Finding 2025-002: Reporting – Significant Deficiency in Internal Controls Over Compliance Programs: Block Grants for Prevention and Treatment of Substance Abuse (ALN 93.959) and SMART Innovation Program Management Response: Management concurs with the finding. Although grant reporting submissions were not subject to a formal documented secondary review and approval process prior to submission, compensating controls existed. The Chief Executive Officer and Controller were copied on submissions and reviewed amounts charged to grants as part of monthly financial reporting and close procedures. No instances of noncompliance or questioned costs were identified. To strengthen controls over compliance reporting, management has implemented a formal review and approval process requiring the Chief Executive Officer to review all grant invoices and reporting submissions prior to submission to the grantor. Documentation of review and approval will be maintained to evidence compliance with established procedures. Corrective Action Planned/Implemented: • Formalized secondary review and approval procedures for all grant reporting submissions prior to submission. • Chief Executive Officer review and approval now required before grant invoices and reports are submitted. • Documentation of review and approval retained to support compliance with internal control procedures. Responsible Party: Chief Executive Officer / Controller / Accounting Department Implementation Date: Implemented as of April 2026