FINDING 2025-002 Contact Person Responsible for Corrective Action: Jeffrey Spalding Contact Phone Number: 317-776-6328 Views of Responsible Official: The City concurs with the finding and recommendation. While monitoring activities were performed for all subrecipients of Coronavirus State and Local Fiscal Recovery Funds, the City acknowledges that a formal written procedure and a standardized tracking mechanism were not in place to ensure all monitoring activities were consistently documented in accordance with Uniform Guidance requirements. Description of Correction Action Plan: The City is in the process of developing and implementing formal written procedures for subrecipient monitoring to ensure compliance with the requirements of 2 CFR 200.332 and other applicable Uniform Guidance provisions. The procedures will establish responsibilities for evaluating subrecipient risk, performing monitoring activities, following up on identified deficiencies, and maintaining documentation supporting monitoring efforts. The City will continue to maintain a centralized tracking system, within its new ERP system, for all federal awards passed through to subrecipients. The tracking system will document subrecipient agreements, risk assessments, reporting requirements, monitoring activities performed, required follow-up actions, and the status of corrective actions, if applicable. Prior to issuing federal funds to a subrecipient, the City will perform and document a risk assessment considering factors such as the subrecipient's prior experience with federal awards, results of previous audits, financial stability, personnel and systems responsible for federal compliance, and any identified compliance concerns. Monitoring procedures will be tailored based on the assessed level of risk. Throughout the period of performance, the City will review required financial and performance reports, verify compliance with applicable award requirements, review audit reports when required, and follow up on any identified deficiencies. Documentation supporting all monitoring activities will be maintained in accordance with federal record retention requirements. Management believes these procedures will strengthen compliance with Uniform Guidance requirements and ensure subrecipient monitoring activities are performed consistently, timely, and appropriately documented. Anticipated Completion Date: December 31, 2026