SEFA) Preparation Questioned Costs: None How the questioned costs were computed: N/A Grant Funding Source Grant Period Maternal, Infant, and U.S. Department of Health Oregon Health 10/01/2022-09/30/23 Early Childhood Home and Human Services Care Authority 10/01/2023-09/30/24 Visiting Program Condition: The SEFA provided for the audit contained significant errors that were identified and corrected during the audit. Criteria: In accordance with the Uniform Guidance (2 CFR Section 200.510(b)), the auditee should identify all federal awards received and prepare a SEFA for the period under audit. The information contained in the SEFA shall be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Cause: Umatilla-Morrow Head Start, Inc. had a third-party prepare the SEFA as of May 31, 2024. However, the report was not reviewed by management of Umatilla-Morrow Head Start, Inc. before it was provided for the audit. Effect: Errors in the preparation of the SEFA schedule could lead funding agencies to misinterpret the level of spending for a particular program for the period under audit. Additionally, the identification of major federal award programs chosen for specific compliance testing could be erroneous, depending on the misstatement in the total amount of federal expenditures for the year. Recommendation: Umatilla-Morrow Head Start, Inc. should perform a timely review of the SEFA to help ensure accurate reporting of federal expenditures in the SEFA report. View of Responsible Officials: Management agrees with the assessment and subsequent to year end, steps were taken to correct the matter.

US Department of the Treasury Passed through Missouri Department of Higher Education and Workforce Development Program Name: Coronavirus State and Local Fiscal Recovery Fund / American Rescue Plan Act / MoExcels Grant Assistance Listing #: 21.027 Finding: 2024 – 001 SIGNIFICANT DEFICIENCY Reporting Condition: During our original audit, the College initially failed to include $768,053 of Coronavirus State and Local Fiscal Recovery Fund (ARPA) funding received from the State of Missouri on the Schedule of Expenditures of Federal Awards. Additionally, the College incorrectly included $78,539 of 2024-25 SEOG funding that was drawn but not expended in the 2023-24 SEFA, resulting in an overstatement of SEOG expenditures. These errors were identified subsequent to the issuance of the report and require a re-issuance of the related audit reports. The internal control system did not prevent or detect these errors during the SEFA preparation process. Cause: The College's procedures for identifying and reporting federal expenditures were insufficient. The MoExcels grant application was submitted outside of the finance office without early communication to finance personnel regarding the federal funding source. Since the College rarely receives federal funding beyond routine Student Financial Aid programs, finance personnel were initially unaware that the MoExcels funding originated from a federal source and therefore required inclusion on the SEFA. Additionally, the College lacked adequate cutoff procedures to ensure federal expenditures were reported in the correct period based on when costs were incurred rather than when funds were drawn down from federal systems. The absence of formal communication protocols between program staff and the finance staff who prepared the SEFA, combined with insufficient review procedures for year-end federal drawdown cutoff, contributed to these oversights. Effect: The initial errors resulted in an understatement of federal expenditures on the originally issued SEFA by $768,053 for ARPA funds and an overstatement by $78,539 for SEOG funds, for a net understatement of $689,514. While these errors have been corrected, the control deficiency increases the risk that future federal awards could be incorrectly reported on the SEFA, potentially resulting in noncompliance with federal reporting requirements and incomplete or inaccurate identification of major programs subject to audit. Questioned Costs: $0 Criteria: 2 CFR 200.510(b) requires that the auditee 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 2 CFR 200.502. Additionally, 2 CFR 200.303 requires that non-federal entities establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing the awards in compliance with Federal statutes, regulations, and the terms and conditions of the related awards. Recommendation: We recommend the College implement written procedures for SEFA preparation that include: (1) obtaining and reviewing all grant agreements to identify federal funding sources; (2) establishing regular communication between program and finance departments to identify all federal awards received; (3) maintaining a master listing of all grants that identifies the funding source (federal/state/local) and applicable Assistance Listing Numbers; (4) implementing cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred, not when funds are drawn down from federal systems; and (5) requiring independent review of the SEFA by someone knowledgeable about federal compliance requirements who verifies completeness against grant documentation and proper period reporting. We note that the College's finance office maintains good communication practices with auditors regarding federal funding when they are aware of such awards; therefore, strengthening the internal identification and cutoff processes will enhance the College's ability to provide complete, accurate, and timely information to auditors about all federal funding sources. Views of responsible personnel and planned corrective actions: Management concurs with this finding. The College has implemented immediate corrective actions including development of a comprehensive grant tracking spreadsheet and establishment of regular meetings between program and finance staff. Additionally, effective immediately, all grant applications must be reviewed and approved by the Controller prior to submission to ensure proper identification of funding sources and compliance requirements. The College will also implement cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred. The Controller will review all G5 drawdowns near year-end to verify proper period reporting. Formal written procedures for SEFA preparation will be implemented by October 15, 2025. The Controller will maintain the master grant listing and review all grant agreements to determine federal funding sources. Beginning with fiscal year 2026 SEFA preparation, the CFO will perform an independent review for completeness and accuracy, including verification of proper period reporting for all federal expenditures.

2024-002: Schedule of Expenditures of Federal Awards (SEFA) Preparation Questioned Costs: None How the questioned costs were computed: N/A Grant Funding Source Grant Period Maternal, Infant, and U.S. Department of Health Oregon Health 10/01/2022-09/30/23 Early Childhood Home and Human Services Care Authority 10/01/2023-09/30/24 Visiting Program Condition: The SEFA provided for the audit contained significant errors that were identified and corrected during the audit. Criteria: In accordance with the Uniform Guidance (2 CFR Section 200.510(b)), the auditee should identify all federal awards received and prepare a SEFA for the period under audit. The information contained in the SEFA shall be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Cause: Umatilla-Morrow Head Start, Inc. had a third-party prepare the SEFA as of May 31, 2024. However, the report was not reviewed by management of Umatilla-Morrow Head Start, Inc. before it was provided for the audit. Effect: Errors in the preparation of the SEFA schedule could lead funding agencies to misinterpret the level of spending for a particular program for the period under audit. Additionally, the identification of major federal award programs chosen for specific compliance testing could be erroneous, depending on the misstatement in the total amount of federal expenditures for the year. Recommendation: Umatilla-Morrow Head Start, Inc. should perform a timely review of the SEFA to help ensure accurate reporting of federal expenditures in the SEFA report. View of Responsible Officials: Management agrees with the assessment and subsequent to year end, steps were taken to correct the matter.

US Department of the Treasury Passed through Missouri Department of Higher Education and Workforce Development Program Name: Coronavirus State and Local Fiscal Recovery Fund / American Rescue Plan Act / MoExcels Grant Assistance Listing #: 21.027 Finding: 2024 – 001 SIGNIFICANT DEFICIENCY Reporting Condition: During our original audit, the College initially failed to include $768,053 of Coronavirus State and Local Fiscal Recovery Fund (ARPA) funding received from the State of Missouri on the Schedule of Expenditures of Federal Awards. Additionally, the College incorrectly included $78,539 of 2024-25 SEOG funding that was drawn but not expended in the 2023-24 SEFA, resulting in an overstatement of SEOG expenditures. These errors were identified subsequent to the issuance of the report and require a re-issuance of the related audit reports. The internal control system did not prevent or detect these errors during the SEFA preparation process. Cause: The College's procedures for identifying and reporting federal expenditures were insufficient. The MoExcels grant application was submitted outside of the finance office without early communication to finance personnel regarding the federal funding source. Since the College rarely receives federal funding beyond routine Student Financial Aid programs, finance personnel were initially unaware that the MoExcels funding originated from a federal source and therefore required inclusion on the SEFA. Additionally, the College lacked adequate cutoff procedures to ensure federal expenditures were reported in the correct period based on when costs were incurred rather than when funds were drawn down from federal systems. The absence of formal communication protocols between program staff and the finance staff who prepared the SEFA, combined with insufficient review procedures for year-end federal drawdown cutoff, contributed to these oversights. Effect: The initial errors resulted in an understatement of federal expenditures on the originally issued SEFA by $768,053 for ARPA funds and an overstatement by $78,539 for SEOG funds, for a net understatement of $689,514. While these errors have been corrected, the control deficiency increases the risk that future federal awards could be incorrectly reported on the SEFA, potentially resulting in noncompliance with federal reporting requirements and incomplete or inaccurate identification of major programs subject to audit. Questioned Costs: $0 Criteria: 2 CFR 200.510(b) requires that the auditee 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 2 CFR 200.502. Additionally, 2 CFR 200.303 requires that non-federal entities establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing the awards in compliance with Federal statutes, regulations, and the terms and conditions of the related awards. Recommendation: We recommend the College implement written procedures for SEFA preparation that include: (1) obtaining and reviewing all grant agreements to identify federal funding sources; (2) establishing regular communication between program and finance departments to identify all federal awards received; (3) maintaining a master listing of all grants that identifies the funding source (federal/state/local) and applicable Assistance Listing Numbers; (4) implementing cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred, not when funds are drawn down from federal systems; and (5) requiring independent review of the SEFA by someone knowledgeable about federal compliance requirements who verifies completeness against grant documentation and proper period reporting. We note that the College's finance office maintains good communication practices with auditors regarding federal funding when they are aware of such awards; therefore, strengthening the internal identification and cutoff processes will enhance the College's ability to provide complete, accurate, and timely information to auditors about all federal funding sources. Views of responsible personnel and planned corrective actions: Management concurs with this finding. The College has implemented immediate corrective actions including development of a comprehensive grant tracking spreadsheet and establishment of regular meetings between program and finance staff. Additionally, effective immediately, all grant applications must be reviewed and approved by the Controller prior to submission to ensure proper identification of funding sources and compliance requirements. The College will also implement cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred. The Controller will review all G5 drawdowns near year-end to verify proper period reporting. Formal written procedures for SEFA preparation will be implemented by October 15, 2025. The Controller will maintain the master grant listing and review all grant agreements to determine federal funding sources. Beginning with fiscal year 2026 SEFA preparation, the CFO will perform an independent review for completeness and accuracy, including verification of proper period reporting for all federal expenditures.

III – Findings and questioned costs for Federal awards US Department of the Treasury Passed through Missouri Department of Higher Education and Workforce Development Program Name: Coronavirus State and Local Fiscal Recovery Fund / American Rescue Plan Act / MoExcels Grant Assistance Listing #: 21.027 Finding: 2024 – 001 SIGNIFICANT DEFICIENCY Reporting Condition: During our original audit, the College initially failed to include $768,053 of Coronavirus State and Local Fiscal Recovery Fund (ARPA) funding received from the State of Missouri on the Schedule of Expenditures of Federal Awards. Additionally, the College incorrectly included $78,539 of 2024-25 SEOG funding that was drawn but not expended in the 2023-24 SEFA, resulting in an overstatement of SEOG expenditures. These errors were identified subsequent to the issuance of the report and require a re-issuance of the related audit reports. The internal control system did not prevent or detect these errors during the SEFA preparation process. Cause: The College's procedures for identifying and reporting federal expenditures were insufficient. The MoExcels grant application was submitted outside of the finance office without early communication to finance personnel regarding the federal funding source. Since the College rarely receives federal funding beyond routine Student Financial Aid programs, finance personnel were initially unaware that the MoExcels funding originated from a federal source and therefore required inclusion on the SEFA. Additionally, the College lacked adequate cutoff procedures to ensure federal expenditures were reported in the correct period based on when costs were incurred rather than when funds were drawn down from federal systems. The absence of formal communication protocols between program staff and the finance staff who prepared the SEFA, combined with insufficient review procedures for year-end federal drawdown cutoff, contributed to these oversights. Effect: The initial errors resulted in an understatement of federal expenditures on the originally issued SEFA by $768,053 for ARPA funds and an overstatement by $78,539 for SEOG funds, for a net understatement of $689,514. While these errors have been corrected, the control deficiency increases the risk that future federal awards could be incorrectly reported on the SEFA, potentially resulting in noncompliance with federal reporting requirements and incomplete or inaccurate identification of major programs subject to audit. Questioned Costs: $0 Criteria: 2 CFR 200.510(b) requires that the auditee 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 2 CFR 200.502. Additionally, 2 CFR 200.303 requires that non-federal entities establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing the awards in compliance with Federal statutes, regulations, and the terms and conditions of the related awards. Recommendation: We recommend the College implement written procedures for SEFA preparation that include: (1) obtaining and reviewing all grant agreements to identify federal funding sources; (2) establishing regular communication between program and finance departments to identify all federal awards received; (3) maintaining a master listing of all grants that identifies the funding source (federal/state/local) and applicable Assistance Listing Numbers; (4) implementing cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred, not when funds are drawn down from federal systems; and (5) requiring independent review of the SEFA by someone knowledgeable about federal compliance requirements who verifies completeness against grant documentation and proper period reporting. We note that the College's finance office maintains good communication practices with auditors regarding federal funding when they are aware of such awards; therefore, strengthening the internal identification and cutoff processes will enhance the College's ability to provide complete, accurate, and timely information to auditors about all federal funding sources. Views of responsible personnel and planned corrective actions: Management concurs with this finding. The College has implemented immediate corrective actions including development of a comprehensive grant tracking spreadsheet and establishment of regular meetings between program and finance staff. Additionally, effective immediately, all grant applications must be reviewed and approved by the Controller prior to submission to ensure proper identification of funding sources and compliance requirements. The College will also implement cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred. The Controller will review all G5 drawdowns near year-end to verify proper period reporting. Formal written procedures for SEFA preparation will be implemented by October 15, 2025. The Controller will maintain the master grant listing and review all grant agreements to determine federal funding sources. Beginning with fiscal year 2026 SEFA preparation, the CFO will perform an independent review for completeness and accuracy, including verification of proper period reporting for all federal expenditures.

Finding 2024-001--Reporting of the Schedule of Expenditure of Federal Awards Federal Agency: U.S. Department of Health and Human Services Federal Program: ALN 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) – Passed through Health Research, Inc. Grant Period: Year ended April 30, 2024 Compliance Requirement: Other – Inaccurate reporting of the Schedule of Expenditures of Federal Awards Condition: The Organization’s internal controls did not identify amounts expended under the ELC program as federal expenditures. The related grant was inadvertently identified as a state grant and was initially excluded from the schedule of expenditures of federal awards (SEFA). As a result, the Organization should have reported ELC expenditures totaling $1,167,015 on the SEFA for the year ended April 30, 2024. Criteria: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the recipient’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. In addition, 2 CFR 200.303 requires non-Federal entities receiving federal awards to establish and maintain internal controls designated to reasonably ensure compliance with federal laws, regulations and program compliance. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. Cause: The grant was originally coded as a state grant was overlooked when management prepared the SEFA. Effect: The SEFA was understated by $1,167,015. In addition, the inaccurate preparation of the SEFA may prevent the Organization from completing an audit in accordance with the timelines established in the Uniform Guidance. Questioned Costs: Not applicable Statistical Sampling: Not appliable Repeat Finding: No Recommendation: We recommend that the Organization implement additional processes and procedures to ensure that the SEFA is complete and accurate. Views of Responsible Officials: We agree with the finding noted above. Although the grant income was federally sourced, our contract was with a state department and was classified as such in our books and records. As soon as the error was realized, we notified the auditors so the necessary corrections could be made. This incident is isolated and not recurring. The grant for which this finding is associated was a temporary grant that has since ended. To prevent future errors from occurring, all new contracts will be reviewed prior to submitting the summary of federal awards to the auditor to ensure that any federally sourced funding is properly identified regardless of grantor. CARES of NY, Inc. will implement a check and balance procedure where the grants director will review the listing prior to audit submission for accuracy.

Finding 2024-001--Reporting of the Schedule of Expenditure of Federal Awards Federal Agency: U.S. Department of Health and Human Services Federal Program: ALN 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) – Passed through Health Research, Inc. Grant Period: Year ended April 30, 2024 Compliance Requirement: Other – Inaccurate reporting of the Schedule of Expenditures of Federal Awards Condition: The Organization’s internal controls did not identify amounts expended under the ELC program as federal expenditures. The related grant was inadvertently identified as a state grant and was initially excluded from the schedule of expenditures of federal awards (SEFA). As a result, the Organization should have reported ELC expenditures totaling $1,167,015 on the SEFA for the year ended April 30, 2024. Criteria: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the recipient’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. In addition, 2 CFR 200.303 requires non-Federal entities receiving federal awards to establish and maintain internal controls designated to reasonably ensure compliance with federal laws, regulations and program compliance. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. Cause: The grant was originally coded as a state grant was overlooked when management prepared the SEFA. Effect: The SEFA was understated by $1,167,015. In addition, the inaccurate preparation of the SEFA may prevent the Organization from completing an audit in accordance with the timelines established in the Uniform Guidance. Questioned Costs: Not applicable Statistical Sampling: Not appliable Repeat Finding: No Recommendation: We recommend that the Organization implement additional processes and procedures to ensure that the SEFA is complete and accurate. Views of Responsible Officials: We agree with the finding noted above. Although the grant income was federally sourced, our contract was with a state department and was classified as such in our books and records. As soon as the error was realized, we notified the auditors so the necessary corrections could be made. This incident is isolated and not recurring. The grant for which this finding is associated was a temporary grant that has since ended. To prevent future errors from occurring, all new contracts will be reviewed prior to submitting the summary of federal awards to the auditor to ensure that any federally sourced funding is properly identified regardless of grantor. CARES of NY, Inc. will implement a check and balance procedure where the grants director will review the listing prior to audit submission for accuracy.

Finding 2024-002 Preparation of the Schedule Expenditures of Federal Awards -Significant Deficiency in Internal Control over Compliance Program: U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Award year: 2022, 2023 Criteria: The Uniform Guidance (2 CFR 200) Section 200.510 requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements [that]….at a minimum shall…list individual Federal programs by Federal agency…[and] provide total Federal awards expended for each individual Federal program and the Assistance Listing Number (ALN) number or other identifying number when the ALN information is not available.” In accordance with Uniform Guidance, the Organization is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition/Cause: The Health Center did not have sufficient controls to ensure the SEFA included all expenditures that qualified as an expenditure of a federal award during the period. Effect: The total expenditures presented per the preliminary SEFA increased by $4,800,000 related to ALN #21.027, Coronavirus State and Local Fiscal Recovery Funds, which resulted in an additional major program. No changes to the other financial statements were needed and the final SEFA was corrected to reflect the change. Questioned Costs: Not applicable. Context: Factors contributing to the condition included the high volume of activity related to new COVID-19 programs and the lack of understanding that the related payments represented grant expenditures from a Federal source that were required to be reported on the SEFA as opposed to grant payments from a non-federal source. Repeat Finding: Not applicable. Recommendation: We recommend the Health Center develop and implement a review process through the year to ensure compliance with SEFA reporting requirements as outlined in the Uniform Guidance. Views of Responsible Officials: Processes will be put in place to compile the SEFA, provide adequete training to staff, and perform a related review prior to audit. In addition, grant agreements will be thoroughly reviewed.

Federal Agency: United States Department of the Treasury Federal Program: COVID-19 – State Small Business Credit Initiative Technical Assistance Grant Program (21.031) Federal Award Number: SSBCI-21031-0037 Federal Award Year: 2024 State Agency: Department of Economic Development and Office of the State Comptroller Reference: 2024-002 Criteria Reporting In accordance with Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 200.510(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 as determined in accordance with section 200.502. For reporting purposes, State Small Business Credit Initiative (SSBCI) capital funds are not considered federal financial assistance. The SSBCI statute, 12 U.S.C. section 5702(c)(5), specifically states that capital funds transferred to jurisdictions are not considered federal financial assistance for the purposes of 31 U.S.C. subtitle V. Funds given to provide technical assistance, however, are considered federal financial assistance. Internal controls Lastly, 2 CFR 200.303(a) states the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Office of the State Comptroller (OSC) is responsible for the preparation of the schedule of expenditures of federal awards (SEFA). Annually, OSC provides the New York State agencies with a proposed SEFA with their respective expenditures by assistance listing number and each agency is charged with reviewing and providing adjustments and feedback. The proposed agency SEFA subschedule for State fiscal year 2024 provided to the Department of Economic Development (DED) did not include the expenditures for the SSBCI program. Upon DED review of the proposed agency SEFA subschedule, DED did not identify and report any expenditures for the SBBCI program that had been disbursed by DED. OSC utilized information in the Statewide Financial System (SFS) to populate the SEFA and which included expenditures totaling $154,792,221 for the SSBCI program. The amount was comprised of $151,191,199 related to capital funds and $3,601,022 of technical assistance funds. In accordance with 12 U.S.C. § 5702(c)(5), capital funds are not considered Federal financial assistance and therefore for reporting purposes should not be included on the SEFA. The preliminary SEFA including SBBCI expenditures of $154,792,221 was provided to the auditors and the SBBCI program was selected as a high-risk B program to be audited as a major program for State fiscal year 2024. Upon audit inquiry, it was determined that $151,191,199 related to capital funds and should not have been included on the SEFA. OSC appropriately adjusted the SEFA prior to finalizing the audit. DED did not properly review and report expenditures related to the SSBCI program on their SEFA subschedule. The communication between the Agencies was not sufficient to uncover the improper reporting on the SEFA. Cause DED did not properly review and report expenditures related to the SSBCI program to OSC. Possible Asserted Effect The effect was the incorrect reporting of federal expenditures, which necessitated adjustments on the SEFA during the audit process and highlighted potential compliance and oversight issues. Questioned Costs None Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation To address the identified issues and prevent future occurrences of improper reporting on the SEFA, we recommend that DED thoroughly review and report federal expenditures on their SEFA subschedule. We also recommend OSC review and enhance its guidelines provided to the Agencies to specifically highlight the Agencies responsibility to communicate to OSC any specific requirements of the programs, and the classification and reporting of different types of funds, such as capital funds and technical assistance funds, in accordance with relevant statutes and regulations. By implementing these recommendations, the State can enhance the accuracy and reliability of SEFA reporting, ensure compliance with federal regulations, and improve overall internal controls and communication between the Agencies.

Finding 2024-002 Preparation of the Schedule Expenditures of Federal Awards -Significant Deficiency in Internal Control over Compliance Program: U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Award year: 2022, 2023 Criteria: The Uniform Guidance (2 CFR 200) Section 200.510 requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements [that]….at a minimum shall…list individual Federal programs by Federal agency…[and] provide total Federal awards expended for each individual Federal program and the Assistance Listing Number (ALN) number or other identifying number when the ALN information is not available.” In accordance with Uniform Guidance, the Organization is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition/Cause: The Health Center did not have sufficient controls to ensure the SEFA included all expenditures that qualified as an expenditure of a federal award during the period. Effect: The total expenditures presented per the preliminary SEFA increased by $4,800,000 related to ALN #21.027, Coronavirus State and Local Fiscal Recovery Funds, which resulted in an additional major program. No changes to the other financial statements were needed and the final SEFA was corrected to reflect the change. Questioned Costs: Not applicable. Context: Factors contributing to the condition included the high volume of activity related to new COVID-19 programs and the lack of understanding that the related payments represented grant expenditures from a Federal source that were required to be reported on the SEFA as opposed to grant payments from a non-federal source. Repeat Finding: Not applicable. Recommendation: We recommend the Health Center develop and implement a review process through the year to ensure compliance with SEFA reporting requirements as outlined in the Uniform Guidance. Views of Responsible Officials: Processes will be put in place to compile the SEFA, provide adequete training to staff, and perform a related review prior to audit. In addition, grant agreements will be thoroughly reviewed.

Federal Agency: United States Department of the Treasury Federal Program: COVID-19 – State Small Business Credit Initiative Technical Assistance Grant Program (21.031) Federal Award Number: SSBCI-21031-0037 Federal Award Year: 2024 State Agency: Department of Economic Development and Office of the State Comptroller Reference: 2024-002 Criteria Reporting In accordance with Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 200.510(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 as determined in accordance with section 200.502. For reporting purposes, State Small Business Credit Initiative (SSBCI) capital funds are not considered federal financial assistance. The SSBCI statute, 12 U.S.C. section 5702(c)(5), specifically states that capital funds transferred to jurisdictions are not considered federal financial assistance for the purposes of 31 U.S.C. subtitle V. Funds given to provide technical assistance, however, are considered federal financial assistance. Internal controls Lastly, 2 CFR 200.303(a) states the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Office of the State Comptroller (OSC) is responsible for the preparation of the schedule of expenditures of federal awards (SEFA). Annually, OSC provides the New York State agencies with a proposed SEFA with their respective expenditures by assistance listing number and each agency is charged with reviewing and providing adjustments and feedback. The proposed agency SEFA subschedule for State fiscal year 2024 provided to the Department of Economic Development (DED) did not include the expenditures for the SSBCI program. Upon DED review of the proposed agency SEFA subschedule, DED did not identify and report any expenditures for the SBBCI program that had been disbursed by DED. OSC utilized information in the Statewide Financial System (SFS) to populate the SEFA and which included expenditures totaling $154,792,221 for the SSBCI program. The amount was comprised of $151,191,199 related to capital funds and $3,601,022 of technical assistance funds. In accordance with 12 U.S.C. § 5702(c)(5), capital funds are not considered Federal financial assistance and therefore for reporting purposes should not be included on the SEFA. The preliminary SEFA including SBBCI expenditures of $154,792,221 was provided to the auditors and the SBBCI program was selected as a high-risk B program to be audited as a major program for State fiscal year 2024. Upon audit inquiry, it was determined that $151,191,199 related to capital funds and should not have been included on the SEFA. OSC appropriately adjusted the SEFA prior to finalizing the audit. DED did not properly review and report expenditures related to the SSBCI program on their SEFA subschedule. The communication between the Agencies was not sufficient to uncover the improper reporting on the SEFA. Cause DED did not properly review and report expenditures related to the SSBCI program to OSC. Possible Asserted Effect The effect was the incorrect reporting of federal expenditures, which necessitated adjustments on the SEFA during the audit process and highlighted potential compliance and oversight issues. Questioned Costs None Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation To address the identified issues and prevent future occurrences of improper reporting on the SEFA, we recommend that DED thoroughly review and report federal expenditures on their SEFA subschedule. We also recommend OSC review and enhance its guidelines provided to the Agencies to specifically highlight the Agencies responsibility to communicate to OSC any specific requirements of the programs, and the classification and reporting of different types of funds, such as capital funds and technical assistance funds, in accordance with relevant statutes and regulations. By implementing these recommendations, the State can enhance the accuracy and reliability of SEFA reporting, ensure compliance with federal regulations, and improve overall internal controls and communication between the Agencies.

2023-001 Internal Controls Over Compliance and Compliance with Reporting - Preparation of the Schedule of Expenditures of Federal Awards Information on the Major Federal Program - Federal Agency: Department of Health and Human Services Assistance Listing Number: 93.855 Assistance Listing Name: Research and Development Cluster Award Number: 1G20AI174721-01 Award Period: 09/16/2022 – 02/29/2024 Criteria: The Uniform Guidance in 2 CFR Section 200.510 (b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR Section 200.502 Basis for determining Federal awards expended.” The Schedule must provide total Federal awards expended for each individual Federal program. Condition: Expenditures for a grant under the Department of Health and Human Services program of approximately $1.3 million were incurred in 2023, but improperly not included in the Schedule. These expenditures were incurred but not billed to the federal awarding agency at December 31, 2023. Cause: The internal controls established for the review and reconciliation of the Schedule to the underlying accounting records were not consistently followed to ensure accurate reporting of expenditures to the Schedule. Questioned Costs: None. Context: We reviewed the Schedule and found the exception as noted in the condition. Effect: Failure to properly review and support expenditures reported in the Schedule can result in inaccurate reporting and non-compliance with laws and regulations. Repeat Finding: This is not a repeat finding. Recommendation: Internal controls should be designed to prevent, detect and correct errors and/or omissions in a timely manner. Without adequate controls, the Organization cannot provide reasonable assurance that the Schedule is fairly presented. See management’s response for further details.

Finding 2023-001: Internal Controls over Compliance and Other Matters Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal Awards – Other U.S. DEPARTMENT OF TRANSPORTATION Highway Planning and Construction (Federal-Aid Highway Program) – ALN 20.205 U.S. DEPARTMENT OF TREASURY COVID-19 - Coronavirus State and Local Fiscal Recovery Funds – ALN 21.027 Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards, “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, Basis for determining Federal awards expended. Condition: Prior to correction, certain federal expenditures were not properly identified on the schedule of expenditures of federal awards (SEFA). During our audit, it was determined total federal expenditures for the Highway Planning and Construction program were overstated by approximately $481,000 and federal expenditures for the Coronavirus State and Local Fiscal Recovery Funds program were understated by approximately $340,000 on the SEFA. Cause: Internal controls were not in place to ensure program related revenues (which are used to prepare the federal expenditures for the SEFA) were properly recorded for the Highway Planning and Construction program and that calculations for the Coronavirus State and Local Fiscal Recovery Funds program were reviewed for accuracy. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not accurately reflect the total amount of federal dollars expended during a particular year. Context: The SEFA was originally overstated by $481,000 for the Highway Planning and Construction program due to reporting $377,000 of expenditures as federal instead of local, reporting $120,000 of remaining encumbrances as 2023 expenditures, and excluding $16,000 of expenditures incurred as a result of recording retainage on a project. The Coronavirus State and Local Fiscal Recovery Funds program expenditures were originally understated on the SEFA by $340,000 due to a formula error relating to the calculation of total federal expenditures for the program. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend staff review procedures related to revenue recognition of its highway construction programs to ensure amounts are properly reported on the SEFA, and that federal expenditure calculations are reviewed for accuracy. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and is in the process of developing internal controls to ensure timely and appropriate actions are made on the deficiency noted. Additional details can be found in the City of Bloomington’s Corrective Action Plan.

Finding 2023-001: Internal Controls over Compliance and Other Matters Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal Awards – Other U.S. DEPARTMENT OF TRANSPORTATION Highway Planning and Construction (Federal-Aid Highway Program) – ALN 20.205 U.S. DEPARTMENT OF TREASURY COVID-19 - Coronavirus State and Local Fiscal Recovery Funds – ALN 21.027 Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards, “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, Basis for determining Federal awards expended. Condition: Prior to correction, certain federal expenditures were not properly identified on the schedule of expenditures of federal awards (SEFA). During our audit, it was determined total federal expenditures for the Highway Planning and Construction program were overstated by approximately $481,000 and federal expenditures for the Coronavirus State and Local Fiscal Recovery Funds program were understated by approximately $340,000 on the SEFA. Cause: Internal controls were not in place to ensure program related revenues (which are used to prepare the federal expenditures for the SEFA) were properly recorded for the Highway Planning and Construction program and that calculations for the Coronavirus State and Local Fiscal Recovery Funds program were reviewed for accuracy. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not accurately reflect the total amount of federal dollars expended during a particular year. Context: The SEFA was originally overstated by $481,000 for the Highway Planning and Construction program due to reporting $377,000 of expenditures as federal instead of local, reporting $120,000 of remaining encumbrances as 2023 expenditures, and excluding $16,000 of expenditures incurred as a result of recording retainage on a project. The Coronavirus State and Local Fiscal Recovery Funds program expenditures were originally understated on the SEFA by $340,000 due to a formula error relating to the calculation of total federal expenditures for the program. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend staff review procedures related to revenue recognition of its highway construction programs to ensure amounts are properly reported on the SEFA, and that federal expenditure calculations are reviewed for accuracy. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and is in the process of developing internal controls to ensure timely and appropriate actions are made on the deficiency noted. Additional details can be found in the City of Bloomington’s Corrective Action Plan.

PREPARATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS: FINDING TYPE: MATERIAL NONCOMPLIANCE/MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE (REPORTING, CASH MANAGEMENT AND ALLOWABLE COSTS/COST PRINCIPLES. PROGRAMS: SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN; ASSISTANCE LISTING NUMBER 10.557; AWARD NUMBERS 50022 AND 50035, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. ELC CONTRACT TRACING, INVESTIGATION, TESTING COORD., AND INFECTION PREVENTION; ASSISTANCE LISTING NUMBER 93.323; AWARD NUMBER 251126, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. CRITERIA: THE CODE OF FEDERAL REGULATIONS (CFR) SECTION 200.303(B) REQUIRES NON-FEDERAL ENTITIES TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROL OVER THE FEDERAL AWARD THAT PROVIDES REASONABLE ASSURANCE THAT THE NON-FEDERAL ENTITY IS MANAGING BY THE FEDERAL AWARD IN COMPLIANCE WITH FEDERAL STATUTES, REGULATIONS, AND TERMS AND CONDITIONS OF THE FEDERAL AWARD. CFR SECTION 200.502(A) STATES THAT THE DETERMINATION OF WHEN A FEDERAL AWARD IS EXPENDED SHOULD BE BASED ON WHEN THE ACTIVITY RELATED TO THE FEDERAL AWARD OCCURS. GENERALLY, THE ACTIVITY PERTAINS TO EVENTS THAT REQUIRE THE NON-FEDERAL ENTITY TO COMPLY WITH FEDERAL STATUTES, REGULATIONS, AND THE TERMS AND CONDITIONS OF FEDERAL AWARDS, SUCH AS EXPENDITURE/EXPENSE TRANSACTIONS ASSOCIATED WITH GRANT AWARDS. THE HEALTH DEPARTMENT REPORTS EXPENDITURES ON THE SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA FOR THE PERIOD COVERED BY THE AUDITEE'S FINANCIAL STATEMENTS WHICH MUST INCLUDE TH TOTAL FEDERAL AWARDS EXPENDED AS DETERMINED IN ACCORANCE WITH CRF SECTION 200.502(A), AS STATED ABOVE, AND MUST RECONCILE AMOUNTS REPORTED IN THE SEFA TO THE AMOUNTS REPORTED IN THE AUDITEEE'S FINANCIAL STATEMENTS. CONDITION: THE SEFA WAS NOT APPROPRIATELY RECONCILED TO THE FEDERAL GRANT REVENUES AND EXPENDITURES RECORDED IN THE FINANCIAL STATEMENTS. CHANGES WERE MADE TO MAJOR PROGRAM EXPENDITURES, AS WELL AS EXPENDITURES OF OTHR PROGRAMS DURING THE CLOSING PROCESS AND DURING COMPLETION OF THE SINGLE AUDIT TO PROPERLY REPORT EXPENDITURES ON THE SEFA. CLOSING PROCEDURES SHOULD BE IN PLACE TO RECONCILE GRANT EXPENDITURES INCURRED AT YEAR-END, CONFIRM THE AMOUNT AS ELIGIBLE WITH THE GRANTOR, CLAIM THE GRANT REVENUES ON A TIMELY BASIS, RECONCILE THE CLAIM TO THE GENERAL LEDGER, AND ENSURE THE EXPENDITURES THAT WILL BE CLAIMED UNDER FEDERAL AWARDS ARE PROPERTLY REPORTED ON THE SEFA AND AUDITED FINANCIAL STATEMENTS PRIOR TO THE START OF THE SINGLE AUDIT. IF EXPENDITURES REPORTED ON THE SEFA ARE MISSTATED, THE COUNTY COULD FAIL TO HAVE A PROGRAM APPROPRIATELY INDENTIFIED AS A MAJOR PROGRAM AND TESTED AS A MAJOR PROGRAM DURING THE SINGLE AUDIT. FAILURE TO HAVE A PROGRAM AUDITED DURING THE SINGLE AUDIT WOULD RESULT IN NONCOMPLIANCE WITH TITLE 2 U.S. CODE OF FEDERAL REGULATIONS PART 200, UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS (UNIFORM GUIDANCE). CAUSE: THE WAS THE HEALTH DEPARTMENT'S FIRST STANDALONE AUDIT AND MANAGEMENT HAD NOT PREPARED A SEFA IN THE PAST. EFFECT: THE SEFA RQUIRED MATERIAL ADJUSTMENTS TO INCLUDE ALL FEDERAL EXPENDITURES PRIOR TO THE SINGLE AUDIT BEGINNING, WHICH RESULTED IN A MISSTATED PRELIMINARY SEFA AND INEFFICIENCIES DURING THE SINGLE AUDIT. QUESTIONED COSTS: NO COSTS HAVE BEEN QUESTIONED AS A RESULT OF THIS FINDING. RECOMMENDATION: WE RECOMMEND THAT THE HEALTH DEPARTMENT TRACT THEIR FEDERAL AWARDS MORE REGULARLY AND RECONCILE IT TO THE GENERAL LEDGER. VIEW OF RESPONSIBLE OFFICIALS: THE HEALTH DEPARTMENT WILL REVISIT THEIR PROCEDURES AND METHOD OF FEDERAL AWARDS.

PREPARATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS: FINDING TYPE: MATERIAL NONCOMPLIANCE/MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE (REPORTING, CASH MANAGEMENT AND ALLOWABLE COSTS/COST PRINCIPLES. PROGRAMS: SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN; ASSISTANCE LISTING NUMBER 10.557; AWARD NUMBERS 50022 AND 50035, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. ELC CONTRACT TRACING, INVESTIGATION, TESTING COORD., AND INFECTION PREVENTION; ASSISTANCE LISTING NUMBER 93.323; AWARD NUMBER 251126, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. CRITERIA: THE CODE OF FEDERAL REGULATIONS (CFR) SECTION 200.303(B) REQUIRES NON-FEDERAL ENTITIES TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROL OVER THE FEDERAL AWARD THAT PROVIDES REASONABLE ASSURANCE THAT THE NON-FEDERAL ENTITY IS MANAGING BY THE FEDERAL AWARD IN COMPLIANCE WITH FEDERAL STATUTES, REGULATIONS, AND TERMS AND CONDITIONS OF THE FEDERAL AWARD. CFR SECTION 200.502(A) STATES THAT THE DETERMINATION OF WHEN A FEDERAL AWARD IS EXPENDED SHOULD BE BASED ON WHEN THE ACTIVITY RELATED TO THE FEDERAL AWARD OCCURS. GENERALLY, THE ACTIVITY PERTAINS TO EVENTS THAT REQUIRE THE NON-FEDERAL ENTITY TO COMPLY WITH FEDERAL STATUTES, REGULATIONS, AND THE TERMS AND CONDITIONS OF FEDERAL AWARDS, SUCH AS EXPENDITURE/EXPENSE TRANSACTIONS ASSOCIATED WITH GRANT AWARDS. THE HEALTH DEPARTMENT REPORTS EXPENDITURES ON THE SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA FOR THE PERIOD COVERED BY THE AUDITEE'S FINANCIAL STATEMENTS WHICH MUST INCLUDE TH TOTAL FEDERAL AWARDS EXPENDED AS DETERMINED IN ACCORANCE WITH CRF SECTION 200.502(A), AS STATED ABOVE, AND MUST RECONCILE AMOUNTS REPORTED IN THE SEFA TO THE AMOUNTS REPORTED IN THE AUDITEEE'S FINANCIAL STATEMENTS. CONDITION: THE SEFA WAS NOT APPROPRIATELY RECONCILED TO THE FEDERAL GRANT REVENUES AND EXPENDITURES RECORDED IN THE FINANCIAL STATEMENTS. CHANGES WERE MADE TO MAJOR PROGRAM EXPENDITURES, AS WELL AS EXPENDITURES OF OTHR PROGRAMS DURING THE CLOSING PROCESS AND DURING COMPLETION OF THE SINGLE AUDIT TO PROPERLY REPORT EXPENDITURES ON THE SEFA. CLOSING PROCEDURES SHOULD BE IN PLACE TO RECONCILE GRANT EXPENDITURES INCURRED AT YEAR-END, CONFIRM THE AMOUNT AS ELIGIBLE WITH THE GRANTOR, CLAIM THE GRANT REVENUES ON A TIMELY BASIS, RECONCILE THE CLAIM TO THE GENERAL LEDGER, AND ENSURE THE EXPENDITURES THAT WILL BE CLAIMED UNDER FEDERAL AWARDS ARE PROPERTLY REPORTED ON THE SEFA AND AUDITED FINANCIAL STATEMENTS PRIOR TO THE START OF THE SINGLE AUDIT. IF EXPENDITURES REPORTED ON THE SEFA ARE MISSTATED, THE COUNTY COULD FAIL TO HAVE A PROGRAM APPROPRIATELY INDENTIFIED AS A MAJOR PROGRAM AND TESTED AS A MAJOR PROGRAM DURING THE SINGLE AUDIT. FAILURE TO HAVE A PROGRAM AUDITED DURING THE SINGLE AUDIT WOULD RESULT IN NONCOMPLIANCE WITH TITLE 2 U.S. CODE OF FEDERAL REGULATIONS PART 200, UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS (UNIFORM GUIDANCE). CAUSE: THE WAS THE HEALTH DEPARTMENT'S FIRST STANDALONE AUDIT AND MANAGEMENT HAD NOT PREPARED A SEFA IN THE PAST. EFFECT: THE SEFA RQUIRED MATERIAL ADJUSTMENTS TO INCLUDE ALL FEDERAL EXPENDITURES PRIOR TO THE SINGLE AUDIT BEGINNING, WHICH RESULTED IN A MISSTATED PRELIMINARY SEFA AND INEFFICIENCIES DURING THE SINGLE AUDIT. QUESTIONED COSTS: NO COSTS HAVE BEEN QUESTIONED AS A RESULT OF THIS FINDING. RECOMMENDATION: WE RECOMMEND THAT THE HEALTH DEPARTMENT TRACT THEIR FEDERAL AWARDS MORE REGULARLY AND RECONCILE IT TO THE GENERAL LEDGER. VIEW OF RESPONSIBLE OFFICIALS: THE HEALTH DEPARTMENT WILL REVISIT THEIR PROCEDURES AND METHOD OF FEDERAL AWARDS.

PREPARATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS: FINDING TYPE: MATERIAL NONCOMPLIANCE/MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE (REPORTING, CASH MANAGEMENT AND ALLOWABLE COSTS/COST PRINCIPLES. PROGRAMS: SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN; ASSISTANCE LISTING NUMBER 10.557; AWARD NUMBERS 50022 AND 50035, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. ELC CONTRACT TRACING, INVESTIGATION, TESTING COORD., AND INFECTION PREVENTION; ASSISTANCE LISTING NUMBER 93.323; AWARD NUMBER 251126, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. CRITERIA: THE CODE OF FEDERAL REGULATIONS (CFR) SECTION 200.303(B) REQUIRES NON-FEDERAL ENTITIES TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROL OVER THE FEDERAL AWARD THAT PROVIDES REASONABLE ASSURANCE THAT THE NON-FEDERAL ENTITY IS MANAGING BY THE FEDERAL AWARD IN COMPLIANCE WITH FEDERAL STATUTES, REGULATIONS, AND TERMS AND CONDITIONS OF THE FEDERAL AWARD. CFR SECTION 200.502(A) STATES THAT THE DETERMINATION OF WHEN A FEDERAL AWARD IS EXPENDED SHOULD BE BASED ON WHEN THE ACTIVITY RELATED TO THE FEDERAL AWARD OCCURS. GENERALLY, THE ACTIVITY PERTAINS TO EVENTS THAT REQUIRE THE NON-FEDERAL ENTITY TO COMPLY WITH FEDERAL STATUTES, REGULATIONS, AND THE TERMS AND CONDITIONS OF FEDERAL AWARDS, SUCH AS EXPENDITURE/EXPENSE TRANSACTIONS ASSOCIATED WITH GRANT AWARDS. THE HEALTH DEPARTMENT REPORTS EXPENDITURES ON THE SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA FOR THE PERIOD COVERED BY THE AUDITEE'S FINANCIAL STATEMENTS WHICH MUST INCLUDE TH TOTAL FEDERAL AWARDS EXPENDED AS DETERMINED IN ACCORANCE WITH CRF SECTION 200.502(A), AS STATED ABOVE, AND MUST RECONCILE AMOUNTS REPORTED IN THE SEFA TO THE AMOUNTS REPORTED IN THE AUDITEEE'S FINANCIAL STATEMENTS. CONDITION: THE SEFA WAS NOT APPROPRIATELY RECONCILED TO THE FEDERAL GRANT REVENUES AND EXPENDITURES RECORDED IN THE FINANCIAL STATEMENTS. CHANGES WERE MADE TO MAJOR PROGRAM EXPENDITURES, AS WELL AS EXPENDITURES OF OTHR PROGRAMS DURING THE CLOSING PROCESS AND DURING COMPLETION OF THE SINGLE AUDIT TO PROPERLY REPORT EXPENDITURES ON THE SEFA. CLOSING PROCEDURES SHOULD BE IN PLACE TO RECONCILE GRANT EXPENDITURES INCURRED AT YEAR-END, CONFIRM THE AMOUNT AS ELIGIBLE WITH THE GRANTOR, CLAIM THE GRANT REVENUES ON A TIMELY BASIS, RECONCILE THE CLAIM TO THE GENERAL LEDGER, AND ENSURE THE EXPENDITURES THAT WILL BE CLAIMED UNDER FEDERAL AWARDS ARE PROPERTLY REPORTED ON THE SEFA AND AUDITED FINANCIAL STATEMENTS PRIOR TO THE START OF THE SINGLE AUDIT. IF EXPENDITURES REPORTED ON THE SEFA ARE MISSTATED, THE COUNTY COULD FAIL TO HAVE A PROGRAM APPROPRIATELY INDENTIFIED AS A MAJOR PROGRAM AND TESTED AS A MAJOR PROGRAM DURING THE SINGLE AUDIT. FAILURE TO HAVE A PROGRAM AUDITED DURING THE SINGLE AUDIT WOULD RESULT IN NONCOMPLIANCE WITH TITLE 2 U.S. CODE OF FEDERAL REGULATIONS PART 200, UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS (UNIFORM GUIDANCE). CAUSE: THE WAS THE HEALTH DEPARTMENT'S FIRST STANDALONE AUDIT AND MANAGEMENT HAD NOT PREPARED A SEFA IN THE PAST. EFFECT: THE SEFA RQUIRED MATERIAL ADJUSTMENTS TO INCLUDE ALL FEDERAL EXPENDITURES PRIOR TO THE SINGLE AUDIT BEGINNING, WHICH RESULTED IN A MISSTATED PRELIMINARY SEFA AND INEFFICIENCIES DURING THE SINGLE AUDIT. QUESTIONED COSTS: NO COSTS HAVE BEEN QUESTIONED AS A RESULT OF THIS FINDING. RECOMMENDATION: WE RECOMMEND THAT THE HEALTH DEPARTMENT TRACT THEIR FEDERAL AWARDS MORE REGULARLY AND RECONCILE IT TO THE GENERAL LEDGER. VIEW OF RESPONSIBLE OFFICIALS: THE HEALTH DEPARTMENT WILL REVISIT THEIR PROCEDURES AND METHOD OF FEDERAL AWARDS.

PREPARATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS: FINDING TYPE: MATERIAL NONCOMPLIANCE/MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE (REPORTING, CASH MANAGEMENT AND ALLOWABLE COSTS/COST PRINCIPLES. PROGRAMS: SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN; ASSISTANCE LISTING NUMBER 10.557; AWARD NUMBERS 50022 AND 50035, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. ELC CONTRACT TRACING, INVESTIGATION, TESTING COORD., AND INFECTION PREVENTION; ASSISTANCE LISTING NUMBER 93.323; AWARD NUMBER 251126, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. CRITERIA: THE CODE OF FEDERAL REGULATIONS (CFR) SECTION 200.303(B) REQUIRES NON-FEDERAL ENTITIES TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROL OVER THE FEDERAL AWARD THAT PROVIDES REASONABLE ASSURANCE THAT THE NON-FEDERAL ENTITY IS MANAGING BY THE FEDERAL AWARD IN COMPLIANCE WITH FEDERAL STATUTES, REGULATIONS, AND TERMS AND CONDITIONS OF THE FEDERAL AWARD. CFR SECTION 200.502(A) STATES THAT THE DETERMINATION OF WHEN A FEDERAL AWARD IS EXPENDED SHOULD BE BASED ON WHEN THE ACTIVITY RELATED TO THE FEDERAL AWARD OCCURS. GENERALLY, THE ACTIVITY PERTAINS TO EVENTS THAT REQUIRE THE NON-FEDERAL ENTITY TO COMPLY WITH FEDERAL STATUTES, REGULATIONS, AND THE TERMS AND CONDITIONS OF FEDERAL AWARDS, SUCH AS EXPENDITURE/EXPENSE TRANSACTIONS ASSOCIATED WITH GRANT AWARDS. THE HEALTH DEPARTMENT REPORTS EXPENDITURES ON THE SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA FOR THE PERIOD COVERED BY THE AUDITEE'S FINANCIAL STATEMENTS WHICH MUST INCLUDE TH TOTAL FEDERAL AWARDS EXPENDED AS DETERMINED IN ACCORANCE WITH CRF SECTION 200.502(A), AS STATED ABOVE, AND MUST RECONCILE AMOUNTS REPORTED IN THE SEFA TO THE AMOUNTS REPORTED IN THE AUDITEEE'S FINANCIAL STATEMENTS. CONDITION: THE SEFA WAS NOT APPROPRIATELY RECONCILED TO THE FEDERAL GRANT REVENUES AND EXPENDITURES RECORDED IN THE FINANCIAL STATEMENTS. CHANGES WERE MADE TO MAJOR PROGRAM EXPENDITURES, AS WELL AS EXPENDITURES OF OTHR PROGRAMS DURING THE CLOSING PROCESS AND DURING COMPLETION OF THE SINGLE AUDIT TO PROPERLY REPORT EXPENDITURES ON THE SEFA. CLOSING PROCEDURES SHOULD BE IN PLACE TO RECONCILE GRANT EXPENDITURES INCURRED AT YEAR-END, CONFIRM THE AMOUNT AS ELIGIBLE WITH THE GRANTOR, CLAIM THE GRANT REVENUES ON A TIMELY BASIS, RECONCILE THE CLAIM TO THE GENERAL LEDGER, AND ENSURE THE EXPENDITURES THAT WILL BE CLAIMED UNDER FEDERAL AWARDS ARE PROPERTLY REPORTED ON THE SEFA AND AUDITED FINANCIAL STATEMENTS PRIOR TO THE START OF THE SINGLE AUDIT. IF EXPENDITURES REPORTED ON THE SEFA ARE MISSTATED, THE COUNTY COULD FAIL TO HAVE A PROGRAM APPROPRIATELY INDENTIFIED AS A MAJOR PROGRAM AND TESTED AS A MAJOR PROGRAM DURING THE SINGLE AUDIT. FAILURE TO HAVE A PROGRAM AUDITED DURING THE SINGLE AUDIT WOULD RESULT IN NONCOMPLIANCE WITH TITLE 2 U.S. CODE OF FEDERAL REGULATIONS PART 200, UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS (UNIFORM GUIDANCE). CAUSE: THE WAS THE HEALTH DEPARTMENT'S FIRST STANDALONE AUDIT AND MANAGEMENT HAD NOT PREPARED A SEFA IN THE PAST. EFFECT: THE SEFA RQUIRED MATERIAL ADJUSTMENTS TO INCLUDE ALL FEDERAL EXPENDITURES PRIOR TO THE SINGLE AUDIT BEGINNING, WHICH RESULTED IN A MISSTATED PRELIMINARY SEFA AND INEFFICIENCIES DURING THE SINGLE AUDIT. QUESTIONED COSTS: NO COSTS HAVE BEEN QUESTIONED AS A RESULT OF THIS FINDING. RECOMMENDATION: WE RECOMMEND THAT THE HEALTH DEPARTMENT TRACT THEIR FEDERAL AWARDS MORE REGULARLY AND RECONCILE IT TO THE GENERAL LEDGER. VIEW OF RESPONSIBLE OFFICIALS: THE HEALTH DEPARTMENT WILL REVISIT THEIR PROCEDURES AND METHOD OF FEDERAL AWARDS.

PREPARATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS: FINDING TYPE: MATERIAL NONCOMPLIANCE/MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE (REPORTING, CASH MANAGEMENT AND ALLOWABLE COSTS/COST PRINCIPLES. PROGRAMS: SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN; ASSISTANCE LISTING NUMBER 10.557; AWARD NUMBERS 50022 AND 50035, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. ELC CONTRACT TRACING, INVESTIGATION, TESTING COORD., AND INFECTION PREVENTION; ASSISTANCE LISTING NUMBER 93.323; AWARD NUMBER 251126, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. CRITERIA: THE CODE OF FEDERAL REGULATIONS (CFR) SECTION 200.303(B) REQUIRES NON-FEDERAL ENTITIES TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROL OVER THE FEDERAL AWARD THAT PROVIDES REASONABLE ASSURANCE THAT THE NON-FEDERAL ENTITY IS MANAGING BY THE FEDERAL AWARD IN COMPLIANCE WITH FEDERAL STATUTES, REGULATIONS, AND TERMS AND CONDITIONS OF THE FEDERAL AWARD. CFR SECTION 200.502(A) STATES THAT THE DETERMINATION OF WHEN A FEDERAL AWARD IS EXPENDED SHOULD BE BASED ON WHEN THE ACTIVITY RELATED TO THE FEDERAL AWARD OCCURS. GENERALLY, THE ACTIVITY PERTAINS TO EVENTS THAT REQUIRE THE NON-FEDERAL ENTITY TO COMPLY WITH FEDERAL STATUTES, REGULATIONS, AND THE TERMS AND CONDITIONS OF FEDERAL AWARDS, SUCH AS EXPENDITURE/EXPENSE TRANSACTIONS ASSOCIATED WITH GRANT AWARDS. THE HEALTH DEPARTMENT REPORTS EXPENDITURES ON THE SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA FOR THE PERIOD COVERED BY THE AUDITEE'S FINANCIAL STATEMENTS WHICH MUST INCLUDE TH TOTAL FEDERAL AWARDS EXPENDED AS DETERMINED IN ACCORANCE WITH CRF SECTION 200.502(A), AS STATED ABOVE, AND MUST RECONCILE AMOUNTS REPORTED IN THE SEFA TO THE AMOUNTS REPORTED IN THE AUDITEEE'S FINANCIAL STATEMENTS. CONDITION: THE SEFA WAS NOT APPROPRIATELY RECONCILED TO THE FEDERAL GRANT REVENUES AND EXPENDITURES RECORDED IN THE FINANCIAL STATEMENTS. CHANGES WERE MADE TO MAJOR PROGRAM EXPENDITURES, AS WELL AS EXPENDITURES OF OTHR PROGRAMS DURING THE CLOSING PROCESS AND DURING COMPLETION OF THE SINGLE AUDIT TO PROPERLY REPORT EXPENDITURES ON THE SEFA. CLOSING PROCEDURES SHOULD BE IN PLACE TO RECONCILE GRANT EXPENDITURES INCURRED AT YEAR-END, CONFIRM THE AMOUNT AS ELIGIBLE WITH THE GRANTOR, CLAIM THE GRANT REVENUES ON A TIMELY BASIS, RECONCILE THE CLAIM TO THE GENERAL LEDGER, AND ENSURE THE EXPENDITURES THAT WILL BE CLAIMED UNDER FEDERAL AWARDS ARE PROPERTLY REPORTED ON THE SEFA AND AUDITED FINANCIAL STATEMENTS PRIOR TO THE START OF THE SINGLE AUDIT. IF EXPENDITURES REPORTED ON THE SEFA ARE MISSTATED, THE COUNTY COULD FAIL TO HAVE A PROGRAM APPROPRIATELY INDENTIFIED AS A MAJOR PROGRAM AND TESTED AS A MAJOR PROGRAM DURING THE SINGLE AUDIT. FAILURE TO HAVE A PROGRAM AUDITED DURING THE SINGLE AUDIT WOULD RESULT IN NONCOMPLIANCE WITH TITLE 2 U.S. CODE OF FEDERAL REGULATIONS PART 200, UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS (UNIFORM GUIDANCE). CAUSE: THE WAS THE HEALTH DEPARTMENT'S FIRST STANDALONE AUDIT AND MANAGEMENT HAD NOT PREPARED A SEFA IN THE PAST. EFFECT: THE SEFA RQUIRED MATERIAL ADJUSTMENTS TO INCLUDE ALL FEDERAL EXPENDITURES PRIOR TO THE SINGLE AUDIT BEGINNING, WHICH RESULTED IN A MISSTATED PRELIMINARY SEFA AND INEFFICIENCIES DURING THE SINGLE AUDIT. QUESTIONED COSTS: NO COSTS HAVE BEEN QUESTIONED AS A RESULT OF THIS FINDING. RECOMMENDATION: WE RECOMMEND THAT THE HEALTH DEPARTMENT TRACT THEIR FEDERAL AWARDS MORE REGULARLY AND RECONCILE IT TO THE GENERAL LEDGER. VIEW OF RESPONSIBLE OFFICIALS: THE HEALTH DEPARTMENT WILL REVISIT THEIR PROCEDURES AND METHOD OF FEDERAL AWARDS.

PREPARATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS: FINDING TYPE: MATERIAL NONCOMPLIANCE/MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE (REPORTING, CASH MANAGEMENT AND ALLOWABLE COSTS/COST PRINCIPLES. PROGRAMS: SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN; ASSISTANCE LISTING NUMBER 10.557; AWARD NUMBERS 50022 AND 50035, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. ELC CONTRACT TRACING, INVESTIGATION, TESTING COORD., AND INFECTION PREVENTION; ASSISTANCE LISTING NUMBER 93.323; AWARD NUMBER 251126, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. CRITERIA: THE CODE OF FEDERAL REGULATIONS (CFR) SECTION 200.303(B) REQUIRES NON-FEDERAL ENTITIES TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROL OVER THE FEDERAL AWARD THAT PROVIDES REASONABLE ASSURANCE THAT THE NON-FEDERAL ENTITY IS MANAGING BY THE FEDERAL AWARD IN COMPLIANCE WITH FEDERAL STATUTES, REGULATIONS, AND TERMS AND CONDITIONS OF THE FEDERAL AWARD. CFR SECTION 200.502(A) STATES THAT THE DETERMINATION OF WHEN A FEDERAL AWARD IS EXPENDED SHOULD BE BASED ON WHEN THE ACTIVITY RELATED TO THE FEDERAL AWARD OCCURS. GENERALLY, THE ACTIVITY PERTAINS TO EVENTS THAT REQUIRE THE NON-FEDERAL ENTITY TO COMPLY WITH FEDERAL STATUTES, REGULATIONS, AND THE TERMS AND CONDITIONS OF FEDERAL AWARDS, SUCH AS EXPENDITURE/EXPENSE TRANSACTIONS ASSOCIATED WITH GRANT AWARDS. THE HEALTH DEPARTMENT REPORTS EXPENDITURES ON THE SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA FOR THE PERIOD COVERED BY THE AUDITEE'S FINANCIAL STATEMENTS WHICH MUST INCLUDE TH TOTAL FEDERAL AWARDS EXPENDED AS DETERMINED IN ACCORANCE WITH CRF SECTION 200.502(A), AS STATED ABOVE, AND MUST RECONCILE AMOUNTS REPORTED IN THE SEFA TO THE AMOUNTS REPORTED IN THE AUDITEEE'S FINANCIAL STATEMENTS. CONDITION: THE SEFA WAS NOT APPROPRIATELY RECONCILED TO THE FEDERAL GRANT REVENUES AND EXPENDITURES RECORDED IN THE FINANCIAL STATEMENTS. CHANGES WERE MADE TO MAJOR PROGRAM EXPENDITURES, AS WELL AS EXPENDITURES OF OTHR PROGRAMS DURING THE CLOSING PROCESS AND DURING COMPLETION OF THE SINGLE AUDIT TO PROPERLY REPORT EXPENDITURES ON THE SEFA. CLOSING PROCEDURES SHOULD BE IN PLACE TO RECONCILE GRANT EXPENDITURES INCURRED AT YEAR-END, CONFIRM THE AMOUNT AS ELIGIBLE WITH THE GRANTOR, CLAIM THE GRANT REVENUES ON A TIMELY BASIS, RECONCILE THE CLAIM TO THE GENERAL LEDGER, AND ENSURE THE EXPENDITURES THAT WILL BE CLAIMED UNDER FEDERAL AWARDS ARE PROPERTLY REPORTED ON THE SEFA AND AUDITED FINANCIAL STATEMENTS PRIOR TO THE START OF THE SINGLE AUDIT. IF EXPENDITURES REPORTED ON THE SEFA ARE MISSTATED, THE COUNTY COULD FAIL TO HAVE A PROGRAM APPROPRIATELY INDENTIFIED AS A MAJOR PROGRAM AND TESTED AS A MAJOR PROGRAM DURING THE SINGLE AUDIT. FAILURE TO HAVE A PROGRAM AUDITED DURING THE SINGLE AUDIT WOULD RESULT IN NONCOMPLIANCE WITH TITLE 2 U.S. CODE OF FEDERAL REGULATIONS PART 200, UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS (UNIFORM GUIDANCE). CAUSE: THE WAS THE HEALTH DEPARTMENT'S FIRST STANDALONE AUDIT AND MANAGEMENT HAD NOT PREPARED A SEFA IN THE PAST. EFFECT: THE SEFA RQUIRED MATERIAL ADJUSTMENTS TO INCLUDE ALL FEDERAL EXPENDITURES PRIOR TO THE SINGLE AUDIT BEGINNING, WHICH RESULTED IN A MISSTATED PRELIMINARY SEFA AND INEFFICIENCIES DURING THE SINGLE AUDIT. QUESTIONED COSTS: NO COSTS HAVE BEEN QUESTIONED AS A RESULT OF THIS FINDING. RECOMMENDATION: WE RECOMMEND THAT THE HEALTH DEPARTMENT TRACT THEIR FEDERAL AWARDS MORE REGULARLY AND RECONCILE IT TO THE GENERAL LEDGER. VIEW OF RESPONSIBLE OFFICIALS: THE HEALTH DEPARTMENT WILL REVISIT THEIR PROCEDURES AND METHOD OF FEDERAL AWARDS.

PREPARATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS: FINDING TYPE: MATERIAL NONCOMPLIANCE/MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE (REPORTING, CASH MANAGEMENT AND ALLOWABLE COSTS/COST PRINCIPLES. PROGRAMS: SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN; ASSISTANCE LISTING NUMBER 10.557; AWARD NUMBERS 50022 AND 50035, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. ELC CONTRACT TRACING, INVESTIGATION, TESTING COORD., AND INFECTION PREVENTION; ASSISTANCE LISTING NUMBER 93.323; AWARD NUMBER 251126, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. CRITERIA: THE CODE OF FEDERAL REGULATIONS (CFR) SECTION 200.303(B) REQUIRES NON-FEDERAL ENTITIES TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROL OVER THE FEDERAL AWARD THAT PROVIDES REASONABLE ASSURANCE THAT THE NON-FEDERAL ENTITY IS MANAGING BY THE FEDERAL AWARD IN COMPLIANCE WITH FEDERAL STATUTES, REGULATIONS, AND TERMS AND CONDITIONS OF THE FEDERAL AWARD. CFR SECTION 200.502(A) STATES THAT THE DETERMINATION OF WHEN A FEDERAL AWARD IS EXPENDED SHOULD BE BASED ON WHEN THE ACTIVITY RELATED TO THE FEDERAL AWARD OCCURS. GENERALLY, THE ACTIVITY PERTAINS TO EVENTS THAT REQUIRE THE NON-FEDERAL ENTITY TO COMPLY WITH FEDERAL STATUTES, REGULATIONS, AND THE TERMS AND CONDITIONS OF FEDERAL AWARDS, SUCH AS EXPENDITURE/EXPENSE TRANSACTIONS ASSOCIATED WITH GRANT AWARDS. THE HEALTH DEPARTMENT REPORTS EXPENDITURES ON THE SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA FOR THE PERIOD COVERED BY THE AUDITEE'S FINANCIAL STATEMENTS WHICH MUST INCLUDE TH TOTAL FEDERAL AWARDS EXPENDED AS DETERMINED IN ACCORANCE WITH CRF SECTION 200.502(A), AS STATED ABOVE, AND MUST RECONCILE AMOUNTS REPORTED IN THE SEFA TO THE AMOUNTS REPORTED IN THE AUDITEEE'S FINANCIAL STATEMENTS. CONDITION: THE SEFA WAS NOT APPROPRIATELY RECONCILED TO THE FEDERAL GRANT REVENUES AND EXPENDITURES RECORDED IN THE FINANCIAL STATEMENTS. CHANGES WERE MADE TO MAJOR PROGRAM EXPENDITURES, AS WELL AS EXPENDITURES OF OTHR PROGRAMS DURING THE CLOSING PROCESS AND DURING COMPLETION OF THE SINGLE AUDIT TO PROPERLY REPORT EXPENDITURES ON THE SEFA. CLOSING PROCEDURES SHOULD BE IN PLACE TO RECONCILE GRANT EXPENDITURES INCURRED AT YEAR-END, CONFIRM THE AMOUNT AS ELIGIBLE WITH THE GRANTOR, CLAIM THE GRANT REVENUES ON A TIMELY BASIS, RECONCILE THE CLAIM TO THE GENERAL LEDGER, AND ENSURE THE EXPENDITURES THAT WILL BE CLAIMED UNDER FEDERAL AWARDS ARE PROPERTLY REPORTED ON THE SEFA AND AUDITED FINANCIAL STATEMENTS PRIOR TO THE START OF THE SINGLE AUDIT. IF EXPENDITURES REPORTED ON THE SEFA ARE MISSTATED, THE COUNTY COULD FAIL TO HAVE A PROGRAM APPROPRIATELY INDENTIFIED AS A MAJOR PROGRAM AND TESTED AS A MAJOR PROGRAM DURING THE SINGLE AUDIT. FAILURE TO HAVE A PROGRAM AUDITED DURING THE SINGLE AUDIT WOULD RESULT IN NONCOMPLIANCE WITH TITLE 2 U.S. CODE OF FEDERAL REGULATIONS PART 200, UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS (UNIFORM GUIDANCE). CAUSE: THE WAS THE HEALTH DEPARTMENT'S FIRST STANDALONE AUDIT AND MANAGEMENT HAD NOT PREPARED A SEFA IN THE PAST. EFFECT: THE SEFA RQUIRED MATERIAL ADJUSTMENTS TO INCLUDE ALL FEDERAL EXPENDITURES PRIOR TO THE SINGLE AUDIT BEGINNING, WHICH RESULTED IN A MISSTATED PRELIMINARY SEFA AND INEFFICIENCIES DURING THE SINGLE AUDIT. QUESTIONED COSTS: NO COSTS HAVE BEEN QUESTIONED AS A RESULT OF THIS FINDING. RECOMMENDATION: WE RECOMMEND THAT THE HEALTH DEPARTMENT TRACT THEIR FEDERAL AWARDS MORE REGULARLY AND RECONCILE IT TO THE GENERAL LEDGER. VIEW OF RESPONSIBLE OFFICIALS: THE HEALTH DEPARTMENT WILL REVISIT THEIR PROCEDURES AND METHOD OF FEDERAL AWARDS.