The District does not disagree with the auditor's findings, but wishes to make several clarifications. 2022-001- State Compliance - Required Financial Audit 1) As stated in the 2022 Audit the primary reason the audit was not submitted to TCEQ on time was because of delays caused by COVID-19. This included that the auditor did not complete the report in time to meet TCEQ deadlines due to a conflict in the auditor' s schedule. 2) The District CFO contacted TCEQ Water District division and advised TCEQ staff that submittal of the audit report would be delayed and TCEQ did not object to the delay. 2022-002- Federal Compliance - SF-425, Federal Financial Report 1) The federal fonn SF-425 purpose is to document financial transactions specific to an awarded federal grant and project grant period. The SF-425 allows for submittal periods to be made quarterly, semi-annual, annual, or final (end of grant). The grant period terminated on December 31, 2022 (3 months after the end of the District's fiscal period). At the district option, it selected to submit the SF-425 for the final period. The District requested an extension of the submittal time and the grant administrator did not object to the SF-425 being submitted late. The following implementation will ensure future audit reports are filed in a timely matter: 2022-001- State Compliance - Required Financial Audit ? Set up a calendar of events scheduling activities and tasks for monthly closing entries ? Create timely reports after closing of each month ? Reconcile transactions throughout the month ? Complete adjusting entries monthly ? Validate year end entries 2022-002- Federal Compliance - SF-425, Federal Financial Report ? Set up a calendar of events scheduling activities and tasks for monthly closing entries. ? Create timely reports after closing of each month ? Reconcile transactions throughout the month ? Complete adjusting entries monthly ? Validate year end entries I, Mary Cortez, as Chief Financial Officer, will implement the corrective action plan hereupon effective FY2023. Chief Financial Officer