Management Response: Management acknowledges that funding percentages in the accounting system did not match the cost allocation plan for several transactions, resulting in a nominal overcharge to the grants. To prevent this in the future, management will institute a mandatory verification step where funding percentages entered into the accounting system are cross-referenced directly against the approved cost allocation plan. We will ensure that the amounts charged to grants agree strictly with the approved percentages. Any discrepancies or rounding issues will be addressed by allocating differences to the organization's operating expense class rather than a government grant, ensuring federal awards are not overcharged. Parties Responsible and Timeline The Executive Director and Accountant will conduct a review of current system percentages against the cost allocation plan immediately. Updates to the internal review process for cost allocations will be approved by TXAEYC’s Finance Committee and Governing Board by April 30, 2026.