Finding Reference Number: 2024-003 Description of Finding: The Town submitted its Audited Financial Statements and Single Audit Report to the federal clearinghouse in November 2025, eight months after it was due, mostly the result of delays in reconciling grant activity to revenue recorded. Statement of Concurrence or Nonconcurrence: The audit was not submitted on time. Corrective Action: The delay in submitting the Town’s Audited Financial Statements and Single Audit Report was primarily caused by significant organizational transitions within the Finance Department during the audit period. Much of the team, including senior staff was newly hired, resulting in limited historical knowledge of several complex, multi-year capital projects and grant activities. At the same time, the Town was implementing a new account structure and adapting to revised financial coding practices. These overlapping system, staffing, and project-knowledge challenges created temporary gaps in continuity, processing, and reconciliation workflows, particularly in reconciling grant activity to revenue recorded, which ultimately contributed to the eight-month delay in submitting required federal reports. To prevent future delays, the Town is implementing a comprehensive corrective action plan focused on stabilizing Finance staffing, improving processes, and strengthening internal controls. Actions include establishing consistent grant billing and reconciliation cycles; developing documented procedures for grant tracking, revenue recognition, SEFA preparation, and year-end close; and enhancing financial coding accuracy under the new account structure. Ongoing staff training will build institutional knowledge, while external support may be utilized as needed for complex reconciliations and transitional needs. These measures will ensure the Town can prepare accurate financial statements and the SEFA in a timely manner and meet all federal reporting deadlines going forward. Name of Contact Person: Aimee Beleu, Finance Director, (530) 872-6291, abeleu@townofparadise.com Projected Completion Date: March 1, 2026