Significant deficiency in internal controls over financial reporting related to the recognition of grant and contract receivables and inventory Contact Person NAME: Keeley Foley PHONE: 206.381.0883 E-Mail: keeley.foley@aahi.org Explanation and Specific Reasons for Disagreement with the Audit Finding or That Corrective Action is not Required (if Applicable) No disagreement. Corrective Action Planned Access to Advanced Health Institute’s (AAHI’s) response to the recommendation: 1. Engage Escalon Financial Services to review/update policies and procedures for grant receivable recognition per GAAP (FASB ASC 958) and Uniform Guidance (distinguish unconditional versus conditional grants, proper cutoff/revenue recognition) 2. Implement quarterly independent review of year-end receivable balances and revenue entries by Escalon. 3. Conduct training for finance staff on GAAP grant recognition (completion tracked via signed attendance sheets) (Escalon is GAAP trained and certified) 4. Test 100% of material grant receivables at next fiscal year-end close for proper recognition (Ensure process is full proof and no deviations of process in prior fiscal year occurred) 5. In addition, AAHI will implement controls over recognition of inventory Responsible party: Escalon with Operations Director and Keeley Foley(oversight) Anticipated Completion Date May 2026 Significant deficiency in internal control over compliance and compliance as it relates to allowable costs and activities Contact Person NAME: Keeley Foley PHONE: 206.381.0883 E-Mail: keeley.foley@aahi.org Explanation and Specific Reasons for Disagreement with the Audit Finding or That Corrective Action is not Required (if Applicable) No disagreement. Corrective Action Planned AAHI’s response to the recommendation: 1. Formalize written policies and procedures for allowable costs per 2CFR 200 Subpart E (necessary, 206.381.0883 222 5th Ave N, Seattle,WA 98109 www.aahi.org reasonable, allocable, documented). 2. Require pre-expenditure requisition approval by Principal Investigator (PI) for all grant-related expenses (tracked in project management system). 3. Mandate dual review and recertification of invoices and drawdowns: PI and Director of Operations (documented sign-off required before payment/submission) 4. Perform monthly compliance reconciliations (grant budget vs. actual expenditures) with variance resolution documented. 5. Deliver annual training, and otherwise as needed, to PIs and staff on allowable/unallowable costs (tracked via attendance and quiz scores above 80%) 6. Conduct quarterly internal monitoring of 25% sample of grant expenses for allowability and compliance. Responsible party: Keeley Foley (oversight), Director of Operations (daily enforcement), Escalon (support) Anticipated Completion Date May 2026