Finding 2023-002 Major Federal Program: 21.027 - COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Compliance Requirements: Reporting Response: LANWT acknowledges that the SEFA initially submitted to the auditors included a clerical error in the FALN classification for Contract #1696416. The $1,617,909 in expenditures was inadvertently reported under FALN 16.575 rather than the correct FALN 21.027 in the SEFA spreadsheet. However, the expenditures were allowable, properly documented, and fully supported by the grant agreement, which was provided to the auditors during fieldwork. LANWT respectfully disagrees with the classification of this matter as a compliance finding and significant deficiency. The misclassification did not involve any questioned costs, noncompliance with the grant terms, or omission of federal expenditures. The auditors had access to the source grant documentation, which clearly identified the correct FALN. In our view, this error was a joint oversight that resulted in a SEFA presentation correction, not a failure in internal control or compliance. Corrective Action: To prevent recurrence, LANWT has strengthened its SEFA preparation process by implementing the following procedures: All SEFA entries are now reviewed against source grant agreements by two independent finance staff members prior to submission. A checklist has been introduced to confirm correct ALNs and funding sources before SEFA finalization. Internal training has been conducted on SEFA requirements, including proper identification and reporting of federal assistance listing numbers. In future audits, LANWT will also request that the audit firm verify that the ALN and program name recorded on the SEFA are consistent with those identified in the source grant agreements, which are made available to the auditors during field work. The Chief Financial Officer (CFO) is responsible for ensuring the implementation and ongoing oversight of these corrective actions. LANWT remains committed to accurate and compliant reporting and appreciates the opportunity to clarify this matter. Date of Completion: June 20, 2025 Person Responsible to Ensure Completion: Bhuvana Kannan, CFO