Finding 2025-003: Preparation of the schedule of federal expenditures (SEFA) – material weakness in internal controls over reporting. Management Response: Management acknowledges the finding and agrees that improvements are needed in the preparation and review of the Schedule of Expenditures of Federal Awards (SEFA). The audit identified that controls over the accuracy, completeness, and reconciliation of the SEFA to the general ledger and financial statements were not consistently performed or documented. This condition developed during a period of organizational transition, including changes in financial leadership, as well as increased complexity in federal funding and reporting requirements. These factors contributed to gaps in oversight and consistency in the SEFA preparation process. To address this finding, management is implementing the following corrective actions: • Establishing a formal, documented SEFA preparation process, including standardized templates and procedures • Implementing quarterly and year-end reconciliation processes to ensure grant activity is accurately recorded and aligned with the general ledger • Strengthening review controls, including secondary review by the Controller and CFO prior to finalization Enhancing grant tracking mechanisms to ensure expenditures, revenues, and matching requirements are properly classified • Providing targeted training to staff responsible for grant accounting and SEFA preparation Responsible party: Brenda Colon, CFO Expected Completion Date: October 2026