State of New HampshireState Government

Finding Reference Number: 2025-001 New Hampshire Department of Education Child Nutrition Cluster (Assistance Listing #10.553, #10.555, #10.556, #10.559) Federal Award Numbers: 254NH304N1099, 254NH304N1199 Federal Award Years: 2024, 2025 U.S. Department of Agriculture Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2024-002 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria The Federal Funding Accountability and Transparency Act of 2006 (FFATA), Public Law 109282, as amended by Section 6202 of the Government Funding Transparency Act of 2008 (Public Law 110252), and its implementing regulations at 2 C.F.R. Part 170, require prime recipients of Federal grants and cooperative agreements to report information on first tier subawards of $30,000 or more to System for Award Management (SAM.gov). Further, Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200),. section 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During the year ended June 30, 2025, we noted the New Hampshire Department of Education (the Department) passed through $40,990,885 in Child Nutrition Cluster Grants (CNC Grant) to Local Educational Agencies (LEAs). During our testwork, we noted that the Department did not submit FFATA reports for all subawards for the entire fiscal year. Cause The Department did not submit reports of amounts passed-through to its subrecipients. No FFATA reporting controls existed or were operating effectively for the period July 1, 2024 – June 30, 2025.   Effect The condition found that first-tier subawards were not reported in the Federal Funding Accountability and Transparency Act Subaward Reporting System. Questioned Costs None Recommendation We recommend DOE implement a process and internal controls to ensure that all first-tier subawards of $30,000 or more be reported in accordance with the Federal Funding Accountability and Transparency Act. View of Responsible Officials Management concurs with the finding above.

Finding Reference: 2025-002 New Hampshire Department of Military National Guard Military Operations and Maintenance (O&M) Projects (Assistance Listing #12.401) Federal Award Numbers: W912TF-23-2-1001, W912TF-24-2-1001, W912TF-25-2-1001 Federal Award Years: 2023, 2024, 2025 U.S. Department of Defense Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-002, 2024-003 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Title 2 of the Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200) section 200.302(b)(2) states the recipient’s and subrecipient’s financial management system must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirement of 2 CFR 200.328 and 2 CFR 200.329. The SF-270, Request for Advance or Reimbursement must be submitted as part of the cash draw request process. Further, 2 CFR 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testwork over the SF-270 Request for Advance or Reimbursement report, we identified errors in the amounts reported on certain reimbursement requests. Specifically, for 3 of 28 SF-270 reports selected for testing, the amounts reported could not be reconciled to the supporting documentation provided. The reported amounts for line items 11(a), total program outlays; line-item 11(c), net program outlays; line 11(f), non-federal share of amount on line e; line 11(g), federal share of amount on line e; and line 11(h) federal payments previously requested did not agree to the supporting accounting records and documentation. Cause The cause of the condition found was due to insufficient review and reconciliation of the SF-270 reports prior to submission. Although the New Hampshire Department of Military (Department) maintains policies and procedures to track total expenditures by appendix over the federal award year, the amounts reported on the SF-270 were not adequately reviewed to ensure they agreed to the Department’s underlying expenditure tracking. For each federal fiscal year, the Department uses an internal tracking sheet that records, by appendix, the federal share of costs incurred each month. However, for the three SF-270 reports tested, state matching expenditures were improperly included in amounts reported as federally reimbursable costs. The lack of a documented review comparing the SF-270 line items to the internal tracking records resulted in the errors not being identified prior to submission. Upon identification by the engagement team, the Department corrected the errors and resubmitted the affected SF-270 reports to the United States Property and Fiscal Officer – New Hampshire National Guard. Effect The effect of the condition is that SF-270 reimbursement requests submitted to the United States Property and Fiscal Officer (USPFO) did not accurately reflect program outlays and the allocation between the Federal and non Federal share. As a result, the Department’s reimbursement requests were not supported by underlying accounting records and source documentation for the affected line items. Because the SF-270 contains a certification that “the data on the reverse are correct” and that “all outlays were made in accordance with the grant conditions or other agreement,” the submission of SF-270s with unsupported or misstated amounts represents noncompliance with the reporting requirements applicable to payment requests. Additionally, inaccurate SF-270 reporting reduces the reliability of information used by the sponsoring agency to process reimbursements and perform oversight, and increases the risk that reimbursements could be made in amounts that are not properly supported and may be unallowable. Questioned Costs None Recommendation We recommend the Department review and strengthen existing policies and procedures related to the preparation and submission of SF-270 reimbursement requests by implementing internal controls to ensure each SF-270 is complete and accurate prior to submission. These controls should include a documented review and reconciliation of each SF-270 line item to supporting documentation, such as the Department’s internal tracking sheets, to verify that reported amounts accurately reflect federally reimbursable costs and the required non-Federal share. In addition, the Department should retain documentation evidencing the reconciliation and review performed with each SF270 to substantiate that amounts reported are complete and accurate at the time of submission. While the majority of SF270 reports tested did not contain errors, strengthening these controls will help ensure consistent compliance across all reimbursement requests. View of Responsible Officials Management does not concur with this finding. Rejoinder Based on the audit evidence obtained, the audit conclusion remains unchanged. The auditee is responsible for establishing and maintaining internal control sufficient to provide reasonable assurance that reimbursement requests are accurate, complete, and adequately supported in accordance with applicable award requirements. The conditions identified demonstrate that the controls in place did not provide that assurance; therefore, the finding remains valid.

Finding Reference Number: 2025-003 New Hampshire Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F24AF02377-00, F21AF04100-02, F24AF00586-00, F24AF02509-00, F21AF03885-02, F21AF04030-06 Federal Award Years: 2021, 2024 U.S. Department of Interior Compliance Requirement: SEFA Reporting Type of Finding: Material Weakness and Noncompliance Prior Year Finding: 2024-006 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR section 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements, section 200.510(b) states the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statement’s which must include the total Federal awards expended as determined in accordance with § 200.502. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. Additionally, per 2 CFR 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The New Hampshire Fish and Game Department (the Department) oversees 23 different grants funded under the Fish and Wildlife Cluster (the Program). To assist in the management of the grants, the Department uses QuickBooks as their main system of books and records, rather than the State of New Hampshire’s centralized accounting system, NH First. The Department manually enters expenditure transactional data into Quickbooks and heavily relies on a number of excel tracking sheets to track expenditures, cash draws, and in-kind match earned for each of the 23 grants. During our testwork over the Program, we identified the following: A. For 6 of 23 grants, we were unable to reconcile the amount reported on the SEFA. For the grants, the Department included $2,030,430 of expenditures on the June 30, 2025 SEFA. As part of our review of the expenditures reported, we were unable to recalculate the amount included by the Department. Based upon the total expenditures incurred during the period ending June 30, 2025, it appeared that the amount that should have been reported was $1,991,560. As such, it appeared that the SEFA as of June 30, 2025 was overstated by a net amount of $38,070. B. For 6 of 6 grants that reported subrecipient pass through expenditures, the Department reported only the cost share amount of the expenditures, rather than the full payment to the subrecipient, on the SEFA. The payments to subrecipients per Quickbooks was $677,949 and the payments to subrecipients per the SEFA was $225,730. Cause The cause of the condition found appears to be related to the heavy reliance on manual spreadsheets and Quickbooks. The manual data entry into Quickbooks and the use of spreadsheets are susceptible to human error. As the Department does not have any internal controls in place to ensure the spreadsheets or Quickbooks reconcile to NH First, if there was an error in the data used by the Department, it would be difficult to detect. Effect The effect of the condition found is that the expenditures and subrecipient pass through amounts were not accurately presented on the SEFA. Questioned Costs Cannot be determined. Recommendation We recommend that the Department develop written policies and procedures and implement internal controls to ensure all spreadsheets utilized to manage the program reconcile to Quickbooks and that Quickbooks reconciles to NH first on a routine basis. View of Responsible Officials Management concurs with the finding above.

Finding Reference Number: 2025-004 New Hampshire Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F24AF02377-00, F21AF04100-02, F23AF02714-01, F24AF01916-00, F24AF00586-00, F24AF00645-00, F23AF02720-00, F24AF01596-00, F22AF02616-02, F23AF02807-00, F24AF02323-00, F23AF02954-00, F24AF02509-00, F21AF03822-01, F21AF03885-02, F22AF03670-01, F21AF03886-03, F21AF04030-06, F22AF00995-00, F22AF00929-00, F23AF03086-00, F25AF00734-00, F20AF11939-04 Federal Award Years: 2020 2021, 2022, 2023, 2024 U.S. Department of Interior Compliance Requirement: Activities Allowed or Unallowed/Allowable Costs/Costs Principles Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2024-007 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Per Part 3 of the Compliance Supplement, costs must be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity in order to be allowable under federal awards. Further per Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200), section 200.502, the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity related to the Federal award pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as expenditure/expense transactions associated with grants. Lastly, 2 CFR 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testwork over Activities Allowed or Unallowed/Allowable Costs/Costs Principles, for 54 of 60 payroll and fringe benefit sampled costs, we were unable to agree the payroll and fringe benefit costs charged to the Fish and Wildlife Cluster (the program) to the State of New Hampshire’s centralized accounting system, NH First. The New Hampshire Department of Fish and Game (the Department) does not charge payroll and fringe benefit costs incurred by the program as processed in NH First. Instead, the Department utilizes an internally calculated "federal rate" that is used to charge both payroll and fringe benefit costs based upon the number of hours worked to the program. As described by the Department, the federal rate is calculated based upon an employee's fringe benefits, the approved NH First pay rate, and the employee’s years of service. While we were able to recalculate the employees’ payroll and fringe benefit amounts for each of the 60 samples selected testwork as recorded in NH First, we were not able to reconcile this amount to what the Department actually charged the program. Cause The Department does not utilize the NH First system as the basis to charge payroll, fringe and indirect costs to the program. As described in the condition found above, the Department performs its own calculation of what the payroll and fringe benefit costs are based upon the Department’s calculated federal rate and then subsequently data enters their calculated expenditure information into QuickBooks. The Department uses QuickBooks to track all federal expenditures under the program by individual federal grant. The Department does not perform any reconciliations to ensure what was entered into QuickBooks reconciles to the NH First system in order to verify that the data in QuickBooks is complete and accurate. Effect Unallowable costs could be charged to the program. Questioned Costs $17,597 Recommendation We recommend that the Department develop written policies and procedures that outline how payroll and fringe benefit costs are charged to the program and implement controls to ensure the amount of payroll and fringe benefits entered into QuickBooks properly reconciles to NH First as part of its routine payroll process. View of Responsible Officials Management partially concurs with this finding. Rejoinder A partial concurrence with this finding is not appropriate, as the Department’s response implicitly confirms the facts and deficiencies identified during the audit. The corrective actions described are planned for a future period and do not negate the noncompliance that occurred during the State Fiscal Year 2025 audit period. The Department's assertion that it "does perform reconciliations and pre-audits of information entered into QuickBooks" is misleading. The core of the finding is not whether data within QuickBooks is internally consistent, but that the Department failed to perform the critical reconciliation of its QuickBooks data back to the State of New Hampshire’s official accounting system, NH First. This failure is the reason that 54 of 60 payroll samples could not be agreed to the system of record, which violates the internal control requirements of 2 CFR section 200.303. Furthermore, the Department’s commitment to change its process "Beginning with SFY26" is an explicit acknowledgment that the process used during the audit period was incorrect. Agreeing to fix a procedural failure in a future fiscal year constitutes a full acceptance of the finding's accuracy for the period under review. This is, by definition, a repeat finding precisely because the deficient process remained in operation throughout SFY25. Per federal regulations, costs charged to federal awards must be based on when the activity occurs and be consistent with policies applied to non-federal activities. By utilizing an internally calculated "federal rate" instead of actual payroll and benefit costs from NH First, the Department was not in compliance with these requirements.

Finding Reference Number: 2025-005 New Hampshire Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F24AF00586-00, F22AF00995-00, F23AF03086- Federal Award Years: 2022, 2023, 2024 U.S. Department of Interior Compliance Requirement: Matching Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2024-008 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria In-kind match requirement is to test records to corroborate the values placed on in-kind contributions (including third party in-kind contributions) are in accordance with 2 CFR 200.306, 200.434, and 200.414, and the terms and conditions of the award. Additionally Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200),. section 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition To meet the federal match required under the program, the New Hampshire Fish and Game Department (the Department) utilizes in-kind match that is earned from volunteer hours and costs contributed by its third party subrecipient. During our testwork over in-kind match, for 3 of 7 subrecipient invoices selected for testwork used to support the Department’s in-kind match, we were unable to obtain documentation to support the amount of the in-kind match earned. For each of the 3 sample selections, the value of the in-kind contribution was handwritten on the subrecipient's invoice for unrelated services. There was no documentation obtained to support the accuracy of this handwritten amount. Upon inquiry, the Department confirmed that no further verification was performed to ensure the subrecipient's in-kind match was accurate and based upon costs in support of the grant associated with the in-kind match. Cause The cause of the condition found is primarily due to insufficient internal controls to ensure that the value of the match contributed by its subrecipient is complete and accurate. Due to the long-standing and collaborative relationship between the Department and the subrecipient, the Department has not developed or implemented formalized policies and procedures related to validating the existence of in-kind match earned. Effect The effect of the condition found is that the Department did not have appropriate documentation to support the in-kind match earned and applied against its federal award in support of federal funds that were drawn. This could lead to unallowable costs being charged to the grant if the sufficient match was not made. Questioned Costs $17,137 Recommendation We recommend that the Department implement written policies and procedures surrounding the tracking of in-kind match. Internal controls should be implemented to ensure the accuracy of the in-kind match earned, including ensuring that there is supporting documentation to substantiate the amount earned. View of Responsible Officials Management concurs with the finding above.

Finding Reference Number: 2025-006 New Hampshire Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F21AF04100-02, F21AF03885-02 Federal Award Year: 2021 U.S. Department of Interior Compliance Requirement: Earmarking Type of Finding: Material Weakness Prior Year Finding: No Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Each State's fish and wildlife agency may not spend more than 15 percent of the annual amount apportioned to the State from the Sport Fish Restoration and Boating Trust Fund for activities in both the Aquatic Resources Education Outreach and the Communication subprograms. The 15 percent maximum applies to both subprograms as if they were one. The Commonwealths of Puerto Rico and the Northern Mariana Islands, the District of Columbia, and the Territories of Guam, the U.S. Virgin Islands, and American Samoa are not limited to the 15 percent cap imposed on the 50 States. Each of these entities may spend more for these purposes with the approval of the Regional Director (50 CFR section 80.62). Additionally, Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200), section 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The New Hampshire Fish and Wildlife Department (the Department) had no internal controls in place to ensure compliance with the federal requirement that no more than 15 percent of the annual apportionment from the Sport Fish Restoration and Boating Trust Fund is spent on the Aquatic Resources Education, Outreach, and Communication subprograms. Cause The Department had not established policies or procedures to specifically track or limit expenditures for the Aquatic Resources Education, Outreach, and Communication subprograms to ensure they remained within the 15 percent cap. There was employee turnover within the Department and the employee that was previously responsible for earmarking activities is no longer with the Department.   Effect Although the Department was in compliance for the audited period, the absence of internal controls creates a risk of future noncompliance. This could lead to a violation of federal regulations (50 CFR section 80.62), potentially resulting in penalties or required corrective actions from the funding agency. Questioned Costs None Recommendation The Department should implement a system of internal controls to ensure compliance with the 15 percent spending limit. These controls should include: 1) A method for tracking expenditures allocated to the Aquatic Resources Education, Outreach, and Communication subprograms; and 2) A periodic review process to monitor spending and ensure it does not exceed the 15 percent cap. This will ensure ongoing compliance with federal requirements and responsible management of grant funds. View of Responsible Officials Management concurs with the finding above.

Finding Reference Number: 2025-007 New Hampshire Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F22AF00995-00, F22AF00929-00, F23AF03086-00, F25AF00734-00, F22AF02616-02, F24AF00586-00 Federal Award Years: 2022, 2023, 2024, 2025 U.S. Department of Interior Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2024-005 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria A pass-through entity (PTE) must: 1. Identify the Award and Applicable Requirements - Clearly identify to the subrecipient required award information and applicable requirements described in Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200) section 200.332(a); 2. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 3. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 2 CFR 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During the year ended June 30, 2025, the New Hampshire Fish and Game Department (the Department) passed through $677,949 of federal funding to 2 subrecipients. As part of our testwork related to subrecipient monitoring, we identified the following: A. As part of the during the award monitoring testwork, we noted that the Department completes a risk assessment questionnaire for new projects that were approved at the subrecipient. As part of our testwork over the risk assessments performed, we identified the following: • For 2 of 2 subrecipients selected for testwork, a risk assessment questionnaire was completed and required monitoring procedures were outlined within the questionnaire, but the monitoring checklist was not completed and required monitoring activities were not performed. As a result, we were not able to determine what monitoring procedures were performed over the subrecipients. B. While the Department has formal policies and procedures to review and maintain documentation to evidence the review and approval of the subrecipient’s unform guidance report, there was no documentation to support that the Department had obtained and reviewed its subrecipient’s most recent uniform guidance report issued. Cause Management was not following formal written policies and procedures and internal controls to ensure that all required subrecipient monitoring compliance procedures were being performed. While management communicated the appropriate award information, designed and implemented controls to perform subrecipient risk assessment and outline monitoring activities, the monitoring checklist was not completed as designed. Effect Improper monitoring would not detect noncompliance with the subaward at the subrecipient level. Questioned Costs None Recommendation We recommend the Department ensure the monitoring checklists are completed and procedures performed are properly documented, and that the receipt and review of the subrecipient’s uniform guidance report is properly documented. View of Responsible Officials Management concurs with the finding above.

Finding Reference Number: 2025-008 NH Department of Business and Economic Affairs WIOA Custer (Assistance Listing #17.258, #17.259, #17.278) Federal Award Numbers: 24A55AY000058-01-00, 24A55AT000066-01-00, 24A55AT000066-01-01 Federal Award Year: 2024 U.S. Department of Labor Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2024-009 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria The Federal Funding Accountability and Transparency Act of 2006 (FFATA), Public Law 109282, as amended by Section 6202 of the Government Funding Transparency Act of 2008 (Public Law 110252), and its implementing regulations at 2 C.F.R. Part 170, require prime recipients of Federal grants and cooperative agreements to report information on first tier subawards of $30,000 or more to System for Award Management (SAM.gov). Further, pursuant to Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200). section 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testwork over compliance with the Federal Funding Accountability and Transparency Act (FFATA) reporting requirements, we noted deficiencies in internal controls over the review, approval, and timely submission of FFATA subaward reports. For 2 of 2 FFATA reports selected testing, the reports were not submitted timely.   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 2 N/A 2 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $3,060,030 N/A $3,060,030 $0 $0 Cause Staffing changes caused a lapse in reporting procedures, resulting in missed FFATA filings during fiscal year 2024. This lapse was discovered during the fiscal year 2024 audit and policies and procedures were updated in fiscal year 2025. Due to the timing of the prior year finding, FFATA filings were submitted in fiscal year 2025, but were not timely. Effect The effect of the condition is that the Department did not comply with the Federal Funding Accountability and Transparency Act (FFATA) reporting requirements, resulting in untimely submission of required subaward information to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). As a result, federal agencies and the public did not receive timely and reliable information regarding subawards funded under the Department’s federal programs, which reduces transparency and limits the ability of federal oversight entities to monitor the use of federal funds. Questioned Costs None Recommendation We recommend the Department continue to implement written policies and establish internal controls for FFATA reporting to ensure all submissions to SAM.gov are timely and appropriately reviewed. View of Responsible Officials Management concurs with the finding above.

Finding Reference Number: 2025-009 New Hampshire Department of Education COVID-19 Education Stabilization Fund (Assistance Listing #84.425U, #84.425V, #84.425W) Federal Award Numbers: S425U210017, S425V210041, S425W210030-21A Federal Award Year: 2021 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Findings: 2022-013, 2022-016, 2023-008, 2024-013 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria The Federal Funding Accountability and Transparency Act of 2006 (FFATA), Public Law 109282, as amended by Section 6202 of the Government Funding Transparency Act of 2008 (Public Law 110252), and its implementing regulations at 2 C.F.R. Part 170, require prime recipients of Federal grants and cooperative agreements to report information on first tier subawards of $30,000 or more to System for Award Management (SAM.gov). Further, 2 CFR 200 200.303(a), requires the recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During the year ended June 30, 2025, we noted the New Hampshire Department of Education (the Department) passed through $104,640,897 in Education Stabilization Fund Grants (ESF Grant) to Local Educational Agencies (Local Educational Agencies). During our testwork over FFATA reporting at the Department for ESF Grants, we selected 9 out of 59 FFATA reports filed in State fiscal year 2025. Our testwork noted a deficiency in internal controls over the timely submission of FFATA reports as 5 reports were not submitted timely. The 5 reports had action dates of July 2, 2024 as reported in the Department’s records and a submission date per SAM.gov of November 14, 2024. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 9 0 5 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $ 1,241,834 $0 $573,209 $0 $0 Cause Following the federal system migration, the FFATA reporting platform within SAM.gov no longer displayed or made readily retrievable the submission date associated with individual FFATA reports. No evidence was maintained to support the Department’s FFATA reports were filed timely. Effect The failure to timely report subawards in accordance with FFATA requirements can lead to increased scrutiny from federal agencies and potential penalties or corrective actions imposed on the Department. Questioned Costs None Recommendation To ensure compliance with FFATA reporting requirements and mitigate the risk of federal scrutiny, we recommend the Department implement a more robust internal control framework for tracking and documenting FFATA submissions. View of Responsible Officials Management concurs with the finding above.

Finding Reference Number: 2025-010 New Hampshire Department of Education COVID-19 Education Stabilization Fund (Assistance Listing #84.425U, #84.425V, #84.425W) Federal Award Numbers: S425U210017, S425V210041, S425W210030-21A Federal Award Year: 2021 U.S. Department of Education Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: No Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria A pass-through entity (PTE) must: 1. Identify the Award and Applicable Requirements - Clearly identify to the subrecipient required award information and applicable requirements described in Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200) section 200.332(a); 2. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 3. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 2 CFR 200 200.303(a), requires the recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During the year ended June 30, 2025, we noted the New Hampshire Department of Education (the Department) passed through $104,640,897 in Education Stabilization Fund Grants (ESF Grant) to Local Educational Agencies (Local Educational Agencies). During our testwork over subrecipient monitoring at the Department for ESF Grants, we selected 8 out of 66 subaward agreements executed in State fiscal year 2025 for testing and noted the following: • The Department communicates award information through the approved Grant Sub-Award Notification (GAN). For 7 of 8 subawards selected for testwork, the Department communicated wrong Assistance Listing Number (ALN) and Federal Assistance Identification Number (FAIN) to the subrecipients that were included in the Grant Sub-Award Notification (GAN). As part of the during the award monitoring testwork, we noted that the Department completed the fiscal and programmatic risk assessment for fiscal year 2025. However, the Department did not perform the fiscal and programmatic monitoring for the entire fiscal year. Specifically, we noted the following deficiencies: • Absence of Fiscal Monitoring: The Department did not perform any activities to monitor the fiscal administration of the subawards for the entire fiscal year. • Incomplete Programmatic Monitoring: While some programmatic monitoring was conducted, these activities were limited to only the first six months of the fiscal year. No programmatic monitoring was performed for the second half of the year to ensure that subrecipients were making progress toward performance goals and using funds for authorized purposes. Cause The Department’s internal controls were properly designed; however, were not operating effectively to identify the missing award communication items. Additionally, due to decreased funding in the program, the Department did not perform adequate subrecipient monitoring activities for the entire fiscal year. Effect The lack of communication of all required award elements can impact the subrecipients ability to comply with federal statutes, regulations, and the terms and conditions applicable to the federal award. The lack of consistent fiscal and programmatic oversight would not detect noncompliance by the subrecipient to administer the subaward in compliance with the terms and conditions of the subaward. Questioned Costs None Recommendation We recommend the Department review its process to communicate subawards to subrecipients to ensure it communicates all of the required elements. Additionally, we recommend the Department reinstitute its programmatic and fiscal monitoring procedures until the final completion of the program to ensure compliance with the federal subrecipient monitoring requirements.   View of Responsible Officials Management does not concur with this finding. Rejoinder We respectfully disagree with the Department’s position that the abrupt change in the administrative funding liquidation period absolved it of its responsibility to perform required subrecipient monitoring for Federal Fiscal Year 2025 (FFY25). While we acknowledge the challenges presented by the unexpected modification of the liquidation period by the U.S. Department of Education (USED) on March 28, 2025, the core requirements for subrecipient oversight as mandated by federal regulations are not contingent upon the availability of administrative funds. The Uniform Guidance, specifically 2 CFR section 200.332, explicitly requires a pass-through entity (PTE) to monitor its subrecipients to ensure federal awards are used for authorized purposes and in compliance with all terms and conditions. Furthermore, 45 CFR section 75.303(a) mandates that the Department establish and maintain effective internal controls to ensure compliance. These regulations do not provide an exception for a lack of administrative funding. The Department's responsibility to monitor the $104,640,897 in Education Stabilization Fund Grants was in effect for the entire fiscal year. The decision to cease all fiscal monitoring and to conduct programmatic monitoring for only the first six months of the fiscal year constitutes a failure of the internal control system to ensure compliance. The cancellation of the Annual Performance Reporting (APR) requirement by USED does not negate the PTE's broader and more fundamental duty to perform other monitoring activities as required by 2 CFR sections 200.332(d) through (f), including the review of financial reports and follow-up on deficiencies. Therefore, the responsibility to ensure federal funds are administered in accordance with federal law remained with the Department. The recommendation to reinstitute comprehensive fiscal and programmatic monitoring procedures to ensure full compliance with federal requirements stands.

Finding Reference Number: 2025-011 New Hampshire Department of Health and Human Services Aging Cluster (Assistance Listing #93.044, #93.045, #93.053) and COVID-Aging Cluster (Assistance Listing #93.044, #93.045, #93.053) Federal Award Numbers: 2301NHOACM, 2401NHOASS, 2401NHOAHD, 2501NHOASS, 2501NHOAHD Federal Award Years: 2023, 2024, 2025 U.S. Department of Health and Human Services Compliance Requirement: Activities Allowed or Unallowed/Allowable Costs/Costs Principles Type of Finding: Material Weakness Prior Year Finding: 2024-016 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Pursuant to Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200), section 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The New Hampshire Department of Health and Human Services (the Department) enters into subrecipient agreements with local area agencies to provide supportive services and nutrition services programs. For 32 of 60 subrecipient invoices selected for testing, there was no evidence of the Department’s review and approval to verify the invoice amounts prior to payment. The total amount paid under the 32 invoices was $472,685. No questioned costs were identified, and no material noncompliance with federal requirements was noted. Cause The cause of the condition found is due to insufficient policies and procedures to ensure documented review the accuracy of the subrecipient invoices prior to or subsequent to payment. For certain invoices, the Department uses the Options Electronic Billing and Service Authorization Maintenance System (the System). Once the subrecipient is authorized within the System to provide services and up to a specified funding amount, the subrecipient electronically submits an invoice for the dates of services provided. The System validates that the subrecipient is approved to provide the service for the dates requested and that sufficient authorized funding remains; however, the System does not verify the accuracy of the invoiced amounts. The Department relied on these automated system validations and did not have compensating procedures to review or verify the accuracy of invoice amounts either prior to payment or through post-payment subrecipient monitoring. Effect The effect of the condition is that, in the absence of documented procedures to review the accuracy of subrecipient invoices, there is an increased risk that reimbursements could be made for costs that are not adequately supported by subrecipient books and records and, therefore, may be unallowable. During the year ended June 30, 2025, total payments reimbursed with federal funds and processed through the System were $5,353,584. Questioned Costs None Recommendation We recommend that the Department develop and implement written policies and procedures to establish internal controls over the review and approval of invoices submitted through the Options Electronic Billing and Service Authorization Maintenance System. These controls should include documented procedures to review and verify the accuracy of invoiced amounts, including comparison to supporting meal count information maintained by subrecipients, either prior to payment or through post-payment monitoring procedures. These procedures should be designed to provide reasonable assurance that reimbursements are accurate and supported in accordance with federal requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2025-012 New Hampshire Department of Health and Human Services Aging Cluster (Assistance Listing #93.044, #93.045, #93.053) and COVID-Aging Cluster (Assistance Listing #93.044, #93.045, #93.053) Federal Award Numbers: 2301NHOASS, 2401NHOAHD, 2501NHOACM, 2501NHOASS Federal Award Years: 2023, 2024, 2025 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2024-015 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria The Federal Funding Accountability and Transparency Act of 2006 (FFATA), Public Law 109282, as amended by Section 6202 of the Government Funding Transparency Act of 2008 (Public Law 110252), and its implementing regulations at 2 C.F.R. Part 170, require prime recipients of Federal grants and cooperative agreements to report information on first tier subawards of $30,000 or more to System for Award Management (SAM.gov). Further, pursuant to Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200),. section 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testwork over compliance with the Federal Funding Accountability and Transparency Act (FFATA) reporting requirements, we noted deficiencies in internal controls over the review, approval, and timely submission of FFATA subaward reports. For each of the nine FFATA reports selected for testing, there was no documented evidence that the reports were reviewed and approved by the Department prior to submission to SAM.gov. A. For each of the nine FFATA reports selected for testing, the reports were not submitted within the required reporting timeframe.   Transactions tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 9 N/A 9 N/A N/A Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $2,477,110 N/A $2,477,110 N/A N/A Cause Internal controls over FFATA reporting were inadequate due to a lack of segregation of duties. Recent staffing changes resulted in the same individual being responsible for both preparing and submitting the reports. This eliminated the required independent review and approval process before submission, which is a key control to ensure accuracy and compliance. Effect The control deficiency led to noncompliance with FFATA. Specifically, nine required subaward reports were submitted late. This failure undermines the objective of FFATA by preventing federal agencies and the public from receiving timely and reliable information on the use of federal funds. The lack of an independent review also increases the risk that reported data could be inaccurate or incomplete, further reducing transparency and effective oversight. Questioned Costs None Recommendation We recommend that the Department develop and implement written policies and procedures and establish internal controls over FFATA reporting to ensure reports are accurate, timely, and appropriately reviewed prior to submission to the SAM.gov. These controls should include documented supervisory review and approval of FFATA reports and the implementation of segregation of duties or compensating controls to ensure that report preparation and submission are independently reviewed. In addition, the Department should implement procedures to monitor FFATA reporting deadlines to ensure timely submission. View of Responsible Officials Management concurs with the finding above.

Finding Reference Number: 2025-013 New Hampshire Department of Health and Human Services Aging Cluster (Assistance Listing #93.044, #93.045, #93.053) and COVID-Aging Cluster (Assistance Listing #93.044, #93.045, #93.053) Federal Award Numbers: 2301NHOACM, 2401NHOASS, 2401NHOAHD, 2501NHOASS, 2501NHOAHD Federal Award Years: 2023, 2024, 2025 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2024-017 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200) section 200.332(e) states a pass-through entity must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must: (1) Review financial and performance reports. (2) Ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward. Significant developments include Single Audit findings related to the subaward, other audit findings, site visits, and written notifications from a subrecipient of adverse conditions which will impact their ability to meet the milestones or the objectives of a subaward. When significant developments negatively impact the subaward, a subrecipient must provide the pass-through entity with information on their plan for corrective action and any assistance needed to resolve the situation. (3) Issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) Resolve audit findings specifically related to the subaward. However, the pass-through entity is not responsible for resolving cross-cutting audit findings that apply to the subaward and other Federal awards or subawards. If a subrecipient has a current Single Audit report and has not been excluded from receiving Federal funding (meaning, has not been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant agency for audit or oversight agency for audit to perform audit follow-up and make management decisions related to cross-cutting audit findings in accordance with section § 200.513(a)(4)(viii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. Additionally 2 CFR 200.332(f) states a pass-through must, depending upon the pass-through entity's assessment of the risk posed by the subrecipient (as described in 2 CFR 200.332(c)), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; (2) Performing site visits to review the subrecipient's program operations; and (3) Arranging for agreed-upon-procedures engagements as described in 2 CFR 200.425. Lastly 2 CFR 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During the year ended June 30, 2025, the New Hampshire Department of Health and Human Services (the Department) passed through $6,418,562 of federal funding to subrecipients. As part of our testing related subrecipient monitoring, we identified the following: A. For 8 out of 9 subrecipients selected for testwork, the Department was unable to provide support evidencing the following required basic monitoring activities, as prescribed by the Department’s policy, were performed: • Regular contract monitoring meetings; and • Review of required performance reports B. For 8 out of 9 subrecipients selected for testwork, the Department was unable to provide evidence that additional monitoring identified as necessary based on the evaluation of the subrecipient’s risk. Cause The cause of the condition was a lack of sufficiently documented and implemented policies, procedures, and internal controls to ensure that required subrecipient monitoring activities were consistently performed and adequately documented in accordance with federal and departmental requirements. Effect The Department did not comply with the subrecipient monitoring requirements of 2 CFR 200.332(d) through (f). In addition, the lack of documented and performed monitoring activities limited the Department’s ability to reasonably ensure that subrecipients complied with applicable Federal statutes, regulations, and the terms and conditions of the subawards, and that subaward funds were used for allowable purposes and in a manner that achieved the intended program objectives. Questioned Costs None Recommendation We recommend the Department update its written policies and procedures to ensure that all required subrecipient monitoring activities—both basic monitoring and those identified through risk assessments—are consistently performed and adequately documented i n accordance with Federal requirements and the terms and conditions of the subawards. Such documentation should provide clear and sufficient evidence that required monitoring procedures have been completed, including documentation that demonstrates what monitoring was performed, when it was performed, who performed it, the results of the monitoring activities, and any follow‑up actions or issues identified, as applicable. This may include retained notes or summaries of monitoring activities, such as contract monitoring meetings or reviews, that support the conclusions reached. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2025-014 New Hampshire Department of Energy Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2401NHLIEA, 2501NHLIEA Federal Award Years: 2024, 2025 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-026, 2023-016, 2024-022 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Title 45 U.S. Code of Federal Regulations Part 96 (45 CFR 96), Block Grants section 96.82, “What are the LIHEAP reporting requirements?” states “As part of the application for block grant funds each year, a report is required for the preceding fiscal year of (1) the number and income levels of the households assisted for each component and any type of LHEAP assistance (heating, cooling, crisis, and weatherization); and (2) the number of households served that contained young children, elderly, or persons with disabilities, or any vulnerable household for each component. This report is titled the Annual Report on Households Assisted by LIHEAP (OMB No. 0970-0060). Additionally, Pursuant to Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200), section 200.328. “Financial reporting,” requires the use of the Federal Financial Report (FFR) (SF-425) to report on the status of financial activities for federal awards. Lastly, 2 CFR 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testwork over federal reporting as part of the Low-Income Home Energy Assistance program (LIHEAP), we noted the following: A. For the Annual Report on Households Assisted by LIHEAP for program year ending September 30, 2024 the Department could not provide supporting documentation for the key line items. Specifically, the underlying detail for “Section 1 – LIHEAP Assisted Households” was unavailable, preventing verification of the report’s completeness and accuracy. B. For 2 of the 3 Federal Financial Reports (SF-425) selected for testwork, the basis of accounting was incorrectly reported as “accrual” basis when the underlying records were reported on a “cash” basis. The impacted reports were 2301NHLIEE PY23 SF-425 and 2401NHLIEA PY23 SF-425. Cause The Department did not implement adequate internal controls for the review and approval of federal reports. Specifically, there were no formal policies or procedures requiring an independent review of reports prepared by its external consultants. This lack of oversight meant that the Department did not reconcile key figures in the Annual Report to underlying program data before submission. Additionally, procedures were not in place to verify that the basis of accounting was correctly stated on Federal Financial Reports. Effect The Department submitted reports that could not be verified as accurate and which contained incorrect information, constituting noncompliance with federal reporting requirements (42 USC 8629 and 45 CFR section 96.82). This noncompliance undermines the ability of the U.S. Department of Health and Human Services to perform effective oversight and monitor program outcomes. Inaccurate reporting also increases the risk of future compliance issues and potential sanctions from the awarding agency. Questioned Costs None Recommendation We recommend that the Department develop and implement formal, written policies and procedures for the preparation, review, and submission of all federal reports. These procedures should include, at a minimum: • A mandatory supervisory review and approval of all reports prior to submission, including those prepared by external consultants. • A requirement to reconcile all reported figures to underlying source documentation, and to retain this documentation for audit purposes. • Specific controls to verify key report elements are accurate, such as the basis of accounting on the SF-425. View of Responsible Official: Management concurs with the finding above.

Finding Reference Number: 2025-015 New Hampshire Department of Health and Human Services CCDF Cluster (Assistance Listing #93.575, #93.596) and COVID-19 CCDF Cluster (Assistance Listing #93.575, #93.596) Federal Award Number: 2501NHCCDD Federal Award Year: 2025 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2024-024 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria The Federal Funding Accountability and Transparency Act of 2006 (FFATA), Public Law 109282, as amended by Section 6202 of the Government Funding Transparency Act of 2008 (Public Law 110252), and its implementing regulations at 2 C.F.R. Part 170, require prime recipients of Federal grants and cooperative agreements to report information on first tier subawards of $30,000 or more to System for Award Management (SAM.gov). Further, pursuant to Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200), section 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testwork over compliance with the Federal Funding Accountability and Transparency Act (FFATA) reporting requirements, we noted deficiencies in internal controls over the review, approval, and timely submission of FFATA subaward reports. For the one FFATA report selected for testing that was reported, there was no documented evidence that the report was reviewed and approved by the Department prior to submission to SAM.gov. A. For the one FFATA report selected for testing, the report was not submitted within the required reporting timeframe.   Transactions tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 1 N/A 1 N/A NA Dollar Amount of Transactions tested Subaward not reported Report not timely Subaward amount incorrect Subawards missing key elements $366,387 N/A $366,387 N/A N/A Cause Internal controls over FFATA reporting were inadequate due to a lack of segregation of duties. Recent staffing changes resulted in the same individual being responsible for both preparing and submitting the reports. This eliminated the required independent review and approval process before submission, which is a key control to ensure accuracy and compliance. Effect The control deficiency led to noncompliance with FFATA. Specifically, one required subaward report was submitted late. This failure undermines the objective of FFATA by preventing federal agencies and the public from receiving timely and reliable information on the use of federal funds. The lack of an independent review also increases the risk that reported data could be inaccurate or incomplete, further reducing transparency and effective oversight. Questioned Costs None Recommendation We recommend that the Department develop and implement written policies and procedures and establish internal controls over FFATA reporting to ensure reports are accurate, timely, and appropriately reviewed prior to submission to the SAM.gov. These controls should include documented supervisory review and approval of FFATA reports and the implementation of segregation of duties or compensating controls to ensure that report preparation and submission are independently reviewed. In addition, the Department should implement procedures to monitor FFATA reporting deadlines to ensure timely submission. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2025-016 New Hampshire Department of Health and Human Services Opioid STR (ALN #93.778) Federal Award Numbers: H79TI085759, H79TI087843 Federal Award Year: 2024, 2025 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2024-027 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria The Federal Funding Accountability and Transparency Act of 2006 (FFATA), Public Law 109-282, as amended by Section 6202 of the Government Funding Transparency Act of 2008 (Public Law 110-252), and its implementing regulations at 2 CFR. Part 170, require prime recipients of Federal grants and cooperative agreements to report information on first tier subawards of $30,000 or more to System for Award Management (SAM.gov). Further, pursuant to Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200), section 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testwork over compliance with the Federal Funding Accountability and Transparency Act (FFATA) reporting requirements, we noted deficiencies in internal controls over the review, approval, and timely submission of FFATA subaward reports. For 9 of 9 FFATA subaward reports tested, there was no documented evidence of review or approval by the Department prior to submission to SAM.gov. In addition, for each 9 of 9 FFATA subaward reports tested, the reports were not submitted within the required reporting timeframe.   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 9 N/A 9 N/A N/A Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subawards missing key elements $2,502,500 N/A $2,502,500 N/A N/A Cause The deficiencies occurred due to inadequate internal controls over FFATA reporting, including a lack of segregation of duties and the absence of formalized review and approval procedures. Specifically, the same individual was responsible for preparing and submitting FFATA reports and no secondary review or supervisory approval was required or documented prior to submission. In addition, the Department did not have procedures in place to monitor reporting deadlines, contributing to untimely submission of FFATA reports. Effect The control deficiency led to noncompliance with FFATA. Specifically, nine required subaward reports were submitted late. This noncompliance undermines the objective of FFATA by preventing federal agencies and the public from receiving timely and reliable information on the use of federal funds. The lack of an independent review also increases the risk that reported data could be inaccurate or incomplete, further reducing transparency and effective oversight. Questioned Costs None Recommendation We recommend that the Department develop and implement written policies and procedures and establish internal controls over FFATA reporting to ensure reports are timely and appropriately reviewed prior to submission to SAM.gov. These controls should include documented supervisory review and approval of FFATA reports and the implementation of segregation of duties or compensating controls to ensure that report preparation and submission are independently reviewed. In addition, the Department should implement procedures to monitor FFATA reporting deadlines to ensure timely submission. View of Responsible Officials Management concurs with the finding above.

Finding Reference Number: 2025-017 New Hampshire Department of Health and Human Services Substance Abuse Prevention and Treatment Block Grant (ALN #93.959) and COVID-19 Substance Abuse Prevention and Treatment Block Grant (ALN #93.959) Federal Award Numbers: B08T108521, B08TI087053 Federal Award Years: 2023, 2024 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2024-029 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria The Federal Funding Accountability and Transparency Act of 2006 (FFATA), Public Law 109282, as amended by Section 6202 of the Government Funding Transparency Act of 2008 (Public Law 110252), and its implementing regulations at 2 C.F.R. Part 170, require prime recipients of Federal grants and cooperative agreements to report information on first tier subawards of $30,000 or more to System for Award Management (SAM.gov). Further, pursuant to Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200), section 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testwork over compliance with the Federal Funding Accountability and Transparency Act (FFATA) reporting requirements, we noted deficiencies in internal controls over the review, approval, and timely submission of FFATA subaward reports. For 4 of 4 FFATA reports selected for testing that were reported, there was no documented evidence that the reports were reviewed and approved by the Department prior to submission to SAM.gov. During our testwork over FFATA reporting, we also noted 4 of 4 FFATA reports were not filed timely.   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 4 N/A 4 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $160,000 N/A $160,000 $0 $0 Cause Internal controls over FFATA reporting were inadequate due to a lack of segregation of duties, whereby, the same individual was responsible for both preparing and submitting the reports. This eliminated the required independent review and approval process before submission, which is a key control to ensure accuracy and compliance. Effect The control deficiency led to noncompliance with FFATA. Specifically, four required subaward report were submitted late. This noncompliance undermines the objective of FFATA by preventing federal agencies and the public from receiving timely and reliable information on the use of federal funds. The lack of an independent review also increases the risk that reported data could be inaccurate or incomplete, further reducing transparency and effective oversight. Questioned Costs None Recommendation We recommend that the Department develop and implement written policies and procedures and establish internal controls over FFATA reporting to ensure reports are timely, and appropriately reviewed prior to submission to SAM.gov. These controls should include documented supervisory review and approval of FFATA reports and the implementation of segregation of duties or compensating controls to ensure that report preparation and submission are independently reviewed. In addition, the Department should implement procedures to monitor FFATA reporting deadlines to ensure timely submission. View of Responsible Officials Management concurs with the finding above.

Finding Reference Number: 2025-018 New Hampshire Department of Education Disability Insurance/SSI Cluster: Social Security-Disability (Assistance Listing #96.001) Federal Award Numbers: 2204NHDI00, 2304NHDI00, 2404NHD100, 2504NHDI00 Federal Award Years: 2022, 2023, 2024, 2025 U.S. Social Security Administration Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-019, 2024-030 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria The Form SSA-4513 – State Agency Report of Obligations for SSA Disability Programs – is used to report all obligations (liquidated and unliquidated) on a quarterly basis for each State agency for each fiscal year still open in order to account for program disbursements and unliquidated obligations (POMS DI 39506.210). Additionally, the report should be accompanied by Form SSA-4513 Addendum, as appropriate, to report the status of unliquidated obligations; explain any adjustments; submit copy of indirect cost agreement, etc. (POMS DI 39506.202). Further, pursuant to Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200), section 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testwork over federal reporting related to the SSA-4513 quarterly report, we identified the following: A. For 2 of 4 SSA-4513 reports selected for testwork, we could not agree the indirect cost rate for Line-Item Section 3.a, Indirect Cost Rate Per Negotiated Agreement to the agreed upon indirect cost rate for the applicable period. Specifically, the approved indirect cost rate was 6.7% for the period July 1, 2022 to June 30, 2023 and 6.1% for the period July 1, 2023 to June 30, 2025 and the amount reported for the fiscal year 2023 SSA-4513 report for the period October 1, 2022 to June 30, 2025 was 3.0% and the amount reported for the fiscal year 2024 SSA-4513 report for the period October 1, 2023 to June 30, 2025 was 3.88%. B. For 4 of 4 SSA-4513 reports selected for testwork, substantiated support was not provided for Line-Item Section 2.d, Other: Identify obligation & amount. Specifically, for the fiscal year 2022 SSA-4513 report for the period October 1, 2021 to September 30, 2024, the reported amount was $854,540 reducing the adjusted non-personnel cost by $532,005. For the fiscal year 2023 SSA-4513 report for the period October 1, 2022 to June 30, 2025, the reported amount was $485,000 reducing the adjusted non-personnel cost by $108,813. For the fiscal year 2024 SSA-4513 report for the period October 1, 2023 to June 30, 2025, the reported amount was $107,620 increasing the adjusted non-personnel cost by $206,587. For the fiscal year 2025 SSA-4513 report for the period October 1, 2024 to June 30, 2025, the reported amount was $71,600 increasing the adjusted non-personnel cost by $232,985. Cause During our testwork over compliance with SSA-4513 reporting requirements, we noted deficiencies in internal controls over the review and approval of the reports and attached addendums. For 4 of the 4 SSA-4513 reports selected for testing that were reported, there was no supporting documentation for Line-Item Section 2.d, Other: Identify obligation & amount. Additionally, for 2 of 4 SSA-4513 reports selected for testing that were reported, we could not agree Line-Item Section 3.a, Indirect Cost Rate per Negotiated Agreement to the approved indirect cost rate. Based on review of the SSA-4513 reports and attached addendums, the State’s indirect cost calculation and reporting requirements do not align with the SSA-4513 reporting requirements. The Department reports actual indirect costs incurred, as calculated from an allocation of substantiated non-personnel costs, including a combination of Equipment, Audit Fund Set-aside, Contracts for Program Services, Transcription Services and DDS Client expenses (MER, CE, and Travel). They use the substantiated non-personnel costs incurred to recalculate either the indirect cost rate, per Line-Item Section 3.a, Indirect Cost Rate Per Negotiated Agreement, or required other costs, per Line-Item Section 2.d, Other: Identify obligation & amount, required to be recorded in the report to arrive at the actual indirect cost incurred to not overstate actual expenditures. Although we saw evidence of review and approval of these reports prior to submission, these amounts were still reported incorrectly, and substantiation of the actual costs could not be provided. Effect The agency is in noncompliance with the reporting terms and conditions of its federal award. Submitting SSA-4513 reports that were neither complete nor accurate undermines the integrity of the financial data reported to the Social Security Administration. This misreporting of both indirect costs and other obligations prevents the SSA from performing its oversight function and creates a risk of future questioned costs, as the agency cannot substantiate the amounts claimed on its federal reports. Questioned Costs None Recommendation We recommend that policies and procedures be developed to ensure that all documentation to support the amounts reported on the SSA-4513 is properly maintained for each quarterly report. In addition, internal control procedures be evaluated to ensure that as part of the review process, each line item on the federal report is verified against the supporting documentation to ensure the report is complete and accurate. The review performed should also be properly documented, showing evidence that the required review process was performed prior to submitting the SSA-4513. View of Responsible Officials Management concurs with the finding above.

Finding Reference Number: 2025-019 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH, FEMA-4740-DR, FEMA-4771-DR, FEMA-4761-DR, FEMA-4799-DR, FEMA-4812-DR Federal Award Years: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-25, 2022, November 1, 2017, July 1-2, 2017, January 20, 2020, September 14, 2023, April 19, 2024, February 27, 2024, July 10, 2024, August 20, 2024 U.S. Department of Homeland Security Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2024-033 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria The Federal Funding Accountability and Transparency Act of 2006 (FFATA), Public Law 109282, as amended by Section 6202 of the Government Funding Transparency Act of 2008 (Public Law 110252), and its implementing regulations at 2 C.F.R. Part 170, require prime recipients of Federal grants and cooperative agreements to report information on first tier subawards of $30,000 or more in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Further, pursuant to Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200), section 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testwork over compliance with the Federal Funding Accountability and Transparency Act (FFATA) reporting requirements, we noted deficiencies in internal controls over the review, approval, and timely submission of FFATA subaward reports. Specifically: A. For 2 of the 16 FFATA reports selected for testing, there was no documented evidence that the reports were reviewed and approved by the New Hampshire Department of Safety (the Department) prior to submission to the SAM.gov. B. For each of the 16 reports selected for testing, the reports were not submitted within the required reporting timeframe, including 1 report which was not submitted. C. For 2 of the 16 reports selected for testing, the reports were not submitted accurately. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 16 0 16 2 N/A Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $4,562,386 $0 $4,562,386 $2,132,040 N/A Cause Delays in FFATA reporting occurred due to the Department’s process to receive a response from the subrecipient that they concur with the receipt of the award prior to the submission of the subaward in SAM.gov. Due to these responses not being provided back to the Department timely, this caused the submission of the FFATA reports to be submitted untimely or not at all if no response was received. The Department does not have sufficiently defined procedures or compensating controls to ensure that the FFATA reports are submitted timely. In addition, formal review and approval controls over FFATA reports were not consistently documented. These process limitations, together with limited staffing resources dedicated to FFATA compliance activities, contributed to untimely submissions, one missed submission, and inaccuracies in reported information. Effect The effect of the condition is that the Department did not comply with the Federal Funding Accountability and Transparency Act (FFATA) reporting requirements, resulting in untimely submission of required subaward information to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). In addition, the lack of documented review and approval increased the risk that FFATA reports may not be complete or accurate. As a result, federal agencies and the public did not receive timely and reliable information regarding subawards funded under the Department’s federal programs, which reduces transparency and limits the ability of federal oversight entities to monitor the use of federal funds. Questioned Costs None Recommendation We recommend that the Department develop and implement written policies, procedures, and internal controls over FFATA reporting to ensure that reports are accurate, timely, and appropriately reviewed prior to submission in SAM.gov. Specifically, we recommend that the Department revise its FFATA reporting process to eliminate the requirement to wait for the subrecipient concurrence with the receipt of the award prior to submitting FFATA reports. FFATA reports may be submitted once the subaward has been communicated to the subrecipient, which would allow the Department to submit reports within the required report timeframe. In addition, we also recommend that the Department implement documented supervisory review procedures to ensure FFATA reports are reviewed for accuracy and completeness prior to submission. The Department should also implement procedures to manually track all Tier 1 subawards to ensure FFATA reports are completed and submitted for all applicable subawards. View of Responsible Officials Management concurs with the finding above.

Finding Reference Number: 2025–020 New Hampshire Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH, FEMA-4740-DR, FEMA-4771-DR, FEMA-4761-DR, FEMA-4799-DR, FEMA-4812-DR Federal Award Years: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-25, 2022, November 1, 2017, July 1-2, 2017, January 20, 2020, September 14, 2023, April 19, 2024, February 27, 2024, July 10, 2024, August 20, 2024 U.S. Department of Homeland Security Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-023, 2024-034 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200) section 200.332(c) requires the pass-through entity to evaluate each subrecipient’s fraud risk and risk of noncompliance to determine the appropriate subrecipient monitoring. In evaluating risk, the pass-through entity should consider: (1) prior experience with the same or similar subawards; (2) results of previous audits, including whether the subrecipient is subject to Single Audit and whether similar subawards were audited as a major program; (3) whether the subrecipient has new personnel or new/substantially changed systems; and (4) the extent and results of Federal agency monitoring. Further, 2 CFR 200.332(e) states that a pass-through entity must monitor the activities of a subrecipient as necessary to ensure compliance with Federal statutes, regulations, and subaward terms and conditions and to ensure the goals and objectives of the subaward are achieved. At a minimum, monitoring must include: (1) Reviewing financial and performance reports; (2) Ensuring the subrecipient takes corrective action on significant developments that negatively affect the subaward (including relevant Single Audit findings, other audit findings, site visits, and written notifications of adverse conditions); (3) Issuing a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity, as required by § 200.521; and (4) Resolving audit findings specifically related to the subaward. Additionally, 2 CFR 200.332(f) states that, depending upon the pass-through entity’s assessment of the risk posed by the subrecipient, monitoring tools may include: (1) Providing subrecipients with training and technical assistance on program-related matters; (2) Performing site visits to review the subrecipient’s program operations; and (3) Arranging for agreed-upon-procedures engagements as described in § 200.425. Also, 2 CFR 200.332(g) requires the pass-through entity to verify that a subrecipient is audited as required by Subpart F of Part 200. Lastly 2 CFR 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During the year ended June 30, 2025, the New Hampshire Department of Safety - Homeland Security and Emergency Management (the Department) passed through $13,228,981 under the Disaster Grants - Public Assistance program. The Department enters into grant agreements with local municipalities to reimburse expenditures incurred as a result of New Hampshire declared disasters. As a pass-through entity, the Department is required to perform a risk assessment over each subrecipients’ risk of noncompliance to determine the nature and extent of additional subrecipient monitoring procedures. In addition, pass-through entities are required to verify that subrecipients are audited as required under Subpart F of 2 CFR Part 200. During our testwork over the Department’s subrecipient risk assessment, related monitoring activities and review of subrecipient single audit reports, we noted the following : • For 2 of the 15 subrecipients selected for testwork, the Department did not review the subrecipient’s single audit report as part of its risk assessment procedures. A timely review of the single audit report would have resulted in the performance of additional monitoring procedures in accordance with the Department’s established risk assessment criteria. • For 1 of the 15 subrecipients selected for testwork, the Department did not perform the additional monitoring procedures required under its policies and procedures based on the results of the risk assessment. Cause Insufficiently designed and implemented internal controls resulted in inconsistent and untimely review of required subrecipient Single Audit reports and inconsistent execution of additional monitoring procedures identified through the Department’s risk assessment process. Specifically, the Department lacked effective procedures to track and document the receipt and review of Single Audit reports and to ensure that risk assessment results consistently triggered and documented completion of required additional monitoring activities. Consequently, Single Audit reviews were not always completed or were delayed and required additional monitoring procedures were not always completed in accordance with established policies and procedures.   Effect Failure to timely review subrecipient Single Audit reports and to perform required additional monitoring procedures increases the risk that subrecipient noncompliance with Federal statutes, regulations, and the terms and conditions of Federal awards is not identified or addressed in a timely manner. As a result, the Department may lack reasonable assurance that subrecipients are administering Federal funds in compliance with applicable requirements. Questioned Costs None Recommendation We recommend that the Department enhances its policies, procedures, and internal controls to ensure that subrecipient risk assessments are supported by timely review of required Single Audit reports, in accordance with 2 CFR 200.332(c) and 2 CFR 200.303(a). Specifically, the Department should implement procedures to track the receipt and review of all required Single Audit reports, verify that the reviews are completed timely, and document the results of those reviews. In addition, the Department should strengthen controls to ensure that additional monitoring procedures identified through the risk assessment process are performed and documented in accordance with established policies and procedures, consistent with 2 CFR 200.332(e) and 2 CFR 200.332(g). View of Responsible Officials Management concurs with the finding above.

Finding Reference Number: 2025–021 New Hampshire Employment Services Unemployment Insurance (Assistance Listing #17.225) and COVID-19 Unemployment Insurance (Assistance Listing #17.225) Federal Award Numbers: Various Federal Award Years: 2024, 2025 U.S. Department of Labor Compliance Requirement: Eligibility Type of Finding: Material Weakness Prior Year Finding: No Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements (2 CFR 200),section 200.303(a), 200.303(a) requires the recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During the audit of Unemployment Insurance, we identified deficiencies in internal control related to information technology general controls with the State of New Hampshire Unemployment Insurance System (NHUIS). Specifically, management was not able to timely provide documentation supporting user access reviews and change management controls. In addition, management was unable to provide last-modified date evidence for application controls designed to ensure: (1) the accurate calculation of weekly benefit payments; (2) validation and cross-matching of claimant Social Security Numbers with the Social Security Administration; and (3) entry of claimant work activity in NHUIS prior to payment of weekly benefits. Although no instances of noncompliance were identified as a result of these deficiencies, the absence of timely and complete documentation limited the audit team’s ability to obtain sufficient appropriate audit evidence over the operating effectiveness of these controls. Cause The cause of the deficiency was that documentation supporting key IT general and application controls was not readily available for audit and that personnel with the requisite system knowledge and access to retrieve such documentation were limited. As a result, management was unable to provide certain requested information within a timely manner. Effect The inability to rely on effective general IT controls and IT application controls increases the risk that system configurations, program logic, or access privileges could be modified without appropriate authorization or detection, and that automated controls relied upon to calculate weekly benefit payments, validate claimant eligibility information, and prevent improper payments may not operate consistently as intended. This condition increases the risk that errors in benefit calculations, eligibility determinations, or payment processing could occur and not be identified in a timely manner, potentially impacting the accuracy and integrity of program disbursement. Questioned Costs None Recommendation We recommend that the Department develop and implement procedures to ensure that documentation supporting IT general controls and application controls is maintained, readily retrievable, and available for audit and oversight purposes. In addition, management should establish backup personnel with appropriate system knowledge and access to ensure continuity in providing required information. These actions will strengthen internal control over the Unemployment Insurance program and provide reasonable assurance that key system controls continue to operate as designed. View of Responsible Officials Management concurs with the finding above.

Finding Reference Number: 2025-022 New Hampshire Department of Health and Human Services Opioid STR (ALN #93.778) Federal Award Numbers: H79TI087843 Federal Award Year: 2024 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness Prior Year Finding: No Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria The Federal Award Number 1H79TI087843-01 Standard Terms and Conditions Reporting Requirements state recipients must collect and report data for SAMHSA to meet its obligations under the Government Performance and Results (GPRA) Modernization Act of 2010. SOR recipients are required to submit data and report program-level data on a quarterly basis via SAMHSA’s Performance Accountability and Reporting System (SPARS). SOR recipients are also required to submit Programmatic Reports at 6 months and 12 months. The six-month reports are due no later than 30 days after the end of the second quarter. The twelve-month reports are due within 90 days of the end of the budget period. Further, pursuant to Title 2 of the Code of Federal Regulations, Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200),. section 200.303(a), recipient and subrecipients of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testwork over compliance with the Programmatic Progress Report (PPR) reporting requirements, we noted deficiencies in internal controls over the review and approval of reports. For 1 of 1 Programmatic Progress reports selected for testing, there was no documented evidence that the report was reviewed and approved by the Department prior to submission to eRA Commons. During our testwork over compliance with the Data Collection/Performance Measurement reporting requirements, we noted deficiencies in internal controls over the review and approval of reports. For 2 of 2 reports selected for testing, there was no documented evidence that the reports were reviewed and approved by the Department prior to submission to SAMHSA’s Performance Accountability and Reporting Systems (SPARS).   Cause The Department has not implemented adequate segregation of duties for federal reporting.. The same individual was responsible for both preparing and submitting the reports, which circumvented any independent review or approval process designed to ensure accuracy and compliance. Effect Without a documented supervisory review, there is no assurance that the data submitted to the federal agency is accurate, complete, or has been reviewed for compliance with award terms. This control deficiency increases the risk of inaccurate reporting, which could lead to flawed decision-making by SAMHSA and misrepresent the program's performance. Questioned Costs None Recommendation We recommend the Department strengthen its internal controls over federal reporting by implementing written policies and procedures that require: • A mandatory, documented supervisory review of all programmatic and data reports prior to submission. • Clear segregation of duties, ensuring the individual who prepares a report is not the same individual who has final approval to submit it. • If segregation of duties is not feasible, the implementation of effective compensating controls, such as a detailed secondary review by another knowledgeable staff member. View of Responsible Officials Management concurs with the finding above.

Finding Reference Number: 2024-002 NH Department of Education Child Nutrition Cluster (Assistance Listing #10.553, #10.555, #10.556, #10.559) Federal Award Numbers: 244NH304N1099, 244NH304N1199 Federal Award Year: 2023, 2024 U.S. Department of Agriculture Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, (Transparency Act) that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Aspects of the Transparency Act that relate to subaward reporting (1) under grants and cooperative agreements were implemented in OMB in 2 CFR Part 170 and (2) under contracts, by the regulatory agencies responsible for the Federal Acquisition Regulation (FAR at 5 FR 39414 et seq., July 8, 2010). The requirements pertain to recipients (i.e., direct recipients) of grants or cooperative agreements who make first-tier subawards and contractors (i.e., prime contractors) that award first-tier subcontracts. There are limited exceptions as specified in 2 CFR Part 170 and the FAR. The guidance at 2 CFR Part 170 currently applies only to federal financial assistance awards in the form of grants and cooperative agreements (e.g., it does not apply to loans made by a federal agency to a recipient), however the subaward reporting requirement applies to all types of first-tier subawards under a grant or cooperative agreement. 2 CFR Part 170 “subaward” has the meaning given in 2 CFR 200.1 and means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2024, we noted the New Hampshire Department of Education (the Department) passed through $40,468,041 in Child Nutrition Cluster Grants (CNC Grant) to Local Educational Agencies (LEAs). During our testwork, we noted that the Department did not submit FFATA reports for all subawards. The following noncompliance was noted for the sample selected: Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 40 40 0 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements $ 584,546 $ 584,546 $0 $0 $0 Cause The Department came to a determination that the FFATA reporting did not apply to the first-tier subawards provided to the LEAs under the child nutrition program. Effect The condition found that first-tier subawards were not reported in the Federal Funding Accountability and Transparency Act Subaward Reporting System. Questioned Costs: None. Recommendation We recommend DOE implement a process and internal controls to ensure that all first-tier subawards of $30,000 or more be reported in accordance with the Federal Funding Accountability and Transparency Act. View of Responsible Officials: Management concurs with the finding above.

Finding Reference: 2024-003 NH Department of Military National Guard Military Operations and Maintenance (O&M) Projects (Assistance Listing #12.401) Federal Award Number: W012TF0190201001, W012TF023-27-2-1001 Federal Award Year: 2022, 2023, 2024 U.S. Department of Defense Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-002 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria The SF-270, Request for Advance or Reimbursement must be submitted as part of the cash draw request process. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the SF-270 Request for Advance or Reimbursement report, we identified the following: A. For 23 of 35 SF-270 reports selected for testwork, we were unable to agree line items a, total program outlays and line-item c, net program outlays, to the supporting documentation provided. B. For 22 of 35 SF-270 reports selected for testwork, we were unable agree line-item e, total, to the supporting documentation provided. C. For 22 of 35 SF-270 reports selected for testwork, we were unable agree line-item f, non-federal share of amount online e, to the supporting documentation provided. D. For 7 of 35 reports selected for testwork, we were unable to agree line-item g, federal share of amount online e, to the supporting documentation provided. E. For 4 of 35 reports selected for testwork, we were unable to agree line-item h, federal payments previously requested, to the supporting documentation provided. F. For 4 of 35 reports selected for testwork, we were unable to agree line item i, federal share now requested, to the supporting documentation provided. G. For all 35 SF-270 reports selected for testwork, we identified that there was a lack of segregation of duties related to the preparation of the SF-270 as there was no documented supervisory review performed over the completeness and accuracy of the reports prior to submission.   Cause The cause of the condition found was due to insufficient policies and procedures to track total expenditures incurred by appendix for each federal award year. The Department relies on the previous amounts reported on the SF-270 report only and does not readily maintain supporting documentation for each report to reconcile the amounts reported on the SF-270 report to New Hampshire First, the State’s centralized accounting system. For each federal fiscal year, the Department uses an internal tracking sheet that tracks by appendix the federal share of costs incurred each month. The tracking sheet does not include the state share of expenses if a state match is required. As a result, for several appendices the tracking sheet used by the Department does not reconcile to the SF-270 report. Effect The effect of the condition found is SF-270 reports submitted were not complete and accurate. Questioned Costs: Not determinable. Recommendation We recommend that the existing policies and procedures in place to prepare the SF-270 be reviewed and internal controls be implemented that will include an independent supervisory review to ensure that the SF-270 is complete and accurate at the time of submission. This would include ensuring that each line item of the SF-270 properly reconciles to supporting documentation. This documentation should be maintained with each report to substantiate the amounts reported are complete and accurate. View of Responsible Officials: Management does not concur with this finding. Rejoinder: As documented within the condition found, for a sample of SF-270 reports selected for testwork, we were unable to agree the amount reported to the supporting documentation provided by the Department. A reconciliation and analysis of expenditures to New Hampshire First, the State of New Hampshire’s centralized accounting system, was not provided by the Department as part of this audit.

Finding Reference Number: 2024-004 NH Department of Military National Guard Military Operations and Maintenance (O&M) Projects (Assistance Listing #12.401) Federal Award Number: W012TF0190201001, W012TF023-27-2-1001 Federal Award Year: 2022, 2023, 2024 U.S. Department of Defense Compliance Requirement: Cash Management Type of Finding: Material Weakness Prior Year Finding: 2023-003 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. This would include internal controls related to the cash management process. Condition As part of our testwork over the cash management process, we identified a lack of segregation of duties related to the preparation of the cash request amount and the approval and authorization for the amount to be drawn. During the year ended June 30, 2024, the same individual calculated and authorized each cash draw for the 35 cash draws selected for testwork. Cause The cause of the condition found was due to insufficient internal controls to ensure an independent supervisory review is performed over each cash draw request, resulting in a lack of segregation of duties. Effect The effect of the condition found is that an error in the cash draw amount calculated could be made and the error would not be identified timely. Questioned Costs: None. Recommendation We recommend that internal controls be implemented that would result in a documented independent review over the amount calculated for the cash draw request to ensure that the amount drawn is complete and accurate. View of Responsible Officials: Management does not concur with this finding. Rejoinder: As documented within the condition found the Department does not have sufficient controls in place to ensure the accuracy of the cash draw as there is no supervisory review performed by the Department. The reliance on the federal government to review the accuracy of the cash draw is not a substitute for the Department maintaining its own internal controls.

Finding Reference Number: 2024-005 NH Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F22AF00995-00, F22AF00929-00, F23AF03086-00, F22AF00514-01, F22AF02616-02 Federal Award Year: 2022, 2023 U.S. Department of Interior Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria A pass-through entity (PTE) must: 1. Identify the Award and Applicable Requirements - Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a). 2. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 3. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. This would include internal controls related to the cash management process.   Condition During the year ended June 30, 2024, the New Hampshire Fish and Game Department (the Department) passed through $484,952 of federal funding to 1 subrecipient to fund 4 different projects. As part of our testwork related subrecipient monitoring, we identified the following: A. The Department communicates award information through the approved grant agreement. For 3 of 4 projects selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR 200.332(b). Specifically, the following elements were not communicated: • Subrecipient's unique entity identifier • Identification of whether the Federal award is for research and development B. As part of the during the award monitoring testwork, we noted that the Department completes a risk assessment questionnaire for all new projects they approve for the subrecipient. As part of our testwork over the risk assessments performed, we identified the following: • For 1 of 4 projects selected for testwork, there was no risk assessment questionnaire completed. • For 3 of 4 projects selected for testwork, a risk assessment questionnaire was completed, however there were no required monitoring procedures outlined within the questionnaire. As a result, we were not able to determine what monitoring procedures should have been performed over the projects as a result of the risk assessment. C. The Department’s during the award monitoring includes the review and approval of the subrecipient’s request for reimbursement. During our testwork over the review and approval of the request for reimbursement, we noted that for all 9 invoices selected for testwork, that while the invoice appeared to be properly reviewed and approved, the level of detail included within the invoice would not allow the Department to determine the reasonableness of the costs incurred to ensure that they were incurred in accordance with the grant agreement. D. The Department’s during the award monitoring includes obtaining a progress report related to each project that the subrecipient has been granted funding for. As part of our testwork, we identified that for all 4 projects selected for testwork, while a progress report was obtained, there was no evidence provided to support that the Department had reviewed the report. As a result, we were unable to determine based on the Department’s risk assessment procedures what the type and frequency of monitoring procedures that should have been performed over each project. E. The Department does not have formal policies and procedures to review and maintain documentation to evidence the review and approval of the subrecipient’s unform guidance report. There was no documentation to support that the Department had obtained and reviewed its subrecipient’s most recent uniform guidance report issued.   Cause The cause of the condition found was primarily due to a lack of formal written policies and procedures and internal controls to ensure that all required subrecipient monitoring compliance procedures are being performed by the Department. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(a), 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). Questioned Costs: None. Recommendation We recommend the Department develop written policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(a), 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). This would ensure that all subrecipient grant agreements contains all required communications, that a risk assessment is performed that will outline the types and frequency of monitoring procedures to be performed, that all during the award monitoring activities are properly documented and that the receipt and review of the subrecipient’s uniform guidance report is properly documented. View of Responsible Officials: Management partially concurs with this finding. Rejoinder: As documented within the condition found, sufficient documentation was not provided to demonstrate that the Department complied with 2 CFR section 200.332(a), 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h).

Finding Reference Number: 2024-006 NH Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F22AF00995-00, F22AF00929-00, F23AF03086-00, F22AF00514-01, F22AF02616-02, F19AF00556-01, F21AF04030-06, F22AF03670-01 Federal Award Year: 2019, 2021, 2022, 2023 U.S. Department of Interior Compliance Requirement: SEFA Reporting Type of Finding: Material Weakness and Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR section 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements, section 200.510(b) states the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition The New Hampshire Fish and Game Department (the Department) oversees 25 different grants funded under the Fish and Wildlife Cluster (the Program). To assist in the management of the grants, the Department uses QuickBooks as their main system of books and records, rather than the State of New Hampshire’s centralized accounting system, NH First. The Department manually enters expenditure transactional data into QuickBooks and heavily relies on a number of excel tracking sheets to track expenditures, cash draws, and in-kind match earned for each of the 25 grants. During our testwork over the Program, we identified the following: A. For 2 of 25 grants, we identified that there were out of period costs that were included on the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2024. Specifically we identified the following: a. For 1 of the 2 grants, the Department, included $247,562 of the expenditures that were paid between March 17, 2017 and January 13, 2023 and should not have been reported on the June 30, 2024 SEFA, resulting in an overstatement of expenditures. b. For the other 1 of 2 grants, the Department included $761 of expenditures that were paid on February 10, 2023 and should not have been reported on the June 30, 2024 SEFA, resulting in an overstatement of expenditures. B. For 1 of 25 grants, the Department reported on the SEFA the amount reimbursed through the cash draw process as of June 30, 2024 rather than expenditures paid during that same period. As such, the amount reported on the June 30, 2024 SEFA was understated by $14,830. C. For 1 of 25 grants, we were unable to reconcile the amount reported on the SEFA. For the grant, the Department included $2,637,617 of expenditures on the June 30, 2024 SEFA. As part of our review of the expenditures reported, we were unable to recalculate the amount included by the Department. Based upon the total expenditures incurred during the period ending June 30, 2024, it appeared that the amount that should have been reported was $2,755,548. As such, it appeared that the June 30 2024 was understated by $117,931. D. For 5 of 5 grants that reported subrecipient pass through expenditures, it appeared that the Department reported pass-through expenditures on the SEFA that included both the state and federal share of the costs, resulting in the pass-through amount being overstated by $118,195. Cause The cause of the condition found appears to be related to the heavy reliance on manual spreadsheets and QuickBooks. The manual data entry into QuickBooks and the use of spreadsheets are susceptible to human error. As the Department does not have any internal controls in place to ensure the spreadsheets or QuickBooks reconcile to NH First, if there was an error in the data used by the Department, it would be difficult to detect. In addition, the Department incorrectly included prior period costs on the SEFA as it had been believed that since the costs had not previously been reported but were eligible for reimbursement should be included on the June 30, 2024 SEFA. Effect The effect of the condition found is that the expenditures and subrecipient pass through amounts were not accurately presented on the SEFA. Questioned Costs: Not determinable. Recommendation We recommend that the Department develop written policies and procedures and implement internal controls to ensure all spreadsheets utilized to manage the program reconcile to QuickBooks and that QuickBooks reconciles to NH first on a routine basis. The Department should also implement internal controls to evaluate the amounts reported on the SEFA to ensure that only current period expenditures that are eligible for reimbursement are reported on the SEFA. View of Responsible Officials: Management partially concurs with this finding. Rejoinder: As documented within the condition found, we were unable to obtain documentation that supported a reconciliation between QuickBooks and New Hampshire First was performed. The amounts reported on the SEFA by the Department for this program were not complete and accurate.

Finding Reference Number: 2024-007 NH Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F22AF02312-00, F21AF04100-02, F22AF02844-00, F24AF00586-00, F23AF02720-00, F21AF03886-03, F20AF11939-04, F23AF02954-00, F23AF02609-00, F23AF02714-01, F19AF00556-01, F19AF00556-01, F22AF03670-01, F19AF00556-01, F22AF02616-02, F22AF00514-01, F19AF00556-01, F21AF04030-06 Federal Award Year: 2019, 2020 2021, 2022, 2023, 2024 U.S. Department of Interior Compliance Requirement: Activities Allowed or Unallowed/Allowable Costs/Costs Principles Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Per Part 3 of the Compliance Supplement, costs must be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity in order to be allowable under federal awards. Further per 2 CFR section 200.502, the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity related to the Federal award pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as expenditure/expense transactions associated with grants. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over Activities Allowed or Unallowed/Allowable Costs/Costs Principles, we identified the following: A. For 18 of 25 payroll and fringe benefit costs selected for testwork, we were unable to agree the payroll and fringe benefit costs charged to the Fish and Wildlife Cluster (the program) to the State of New Hampshire’s centralized accounting system, NH First. The New Hampshire Department of Fish and Game (the Department) does not charge payroll and fringe benefit costs incurred by the program as processed in NH First. Instead, the Department utilizes an internally calculated "federal rate" that is used to charge both payroll and fringe benefit costs based upon the number of hours worked to the program. As described by the Department, the federal rate is calculated based upon an employee's fringe benefits, the approved NH First pay rate, and the employee’s years of service. While we were able to recalculate the employee’s payroll and fringe benefit amounts for each of the 20 samples selected testwork as recorded in NH First, we were not able to reconcile this amount to what the Department actually charged the program. A variance of $9,754 was identified and included in the Questioned Cost amount below. B. For 5 of 25 payroll costs selected for testwork, we were unable to obtain support to substantiate the payroll costs recorded by the Department, including the Fish and Game Activity Task Report, which shows the Department's method of allocating time and payroll to the Cluster. As a result, we were unable to reconcile the amount paid in NH First of $11,541 to what the Department had allocated to the program. While we were able to recalculate the employee’s payroll and fringe benefit amounts for each of the 5 samples selected based upon what was recorded in NH First, we were not able to reconcile this amount to what the Department had actually charged the program. Since we were unable to determine what was charged to the program this amount is not a known questioned cost below. C. Indirect costs charged to the program are based upon the Department's "federal rate" calculation of payroll and fringe benefit costs as described above in Bullet A. As a result, we were unable to substantiate the basis upon which the indirect cost rate was applied for all 25 payroll periods for testwork. We further noted that for 2 of 25 payroll periods selected for testwork, the indirect costs drawn down at the time of grant close out in proportion to the payroll drawn down exceeded the 18.19% indirect cost rate that should be applied to payroll. A variance of $1,655 was identified and included in the Questioned Cost amount below. D. During our testwork over the allowability of non-payroll costs, we identified that for 2 of 60 invoices selected for testwork, the invoice was not approved by the Division Chief prior to payment as required. Of the 2 invoices, 1 invoice was approved by the program supervisor and 1 invoice did not contain any evidence of it being approved. While the invoices did not appear to be properly reviewed, the amount paid appeared to be properly supported and as such, no questioned costs were identified. Cause The cause of the condition found is that the Department does not utilize the NH First system as the basis to charge payroll, fringe and indirect costs to the program. As described in the condition found above, the Department performs its own calculation of what the payroll and fringe benefit costs are based upon the Department’s calculated federal rate and then subsequently data enters their calculated expenditure information into QuickBooks. The Department uses QuickBooks to track all federal expenditures under the program by individual federal grant. The Department does not perform any reconciliations to ensure what was entered into QuickBooks reconciles to the NH First system in order to verify that the data in QuickBooks is complete and accurate. In addition, the cause of the condition found related to the review and approval of non-payroll costs is primarily a result of insufficient internal controls in place to ensure all invoices are reviewed and approved prior to payment. Effect The effect of the condition found is that the Department would be unable to detect an error within the amounts data entered into QuickBooks and the amount allocated to the program could be inaccurate. In addition, insufficient review and approval of non-payroll expenditures could result in unallowable costs charged to the program. Questioned Costs: $11,409 Recommendation We recommend that the Department develop written policies and procedures that outline how payroll and fringe benefit costs are charged to the program and implement controls to ensure the amount of payroll and fringe benefits entered into QuickBooks properly reconciles to NH First as part of its routine payroll process. We also recommend that the Department implement internal controls to ensure that the correct indirect cost rate is utilized based upon the applicable time period for which indirect costs are being calculated. Finally, we recommend that the Department review its existing policies and procedures related to the review and approval of non-payroll expenditures to ensure that they are properly reviewed and approved prior to payment. View of Responsible Officials: Management partially concurs with this finding. Rejoinder: As documented within the condition found, the Department did not provide documentation to support that QuickBooks is reconciled to New Hampshire First to ensure that the data within QuickBooks is complete and accurate. Within Bullets B and C were unable to obtain documentation to support these transactions from the Department within a timely manner. As a result of our audit procedures, we identified questioned costs of $11,409. We further note that the NH First system does allow for the allocation of employee salaries to grants from the standard or normal accounting assignment of their costs. The Department has elected not to implement this model.

Finding Reference Number: 2024-008 NH Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F22AF00995-00, F22AF00929-00, F23AF03086-00, F22AF00514-01, F22AF02616-02, F21AF04100-02, F21AF03886-03 Federal Award Year: 2021, 2022, 2023 U.S. Department of Interior Compliance Requirement: Matching Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria In-kind match requirement is to test records to corroborate the values placed on in-kind contributions (including third party in-kind contributions) are in accordance with 2 CFR 200.306, 200.434, and 200.414, and the terms and conditions of the award. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition To meet the federal match required under the program, the New Hampshire Fish and Game Department (the Department) utilizes in-kind match that is earned from volunteer hours and costs contributed by its third party subrecipient. During our testwork over in-kind match, we identified the following: A. For 7 of 9 subrecipient invoices selected for testwork used to support the Department’s in-kind match, we were unable to obtain documentation to support the amount of the in-kind match earned. For each of the 7 sample selections, the value of the in-kind contribution was handwritten on the subrecipient's invoice for unrelated services. There was no documentation obtained to support the accuracy of this handwritten amount. Upon inquiry, the Department confirmed that no further verification was performed to ensure the subrecipient's in-kind match was accurate and based upon costs in support of the grant associated with the in-kind match. B. For 1 of 4 volunteer in-kind match contribution calculations, the Department incorrectly allocated volunteer hours using the prior fiscal year rates, resulting in an excess of in-kind match being recorded as earned. In addition, we were unable to verify the existence of 1 of the volunteer timesheets used in this calculation for this sample selection.   Cause The cause of the condition found is primarily due to insufficient internal controls to ensure that the value of the match contributed by its subrecipient is complete and accurate. Due to the long-standing and collaborative relationship between the Department and the subrecipient, the Department has not developed or implemented formalized policies and procedures related to validating the existence of in-kind match earned. Further, related to the volunteer hours, the cause of the condition is due to human error. With over 250 timesheets to process, the volume of data and calculations are susceptible to error. Effect The effect of the condition found is that the Department did not have appropriate documentation to support the in-kind match earned and applied against its federal award in support of federal funds that were drawn. This could lead to unallowable costs being charged to the grant if the sufficient match was not made. Questioned Costs: $201,250 Recommendation We recommend that the Department implement written policies and procedures surrounding the tracking of in-kind match. Internal controls should be implemented to ensure the accuracy of the in-kind match earned, including ensuring that there is supporting documentation to substantiate the amount earned. The existing policies and procedures should also be enhanced related to volunteer time to monitor to ensure that all required timesheets are completed before using the volunteer time in support of its matching requirement and that the appropriate rate is used when determining the value of the volunteer in-kind match. View of Responsible Officials: Management concurs with this finding except for the questioned cost amount. Rejoinder: As documented within the condition found, we were unable to obtain sufficient documentation to support in-kind matching costs. As a result of our audit procedures, we identified questioned costs of $201,250.

Finding Reference Number: 2024-009 NH Department of Business and Economic Affairs WIOA Cluster (Assistance Listing #17.258, #17.259, #17.278) Federal Award Numbers: AA-3633-21-55-A-33, AA-38543-22-A-33, 23A55AW000046-01, 23A55AT000041-01-01, 23A55AY000021-01-00, 23R55MS000053-01-01, 23A60AD000082-01-00, 24A55AY000058-01-00 Federal Award Year: 2021, 2022, 2023, 2024 U.S. Department of Labor Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting, we identified that the Department of Business and Economic Affairs (the Department) did not file any reports in accordance with the Federal Financial Accountability and Transparency Act (FFATA) for the year ended June 30, 2024. Cause The cause of the condition found was primarily due to staffing changes within the Department. While the Department has a policy regarding FFATA reporting, there appears to be insufficient controls in place to ensure that the required FFATA reports were filed. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs: None.   Recommendation We recommend that the Department continue to enhance policies and procedures and implement include internal ensure all FFATA reports are submitted in compliance with the Transparency Act reporting requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference: 2024-010 NH Department of Business and Economic Affairs NH Department of Administrative Services COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing #21.027) Federal Award Numbers: SLFRP0145 Federal Award Year: 2021 U.S. Department of Treasury Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency Prior Year Finding: 2023-004 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over suspension and debarment, we identified that for 4 of 112 items selected for testwork related to 60 contracts and 52 subrecipients, there was no supporting documentation that the State had verified either through a signed certification or searching SAM.gov that the entity was not suspended or debarred. As part of our testwork, we reviewed SAM.gov for each of the 4 items and found that none of the entities had been suspended or debarred. Of the 4 sample selections, all 4 selections were contracts. Cause The cause of the condition found is due to insufficient controls and procedures to ensure that for all covered transactions the State determines if the entity covered has been suspended or debarred. Effect The effect of the condition found is that the funds could be paid to an entity that has been suspended or debarred and costs paid to the entity would be unallowable. Questioned Cost: Not determinable.   Recommendation We recommend that the State review its existing policies and procedures related to suspension and debarment and ensure that all covered transactions with entities are properly reviewed to verify that the entity has not been suspended and debarred. View of Responsible Officials: Management partially concurs with the finding above. Rejoinder: As documented within the condition found, we were unable to obtain documentation that the Department ensured that the vendor was not suspended or debarred for 4 of 112 samples selected for testwork.

Finding Reference: 2024-011 NH Governor’s Office of Emergency Relief and Recovery COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing #21.027) Federal Award Numbers: SLFRP0145 Federal Award Year: 2021 U.S. Department of Treasury Compliance Requirement: Procurement Type of Finding: Significant Deficiency Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria An entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor. The pass-through entity is responsible for making case-by-case determinations to determine whether the entity receiving Federal funds is a subrecipient or a contractor. The Federal agency may require the pass-through entity to comply with additional guidance to make these determinations, provided such guidance does not conflict with this section. The Federal agency does not have a direct legal relationship with subrecipients or contractors of any tier; however, the Federal agency is responsible for monitoring the pass-through entity's oversight of first-tier subrecipients. All of the characteristics listed below may not be present in all cases, and some characteristics from both categories may be present at the same time. No single factor or any combination of factors is necessarily determinative. The pass-through entity must use judgment in classifying each agreement as a subaward or a procurement contract. In making this determination, the substance of the relationship is more important than the form of the agreement (2 CFR 200.331) Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Coronavirus State and Local Fiscal Recovery Funds program, the State of New Hampshire (the State) entered into grant agreements with local entities and third-party contracts to support allowable activities under the federal program. As part of our testwork over the completeness of the procurement (contracts) and subrecipient grants populations, we identified the following: A. For 91 procurement samples selected for testwork, 12 sample selections did not appear to be contracts. 11 of 12 sample items appeared to be a beneficiary payment. The remaining 1 sample items appeared to be a subrecipient grant agreements. B. For 2 of 24 subrecipient grant samples selected for testwork, 2 sample selections did not appear to be a subrecipient grant. 1 of the 2 sample selections appeared to be a contract and the other 1 was a forgivable loan payment that appeared to be a beneficiary payment. No procurement noncompliance was identified for the contract and subrecipient samples subject to testwork. Cause The cause of the condition found is primarily due to insufficient controls related to the determination of vendor versus subrecipient versus beneficiary payment in order to determine what additional monitoring procedures the State needs to be perform and to determine if the recipient needs to comply with federal compliance requirements. . Effect The effect of the condition found is that the State may not have properly classified contracts, beneficiary and subrecipient awards. Questioned Costs: None. Recommendation We recommend that the State continue to review its vendor determination policy to ensure that the policy is consistently applied across all Department’s within the State. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2024-012 NH Department of Business and Economic Affairs COVID-19 Capital Projects Fund (Assistance Listing #21.029) Federal Award Number: CPFFN0143 Federal Award Year: 2022 U.S. Department of Treasury Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-006 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria The Project and Expenditure Report for States, Territories & Freely Associated States (PRA 1505-0277) is required to be filed on a quarterly basis. For broadband infrastructure projects, miles of fiber purchased is required to be reported. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of our testwork over the Project and Expenditure Report for States, Territories & Freely Associated States, we identified the following: A. The total amount expended for administrative expenses within Section 6.1 was under reported by $3,427 for the quarter ending September 30, 2023. B. The actual total miles of fiber deployed, and actual total locations are not tracked by the Department and as a result, we were unable to verify the accuracy of the data reported within section 5.2 for the September 30, 2023 and June 30, 2024 quarterly reports. The Department reported its planned activities only but there were no actual results reported. Cause The cause of the condition found related to bullet A was due an existing internal control deficiency related to the review and approval of the report not being at a precision level that would identify the underreporting of expenses incurred that was identified as part of the June 30, 2023 audit. The Department subsequently implemented their corrective action plan, and a similar error was not identified within the June 30, 2024 quarterly report. In addition, as it relates to the number of funded locations and the planned number of miles of fiber to be deployed, the Department relies upon data provided by their contractors to report this data. The Department has made attempts to obtain this information however the data has not been provided by the contractors so that the amounts reported within the quarterly reports can be updated.   Effect The effect of the condition found is that the quarterly project and expenditures reports were not complete and accurate. Questioned Costs: None. Recommendation We recommend that the Department continue to review its existing internal controls over quarterly reporting to ensure that all line items reported are complete and accurate. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2024-013 COVID-19 Education Stabilization Fund (Assistance Listing #84.425D, #84.425R, #84.425U, #84.425V, and #84.425W) Federal Award Numbers: S425D210017, S425U210017 Federal Award Year: 2021 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-008 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2024, we noted the New Hampshire Department of Education (the Department) passed through $145,806,837 in Education Stabilization Fund Grants (ESF Grant) to Local Educational Agencies (Local Educational Agencies). During our testwork over FFATA reporting at the Department for ESF Grants, we selected 60 out of 394 FFATA reports across 198 different LEAs for testing and noted the following: Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 60 0 34 8 25 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $99,319,258 $0 $56,002,866 $6,036,865 $41,275,186 Summary – By Year Year Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements FY21 Count 24 0 9 6 21 FY21 $ $39,289,343 $0 $5,233,893 $4,036,411 $38,341,157 FY22 Count 22 0 22 1 0 FY22 $ $48,539,951 $0 $48,539,951 $124,222 $0 FY23 Count 9 0 3 0 1 FY23 $ $8,090,618 $0 $2,229,022 $0 $286,401 FY24 Count 5 0 0 1 3 FY24 $ $3,399,346 $0 $0 $1,876,232 $2,647,628 Cause The reconciliation control is not operating at a sufficient precision level to ensure completeness and accuracy of the key elements. Additionally, effective controls were not in place to ensure timely reporting. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs: None. Recommendation We recommend that the Department continue to enhance policies and procedures which include internal controls across the Department programs to which FFATA reporting is applicable, to ensure timely and accurate reporting to the FSRS system to ensure compliance with the Transparency Act reporting requirements. View of Responsible Officials: Management concurs with the finding above

Finding Reference Number: 2024-014 COVID-19 Education Stabilization Fund (Assistance Listing #84.425D, #84.425R, #84.425U, #84.425V, and #84.425W) Federal Award Numbers: S425D210017, S425U210017 Federal Award Year: 2021 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-008 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria ESSER, GEER, and EANS grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. LEAs/subrecipients submit data to the SEA/Governor for the SEA’s/Governor’s report. Report Title: ESF – ESSER Recipient Data Collection Form (OMB No 1810-0749) is required to filled annually in the spring based on the State fiscal year. Key line items include: 1. Line 3.b1 LEA expenditures by ESSER Subgrant fund, expenditure category, and object code 2. Line 3.b10 Number of specific positions supported with ESSER Funds 3. Line 3.c Allocation of ESSER funds to schools and criteria used to allocate funds to schools 4. Line 5.a Full Time Equivalent positions Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2024, we noted the New Hampshire Department of Education (the Department) passed through $145,806,837 in Education Stabilization Funds (ESF) to subrecipients (Local Educational Agencies). During our testwork over special reporting at the Department for ESF Grants, we selected each annual report for ESSER, GEER, and EANS Recipient Data Collection Forms and noted for the ESSER Recipient Data Collection Form, there was no supporting documentation provided to adequately reconcile the difference from the underlying support to the reported amounts for key line item 3.c on the ESSER Recipient Data Collection Form. Discrepancies include the following: A. For ESSER I, total amount of remaining grant funds and amount of remaining funds planned for specific purpose each reported as $0 while underlying support shows $423 for an unreconciled difference of $423. B. For ESSER II, total amount of grant expended by the SEA and all state subrecipients in the reporting period reported as $85,705,938 while underlying support shows $82,847,502 for an unreconciled difference of $2,858,436. C. For ESSER II, total amount of remaining grant funds and amount of remaining funds planned for a specific purpose each reported as $240,920,978 while underlying support shows $243,779,414 for an unreconciled difference of $2,858,436. D. For ESSER III, total amount of SEA Reserve that SEA expended directly in the current reporting period reported as $3,409,199 while underlying support shows $3,133,439 for an unreconciled difference of $275,760. E. For ESSER III, total amount of Summer Enrichment Set Aside reported as $0 while underlying support shows $247,835 for an unreconciled difference of $247,835. F. For ESSER III, total amount of Afterschool Programs Set Aside reported as $709,512 while underlying support shows $1,295,12 for an unreconciled difference of $709,512. G. For ESSER III, total amount of Emergency Needs and/or Admin Costs Set Aside reported as $395,035 while underlying support shows $274,198 for an unreconciled difference of $120,837. Cause The cause of the condition found that there are insufficient policies and procedures in place to ensure that all necessary documentation is maintained to support the amounts reported for each federal report filed and that amounts are reconciled to the report. Based on the documentation that was provided to support the data reported within each annual report, it is unclear if the internal control review procedures performed included a detail review over each line item of the report to ensure the amount reported is complete and accurate. Effect The effect of the condition found is that the ESSER annual report was not complete and accurate when it was filed. Questioned Costs: None. Recommendation We recommend that policies and procedures be developed to ensure that all documentation to support the amounts reported on the ESSER Recipient Data Collection Form is properly maintained for each annual report. In addition, internal control procedures be evaluated to ensure that as part of the review process, each line item on the federal report is verified against the supporting documentation to ensure the report is complete and accurate. The review performed should also be properly documented showing evidence that the required review process was performed prior to submitting the annual Recipient Data Collection Form. View of Responsible Officials: Management concurs with the finding above

Finding Reference Number: 2024-015 NH Department of Health and Human Services Aging Cluster and COVID-19 Aging Cluster (Assistance Listing #93.044, #93.045, #93.053) Federal Award Number: 2401NHOASS, 2301NHOASS Federal Award Year: 2023, 2024 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, 45 CFR section 75 303(a) states the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testwork over FFATA reporting, we identified the following: A. For each of the 2 FFATA reports selected for testwork, there was no evidence provided that the report was reviewed and approved prior to submission. B. For each of the 2 FFATA reports selected for testwork, the UEI number did not agree to the underlying supporting documentation as the UEI number was not included in the subaward agreement. C. For 1 of 2 FFATA reports selected for testwork, the report was not filed timely.   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 3 N/A 2 N/A 2 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $548,250 N/A $510,000 N/A $548,250 Cause The cause of the condition found related to FFATA reporting is due to insufficient controls related to the review and approval of FFATA reports to ensure the accuracy of the data reported. During the period ending June 30, 2024, due to staffing changes, the same individual was preparing and submitting the FFATA report, resulting in a lack of segregation of duties over the review and approval of the FFATA report. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs: None. Recommendation We recommend that the Department implement written policies, procedures and internal controls to ensure the accuracy of the data reported within FSRS and to ensure that reports are filed timely. This would include ensuring that a supervisory review is performed over the FFATA report prior to submission. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2024-016 NH Department of Health and Human Services Aging Cluster and COVID-19 Aging Cluster (Assistance Listing #93.044, #93.045, #93.053) Federal Award Number: 2101NHCMC6-01, 2101NHCMC6-02, 2201NHOACM-02, 2201NHOACM-00, 2201NHOACM-03, 2201NHOACM-04, 2201NHOAHD-03, 2201NHOAHD-00, 2201NHOAHD-02, 2301NHOASS-02, 2301NHOACM-02, 2301NHOACM-01, 2301NHOAHD-01, 2301NHOAHD-02 Federal Award Year: 2021, 2022, 2023, 2024 U.S. Department of Health and Human Services Compliance Requirement: Activities Allowed or Unallowed/Allowable Costs/Costs Principles Type of Finding: Material Weakness Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Funds may be used for nutrition services and supportive services consistent with the terms of the agreement between the Area Agency and the service provider (42 USC 3026(a)(1), 3030d(a), and 3030e). Funds may be used for the provision of home-delivered meals to older individuals (42 USC 3030f). Additionally, 45 CFR section 75 303(a) states the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition The New Hampshire Department of Health and Human Services (the Department) enters into subrecipient agreements with local area agencies that provide supportive services and nutrition programs. These programs include providing meals both in a congregate group setting as well as home delivery for older individuals. During our testwork over the allowability of costs charged to the program, for 18 of 40 invoices selected for testwork, there was no evidence the Department had ensured the accuracy of the amount being billed prior to payment. While there was no evidence that these invoices had been reviewed and approved, the amount paid appeared to be properly supported by the invoice. Cause The cause of the condition found is due to insufficient policies and procedures to review the accuracy of the amount being billed. For certain invoices the Department uses the Options Electronic Billing and Service Authorization Maintenance System (the System). Once the subrecipient is authorized within the System to provide services and up to a certain amount of funding, the subrecipient electronically submits an invoice for the dates of services provided. The System performs validation that will verify that the subrecipient is approved to provide the service for the dates requested and if there is money remaining within the amount authorized, the request for reimbursement will be paid. The Department does not review the accuracy of the invoiced amount either prior to payment or subsequent to payment through its subrecipient monitoring procedures. Effect The effect of the condition found is that reimbursements could be made to subrecipient grants that are not properly supported by the subrecipients books and records resulting in unallowable costs. Questioned Costs: None. Recommendation We recommend that the Department develop written policies and procedures and implement internal controls over the review and approval of invoices submitted through the Options Electronic Billing and Service Authorization Maintenance System. This would include procedures to review meal count information maintained by the subrecipient either prior to or subsequent to the reimbursement of costs to the subrecipient to ensure the accuracy of the amount being billed by the subrecipient. View of Responsible Officials: Management concurs with the finding above

Finding Reference Number: 2024-17 NH Department of Health and Human Services Aging Cluster and COVID-19 Aging Cluster (Assistance Listing #93.044, #93.045, #93.053) Federal Award Number: 2401NHOASS, 2301NHOASS Federal Award Year: 2023, 2024 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria A pass-through entity (PTE) must: 1. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 2. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 45 CFR section 75 303(a) states the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During the year ended June 30, 2024, the New Hampshire Department of Health and Human Services (the Department) passed through $9,048,291 of federal funding to subrecipients. As part of our testing related subrecipient monitoring, we identified the following: A. For 2 of 7 subrecipients selected for testwork, a risk assessment was not completed. As a result, we were unable to determine if the Department had adequately monitored the subrecipient. There was no documentation provided that any monitoring procedures were performed. B. For 2 of 7 subrecipients selected for testwork, a transportation risk assessment was completed. Per review of the risk assessment, a quarterly review was to be performed to examine the expenditure detail to assess purchasing compliance with contract requirements and applicable laws or rules. There was no documentation provided that this review had taken place. In addition, a nutrition risk assessment was also completed, however there were no specified monitoring procedures. As such, we are unable to determine if the appropriate monitoring procedures were performed for this subrecipient. C. For 1 of 7 subrecipients selected for testwork, a nutrition risk assessment was completed. Based on our review of the risk assessment, a review was to be performed to examine the expenditure detail to assess purchasing compliance with contract requirements and applicable laws or rules. There was no documentation provided to support that this type of monitoring procedure was performed. D. For 1 of 7 subrecipients selected for testwork, the nutrition risk assessment that was completed did not contain any required monitoring procedures. As such, we are unable to determine if the appropriate monitoring procedures were performed for this subrecipient. E. For 1 of 7 subrecipients selected for testwork the nutrition risk assessment indicated that an onsite review should be performed annually. The risk assessment was dated July 19, 2023 and as of June 30, 2024 an on-site monitoring review was not completed. We further noted that a review was conducted in October of 2024. As the risk assessment indicated the review was to be conducted annually, it does not appear that this review was completed timely. Cause The cause of the condition found was primarily due to a lack of formal documented policies, procedures and internal controls to ensure to ensure that required monitoring procedures outlined within the subrecipient’s risk assessment is performed. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(b), and 2 CFR sections 200.332(d) through (f). Questioned Costs: None. Recommendation We recommend the Department develop written policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(b), and 2 CFR sections 200.332(d) through (f). This would ensure that all required award identification information is properly communicated to subrecipients, and that the prescribed monitoring procedures outlined within the risk assessment are properly performed. Written policies and procedures should be established to ensure that if the risk assessment has suggested a particular monitoring procedure be performed, that the Department is adequately documenting its monitoring procedures to ensure that it has performed the required procedures. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2024-018 NH Department of Health and Human Services Immunization Cooperative Agreements and COVID-19 Immunization Cooperative Agreements (Assistance Listing #93.268) Federal Award Number: NH23IP922595 Federal Award Year: 2019 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, 45 CFR section 75 303(a) states the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testwork over FFATA reporting, we identified the following: A. For all 3 FFATA reports selected for testwork, there was no evidence provided that the report was reviewed and approved prior to submission. B. For 2 of the 3 FFATA reports selected for testwork, we were unable to verify the UEI number reported in the FFATA report as it was not included within the subaward agreement. C. For all 3 FFATA reports selected for testwork, the report was not filed timely.   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 3 N/A 3 N/A 2 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $430,000 N/A $430,000 N/A $30,000 Cause The cause of the condition found related to FFATA reporting is due to insufficient controls related to the review and approval of FFATA reports to ensure the accuracy of the data reported. During the period ending June 30, 2024, due to staffing changes, the same individual was preparing and submitting the FFATA report, resulting in a lack of segregation of duties over the review and approval of the FFATA report. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs: None. Recommendation We recommend that the Department implement written policies, procedures and internal controls to ensure the accuracy of the data reported within FSRS and to ensure that reports are filed timely. This would include ensuring that a supervisory review is performed over the FFATA report prior to submission. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2024-019 NH Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) and COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Federal Award Number: NUK50CK000522 Federal Award Year: 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-010 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Quarterly fiscal reports are required to be submitted beginning 69 days after the notice of Awards is issued. Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, 45 CFR section 75 303(a) states the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Quarterly Reporting As part of the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, the New Hampshire Department of Health and Human Services (the Department) reports financial information to the Centers for Disease Control (CD) on a quarterly basis related to expenditures incurred and the amount of unliquidated obligations for the reporting period. During our testwork over quarterly reporting, we identified that for 12 of 27 quarterly reports selected for testwork, we were unable to obtain a copy of the report summary for the reporting period selected for testwork. As a result, were unable to verify that the that the unliquidated obligation for the reporting period was properly reported. FFATA Reporting During our testwork over FFATA reporting, we identified the following: A. For each of the 4 FFATA reports selected for testwork, there was no evidence provided that the report was reviewed and approved prior to submission. B. For each of the 4 FFATA reports selected for testwork, we were unable to validate the UEI number as it was not included within the subaward. C. For 1 of 4 FFATA reports selected for testwork, the report was not filed timely. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 4 N/A 1 N/A 4 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $1,947,055 N/A $266,603 N/A $1,947,055 Cause The cause of the condition found related to quarterly reporting is that the Department did not maintain a screenshot of the unliquidated obligations reported for COVID related federal awards. The federal reporting system does not allow the user to review prior submissions and only shows the status of the grant, including the unliquidated obligation balance. The only thing that appears in the federal reporting system is the current status of the grant. The cause of the condition found related to FFATA reporting is due to insufficient controls related to the review and approval of FFATA reports to ensure the accuracy of the data reported. During the period ending June 30, 2024, due to staffing changes, the same individual was preparing and submitting the FFATA report, resulting in a lack of segregation of duties over the review and approval of the FFATA report. Effect The effect of the condition found is that the Department does not have sufficient documentation to support the unliquidated obligation balances for COVID related quarterly reports the amounts reported may not have been accurately filed. In addition, the Department did not comply with the Transparency Act reporting requirements. Questioned Costs: Not determinable. Recommendation We recommend that the Department continue to review its existing internal controls, policies, and procedures related to monthly reporting to ensure that a copy of all quarterly financial reports summary for all COVID grants maintained to properly document that the unliquidated obligation is properly reported.   We further recommend that the Department implement written policies, procedures and internal controls to ensure the accuracy of the data reported within FSRS and to ensure that reports are filed timely. This would include ensuring that a supervisory review is performed over the FFATA reports prior to submission. View of Responsible Officials: Management concurs with the finding above

Finding Reference Number: 2024-020 NH Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) and COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Federal Award Numbers: NUK50CK000522 Federal Award Year: 2019 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-011 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria A pass-through entity (PTE) must: 1. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 2. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 45 CFR section 75 303(a) states the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award Condition During the year ended June 30, 2024, the New Hampshire Department of Health and Human Services (the Department) passed through $3,241,196 of federal funding to subrecipients. As part of our testing related subrecipient monitoring, we identified the following: A. We were unable to obtain documentation to support that that the Department had performed the suggested monitoring procedures for 3 of the 4 subrecipients selected for testwork based upon the subrecipients most recent risk assessment performed. For the remaining 1 subrecipient, the risk assessment form did not contain any suggested monitoring procedures. As a result, we were not able to verify that the Department had performed the appropriate monitoring procedures as outlined by the risk assessment performed for each subrecipient. B. The Department’s during the award monitoring for each of the 4 subrecipients selected for testwork consisted of the review and approval of subrecipient invoices. Per review of the invoices, the invoice contained a summary of costs incurred by the subrecipient by category of expense that it was seeking reimbursement for. The Department did not perform any other monitoring procedures to ensure the accuracy of the request made by the subrecipient through either a desk review or an on-site monitoring visit. As no further monitoring procedures were performed by the Department to ensure that the subrecipient was in compliance with the terms and conditions of its subrecipient grant agreement, the Department does not appear to have monitoring procedure in place that would allow it to timely identify noncompliance incurred at the subrecipient level. Cause The cause of the condition found was primarily due to a lack of formal policies and internal controls to ensure that all required subrecipient monitoring compliance procedures are being performed by the Department. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(b), and 2 CFR sections 200.332(d) through (f). Questioned Costs: None. Recommendation We recommend the Department develop written policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(b), and 2 CFR sections 200.332(d) through (f). This would ensure that the subrecipient risk assessment is routinely updated for multiyear grants and that the prescribed monitoring procedures take into consideration any additional monitoring procedures that might need to be performed, such as a desk review or on-site visit, particularly if the program is not audited as part of the subrecipient’s uniform guidance audit. In addition, written policies and procedures should be established to ensure that if the risk assessment has suggested a particular monitoring procedure be performed, that the Department is adequately documenting its monitoring procedures to ensure that it has performed the required procedures. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2024-021 NH Department of Energy Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2301NHLIEA, 2401NHLIEA Federal Award Year: 2023, 2024 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-015 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria A pass-through entity must: • Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a); • Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means; and Issuing a management decision for audit findings pertaining to federal award provided to the subrecipient from the subrecipient as required by 2 CFR section 200.521. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Low-Income Home Energy Assistance program (LIHEAP), the New Hampshire Department of Energy (the Department) enters into grant agreements with local entities to provide services related to the eligibility determination process for the LIHEAP program (including the calculation of participant benefits) and payment of benefits to fuel providers. During the year ended June 30, 2024, $38,545,693 was passed through to subrecipients. As part of our testwork over the subrecipient monitoring process, we identified the following: A. The Department communicates award information to subrecipients through the approved grant agreement. Per review of the grant agreement, for each of the 4 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.332. Specifically, the following elements were not communicated: a. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414) b. Identification of whether the award is R&D B. The data that is used to compile the Annual Report on Households Assisted by LIHEAP is obtained from case data that is reported to the New Hampshire Department of Energy (the Department) from its subrecipients as the Department has entered into grant agreements with third parties who are responsible for the eligibility determination and benefit payment process. The Annual Report on Households Assisted by LIHEAP contains data that is specific to benefits paid to eligible participants. As part of our subrecipient monitoring testwork, we were unable to verify that the Department had performed any monitoring procedures over the data provided by each subrecipient to ensure that the data reported within the annual report was complete and accurate. Cause The cause of the condition found was primarily due to insufficient documented subrecipient policies and procedures to ensure that award information is appropriately communicated and that there is appropriate monitoring procedures performed over the completeness and accuracy of the data submitted by the subrecipient utilized to compile federal reports. Effect The effect of the condition found is that the Department did not comply with section 2 CFR 200.332 (a) and 2 CFR 200.332(d) through (f). Questioned Costs: None. Recommendation We recommend that the Department formalize, policies and procedures and implement the necessary internal controls to ensure that all required award identification information is communicated to subrecipients and over the monitoring of data submitted by subrecipients to be used in the Annual Report on Households Assisted by LIHEAP to ensure that the report is complete and accurate. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2024-022 NH Department of Energy Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2301NHLIEA, 2401NHLIEA Federal Award Year: 2023, 2024 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-016 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Annual Report on Households Assisted by LIHEAP (OMB No. 0970-0060) – As part of the application for block grant funds each year, a report is required for the preceding fiscal year of (1) the number and income levels of the households assisted for each component and any type of LHEAP assistance (heating, cooling, crisis, and weatherization); and (2) the number of households served that contained young children, elderly, or persons with disabilities, or any vulnerable household for each component. Territories with annual allotments of less than $200,000 and all Native American tribes are required to report only on the number of households served for each program component (42 USC 8629; 45 CFR section 96.82). Quarterly Performance and Management Report (OMB No. 0970-0589) https://omb.report/icr/202205-0970-017/doc/121847100 – Grant recipients must submit data and information about LIHEAP during the current FY, including success, challenges, needs and innovations. The quarterly reports focus on assisted households, performance management, obligation of funding, changes made due to anticipated increase in energy bills, collaboration with other utility programs, and training and technical assistance needs. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting as part of the Low-Income Home Energy Assistance program (LIHEAP), we noted the following: A. During our testwork over FFATA report completed by the New Hampshire Department of Energy (the Department), we identified that for 1 of 3 FFATA reports selected for testwork that the FFATA report was not submitted timely. Reports Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 4 0 1 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $86,991,138 $0 $26,928,592 $0 $0 B. The Annual Report on Households Assisted by LIHEAP report was submitted by the Department’s externally engaged consultants, APPRISE, for both program year ending September 30, 2023 and September 30, 2024. For this process, the Department submitted raw data files retrieved from their subrecipients to APPRISE to utilize in the development of the balances submitted within the report. The Department was unable to provide us with supporting documentation that reconciled to the balances submitted within the report, as the balances submitted were developed by APPRISE. As they were unable to provide us with supporting documentation behind the balances submitted, we were unable to determine the report submitted was complete and accurate. We further identified that for the report submitted for program year September 30, 2024, the report was required be resubmitted due to an error being discovered by APPRISE after their submission of the report. C. During our testwork related to the Quarterly Performance and Management Reports, we identified the following: a. For 1 of 4 quarterly reports tested, we were unable to determine whether the report was submitted as the report provided was not signed and dated by the Program Director. b. For the Quarterly Performance and Management report submitted for the quarters ended September 30, 2023 and December 31, 2023, we were unable to verify to obtain documentation to support the following key line items: i. Number of assisted households during the same period last year for the same quarter x for federal fiscal year 2023, ii. Total amount of funds obligated for LIHEAP fiscal year 2023 allotment iii. Amount of funds obligated for other supplemental allotment. Cause The cause of the condition found related primarily to insufficient resources to ensure reports are filed and complete and accurate. In addition, the Department did not have procedures in place to ensure it reconciled reports prepared by their contractor to ensure that the reports were accurately filed. Effect The effect of the condition found is that the required reports may not be submitted and accurate and their are sufficient internal controls to identify errors or non-submission. Questioned Costs: None. Recommendation We recommend that the Department should review to ensure there is sufficient safeguards in place for professionals to perform when positions are vacant so that necessary processes are completed related to compliance with federal requirements, including submission of federal reports, including FFATA reports. In addition, we recommend that the Department implement written policies and procedures for the compilation and review of the Quarterly Performance and Management Report and Annual Report on Households Assisted by LIHEAP and ensure that the documentation to support the amounts reported is maintained to support that the report is complete and accurate. View of Responsible Official: Management concurs with the finding above.

Finding Reference Number: 2024-023 NH Department of Energy Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2301NHLIEA, 2401NHLIEA Federal Award Year: 2023, 2024 U.S. Department of Health and Human Services Compliance Requirement: Cash Management Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-014 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1). Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting as part of the Low-Income Home Energy Assistance program (LIHEAP), we noted the New Hampshire Department of Energy (the Department) advances payments to subrecipients to ensure that they have sufficient cash on hand in order to pay for benefit payments. The Department advances payments to subrecipients to ensure that they have sufficient cash on hand to pay for benefit payments. The Department passed through $38,545,693 to subrecipients during the year ended June 30, 2024. During our testwork over cash management, we noted that for the 4 cash advance payment samples selected for testwork, while the Department properly tracks subrecipient's expenditures, the Department does not ensure that the amount of time the cash on hand is minimized. The engagement team noted that for all 4 samples tested, cash is on hand for over 30 days according to each tracking sheet maintained by management. Cause The cause of the condition found was primarily due to insufficient monitoring procedures and internal controls to ensure that subrecipients either utilized advanced funds timely or effectively evaluate the amount of funds the subrecipient would need to have on hand at the time of the advance payment.   Effect The effect of the condition found is that the Department was not in compliance with 2 CFR section 200.204(b)(1). Questioned Costs: None. Recommendation We recommend that the Department continue to review its existing internal controls, policies, and procedures relating to advancing funds to subrecipients to ensure that excess cash held by the subrecipients does not exceed 30 days. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2024-024 NH Department of Health and Human Services CCDF Cluster COVID-19 CCDF Cluster (Assistance Listing #93.575, #93.596) Federal Award Number: 2101NHCDC6, 2201NHCCDD, 2301NHCCDD Federal Award Year: 2021, 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over FFATA reporting, we identified the following: A. For all 3 FFATA reports selected for testwork, there was no evidence provided that the report was reviewed and approved prior to submission. B. For 2 of 3 FFATA reports selected for testwork, we were unable to verify the UEI number reported as the UEI number was not included on the subaward agreement. C. For 1 of the 3 FFATA reports selected for testwork, the report was not filed timely.   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 3 N/A 1 N/A 2 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $5,793,670 N/A $750,000 N/A 4,293,670 Cause The cause of the condition found related to FFATA reporting is due to insufficient controls related to the review and approval of FFATA reports to ensure the accuracy of the data reported. During the period ending June 30, 2024, due to staffing changes, the same individual was preparing and submitting the FFATA report, resulting in a lack of segregation of duties over the review and approval of the FFATA report. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs: None. Recommendation We recommend that the Department implement written policies, procedures and internal controls to ensure the accuracy of the data reported within FSRS and to ensure that reports are filed timely. This would include ensuring that a supervisory review is performed over the FFATA report prior to submission. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2024-025 NH Department of Health and Human Services CCDF Cluster COVID-19 CCDF Cluster (Assistance Listing #93.575, #93.596) Federal Award Number: 2101NHCDC6, 2201NHCCDD, 2301NHCCDD Federal Award Year: 2021, 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria A pass-through entity (PTE) must: 1. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 2. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 45 CFR section 75 303(a) states the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award Condition During the year ended June 30, 2024, the New Hampshire Department of Health and Human Services (the Department) passed through $7,770,973 of federal funding to subrecipients. As part of our testing related subrecipient monitoring, we identified the following: A. For 1 of 3 subrecipients selected for testwork, there were no suggested monitoring procedures included within the subrecipient’s risk assessment. As a result, we were unable to determine if the Department had adequately monitored the subrecipient. B. For 1 of 3 of subrecipients selected for testwork, the risk assessment indicated that a quarterly expenditure review was to be performed. We were unable to obtain documentation to support that an onsite monitoring review was completed or started during our audit period. C. For 1 of 3 of subrecipients selected for testwork, the risk assessment indicated that a monthly expenditure review was to be performed. We were unable to obtain documentation to support that an onsite monitoring review was completed or started during our audit period Cause The cause of the condition found was primarily due to a lack of formal documented policies, procedures and internal controls to ensure that required monitoring procedures outlined within the subrecipient’s risk assessment is performed. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(b), and 2 CFR sections 200.332(d) through (f). Questioned Costs: None. Recommendation We recommend the Department develop written policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(b), and 2 CFR sections 200.332(d) through (f). This would ensure that the prescribed monitoring procedures outlined within the risk assessment are properly performed. Written policies and procedures should be established to ensure that if the risk assessment has suggested a particular monitoring procedure be performed, that the Department is adequately documenting its monitoring procedures to ensure that it has performed the required procedures. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2024-026 NH Department of Health and Human Services Opioid STR (Assistance Listing #93.788) Federal Award Number: H79TI081685, H79TI083326, H79TI085759 Federal Award Year: 2022, 2023, 2024 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria A pass-through entity (PTE) must: 1. Identify the Award and Applicable Requirements –Clearly identify to the subrecipient the award as a subrecipient by providing the information prescribed in 2 CFR 200.332(a) 2. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 3. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 45 CFR section 75 303(a) states the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During the year ended June 30, 2024, the New Hampshire Department of Health and Human Services (the Department) passed through $21,190,358 of federal funding to subrecipients. As part of our testing related subrecipient monitoring, we identified the following: A. For 3 of 7 subrecipients selected for testwork, per review of the award communication, the Department did not properly communicate the indirect cost rate for the federal award. B. For 1 of 7 subrecipients selected for testwork, there were no suggested monitoring procedures included within the subrecipient’s risk assessment. As a result, we were unable to determine if the Department had adequately monitored the subrecipient. We noted that while there no monitoring procedures listed, the Department did complete a monthly expenditure detail review. C. For 1 of 7 subrecipients selected for testwork, the risk assessment indicated that an annual onsite monitoring review was to be conducted. We were unable to obtain documentation to support that an onsite monitoring review was completed or started during our audit period. Cause The cause of the condition found was primarily due to a lack of formal documented policies, procedures and internal controls to ensure that the required award identification information is communicated to all subrecipients and to ensure that required monitoring procedures outlined within the subrecipient’s risk assessment is performed. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(a), 2 CFR section 200.332(b), and 2 CFR sections 200.332(d) through (f). Questioned Costs: None. Recommendation We recommend the Department develop written policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(a), 2 CFR section 200.332(b), and 2 CFR sections 200.332(d) through (f). This would ensure that all required award identification information is properly communicated to subrecipients, and that the prescribed monitoring procedures outlined within the risk assessment are properly performed. Written policies and procedures should be established to ensure that if the risk assessment has suggested a particular monitoring procedure be performed, that the Department is adequately documenting its monitoring procedures to ensure that it has performed the required procedures. View of Responsible Officials: Management partially concurs with the finding above. Rejoinder: As documented in Bullet B above, the risk assessment provided by the Department for 1 of 7 subrecipients did not contain any suggested monitoring procedures. As a result, we were unable to determine if the Department had adequately monitored the subrecipient.

Finding Reference Number: 2024-027 NH Department of Health and Human Services Opioid STR (Assistance Listing #93.778) Federal Award Number: H79TI081685, H79TI083326, H79TI085759 Federal Award Year: 2022, 2023, 2024 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, 45 CFR section 75 303(a) states the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testwork over FFATA reporting, we identified the following that for all 7 FFATA reports selected for testwork, there was no evidence that the reports were reviewed and approved prior to submission. While there was no evidence of review, the reports appeared to be complete, accurate and filed timely. Cause The cause of the condition found related to FFATA reporting is due to insufficient controls related to the review and approval of FFATA reports to ensure the accuracy of the data reported. During the period ending June 30, 2024, due to staffing changes, the same individual was preparing and submitting the FFATA report, resulting in a lack of segregation of duties over the review and approval of the FFATA report. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs: None.   Recommendation We recommend that the Department implement written policies, procedures and internal controls to ensure the accuracy of the data reported within FSRS and to ensure that reports are filed timely. This would include ensuring that a supervisory review is performed over the FFATA report prior to submission. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2024-028 NH Department of Health and Human Services Block Grants for Substance Use Prevention, Treatment, and Recovery Services and COVID-19 Block Grants for Substance Use Prevention, Treatment, and Recovery Services (Assistance Listing #93.959) Federal Award Numbers: 1B08TI084659-01, 1B08TI085821-01 Federal Award Year: 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-017 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria A pass-through entity (PTE) must: 1. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 2. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 45 CFR section 75 303(a) states the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award Condition During the year ended June 30, 2024, the New Hampshire Department of Health and Human Services (the Department) passed through $7,698,389 of federal funding to subrecipients. As part of our testing related subrecipient monitoring, we identified that for all 9 of the subrecipients selected for testwork, the risk assessment indicated that on a monthly an examination of the expenditure detail to assess purchasing compliance with contract requirements and applicable laws and regulations was to be performed. As part of our testwork, we were unable to obtain documentation to support that this review had taken place. Cause The cause of the condition found was primarily due to a lack of formal policies and internal controls to ensure that all required subrecipient monitoring compliance procedures are being performed by the Department. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(b) and 2 CFR sections 200.332(d) through (f). Questioned Costs: None. Recommendation We recommend the Department develop written policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(b), and 2 CFR sections 200.332(d) through (f). In addition, written policies and procedures should be established to ensure that if the risk assessment has suggested a particular monitoring procedure be performed, that the Department is adequately documenting its monitoring procedures to ensure that it has performed the required procedures. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2024-029 Block Grants for Substance Use Prevention, Treatment, and Recovery Services and COVID-19 Block Grants for Substance Use Prevention, Treatment, and Recovery Services (Assistance Listing #93.959) Federal Award Numbers: 1B08T083509, 1B08T1084595, 1B08T1083464, 6B08T103464, 1B08T1084659, B08T108521 Federal Award Year: 2021, 2022, 2023, 2024 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, 45 CFR section 75 303(a) states the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testwork over FFATA reporting, we identified the following: A. For each of the 4 FFATA reports selected for testwork, there was no evidence provided that the report was reviewed and approved prior to submission. B. For 3 of 4 FFATA reports selected for testwork, we were unable to validate the UEI number was not included within the subaward agreement. C. For 3 of 4 FFATA reports, the reports were not filed timely.   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 4 N/A 3 2 3 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $1,545,840 N/A $6,788,363 $5,442,523 $1,345,840 Cause The cause of the condition found related to FFATA reporting is due to insufficient controls related to the review and approval of FFATA reports to ensure the accuracy of the data reported. During the period ending June 30, 2024, due to staffing changes, the same individual was preparing and submitting the FFATA report, resulting in a lack of segregation of duties over the review and approval of the FFATA report. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs: None. Recommendation We recommend that the Department implement written policies, procedures and internal controls to ensure the accuracy of the data reported within FSRS and to ensure that reports are filed timely. This would include ensuring that a supervisory review is performed over the FFATA report prior to submission. View of Responsible Officials: Management concurs with the finding above

Finding Reference Number: 2024-030 NH Department of Education Disability Insurance/SSI Cluster (Assistance Listing #96.001) Federal Award Numbers: 2304NHDI00, 2404NHD100 Federal Award Year: 2023, 2024 U.S. Social Security Administration Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-019 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. The SSA-4513 – State Agency Report of Obligations for SSA Disability Programs – is due quarterly for each fiscal year still open in order to account for program disbursements and unliquidated obligations (POMS DI 39506.202). Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting related to the SSA-4513 quarterly report, we identified the following: A. For all 4 of 9 SSA-4513 reports selected for testwork, line item 7 was not checked to identify if the SSA-871 needed to be attached to the report. It is unclear if this needed to be attached or not. B. For all 9 SSA-4513 reports selected for testwork, the reports did not reconcile to the internal tracking sheets provided to validate the amounts reported. For all reports there were variances between the tracking sheets and the dollar amounts included within the federal report within sections 1, 2, 3 and 4. While variances are identified, we noted that the variances were not material overall to the individual line item. C. For all 9 SSA-4513 reports selected for testwork, we were unable to validate the completeness and accuracy of the amounts reported within Section 1 for Columns (A) for Disbursements, (B) for unliquidated obligations and (C) total obligations for line items 1, 2, 3 and 4. As such, we are not able to validate that the amounts reported are complete and accurate. As we were not able to obtain documentation to validate the obligation balances, we are unable to validate the accuracy of amounts reported within Sections 1, 2, and 3 of the report. D. For all 9 of the SSA-4513 reports selected for testwork, there was no support for the difference between the total obligations and cumulative obligational authorization. E. For 1 of 9 SSA-4513 reports selected for testwork, no supporting documentation was provided. F. For 8 of 9 SSA-4513 reports selected for testwork, documentation was not provided for Line Item 2.d, Other Identity obligation & amount Cause The cause of the condition found related to the SSA-4513 was due to insufficient policies and procedures to ensure that all necessary documentation is maintained to support the amounts reported for each federal report filed. Based on the documentation that was provided to support the data reported within each quarterly report, it is unclear if the internal control review procedures performed included a detail review over each line item of the report to ensure the amount reported is complete and accurate. Effect The effect of the condition found is the SSA-4134 reports were not complete and accurate when they were filed. Questioned Costs: None. Recommendation We recommend that the existing policies and procedures be developed to ensure that all documentation to support the amounts reported on the SSA-4513 is properly maintained for each quarterly report. In addition, internal control procedures should be evaluated to ensure that as part of the review process, each line item on the federal report is verified against the supporting documentation to ensure the report is complete and accurate. The review performed should also be properly documenting showing that the required review process was performed prior to submitting the SSA-4513. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2024-031 NH Department of Education Disability Insurance/SSI Cluster (Assistance Listing #96.001) Federal Award Numbers: 2304NHDI00, 2404NHD100 Federal Award Year: 2023, 2024 U.S. Social Security Administration Compliance Requirement: Special Tests and Provisions – Qualified Providers Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-020 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Each state agency is responsible for comprehensive oversight management of its process and for ensuring accuracy, integrity, and economy of its processes (20 CFR sections 404.519g and 416.919g, and POMS DI 396569.300). As part of these duties, DDSs must have and follow procedures for performing medical license verifications to ensure that only qualified providers perform DDSs tasks. By “qualified,” SSA means that the medical source must: 1. Be currently licensed in the state and have the training and experience to perform the type of examination or tests DDS requests; and 2. Not be barred from participating in Medicare or Medicaid programs or other federal or federally assisted programs (20 CFR sections 404.5159g and 416.919g). Prior to using the services of any medical provider, the DDS must check the System of Award Management (SAM) website. Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the special test and provision related to qualified providers, we identified the following 9 of 9 exceptions: A. For 2 of the 9 new providers selected for testwork, there was no documentation maintained that evidenced inspection of the SAM.gov website to verify the suspension and debarment status for new providers and no information was provided to support the provider had a valid medical license. B. For 3 of the 9 new providers selected for testwork, there was no documentation maintained to support the start date of the individual to verify the inspection of the SAM.gov website was performed prior to use of the provider’s service. C. For the remaining 4 of the 9 new providers selected for testwork, the supporting documentation maintained that evidenced inspection of the SAM.gov website to verify the suspension and debarment status for the provider occurred subsequent to the individual’s start date. Cause The cause of the condition found is primarily due to insufficient policies and procedures to verify a provider’s had a valid medical license or the provider’s suspension and debarment status had been reviewed within SAM.gov prior to use of services by the provider as required by the federal regulations. In response to the prior year finding corrective actions were being implemented after June 30, 2024 and not all personnel were following the policies and procedures. There does not appear to be sufficient internal controls in place to ensure that reviews of provider’s licenses and suspension and debarment status are performed, completed and properly documented and sufficient documentation is maintained and reviewed. Effect The effect of the condition found is that documentation to support the qualifications of providers has not been appropriately maintained and providers could have been used that did not meet the criteria to be a qualified provider. Questioned Costs: Not determinable. Recommendation We recommend that written policies and procedures be developed and followed by all personnel to outline what the required procedures are related to reviewing professional licenses and suspension and debarment status for new provider. The policies should describe how the reviews will be performed, how the review will be documented, and the timing of when reviews will be performed relative to the provider’s start date. Internal controls should be implemented to ensure that an appropriate review over the review is conducted to ensure that the review is performed, completed and accurate documentation maintained. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2024-032 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4624-DR-NH, FEMA-4329-DR Federal Award Year: July 29-30, 2021, July 1-2, 2017 U.S. Department of Homeland Security Compliance Requirement: Special Tests and Provisions - Project Accounting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-021 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria For large projects, the recipient is required to make an accounting to the Federal Emergency Management Agency (FEMA) of eligible costs. Similarly, the subrecipient must make an accounting to the recipient. In submitting the accounting, the entity is required to certify that reported costs were incurred in performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, all grant conditions were met, and that payments for that project were made in accordance with the applicable payment provisions. For improved and alternate projects, if the total cost of the projects does not equal or exceed the approved eligible costs, then the auditor should expect to see an adjustment to reduce eligible costs (44 CFR section 206.205). Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Disaster Grants - Public Assistance program (DGPA), the New Hampshire Department of Safety - Homeland Security and Emergency Management (the Department) enters into grant agreements with local municipalities to provide reimbursement for expenditures incurred as a result of New Hampshire declared disasters. During testwork over the Special Test - Project Accounting, the engagement team sampled 2 large ongoing projects and identified the following: A. For 1 of 2 ongoing projects, the award letter did not include any language outlining the project certification requirements in which the subrecipient must attest to. B. For 2 of 2 ongoing projects, the Department could not provide evidence of the project accounting reporting made to FEMA in compliance with required certification. Specifically, the Department has a process whereby the Project Completion and Certification reports are to be completed and submitted to the Department by subrecipients within 90 days of the project obligation date. The Department then submits a certification report on the first of each month on the reports submitted during the previous month. However, the engagement team requested evidence of the Project Completion and Certification report being received from the subrecipient or it being sent to FEMA and it could not be provided. Cause This control is not operating at a sufficient precision level to ensure the accounting certification reports were sent to FEMA and maintained as evidence of control operation. Effect The effect of the condition found is that the Department did not comply with 44 CFR section 206.205 and 45 CFR section 75 303(a). Questioned Costs: None. Recommendation We recommend that the Department enhance policies and procedures which include internal controls to ensure project accounting completion and certification reports are sent to FEMA and maintained on file as evidence of compliance with the Project Accounting certification requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2024-033 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH, FEMA-4740-DR, FEMA-4771-DR Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-25, 2022, November 1, 2017, July 1-2, 2017, January 20, 2020, September 14, 2023, April 19, 2024 U.S. Department of Homeland Security Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition New Hampshire Department of Safety (the Department) during the year ended June 30, 2024, $109,539,714 was passed through to subrecipients that met the requirements for first tier subawards under the Transparency Act and as such FFATA reports were required to be filed for each of those subawards. During our testwork over FFATA reporting, we identified the following: A. For the period ending June 30, 2024, we have identified that 10 of the 53 reports submitted were not submitted timely. B. For 1 of 8 reports selected for testwork, the report was missing an obligated awards noted within the expenditure detail provided by the Department that should have been reported. C. For 1 of 8 reports selected for testwork, the Department was unable to provide us with a copy of one of the submitted FFATA reports selected for testing.   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 8 1 10 Unknown Unknown Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $1,616,072 $919,070 Unknown Unknown Unknown Cause The cause of the condition found was primarily due to insufficient internal controls and resources within the Department to ensure that FFATA reports were filed and that the reports filed were complete and accurate. Effect The effect of the condition found is that the inaccurate and not timely FFATA reports can be filed. Questioned Costs: None. Recommendation We recommend that the Department implement written policies, procedures and internal controls to ensure the accuracy of the data reported within FSRS and to ensure that reports are filed timely. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2024-034 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-December 25, 2022, October 29-November 1, 2017, July 1-2, 2017, January 20, 2020 U.S. Department of Homeland Security Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-023 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria A pass-through entity (PTE) must: 1. Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). 2. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 3. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Disaster Grants - Public Assistance program (DGPA), the New Hampshire Department of Safety - Homeland Security and Emergency Management (the Department) enters into grant agreements with local municipalities to provide reimbursement for expenditures incurred as a result of New Hampshire declared disasters. During the year ended June 30, 2024, $41,851,050 was passed through to 85 subrecipients. As part of our testwork over the subrecipient monitoring process, we noted the following: A. The Department communicates award information to subrecipients through the approved agreement. Per review of the agreement, for each of the 17 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.332(a). Specifically, the following elements were not communicated: • Identification of whether the award is R&D was not communicated for 13 of 17 subrecipients selected for testwork; and • Indirect cost rate for the federal award was not communicated for 13 of 17 subrecipients selected for testwork B. For 4 of 17 subrecipients selected for testwork, while a risk assessment was performed, the Department did not perform it within calendar year of when the award was obligated as outlined within their policies and procedures. C. For 1 of 17 subrecipients selected for testwork, the risk assessment form was not dated or initialed to indicted when the risk assessment procedures were performed. As such, it was unclear if the risk assessment was completed timely. D. During our testwork over the Department’s review of subrecipient uniform guidance reports, we noted there were no uniform guidance report review policies and procedures in place. For the 17 subrecipients selected for testwork, 5 subrecipients were identified in which the Department did not review the most recent uniform guidance report issued. Specifically, we noted: • For 4 of 5 subrecipients, the subrecipient’s uniform guidance report was not reviewed due to updated risk assessments not being performed in the current year. • For 1 of 5 subrecipients, the current year risk assessment was performed prior to the receipt of the subrecipient’s uniform guidance report and management did not go back to review the report. Cause The cause of the condition found was primarily due to the Department not following their sub monitoring internal controls in accordance with written formal policies and procedures. Questioned Costs: None.   Recommendation We recommend that the Department develop policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(a-h) and 2 CFR section 200.501(h). View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-002 NH Department of Military National Guard Military Operations and Maintenance (O&M) Projects (Assistance Listing #12.401) Federal Award Number: W012TF0190201001, W012TF023-27-2-1001 Federal Award Year: 2022, 2023 U.S. Department of Defense Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria The SF-270, Request for Advance or Reimbursement, must be submitted as part of the cash draw request process. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the SF-270 reporting process, we identified the following: A. For 31 of 33 SF-270 reports selected for testwork, we were unable to obtain documentation to support the amount reported within the following report line items to ensure that the amount reported was complete and accurate: • Line item a – total program outlays to date • Line item c – net program outlays • Line item e – total • Line item f – non-federal share of amount on line e B. For 12 of 33 reports selected for testwork, we were unable to agree line item h, federal payments previously received, to the supporting documentation provided. C. For all 33 SF-270 reports selected for testwork, we identified that there was a lack of segregation of duties related to the preparation of the SF-270 as there was no documented supervisory review performed over the completeness and accuracy of the report prior to submission.   Cause The cause of the condition found was due to insufficient policies and procedures to track total expenditures by appendix over the federal award year. For each federal fiscal year, a tracking sheet is used by appendix and the tracking sheet shows the federal share of the expenditures incurred each month. The tracking sheet does not represent the total expense incurred and if the appendix has a state share associated with the costs, the state portion is not included. When the SF-270 is prepared, documentation to support line items a, c, e and f is not maintained with the report to support accuracy of amounts reported. We further noted that the tracking sheets in some instances did not reconcile to the federal payments previously requested. The Department relies on the previous amount reported on the SF-270 only and did not identify the error as part of the preparation process of the SF-270 as there is no independent review to ensure it is complete and accurate. Effect The effect of the condition found is SF-270 reports submitted were not complete and accurate. Questioned Costs Not determinable Recommendation We recommend that the existing policies and procedures in place to prepare the SF-270 be reviewed and internal controls be implemented that will include an independent supervisory review to ensure that the SF-270 is complete and accurate at the time of submission. This would include ensuring that each line item of the SF-270 properly reconciles to supporting documentation and that the appropriate documentation for each line item is kept with each report to substantiate the amount reported. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-002 NH Department of Military National Guard Military Operations and Maintenance (O&M) Projects (Assistance Listing #12.401) Federal Award Number: W012TF0190201001, W012TF023-27-2-1001 Federal Award Year: 2022, 2023 U.S. Department of Defense Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria The SF-270, Request for Advance or Reimbursement, must be submitted as part of the cash draw request process. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the SF-270 reporting process, we identified the following: A. For 31 of 33 SF-270 reports selected for testwork, we were unable to obtain documentation to support the amount reported within the following report line items to ensure that the amount reported was complete and accurate: • Line item a – total program outlays to date • Line item c – net program outlays • Line item e – total • Line item f – non-federal share of amount on line e B. For 12 of 33 reports selected for testwork, we were unable to agree line item h, federal payments previously received, to the supporting documentation provided. C. For all 33 SF-270 reports selected for testwork, we identified that there was a lack of segregation of duties related to the preparation of the SF-270 as there was no documented supervisory review performed over the completeness and accuracy of the report prior to submission.   Cause The cause of the condition found was due to insufficient policies and procedures to track total expenditures by appendix over the federal award year. For each federal fiscal year, a tracking sheet is used by appendix and the tracking sheet shows the federal share of the expenditures incurred each month. The tracking sheet does not represent the total expense incurred and if the appendix has a state share associated with the costs, the state portion is not included. When the SF-270 is prepared, documentation to support line items a, c, e and f is not maintained with the report to support accuracy of amounts reported. We further noted that the tracking sheets in some instances did not reconcile to the federal payments previously requested. The Department relies on the previous amount reported on the SF-270 only and did not identify the error as part of the preparation process of the SF-270 as there is no independent review to ensure it is complete and accurate. Effect The effect of the condition found is SF-270 reports submitted were not complete and accurate. Questioned Costs Not determinable Recommendation We recommend that the existing policies and procedures in place to prepare the SF-270 be reviewed and internal controls be implemented that will include an independent supervisory review to ensure that the SF-270 is complete and accurate at the time of submission. This would include ensuring that each line item of the SF-270 properly reconciles to supporting documentation and that the appropriate documentation for each line item is kept with each report to substantiate the amount reported. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-003 NH Department of Military National Guard Military Operations and Maintenance (O&M) Projects (Assistance Listing #12.401) Federal Award Number: W012TF0190201001, W012TF023-27-2-1001 Federal Award Year: 2022, 2023 U.S. Department of Defense Compliance Requirement: Cash Management Type of Finding: Material Weakness Prior Year Finding: None Statistically Valid Sample: No Criteria 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. This would include internal controls related to the cash management process. Condition As part of our testwork over the cash management process, we identified that was a lack of segregation of duties related to the preparation of the cash request amount and the approval and authorization for the amount to be drawn. During the year ended June 30, 2023, the same individual calculated and authorized each cash draw for the 33 cash draws selected for testwork. Cause The cause of the condition found was due to insufficient internal controls to ensure an independent supervisory review be performed over each cash draw request, resulting in a lack of segregation of duties. Effect The effect of the condition found is that an error in the cash draw amount calculated could be made and the error would not be identified timely. Questioned Costs None. Recommendation We recommend that internal controls be implemented that would result in a documented independent review over the amount calculated for the cash draw request to ensure that the amount drawn is complete and accurate. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-003 NH Department of Military National Guard Military Operations and Maintenance (O&M) Projects (Assistance Listing #12.401) Federal Award Number: W012TF0190201001, W012TF023-27-2-1001 Federal Award Year: 2022, 2023 U.S. Department of Defense Compliance Requirement: Cash Management Type of Finding: Material Weakness Prior Year Finding: None Statistically Valid Sample: No Criteria 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. This would include internal controls related to the cash management process. Condition As part of our testwork over the cash management process, we identified that was a lack of segregation of duties related to the preparation of the cash request amount and the approval and authorization for the amount to be drawn. During the year ended June 30, 2023, the same individual calculated and authorized each cash draw for the 33 cash draws selected for testwork. Cause The cause of the condition found was due to insufficient internal controls to ensure an independent supervisory review be performed over each cash draw request, resulting in a lack of segregation of duties. Effect The effect of the condition found is that an error in the cash draw amount calculated could be made and the error would not be identified timely. Questioned Costs None. Recommendation We recommend that internal controls be implemented that would result in a documented independent review over the amount calculated for the cash draw request to ensure that the amount drawn is complete and accurate. View of Responsible Officials: Management concurs with the finding above.

Finding Reference: 2023-004 NH Governor’s Office of Emergency Relief and Recovery NH Department of Health and Human Services NH Department of Labor NH Department of Information Technology NH Department of Environmental Services NH Department of Business and Economic Affairs NH Governor’s Office of Emergency Relief and Recovery COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing #21.027) Federal Award Numbers: SLFRP0145 Federal Award Year: 2021 U.S. Department of Treasury Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-009 Statistically Valid Sample: No Criteria Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over procurement, suspension and debarment, we identified the following: A. As part of our testwork over procurement and suspension and debarment, management provided us a listing of new procurements entered into during the period ending June 30, 2023. From this listing, we selected a sample of 60 items for testwork and noted that 33 items appeared to be subrecipient grants and did not represent a new contract. As such, we were unable to verify the completeness and accuracy of the procurement population. While we were unable to verify the completeness and accuracy of the population, there was no impact on the amounts reported on the Schedule of Expenditures of Federal Awards related to amounts passed-through to subrecipients, as the population represented new procurements and as of June 30, 2023 there not been any expenditures incurred under the sample items selected for testwork. B. For 14 of 104 items selected for testwork related to suspension and debarment, there was no supporting documentation that the State had verified either through a signed certification or searching SAM.gov that the entity was not suspended or debarred. As part of our testwork, we reviewed SAM.gov for each of the 14 items and found that none of the entities had been suspended or debarred. Cause The cause of the condition found is due to insufficient controls and procedures to ensure that for all covered transactions the State determines if the entity covered has been suspended or debarred. In addition, there appears to be insufficient controls in place to properly classify contracts and subrecipient relationships. Effect The effect of the condition found is that the funds could be paid to an entity that has been suspended or debarred and costs paid to the entity would be unallowable. In addition, improper identification of contracts and subrecipients could lead to noncompliance with the State’s procurement policy or the proper monitoring of subrecipients. Questioned Costs Not determinable. Recommendation We recommend that the State review its existing policies and procedures related to suspension and debarment and ensure that all covered transactions with entities are properly reviewed to verify that the entity has not been suspended and debarred. In addition, the State should continue to review its vendor determination policy to ensure that the policy is consistently applied across all Department’s within the State. View of Responsible Officials: Management partially concurs with the finding above. Rejoinder: As it relates bullet A, we were unable to obtain a population that was complete and accurate related to new procurement agreements that were entered into during the period ending June 30, 2023. From the population provided, of the 60 items selected for testwork, 33 items appeared to be subrecipient grants and did not represent a new contract.

Finding Reference: 2023-004 NH Governor’s Office of Emergency Relief and Recovery NH Department of Health and Human Services NH Department of Labor NH Department of Information Technology NH Department of Environmental Services NH Department of Business and Economic Affairs NH Governor’s Office of Emergency Relief and Recovery COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing #21.027) Federal Award Numbers: SLFRP0145 Federal Award Year: 2021 U.S. Department of Treasury Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-009 Statistically Valid Sample: No Criteria Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over procurement, suspension and debarment, we identified the following: A. As part of our testwork over procurement and suspension and debarment, management provided us a listing of new procurements entered into during the period ending June 30, 2023. From this listing, we selected a sample of 60 items for testwork and noted that 33 items appeared to be subrecipient grants and did not represent a new contract. As such, we were unable to verify the completeness and accuracy of the procurement population. While we were unable to verify the completeness and accuracy of the population, there was no impact on the amounts reported on the Schedule of Expenditures of Federal Awards related to amounts passed-through to subrecipients, as the population represented new procurements and as of June 30, 2023 there not been any expenditures incurred under the sample items selected for testwork. B. For 14 of 104 items selected for testwork related to suspension and debarment, there was no supporting documentation that the State had verified either through a signed certification or searching SAM.gov that the entity was not suspended or debarred. As part of our testwork, we reviewed SAM.gov for each of the 14 items and found that none of the entities had been suspended or debarred. Cause The cause of the condition found is due to insufficient controls and procedures to ensure that for all covered transactions the State determines if the entity covered has been suspended or debarred. In addition, there appears to be insufficient controls in place to properly classify contracts and subrecipient relationships. Effect The effect of the condition found is that the funds could be paid to an entity that has been suspended or debarred and costs paid to the entity would be unallowable. In addition, improper identification of contracts and subrecipients could lead to noncompliance with the State’s procurement policy or the proper monitoring of subrecipients. Questioned Costs Not determinable. Recommendation We recommend that the State review its existing policies and procedures related to suspension and debarment and ensure that all covered transactions with entities are properly reviewed to verify that the entity has not been suspended and debarred. In addition, the State should continue to review its vendor determination policy to ensure that the policy is consistently applied across all Department’s within the State. View of Responsible Officials: Management partially concurs with the finding above. Rejoinder: As it relates bullet A, we were unable to obtain a population that was complete and accurate related to new procurement agreements that were entered into during the period ending June 30, 2023. From the population provided, of the 60 items selected for testwork, 33 items appeared to be subrecipient grants and did not represent a new contract.

Finding Reference Number: 2023-005 NH Department of Justice NH Department of Health and Human Services NH Department of Environmental Services NH Department of Business and Economic Affairs COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing #21.027) Federal Award Numbers: SLFRP0145 Federal Award Year: 2021 U.S. Department of Treasury Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-008 Statistically Valid Sample: No Criteria A pass-through entity must: 1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a); 2. Evaluate each subrecipient’s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.332(b)); 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorization purposes, complies with the terms and conditions of the subaward 4. Issuing a management decision for audit findings pertaining to federal award provided to the subrecipient from the subrecipient as required by 2 CFR section 200.521. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Coronavirus State and Local Fiscal Recovery Funds program, the State of New Hampshire (the State) entered into grant agreements with local entities to support allowable activities under the federal program. During the year ended June 30, 2022, the State passed through $73,337,682 to subrecipients. As part of our testwork over the subrecipient monitoring process, we identified the following breakdown of internal controls: A. As part of our testwork over subrecipient monitoring, we selected a sample of 49 items from the listing of subrecipients provided by the State that reconciled to the amount reported on the Schedule of Expenditures of Federal Awards. Of the 49 items selected for testwork, 6 items were contracts and were not subrecipient agreements. As such, we were unable to determine the completeness and accuracy of the subrecipient population. As a result of our audit, the State identified that this error resulted in the amount reported on the Schedule of Expenditures of Federal Awards as pass-through expenditures to be overstated by $7,261,684. The State has corrected the Schedule of Expenditures of Federal Awards so that the amount reported is accurate. B. The State communicates award information to subrecipients through the approved grant agreement. For 19 of the 43 remaining subrecipients selected for testwork, the State did not communicate all the required award information as outlined in 2 CFR section 200.332. Specifically, the following elements were not communicated: a. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414) was not communicated for 19 of the 43 remaining subrecipients selected for testwork. b. Identification of whether the award is R&D was not communicated for 17 of the remaining 43 subrecipients selected for testwork. C. As part of our testwork over during the award monitoring, it was identified that subrecipient monitoring activities include the review and approval of invoices submitted for reimbursement from the subrecipient. During our testwork over the invoice review we identified the following: a. For 6 of the remaining 43 subrecipients selected for testwork, we were unable to obtain the invoices paid by the State to verify that they were reviewed and approved. While the invoices were not provided to us, we noted that other monitoring procedures were performed for 4 of the 6 subrecipients. b. For 10 of the remaining 43 subrecipients selected for testwork, while we were able to obtain the invoices paid by the State, we were unable to properly identify who the appropriate reviewer was for the invoice to ensure that the individual who approved the invoice had the appropriate knowledge and competency to perform the review process. As a result, we were unable to verify if the invoice was appropriately reviewed. While we were unable to verify this, we noted that other monitoring procedures were performed for 9 of the 10 subrecipients. D. As part of our testwork over during the award monitoring, for 9 of the 43 remaining subrecipients selected for testwork, no documentation was provided to support that during the award monitoring procedures had been performed during the audit period. As such, we could not verify that appropriate monitoring procedures were performed as outlined by the subrecipient’s risk assessment. E. As part of our testwork over the review of Uniform Guidance Reports, we identified the following: a. For 6 of the remaining 43 subrecipients selected for testwork, the State provided the subrecipients Uniform Guidance report, however there was no evidence that the reports were reviewed to determine if a management decision letter needed to be issued. As part of our audit, we reviewed the 6 uniform guidance reports and did not identify any findings that would have required to be followed up on by the State. b. For 7 of the remaining 43 subrecipients selected for testwork, the subrecipient’s uniform guidance report was not provided. We reviewed the FAC to determine if a report was submitted during the audit period and identified that all 7 subrecipients had submitted a uniform guidance report. Of the 7 subrecipients, 1 report contained findings reported within Section III of the report. There was no evidence provided that the State had issued a management decision related to this subrecipient. Cause The cause of the condition found is primarily due to insufficient internal controls and procedures to ensure that award identification information is communicated, that appropriate during the award monitoring is performed based on the risk assessments and that all subrecipients are reviewed to determine if a uniform guidance audit was issued regardless of amount awarded to the subrecipient. Given the nature of this program, several Departments within the State entered into subrecipient grants resulting in a decentralized process. Not all Departments within the State are experienced with subrecipient relationships and may not have had developed policies to comply with subrecipient monitoring requirements. Finally, the State does not have sufficient internal controls in place to properly classify contracts and subrecipient relationships. Effect The effect of the condition found is that the State may not have properly monitored subrecipients in accordance with State policies and federal requirements. In addition, improper identification of contracts and subrecipients could lead to noncompliance with the State’s procurement policy or the proper monitoring of subrecipients. Questioned Costs None. Recommendation We recommend that the State review its existing internal controls, policies, and procedures to ensure that the State complies with the provisions of 2 CFR section 200.332(a), 2 CFR section 200.332(d through (f), and 2 CFR section 200.251. This would include ensuring that: 1. All required award information is communicated to subrecipients; 2. Ensure that appropriate during the award monitoring is performed as outlined within the subrecipient’s risk assessment; and 3. All subrecipients are reviewed regardless of the amount awarded to determine if a uniform guidance report was issued and if a management decision letter should be issued. In addition, the State should continue to review its vendor determination policy to ensure that the policy is consistently applied across all Department’s within the State. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-005 NH Department of Justice NH Department of Health and Human Services NH Department of Environmental Services NH Department of Business and Economic Affairs COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing #21.027) Federal Award Numbers: SLFRP0145 Federal Award Year: 2021 U.S. Department of Treasury Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-008 Statistically Valid Sample: No Criteria A pass-through entity must: 1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a); 2. Evaluate each subrecipient’s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.332(b)); 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorization purposes, complies with the terms and conditions of the subaward 4. Issuing a management decision for audit findings pertaining to federal award provided to the subrecipient from the subrecipient as required by 2 CFR section 200.521. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Coronavirus State and Local Fiscal Recovery Funds program, the State of New Hampshire (the State) entered into grant agreements with local entities to support allowable activities under the federal program. During the year ended June 30, 2022, the State passed through $73,337,682 to subrecipients. As part of our testwork over the subrecipient monitoring process, we identified the following breakdown of internal controls: A. As part of our testwork over subrecipient monitoring, we selected a sample of 49 items from the listing of subrecipients provided by the State that reconciled to the amount reported on the Schedule of Expenditures of Federal Awards. Of the 49 items selected for testwork, 6 items were contracts and were not subrecipient agreements. As such, we were unable to determine the completeness and accuracy of the subrecipient population. As a result of our audit, the State identified that this error resulted in the amount reported on the Schedule of Expenditures of Federal Awards as pass-through expenditures to be overstated by $7,261,684. The State has corrected the Schedule of Expenditures of Federal Awards so that the amount reported is accurate. B. The State communicates award information to subrecipients through the approved grant agreement. For 19 of the 43 remaining subrecipients selected for testwork, the State did not communicate all the required award information as outlined in 2 CFR section 200.332. Specifically, the following elements were not communicated: a. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414) was not communicated for 19 of the 43 remaining subrecipients selected for testwork. b. Identification of whether the award is R&D was not communicated for 17 of the remaining 43 subrecipients selected for testwork. C. As part of our testwork over during the award monitoring, it was identified that subrecipient monitoring activities include the review and approval of invoices submitted for reimbursement from the subrecipient. During our testwork over the invoice review we identified the following: a. For 6 of the remaining 43 subrecipients selected for testwork, we were unable to obtain the invoices paid by the State to verify that they were reviewed and approved. While the invoices were not provided to us, we noted that other monitoring procedures were performed for 4 of the 6 subrecipients. b. For 10 of the remaining 43 subrecipients selected for testwork, while we were able to obtain the invoices paid by the State, we were unable to properly identify who the appropriate reviewer was for the invoice to ensure that the individual who approved the invoice had the appropriate knowledge and competency to perform the review process. As a result, we were unable to verify if the invoice was appropriately reviewed. While we were unable to verify this, we noted that other monitoring procedures were performed for 9 of the 10 subrecipients. D. As part of our testwork over during the award monitoring, for 9 of the 43 remaining subrecipients selected for testwork, no documentation was provided to support that during the award monitoring procedures had been performed during the audit period. As such, we could not verify that appropriate monitoring procedures were performed as outlined by the subrecipient’s risk assessment. E. As part of our testwork over the review of Uniform Guidance Reports, we identified the following: a. For 6 of the remaining 43 subrecipients selected for testwork, the State provided the subrecipients Uniform Guidance report, however there was no evidence that the reports were reviewed to determine if a management decision letter needed to be issued. As part of our audit, we reviewed the 6 uniform guidance reports and did not identify any findings that would have required to be followed up on by the State. b. For 7 of the remaining 43 subrecipients selected for testwork, the subrecipient’s uniform guidance report was not provided. We reviewed the FAC to determine if a report was submitted during the audit period and identified that all 7 subrecipients had submitted a uniform guidance report. Of the 7 subrecipients, 1 report contained findings reported within Section III of the report. There was no evidence provided that the State had issued a management decision related to this subrecipient. Cause The cause of the condition found is primarily due to insufficient internal controls and procedures to ensure that award identification information is communicated, that appropriate during the award monitoring is performed based on the risk assessments and that all subrecipients are reviewed to determine if a uniform guidance audit was issued regardless of amount awarded to the subrecipient. Given the nature of this program, several Departments within the State entered into subrecipient grants resulting in a decentralized process. Not all Departments within the State are experienced with subrecipient relationships and may not have had developed policies to comply with subrecipient monitoring requirements. Finally, the State does not have sufficient internal controls in place to properly classify contracts and subrecipient relationships. Effect The effect of the condition found is that the State may not have properly monitored subrecipients in accordance with State policies and federal requirements. In addition, improper identification of contracts and subrecipients could lead to noncompliance with the State’s procurement policy or the proper monitoring of subrecipients. Questioned Costs None. Recommendation We recommend that the State review its existing internal controls, policies, and procedures to ensure that the State complies with the provisions of 2 CFR section 200.332(a), 2 CFR section 200.332(d through (f), and 2 CFR section 200.251. This would include ensuring that: 1. All required award information is communicated to subrecipients; 2. Ensure that appropriate during the award monitoring is performed as outlined within the subrecipient’s risk assessment; and 3. All subrecipients are reviewed regardless of the amount awarded to determine if a uniform guidance report was issued and if a management decision letter should be issued. In addition, the State should continue to review its vendor determination policy to ensure that the policy is consistently applied across all Department’s within the State. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-006 NH Department of Business and Economic Affairs COVID-19 Capital Projects Fund (Assistance Listing #21.029) Federal Award Number: CPFFN0143 Federal Award Year: 2022 U.S. Department of Treasury Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria The Project and Expenditure Report for States, Territories & Freely Associated States (PRA 1505-0277) is required to be filed on a quarterly basis. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During state fiscal year 2023, the State was only required to file 1 quarterly Project and Expenditure Report and this report was filed for the quarter ending June 30, 2023. As part of our testwork reporting, we identified the following: A. The total amount expended for administrative expenses within Section 7.1 was under reported by $73,393. B. Within the 4.2A Broadband Infrastructure section of the report, we were unable to obtain documentation to support the total number of funded locations served by type within the planned column of the report for 1 of 2 projects reported. Specifically we were unable to tie out the following line items: a. F. Total Number of Funded Locations Served by Type – Residential: Planned amount of 20,549 b. G. Total Number of Funded Locations Served by Type – Total Housing Units: Planned amount of 20,549 c. H: Total Number of Funded Locations Served by Type – Business: Planned amount of 2,485 d. I: Total Number of Funded Locations Served by Type – Community Anchor Institutions: Planned amount of 225 C. Within the 4.2A Broadband Infrastructure section of the report, we were unable to obtain documentation to support the planned total miles of fiber to be deployed for 1 of 2 projects reported. Specifically we were unable to verify the accuracy of the total miles of fiber deployed (planned) of 2,676. Cause The cause of the condition found was due the existing internal control related to the review and approval of the report not being at a precision level that would identify the underreporting of expenses incurred during the month of June. In addition, as it relates to the number of funded locations and the planned number of miles of fiber to be deployed, documentation was not maintained to support the numbers that were included within the report. Effect The effect of the condition found is that the quarterly Project and Expenditure Report filed for the quarter ending June 30, 2023 was not have been complete and accurate. Questioned Costs None. Recommendation We recommend that the existing internal controls in place be evaluated to ensure that the precision level of the control performed is such that it would detect an error in the expenditures reported in comparison to the expenditures incurred within the general ledger and that all documentation used to support the amounts reported on the federal report are properly maintained. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-006 NH Department of Business and Economic Affairs COVID-19 Capital Projects Fund (Assistance Listing #21.029) Federal Award Number: CPFFN0143 Federal Award Year: 2022 U.S. Department of Treasury Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria The Project and Expenditure Report for States, Territories & Freely Associated States (PRA 1505-0277) is required to be filed on a quarterly basis. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During state fiscal year 2023, the State was only required to file 1 quarterly Project and Expenditure Report and this report was filed for the quarter ending June 30, 2023. As part of our testwork reporting, we identified the following: A. The total amount expended for administrative expenses within Section 7.1 was under reported by $73,393. B. Within the 4.2A Broadband Infrastructure section of the report, we were unable to obtain documentation to support the total number of funded locations served by type within the planned column of the report for 1 of 2 projects reported. Specifically we were unable to tie out the following line items: a. F. Total Number of Funded Locations Served by Type – Residential: Planned amount of 20,549 b. G. Total Number of Funded Locations Served by Type – Total Housing Units: Planned amount of 20,549 c. H: Total Number of Funded Locations Served by Type – Business: Planned amount of 2,485 d. I: Total Number of Funded Locations Served by Type – Community Anchor Institutions: Planned amount of 225 C. Within the 4.2A Broadband Infrastructure section of the report, we were unable to obtain documentation to support the planned total miles of fiber to be deployed for 1 of 2 projects reported. Specifically we were unable to verify the accuracy of the total miles of fiber deployed (planned) of 2,676. Cause The cause of the condition found was due the existing internal control related to the review and approval of the report not being at a precision level that would identify the underreporting of expenses incurred during the month of June. In addition, as it relates to the number of funded locations and the planned number of miles of fiber to be deployed, documentation was not maintained to support the numbers that were included within the report. Effect The effect of the condition found is that the quarterly Project and Expenditure Report filed for the quarter ending June 30, 2023 was not have been complete and accurate. Questioned Costs None. Recommendation We recommend that the existing internal controls in place be evaluated to ensure that the precision level of the control performed is such that it would detect an error in the expenditures reported in comparison to the expenditures incurred within the general ledger and that all documentation used to support the amounts reported on the federal report are properly maintained. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-007 Title I Grants to Local Educational Agencies (Assistance Listing #84.010) Federal Award Numbers: S010A210029, S010A220029 Federal Award Year: 2022, 2023 U.S. Department of Education Compliance Requirement: Earmarking Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria Under the requirements of the special rule in section 1003(h) of the Elementary and Secondary Education Act of 1965 (ESEA), as amended by the Every Student Succeeds Act (ESSA) that are codified in 2 CFR Part 170, starting with the 2018-2019 allocations, a State Educational Agency is required to not reduce a Local Educational Agency below its prior year’s Title I, Part A allocation in reserving funds for school improvement. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2023, we noted the New Hampshire Department of Education (the Department) passed through $42,672,742 in Title I Grants to Local Educational Agencies (LEAs) which are considered to be subrecipients . During our testwork over the Title I Earmarking of Targeting School Improvement Funds (SEAs), the engagement team identified that the allocations performed by the NH Department adjusted all LEA allocations for the SIG reduction, rather than just those LEAs whose allocation was greater than the prior year as required. The Department’s internal review of the FY23 allocations did not identify the calculation error in the SIG reduction formula which resulted in errors in the allocations to all LEAs. Cause The cause of the condition found is due to the management calculation error which was not identified during management’s review of the LEA allocations as the review was not being performed at a precise enough level to ensure timely and accurate Title I earmarking allocations to LEAs. Effect The effect of the condition found is that the Department did not comply with the special rule in section 1003(h) of the ESEA and as such funding to LEA’s was not accurate. KPMG notes this break down of internal control relates specific to the SIG earmarking requirement, not the determination of LEA eligibility for Title I funding as SIG does not impact actual LEA eligibility. Questioned Costs None as 100% was allocated. The error is within the calculation of allocated funds to the LEAs. Recommendation We recommend that the Department enhance the precision level of the internal controls across the Department programs to which SIG earmarking is applicable, to ensure accurate allocations to LEAs to ensure compliance with the targeting school improvement funds earmarking requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-007 Title I Grants to Local Educational Agencies (Assistance Listing #84.010) Federal Award Numbers: S010A210029, S010A220029 Federal Award Year: 2022, 2023 U.S. Department of Education Compliance Requirement: Earmarking Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria Under the requirements of the special rule in section 1003(h) of the Elementary and Secondary Education Act of 1965 (ESEA), as amended by the Every Student Succeeds Act (ESSA) that are codified in 2 CFR Part 170, starting with the 2018-2019 allocations, a State Educational Agency is required to not reduce a Local Educational Agency below its prior year’s Title I, Part A allocation in reserving funds for school improvement. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2023, we noted the New Hampshire Department of Education (the Department) passed through $42,672,742 in Title I Grants to Local Educational Agencies (LEAs) which are considered to be subrecipients . During our testwork over the Title I Earmarking of Targeting School Improvement Funds (SEAs), the engagement team identified that the allocations performed by the NH Department adjusted all LEA allocations for the SIG reduction, rather than just those LEAs whose allocation was greater than the prior year as required. The Department’s internal review of the FY23 allocations did not identify the calculation error in the SIG reduction formula which resulted in errors in the allocations to all LEAs. Cause The cause of the condition found is due to the management calculation error which was not identified during management’s review of the LEA allocations as the review was not being performed at a precise enough level to ensure timely and accurate Title I earmarking allocations to LEAs. Effect The effect of the condition found is that the Department did not comply with the special rule in section 1003(h) of the ESEA and as such funding to LEA’s was not accurate. KPMG notes this break down of internal control relates specific to the SIG earmarking requirement, not the determination of LEA eligibility for Title I funding as SIG does not impact actual LEA eligibility. Questioned Costs None as 100% was allocated. The error is within the calculation of allocated funds to the LEAs. Recommendation We recommend that the Department enhance the precision level of the internal controls across the Department programs to which SIG earmarking is applicable, to ensure accurate allocations to LEAs to ensure compliance with the targeting school improvement funds earmarking requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-008 Title I Grants to Local Educational Agencies (Assistance Listing #84.010) Supporting Effective Instruction State Grant (Title IIA (Assistance Listing #84.367) COVID-19 Education Stabilization Fund (Assistance Listing #84.425C, #84.425D, #84.425R, #84.425U, #84.425V, and #84.425W) Federal Award Numbers: S010A210029, S010A220029, S367A220028, S425D200017, S425D210017, S425U210017, S425U210017-21A Federal Award Year: 2020, 2021, 2022, 2023 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-013, 2022-016 Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2023, we noted the New Hampshire Department of Education (the Department) passed through $42,672,742 in Title I Grants to Local Educational Agencies (Title I Grant) funds to subrecipients (Local Educational Agencies). During our testwork over FFATA reporting at the Department for Title I Grants, we selected 35 out of 132 FFATA reports for testing and noted the following:   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 35 0 28 0 1 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $7,616,436 $0 $7,811,866 $0 $620,384 During the year ended June 30, 2023, we noted the New Hampshire Department of Education (the Department) passed through $146,314,016 in Education Stabilization Funds (ESF) to subrecipients (Local Educational Agencies). During our testwork over FFATA reporting at the Department for ESF grants, we selected 60 out of 460 FFATA reports for testing and noted the following: Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 60 0 56 5 32 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $155,941,257 $0 $142,016,966 $7,869,109 $76,269,656 During the year ended June 30, 2023, we noted the New Hampshire Department of Education (the Department) passed through $9,809,023 in Supporting Effective Instruction State Grant (Title IIA) funds to subrecipients (Local Educational Agencies). During our testwork over FFATA reporting at the Department for Title IIA, we selected 20 out of 74 FFATA reports for testing and noted the following:   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 20 0 9 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $5,064,865 $0 $2,754,111 $0 $0 Cause The Department’s internal controls were properly designed; however, the cause of the condition is due to the operating effectiveness of the reconciliation control not being at a precision level to ensure completeness and accuracy of the filed key elements. Additionally, effective controls were not in place to ensure timely reporting. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs None. Recommendation We recommend that the Department continue to enhance policies and procedures which include internal controls across the Department programs to which FFATA reporting is applicable, to ensure timely and accurate reporting to the FSRS system to ensure compliance with the Transparency Act reporting requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-008 Title I Grants to Local Educational Agencies (Assistance Listing #84.010) Supporting Effective Instruction State Grant (Title IIA (Assistance Listing #84.367) COVID-19 Education Stabilization Fund (Assistance Listing #84.425C, #84.425D, #84.425R, #84.425U, #84.425V, and #84.425W) Federal Award Numbers: S010A210029, S010A220029, S367A220028, S425D200017, S425D210017, S425U210017, S425U210017-21A Federal Award Year: 2020, 2021, 2022, 2023 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-013, 2022-016 Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2023, we noted the New Hampshire Department of Education (the Department) passed through $42,672,742 in Title I Grants to Local Educational Agencies (Title I Grant) funds to subrecipients (Local Educational Agencies). During our testwork over FFATA reporting at the Department for Title I Grants, we selected 35 out of 132 FFATA reports for testing and noted the following:   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 35 0 28 0 1 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $7,616,436 $0 $7,811,866 $0 $620,384 During the year ended June 30, 2023, we noted the New Hampshire Department of Education (the Department) passed through $146,314,016 in Education Stabilization Funds (ESF) to subrecipients (Local Educational Agencies). During our testwork over FFATA reporting at the Department for ESF grants, we selected 60 out of 460 FFATA reports for testing and noted the following: Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 60 0 56 5 32 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $155,941,257 $0 $142,016,966 $7,869,109 $76,269,656 During the year ended June 30, 2023, we noted the New Hampshire Department of Education (the Department) passed through $9,809,023 in Supporting Effective Instruction State Grant (Title IIA) funds to subrecipients (Local Educational Agencies). During our testwork over FFATA reporting at the Department for Title IIA, we selected 20 out of 74 FFATA reports for testing and noted the following:   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 20 0 9 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $5,064,865 $0 $2,754,111 $0 $0 Cause The Department’s internal controls were properly designed; however, the cause of the condition is due to the operating effectiveness of the reconciliation control not being at a precision level to ensure completeness and accuracy of the filed key elements. Additionally, effective controls were not in place to ensure timely reporting. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs None. Recommendation We recommend that the Department continue to enhance policies and procedures which include internal controls across the Department programs to which FFATA reporting is applicable, to ensure timely and accurate reporting to the FSRS system to ensure compliance with the Transparency Act reporting requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-009 NH Department of Education Special Education Cluster (Assistance Listing #84.027 and #84.173) COVID Special Education Cluster (Assistance Listing #84.027 and #84.173) Federal Award Numbers: H027A200103, H027A220103 Federal Award Year: 2020, 2022 U.S. Department of Education Compliance Requirements: Period of Performance Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-015 Statistically Valid Sample: No Criteria LEAs and SEAs must obligate funds during the 27 months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15-month period of initial availability plus a 12-month period for carryover. For example, funds from the fiscal year 2019 appropriation initially became available on July 1, 2019; and may be obligated by the grantee and subgrantee through September 30, 2021 (Section 421(b) of GEPA (20 USC 1225(b)); 34 CFR sections 76.703 through 76.710). Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over period of performance at the New Hampshire Department of Education (the Department), we noted for 12 of 19 expenditures selected for testing awards that started during the state fiscal year, the Department had charged the expense to the new federal fiscal year grant, however, the date of service on the invoice was for a period prior to the start of that federal award. Furthermore, during our testwork over period of performance at the New Hampshire Department of Education (the Department), we noted for 6 of 45 expenditures selected for testing awards that ended/liquidated during the state fiscal year, the Department had charged the expense to the old federal fiscal year grant, however, the date of service on the invoice was for a period subsequent to the end of that federal award. We also noted for 1 of the 45 expenditures selected for testing awards that ended/liquidated during the state fiscal year, the period of performance could not be confirmed for partial expenditure as the invoice provided did not include dates of service. Lastly, the Department had a breakdown of internal controls to ensure that expenditures are charged to the correct CAN for period of performance tracking.   Cause The cause of the condition found is due to how the Department charges costs to federal grants and the breakdown of internal controls to ensure that expenditures are charged to the correct CAN for period of performance tracking. Effect The effect of the condition found is that the Department did not comply with the period of performance or allowability regulations. Questioned Costs $3,605 - the amount of expenditures charged to the Fiscal Year 2020 award that related to a date of service subsequent to the end of liquidation period for that award $5,172 - the amount of expenditures charged to the Fiscal Year 2022 award that related to a date of service prior to the start of that federal award $816 - the amount of expenditures charged to the Fiscal Year 2020 award that related to a date of service that could not be confirmed as the invoice did not include service dates Recommendation We recommend that the Department implement internal control and policies and procedures to ensure costs are appropriately charged to federal awards based on the incurred date. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-009 NH Department of Education Special Education Cluster (Assistance Listing #84.027 and #84.173) COVID Special Education Cluster (Assistance Listing #84.027 and #84.173) Federal Award Numbers: H027A200103, H027A220103 Federal Award Year: 2020, 2022 U.S. Department of Education Compliance Requirements: Period of Performance Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-015 Statistically Valid Sample: No Criteria LEAs and SEAs must obligate funds during the 27 months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15-month period of initial availability plus a 12-month period for carryover. For example, funds from the fiscal year 2019 appropriation initially became available on July 1, 2019; and may be obligated by the grantee and subgrantee through September 30, 2021 (Section 421(b) of GEPA (20 USC 1225(b)); 34 CFR sections 76.703 through 76.710). Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over period of performance at the New Hampshire Department of Education (the Department), we noted for 12 of 19 expenditures selected for testing awards that started during the state fiscal year, the Department had charged the expense to the new federal fiscal year grant, however, the date of service on the invoice was for a period prior to the start of that federal award. Furthermore, during our testwork over period of performance at the New Hampshire Department of Education (the Department), we noted for 6 of 45 expenditures selected for testing awards that ended/liquidated during the state fiscal year, the Department had charged the expense to the old federal fiscal year grant, however, the date of service on the invoice was for a period subsequent to the end of that federal award. We also noted for 1 of the 45 expenditures selected for testing awards that ended/liquidated during the state fiscal year, the period of performance could not be confirmed for partial expenditure as the invoice provided did not include dates of service. Lastly, the Department had a breakdown of internal controls to ensure that expenditures are charged to the correct CAN for period of performance tracking.   Cause The cause of the condition found is due to how the Department charges costs to federal grants and the breakdown of internal controls to ensure that expenditures are charged to the correct CAN for period of performance tracking. Effect The effect of the condition found is that the Department did not comply with the period of performance or allowability regulations. Questioned Costs $3,605 - the amount of expenditures charged to the Fiscal Year 2020 award that related to a date of service subsequent to the end of liquidation period for that award $5,172 - the amount of expenditures charged to the Fiscal Year 2022 award that related to a date of service prior to the start of that federal award $816 - the amount of expenditures charged to the Fiscal Year 2020 award that related to a date of service that could not be confirmed as the invoice did not include service dates Recommendation We recommend that the Department implement internal control and policies and procedures to ensure costs are appropriately charged to federal awards based on the incurred date. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-010 NH Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) and COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Federal Award Number: NUK50CK000522 Federal Award Year: 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Monthly fiscal reports are required to be submitted beginning 69 days after the notice of Awards is issued Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition FFATA Reporting During our testwork over FFATA reporting, we identified the following: A. For each of the 3 FFATA reports selected for testwork, there was no evidence provided that the report was reviewed and approved prior to submission. B. For each of the 3 FFATA reports selected for testwork, we were unable to validate certain data elements that were reported. Specifically, we identified the following:   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 3 N/A N/A 2 3 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $7,126,552 N/A N/A $2,212,906 $7,126,552 Monthly Reporting As part of the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, the New Hampshire Department of Health and Human Services (the Department) reports financial information to the CDC on a monthly basis related to expenditures paid out and the amount of unliquidated obligations for the reporting period. During our testwork over monthly reporting, we identified that for 2 of the 40 reports selected for testwork, while the amount of unliquidated obligations and expenditures for the month selected appeared to be reported accurately, the total cumulative expenditures reported exceeded the amount awarded. Both of reports appeared to be related to the same project. Per review of the reports, the report filed for the month of February 2023 was over reported by $7,797 and the report filed for the month of May 2023 was over reported by $19,071 Cause The cause of the condition found related to FFATA reporting is due to insufficient controls related to the review and approval of FFATA reports to ensure the accuracy of the data reported. The cause of the condition found related to monthly reporting was the result of insufficient internal controls in place to ensure that that the report was accurate. For the 2 monthly reports identified, the CDC recently switched to a quarterly reporting process. When the report was filed, the Department inadvertently reported expenditures that had been previously reported in early months and was unable to identify that the error had occurred. Effect The effect of the condition found is that the Department did not comply with the Transparency Act and the Department submitted monthly federal reports that were inaccurate. Questioned Costs None. Recommendation We recommend that the Department implement policies, procedures and internal controls to ensure the accuracy of the data reported within FSRS is complete and accurate. We recommend that the Department continue to review its existing internal controls, policies, and procedures related to monthly reporting to ensure that all required monthly financial reports are reviewed to ensure the data in the report is complete and accurate. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-010 NH Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) and COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Federal Award Number: NUK50CK000522 Federal Award Year: 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Monthly fiscal reports are required to be submitted beginning 69 days after the notice of Awards is issued Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition FFATA Reporting During our testwork over FFATA reporting, we identified the following: A. For each of the 3 FFATA reports selected for testwork, there was no evidence provided that the report was reviewed and approved prior to submission. B. For each of the 3 FFATA reports selected for testwork, we were unable to validate certain data elements that were reported. Specifically, we identified the following:   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 3 N/A N/A 2 3 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $7,126,552 N/A N/A $2,212,906 $7,126,552 Monthly Reporting As part of the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, the New Hampshire Department of Health and Human Services (the Department) reports financial information to the CDC on a monthly basis related to expenditures paid out and the amount of unliquidated obligations for the reporting period. During our testwork over monthly reporting, we identified that for 2 of the 40 reports selected for testwork, while the amount of unliquidated obligations and expenditures for the month selected appeared to be reported accurately, the total cumulative expenditures reported exceeded the amount awarded. Both of reports appeared to be related to the same project. Per review of the reports, the report filed for the month of February 2023 was over reported by $7,797 and the report filed for the month of May 2023 was over reported by $19,071 Cause The cause of the condition found related to FFATA reporting is due to insufficient controls related to the review and approval of FFATA reports to ensure the accuracy of the data reported. The cause of the condition found related to monthly reporting was the result of insufficient internal controls in place to ensure that that the report was accurate. For the 2 monthly reports identified, the CDC recently switched to a quarterly reporting process. When the report was filed, the Department inadvertently reported expenditures that had been previously reported in early months and was unable to identify that the error had occurred. Effect The effect of the condition found is that the Department did not comply with the Transparency Act and the Department submitted monthly federal reports that were inaccurate. Questioned Costs None. Recommendation We recommend that the Department implement policies, procedures and internal controls to ensure the accuracy of the data reported within FSRS is complete and accurate. We recommend that the Department continue to review its existing internal controls, policies, and procedures related to monthly reporting to ensure that all required monthly financial reports are reviewed to ensure the data in the report is complete and accurate. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-011 NH Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) and COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Federal Award Numbers: NUK50CK000522 Federal Award Year: 2019 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-018 Statistically Valid Sample: No Criteria A pass-through entity (PTE) must: 1. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 2. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award Condition During the year ended June 30, 2023, the New Hampshire Department of Health and Human Services (the Department) passed through $5,070,789 of federal funding to subrecipient. As part of our testing related subrecipient monitoring, we noted the following: A. As part of our during the award monitoring testwork, we were unable to obtain documentation to support that that the Department had performed the suggested monitoring procedures for 3 of the 4 subrecipients selected for testwork based upon the subrecipients most recent risk assessment performed. For the remaining 1 subrecipient, the risk assessment form did not indicate the required frequency of the suggested type of monitoring. As a result, we were not able to verify that the Department had performed the appropriate monitoring procedures as outlined by the risk assessment performed for each subrecipient. B. The Department’s during the award monitoring for each of the 4 subrecipients selected for testwork consisted of the review and approval of subrecipient invoices. Per review of the invoices, the invoice contained a summary of costs incurred by the subrecipient by category of expense that it was seeking reimbursement for. The Department did not perform any other monitoring procedures to ensure the accuracy of the request made by the subrecipient through either a desk review or an on-site monitoring visit. We further noted that no other monitoring was performed by the Department to ensure that the subrecipient was complying with the terms and conditions of its subrecipient grant agreement. Per review of the risk assessment for each of the 4 subrecipients, the risk assessment did not provide for specific monitoring procedures that would address compliance with the subrecipients grant agreement beyond the period review of expenditure data. Taking into consideration that for each of the 4 subrecipients selected the testwork, if an Uniform Guidance report was issued for the subrecipient, this program was not audited as a major program, it does not appear that either the procedures suggested within the risk assessment or the procedures performed by the Department would be able to identify noncompliance incurred at the subrecipient level. C. During our review over the Department’s review over the subrecipients Uniform Guidance reports, we identified the following: • For 1 of 3 subrecipients selected for testwork which had a Uniform Guidance audit, the subrecipients uniform guidance audit was not issued within 9 months of the subrecipients year end. We were unable to obtain any correspondence between the Department or the subrecipient to inquire about the uniform guidance report or when it would be issued. Upon receipt of the report, the Department did issue a management decision letter upon receipt of the report. • For 1 of 3 subrecipients selected for testwork which had a Uniform Guidance audit, the Department did not issue a management decision letter within 6 months of receipt of the report. We noted however there were no findings identified within the uniform guidance report that would have required corrective action. Cause The cause of the condition found was primarily due to a lack of formal policies and internal controls to ensure that all required subrecipient monitoring compliance procedures are being performed by the Department. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). Questioned Costs None. Recommendation We recommend the Department develop policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). This would ensure that the risk assessment is routinely updated for multiyear grants and that the prescribed monitoring procedures take into consideration any additional monitoring procedures that might need to be performed, such as a desk review or on-site visit, if the program is not audited as part of the subrecipient’s uniform guidance audit. In addition, policies and procedures should be established to ensure that if the risk assessment has suggested a particular monitoring procedure be performed, that the Department is adequately documenting its monitoring procedures to ensure that it has performed the required procedures. View of Responsible Officials: Management partially concurs with the finding above. Rejoinder As it relates to Bullet B above, for each of the 4 subrecipients selected for testwork consisted of the review and approval of subrecipient invoices. Per review of the invoices, the invoice contained a summary of costs incurred by the subrecipient by category of expense that it was seeking reimbursement for. The Department did not perform any other monitoring procedures to ensure the accuracy of the request made by the subrecipient through either a desk review or an on-site monitoring visit. We further noted that no other monitoring was performed by the Department to ensure that the subrecipient was complying with the terms and conditions of its subrecipient grant agreement. As it relates to Bullet C above, we were unable to obtain any correspondence between the Department or the subrecipient to inquire about the uniform guidance report or when it would be issued for 1 of 3 items selected for testwork. Upon receipt of the report, the Department did issue a management decision letter upon receipt of the report. In addition, for 1 of 3 subrecipients selected for testwork which had a Uniform Guidance audit, the Department did not issue a management decision letter within 6 months of receipt of the report.

Finding Reference Number: 2023-011 NH Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) and COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Federal Award Numbers: NUK50CK000522 Federal Award Year: 2019 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-018 Statistically Valid Sample: No Criteria A pass-through entity (PTE) must: 1. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 2. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award Condition During the year ended June 30, 2023, the New Hampshire Department of Health and Human Services (the Department) passed through $5,070,789 of federal funding to subrecipient. As part of our testing related subrecipient monitoring, we noted the following: A. As part of our during the award monitoring testwork, we were unable to obtain documentation to support that that the Department had performed the suggested monitoring procedures for 3 of the 4 subrecipients selected for testwork based upon the subrecipients most recent risk assessment performed. For the remaining 1 subrecipient, the risk assessment form did not indicate the required frequency of the suggested type of monitoring. As a result, we were not able to verify that the Department had performed the appropriate monitoring procedures as outlined by the risk assessment performed for each subrecipient. B. The Department’s during the award monitoring for each of the 4 subrecipients selected for testwork consisted of the review and approval of subrecipient invoices. Per review of the invoices, the invoice contained a summary of costs incurred by the subrecipient by category of expense that it was seeking reimbursement for. The Department did not perform any other monitoring procedures to ensure the accuracy of the request made by the subrecipient through either a desk review or an on-site monitoring visit. We further noted that no other monitoring was performed by the Department to ensure that the subrecipient was complying with the terms and conditions of its subrecipient grant agreement. Per review of the risk assessment for each of the 4 subrecipients, the risk assessment did not provide for specific monitoring procedures that would address compliance with the subrecipients grant agreement beyond the period review of expenditure data. Taking into consideration that for each of the 4 subrecipients selected the testwork, if an Uniform Guidance report was issued for the subrecipient, this program was not audited as a major program, it does not appear that either the procedures suggested within the risk assessment or the procedures performed by the Department would be able to identify noncompliance incurred at the subrecipient level. C. During our review over the Department’s review over the subrecipients Uniform Guidance reports, we identified the following: • For 1 of 3 subrecipients selected for testwork which had a Uniform Guidance audit, the subrecipients uniform guidance audit was not issued within 9 months of the subrecipients year end. We were unable to obtain any correspondence between the Department or the subrecipient to inquire about the uniform guidance report or when it would be issued. Upon receipt of the report, the Department did issue a management decision letter upon receipt of the report. • For 1 of 3 subrecipients selected for testwork which had a Uniform Guidance audit, the Department did not issue a management decision letter within 6 months of receipt of the report. We noted however there were no findings identified within the uniform guidance report that would have required corrective action. Cause The cause of the condition found was primarily due to a lack of formal policies and internal controls to ensure that all required subrecipient monitoring compliance procedures are being performed by the Department. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). Questioned Costs None. Recommendation We recommend the Department develop policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). This would ensure that the risk assessment is routinely updated for multiyear grants and that the prescribed monitoring procedures take into consideration any additional monitoring procedures that might need to be performed, such as a desk review or on-site visit, if the program is not audited as part of the subrecipient’s uniform guidance audit. In addition, policies and procedures should be established to ensure that if the risk assessment has suggested a particular monitoring procedure be performed, that the Department is adequately documenting its monitoring procedures to ensure that it has performed the required procedures. View of Responsible Officials: Management partially concurs with the finding above. Rejoinder As it relates to Bullet B above, for each of the 4 subrecipients selected for testwork consisted of the review and approval of subrecipient invoices. Per review of the invoices, the invoice contained a summary of costs incurred by the subrecipient by category of expense that it was seeking reimbursement for. The Department did not perform any other monitoring procedures to ensure the accuracy of the request made by the subrecipient through either a desk review or an on-site monitoring visit. We further noted that no other monitoring was performed by the Department to ensure that the subrecipient was complying with the terms and conditions of its subrecipient grant agreement. As it relates to Bullet C above, we were unable to obtain any correspondence between the Department or the subrecipient to inquire about the uniform guidance report or when it would be issued for 1 of 3 items selected for testwork. Upon receipt of the report, the Department did issue a management decision letter upon receipt of the report. In addition, for 1 of 3 subrecipients selected for testwork which had a Uniform Guidance audit, the Department did not issue a management decision letter within 6 months of receipt of the report.

Finding Reference Number: 2023-012 NH Department of Health and Human Services Temporary Assistance for Needy Families and COVID-19 Temporary Assistance for Needy Families (Assistance Listing #93.558) Federal Award Numbers: 2021G996115, 2021G990228, 2022G996115 Federal Award Year: 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provisions: Penalty for Failure to Comply with Work Verification Plan Type of Finding: Significant Deficiency Prior Year Finding: 2022-024 Statistically Valid Sample: No The State agency must maintain adequate documentation, verification, and internal control procedures to ensure the accuracy of the data used in calculating work participation rates. In so doing, it must have in place procedures to (a) determine whether its work activities may count for participation rate purposes; (b) determine how to count and verify reported hours of work; (c) identify who is a work eligible individual; and (d) control internal data transmission and accuracy. Each State agency must comply with its HHS-approved Work Verification Plan in effect for the period that is audited. HHS may penalize the State by an amount not less than one percent and not more than five percent of the SFAG for violation of this provision (42 USC 601, 602, 607, and 609); 45 CFR sections 261.60, 261.61, 261.62, 261.63, 261.64, and 261.65). Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork related to compliance with the New Hampshire Department of Health and Human Services (the Department) work verification plan we identified that for 2 of 60 participants selected for testwork, there was insufficient documentation to support the number of hours worked within the New Heights system for the participant. For the 2 participants, we identified that for 1 participant the number of hours worked appeared to be underreported and for 1 participant the number of hours appeared to be overreported. Cause The cause of the condition found was a result of inadequate review to ensure that the hours worked by each participant is accurately reported within the New Heights system. Effect The effect of the condition found is that the State may not be in compliance with its work verification plan and would not be able to identify the noncompliance. Questioned Costs Not determinable. Recommendation We recommend that the Department continue to enhance its existing internal controls and procedures to ensure that participant work hours reported agree to the documented hours worked and that the work hours are accurately reflected within the New Heights system. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-012 NH Department of Health and Human Services Temporary Assistance for Needy Families and COVID-19 Temporary Assistance for Needy Families (Assistance Listing #93.558) Federal Award Numbers: 2021G996115, 2021G990228, 2022G996115 Federal Award Year: 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provisions: Penalty for Failure to Comply with Work Verification Plan Type of Finding: Significant Deficiency Prior Year Finding: 2022-024 Statistically Valid Sample: No The State agency must maintain adequate documentation, verification, and internal control procedures to ensure the accuracy of the data used in calculating work participation rates. In so doing, it must have in place procedures to (a) determine whether its work activities may count for participation rate purposes; (b) determine how to count and verify reported hours of work; (c) identify who is a work eligible individual; and (d) control internal data transmission and accuracy. Each State agency must comply with its HHS-approved Work Verification Plan in effect for the period that is audited. HHS may penalize the State by an amount not less than one percent and not more than five percent of the SFAG for violation of this provision (42 USC 601, 602, 607, and 609); 45 CFR sections 261.60, 261.61, 261.62, 261.63, 261.64, and 261.65). Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork related to compliance with the New Hampshire Department of Health and Human Services (the Department) work verification plan we identified that for 2 of 60 participants selected for testwork, there was insufficient documentation to support the number of hours worked within the New Heights system for the participant. For the 2 participants, we identified that for 1 participant the number of hours worked appeared to be underreported and for 1 participant the number of hours appeared to be overreported. Cause The cause of the condition found was a result of inadequate review to ensure that the hours worked by each participant is accurately reported within the New Heights system. Effect The effect of the condition found is that the State may not be in compliance with its work verification plan and would not be able to identify the noncompliance. Questioned Costs Not determinable. Recommendation We recommend that the Department continue to enhance its existing internal controls and procedures to ensure that participant work hours reported agree to the documented hours worked and that the work hours are accurately reflected within the New Heights system. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-013 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2101NHE5C6 Federal Award Year: 2021 U.S. Department of Health and Human Services Compliance Requirement: Earmarking Type of Finding: Significant Deficiency Prior Year Finding: 2022-028 Statistically Valid Sample: No Criteria Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition To ensure that the Department had met the required earmarking requirements related to administrative costs, the New Hampshire Department of Energy (the Department) maintains a tracking sheet for each federal grant that tracks all expenditures by category. At the end of the grant period, the total expenditures are reconciled to the federal grant and costs incurred related to the earmarking requirements are calculated to ensure that the required limitations are not exceeded. During our testwork over earmarking, we noted that for the 1 grant award which ended during the period under audit, the grant appeared to have met the required earmarking requirements, however we were unable to test the completeness and accuracy of the underlying support provided by management. Specifically, we were unable to reconcile the total expenditures contained within the underlying support to the final grant close out report (the SF-425) submitted for the grant. Cause The cause of the condition found is due to the Department is unable to submit a final close out report within the federal reporting portal as the portal does not contain an option to complete the required report. As a result, the last federal report filed for this grant was as of September 30, 2022, which was prior to the liquidation of all obligations under the grant. Effect The effect of the condition found is that the expenditures utilized to track compliance with the earmarking requirement may not reconcile to the final expenditures reported within the SF-425 resulting in noncompliance. Questioned Costs Not determinable. Recommendation We recommend that the Department continue to work with the federal government to ensure that all grants that are required to be closed out have a final SF-245 and that the final expenditures reported reconciles to the expenditures used to track the required earmarking requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-013 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2101NHE5C6 Federal Award Year: 2021 U.S. Department of Health and Human Services Compliance Requirement: Earmarking Type of Finding: Significant Deficiency Prior Year Finding: 2022-028 Statistically Valid Sample: No Criteria Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition To ensure that the Department had met the required earmarking requirements related to administrative costs, the New Hampshire Department of Energy (the Department) maintains a tracking sheet for each federal grant that tracks all expenditures by category. At the end of the grant period, the total expenditures are reconciled to the federal grant and costs incurred related to the earmarking requirements are calculated to ensure that the required limitations are not exceeded. During our testwork over earmarking, we noted that for the 1 grant award which ended during the period under audit, the grant appeared to have met the required earmarking requirements, however we were unable to test the completeness and accuracy of the underlying support provided by management. Specifically, we were unable to reconcile the total expenditures contained within the underlying support to the final grant close out report (the SF-425) submitted for the grant. Cause The cause of the condition found is due to the Department is unable to submit a final close out report within the federal reporting portal as the portal does not contain an option to complete the required report. As a result, the last federal report filed for this grant was as of September 30, 2022, which was prior to the liquidation of all obligations under the grant. Effect The effect of the condition found is that the expenditures utilized to track compliance with the earmarking requirement may not reconcile to the final expenditures reported within the SF-425 resulting in noncompliance. Questioned Costs Not determinable. Recommendation We recommend that the Department continue to work with the federal government to ensure that all grants that are required to be closed out have a final SF-245 and that the final expenditures reported reconciles to the expenditures used to track the required earmarking requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-014 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance. (Assistance Listing #93.568) Federal Award Numbers: 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4, 2201NHLIEE, 2201NHLIEI, 2301NHLIEA, 2301NHLIEE, 2301NHLIEI Federal Award Year: 2020, 2021, 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Cash Management Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-027 Statistically Valid Sample: No Criteria U.S. Department of the Treasury (Treasury) regulations at 31 CFR 204 part 205 implement the Cash Management Act of 1990 (CMIA). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Catalog of Federal Domestic assistance that meet the funding threshold for a major federal program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over performed over cash management related to the Low-Income Home Energy Assistance program, we noted the following: A. Under the State of New Hampshire’s Cash Management Agreement (CMIA), direct expenditures are to be drawn using the actual draw – monthly technique. Under this technique, the funds are to be requested monthly based on actual costs incurred during that 1-month period. The funding technique is interest neutral. During our testwork over the cash draw process, we noted the following: a. For 4 of 9 cash draws selected for testwork, the New Hampshire Department of Energy (the Department) did not draw funds timely resulting in the cash draw to be delinquent. Each of the 4 cash draw covered multiple months of activity. As the clearance pattern within the CMIA agreement is interest neutral, there was no interest impact because of the cash draws not being performed timely. B. The Department advances payments to subrecipients to ensure that they have sufficient cash on hand to pay for benefit payments. The Department passed through $52,485,098 to subrecipients during the year ended June 30, 2023. During our testwork over compliance with cash management, we noted that for the 4 cash advance payment samples selected for testwork, the Department was not able to provide sufficient evidence to support that the cash advance was spent within a time period that minimizes the time elapsed between the transfer of federal funds to the subrecipient and their disbursement for program purposes. The Department’s normal disbursement cycle of every 30 days. As such, it does not appear that the Department sufficiently minimized the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes. Cause The cause of the condition found was primarily due to insufficient resources to monitor and track cash draws to ensure they are performed timely in accordance with the clearance patten established within the CMIA agreement and to ensure that subrecipients either utilize advance funds timely or effectively evaluate the amount of funds they need on hand at the time of the advance payment. Effect The effect of the condition found is that the Department did not comply with the provisions of the CMIA as it relates to the timing of cash draws. In addition, the Department did not have sufficient policies and procedures in place to ensure the time elapsed between the transfer of federal funds to the subrecipient and their disbursement of funds for program purposes is minimized. As such the Department was not in compliance with 2 CFR section 200.305(b)(1). Questioned Costs None. Recommendation We recommend that the Department review its existing internal controls, policies, and procedures to ensure that all cash draws are performed timely and in accordance with the CMIA agreement. In addition, we recommend that the Department review its existing internal controls, policies and procedures relating to advancing funds to subrecipients to ensure that excess cash held by the subrecipients does not exceed 30 days. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-014 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance. (Assistance Listing #93.568) Federal Award Numbers: 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4, 2201NHLIEE, 2201NHLIEI, 2301NHLIEA, 2301NHLIEE, 2301NHLIEI Federal Award Year: 2020, 2021, 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Cash Management Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-027 Statistically Valid Sample: No Criteria U.S. Department of the Treasury (Treasury) regulations at 31 CFR 204 part 205 implement the Cash Management Act of 1990 (CMIA). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Catalog of Federal Domestic assistance that meet the funding threshold for a major federal program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over performed over cash management related to the Low-Income Home Energy Assistance program, we noted the following: A. Under the State of New Hampshire’s Cash Management Agreement (CMIA), direct expenditures are to be drawn using the actual draw – monthly technique. Under this technique, the funds are to be requested monthly based on actual costs incurred during that 1-month period. The funding technique is interest neutral. During our testwork over the cash draw process, we noted the following: a. For 4 of 9 cash draws selected for testwork, the New Hampshire Department of Energy (the Department) did not draw funds timely resulting in the cash draw to be delinquent. Each of the 4 cash draw covered multiple months of activity. As the clearance pattern within the CMIA agreement is interest neutral, there was no interest impact because of the cash draws not being performed timely. B. The Department advances payments to subrecipients to ensure that they have sufficient cash on hand to pay for benefit payments. The Department passed through $52,485,098 to subrecipients during the year ended June 30, 2023. During our testwork over compliance with cash management, we noted that for the 4 cash advance payment samples selected for testwork, the Department was not able to provide sufficient evidence to support that the cash advance was spent within a time period that minimizes the time elapsed between the transfer of federal funds to the subrecipient and their disbursement for program purposes. The Department’s normal disbursement cycle of every 30 days. As such, it does not appear that the Department sufficiently minimized the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes. Cause The cause of the condition found was primarily due to insufficient resources to monitor and track cash draws to ensure they are performed timely in accordance with the clearance patten established within the CMIA agreement and to ensure that subrecipients either utilize advance funds timely or effectively evaluate the amount of funds they need on hand at the time of the advance payment. Effect The effect of the condition found is that the Department did not comply with the provisions of the CMIA as it relates to the timing of cash draws. In addition, the Department did not have sufficient policies and procedures in place to ensure the time elapsed between the transfer of federal funds to the subrecipient and their disbursement of funds for program purposes is minimized. As such the Department was not in compliance with 2 CFR section 200.305(b)(1). Questioned Costs None. Recommendation We recommend that the Department review its existing internal controls, policies, and procedures to ensure that all cash draws are performed timely and in accordance with the CMIA agreement. In addition, we recommend that the Department review its existing internal controls, policies and procedures relating to advancing funds to subrecipients to ensure that excess cash held by the subrecipients does not exceed 30 days. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-015 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4, 2201NHLIEE, 2201NHLIEI, 2301NHLIEA, 2301NHLIEE, 2301NHLIEI Federal Award Year: 2020, 2021, 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-025 Statistically Valid Sample: No Criteria A pass-through entity must: 1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a); 2. Evaluate each subrecipient’s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.332(b)); 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means; and 4. Issuing a management decision for audit findings pertaining to federal award provided to the subrecipient from the subrecipient as required by 2 CFR section 200.521. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Low-Income Home Energy Assistance program (LIHEAP), the New Hampshire Department of Energy (the Department) enters into grant agreements with local entities to provide services related to the eligibility determination process for the LIHEAP program (including the calculation of participant benefits) and payment of benefits to fuel providers. During the year ended June 30, 2023, $52,485,098 was passed through to subrecipients. As part of our testwork over the subrecipient monitoring process, we noted the following as of the year ending June 30, 2023: A. The Department communicates award information to subrecipients through the approved grant agreement. Per review of the grant agreement, for each of the 3 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.332. Specifically, the following elements were not communicated: a. Federal Award Identification Number (FAIN) b. Federal award date c. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414) d. Identification of whether the award is R&D B. For the 1 programmatic monitoring review completed by the Department during the period under audit, the Department did not issue its programmatic monitoring report to the subrecipient timely after the monitoring review was completed. As a result, there was a delay in the subrecipient implementing its corrective action plan to address the findings identified during the programmatic monitoring review. Specifically, we noted the following: a. For the 1 programmatic monitoring review, the monitoring review took place on May 4, 2023, but the report to the subrecipient was not issued until September 23, 2023. Per review of the report that was issued, there were findings identified by the Department that warranted corrective action. Due to the delay in issuing the report, a corrective action plan was not obtained from the subrecipient until almost 5 months after the date of that the monitoring review took place. C. For 3 of 3 subrecipients selected for testwork, the Department did not complete its annual fiscal monitoring review during the audit period as required by their monitoring policy. D. During our testwork over the Department’s review of subrecipient uniform guidance reports, we noted the following: a. The Department does not track the receipt of uniform guidance reports. As a result, we were unable to determine when the uniform guidance reports were received by the Department to ensure they are reviewed timely. Specifically, we noted: i. For all 3 subrecipients selected, the subrecipient’s uniform guidance appeared to have been reviewed, but as the Department does not track the receipt of uniform guidance reports, it was unclear if it was reviewed timely. We did note based on the date that the uniform guidance report was issued, the management decision letter was not issued within 6 months of the date of the report being issued as required by 2 CRF 200.521 (d). ii. For 1 subrecipient in which the UG report had a finding, we were unable to obtain evidence to support that the Department had obtained and reviewed the subrecipient’s uniform guidance report, including management’s response to findings letter as well as the related Corrective Action Plan, as this subrecipient’s uniform guidance report noted a material weakness. E. The Annual Report on Households Assisted by LIHEAP contains data that is specific to benefits paid to eligible participants. The data that is used to compile the annual report is obtained from case data that is reported to the New Hampshire Department of Energy (the Department) from its subrecipients as the Department has entered into grant agreements with third parties who are responsible for the eligibility determination and benefit payment process. As part of our subrecipient monitoring testwork, we were unable to verify that the Department had performed any monitoring procedures over the data provided by each subrecipient to ensure that the data reported within the annual report was complete and accurate. Cause The cause of the condition found was primarily due to insufficient documented subrecipient policies and procedures to ensure that adequate monitoring is performed over subrecipients to align with the risk assessments performed. The monitoring procedures that are in place do not include the completeness and accuracy of the data submitted by the subrecipient utilized to compile federal reports. Further, the Department does not have sufficient internal controls and procedures to ensure results of monitoring visits are performed and results communicated timely to subrecipient or to ensure that subrecipient uniform guidance reports are obtained and reviewed timely. In addition, there are insufficient internal controls in place to review the grant agreements to ensure that all required data elements are communicated to the subrecipient in accordance with 2 CFR section 300.332(b). Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(a), section 200.332(b) and 2 CFR section 200.521. Questioned Costs None. Recommendation We recommend that the Department formalize, policies and procedures and implement the necessary internal controls to ensure that the Department complies with the provisions of 2 CFR section 200.332(a), 2 CFR section 200.332(b) and 2 CFR section 200.251. This would include ensuring that: 1. All required award information is communicated to subrecipients; 2. As a result of the risk assessment performed, monitoring activities are performed over subrecipients to ensure compliance with the terms and conditions of its subrecipient grant agreement. The results of all monitoring reviews should be timely communicated in accordance with the Department’s policies to the subrecipient and actions requiring corrective action plan should be followed up on to ensure that the matter is resolved; and 3. Ensure that all uniform guidance reports are collected and reviewed timely so that a management decision letter can be issued within the time period required by federal regulations. Retain evidence of Department review of uniform guidance reports and management letters issued as a result of their review. View of Responsible Officials: Management partially concurs with the finding above Rejoinder As it relates to Bullet C above, for 3 of 3 subrecipients selected for testwork, the Department did not complete its annual fiscal monitoring review during the audit period as required by their monitoring policy

Finding Reference Number: 2023-015 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4, 2201NHLIEE, 2201NHLIEI, 2301NHLIEA, 2301NHLIEE, 2301NHLIEI Federal Award Year: 2020, 2021, 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-025 Statistically Valid Sample: No Criteria A pass-through entity must: 1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a); 2. Evaluate each subrecipient’s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.332(b)); 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means; and 4. Issuing a management decision for audit findings pertaining to federal award provided to the subrecipient from the subrecipient as required by 2 CFR section 200.521. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Low-Income Home Energy Assistance program (LIHEAP), the New Hampshire Department of Energy (the Department) enters into grant agreements with local entities to provide services related to the eligibility determination process for the LIHEAP program (including the calculation of participant benefits) and payment of benefits to fuel providers. During the year ended June 30, 2023, $52,485,098 was passed through to subrecipients. As part of our testwork over the subrecipient monitoring process, we noted the following as of the year ending June 30, 2023: A. The Department communicates award information to subrecipients through the approved grant agreement. Per review of the grant agreement, for each of the 3 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.332. Specifically, the following elements were not communicated: a. Federal Award Identification Number (FAIN) b. Federal award date c. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414) d. Identification of whether the award is R&D B. For the 1 programmatic monitoring review completed by the Department during the period under audit, the Department did not issue its programmatic monitoring report to the subrecipient timely after the monitoring review was completed. As a result, there was a delay in the subrecipient implementing its corrective action plan to address the findings identified during the programmatic monitoring review. Specifically, we noted the following: a. For the 1 programmatic monitoring review, the monitoring review took place on May 4, 2023, but the report to the subrecipient was not issued until September 23, 2023. Per review of the report that was issued, there were findings identified by the Department that warranted corrective action. Due to the delay in issuing the report, a corrective action plan was not obtained from the subrecipient until almost 5 months after the date of that the monitoring review took place. C. For 3 of 3 subrecipients selected for testwork, the Department did not complete its annual fiscal monitoring review during the audit period as required by their monitoring policy. D. During our testwork over the Department’s review of subrecipient uniform guidance reports, we noted the following: a. The Department does not track the receipt of uniform guidance reports. As a result, we were unable to determine when the uniform guidance reports were received by the Department to ensure they are reviewed timely. Specifically, we noted: i. For all 3 subrecipients selected, the subrecipient’s uniform guidance appeared to have been reviewed, but as the Department does not track the receipt of uniform guidance reports, it was unclear if it was reviewed timely. We did note based on the date that the uniform guidance report was issued, the management decision letter was not issued within 6 months of the date of the report being issued as required by 2 CRF 200.521 (d). ii. For 1 subrecipient in which the UG report had a finding, we were unable to obtain evidence to support that the Department had obtained and reviewed the subrecipient’s uniform guidance report, including management’s response to findings letter as well as the related Corrective Action Plan, as this subrecipient’s uniform guidance report noted a material weakness. E. The Annual Report on Households Assisted by LIHEAP contains data that is specific to benefits paid to eligible participants. The data that is used to compile the annual report is obtained from case data that is reported to the New Hampshire Department of Energy (the Department) from its subrecipients as the Department has entered into grant agreements with third parties who are responsible for the eligibility determination and benefit payment process. As part of our subrecipient monitoring testwork, we were unable to verify that the Department had performed any monitoring procedures over the data provided by each subrecipient to ensure that the data reported within the annual report was complete and accurate. Cause The cause of the condition found was primarily due to insufficient documented subrecipient policies and procedures to ensure that adequate monitoring is performed over subrecipients to align with the risk assessments performed. The monitoring procedures that are in place do not include the completeness and accuracy of the data submitted by the subrecipient utilized to compile federal reports. Further, the Department does not have sufficient internal controls and procedures to ensure results of monitoring visits are performed and results communicated timely to subrecipient or to ensure that subrecipient uniform guidance reports are obtained and reviewed timely. In addition, there are insufficient internal controls in place to review the grant agreements to ensure that all required data elements are communicated to the subrecipient in accordance with 2 CFR section 300.332(b). Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(a), section 200.332(b) and 2 CFR section 200.521. Questioned Costs None. Recommendation We recommend that the Department formalize, policies and procedures and implement the necessary internal controls to ensure that the Department complies with the provisions of 2 CFR section 200.332(a), 2 CFR section 200.332(b) and 2 CFR section 200.251. This would include ensuring that: 1. All required award information is communicated to subrecipients; 2. As a result of the risk assessment performed, monitoring activities are performed over subrecipients to ensure compliance with the terms and conditions of its subrecipient grant agreement. The results of all monitoring reviews should be timely communicated in accordance with the Department’s policies to the subrecipient and actions requiring corrective action plan should be followed up on to ensure that the matter is resolved; and 3. Ensure that all uniform guidance reports are collected and reviewed timely so that a management decision letter can be issued within the time period required by federal regulations. Retain evidence of Department review of uniform guidance reports and management letters issued as a result of their review. View of Responsible Officials: Management partially concurs with the finding above Rejoinder As it relates to Bullet C above, for 3 of 3 subrecipients selected for testwork, the Department did not complete its annual fiscal monitoring review during the audit period as required by their monitoring policy

Finding Reference Number: 2023-016 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4, 2201NHLIEE, 2201NHLIEI, 2301NHLIEA, 2301NHLIEE, 2301NHLIEI, 1700NHLIEA Federal Award Year: 2017, 2020, 2021, 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-026 Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The Low-Income Home Energy Assistance program (LIHEAP), Performance Data Form (OMB No. 0970-0449) must be submitted before January 31st regarding the prior federal fiscal year. The first section of the report is the Grant recipient Survey that collects and reports data on sources and uses of LIHEAP funds. The Grant recipient Survey includes Section III: Estimated Sources of Funds and Section IV: Estimated Use of LIHEAP Funds. Note: that these are referencing obligated not expended funding. The rest of the report is regarding performance metrics, mostly related to home energy burden targeting and reduction, as well as the continuity of home energy service. The Grantee Survey obligation amounts should be compared with the Carryover and Reallotment and FFR-425 reports. This reconciliation is needed to make sure the obligated balances for the program year being tested are accurate. LIHEAP Carryover and Reallotment Report (OMB No. 0970-0106) – Grantees must submit this report no later than August 1 indicating the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds. Funds in excess of the maximum carryover limit are subject to reallotment to other LIHEAP grantees in the following fiscal year and must also be reported (42 USC 8626). Annual Report on Households Assisted by LIHEAP (OMB No. 0970-0060) https://omb.report/icr/202211-0970-005 – As part of the application for block grant funds each year, a report is required for the preceding fiscal year of (1) the number and income levels of the households assisted for each component and any type of LHEAP assistance (heating, cooling, crisis, and weatherization); and (2) the number of households served that contained young children, elderly, or persons with disabilities, or any vulnerable household for each component. Territories with annual allotments of less than $200,000 and all Native American tribes are required to report only on the number of households served for each program component (42 USC 8629; 45 CFR section 96.82). Quarterly Performance and Management Report (OMB No. 0970-0589) https://omb.report/icr/202205-0970-017/doc/121847100 – Grant recipients must submit data and information about LIHEAP during the current FY, including success, challenges, needs and innovations. The quarterly reports focus on assisted households, performance management, obligation of funding, changes made due to anticipated increase in energy bills, collaboration with other utility programs, and training and technical assistance needs. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting as part of the Low-Income Home Energy Assistance program (LIHEAP), we noted the following: A. The New Hampshire Department of Energy (the Department) during the year ended June 30, 2023, $52,485,098 was passed through to subrecipients that met the requirements for first tier subawards under the Transparency Act and as such FFATA reports were required to be filed for each of those subawards. During our testwork over FFATA reporting at the Department of Energy, we selected 4 out of 7 FFATA reports for testing and noted the following: Reports Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 4 0 1 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $13,825,743 $0 $1,115,000 $0 $0 B. The annual LIHEAP Performance Data Form was not submitted by January 31, 2023. The Department submitted the report in December 2023. The Department was unable to provide sufficient underlying support for the Key Line items associated with the report including the following: Uses of Funds, the total Uses of Funds should equal the total Sources of Funds, and Other LIHEAP assistance. The Department was unable to provide a reconciliation between the LIHEAP Performance Data Form Grantee Survey obligation amounts reported to the Carryover and Reallotment and FFR-425 reports. C. The Department did not submit its required special reports (i.e. Quarterly Performance and Management Reports, Annual Report of Assisted Households Report, and LIHEAP Carryover and Reallotment Report) in a timely manner. There were also no procedures implemented to ensure that the submission of Special Reports includes accurate and complete data. Specifically, we noted the following: LIHEAP Carryover and Reallotment Report - This report must be submitted no later than August 1 for the federal fiscal year. This report was not submitted in a timely manner for the period ending 9/30/2022, as it was submitted on 8/9/2023 with an original due date of 8/1/2022. This report was not submitted in a timely manner for the period ending 9/30/2023, as it was not yet submitted as of March 12, 2024, with an original due date of 8/1/2023. The administrative expenditures balance utilized to calculate the PY22 Carryover balance submitted in the PY22 Carryover and Reallotment Report was an estimate, even though there was actual data for this balance since the report was submitted a year late. The actual balance per the support provided by the Dept. of Energy was $14,488.95, which is $20,337.05 less than the balance estimated. Annual Report on Households Assisted by LIHEAP - There is not a designated due date for this report. However, as this report is due at the end of every federal fiscal year, this should be submitted within a reasonable time after the end of the federal fiscal year (9/30) for the data to be reported in a timely manner to the Federal Government. The report for the year ending 9/30/2022 was submitted on 9/25/2023, which is almost an entire year after the end of the federal fiscal year, and the report for the year ending 9/30/2023 wasn't submitted until 1/23/2024, which is almost four months after federal fiscal year end. Additionally, some of the data submitted within the 9/30/2022 report is deemed to not be complete and accurate based on the underlying support provided. Specifically, the following was noted: In Section 1, line item 10. Weatherization the amount reported was 249 households and the amount per the underlying support was 7,262 households. In Section 2, line item 10. Weatherization the amounts reported for the various poverty levels was inaccurate per the underlying support, as shown in the below table. Section Type of LIHEAP assistance A. Under 75% poverty B. 75%- 100% poverty C. 101%- 125% poverty D. 126%- 150% poverty E. Over 150% poverty Per Report: 2 10. Weatherization 33 38 43 38 97 Per Support: 2 Weatherization 1,013 1,122 1,123 1,163 2,841 Furthermore, all the data submitted within the 9/30/2023 report is deemed to not be complete and accurate based on the underlying support provided. Specifically, the following was noted for Sections 1 and 2 below: Section Data Field Amount per Report Amount per Support 1 1. Heating 29,642 31,289 e. Winter 1,680 1,730 10. Weatherization 199 9,875 14. Any type of LIHEAP assistance 29,669 31,289 18. Bill Payment Assistance 29,642 31,289 Section Type of LIHEAP assistance A. Under 75% poverty B. 75%- 100% poverty C. 101%- 125% poverty D. 126%- 150% poverty E. Over 150% poverty Per Report: 2 1. Heating 3,190 3,238 3,519 3,710 15,985 e. Winter 332 172 164 182 830 10. Weatherization 10 22 26 19 122 Per Support: 2 Heating 4,040 4,074 4,432 4,329 14,414 Winter/Year Round Crisis 395 216 200 212 707 Weatherization 1,134 1,202 1,312 1,354 4,873 Quarterly Performance and Management Report - There is not a designated due date within for this report. However, as this report is due every quarter, this report should be submitted within the subsequent quarter for the data to be reported in a timely manner to the Federal Government. For 1 of the 3 quarterly reports submitted, we were unable to determine when it was submitted, as the report was not signed and dated by the Program Director when submitted. Additionally, for the Quarterly Performance and Management report submitted for the quarter ended 6/30/2022, we noted 2 key line items that were inaccurate based upon the underlying support. Specifically, the total number of assisted households for quarter 3 federal fiscal year 2022 was reported as 24,405 and the amount per the underlying support was 24,425, as well as the LIHEAP fiscal year end 2022 non-Supplemental (released November 1, 2021) amount of funds obligated was reported as $24,114,530 and the amount per the underlying support was $30,948,915. Additionally, we noted 7 key line items that were unable to be verified as complete and accurate as no underlying support could be provided. Those key line items are as follows: total cumulative assisted households, total cumulative assisted households during the same period last year, total households for quarter 3 assisted during the same period last year, number of occurrences of households where LIHEAP prevented the loss of home energy for quarter 3, number of occurrences of households where LIHEAP restored home energy for quarter 3, total amount of funds obligated for ARPA 2021, amount of funds obligated for other supplemental allotment. For the Quarterly Performance and Management report submitted for the quarter ended 12/31/2022, we noted 3 key line items that were unable to be verified as complete and accurate as no underlying support could be provided by the Department. Those key line items are as follows: number of assisted households during the same period last year for quarter 1 federal fiscal year 2023, total amount of funds obligated for LIHEAP fiscal year 2023 allotment B, and amount of funds obligated for other supplemental allotment. For the Quarterly Performance and Management report submitted for the quarter ended 6/30/2023, we noted 1 key line item that was inaccurate based upon the underlying support. Specifically, the total number of assisted households for quarter 3 federal fiscal year 2023 was reported as 3,232 and the amount per the underlying support was 3,367. Additionally, we noted 2 key line items that were unable to be verified as complete and accurate as no underlying support could be provided. Those key line items are as follows: amount of funds obligated for LIHEAP federal fiscal year 2023 allotment and amount of funds obligated for other supplemental allotment. Cause The cause of the condition found was primarily due to insufficient resources within the Department to ensure the federal FFATA reports were filed timely. The cause of the condition found was primarily due to insufficient resources within the Department to ensure the federal performance reports were filed or filed timely as well as insufficient policies and procedures to ensure that the documentation to support the key line items reported on the LIHEAP Performance Data Form were retained. Additionally, the Department has insufficient policies and procedures to ensure that the required reconciliation between reported Performance Data Form Grantee Survey obligation amounts and Carryover and Reallotment report as well as FFR-425 reports is completed. The cause of the condition found was primarily due to insufficient resources within the Department to ensure the federal special reports were filed or filed timely. Also, the Department had the Federal Government contract out a federal consulting firm, APRISE, to help the Department submit the required special reports and the federal consulting firm was not able to provide the Department with support for the data that was submitted within these reports. Effect The effect of the condition found is that the Department did not file required FFATA reports, LIHEAP Performance Data Form, LIHEAP Carryover and Reallotment Report, Quarterly Performance and Management Report and Annual Report on Households Assisted by LIHEAP in a timely manner. The effect of the condition is also that the Department did not file complete and accurate performance and special federal reports. Questioned Costs None. Recommendation We recommend that the Department should review to ensure there is sufficient safeguards in place for professionals to perform when positions are vacant so that necessary processes are completed related to compliance with federal requirements, including federal reporting requirements related to the timely submission of the annual LIHEAP Performance Report, the annual LIHEAP Carryover and Reallotment Report, the Quarterly Performance and Management Report and the Annual Report on Households Assisted by LIHEAP as well as the submission of FFATA reports for first-tier subawards. In addition, we recommend that the Department implement written policies and procedures for the compilation and review of the LIHEAP Performance Data Form, LIHEAP Carryover and Reallotment Report, Quarterly Performance and Management Report and Annual Report on Households Assisted by LIHEAP and ensure that the documentation to support the amounts reported is maintained to support that the report is complete and accurate. View of Responsible Official: Management concurs with the finding above.

Finding Reference Number: 2023-016 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4, 2201NHLIEE, 2201NHLIEI, 2301NHLIEA, 2301NHLIEE, 2301NHLIEI, 1700NHLIEA Federal Award Year: 2017, 2020, 2021, 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-026 Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The Low-Income Home Energy Assistance program (LIHEAP), Performance Data Form (OMB No. 0970-0449) must be submitted before January 31st regarding the prior federal fiscal year. The first section of the report is the Grant recipient Survey that collects and reports data on sources and uses of LIHEAP funds. The Grant recipient Survey includes Section III: Estimated Sources of Funds and Section IV: Estimated Use of LIHEAP Funds. Note: that these are referencing obligated not expended funding. The rest of the report is regarding performance metrics, mostly related to home energy burden targeting and reduction, as well as the continuity of home energy service. The Grantee Survey obligation amounts should be compared with the Carryover and Reallotment and FFR-425 reports. This reconciliation is needed to make sure the obligated balances for the program year being tested are accurate. LIHEAP Carryover and Reallotment Report (OMB No. 0970-0106) – Grantees must submit this report no later than August 1 indicating the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds. Funds in excess of the maximum carryover limit are subject to reallotment to other LIHEAP grantees in the following fiscal year and must also be reported (42 USC 8626). Annual Report on Households Assisted by LIHEAP (OMB No. 0970-0060) https://omb.report/icr/202211-0970-005 – As part of the application for block grant funds each year, a report is required for the preceding fiscal year of (1) the number and income levels of the households assisted for each component and any type of LHEAP assistance (heating, cooling, crisis, and weatherization); and (2) the number of households served that contained young children, elderly, or persons with disabilities, or any vulnerable household for each component. Territories with annual allotments of less than $200,000 and all Native American tribes are required to report only on the number of households served for each program component (42 USC 8629; 45 CFR section 96.82). Quarterly Performance and Management Report (OMB No. 0970-0589) https://omb.report/icr/202205-0970-017/doc/121847100 – Grant recipients must submit data and information about LIHEAP during the current FY, including success, challenges, needs and innovations. The quarterly reports focus on assisted households, performance management, obligation of funding, changes made due to anticipated increase in energy bills, collaboration with other utility programs, and training and technical assistance needs. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting as part of the Low-Income Home Energy Assistance program (LIHEAP), we noted the following: A. The New Hampshire Department of Energy (the Department) during the year ended June 30, 2023, $52,485,098 was passed through to subrecipients that met the requirements for first tier subawards under the Transparency Act and as such FFATA reports were required to be filed for each of those subawards. During our testwork over FFATA reporting at the Department of Energy, we selected 4 out of 7 FFATA reports for testing and noted the following: Reports Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 4 0 1 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $13,825,743 $0 $1,115,000 $0 $0 B. The annual LIHEAP Performance Data Form was not submitted by January 31, 2023. The Department submitted the report in December 2023. The Department was unable to provide sufficient underlying support for the Key Line items associated with the report including the following: Uses of Funds, the total Uses of Funds should equal the total Sources of Funds, and Other LIHEAP assistance. The Department was unable to provide a reconciliation between the LIHEAP Performance Data Form Grantee Survey obligation amounts reported to the Carryover and Reallotment and FFR-425 reports. C. The Department did not submit its required special reports (i.e. Quarterly Performance and Management Reports, Annual Report of Assisted Households Report, and LIHEAP Carryover and Reallotment Report) in a timely manner. There were also no procedures implemented to ensure that the submission of Special Reports includes accurate and complete data. Specifically, we noted the following: LIHEAP Carryover and Reallotment Report - This report must be submitted no later than August 1 for the federal fiscal year. This report was not submitted in a timely manner for the period ending 9/30/2022, as it was submitted on 8/9/2023 with an original due date of 8/1/2022. This report was not submitted in a timely manner for the period ending 9/30/2023, as it was not yet submitted as of March 12, 2024, with an original due date of 8/1/2023. The administrative expenditures balance utilized to calculate the PY22 Carryover balance submitted in the PY22 Carryover and Reallotment Report was an estimate, even though there was actual data for this balance since the report was submitted a year late. The actual balance per the support provided by the Dept. of Energy was $14,488.95, which is $20,337.05 less than the balance estimated. Annual Report on Households Assisted by LIHEAP - There is not a designated due date for this report. However, as this report is due at the end of every federal fiscal year, this should be submitted within a reasonable time after the end of the federal fiscal year (9/30) for the data to be reported in a timely manner to the Federal Government. The report for the year ending 9/30/2022 was submitted on 9/25/2023, which is almost an entire year after the end of the federal fiscal year, and the report for the year ending 9/30/2023 wasn't submitted until 1/23/2024, which is almost four months after federal fiscal year end. Additionally, some of the data submitted within the 9/30/2022 report is deemed to not be complete and accurate based on the underlying support provided. Specifically, the following was noted: In Section 1, line item 10. Weatherization the amount reported was 249 households and the amount per the underlying support was 7,262 households. In Section 2, line item 10. Weatherization the amounts reported for the various poverty levels was inaccurate per the underlying support, as shown in the below table. Section Type of LIHEAP assistance A. Under 75% poverty B. 75%- 100% poverty C. 101%- 125% poverty D. 126%- 150% poverty E. Over 150% poverty Per Report: 2 10. Weatherization 33 38 43 38 97 Per Support: 2 Weatherization 1,013 1,122 1,123 1,163 2,841 Furthermore, all the data submitted within the 9/30/2023 report is deemed to not be complete and accurate based on the underlying support provided. Specifically, the following was noted for Sections 1 and 2 below: Section Data Field Amount per Report Amount per Support 1 1. Heating 29,642 31,289 e. Winter 1,680 1,730 10. Weatherization 199 9,875 14. Any type of LIHEAP assistance 29,669 31,289 18. Bill Payment Assistance 29,642 31,289 Section Type of LIHEAP assistance A. Under 75% poverty B. 75%- 100% poverty C. 101%- 125% poverty D. 126%- 150% poverty E. Over 150% poverty Per Report: 2 1. Heating 3,190 3,238 3,519 3,710 15,985 e. Winter 332 172 164 182 830 10. Weatherization 10 22 26 19 122 Per Support: 2 Heating 4,040 4,074 4,432 4,329 14,414 Winter/Year Round Crisis 395 216 200 212 707 Weatherization 1,134 1,202 1,312 1,354 4,873 Quarterly Performance and Management Report - There is not a designated due date within for this report. However, as this report is due every quarter, this report should be submitted within the subsequent quarter for the data to be reported in a timely manner to the Federal Government. For 1 of the 3 quarterly reports submitted, we were unable to determine when it was submitted, as the report was not signed and dated by the Program Director when submitted. Additionally, for the Quarterly Performance and Management report submitted for the quarter ended 6/30/2022, we noted 2 key line items that were inaccurate based upon the underlying support. Specifically, the total number of assisted households for quarter 3 federal fiscal year 2022 was reported as 24,405 and the amount per the underlying support was 24,425, as well as the LIHEAP fiscal year end 2022 non-Supplemental (released November 1, 2021) amount of funds obligated was reported as $24,114,530 and the amount per the underlying support was $30,948,915. Additionally, we noted 7 key line items that were unable to be verified as complete and accurate as no underlying support could be provided. Those key line items are as follows: total cumulative assisted households, total cumulative assisted households during the same period last year, total households for quarter 3 assisted during the same period last year, number of occurrences of households where LIHEAP prevented the loss of home energy for quarter 3, number of occurrences of households where LIHEAP restored home energy for quarter 3, total amount of funds obligated for ARPA 2021, amount of funds obligated for other supplemental allotment. For the Quarterly Performance and Management report submitted for the quarter ended 12/31/2022, we noted 3 key line items that were unable to be verified as complete and accurate as no underlying support could be provided by the Department. Those key line items are as follows: number of assisted households during the same period last year for quarter 1 federal fiscal year 2023, total amount of funds obligated for LIHEAP fiscal year 2023 allotment B, and amount of funds obligated for other supplemental allotment. For the Quarterly Performance and Management report submitted for the quarter ended 6/30/2023, we noted 1 key line item that was inaccurate based upon the underlying support. Specifically, the total number of assisted households for quarter 3 federal fiscal year 2023 was reported as 3,232 and the amount per the underlying support was 3,367. Additionally, we noted 2 key line items that were unable to be verified as complete and accurate as no underlying support could be provided. Those key line items are as follows: amount of funds obligated for LIHEAP federal fiscal year 2023 allotment and amount of funds obligated for other supplemental allotment. Cause The cause of the condition found was primarily due to insufficient resources within the Department to ensure the federal FFATA reports were filed timely. The cause of the condition found was primarily due to insufficient resources within the Department to ensure the federal performance reports were filed or filed timely as well as insufficient policies and procedures to ensure that the documentation to support the key line items reported on the LIHEAP Performance Data Form were retained. Additionally, the Department has insufficient policies and procedures to ensure that the required reconciliation between reported Performance Data Form Grantee Survey obligation amounts and Carryover and Reallotment report as well as FFR-425 reports is completed. The cause of the condition found was primarily due to insufficient resources within the Department to ensure the federal special reports were filed or filed timely. Also, the Department had the Federal Government contract out a federal consulting firm, APRISE, to help the Department submit the required special reports and the federal consulting firm was not able to provide the Department with support for the data that was submitted within these reports. Effect The effect of the condition found is that the Department did not file required FFATA reports, LIHEAP Performance Data Form, LIHEAP Carryover and Reallotment Report, Quarterly Performance and Management Report and Annual Report on Households Assisted by LIHEAP in a timely manner. The effect of the condition is also that the Department did not file complete and accurate performance and special federal reports. Questioned Costs None. Recommendation We recommend that the Department should review to ensure there is sufficient safeguards in place for professionals to perform when positions are vacant so that necessary processes are completed related to compliance with federal requirements, including federal reporting requirements related to the timely submission of the annual LIHEAP Performance Report, the annual LIHEAP Carryover and Reallotment Report, the Quarterly Performance and Management Report and the Annual Report on Households Assisted by LIHEAP as well as the submission of FFATA reports for first-tier subawards. In addition, we recommend that the Department implement written policies and procedures for the compilation and review of the LIHEAP Performance Data Form, LIHEAP Carryover and Reallotment Report, Quarterly Performance and Management Report and Annual Report on Households Assisted by LIHEAP and ensure that the documentation to support the amounts reported is maintained to support that the report is complete and accurate. View of Responsible Official: Management concurs with the finding above.

Finding Reference Number: 2023-017 NH Department of Health and Human Services Substance Abuse Prevention and Treatment Block Grant (ALN #93.959) and COVID-19 Substance Abuse Prevention and Treatment Block Grant (ALN #93.959) Federal Award Numbers: 1B08Ti084659-01, 1B08TI085821-01 Federal Award Year: 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria A pass-through entity (PTE) must: 1. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 2. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award Condition During the year ended June 30, 2023, the New Hampshire Department of Health and Human Services (the Department) passed through $7,720,172 of federal funding to subrecipients. As part of our testing related subrecipient monitoring, we identified the following: A. The Department provided the most recent risk assessment performed for each of the 7 subrecipients selected for testwork. Per review of the risk assessments provided, we identified the following: 1. For 5 of the subrecipients, the risk assessment indicated that the subrecipients expenditure detail should be examined monthly to ensure compliance with contract requirements and applicable laws and rules. We were unable to determine if this procedure had been performed as part of the Department’s subrecipient monitoring process. 2. For the remaining 2 subrecipients the recommended monitoring procedures was left blank on the risk assessment and as such we are unable to verify what type of monitoring procedures should have been performed. B. The Department’s during the award monitoring for of the 4 of the 7 subrecipients selected for testwork consisted of the review and approval of subrecipient invoices. Per review of the invoices, the invoice contained a summary of costs incurred by the subrecipient by category of expense that it was seeking reimbursement for. It was evident through the invoice review that the Department often followed up on inconsistencies on hours worked with the subrecipient to help ensure the accuracy of the invoice reviewed. While this detailed review was performed, the Department did not perform any other monitoring procedures related to these 4 subrecipients to ensure the accuracy of the request made by the subrecipient through either a desk review or an on-site monitoring visit. As such, it is unclear if the monitoring performed was sufficient to ensure that the subrecipient was complying with the terms and conditions of its subrecipient grant agreement. C. During our review over the Department’s review over the subrecipients Uniform Guidance reports, we identified that for 2 of 7 subrecipients selected for testwork, the subrecipients uniform guidance audit was not issued within 9 months of the subrecipients year end. We were unable to obtain any correspondence between the Department or the subrecipient to inquire about the uniform guidance report or when it would be issued. Upon receipt of the report, the Department did issue a management decision letter upon receipt of the report. Cause The cause of the condition found was primarily due to a lack of formal policies and internal controls to ensure that all required subrecipient monitoring compliance procedures are being performed by the Department. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). Questioned Costs None. Recommendation We recommend the Department review its existing policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). This would ensure that the risk assessment is routinely updated for multiyear grants and that the prescribed monitoring procedures take into consideration any additional monitoring procedures that might need to be performed, such as a desk review or on-site visit, if the program is not audited as part of the subrecipient’s uniform guidance audit. In addition, policies and procedures should be established to ensure that if the risk assessment has suggested a particular monitoring procedure be performed, that the Department is adequately documenting its monitoring procedures to ensure that it has performed the required procedures. View of Responsible Officials Management partially concurs with the finding above. Rejoinder As it relates to Bullet A above, we were not able to obtain documentation to support that the suggested procedures outlined within the risk assessment was performed. As it relates to Bullet B above, for of the 4 of the 7 subrecipients selected for testwork consisted of the review and approval of subrecipient invoices. Per review of the invoices, the invoice contained a summary of costs incurred by the subrecipient by category of expense that it was seeking reimbursement for. It was evident through the invoice review that the Department often followed up on inconsistencies on hours worked with the subrecipient to help ensure the accuracy of the invoice reviewed. While this detailed review was performed, the Department did not perform any other monitoring procedures related to these 4 subrecipients to ensure the accuracy of the request made by the subrecipient through either a desk review or an on-site monitoring visit. As such, it is unclear if the monitoring performed was sufficient to ensure that the subrecipient was complying with the terms and conditions of its subrecipient grant agreement.

Finding Reference Number: 2023-017 NH Department of Health and Human Services Substance Abuse Prevention and Treatment Block Grant (ALN #93.959) and COVID-19 Substance Abuse Prevention and Treatment Block Grant (ALN #93.959) Federal Award Numbers: 1B08Ti084659-01, 1B08TI085821-01 Federal Award Year: 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria A pass-through entity (PTE) must: 1. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 2. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award Condition During the year ended June 30, 2023, the New Hampshire Department of Health and Human Services (the Department) passed through $7,720,172 of federal funding to subrecipients. As part of our testing related subrecipient monitoring, we identified the following: A. The Department provided the most recent risk assessment performed for each of the 7 subrecipients selected for testwork. Per review of the risk assessments provided, we identified the following: 1. For 5 of the subrecipients, the risk assessment indicated that the subrecipients expenditure detail should be examined monthly to ensure compliance with contract requirements and applicable laws and rules. We were unable to determine if this procedure had been performed as part of the Department’s subrecipient monitoring process. 2. For the remaining 2 subrecipients the recommended monitoring procedures was left blank on the risk assessment and as such we are unable to verify what type of monitoring procedures should have been performed. B. The Department’s during the award monitoring for of the 4 of the 7 subrecipients selected for testwork consisted of the review and approval of subrecipient invoices. Per review of the invoices, the invoice contained a summary of costs incurred by the subrecipient by category of expense that it was seeking reimbursement for. It was evident through the invoice review that the Department often followed up on inconsistencies on hours worked with the subrecipient to help ensure the accuracy of the invoice reviewed. While this detailed review was performed, the Department did not perform any other monitoring procedures related to these 4 subrecipients to ensure the accuracy of the request made by the subrecipient through either a desk review or an on-site monitoring visit. As such, it is unclear if the monitoring performed was sufficient to ensure that the subrecipient was complying with the terms and conditions of its subrecipient grant agreement. C. During our review over the Department’s review over the subrecipients Uniform Guidance reports, we identified that for 2 of 7 subrecipients selected for testwork, the subrecipients uniform guidance audit was not issued within 9 months of the subrecipients year end. We were unable to obtain any correspondence between the Department or the subrecipient to inquire about the uniform guidance report or when it would be issued. Upon receipt of the report, the Department did issue a management decision letter upon receipt of the report. Cause The cause of the condition found was primarily due to a lack of formal policies and internal controls to ensure that all required subrecipient monitoring compliance procedures are being performed by the Department. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). Questioned Costs None. Recommendation We recommend the Department review its existing policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). This would ensure that the risk assessment is routinely updated for multiyear grants and that the prescribed monitoring procedures take into consideration any additional monitoring procedures that might need to be performed, such as a desk review or on-site visit, if the program is not audited as part of the subrecipient’s uniform guidance audit. In addition, policies and procedures should be established to ensure that if the risk assessment has suggested a particular monitoring procedure be performed, that the Department is adequately documenting its monitoring procedures to ensure that it has performed the required procedures. View of Responsible Officials Management partially concurs with the finding above. Rejoinder As it relates to Bullet A above, we were not able to obtain documentation to support that the suggested procedures outlined within the risk assessment was performed. As it relates to Bullet B above, for of the 4 of the 7 subrecipients selected for testwork consisted of the review and approval of subrecipient invoices. Per review of the invoices, the invoice contained a summary of costs incurred by the subrecipient by category of expense that it was seeking reimbursement for. It was evident through the invoice review that the Department often followed up on inconsistencies on hours worked with the subrecipient to help ensure the accuracy of the invoice reviewed. While this detailed review was performed, the Department did not perform any other monitoring procedures related to these 4 subrecipients to ensure the accuracy of the request made by the subrecipient through either a desk review or an on-site monitoring visit. As such, it is unclear if the monitoring performed was sufficient to ensure that the subrecipient was complying with the terms and conditions of its subrecipient grant agreement.

Finding Reference Number: 2023-018 NH Department of Health and Human Services Child Support Enforcement (ALN #93.563) Federal Award Number: 2201 NHCSES, 2301NHCSES Federal Award Year: 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Period of Performance Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria This program operates on a cash basis and each year’s funding and accounting is discrete; i.e., there is no carry-forward of unobligated funds. To be eligible for federal funding, claims must be submitted to ACF within two years after the calendar quarter in which the state made the expenditure. This limitation does not apply to any claim for an adjustment to prior year costs or resulting from a court-ordered retroactive adjustment (45 CFR sections 95.7, 95.13 and 95.19) 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the period of performance, we identified the following: A. For 3 of 40 payments selected for testwork that was charged during the last 60 days of the federal fiscal year 2022 federal grant, we identified there was no evidence that the payment had been reviewed and approved. All 3 sample items were related to journal entry vouchers charged to the program. As a result, it is unclear if the payment should have been charged to the federal award. B. For 4 of 40 payments selected for testwork that was charged during the first 60 days of the federal fiscal year 2023 federal grant, we identified there was no evidence that the payment had been reviewed and approved. All 4 sample items were related to journal entry vouchers charged to the program. As a result, it is unclear if the payment should have been charged to the federal award. Cause The cause of the condition found is that the Department does not appear to have sufficient internal controls to document the review and approval of journal entry vouchers that are charged to the program to support that the journal entry voucher has been properly authorized to be charged to the federal program. Effect The effect of the condition found is that unauthorized expenses may have been charged inappropriately to grant period based on the period of service in cost was paid. Questioned Costs $3,250 Recommendation We recommend that the Department review its existing policies and procedures related to the review and approval of journal entry vouchers to ensure that internal controls are implemented to document the review and approval of all journal entry vouchers to support that the journal entry voucher has been authorized to be charged to the federal program. View of Responsible Officials: Management concurs with the above finding.

Finding Reference Number: 2023-018 NH Department of Health and Human Services Child Support Enforcement (ALN #93.563) Federal Award Number: 2201 NHCSES, 2301NHCSES Federal Award Year: 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Period of Performance Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria This program operates on a cash basis and each year’s funding and accounting is discrete; i.e., there is no carry-forward of unobligated funds. To be eligible for federal funding, claims must be submitted to ACF within two years after the calendar quarter in which the state made the expenditure. This limitation does not apply to any claim for an adjustment to prior year costs or resulting from a court-ordered retroactive adjustment (45 CFR sections 95.7, 95.13 and 95.19) 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the period of performance, we identified the following: A. For 3 of 40 payments selected for testwork that was charged during the last 60 days of the federal fiscal year 2022 federal grant, we identified there was no evidence that the payment had been reviewed and approved. All 3 sample items were related to journal entry vouchers charged to the program. As a result, it is unclear if the payment should have been charged to the federal award. B. For 4 of 40 payments selected for testwork that was charged during the first 60 days of the federal fiscal year 2023 federal grant, we identified there was no evidence that the payment had been reviewed and approved. All 4 sample items were related to journal entry vouchers charged to the program. As a result, it is unclear if the payment should have been charged to the federal award. Cause The cause of the condition found is that the Department does not appear to have sufficient internal controls to document the review and approval of journal entry vouchers that are charged to the program to support that the journal entry voucher has been properly authorized to be charged to the federal program. Effect The effect of the condition found is that unauthorized expenses may have been charged inappropriately to grant period based on the period of service in cost was paid. Questioned Costs $3,250 Recommendation We recommend that the Department review its existing policies and procedures related to the review and approval of journal entry vouchers to ensure that internal controls are implemented to document the review and approval of all journal entry vouchers to support that the journal entry voucher has been authorized to be charged to the federal program. View of Responsible Officials: Management concurs with the above finding.

Finding Reference Number: 2023-019 NH Department of Education Disability Insurance/SSI Cluster: Social Security-Disability (Assistance Listing #96.001) Federal Award Numbers: 1904NHDI00, 2024NHDI00, 2104NHDI00, 2204NHI00, 2304NHDI00 Federal Award Year: 2019, 2020, 2021, 2022, 2023 U.S. Social Security Administration Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No The SSA-4514, Time Report of Personal Services For Disability Determination Services, is due quarterly to account for employee time. The SSA-4513 – State Agency Report of Obligations for SSA Disability Programs – is due quarterly for each fiscal year still open in order to account for program disbursements and unliquidated obligations (POMS DI 39506.202). Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting related to the SSA-4514 quarterly report, we identified the following: A. For the quarter ending September 30, 2022, the SSA-4514 report understated the reported number of hours as follows: a. Examiners duty hours by 241 hours and holiday/leave time by 7.50 hours. b. Hearing officers duty hours of 480 hours and holiday/leave time by 15 hours B. For the quarter ending June 30, 2023, the SSA-4514 report understated the reported number as follows: a. Hearing officers duty hours of 480 hours and holiday/leave time by 7.5 hours. During our testwork over federal reporting related to the SSA-4513 quarterly report, we identified the following: C. For all 10 SSA-4513 reports selected for testwork, line item 7 was not checked to identify if the SSA-871 needed to be attached to the report. It is unclear if this needed to be attached or not. D. For all 10 SSA-4513 reports selected for testwork, the reports did not reconcile to the internal tracking sheets provided to validate the amounts reported. For all reports there were variances between the tracking sheets and the dollar amounts included within the federal report within sections 1, 2, 3 and 4. While variances are identified, we noted that the variances were not material overall to the individual line item. E. For all 10 SSA-4513 reports selected for testwork, we were unable to validate the completeness and accuracy of the amounts reported within Section 1 for Columns (A) for Disbursements, (B) for unliquidated obligations and (C) total obligations for line items 1, 2, 3 and 4. As such, we are not able to validate that the amounts reported are complete and accurate. As we were not able to obtain documentation to validate the obligation balances, we are unable to validate the accuracy of amounts reported within Sections 1, 2, and 3 of the report. F. For all 10 of the SSA-4513 reports selected for testwork, documentation was not provided for all line items contained in the report. Specifically we identified the following: a. For 2 of 10 SSA-4513 reports selected for testing, documentation was not provided for Columns (A), (B) and (C) for the following line items: i. Line 2.a.1 Disability (DI) Claims ii. Line 2.a.2 Supplemental Security Income (SSI) Claims iii. Line 1.a.3 Concurrent DI/SSI Claims iv. Line 2.b.1 Disability (DI) Claims v. Line 2.b.2 Supplemental Security Income (SSI) Claims vi. Line 1.b.3 Concurrent DI/SSI Claims vii. Line 3 Indirect Costs b. For 2 of 10 SSA-4513 reports, documentation was not provided for Line Item Section 2. Other Nonpersonnel Costs per SSA-4513 (Total Obligation) c. For 7 of 10 SSA-4513 reports documentation was not provided for Line Item Section 2 Total Adjusted All Other Nonpersonnel Costs (B) d. For 10 of 10 SSA-4513 documentation was not provided for Line Item Section 2.d, Other: Identify obligation & amount G. For 3 of 10 SSA-4513 reports selected for testwork, we identified while there were no expenditures incurred for the federal grant between October 1, 2022 and June 30, 2023, the expenditures for the quarter selected, June 30, 2022, did not agree to what was reported for the quarter ending September 30, 2023. We were unable to obtain supporting documentation as to why the amounts reported were different. Cause The cause of the condition found related to the SSA-4514 was due to formula errors within the spreadsheet used to calculate the quarterly hours. The formulas were not updated to reflect any new lines of data that may have been added and needed to be includes within the total formulas included in the spreadsheet. While the spreadsheets were reviewed as part of the existing internal control procedures, the review as not at a precision level that detected the formula errors. The cause of the condition found related to the SSA-4513 was due to insufficient policies and procedures to ensure that all necessary documentation is maintained to support the amounts reported for each federal report filed. Based on the documentation that was provided to support the data reported within each quarterly report, it is unclear if the internal control review procedures performed included a detail review over each line item of the report to ensure the amount reported is complete and accurate. Effect The effect of the condition found is the SSA-4514 and SSA-4514 reports were not complete and accurate when they were filed. Questioned Costs None Recommendation We recommend that the existing internal control procedures over the review and approval of the SSA-4514 report are evaluated to ensure that the accuracy of spreadsheet formulas used are appropriate and capture all of the data necessary to accurately prepare the SSA-4514. In addition, we recommend that the existing policies and procedures be developed to ensure that all documentation to support the amounts reported on the SSA-4513 is properly maintained for each quarterly report. In addition, the existing internal control procedures should be evaluated to ensure that as part of the review process, each line item on the federal report is verified against the supporting documentation to ensure the report is complete and accurate. The review performed should also be properly documenting showing that the required review process was performed prior to submitting the SSA-4513. View of Responsible Officials: Managementconcurs with the above finding.

Finding Reference Number: 2023-019 NH Department of Education Disability Insurance/SSI Cluster: Social Security-Disability (Assistance Listing #96.001) Federal Award Numbers: 1904NHDI00, 2024NHDI00, 2104NHDI00, 2204NHI00, 2304NHDI00 Federal Award Year: 2019, 2020, 2021, 2022, 2023 U.S. Social Security Administration Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No The SSA-4514, Time Report of Personal Services For Disability Determination Services, is due quarterly to account for employee time. The SSA-4513 – State Agency Report of Obligations for SSA Disability Programs – is due quarterly for each fiscal year still open in order to account for program disbursements and unliquidated obligations (POMS DI 39506.202). Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting related to the SSA-4514 quarterly report, we identified the following: A. For the quarter ending September 30, 2022, the SSA-4514 report understated the reported number of hours as follows: a. Examiners duty hours by 241 hours and holiday/leave time by 7.50 hours. b. Hearing officers duty hours of 480 hours and holiday/leave time by 15 hours B. For the quarter ending June 30, 2023, the SSA-4514 report understated the reported number as follows: a. Hearing officers duty hours of 480 hours and holiday/leave time by 7.5 hours. During our testwork over federal reporting related to the SSA-4513 quarterly report, we identified the following: C. For all 10 SSA-4513 reports selected for testwork, line item 7 was not checked to identify if the SSA-871 needed to be attached to the report. It is unclear if this needed to be attached or not. D. For all 10 SSA-4513 reports selected for testwork, the reports did not reconcile to the internal tracking sheets provided to validate the amounts reported. For all reports there were variances between the tracking sheets and the dollar amounts included within the federal report within sections 1, 2, 3 and 4. While variances are identified, we noted that the variances were not material overall to the individual line item. E. For all 10 SSA-4513 reports selected for testwork, we were unable to validate the completeness and accuracy of the amounts reported within Section 1 for Columns (A) for Disbursements, (B) for unliquidated obligations and (C) total obligations for line items 1, 2, 3 and 4. As such, we are not able to validate that the amounts reported are complete and accurate. As we were not able to obtain documentation to validate the obligation balances, we are unable to validate the accuracy of amounts reported within Sections 1, 2, and 3 of the report. F. For all 10 of the SSA-4513 reports selected for testwork, documentation was not provided for all line items contained in the report. Specifically we identified the following: a. For 2 of 10 SSA-4513 reports selected for testing, documentation was not provided for Columns (A), (B) and (C) for the following line items: i. Line 2.a.1 Disability (DI) Claims ii. Line 2.a.2 Supplemental Security Income (SSI) Claims iii. Line 1.a.3 Concurrent DI/SSI Claims iv. Line 2.b.1 Disability (DI) Claims v. Line 2.b.2 Supplemental Security Income (SSI) Claims vi. Line 1.b.3 Concurrent DI/SSI Claims vii. Line 3 Indirect Costs b. For 2 of 10 SSA-4513 reports, documentation was not provided for Line Item Section 2. Other Nonpersonnel Costs per SSA-4513 (Total Obligation) c. For 7 of 10 SSA-4513 reports documentation was not provided for Line Item Section 2 Total Adjusted All Other Nonpersonnel Costs (B) d. For 10 of 10 SSA-4513 documentation was not provided for Line Item Section 2.d, Other: Identify obligation & amount G. For 3 of 10 SSA-4513 reports selected for testwork, we identified while there were no expenditures incurred for the federal grant between October 1, 2022 and June 30, 2023, the expenditures for the quarter selected, June 30, 2022, did not agree to what was reported for the quarter ending September 30, 2023. We were unable to obtain supporting documentation as to why the amounts reported were different. Cause The cause of the condition found related to the SSA-4514 was due to formula errors within the spreadsheet used to calculate the quarterly hours. The formulas were not updated to reflect any new lines of data that may have been added and needed to be includes within the total formulas included in the spreadsheet. While the spreadsheets were reviewed as part of the existing internal control procedures, the review as not at a precision level that detected the formula errors. The cause of the condition found related to the SSA-4513 was due to insufficient policies and procedures to ensure that all necessary documentation is maintained to support the amounts reported for each federal report filed. Based on the documentation that was provided to support the data reported within each quarterly report, it is unclear if the internal control review procedures performed included a detail review over each line item of the report to ensure the amount reported is complete and accurate. Effect The effect of the condition found is the SSA-4514 and SSA-4514 reports were not complete and accurate when they were filed. Questioned Costs None Recommendation We recommend that the existing internal control procedures over the review and approval of the SSA-4514 report are evaluated to ensure that the accuracy of spreadsheet formulas used are appropriate and capture all of the data necessary to accurately prepare the SSA-4514. In addition, we recommend that the existing policies and procedures be developed to ensure that all documentation to support the amounts reported on the SSA-4513 is properly maintained for each quarterly report. In addition, the existing internal control procedures should be evaluated to ensure that as part of the review process, each line item on the federal report is verified against the supporting documentation to ensure the report is complete and accurate. The review performed should also be properly documenting showing that the required review process was performed prior to submitting the SSA-4513. View of Responsible Officials: Managementconcurs with the above finding.

Finding Reference Number: 2023-020 NH Department of Education Disability Insurance/SSI Cluster: Social Security-Disability (Assistance Listing #96.001) Federal Award Numbers: 1904NHDI00, 2024NHDI00, 2104NHDI00, 2204NHI00, 2304NHDI00 Federal Award Year: 2019, 2020, 2021, 2022, 2023 U.S. Social Security Administration Compliance Requirement: Special Tests and Provisions – Qualified Providers Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria Each state agency is responsible for comprehensive oversight management of its process and for ensuring accuracy, integrity, and economy of its processes (20 CFR sections 404.519g and 416.919g, and POMS DI 396569.300). As part of these duties, DDSs must have, and follow procedures for performing medical license verifications to ensure that only qualified providers perform DDSs tasks. By “qualified,” SSA means that the medical source must: 1. Be currently licensed in the state and have the training and experience to perform the type of examination or tests DDS requests; and 2. Not be barred from participating in Medicare or Medicaid programs or other federal or federally assisted programs (20 CFR sections 404.5159g and 416.919g). Prior to using the services of any medical provider, the DDS must check the System of Award Management (SAM) website. Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the special test and provision related to qualified providers, we identified the following: A. For all 4 new providers selected for testwork, the SAM.gov website was not utilized to verify the suspension and debarment status for new providers. B. For 7 existing providers selected for testwork, we identified: a. For 4 of 7 annual reviews selected for testwork, there was no documentation maintained to verify that the providers medical license or suspension and debarment status had been reviewed. b. For 2 of 7 annual reviews selected for testwork, there was no documentation maintained that the providers suspension and debarment status had been reviewed. c. For 1 of 7 annual reviews selected for testwork, there was no documentation that an annual review of the provider had been performed. Cause The cause of the condition found is primarily due to insufficient policies and procedures to verify a provider’s suspension and debarment status has been reviewed within SAM.gov as required by the federal regulations. For new providers, the Office of Inspector General’s List of Excluded Individuals/Entities (LEIE) was reviewed, however the review took place after the provider was already hired. In addition, there does not appear to be any policies and procedures in place to document how an annual review should be conducted and what documentation needs to be maintained to support the procedures performed. There does not appear to be any internal controls in place to ensure that reviews are complete and properly documented. Effect The effect of the condition found is that documentation to support the qualifications of providers has not been appropriately maintained and providers could have been used that did not meet the criteria to be a qualified provider. Questioned Costs None Recommendation We recommend that written policies and procedures been developed to outline what the required procedures are related to reviewing professional licenses and suspension and debarment status for new providers and as part of the annual review process for existing providers. The policies should describe how the reviews will be performed, how the review will be documented. Internal controls should be implemented to ensure that an appropriate review over the review is conducted to ensure that the review is complete and accurate. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-020 NH Department of Education Disability Insurance/SSI Cluster: Social Security-Disability (Assistance Listing #96.001) Federal Award Numbers: 1904NHDI00, 2024NHDI00, 2104NHDI00, 2204NHI00, 2304NHDI00 Federal Award Year: 2019, 2020, 2021, 2022, 2023 U.S. Social Security Administration Compliance Requirement: Special Tests and Provisions – Qualified Providers Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria Each state agency is responsible for comprehensive oversight management of its process and for ensuring accuracy, integrity, and economy of its processes (20 CFR sections 404.519g and 416.919g, and POMS DI 396569.300). As part of these duties, DDSs must have, and follow procedures for performing medical license verifications to ensure that only qualified providers perform DDSs tasks. By “qualified,” SSA means that the medical source must: 1. Be currently licensed in the state and have the training and experience to perform the type of examination or tests DDS requests; and 2. Not be barred from participating in Medicare or Medicaid programs or other federal or federally assisted programs (20 CFR sections 404.5159g and 416.919g). Prior to using the services of any medical provider, the DDS must check the System of Award Management (SAM) website. Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the special test and provision related to qualified providers, we identified the following: A. For all 4 new providers selected for testwork, the SAM.gov website was not utilized to verify the suspension and debarment status for new providers. B. For 7 existing providers selected for testwork, we identified: a. For 4 of 7 annual reviews selected for testwork, there was no documentation maintained to verify that the providers medical license or suspension and debarment status had been reviewed. b. For 2 of 7 annual reviews selected for testwork, there was no documentation maintained that the providers suspension and debarment status had been reviewed. c. For 1 of 7 annual reviews selected for testwork, there was no documentation that an annual review of the provider had been performed. Cause The cause of the condition found is primarily due to insufficient policies and procedures to verify a provider’s suspension and debarment status has been reviewed within SAM.gov as required by the federal regulations. For new providers, the Office of Inspector General’s List of Excluded Individuals/Entities (LEIE) was reviewed, however the review took place after the provider was already hired. In addition, there does not appear to be any policies and procedures in place to document how an annual review should be conducted and what documentation needs to be maintained to support the procedures performed. There does not appear to be any internal controls in place to ensure that reviews are complete and properly documented. Effect The effect of the condition found is that documentation to support the qualifications of providers has not been appropriately maintained and providers could have been used that did not meet the criteria to be a qualified provider. Questioned Costs None Recommendation We recommend that written policies and procedures been developed to outline what the required procedures are related to reviewing professional licenses and suspension and debarment status for new providers and as part of the annual review process for existing providers. The policies should describe how the reviews will be performed, how the review will be documented. Internal controls should be implemented to ensure that an appropriate review over the review is conducted to ensure that the review is complete and accurate. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-021 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-December 25, 2022, October 29-November 1, 2017, July 1-2, 2017, January 20, 2020 U.S. Department of Homeland Security Compliance Requirement: Special Tests and Provisions - Project Accounting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria For large projects, the recipient is required to make an accounting to FEMA of eligible costs. Similarly, the subrecipient must make an accounting to the recipient. In submitting the accounting, the entity is required to certify that reported costs were incurred in performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, all grant conditions were met, and that payments for that project were made in accordance with the applicable payment provisions. For improved and alternate projects, if the total cost of the projects does not equal or exceed the approved eligible costs, then the auditor should expect to see an adjustment to reduce eligible costs (44 CFR section 206.205). Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition As part of the Disaster Grants - Public Assistance program (DGPA), the New Hampshire Department of Safety - Homeland Security and Emergency Management (the Department) enters into grant agreements with local municipalities to provide reimbursement for expenditures incurred as a result of New Hampshire declared disasters. During testwork over the Special Test- Project Accounting, the engagement team sampled 7 ongoing, large projects and 3 large, closed projects out of a total of 48 and 10, respectively. The engagement team noted the following: For 5 out of the 7 ongoing projects and for 2 out of the 3 closed projects, the Department could not provide evidence of project accounting reporting to FEMA in compliance with required certification. Specifically, the Department has a process whereby the Project Completion and Certification reports are to be completed and submitted to HSEM by subrecipients within 90 days of the project obligation date. HSEM then submits a certification report on the first of each month on the reports submitted during the previous month. However, the engagement team requested evidence of the certification report to FEMA and it could not be provided. Per discussion with HSEM staff, during the audit period, some of the emails were sent from individual employee state issued email addresses of individuals who no longer are employed by the Department and were not saved. Cause The Department’s internal controls were properly designed; however, the cause of the condition is due to the operating effectiveness of the control not being at a precision level to ensure the accounting certification reports were sent to FEMA and maintained as evidence of control operation. Effect The effect of the condition found is that the Department did not comply with 44 CFR section 206.205 and 45 CFR section 75 303(a). Questioned Costs None. Recommendation We recommend that the Department enhance policies and procedures which include internal controls to ensure project accounting completion and certification reports are sent to FEMA and maintained on file as evidence of compliance with the Project Accounting certification requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-021 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-December 25, 2022, October 29-November 1, 2017, July 1-2, 2017, January 20, 2020 U.S. Department of Homeland Security Compliance Requirement: Special Tests and Provisions - Project Accounting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria For large projects, the recipient is required to make an accounting to FEMA of eligible costs. Similarly, the subrecipient must make an accounting to the recipient. In submitting the accounting, the entity is required to certify that reported costs were incurred in performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, all grant conditions were met, and that payments for that project were made in accordance with the applicable payment provisions. For improved and alternate projects, if the total cost of the projects does not equal or exceed the approved eligible costs, then the auditor should expect to see an adjustment to reduce eligible costs (44 CFR section 206.205). Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition As part of the Disaster Grants - Public Assistance program (DGPA), the New Hampshire Department of Safety - Homeland Security and Emergency Management (the Department) enters into grant agreements with local municipalities to provide reimbursement for expenditures incurred as a result of New Hampshire declared disasters. During testwork over the Special Test- Project Accounting, the engagement team sampled 7 ongoing, large projects and 3 large, closed projects out of a total of 48 and 10, respectively. The engagement team noted the following: For 5 out of the 7 ongoing projects and for 2 out of the 3 closed projects, the Department could not provide evidence of project accounting reporting to FEMA in compliance with required certification. Specifically, the Department has a process whereby the Project Completion and Certification reports are to be completed and submitted to HSEM by subrecipients within 90 days of the project obligation date. HSEM then submits a certification report on the first of each month on the reports submitted during the previous month. However, the engagement team requested evidence of the certification report to FEMA and it could not be provided. Per discussion with HSEM staff, during the audit period, some of the emails were sent from individual employee state issued email addresses of individuals who no longer are employed by the Department and were not saved. Cause The Department’s internal controls were properly designed; however, the cause of the condition is due to the operating effectiveness of the control not being at a precision level to ensure the accounting certification reports were sent to FEMA and maintained as evidence of control operation. Effect The effect of the condition found is that the Department did not comply with 44 CFR section 206.205 and 45 CFR section 75 303(a). Questioned Costs None. Recommendation We recommend that the Department enhance policies and procedures which include internal controls to ensure project accounting completion and certification reports are sent to FEMA and maintained on file as evidence of compliance with the Project Accounting certification requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-022 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-December 25, 2022, October 29-November 1, 2017, July 1-2, 2017, January 20, 2020 U.S. Department of Homeland Security Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-032 Statistically Valid Sample: No Criteria The SF-425, Federal Financial Report, is required to be filed annually. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting as part of the reporting, we noted the following: A. We noted for 1 out of 9 SF-425’s tested the total federal funds authorized (line 10d) per the SF-425 report did not agree to the SAG Smartlink Report. The SF-425 for disaster #4329 for the quarter ended 6/30/23 reported $6,893,951, while Smartlink reported $7,173,317. The Department did not update this amount on the SF 425, as the line should have read $7,173,317. The amount reported was the balance from the prior quarter. B. We noted for an additional 2 out of 9 SF-425s tested the recipient share figures (lines 10i-10k) were incorrectly calculated. When disaster declarations were made for disasters #4622 and #4624, the federal share was 75%. However, on August 8, 2022, amendments were executed that updated the federal share to 90%. When calculating the recipient share amounts on the SF-425s for these two disasters, HSEM utilized the old recipient share of 25%.One SF-425 report for disaster #4622 for the quarter ended 6/30/23 reported $338,319.94 for the total recipient shared required (line 10i) and $305,440.94 for recipient share of expenditures (line 10j). As a result, the remaining recipient share to be provided (line 10k) was reported as $32.879. Using the appropriate recipient share of 10%, we determined that lines 10i, 10j and 10k should have been reported, respectively, as follows $112,773.31, $101,813.65, and $10,959.66. The SF-425 report for disaster #4624 for the quarter ended 12/31/22 reported $204,156.96 for the total recipient shared required (line 10i) and $194,774.41 for recipient share of expenditures (line 10j). As a result, the remaining recipient share to be provided (line 10k) was reported as $9,382.54. Using the appropriate recipient share of 10%, we determined that lines 10i, 10j and 10k should have been reported, respectively, as follows $68,052.32, $64,924.80, and $3,127.52. Cause The cause of the condition found was primarily due to insufficient internal controls related to reporting. Specifically, there were no internal controls in place to detect inaccuracies in amounts reported on the SF-425 reports. Effect The effect of the condition found is that the Department did not file SF-425 reports accurately. Questioned Costs None. Recommendation We recommend that the Department develop policies and procedures and implement internal controls over financial reporting at a precision level sufficient to ensure the accuracy of its federal reporting. We recommend that the Department revise the inaccurate SF-425 reports and resubmit the corrected versions. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-022 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-December 25, 2022, October 29-November 1, 2017, July 1-2, 2017, January 20, 2020 U.S. Department of Homeland Security Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-032 Statistically Valid Sample: No Criteria The SF-425, Federal Financial Report, is required to be filed annually. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting as part of the reporting, we noted the following: A. We noted for 1 out of 9 SF-425’s tested the total federal funds authorized (line 10d) per the SF-425 report did not agree to the SAG Smartlink Report. The SF-425 for disaster #4329 for the quarter ended 6/30/23 reported $6,893,951, while Smartlink reported $7,173,317. The Department did not update this amount on the SF 425, as the line should have read $7,173,317. The amount reported was the balance from the prior quarter. B. We noted for an additional 2 out of 9 SF-425s tested the recipient share figures (lines 10i-10k) were incorrectly calculated. When disaster declarations were made for disasters #4622 and #4624, the federal share was 75%. However, on August 8, 2022, amendments were executed that updated the federal share to 90%. When calculating the recipient share amounts on the SF-425s for these two disasters, HSEM utilized the old recipient share of 25%.One SF-425 report for disaster #4622 for the quarter ended 6/30/23 reported $338,319.94 for the total recipient shared required (line 10i) and $305,440.94 for recipient share of expenditures (line 10j). As a result, the remaining recipient share to be provided (line 10k) was reported as $32.879. Using the appropriate recipient share of 10%, we determined that lines 10i, 10j and 10k should have been reported, respectively, as follows $112,773.31, $101,813.65, and $10,959.66. The SF-425 report for disaster #4624 for the quarter ended 12/31/22 reported $204,156.96 for the total recipient shared required (line 10i) and $194,774.41 for recipient share of expenditures (line 10j). As a result, the remaining recipient share to be provided (line 10k) was reported as $9,382.54. Using the appropriate recipient share of 10%, we determined that lines 10i, 10j and 10k should have been reported, respectively, as follows $68,052.32, $64,924.80, and $3,127.52. Cause The cause of the condition found was primarily due to insufficient internal controls related to reporting. Specifically, there were no internal controls in place to detect inaccuracies in amounts reported on the SF-425 reports. Effect The effect of the condition found is that the Department did not file SF-425 reports accurately. Questioned Costs None. Recommendation We recommend that the Department develop policies and procedures and implement internal controls over financial reporting at a precision level sufficient to ensure the accuracy of its federal reporting. We recommend that the Department revise the inaccurate SF-425 reports and resubmit the corrected versions. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-023 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-December 25, 2022, October 29-November 1, 2017, July 1-2, 2017, January 20, 2020 U.S. Department of Homeland Security Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria A pass-through entity (PTE) must: 1. Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). 2. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 3. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition As part of the Disaster Grants - Public Assistance program (DGPA), the New Hampshire Department of Safety - Homeland Security and Emergency Management (the Department) enters into grant agreements with local municipalities to provide reimbursement for expenditures incurred as a result of New Hampshire declared disasters. During the year ended June 30, 2023, $27,041,873 was passed through to 85 subrecipients. As part of our testwork over the subrecipient monitoring process, we noted the following: A. The Department communicates award information to subrecipients through the approved agreement. Per review of the agreement, for each of the 27 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.332(a). Specifically, the following elements were not communicated: - Subrecipient unique entity identifier (not communicated for 19/27); - Federal Award Identification Number (FAIN) (not communicated for 27/27); - Identification of whether the award is R&D (not communicated for 27/27); and - Indirect cost rate for the federal award (including if the de minimis rate is charged) (not communicated for 27/27) B. The Department evaluated the subrecipient risk of noncompliance through a risk assessment for each of the 13 subrecipients selected for testwork. However, there was no formal risk assessment policy in place that indicated how frequently risk assessments should be performed. As a result, 5 subrecipients did not have risk assessments performed during the current year for purposes of determining the appropriate subrecipient monitoring response. These prior fiscal year(s) risk assessments were performed as of the following dates: September 2019, October and December 2021, May and June 2022. C. For each of the 13 subrecipients selected for testwork, the Department did not perform any during the award monitoring. D. During our testwork over the Department’s review of subrecipient uniform guidance reports, we noted there were no UG report review policies and procedures in place. For the 13 subrecipients selected for testwork, 6 subrecipients were identified in which the Department did not review the most recent uniform guidance report issued. Specifically, we noted: • For 5 of 13 subrecipients, the subrecipient’s uniform guidance was not reviewed due to updated risk assessments not being performed in the current year (refer to item 2 above) • For 1 of 13 subrecipients, the current year risk assessment was performed prior to the receipt of the subrecipient’s uniform guidance report and management did not go back to review the report Cause The cause of the condition found was primarily due to the Department not performing their sub monitoring internal controls in accordance with written formal policies and procedures. Questioned Costs None. Recommendation We recommend that the Department develop policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(a-h) and 2 CFR section 200.501(h). View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-023 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-December 25, 2022, October 29-November 1, 2017, July 1-2, 2017, January 20, 2020 U.S. Department of Homeland Security Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria A pass-through entity (PTE) must: 1. Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). 2. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 3. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition As part of the Disaster Grants - Public Assistance program (DGPA), the New Hampshire Department of Safety - Homeland Security and Emergency Management (the Department) enters into grant agreements with local municipalities to provide reimbursement for expenditures incurred as a result of New Hampshire declared disasters. During the year ended June 30, 2023, $27,041,873 was passed through to 85 subrecipients. As part of our testwork over the subrecipient monitoring process, we noted the following: A. The Department communicates award information to subrecipients through the approved agreement. Per review of the agreement, for each of the 27 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.332(a). Specifically, the following elements were not communicated: - Subrecipient unique entity identifier (not communicated for 19/27); - Federal Award Identification Number (FAIN) (not communicated for 27/27); - Identification of whether the award is R&D (not communicated for 27/27); and - Indirect cost rate for the federal award (including if the de minimis rate is charged) (not communicated for 27/27) B. The Department evaluated the subrecipient risk of noncompliance through a risk assessment for each of the 13 subrecipients selected for testwork. However, there was no formal risk assessment policy in place that indicated how frequently risk assessments should be performed. As a result, 5 subrecipients did not have risk assessments performed during the current year for purposes of determining the appropriate subrecipient monitoring response. These prior fiscal year(s) risk assessments were performed as of the following dates: September 2019, October and December 2021, May and June 2022. C. For each of the 13 subrecipients selected for testwork, the Department did not perform any during the award monitoring. D. During our testwork over the Department’s review of subrecipient uniform guidance reports, we noted there were no UG report review policies and procedures in place. For the 13 subrecipients selected for testwork, 6 subrecipients were identified in which the Department did not review the most recent uniform guidance report issued. Specifically, we noted: • For 5 of 13 subrecipients, the subrecipient’s uniform guidance was not reviewed due to updated risk assessments not being performed in the current year (refer to item 2 above) • For 1 of 13 subrecipients, the current year risk assessment was performed prior to the receipt of the subrecipient’s uniform guidance report and management did not go back to review the report Cause The cause of the condition found was primarily due to the Department not performing their sub monitoring internal controls in accordance with written formal policies and procedures. Questioned Costs None. Recommendation We recommend that the Department develop policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(a-h) and 2 CFR section 200.501(h). View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-002 NH Department of Military National Guard Military Operations and Maintenance (O&M) Projects (Assistance Listing #12.401) Federal Award Number: W012TF0190201001, W012TF023-27-2-1001 Federal Award Year: 2022, 2023 U.S. Department of Defense Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria The SF-270, Request for Advance or Reimbursement, must be submitted as part of the cash draw request process. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the SF-270 reporting process, we identified the following: A. For 31 of 33 SF-270 reports selected for testwork, we were unable to obtain documentation to support the amount reported within the following report line items to ensure that the amount reported was complete and accurate: • Line item a – total program outlays to date • Line item c – net program outlays • Line item e – total • Line item f – non-federal share of amount on line e B. For 12 of 33 reports selected for testwork, we were unable to agree line item h, federal payments previously received, to the supporting documentation provided. C. For all 33 SF-270 reports selected for testwork, we identified that there was a lack of segregation of duties related to the preparation of the SF-270 as there was no documented supervisory review performed over the completeness and accuracy of the report prior to submission.   Cause The cause of the condition found was due to insufficient policies and procedures to track total expenditures by appendix over the federal award year. For each federal fiscal year, a tracking sheet is used by appendix and the tracking sheet shows the federal share of the expenditures incurred each month. The tracking sheet does not represent the total expense incurred and if the appendix has a state share associated with the costs, the state portion is not included. When the SF-270 is prepared, documentation to support line items a, c, e and f is not maintained with the report to support accuracy of amounts reported. We further noted that the tracking sheets in some instances did not reconcile to the federal payments previously requested. The Department relies on the previous amount reported on the SF-270 only and did not identify the error as part of the preparation process of the SF-270 as there is no independent review to ensure it is complete and accurate. Effect The effect of the condition found is SF-270 reports submitted were not complete and accurate. Questioned Costs Not determinable Recommendation We recommend that the existing policies and procedures in place to prepare the SF-270 be reviewed and internal controls be implemented that will include an independent supervisory review to ensure that the SF-270 is complete and accurate at the time of submission. This would include ensuring that each line item of the SF-270 properly reconciles to supporting documentation and that the appropriate documentation for each line item is kept with each report to substantiate the amount reported. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-002 NH Department of Military National Guard Military Operations and Maintenance (O&M) Projects (Assistance Listing #12.401) Federal Award Number: W012TF0190201001, W012TF023-27-2-1001 Federal Award Year: 2022, 2023 U.S. Department of Defense Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria The SF-270, Request for Advance or Reimbursement, must be submitted as part of the cash draw request process. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the SF-270 reporting process, we identified the following: A. For 31 of 33 SF-270 reports selected for testwork, we were unable to obtain documentation to support the amount reported within the following report line items to ensure that the amount reported was complete and accurate: • Line item a – total program outlays to date • Line item c – net program outlays • Line item e – total • Line item f – non-federal share of amount on line e B. For 12 of 33 reports selected for testwork, we were unable to agree line item h, federal payments previously received, to the supporting documentation provided. C. For all 33 SF-270 reports selected for testwork, we identified that there was a lack of segregation of duties related to the preparation of the SF-270 as there was no documented supervisory review performed over the completeness and accuracy of the report prior to submission.   Cause The cause of the condition found was due to insufficient policies and procedures to track total expenditures by appendix over the federal award year. For each federal fiscal year, a tracking sheet is used by appendix and the tracking sheet shows the federal share of the expenditures incurred each month. The tracking sheet does not represent the total expense incurred and if the appendix has a state share associated with the costs, the state portion is not included. When the SF-270 is prepared, documentation to support line items a, c, e and f is not maintained with the report to support accuracy of amounts reported. We further noted that the tracking sheets in some instances did not reconcile to the federal payments previously requested. The Department relies on the previous amount reported on the SF-270 only and did not identify the error as part of the preparation process of the SF-270 as there is no independent review to ensure it is complete and accurate. Effect The effect of the condition found is SF-270 reports submitted were not complete and accurate. Questioned Costs Not determinable Recommendation We recommend that the existing policies and procedures in place to prepare the SF-270 be reviewed and internal controls be implemented that will include an independent supervisory review to ensure that the SF-270 is complete and accurate at the time of submission. This would include ensuring that each line item of the SF-270 properly reconciles to supporting documentation and that the appropriate documentation for each line item is kept with each report to substantiate the amount reported. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-003 NH Department of Military National Guard Military Operations and Maintenance (O&M) Projects (Assistance Listing #12.401) Federal Award Number: W012TF0190201001, W012TF023-27-2-1001 Federal Award Year: 2022, 2023 U.S. Department of Defense Compliance Requirement: Cash Management Type of Finding: Material Weakness Prior Year Finding: None Statistically Valid Sample: No Criteria 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. This would include internal controls related to the cash management process. Condition As part of our testwork over the cash management process, we identified that was a lack of segregation of duties related to the preparation of the cash request amount and the approval and authorization for the amount to be drawn. During the year ended June 30, 2023, the same individual calculated and authorized each cash draw for the 33 cash draws selected for testwork. Cause The cause of the condition found was due to insufficient internal controls to ensure an independent supervisory review be performed over each cash draw request, resulting in a lack of segregation of duties. Effect The effect of the condition found is that an error in the cash draw amount calculated could be made and the error would not be identified timely. Questioned Costs None. Recommendation We recommend that internal controls be implemented that would result in a documented independent review over the amount calculated for the cash draw request to ensure that the amount drawn is complete and accurate. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-003 NH Department of Military National Guard Military Operations and Maintenance (O&M) Projects (Assistance Listing #12.401) Federal Award Number: W012TF0190201001, W012TF023-27-2-1001 Federal Award Year: 2022, 2023 U.S. Department of Defense Compliance Requirement: Cash Management Type of Finding: Material Weakness Prior Year Finding: None Statistically Valid Sample: No Criteria 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. This would include internal controls related to the cash management process. Condition As part of our testwork over the cash management process, we identified that was a lack of segregation of duties related to the preparation of the cash request amount and the approval and authorization for the amount to be drawn. During the year ended June 30, 2023, the same individual calculated and authorized each cash draw for the 33 cash draws selected for testwork. Cause The cause of the condition found was due to insufficient internal controls to ensure an independent supervisory review be performed over each cash draw request, resulting in a lack of segregation of duties. Effect The effect of the condition found is that an error in the cash draw amount calculated could be made and the error would not be identified timely. Questioned Costs None. Recommendation We recommend that internal controls be implemented that would result in a documented independent review over the amount calculated for the cash draw request to ensure that the amount drawn is complete and accurate. View of Responsible Officials: Management concurs with the finding above.

Finding Reference: 2023-004 NH Governor’s Office of Emergency Relief and Recovery NH Department of Health and Human Services NH Department of Labor NH Department of Information Technology NH Department of Environmental Services NH Department of Business and Economic Affairs NH Governor’s Office of Emergency Relief and Recovery COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing #21.027) Federal Award Numbers: SLFRP0145 Federal Award Year: 2021 U.S. Department of Treasury Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-009 Statistically Valid Sample: No Criteria Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over procurement, suspension and debarment, we identified the following: A. As part of our testwork over procurement and suspension and debarment, management provided us a listing of new procurements entered into during the period ending June 30, 2023. From this listing, we selected a sample of 60 items for testwork and noted that 33 items appeared to be subrecipient grants and did not represent a new contract. As such, we were unable to verify the completeness and accuracy of the procurement population. While we were unable to verify the completeness and accuracy of the population, there was no impact on the amounts reported on the Schedule of Expenditures of Federal Awards related to amounts passed-through to subrecipients, as the population represented new procurements and as of June 30, 2023 there not been any expenditures incurred under the sample items selected for testwork. B. For 14 of 104 items selected for testwork related to suspension and debarment, there was no supporting documentation that the State had verified either through a signed certification or searching SAM.gov that the entity was not suspended or debarred. As part of our testwork, we reviewed SAM.gov for each of the 14 items and found that none of the entities had been suspended or debarred. Cause The cause of the condition found is due to insufficient controls and procedures to ensure that for all covered transactions the State determines if the entity covered has been suspended or debarred. In addition, there appears to be insufficient controls in place to properly classify contracts and subrecipient relationships. Effect The effect of the condition found is that the funds could be paid to an entity that has been suspended or debarred and costs paid to the entity would be unallowable. In addition, improper identification of contracts and subrecipients could lead to noncompliance with the State’s procurement policy or the proper monitoring of subrecipients. Questioned Costs Not determinable. Recommendation We recommend that the State review its existing policies and procedures related to suspension and debarment and ensure that all covered transactions with entities are properly reviewed to verify that the entity has not been suspended and debarred. In addition, the State should continue to review its vendor determination policy to ensure that the policy is consistently applied across all Department’s within the State. View of Responsible Officials: Management partially concurs with the finding above. Rejoinder: As it relates bullet A, we were unable to obtain a population that was complete and accurate related to new procurement agreements that were entered into during the period ending June 30, 2023. From the population provided, of the 60 items selected for testwork, 33 items appeared to be subrecipient grants and did not represent a new contract.

Finding Reference: 2023-004 NH Governor’s Office of Emergency Relief and Recovery NH Department of Health and Human Services NH Department of Labor NH Department of Information Technology NH Department of Environmental Services NH Department of Business and Economic Affairs NH Governor’s Office of Emergency Relief and Recovery COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing #21.027) Federal Award Numbers: SLFRP0145 Federal Award Year: 2021 U.S. Department of Treasury Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-009 Statistically Valid Sample: No Criteria Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over procurement, suspension and debarment, we identified the following: A. As part of our testwork over procurement and suspension and debarment, management provided us a listing of new procurements entered into during the period ending June 30, 2023. From this listing, we selected a sample of 60 items for testwork and noted that 33 items appeared to be subrecipient grants and did not represent a new contract. As such, we were unable to verify the completeness and accuracy of the procurement population. While we were unable to verify the completeness and accuracy of the population, there was no impact on the amounts reported on the Schedule of Expenditures of Federal Awards related to amounts passed-through to subrecipients, as the population represented new procurements and as of June 30, 2023 there not been any expenditures incurred under the sample items selected for testwork. B. For 14 of 104 items selected for testwork related to suspension and debarment, there was no supporting documentation that the State had verified either through a signed certification or searching SAM.gov that the entity was not suspended or debarred. As part of our testwork, we reviewed SAM.gov for each of the 14 items and found that none of the entities had been suspended or debarred. Cause The cause of the condition found is due to insufficient controls and procedures to ensure that for all covered transactions the State determines if the entity covered has been suspended or debarred. In addition, there appears to be insufficient controls in place to properly classify contracts and subrecipient relationships. Effect The effect of the condition found is that the funds could be paid to an entity that has been suspended or debarred and costs paid to the entity would be unallowable. In addition, improper identification of contracts and subrecipients could lead to noncompliance with the State’s procurement policy or the proper monitoring of subrecipients. Questioned Costs Not determinable. Recommendation We recommend that the State review its existing policies and procedures related to suspension and debarment and ensure that all covered transactions with entities are properly reviewed to verify that the entity has not been suspended and debarred. In addition, the State should continue to review its vendor determination policy to ensure that the policy is consistently applied across all Department’s within the State. View of Responsible Officials: Management partially concurs with the finding above. Rejoinder: As it relates bullet A, we were unable to obtain a population that was complete and accurate related to new procurement agreements that were entered into during the period ending June 30, 2023. From the population provided, of the 60 items selected for testwork, 33 items appeared to be subrecipient grants and did not represent a new contract.

Finding Reference Number: 2023-005 NH Department of Justice NH Department of Health and Human Services NH Department of Environmental Services NH Department of Business and Economic Affairs COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing #21.027) Federal Award Numbers: SLFRP0145 Federal Award Year: 2021 U.S. Department of Treasury Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-008 Statistically Valid Sample: No Criteria A pass-through entity must: 1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a); 2. Evaluate each subrecipient’s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.332(b)); 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorization purposes, complies with the terms and conditions of the subaward 4. Issuing a management decision for audit findings pertaining to federal award provided to the subrecipient from the subrecipient as required by 2 CFR section 200.521. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Coronavirus State and Local Fiscal Recovery Funds program, the State of New Hampshire (the State) entered into grant agreements with local entities to support allowable activities under the federal program. During the year ended June 30, 2022, the State passed through $73,337,682 to subrecipients. As part of our testwork over the subrecipient monitoring process, we identified the following breakdown of internal controls: A. As part of our testwork over subrecipient monitoring, we selected a sample of 49 items from the listing of subrecipients provided by the State that reconciled to the amount reported on the Schedule of Expenditures of Federal Awards. Of the 49 items selected for testwork, 6 items were contracts and were not subrecipient agreements. As such, we were unable to determine the completeness and accuracy of the subrecipient population. As a result of our audit, the State identified that this error resulted in the amount reported on the Schedule of Expenditures of Federal Awards as pass-through expenditures to be overstated by $7,261,684. The State has corrected the Schedule of Expenditures of Federal Awards so that the amount reported is accurate. B. The State communicates award information to subrecipients through the approved grant agreement. For 19 of the 43 remaining subrecipients selected for testwork, the State did not communicate all the required award information as outlined in 2 CFR section 200.332. Specifically, the following elements were not communicated: a. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414) was not communicated for 19 of the 43 remaining subrecipients selected for testwork. b. Identification of whether the award is R&D was not communicated for 17 of the remaining 43 subrecipients selected for testwork. C. As part of our testwork over during the award monitoring, it was identified that subrecipient monitoring activities include the review and approval of invoices submitted for reimbursement from the subrecipient. During our testwork over the invoice review we identified the following: a. For 6 of the remaining 43 subrecipients selected for testwork, we were unable to obtain the invoices paid by the State to verify that they were reviewed and approved. While the invoices were not provided to us, we noted that other monitoring procedures were performed for 4 of the 6 subrecipients. b. For 10 of the remaining 43 subrecipients selected for testwork, while we were able to obtain the invoices paid by the State, we were unable to properly identify who the appropriate reviewer was for the invoice to ensure that the individual who approved the invoice had the appropriate knowledge and competency to perform the review process. As a result, we were unable to verify if the invoice was appropriately reviewed. While we were unable to verify this, we noted that other monitoring procedures were performed for 9 of the 10 subrecipients. D. As part of our testwork over during the award monitoring, for 9 of the 43 remaining subrecipients selected for testwork, no documentation was provided to support that during the award monitoring procedures had been performed during the audit period. As such, we could not verify that appropriate monitoring procedures were performed as outlined by the subrecipient’s risk assessment. E. As part of our testwork over the review of Uniform Guidance Reports, we identified the following: a. For 6 of the remaining 43 subrecipients selected for testwork, the State provided the subrecipients Uniform Guidance report, however there was no evidence that the reports were reviewed to determine if a management decision letter needed to be issued. As part of our audit, we reviewed the 6 uniform guidance reports and did not identify any findings that would have required to be followed up on by the State. b. For 7 of the remaining 43 subrecipients selected for testwork, the subrecipient’s uniform guidance report was not provided. We reviewed the FAC to determine if a report was submitted during the audit period and identified that all 7 subrecipients had submitted a uniform guidance report. Of the 7 subrecipients, 1 report contained findings reported within Section III of the report. There was no evidence provided that the State had issued a management decision related to this subrecipient. Cause The cause of the condition found is primarily due to insufficient internal controls and procedures to ensure that award identification information is communicated, that appropriate during the award monitoring is performed based on the risk assessments and that all subrecipients are reviewed to determine if a uniform guidance audit was issued regardless of amount awarded to the subrecipient. Given the nature of this program, several Departments within the State entered into subrecipient grants resulting in a decentralized process. Not all Departments within the State are experienced with subrecipient relationships and may not have had developed policies to comply with subrecipient monitoring requirements. Finally, the State does not have sufficient internal controls in place to properly classify contracts and subrecipient relationships. Effect The effect of the condition found is that the State may not have properly monitored subrecipients in accordance with State policies and federal requirements. In addition, improper identification of contracts and subrecipients could lead to noncompliance with the State’s procurement policy or the proper monitoring of subrecipients. Questioned Costs None. Recommendation We recommend that the State review its existing internal controls, policies, and procedures to ensure that the State complies with the provisions of 2 CFR section 200.332(a), 2 CFR section 200.332(d through (f), and 2 CFR section 200.251. This would include ensuring that: 1. All required award information is communicated to subrecipients; 2. Ensure that appropriate during the award monitoring is performed as outlined within the subrecipient’s risk assessment; and 3. All subrecipients are reviewed regardless of the amount awarded to determine if a uniform guidance report was issued and if a management decision letter should be issued. In addition, the State should continue to review its vendor determination policy to ensure that the policy is consistently applied across all Department’s within the State. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-005 NH Department of Justice NH Department of Health and Human Services NH Department of Environmental Services NH Department of Business and Economic Affairs COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing #21.027) Federal Award Numbers: SLFRP0145 Federal Award Year: 2021 U.S. Department of Treasury Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-008 Statistically Valid Sample: No Criteria A pass-through entity must: 1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a); 2. Evaluate each subrecipient’s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.332(b)); 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorization purposes, complies with the terms and conditions of the subaward 4. Issuing a management decision for audit findings pertaining to federal award provided to the subrecipient from the subrecipient as required by 2 CFR section 200.521. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Coronavirus State and Local Fiscal Recovery Funds program, the State of New Hampshire (the State) entered into grant agreements with local entities to support allowable activities under the federal program. During the year ended June 30, 2022, the State passed through $73,337,682 to subrecipients. As part of our testwork over the subrecipient monitoring process, we identified the following breakdown of internal controls: A. As part of our testwork over subrecipient monitoring, we selected a sample of 49 items from the listing of subrecipients provided by the State that reconciled to the amount reported on the Schedule of Expenditures of Federal Awards. Of the 49 items selected for testwork, 6 items were contracts and were not subrecipient agreements. As such, we were unable to determine the completeness and accuracy of the subrecipient population. As a result of our audit, the State identified that this error resulted in the amount reported on the Schedule of Expenditures of Federal Awards as pass-through expenditures to be overstated by $7,261,684. The State has corrected the Schedule of Expenditures of Federal Awards so that the amount reported is accurate. B. The State communicates award information to subrecipients through the approved grant agreement. For 19 of the 43 remaining subrecipients selected for testwork, the State did not communicate all the required award information as outlined in 2 CFR section 200.332. Specifically, the following elements were not communicated: a. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414) was not communicated for 19 of the 43 remaining subrecipients selected for testwork. b. Identification of whether the award is R&D was not communicated for 17 of the remaining 43 subrecipients selected for testwork. C. As part of our testwork over during the award monitoring, it was identified that subrecipient monitoring activities include the review and approval of invoices submitted for reimbursement from the subrecipient. During our testwork over the invoice review we identified the following: a. For 6 of the remaining 43 subrecipients selected for testwork, we were unable to obtain the invoices paid by the State to verify that they were reviewed and approved. While the invoices were not provided to us, we noted that other monitoring procedures were performed for 4 of the 6 subrecipients. b. For 10 of the remaining 43 subrecipients selected for testwork, while we were able to obtain the invoices paid by the State, we were unable to properly identify who the appropriate reviewer was for the invoice to ensure that the individual who approved the invoice had the appropriate knowledge and competency to perform the review process. As a result, we were unable to verify if the invoice was appropriately reviewed. While we were unable to verify this, we noted that other monitoring procedures were performed for 9 of the 10 subrecipients. D. As part of our testwork over during the award monitoring, for 9 of the 43 remaining subrecipients selected for testwork, no documentation was provided to support that during the award monitoring procedures had been performed during the audit period. As such, we could not verify that appropriate monitoring procedures were performed as outlined by the subrecipient’s risk assessment. E. As part of our testwork over the review of Uniform Guidance Reports, we identified the following: a. For 6 of the remaining 43 subrecipients selected for testwork, the State provided the subrecipients Uniform Guidance report, however there was no evidence that the reports were reviewed to determine if a management decision letter needed to be issued. As part of our audit, we reviewed the 6 uniform guidance reports and did not identify any findings that would have required to be followed up on by the State. b. For 7 of the remaining 43 subrecipients selected for testwork, the subrecipient’s uniform guidance report was not provided. We reviewed the FAC to determine if a report was submitted during the audit period and identified that all 7 subrecipients had submitted a uniform guidance report. Of the 7 subrecipients, 1 report contained findings reported within Section III of the report. There was no evidence provided that the State had issued a management decision related to this subrecipient. Cause The cause of the condition found is primarily due to insufficient internal controls and procedures to ensure that award identification information is communicated, that appropriate during the award monitoring is performed based on the risk assessments and that all subrecipients are reviewed to determine if a uniform guidance audit was issued regardless of amount awarded to the subrecipient. Given the nature of this program, several Departments within the State entered into subrecipient grants resulting in a decentralized process. Not all Departments within the State are experienced with subrecipient relationships and may not have had developed policies to comply with subrecipient monitoring requirements. Finally, the State does not have sufficient internal controls in place to properly classify contracts and subrecipient relationships. Effect The effect of the condition found is that the State may not have properly monitored subrecipients in accordance with State policies and federal requirements. In addition, improper identification of contracts and subrecipients could lead to noncompliance with the State’s procurement policy or the proper monitoring of subrecipients. Questioned Costs None. Recommendation We recommend that the State review its existing internal controls, policies, and procedures to ensure that the State complies with the provisions of 2 CFR section 200.332(a), 2 CFR section 200.332(d through (f), and 2 CFR section 200.251. This would include ensuring that: 1. All required award information is communicated to subrecipients; 2. Ensure that appropriate during the award monitoring is performed as outlined within the subrecipient’s risk assessment; and 3. All subrecipients are reviewed regardless of the amount awarded to determine if a uniform guidance report was issued and if a management decision letter should be issued. In addition, the State should continue to review its vendor determination policy to ensure that the policy is consistently applied across all Department’s within the State. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-006 NH Department of Business and Economic Affairs COVID-19 Capital Projects Fund (Assistance Listing #21.029) Federal Award Number: CPFFN0143 Federal Award Year: 2022 U.S. Department of Treasury Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria The Project and Expenditure Report for States, Territories & Freely Associated States (PRA 1505-0277) is required to be filed on a quarterly basis. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During state fiscal year 2023, the State was only required to file 1 quarterly Project and Expenditure Report and this report was filed for the quarter ending June 30, 2023. As part of our testwork reporting, we identified the following: A. The total amount expended for administrative expenses within Section 7.1 was under reported by $73,393. B. Within the 4.2A Broadband Infrastructure section of the report, we were unable to obtain documentation to support the total number of funded locations served by type within the planned column of the report for 1 of 2 projects reported. Specifically we were unable to tie out the following line items: a. F. Total Number of Funded Locations Served by Type – Residential: Planned amount of 20,549 b. G. Total Number of Funded Locations Served by Type – Total Housing Units: Planned amount of 20,549 c. H: Total Number of Funded Locations Served by Type – Business: Planned amount of 2,485 d. I: Total Number of Funded Locations Served by Type – Community Anchor Institutions: Planned amount of 225 C. Within the 4.2A Broadband Infrastructure section of the report, we were unable to obtain documentation to support the planned total miles of fiber to be deployed for 1 of 2 projects reported. Specifically we were unable to verify the accuracy of the total miles of fiber deployed (planned) of 2,676. Cause The cause of the condition found was due the existing internal control related to the review and approval of the report not being at a precision level that would identify the underreporting of expenses incurred during the month of June. In addition, as it relates to the number of funded locations and the planned number of miles of fiber to be deployed, documentation was not maintained to support the numbers that were included within the report. Effect The effect of the condition found is that the quarterly Project and Expenditure Report filed for the quarter ending June 30, 2023 was not have been complete and accurate. Questioned Costs None. Recommendation We recommend that the existing internal controls in place be evaluated to ensure that the precision level of the control performed is such that it would detect an error in the expenditures reported in comparison to the expenditures incurred within the general ledger and that all documentation used to support the amounts reported on the federal report are properly maintained. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-006 NH Department of Business and Economic Affairs COVID-19 Capital Projects Fund (Assistance Listing #21.029) Federal Award Number: CPFFN0143 Federal Award Year: 2022 U.S. Department of Treasury Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria The Project and Expenditure Report for States, Territories & Freely Associated States (PRA 1505-0277) is required to be filed on a quarterly basis. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During state fiscal year 2023, the State was only required to file 1 quarterly Project and Expenditure Report and this report was filed for the quarter ending June 30, 2023. As part of our testwork reporting, we identified the following: A. The total amount expended for administrative expenses within Section 7.1 was under reported by $73,393. B. Within the 4.2A Broadband Infrastructure section of the report, we were unable to obtain documentation to support the total number of funded locations served by type within the planned column of the report for 1 of 2 projects reported. Specifically we were unable to tie out the following line items: a. F. Total Number of Funded Locations Served by Type – Residential: Planned amount of 20,549 b. G. Total Number of Funded Locations Served by Type – Total Housing Units: Planned amount of 20,549 c. H: Total Number of Funded Locations Served by Type – Business: Planned amount of 2,485 d. I: Total Number of Funded Locations Served by Type – Community Anchor Institutions: Planned amount of 225 C. Within the 4.2A Broadband Infrastructure section of the report, we were unable to obtain documentation to support the planned total miles of fiber to be deployed for 1 of 2 projects reported. Specifically we were unable to verify the accuracy of the total miles of fiber deployed (planned) of 2,676. Cause The cause of the condition found was due the existing internal control related to the review and approval of the report not being at a precision level that would identify the underreporting of expenses incurred during the month of June. In addition, as it relates to the number of funded locations and the planned number of miles of fiber to be deployed, documentation was not maintained to support the numbers that were included within the report. Effect The effect of the condition found is that the quarterly Project and Expenditure Report filed for the quarter ending June 30, 2023 was not have been complete and accurate. Questioned Costs None. Recommendation We recommend that the existing internal controls in place be evaluated to ensure that the precision level of the control performed is such that it would detect an error in the expenditures reported in comparison to the expenditures incurred within the general ledger and that all documentation used to support the amounts reported on the federal report are properly maintained. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-007 Title I Grants to Local Educational Agencies (Assistance Listing #84.010) Federal Award Numbers: S010A210029, S010A220029 Federal Award Year: 2022, 2023 U.S. Department of Education Compliance Requirement: Earmarking Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria Under the requirements of the special rule in section 1003(h) of the Elementary and Secondary Education Act of 1965 (ESEA), as amended by the Every Student Succeeds Act (ESSA) that are codified in 2 CFR Part 170, starting with the 2018-2019 allocations, a State Educational Agency is required to not reduce a Local Educational Agency below its prior year’s Title I, Part A allocation in reserving funds for school improvement. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2023, we noted the New Hampshire Department of Education (the Department) passed through $42,672,742 in Title I Grants to Local Educational Agencies (LEAs) which are considered to be subrecipients . During our testwork over the Title I Earmarking of Targeting School Improvement Funds (SEAs), the engagement team identified that the allocations performed by the NH Department adjusted all LEA allocations for the SIG reduction, rather than just those LEAs whose allocation was greater than the prior year as required. The Department’s internal review of the FY23 allocations did not identify the calculation error in the SIG reduction formula which resulted in errors in the allocations to all LEAs. Cause The cause of the condition found is due to the management calculation error which was not identified during management’s review of the LEA allocations as the review was not being performed at a precise enough level to ensure timely and accurate Title I earmarking allocations to LEAs. Effect The effect of the condition found is that the Department did not comply with the special rule in section 1003(h) of the ESEA and as such funding to LEA’s was not accurate. KPMG notes this break down of internal control relates specific to the SIG earmarking requirement, not the determination of LEA eligibility for Title I funding as SIG does not impact actual LEA eligibility. Questioned Costs None as 100% was allocated. The error is within the calculation of allocated funds to the LEAs. Recommendation We recommend that the Department enhance the precision level of the internal controls across the Department programs to which SIG earmarking is applicable, to ensure accurate allocations to LEAs to ensure compliance with the targeting school improvement funds earmarking requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-007 Title I Grants to Local Educational Agencies (Assistance Listing #84.010) Federal Award Numbers: S010A210029, S010A220029 Federal Award Year: 2022, 2023 U.S. Department of Education Compliance Requirement: Earmarking Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria Under the requirements of the special rule in section 1003(h) of the Elementary and Secondary Education Act of 1965 (ESEA), as amended by the Every Student Succeeds Act (ESSA) that are codified in 2 CFR Part 170, starting with the 2018-2019 allocations, a State Educational Agency is required to not reduce a Local Educational Agency below its prior year’s Title I, Part A allocation in reserving funds for school improvement. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2023, we noted the New Hampshire Department of Education (the Department) passed through $42,672,742 in Title I Grants to Local Educational Agencies (LEAs) which are considered to be subrecipients . During our testwork over the Title I Earmarking of Targeting School Improvement Funds (SEAs), the engagement team identified that the allocations performed by the NH Department adjusted all LEA allocations for the SIG reduction, rather than just those LEAs whose allocation was greater than the prior year as required. The Department’s internal review of the FY23 allocations did not identify the calculation error in the SIG reduction formula which resulted in errors in the allocations to all LEAs. Cause The cause of the condition found is due to the management calculation error which was not identified during management’s review of the LEA allocations as the review was not being performed at a precise enough level to ensure timely and accurate Title I earmarking allocations to LEAs. Effect The effect of the condition found is that the Department did not comply with the special rule in section 1003(h) of the ESEA and as such funding to LEA’s was not accurate. KPMG notes this break down of internal control relates specific to the SIG earmarking requirement, not the determination of LEA eligibility for Title I funding as SIG does not impact actual LEA eligibility. Questioned Costs None as 100% was allocated. The error is within the calculation of allocated funds to the LEAs. Recommendation We recommend that the Department enhance the precision level of the internal controls across the Department programs to which SIG earmarking is applicable, to ensure accurate allocations to LEAs to ensure compliance with the targeting school improvement funds earmarking requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-008 Title I Grants to Local Educational Agencies (Assistance Listing #84.010) Supporting Effective Instruction State Grant (Title IIA (Assistance Listing #84.367) COVID-19 Education Stabilization Fund (Assistance Listing #84.425C, #84.425D, #84.425R, #84.425U, #84.425V, and #84.425W) Federal Award Numbers: S010A210029, S010A220029, S367A220028, S425D200017, S425D210017, S425U210017, S425U210017-21A Federal Award Year: 2020, 2021, 2022, 2023 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-013, 2022-016 Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2023, we noted the New Hampshire Department of Education (the Department) passed through $42,672,742 in Title I Grants to Local Educational Agencies (Title I Grant) funds to subrecipients (Local Educational Agencies). During our testwork over FFATA reporting at the Department for Title I Grants, we selected 35 out of 132 FFATA reports for testing and noted the following:   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 35 0 28 0 1 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $7,616,436 $0 $7,811,866 $0 $620,384 During the year ended June 30, 2023, we noted the New Hampshire Department of Education (the Department) passed through $146,314,016 in Education Stabilization Funds (ESF) to subrecipients (Local Educational Agencies). During our testwork over FFATA reporting at the Department for ESF grants, we selected 60 out of 460 FFATA reports for testing and noted the following: Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 60 0 56 5 32 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $155,941,257 $0 $142,016,966 $7,869,109 $76,269,656 During the year ended June 30, 2023, we noted the New Hampshire Department of Education (the Department) passed through $9,809,023 in Supporting Effective Instruction State Grant (Title IIA) funds to subrecipients (Local Educational Agencies). During our testwork over FFATA reporting at the Department for Title IIA, we selected 20 out of 74 FFATA reports for testing and noted the following:   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 20 0 9 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $5,064,865 $0 $2,754,111 $0 $0 Cause The Department’s internal controls were properly designed; however, the cause of the condition is due to the operating effectiveness of the reconciliation control not being at a precision level to ensure completeness and accuracy of the filed key elements. Additionally, effective controls were not in place to ensure timely reporting. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs None. Recommendation We recommend that the Department continue to enhance policies and procedures which include internal controls across the Department programs to which FFATA reporting is applicable, to ensure timely and accurate reporting to the FSRS system to ensure compliance with the Transparency Act reporting requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-008 Title I Grants to Local Educational Agencies (Assistance Listing #84.010) Supporting Effective Instruction State Grant (Title IIA (Assistance Listing #84.367) COVID-19 Education Stabilization Fund (Assistance Listing #84.425C, #84.425D, #84.425R, #84.425U, #84.425V, and #84.425W) Federal Award Numbers: S010A210029, S010A220029, S367A220028, S425D200017, S425D210017, S425U210017, S425U210017-21A Federal Award Year: 2020, 2021, 2022, 2023 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-013, 2022-016 Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2023, we noted the New Hampshire Department of Education (the Department) passed through $42,672,742 in Title I Grants to Local Educational Agencies (Title I Grant) funds to subrecipients (Local Educational Agencies). During our testwork over FFATA reporting at the Department for Title I Grants, we selected 35 out of 132 FFATA reports for testing and noted the following:   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 35 0 28 0 1 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $7,616,436 $0 $7,811,866 $0 $620,384 During the year ended June 30, 2023, we noted the New Hampshire Department of Education (the Department) passed through $146,314,016 in Education Stabilization Funds (ESF) to subrecipients (Local Educational Agencies). During our testwork over FFATA reporting at the Department for ESF grants, we selected 60 out of 460 FFATA reports for testing and noted the following: Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 60 0 56 5 32 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $155,941,257 $0 $142,016,966 $7,869,109 $76,269,656 During the year ended June 30, 2023, we noted the New Hampshire Department of Education (the Department) passed through $9,809,023 in Supporting Effective Instruction State Grant (Title IIA) funds to subrecipients (Local Educational Agencies). During our testwork over FFATA reporting at the Department for Title IIA, we selected 20 out of 74 FFATA reports for testing and noted the following:   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 20 0 9 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $5,064,865 $0 $2,754,111 $0 $0 Cause The Department’s internal controls were properly designed; however, the cause of the condition is due to the operating effectiveness of the reconciliation control not being at a precision level to ensure completeness and accuracy of the filed key elements. Additionally, effective controls were not in place to ensure timely reporting. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs None. Recommendation We recommend that the Department continue to enhance policies and procedures which include internal controls across the Department programs to which FFATA reporting is applicable, to ensure timely and accurate reporting to the FSRS system to ensure compliance with the Transparency Act reporting requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-009 NH Department of Education Special Education Cluster (Assistance Listing #84.027 and #84.173) COVID Special Education Cluster (Assistance Listing #84.027 and #84.173) Federal Award Numbers: H027A200103, H027A220103 Federal Award Year: 2020, 2022 U.S. Department of Education Compliance Requirements: Period of Performance Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-015 Statistically Valid Sample: No Criteria LEAs and SEAs must obligate funds during the 27 months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15-month period of initial availability plus a 12-month period for carryover. For example, funds from the fiscal year 2019 appropriation initially became available on July 1, 2019; and may be obligated by the grantee and subgrantee through September 30, 2021 (Section 421(b) of GEPA (20 USC 1225(b)); 34 CFR sections 76.703 through 76.710). Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over period of performance at the New Hampshire Department of Education (the Department), we noted for 12 of 19 expenditures selected for testing awards that started during the state fiscal year, the Department had charged the expense to the new federal fiscal year grant, however, the date of service on the invoice was for a period prior to the start of that federal award. Furthermore, during our testwork over period of performance at the New Hampshire Department of Education (the Department), we noted for 6 of 45 expenditures selected for testing awards that ended/liquidated during the state fiscal year, the Department had charged the expense to the old federal fiscal year grant, however, the date of service on the invoice was for a period subsequent to the end of that federal award. We also noted for 1 of the 45 expenditures selected for testing awards that ended/liquidated during the state fiscal year, the period of performance could not be confirmed for partial expenditure as the invoice provided did not include dates of service. Lastly, the Department had a breakdown of internal controls to ensure that expenditures are charged to the correct CAN for period of performance tracking.   Cause The cause of the condition found is due to how the Department charges costs to federal grants and the breakdown of internal controls to ensure that expenditures are charged to the correct CAN for period of performance tracking. Effect The effect of the condition found is that the Department did not comply with the period of performance or allowability regulations. Questioned Costs $3,605 - the amount of expenditures charged to the Fiscal Year 2020 award that related to a date of service subsequent to the end of liquidation period for that award $5,172 - the amount of expenditures charged to the Fiscal Year 2022 award that related to a date of service prior to the start of that federal award $816 - the amount of expenditures charged to the Fiscal Year 2020 award that related to a date of service that could not be confirmed as the invoice did not include service dates Recommendation We recommend that the Department implement internal control and policies and procedures to ensure costs are appropriately charged to federal awards based on the incurred date. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-009 NH Department of Education Special Education Cluster (Assistance Listing #84.027 and #84.173) COVID Special Education Cluster (Assistance Listing #84.027 and #84.173) Federal Award Numbers: H027A200103, H027A220103 Federal Award Year: 2020, 2022 U.S. Department of Education Compliance Requirements: Period of Performance Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-015 Statistically Valid Sample: No Criteria LEAs and SEAs must obligate funds during the 27 months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15-month period of initial availability plus a 12-month period for carryover. For example, funds from the fiscal year 2019 appropriation initially became available on July 1, 2019; and may be obligated by the grantee and subgrantee through September 30, 2021 (Section 421(b) of GEPA (20 USC 1225(b)); 34 CFR sections 76.703 through 76.710). Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over period of performance at the New Hampshire Department of Education (the Department), we noted for 12 of 19 expenditures selected for testing awards that started during the state fiscal year, the Department had charged the expense to the new federal fiscal year grant, however, the date of service on the invoice was for a period prior to the start of that federal award. Furthermore, during our testwork over period of performance at the New Hampshire Department of Education (the Department), we noted for 6 of 45 expenditures selected for testing awards that ended/liquidated during the state fiscal year, the Department had charged the expense to the old federal fiscal year grant, however, the date of service on the invoice was for a period subsequent to the end of that federal award. We also noted for 1 of the 45 expenditures selected for testing awards that ended/liquidated during the state fiscal year, the period of performance could not be confirmed for partial expenditure as the invoice provided did not include dates of service. Lastly, the Department had a breakdown of internal controls to ensure that expenditures are charged to the correct CAN for period of performance tracking.   Cause The cause of the condition found is due to how the Department charges costs to federal grants and the breakdown of internal controls to ensure that expenditures are charged to the correct CAN for period of performance tracking. Effect The effect of the condition found is that the Department did not comply with the period of performance or allowability regulations. Questioned Costs $3,605 - the amount of expenditures charged to the Fiscal Year 2020 award that related to a date of service subsequent to the end of liquidation period for that award $5,172 - the amount of expenditures charged to the Fiscal Year 2022 award that related to a date of service prior to the start of that federal award $816 - the amount of expenditures charged to the Fiscal Year 2020 award that related to a date of service that could not be confirmed as the invoice did not include service dates Recommendation We recommend that the Department implement internal control and policies and procedures to ensure costs are appropriately charged to federal awards based on the incurred date. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-010 NH Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) and COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Federal Award Number: NUK50CK000522 Federal Award Year: 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Monthly fiscal reports are required to be submitted beginning 69 days after the notice of Awards is issued Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition FFATA Reporting During our testwork over FFATA reporting, we identified the following: A. For each of the 3 FFATA reports selected for testwork, there was no evidence provided that the report was reviewed and approved prior to submission. B. For each of the 3 FFATA reports selected for testwork, we were unable to validate certain data elements that were reported. Specifically, we identified the following:   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 3 N/A N/A 2 3 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $7,126,552 N/A N/A $2,212,906 $7,126,552 Monthly Reporting As part of the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, the New Hampshire Department of Health and Human Services (the Department) reports financial information to the CDC on a monthly basis related to expenditures paid out and the amount of unliquidated obligations for the reporting period. During our testwork over monthly reporting, we identified that for 2 of the 40 reports selected for testwork, while the amount of unliquidated obligations and expenditures for the month selected appeared to be reported accurately, the total cumulative expenditures reported exceeded the amount awarded. Both of reports appeared to be related to the same project. Per review of the reports, the report filed for the month of February 2023 was over reported by $7,797 and the report filed for the month of May 2023 was over reported by $19,071 Cause The cause of the condition found related to FFATA reporting is due to insufficient controls related to the review and approval of FFATA reports to ensure the accuracy of the data reported. The cause of the condition found related to monthly reporting was the result of insufficient internal controls in place to ensure that that the report was accurate. For the 2 monthly reports identified, the CDC recently switched to a quarterly reporting process. When the report was filed, the Department inadvertently reported expenditures that had been previously reported in early months and was unable to identify that the error had occurred. Effect The effect of the condition found is that the Department did not comply with the Transparency Act and the Department submitted monthly federal reports that were inaccurate. Questioned Costs None. Recommendation We recommend that the Department implement policies, procedures and internal controls to ensure the accuracy of the data reported within FSRS is complete and accurate. We recommend that the Department continue to review its existing internal controls, policies, and procedures related to monthly reporting to ensure that all required monthly financial reports are reviewed to ensure the data in the report is complete and accurate. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-010 NH Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) and COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Federal Award Number: NUK50CK000522 Federal Award Year: 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Monthly fiscal reports are required to be submitted beginning 69 days after the notice of Awards is issued Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition FFATA Reporting During our testwork over FFATA reporting, we identified the following: A. For each of the 3 FFATA reports selected for testwork, there was no evidence provided that the report was reviewed and approved prior to submission. B. For each of the 3 FFATA reports selected for testwork, we were unable to validate certain data elements that were reported. Specifically, we identified the following:   Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 3 N/A N/A 2 3 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $7,126,552 N/A N/A $2,212,906 $7,126,552 Monthly Reporting As part of the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, the New Hampshire Department of Health and Human Services (the Department) reports financial information to the CDC on a monthly basis related to expenditures paid out and the amount of unliquidated obligations for the reporting period. During our testwork over monthly reporting, we identified that for 2 of the 40 reports selected for testwork, while the amount of unliquidated obligations and expenditures for the month selected appeared to be reported accurately, the total cumulative expenditures reported exceeded the amount awarded. Both of reports appeared to be related to the same project. Per review of the reports, the report filed for the month of February 2023 was over reported by $7,797 and the report filed for the month of May 2023 was over reported by $19,071 Cause The cause of the condition found related to FFATA reporting is due to insufficient controls related to the review and approval of FFATA reports to ensure the accuracy of the data reported. The cause of the condition found related to monthly reporting was the result of insufficient internal controls in place to ensure that that the report was accurate. For the 2 monthly reports identified, the CDC recently switched to a quarterly reporting process. When the report was filed, the Department inadvertently reported expenditures that had been previously reported in early months and was unable to identify that the error had occurred. Effect The effect of the condition found is that the Department did not comply with the Transparency Act and the Department submitted monthly federal reports that were inaccurate. Questioned Costs None. Recommendation We recommend that the Department implement policies, procedures and internal controls to ensure the accuracy of the data reported within FSRS is complete and accurate. We recommend that the Department continue to review its existing internal controls, policies, and procedures related to monthly reporting to ensure that all required monthly financial reports are reviewed to ensure the data in the report is complete and accurate. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-011 NH Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) and COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Federal Award Numbers: NUK50CK000522 Federal Award Year: 2019 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-018 Statistically Valid Sample: No Criteria A pass-through entity (PTE) must: 1. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 2. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award Condition During the year ended June 30, 2023, the New Hampshire Department of Health and Human Services (the Department) passed through $5,070,789 of federal funding to subrecipient. As part of our testing related subrecipient monitoring, we noted the following: A. As part of our during the award monitoring testwork, we were unable to obtain documentation to support that that the Department had performed the suggested monitoring procedures for 3 of the 4 subrecipients selected for testwork based upon the subrecipients most recent risk assessment performed. For the remaining 1 subrecipient, the risk assessment form did not indicate the required frequency of the suggested type of monitoring. As a result, we were not able to verify that the Department had performed the appropriate monitoring procedures as outlined by the risk assessment performed for each subrecipient. B. The Department’s during the award monitoring for each of the 4 subrecipients selected for testwork consisted of the review and approval of subrecipient invoices. Per review of the invoices, the invoice contained a summary of costs incurred by the subrecipient by category of expense that it was seeking reimbursement for. The Department did not perform any other monitoring procedures to ensure the accuracy of the request made by the subrecipient through either a desk review or an on-site monitoring visit. We further noted that no other monitoring was performed by the Department to ensure that the subrecipient was complying with the terms and conditions of its subrecipient grant agreement. Per review of the risk assessment for each of the 4 subrecipients, the risk assessment did not provide for specific monitoring procedures that would address compliance with the subrecipients grant agreement beyond the period review of expenditure data. Taking into consideration that for each of the 4 subrecipients selected the testwork, if an Uniform Guidance report was issued for the subrecipient, this program was not audited as a major program, it does not appear that either the procedures suggested within the risk assessment or the procedures performed by the Department would be able to identify noncompliance incurred at the subrecipient level. C. During our review over the Department’s review over the subrecipients Uniform Guidance reports, we identified the following: • For 1 of 3 subrecipients selected for testwork which had a Uniform Guidance audit, the subrecipients uniform guidance audit was not issued within 9 months of the subrecipients year end. We were unable to obtain any correspondence between the Department or the subrecipient to inquire about the uniform guidance report or when it would be issued. Upon receipt of the report, the Department did issue a management decision letter upon receipt of the report. • For 1 of 3 subrecipients selected for testwork which had a Uniform Guidance audit, the Department did not issue a management decision letter within 6 months of receipt of the report. We noted however there were no findings identified within the uniform guidance report that would have required corrective action. Cause The cause of the condition found was primarily due to a lack of formal policies and internal controls to ensure that all required subrecipient monitoring compliance procedures are being performed by the Department. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). Questioned Costs None. Recommendation We recommend the Department develop policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). This would ensure that the risk assessment is routinely updated for multiyear grants and that the prescribed monitoring procedures take into consideration any additional monitoring procedures that might need to be performed, such as a desk review or on-site visit, if the program is not audited as part of the subrecipient’s uniform guidance audit. In addition, policies and procedures should be established to ensure that if the risk assessment has suggested a particular monitoring procedure be performed, that the Department is adequately documenting its monitoring procedures to ensure that it has performed the required procedures. View of Responsible Officials: Management partially concurs with the finding above. Rejoinder As it relates to Bullet B above, for each of the 4 subrecipients selected for testwork consisted of the review and approval of subrecipient invoices. Per review of the invoices, the invoice contained a summary of costs incurred by the subrecipient by category of expense that it was seeking reimbursement for. The Department did not perform any other monitoring procedures to ensure the accuracy of the request made by the subrecipient through either a desk review or an on-site monitoring visit. We further noted that no other monitoring was performed by the Department to ensure that the subrecipient was complying with the terms and conditions of its subrecipient grant agreement. As it relates to Bullet C above, we were unable to obtain any correspondence between the Department or the subrecipient to inquire about the uniform guidance report or when it would be issued for 1 of 3 items selected for testwork. Upon receipt of the report, the Department did issue a management decision letter upon receipt of the report. In addition, for 1 of 3 subrecipients selected for testwork which had a Uniform Guidance audit, the Department did not issue a management decision letter within 6 months of receipt of the report.

Finding Reference Number: 2023-011 NH Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) and COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Federal Award Numbers: NUK50CK000522 Federal Award Year: 2019 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-018 Statistically Valid Sample: No Criteria A pass-through entity (PTE) must: 1. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 2. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award Condition During the year ended June 30, 2023, the New Hampshire Department of Health and Human Services (the Department) passed through $5,070,789 of federal funding to subrecipient. As part of our testing related subrecipient monitoring, we noted the following: A. As part of our during the award monitoring testwork, we were unable to obtain documentation to support that that the Department had performed the suggested monitoring procedures for 3 of the 4 subrecipients selected for testwork based upon the subrecipients most recent risk assessment performed. For the remaining 1 subrecipient, the risk assessment form did not indicate the required frequency of the suggested type of monitoring. As a result, we were not able to verify that the Department had performed the appropriate monitoring procedures as outlined by the risk assessment performed for each subrecipient. B. The Department’s during the award monitoring for each of the 4 subrecipients selected for testwork consisted of the review and approval of subrecipient invoices. Per review of the invoices, the invoice contained a summary of costs incurred by the subrecipient by category of expense that it was seeking reimbursement for. The Department did not perform any other monitoring procedures to ensure the accuracy of the request made by the subrecipient through either a desk review or an on-site monitoring visit. We further noted that no other monitoring was performed by the Department to ensure that the subrecipient was complying with the terms and conditions of its subrecipient grant agreement. Per review of the risk assessment for each of the 4 subrecipients, the risk assessment did not provide for specific monitoring procedures that would address compliance with the subrecipients grant agreement beyond the period review of expenditure data. Taking into consideration that for each of the 4 subrecipients selected the testwork, if an Uniform Guidance report was issued for the subrecipient, this program was not audited as a major program, it does not appear that either the procedures suggested within the risk assessment or the procedures performed by the Department would be able to identify noncompliance incurred at the subrecipient level. C. During our review over the Department’s review over the subrecipients Uniform Guidance reports, we identified the following: • For 1 of 3 subrecipients selected for testwork which had a Uniform Guidance audit, the subrecipients uniform guidance audit was not issued within 9 months of the subrecipients year end. We were unable to obtain any correspondence between the Department or the subrecipient to inquire about the uniform guidance report or when it would be issued. Upon receipt of the report, the Department did issue a management decision letter upon receipt of the report. • For 1 of 3 subrecipients selected for testwork which had a Uniform Guidance audit, the Department did not issue a management decision letter within 6 months of receipt of the report. We noted however there were no findings identified within the uniform guidance report that would have required corrective action. Cause The cause of the condition found was primarily due to a lack of formal policies and internal controls to ensure that all required subrecipient monitoring compliance procedures are being performed by the Department. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). Questioned Costs None. Recommendation We recommend the Department develop policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). This would ensure that the risk assessment is routinely updated for multiyear grants and that the prescribed monitoring procedures take into consideration any additional monitoring procedures that might need to be performed, such as a desk review or on-site visit, if the program is not audited as part of the subrecipient’s uniform guidance audit. In addition, policies and procedures should be established to ensure that if the risk assessment has suggested a particular monitoring procedure be performed, that the Department is adequately documenting its monitoring procedures to ensure that it has performed the required procedures. View of Responsible Officials: Management partially concurs with the finding above. Rejoinder As it relates to Bullet B above, for each of the 4 subrecipients selected for testwork consisted of the review and approval of subrecipient invoices. Per review of the invoices, the invoice contained a summary of costs incurred by the subrecipient by category of expense that it was seeking reimbursement for. The Department did not perform any other monitoring procedures to ensure the accuracy of the request made by the subrecipient through either a desk review or an on-site monitoring visit. We further noted that no other monitoring was performed by the Department to ensure that the subrecipient was complying with the terms and conditions of its subrecipient grant agreement. As it relates to Bullet C above, we were unable to obtain any correspondence between the Department or the subrecipient to inquire about the uniform guidance report or when it would be issued for 1 of 3 items selected for testwork. Upon receipt of the report, the Department did issue a management decision letter upon receipt of the report. In addition, for 1 of 3 subrecipients selected for testwork which had a Uniform Guidance audit, the Department did not issue a management decision letter within 6 months of receipt of the report.

Finding Reference Number: 2023-012 NH Department of Health and Human Services Temporary Assistance for Needy Families and COVID-19 Temporary Assistance for Needy Families (Assistance Listing #93.558) Federal Award Numbers: 2021G996115, 2021G990228, 2022G996115 Federal Award Year: 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provisions: Penalty for Failure to Comply with Work Verification Plan Type of Finding: Significant Deficiency Prior Year Finding: 2022-024 Statistically Valid Sample: No The State agency must maintain adequate documentation, verification, and internal control procedures to ensure the accuracy of the data used in calculating work participation rates. In so doing, it must have in place procedures to (a) determine whether its work activities may count for participation rate purposes; (b) determine how to count and verify reported hours of work; (c) identify who is a work eligible individual; and (d) control internal data transmission and accuracy. Each State agency must comply with its HHS-approved Work Verification Plan in effect for the period that is audited. HHS may penalize the State by an amount not less than one percent and not more than five percent of the SFAG for violation of this provision (42 USC 601, 602, 607, and 609); 45 CFR sections 261.60, 261.61, 261.62, 261.63, 261.64, and 261.65). Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork related to compliance with the New Hampshire Department of Health and Human Services (the Department) work verification plan we identified that for 2 of 60 participants selected for testwork, there was insufficient documentation to support the number of hours worked within the New Heights system for the participant. For the 2 participants, we identified that for 1 participant the number of hours worked appeared to be underreported and for 1 participant the number of hours appeared to be overreported. Cause The cause of the condition found was a result of inadequate review to ensure that the hours worked by each participant is accurately reported within the New Heights system. Effect The effect of the condition found is that the State may not be in compliance with its work verification plan and would not be able to identify the noncompliance. Questioned Costs Not determinable. Recommendation We recommend that the Department continue to enhance its existing internal controls and procedures to ensure that participant work hours reported agree to the documented hours worked and that the work hours are accurately reflected within the New Heights system. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-012 NH Department of Health and Human Services Temporary Assistance for Needy Families and COVID-19 Temporary Assistance for Needy Families (Assistance Listing #93.558) Federal Award Numbers: 2021G996115, 2021G990228, 2022G996115 Federal Award Year: 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provisions: Penalty for Failure to Comply with Work Verification Plan Type of Finding: Significant Deficiency Prior Year Finding: 2022-024 Statistically Valid Sample: No The State agency must maintain adequate documentation, verification, and internal control procedures to ensure the accuracy of the data used in calculating work participation rates. In so doing, it must have in place procedures to (a) determine whether its work activities may count for participation rate purposes; (b) determine how to count and verify reported hours of work; (c) identify who is a work eligible individual; and (d) control internal data transmission and accuracy. Each State agency must comply with its HHS-approved Work Verification Plan in effect for the period that is audited. HHS may penalize the State by an amount not less than one percent and not more than five percent of the SFAG for violation of this provision (42 USC 601, 602, 607, and 609); 45 CFR sections 261.60, 261.61, 261.62, 261.63, 261.64, and 261.65). Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork related to compliance with the New Hampshire Department of Health and Human Services (the Department) work verification plan we identified that for 2 of 60 participants selected for testwork, there was insufficient documentation to support the number of hours worked within the New Heights system for the participant. For the 2 participants, we identified that for 1 participant the number of hours worked appeared to be underreported and for 1 participant the number of hours appeared to be overreported. Cause The cause of the condition found was a result of inadequate review to ensure that the hours worked by each participant is accurately reported within the New Heights system. Effect The effect of the condition found is that the State may not be in compliance with its work verification plan and would not be able to identify the noncompliance. Questioned Costs Not determinable. Recommendation We recommend that the Department continue to enhance its existing internal controls and procedures to ensure that participant work hours reported agree to the documented hours worked and that the work hours are accurately reflected within the New Heights system. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-013 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2101NHE5C6 Federal Award Year: 2021 U.S. Department of Health and Human Services Compliance Requirement: Earmarking Type of Finding: Significant Deficiency Prior Year Finding: 2022-028 Statistically Valid Sample: No Criteria Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition To ensure that the Department had met the required earmarking requirements related to administrative costs, the New Hampshire Department of Energy (the Department) maintains a tracking sheet for each federal grant that tracks all expenditures by category. At the end of the grant period, the total expenditures are reconciled to the federal grant and costs incurred related to the earmarking requirements are calculated to ensure that the required limitations are not exceeded. During our testwork over earmarking, we noted that for the 1 grant award which ended during the period under audit, the grant appeared to have met the required earmarking requirements, however we were unable to test the completeness and accuracy of the underlying support provided by management. Specifically, we were unable to reconcile the total expenditures contained within the underlying support to the final grant close out report (the SF-425) submitted for the grant. Cause The cause of the condition found is due to the Department is unable to submit a final close out report within the federal reporting portal as the portal does not contain an option to complete the required report. As a result, the last federal report filed for this grant was as of September 30, 2022, which was prior to the liquidation of all obligations under the grant. Effect The effect of the condition found is that the expenditures utilized to track compliance with the earmarking requirement may not reconcile to the final expenditures reported within the SF-425 resulting in noncompliance. Questioned Costs Not determinable. Recommendation We recommend that the Department continue to work with the federal government to ensure that all grants that are required to be closed out have a final SF-245 and that the final expenditures reported reconciles to the expenditures used to track the required earmarking requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-013 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2101NHE5C6 Federal Award Year: 2021 U.S. Department of Health and Human Services Compliance Requirement: Earmarking Type of Finding: Significant Deficiency Prior Year Finding: 2022-028 Statistically Valid Sample: No Criteria Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition To ensure that the Department had met the required earmarking requirements related to administrative costs, the New Hampshire Department of Energy (the Department) maintains a tracking sheet for each federal grant that tracks all expenditures by category. At the end of the grant period, the total expenditures are reconciled to the federal grant and costs incurred related to the earmarking requirements are calculated to ensure that the required limitations are not exceeded. During our testwork over earmarking, we noted that for the 1 grant award which ended during the period under audit, the grant appeared to have met the required earmarking requirements, however we were unable to test the completeness and accuracy of the underlying support provided by management. Specifically, we were unable to reconcile the total expenditures contained within the underlying support to the final grant close out report (the SF-425) submitted for the grant. Cause The cause of the condition found is due to the Department is unable to submit a final close out report within the federal reporting portal as the portal does not contain an option to complete the required report. As a result, the last federal report filed for this grant was as of September 30, 2022, which was prior to the liquidation of all obligations under the grant. Effect The effect of the condition found is that the expenditures utilized to track compliance with the earmarking requirement may not reconcile to the final expenditures reported within the SF-425 resulting in noncompliance. Questioned Costs Not determinable. Recommendation We recommend that the Department continue to work with the federal government to ensure that all grants that are required to be closed out have a final SF-245 and that the final expenditures reported reconciles to the expenditures used to track the required earmarking requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-014 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance. (Assistance Listing #93.568) Federal Award Numbers: 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4, 2201NHLIEE, 2201NHLIEI, 2301NHLIEA, 2301NHLIEE, 2301NHLIEI Federal Award Year: 2020, 2021, 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Cash Management Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-027 Statistically Valid Sample: No Criteria U.S. Department of the Treasury (Treasury) regulations at 31 CFR 204 part 205 implement the Cash Management Act of 1990 (CMIA). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Catalog of Federal Domestic assistance that meet the funding threshold for a major federal program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over performed over cash management related to the Low-Income Home Energy Assistance program, we noted the following: A. Under the State of New Hampshire’s Cash Management Agreement (CMIA), direct expenditures are to be drawn using the actual draw – monthly technique. Under this technique, the funds are to be requested monthly based on actual costs incurred during that 1-month period. The funding technique is interest neutral. During our testwork over the cash draw process, we noted the following: a. For 4 of 9 cash draws selected for testwork, the New Hampshire Department of Energy (the Department) did not draw funds timely resulting in the cash draw to be delinquent. Each of the 4 cash draw covered multiple months of activity. As the clearance pattern within the CMIA agreement is interest neutral, there was no interest impact because of the cash draws not being performed timely. B. The Department advances payments to subrecipients to ensure that they have sufficient cash on hand to pay for benefit payments. The Department passed through $52,485,098 to subrecipients during the year ended June 30, 2023. During our testwork over compliance with cash management, we noted that for the 4 cash advance payment samples selected for testwork, the Department was not able to provide sufficient evidence to support that the cash advance was spent within a time period that minimizes the time elapsed between the transfer of federal funds to the subrecipient and their disbursement for program purposes. The Department’s normal disbursement cycle of every 30 days. As such, it does not appear that the Department sufficiently minimized the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes. Cause The cause of the condition found was primarily due to insufficient resources to monitor and track cash draws to ensure they are performed timely in accordance with the clearance patten established within the CMIA agreement and to ensure that subrecipients either utilize advance funds timely or effectively evaluate the amount of funds they need on hand at the time of the advance payment. Effect The effect of the condition found is that the Department did not comply with the provisions of the CMIA as it relates to the timing of cash draws. In addition, the Department did not have sufficient policies and procedures in place to ensure the time elapsed between the transfer of federal funds to the subrecipient and their disbursement of funds for program purposes is minimized. As such the Department was not in compliance with 2 CFR section 200.305(b)(1). Questioned Costs None. Recommendation We recommend that the Department review its existing internal controls, policies, and procedures to ensure that all cash draws are performed timely and in accordance with the CMIA agreement. In addition, we recommend that the Department review its existing internal controls, policies and procedures relating to advancing funds to subrecipients to ensure that excess cash held by the subrecipients does not exceed 30 days. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-014 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance. (Assistance Listing #93.568) Federal Award Numbers: 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4, 2201NHLIEE, 2201NHLIEI, 2301NHLIEA, 2301NHLIEE, 2301NHLIEI Federal Award Year: 2020, 2021, 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Cash Management Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-027 Statistically Valid Sample: No Criteria U.S. Department of the Treasury (Treasury) regulations at 31 CFR 204 part 205 implement the Cash Management Act of 1990 (CMIA). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Catalog of Federal Domestic assistance that meet the funding threshold for a major federal program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over performed over cash management related to the Low-Income Home Energy Assistance program, we noted the following: A. Under the State of New Hampshire’s Cash Management Agreement (CMIA), direct expenditures are to be drawn using the actual draw – monthly technique. Under this technique, the funds are to be requested monthly based on actual costs incurred during that 1-month period. The funding technique is interest neutral. During our testwork over the cash draw process, we noted the following: a. For 4 of 9 cash draws selected for testwork, the New Hampshire Department of Energy (the Department) did not draw funds timely resulting in the cash draw to be delinquent. Each of the 4 cash draw covered multiple months of activity. As the clearance pattern within the CMIA agreement is interest neutral, there was no interest impact because of the cash draws not being performed timely. B. The Department advances payments to subrecipients to ensure that they have sufficient cash on hand to pay for benefit payments. The Department passed through $52,485,098 to subrecipients during the year ended June 30, 2023. During our testwork over compliance with cash management, we noted that for the 4 cash advance payment samples selected for testwork, the Department was not able to provide sufficient evidence to support that the cash advance was spent within a time period that minimizes the time elapsed between the transfer of federal funds to the subrecipient and their disbursement for program purposes. The Department’s normal disbursement cycle of every 30 days. As such, it does not appear that the Department sufficiently minimized the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes. Cause The cause of the condition found was primarily due to insufficient resources to monitor and track cash draws to ensure they are performed timely in accordance with the clearance patten established within the CMIA agreement and to ensure that subrecipients either utilize advance funds timely or effectively evaluate the amount of funds they need on hand at the time of the advance payment. Effect The effect of the condition found is that the Department did not comply with the provisions of the CMIA as it relates to the timing of cash draws. In addition, the Department did not have sufficient policies and procedures in place to ensure the time elapsed between the transfer of federal funds to the subrecipient and their disbursement of funds for program purposes is minimized. As such the Department was not in compliance with 2 CFR section 200.305(b)(1). Questioned Costs None. Recommendation We recommend that the Department review its existing internal controls, policies, and procedures to ensure that all cash draws are performed timely and in accordance with the CMIA agreement. In addition, we recommend that the Department review its existing internal controls, policies and procedures relating to advancing funds to subrecipients to ensure that excess cash held by the subrecipients does not exceed 30 days. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-015 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4, 2201NHLIEE, 2201NHLIEI, 2301NHLIEA, 2301NHLIEE, 2301NHLIEI Federal Award Year: 2020, 2021, 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-025 Statistically Valid Sample: No Criteria A pass-through entity must: 1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a); 2. Evaluate each subrecipient’s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.332(b)); 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means; and 4. Issuing a management decision for audit findings pertaining to federal award provided to the subrecipient from the subrecipient as required by 2 CFR section 200.521. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Low-Income Home Energy Assistance program (LIHEAP), the New Hampshire Department of Energy (the Department) enters into grant agreements with local entities to provide services related to the eligibility determination process for the LIHEAP program (including the calculation of participant benefits) and payment of benefits to fuel providers. During the year ended June 30, 2023, $52,485,098 was passed through to subrecipients. As part of our testwork over the subrecipient monitoring process, we noted the following as of the year ending June 30, 2023: A. The Department communicates award information to subrecipients through the approved grant agreement. Per review of the grant agreement, for each of the 3 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.332. Specifically, the following elements were not communicated: a. Federal Award Identification Number (FAIN) b. Federal award date c. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414) d. Identification of whether the award is R&D B. For the 1 programmatic monitoring review completed by the Department during the period under audit, the Department did not issue its programmatic monitoring report to the subrecipient timely after the monitoring review was completed. As a result, there was a delay in the subrecipient implementing its corrective action plan to address the findings identified during the programmatic monitoring review. Specifically, we noted the following: a. For the 1 programmatic monitoring review, the monitoring review took place on May 4, 2023, but the report to the subrecipient was not issued until September 23, 2023. Per review of the report that was issued, there were findings identified by the Department that warranted corrective action. Due to the delay in issuing the report, a corrective action plan was not obtained from the subrecipient until almost 5 months after the date of that the monitoring review took place. C. For 3 of 3 subrecipients selected for testwork, the Department did not complete its annual fiscal monitoring review during the audit period as required by their monitoring policy. D. During our testwork over the Department’s review of subrecipient uniform guidance reports, we noted the following: a. The Department does not track the receipt of uniform guidance reports. As a result, we were unable to determine when the uniform guidance reports were received by the Department to ensure they are reviewed timely. Specifically, we noted: i. For all 3 subrecipients selected, the subrecipient’s uniform guidance appeared to have been reviewed, but as the Department does not track the receipt of uniform guidance reports, it was unclear if it was reviewed timely. We did note based on the date that the uniform guidance report was issued, the management decision letter was not issued within 6 months of the date of the report being issued as required by 2 CRF 200.521 (d). ii. For 1 subrecipient in which the UG report had a finding, we were unable to obtain evidence to support that the Department had obtained and reviewed the subrecipient’s uniform guidance report, including management’s response to findings letter as well as the related Corrective Action Plan, as this subrecipient’s uniform guidance report noted a material weakness. E. The Annual Report on Households Assisted by LIHEAP contains data that is specific to benefits paid to eligible participants. The data that is used to compile the annual report is obtained from case data that is reported to the New Hampshire Department of Energy (the Department) from its subrecipients as the Department has entered into grant agreements with third parties who are responsible for the eligibility determination and benefit payment process. As part of our subrecipient monitoring testwork, we were unable to verify that the Department had performed any monitoring procedures over the data provided by each subrecipient to ensure that the data reported within the annual report was complete and accurate. Cause The cause of the condition found was primarily due to insufficient documented subrecipient policies and procedures to ensure that adequate monitoring is performed over subrecipients to align with the risk assessments performed. The monitoring procedures that are in place do not include the completeness and accuracy of the data submitted by the subrecipient utilized to compile federal reports. Further, the Department does not have sufficient internal controls and procedures to ensure results of monitoring visits are performed and results communicated timely to subrecipient or to ensure that subrecipient uniform guidance reports are obtained and reviewed timely. In addition, there are insufficient internal controls in place to review the grant agreements to ensure that all required data elements are communicated to the subrecipient in accordance with 2 CFR section 300.332(b). Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(a), section 200.332(b) and 2 CFR section 200.521. Questioned Costs None. Recommendation We recommend that the Department formalize, policies and procedures and implement the necessary internal controls to ensure that the Department complies with the provisions of 2 CFR section 200.332(a), 2 CFR section 200.332(b) and 2 CFR section 200.251. This would include ensuring that: 1. All required award information is communicated to subrecipients; 2. As a result of the risk assessment performed, monitoring activities are performed over subrecipients to ensure compliance with the terms and conditions of its subrecipient grant agreement. The results of all monitoring reviews should be timely communicated in accordance with the Department’s policies to the subrecipient and actions requiring corrective action plan should be followed up on to ensure that the matter is resolved; and 3. Ensure that all uniform guidance reports are collected and reviewed timely so that a management decision letter can be issued within the time period required by federal regulations. Retain evidence of Department review of uniform guidance reports and management letters issued as a result of their review. View of Responsible Officials: Management partially concurs with the finding above Rejoinder As it relates to Bullet C above, for 3 of 3 subrecipients selected for testwork, the Department did not complete its annual fiscal monitoring review during the audit period as required by their monitoring policy

Finding Reference Number: 2023-015 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4, 2201NHLIEE, 2201NHLIEI, 2301NHLIEA, 2301NHLIEE, 2301NHLIEI Federal Award Year: 2020, 2021, 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-025 Statistically Valid Sample: No Criteria A pass-through entity must: 1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a); 2. Evaluate each subrecipient’s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.332(b)); 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means; and 4. Issuing a management decision for audit findings pertaining to federal award provided to the subrecipient from the subrecipient as required by 2 CFR section 200.521. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Low-Income Home Energy Assistance program (LIHEAP), the New Hampshire Department of Energy (the Department) enters into grant agreements with local entities to provide services related to the eligibility determination process for the LIHEAP program (including the calculation of participant benefits) and payment of benefits to fuel providers. During the year ended June 30, 2023, $52,485,098 was passed through to subrecipients. As part of our testwork over the subrecipient monitoring process, we noted the following as of the year ending June 30, 2023: A. The Department communicates award information to subrecipients through the approved grant agreement. Per review of the grant agreement, for each of the 3 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.332. Specifically, the following elements were not communicated: a. Federal Award Identification Number (FAIN) b. Federal award date c. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414) d. Identification of whether the award is R&D B. For the 1 programmatic monitoring review completed by the Department during the period under audit, the Department did not issue its programmatic monitoring report to the subrecipient timely after the monitoring review was completed. As a result, there was a delay in the subrecipient implementing its corrective action plan to address the findings identified during the programmatic monitoring review. Specifically, we noted the following: a. For the 1 programmatic monitoring review, the monitoring review took place on May 4, 2023, but the report to the subrecipient was not issued until September 23, 2023. Per review of the report that was issued, there were findings identified by the Department that warranted corrective action. Due to the delay in issuing the report, a corrective action plan was not obtained from the subrecipient until almost 5 months after the date of that the monitoring review took place. C. For 3 of 3 subrecipients selected for testwork, the Department did not complete its annual fiscal monitoring review during the audit period as required by their monitoring policy. D. During our testwork over the Department’s review of subrecipient uniform guidance reports, we noted the following: a. The Department does not track the receipt of uniform guidance reports. As a result, we were unable to determine when the uniform guidance reports were received by the Department to ensure they are reviewed timely. Specifically, we noted: i. For all 3 subrecipients selected, the subrecipient’s uniform guidance appeared to have been reviewed, but as the Department does not track the receipt of uniform guidance reports, it was unclear if it was reviewed timely. We did note based on the date that the uniform guidance report was issued, the management decision letter was not issued within 6 months of the date of the report being issued as required by 2 CRF 200.521 (d). ii. For 1 subrecipient in which the UG report had a finding, we were unable to obtain evidence to support that the Department had obtained and reviewed the subrecipient’s uniform guidance report, including management’s response to findings letter as well as the related Corrective Action Plan, as this subrecipient’s uniform guidance report noted a material weakness. E. The Annual Report on Households Assisted by LIHEAP contains data that is specific to benefits paid to eligible participants. The data that is used to compile the annual report is obtained from case data that is reported to the New Hampshire Department of Energy (the Department) from its subrecipients as the Department has entered into grant agreements with third parties who are responsible for the eligibility determination and benefit payment process. As part of our subrecipient monitoring testwork, we were unable to verify that the Department had performed any monitoring procedures over the data provided by each subrecipient to ensure that the data reported within the annual report was complete and accurate. Cause The cause of the condition found was primarily due to insufficient documented subrecipient policies and procedures to ensure that adequate monitoring is performed over subrecipients to align with the risk assessments performed. The monitoring procedures that are in place do not include the completeness and accuracy of the data submitted by the subrecipient utilized to compile federal reports. Further, the Department does not have sufficient internal controls and procedures to ensure results of monitoring visits are performed and results communicated timely to subrecipient or to ensure that subrecipient uniform guidance reports are obtained and reviewed timely. In addition, there are insufficient internal controls in place to review the grant agreements to ensure that all required data elements are communicated to the subrecipient in accordance with 2 CFR section 300.332(b). Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(a), section 200.332(b) and 2 CFR section 200.521. Questioned Costs None. Recommendation We recommend that the Department formalize, policies and procedures and implement the necessary internal controls to ensure that the Department complies with the provisions of 2 CFR section 200.332(a), 2 CFR section 200.332(b) and 2 CFR section 200.251. This would include ensuring that: 1. All required award information is communicated to subrecipients; 2. As a result of the risk assessment performed, monitoring activities are performed over subrecipients to ensure compliance with the terms and conditions of its subrecipient grant agreement. The results of all monitoring reviews should be timely communicated in accordance with the Department’s policies to the subrecipient and actions requiring corrective action plan should be followed up on to ensure that the matter is resolved; and 3. Ensure that all uniform guidance reports are collected and reviewed timely so that a management decision letter can be issued within the time period required by federal regulations. Retain evidence of Department review of uniform guidance reports and management letters issued as a result of their review. View of Responsible Officials: Management partially concurs with the finding above Rejoinder As it relates to Bullet C above, for 3 of 3 subrecipients selected for testwork, the Department did not complete its annual fiscal monitoring review during the audit period as required by their monitoring policy

Finding Reference Number: 2023-016 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4, 2201NHLIEE, 2201NHLIEI, 2301NHLIEA, 2301NHLIEE, 2301NHLIEI, 1700NHLIEA Federal Award Year: 2017, 2020, 2021, 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-026 Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The Low-Income Home Energy Assistance program (LIHEAP), Performance Data Form (OMB No. 0970-0449) must be submitted before January 31st regarding the prior federal fiscal year. The first section of the report is the Grant recipient Survey that collects and reports data on sources and uses of LIHEAP funds. The Grant recipient Survey includes Section III: Estimated Sources of Funds and Section IV: Estimated Use of LIHEAP Funds. Note: that these are referencing obligated not expended funding. The rest of the report is regarding performance metrics, mostly related to home energy burden targeting and reduction, as well as the continuity of home energy service. The Grantee Survey obligation amounts should be compared with the Carryover and Reallotment and FFR-425 reports. This reconciliation is needed to make sure the obligated balances for the program year being tested are accurate. LIHEAP Carryover and Reallotment Report (OMB No. 0970-0106) – Grantees must submit this report no later than August 1 indicating the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds. Funds in excess of the maximum carryover limit are subject to reallotment to other LIHEAP grantees in the following fiscal year and must also be reported (42 USC 8626). Annual Report on Households Assisted by LIHEAP (OMB No. 0970-0060) https://omb.report/icr/202211-0970-005 – As part of the application for block grant funds each year, a report is required for the preceding fiscal year of (1) the number and income levels of the households assisted for each component and any type of LHEAP assistance (heating, cooling, crisis, and weatherization); and (2) the number of households served that contained young children, elderly, or persons with disabilities, or any vulnerable household for each component. Territories with annual allotments of less than $200,000 and all Native American tribes are required to report only on the number of households served for each program component (42 USC 8629; 45 CFR section 96.82). Quarterly Performance and Management Report (OMB No. 0970-0589) https://omb.report/icr/202205-0970-017/doc/121847100 – Grant recipients must submit data and information about LIHEAP during the current FY, including success, challenges, needs and innovations. The quarterly reports focus on assisted households, performance management, obligation of funding, changes made due to anticipated increase in energy bills, collaboration with other utility programs, and training and technical assistance needs. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting as part of the Low-Income Home Energy Assistance program (LIHEAP), we noted the following: A. The New Hampshire Department of Energy (the Department) during the year ended June 30, 2023, $52,485,098 was passed through to subrecipients that met the requirements for first tier subawards under the Transparency Act and as such FFATA reports were required to be filed for each of those subawards. During our testwork over FFATA reporting at the Department of Energy, we selected 4 out of 7 FFATA reports for testing and noted the following: Reports Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 4 0 1 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $13,825,743 $0 $1,115,000 $0 $0 B. The annual LIHEAP Performance Data Form was not submitted by January 31, 2023. The Department submitted the report in December 2023. The Department was unable to provide sufficient underlying support for the Key Line items associated with the report including the following: Uses of Funds, the total Uses of Funds should equal the total Sources of Funds, and Other LIHEAP assistance. The Department was unable to provide a reconciliation between the LIHEAP Performance Data Form Grantee Survey obligation amounts reported to the Carryover and Reallotment and FFR-425 reports. C. The Department did not submit its required special reports (i.e. Quarterly Performance and Management Reports, Annual Report of Assisted Households Report, and LIHEAP Carryover and Reallotment Report) in a timely manner. There were also no procedures implemented to ensure that the submission of Special Reports includes accurate and complete data. Specifically, we noted the following: LIHEAP Carryover and Reallotment Report - This report must be submitted no later than August 1 for the federal fiscal year. This report was not submitted in a timely manner for the period ending 9/30/2022, as it was submitted on 8/9/2023 with an original due date of 8/1/2022. This report was not submitted in a timely manner for the period ending 9/30/2023, as it was not yet submitted as of March 12, 2024, with an original due date of 8/1/2023. The administrative expenditures balance utilized to calculate the PY22 Carryover balance submitted in the PY22 Carryover and Reallotment Report was an estimate, even though there was actual data for this balance since the report was submitted a year late. The actual balance per the support provided by the Dept. of Energy was $14,488.95, which is $20,337.05 less than the balance estimated. Annual Report on Households Assisted by LIHEAP - There is not a designated due date for this report. However, as this report is due at the end of every federal fiscal year, this should be submitted within a reasonable time after the end of the federal fiscal year (9/30) for the data to be reported in a timely manner to the Federal Government. The report for the year ending 9/30/2022 was submitted on 9/25/2023, which is almost an entire year after the end of the federal fiscal year, and the report for the year ending 9/30/2023 wasn't submitted until 1/23/2024, which is almost four months after federal fiscal year end. Additionally, some of the data submitted within the 9/30/2022 report is deemed to not be complete and accurate based on the underlying support provided. Specifically, the following was noted: In Section 1, line item 10. Weatherization the amount reported was 249 households and the amount per the underlying support was 7,262 households. In Section 2, line item 10. Weatherization the amounts reported for the various poverty levels was inaccurate per the underlying support, as shown in the below table. Section Type of LIHEAP assistance A. Under 75% poverty B. 75%- 100% poverty C. 101%- 125% poverty D. 126%- 150% poverty E. Over 150% poverty Per Report: 2 10. Weatherization 33 38 43 38 97 Per Support: 2 Weatherization 1,013 1,122 1,123 1,163 2,841 Furthermore, all the data submitted within the 9/30/2023 report is deemed to not be complete and accurate based on the underlying support provided. Specifically, the following was noted for Sections 1 and 2 below: Section Data Field Amount per Report Amount per Support 1 1. Heating 29,642 31,289 e. Winter 1,680 1,730 10. Weatherization 199 9,875 14. Any type of LIHEAP assistance 29,669 31,289 18. Bill Payment Assistance 29,642 31,289 Section Type of LIHEAP assistance A. Under 75% poverty B. 75%- 100% poverty C. 101%- 125% poverty D. 126%- 150% poverty E. Over 150% poverty Per Report: 2 1. Heating 3,190 3,238 3,519 3,710 15,985 e. Winter 332 172 164 182 830 10. Weatherization 10 22 26 19 122 Per Support: 2 Heating 4,040 4,074 4,432 4,329 14,414 Winter/Year Round Crisis 395 216 200 212 707 Weatherization 1,134 1,202 1,312 1,354 4,873 Quarterly Performance and Management Report - There is not a designated due date within for this report. However, as this report is due every quarter, this report should be submitted within the subsequent quarter for the data to be reported in a timely manner to the Federal Government. For 1 of the 3 quarterly reports submitted, we were unable to determine when it was submitted, as the report was not signed and dated by the Program Director when submitted. Additionally, for the Quarterly Performance and Management report submitted for the quarter ended 6/30/2022, we noted 2 key line items that were inaccurate based upon the underlying support. Specifically, the total number of assisted households for quarter 3 federal fiscal year 2022 was reported as 24,405 and the amount per the underlying support was 24,425, as well as the LIHEAP fiscal year end 2022 non-Supplemental (released November 1, 2021) amount of funds obligated was reported as $24,114,530 and the amount per the underlying support was $30,948,915. Additionally, we noted 7 key line items that were unable to be verified as complete and accurate as no underlying support could be provided. Those key line items are as follows: total cumulative assisted households, total cumulative assisted households during the same period last year, total households for quarter 3 assisted during the same period last year, number of occurrences of households where LIHEAP prevented the loss of home energy for quarter 3, number of occurrences of households where LIHEAP restored home energy for quarter 3, total amount of funds obligated for ARPA 2021, amount of funds obligated for other supplemental allotment. For the Quarterly Performance and Management report submitted for the quarter ended 12/31/2022, we noted 3 key line items that were unable to be verified as complete and accurate as no underlying support could be provided by the Department. Those key line items are as follows: number of assisted households during the same period last year for quarter 1 federal fiscal year 2023, total amount of funds obligated for LIHEAP fiscal year 2023 allotment B, and amount of funds obligated for other supplemental allotment. For the Quarterly Performance and Management report submitted for the quarter ended 6/30/2023, we noted 1 key line item that was inaccurate based upon the underlying support. Specifically, the total number of assisted households for quarter 3 federal fiscal year 2023 was reported as 3,232 and the amount per the underlying support was 3,367. Additionally, we noted 2 key line items that were unable to be verified as complete and accurate as no underlying support could be provided. Those key line items are as follows: amount of funds obligated for LIHEAP federal fiscal year 2023 allotment and amount of funds obligated for other supplemental allotment. Cause The cause of the condition found was primarily due to insufficient resources within the Department to ensure the federal FFATA reports were filed timely. The cause of the condition found was primarily due to insufficient resources within the Department to ensure the federal performance reports were filed or filed timely as well as insufficient policies and procedures to ensure that the documentation to support the key line items reported on the LIHEAP Performance Data Form were retained. Additionally, the Department has insufficient policies and procedures to ensure that the required reconciliation between reported Performance Data Form Grantee Survey obligation amounts and Carryover and Reallotment report as well as FFR-425 reports is completed. The cause of the condition found was primarily due to insufficient resources within the Department to ensure the federal special reports were filed or filed timely. Also, the Department had the Federal Government contract out a federal consulting firm, APRISE, to help the Department submit the required special reports and the federal consulting firm was not able to provide the Department with support for the data that was submitted within these reports. Effect The effect of the condition found is that the Department did not file required FFATA reports, LIHEAP Performance Data Form, LIHEAP Carryover and Reallotment Report, Quarterly Performance and Management Report and Annual Report on Households Assisted by LIHEAP in a timely manner. The effect of the condition is also that the Department did not file complete and accurate performance and special federal reports. Questioned Costs None. Recommendation We recommend that the Department should review to ensure there is sufficient safeguards in place for professionals to perform when positions are vacant so that necessary processes are completed related to compliance with federal requirements, including federal reporting requirements related to the timely submission of the annual LIHEAP Performance Report, the annual LIHEAP Carryover and Reallotment Report, the Quarterly Performance and Management Report and the Annual Report on Households Assisted by LIHEAP as well as the submission of FFATA reports for first-tier subawards. In addition, we recommend that the Department implement written policies and procedures for the compilation and review of the LIHEAP Performance Data Form, LIHEAP Carryover and Reallotment Report, Quarterly Performance and Management Report and Annual Report on Households Assisted by LIHEAP and ensure that the documentation to support the amounts reported is maintained to support that the report is complete and accurate. View of Responsible Official: Management concurs with the finding above.

Finding Reference Number: 2023-016 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4, 2201NHLIEE, 2201NHLIEI, 2301NHLIEA, 2301NHLIEE, 2301NHLIEI, 1700NHLIEA Federal Award Year: 2017, 2020, 2021, 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-026 Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The Low-Income Home Energy Assistance program (LIHEAP), Performance Data Form (OMB No. 0970-0449) must be submitted before January 31st regarding the prior federal fiscal year. The first section of the report is the Grant recipient Survey that collects and reports data on sources and uses of LIHEAP funds. The Grant recipient Survey includes Section III: Estimated Sources of Funds and Section IV: Estimated Use of LIHEAP Funds. Note: that these are referencing obligated not expended funding. The rest of the report is regarding performance metrics, mostly related to home energy burden targeting and reduction, as well as the continuity of home energy service. The Grantee Survey obligation amounts should be compared with the Carryover and Reallotment and FFR-425 reports. This reconciliation is needed to make sure the obligated balances for the program year being tested are accurate. LIHEAP Carryover and Reallotment Report (OMB No. 0970-0106) – Grantees must submit this report no later than August 1 indicating the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds. Funds in excess of the maximum carryover limit are subject to reallotment to other LIHEAP grantees in the following fiscal year and must also be reported (42 USC 8626). Annual Report on Households Assisted by LIHEAP (OMB No. 0970-0060) https://omb.report/icr/202211-0970-005 – As part of the application for block grant funds each year, a report is required for the preceding fiscal year of (1) the number and income levels of the households assisted for each component and any type of LHEAP assistance (heating, cooling, crisis, and weatherization); and (2) the number of households served that contained young children, elderly, or persons with disabilities, or any vulnerable household for each component. Territories with annual allotments of less than $200,000 and all Native American tribes are required to report only on the number of households served for each program component (42 USC 8629; 45 CFR section 96.82). Quarterly Performance and Management Report (OMB No. 0970-0589) https://omb.report/icr/202205-0970-017/doc/121847100 – Grant recipients must submit data and information about LIHEAP during the current FY, including success, challenges, needs and innovations. The quarterly reports focus on assisted households, performance management, obligation of funding, changes made due to anticipated increase in energy bills, collaboration with other utility programs, and training and technical assistance needs. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting as part of the Low-Income Home Energy Assistance program (LIHEAP), we noted the following: A. The New Hampshire Department of Energy (the Department) during the year ended June 30, 2023, $52,485,098 was passed through to subrecipients that met the requirements for first tier subawards under the Transparency Act and as such FFATA reports were required to be filed for each of those subawards. During our testwork over FFATA reporting at the Department of Energy, we selected 4 out of 7 FFATA reports for testing and noted the following: Reports Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 4 0 1 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $13,825,743 $0 $1,115,000 $0 $0 B. The annual LIHEAP Performance Data Form was not submitted by January 31, 2023. The Department submitted the report in December 2023. The Department was unable to provide sufficient underlying support for the Key Line items associated with the report including the following: Uses of Funds, the total Uses of Funds should equal the total Sources of Funds, and Other LIHEAP assistance. The Department was unable to provide a reconciliation between the LIHEAP Performance Data Form Grantee Survey obligation amounts reported to the Carryover and Reallotment and FFR-425 reports. C. The Department did not submit its required special reports (i.e. Quarterly Performance and Management Reports, Annual Report of Assisted Households Report, and LIHEAP Carryover and Reallotment Report) in a timely manner. There were also no procedures implemented to ensure that the submission of Special Reports includes accurate and complete data. Specifically, we noted the following: LIHEAP Carryover and Reallotment Report - This report must be submitted no later than August 1 for the federal fiscal year. This report was not submitted in a timely manner for the period ending 9/30/2022, as it was submitted on 8/9/2023 with an original due date of 8/1/2022. This report was not submitted in a timely manner for the period ending 9/30/2023, as it was not yet submitted as of March 12, 2024, with an original due date of 8/1/2023. The administrative expenditures balance utilized to calculate the PY22 Carryover balance submitted in the PY22 Carryover and Reallotment Report was an estimate, even though there was actual data for this balance since the report was submitted a year late. The actual balance per the support provided by the Dept. of Energy was $14,488.95, which is $20,337.05 less than the balance estimated. Annual Report on Households Assisted by LIHEAP - There is not a designated due date for this report. However, as this report is due at the end of every federal fiscal year, this should be submitted within a reasonable time after the end of the federal fiscal year (9/30) for the data to be reported in a timely manner to the Federal Government. The report for the year ending 9/30/2022 was submitted on 9/25/2023, which is almost an entire year after the end of the federal fiscal year, and the report for the year ending 9/30/2023 wasn't submitted until 1/23/2024, which is almost four months after federal fiscal year end. Additionally, some of the data submitted within the 9/30/2022 report is deemed to not be complete and accurate based on the underlying support provided. Specifically, the following was noted: In Section 1, line item 10. Weatherization the amount reported was 249 households and the amount per the underlying support was 7,262 households. In Section 2, line item 10. Weatherization the amounts reported for the various poverty levels was inaccurate per the underlying support, as shown in the below table. Section Type of LIHEAP assistance A. Under 75% poverty B. 75%- 100% poverty C. 101%- 125% poverty D. 126%- 150% poverty E. Over 150% poverty Per Report: 2 10. Weatherization 33 38 43 38 97 Per Support: 2 Weatherization 1,013 1,122 1,123 1,163 2,841 Furthermore, all the data submitted within the 9/30/2023 report is deemed to not be complete and accurate based on the underlying support provided. Specifically, the following was noted for Sections 1 and 2 below: Section Data Field Amount per Report Amount per Support 1 1. Heating 29,642 31,289 e. Winter 1,680 1,730 10. Weatherization 199 9,875 14. Any type of LIHEAP assistance 29,669 31,289 18. Bill Payment Assistance 29,642 31,289 Section Type of LIHEAP assistance A. Under 75% poverty B. 75%- 100% poverty C. 101%- 125% poverty D. 126%- 150% poverty E. Over 150% poverty Per Report: 2 1. Heating 3,190 3,238 3,519 3,710 15,985 e. Winter 332 172 164 182 830 10. Weatherization 10 22 26 19 122 Per Support: 2 Heating 4,040 4,074 4,432 4,329 14,414 Winter/Year Round Crisis 395 216 200 212 707 Weatherization 1,134 1,202 1,312 1,354 4,873 Quarterly Performance and Management Report - There is not a designated due date within for this report. However, as this report is due every quarter, this report should be submitted within the subsequent quarter for the data to be reported in a timely manner to the Federal Government. For 1 of the 3 quarterly reports submitted, we were unable to determine when it was submitted, as the report was not signed and dated by the Program Director when submitted. Additionally, for the Quarterly Performance and Management report submitted for the quarter ended 6/30/2022, we noted 2 key line items that were inaccurate based upon the underlying support. Specifically, the total number of assisted households for quarter 3 federal fiscal year 2022 was reported as 24,405 and the amount per the underlying support was 24,425, as well as the LIHEAP fiscal year end 2022 non-Supplemental (released November 1, 2021) amount of funds obligated was reported as $24,114,530 and the amount per the underlying support was $30,948,915. Additionally, we noted 7 key line items that were unable to be verified as complete and accurate as no underlying support could be provided. Those key line items are as follows: total cumulative assisted households, total cumulative assisted households during the same period last year, total households for quarter 3 assisted during the same period last year, number of occurrences of households where LIHEAP prevented the loss of home energy for quarter 3, number of occurrences of households where LIHEAP restored home energy for quarter 3, total amount of funds obligated for ARPA 2021, amount of funds obligated for other supplemental allotment. For the Quarterly Performance and Management report submitted for the quarter ended 12/31/2022, we noted 3 key line items that were unable to be verified as complete and accurate as no underlying support could be provided by the Department. Those key line items are as follows: number of assisted households during the same period last year for quarter 1 federal fiscal year 2023, total amount of funds obligated for LIHEAP fiscal year 2023 allotment B, and amount of funds obligated for other supplemental allotment. For the Quarterly Performance and Management report submitted for the quarter ended 6/30/2023, we noted 1 key line item that was inaccurate based upon the underlying support. Specifically, the total number of assisted households for quarter 3 federal fiscal year 2023 was reported as 3,232 and the amount per the underlying support was 3,367. Additionally, we noted 2 key line items that were unable to be verified as complete and accurate as no underlying support could be provided. Those key line items are as follows: amount of funds obligated for LIHEAP federal fiscal year 2023 allotment and amount of funds obligated for other supplemental allotment. Cause The cause of the condition found was primarily due to insufficient resources within the Department to ensure the federal FFATA reports were filed timely. The cause of the condition found was primarily due to insufficient resources within the Department to ensure the federal performance reports were filed or filed timely as well as insufficient policies and procedures to ensure that the documentation to support the key line items reported on the LIHEAP Performance Data Form were retained. Additionally, the Department has insufficient policies and procedures to ensure that the required reconciliation between reported Performance Data Form Grantee Survey obligation amounts and Carryover and Reallotment report as well as FFR-425 reports is completed. The cause of the condition found was primarily due to insufficient resources within the Department to ensure the federal special reports were filed or filed timely. Also, the Department had the Federal Government contract out a federal consulting firm, APRISE, to help the Department submit the required special reports and the federal consulting firm was not able to provide the Department with support for the data that was submitted within these reports. Effect The effect of the condition found is that the Department did not file required FFATA reports, LIHEAP Performance Data Form, LIHEAP Carryover and Reallotment Report, Quarterly Performance and Management Report and Annual Report on Households Assisted by LIHEAP in a timely manner. The effect of the condition is also that the Department did not file complete and accurate performance and special federal reports. Questioned Costs None. Recommendation We recommend that the Department should review to ensure there is sufficient safeguards in place for professionals to perform when positions are vacant so that necessary processes are completed related to compliance with federal requirements, including federal reporting requirements related to the timely submission of the annual LIHEAP Performance Report, the annual LIHEAP Carryover and Reallotment Report, the Quarterly Performance and Management Report and the Annual Report on Households Assisted by LIHEAP as well as the submission of FFATA reports for first-tier subawards. In addition, we recommend that the Department implement written policies and procedures for the compilation and review of the LIHEAP Performance Data Form, LIHEAP Carryover and Reallotment Report, Quarterly Performance and Management Report and Annual Report on Households Assisted by LIHEAP and ensure that the documentation to support the amounts reported is maintained to support that the report is complete and accurate. View of Responsible Official: Management concurs with the finding above.

Finding Reference Number: 2023-017 NH Department of Health and Human Services Substance Abuse Prevention and Treatment Block Grant (ALN #93.959) and COVID-19 Substance Abuse Prevention and Treatment Block Grant (ALN #93.959) Federal Award Numbers: 1B08Ti084659-01, 1B08TI085821-01 Federal Award Year: 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria A pass-through entity (PTE) must: 1. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 2. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award Condition During the year ended June 30, 2023, the New Hampshire Department of Health and Human Services (the Department) passed through $7,720,172 of federal funding to subrecipients. As part of our testing related subrecipient monitoring, we identified the following: A. The Department provided the most recent risk assessment performed for each of the 7 subrecipients selected for testwork. Per review of the risk assessments provided, we identified the following: 1. For 5 of the subrecipients, the risk assessment indicated that the subrecipients expenditure detail should be examined monthly to ensure compliance with contract requirements and applicable laws and rules. We were unable to determine if this procedure had been performed as part of the Department’s subrecipient monitoring process. 2. For the remaining 2 subrecipients the recommended monitoring procedures was left blank on the risk assessment and as such we are unable to verify what type of monitoring procedures should have been performed. B. The Department’s during the award monitoring for of the 4 of the 7 subrecipients selected for testwork consisted of the review and approval of subrecipient invoices. Per review of the invoices, the invoice contained a summary of costs incurred by the subrecipient by category of expense that it was seeking reimbursement for. It was evident through the invoice review that the Department often followed up on inconsistencies on hours worked with the subrecipient to help ensure the accuracy of the invoice reviewed. While this detailed review was performed, the Department did not perform any other monitoring procedures related to these 4 subrecipients to ensure the accuracy of the request made by the subrecipient through either a desk review or an on-site monitoring visit. As such, it is unclear if the monitoring performed was sufficient to ensure that the subrecipient was complying with the terms and conditions of its subrecipient grant agreement. C. During our review over the Department’s review over the subrecipients Uniform Guidance reports, we identified that for 2 of 7 subrecipients selected for testwork, the subrecipients uniform guidance audit was not issued within 9 months of the subrecipients year end. We were unable to obtain any correspondence between the Department or the subrecipient to inquire about the uniform guidance report or when it would be issued. Upon receipt of the report, the Department did issue a management decision letter upon receipt of the report. Cause The cause of the condition found was primarily due to a lack of formal policies and internal controls to ensure that all required subrecipient monitoring compliance procedures are being performed by the Department. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). Questioned Costs None. Recommendation We recommend the Department review its existing policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). This would ensure that the risk assessment is routinely updated for multiyear grants and that the prescribed monitoring procedures take into consideration any additional monitoring procedures that might need to be performed, such as a desk review or on-site visit, if the program is not audited as part of the subrecipient’s uniform guidance audit. In addition, policies and procedures should be established to ensure that if the risk assessment has suggested a particular monitoring procedure be performed, that the Department is adequately documenting its monitoring procedures to ensure that it has performed the required procedures. View of Responsible Officials Management partially concurs with the finding above. Rejoinder As it relates to Bullet A above, we were not able to obtain documentation to support that the suggested procedures outlined within the risk assessment was performed. As it relates to Bullet B above, for of the 4 of the 7 subrecipients selected for testwork consisted of the review and approval of subrecipient invoices. Per review of the invoices, the invoice contained a summary of costs incurred by the subrecipient by category of expense that it was seeking reimbursement for. It was evident through the invoice review that the Department often followed up on inconsistencies on hours worked with the subrecipient to help ensure the accuracy of the invoice reviewed. While this detailed review was performed, the Department did not perform any other monitoring procedures related to these 4 subrecipients to ensure the accuracy of the request made by the subrecipient through either a desk review or an on-site monitoring visit. As such, it is unclear if the monitoring performed was sufficient to ensure that the subrecipient was complying with the terms and conditions of its subrecipient grant agreement.

Finding Reference Number: 2023-017 NH Department of Health and Human Services Substance Abuse Prevention and Treatment Block Grant (ALN #93.959) and COVID-19 Substance Abuse Prevention and Treatment Block Grant (ALN #93.959) Federal Award Numbers: 1B08Ti084659-01, 1B08TI085821-01 Federal Award Year: 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria A pass-through entity (PTE) must: 1. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 2. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award Condition During the year ended June 30, 2023, the New Hampshire Department of Health and Human Services (the Department) passed through $7,720,172 of federal funding to subrecipients. As part of our testing related subrecipient monitoring, we identified the following: A. The Department provided the most recent risk assessment performed for each of the 7 subrecipients selected for testwork. Per review of the risk assessments provided, we identified the following: 1. For 5 of the subrecipients, the risk assessment indicated that the subrecipients expenditure detail should be examined monthly to ensure compliance with contract requirements and applicable laws and rules. We were unable to determine if this procedure had been performed as part of the Department’s subrecipient monitoring process. 2. For the remaining 2 subrecipients the recommended monitoring procedures was left blank on the risk assessment and as such we are unable to verify what type of monitoring procedures should have been performed. B. The Department’s during the award monitoring for of the 4 of the 7 subrecipients selected for testwork consisted of the review and approval of subrecipient invoices. Per review of the invoices, the invoice contained a summary of costs incurred by the subrecipient by category of expense that it was seeking reimbursement for. It was evident through the invoice review that the Department often followed up on inconsistencies on hours worked with the subrecipient to help ensure the accuracy of the invoice reviewed. While this detailed review was performed, the Department did not perform any other monitoring procedures related to these 4 subrecipients to ensure the accuracy of the request made by the subrecipient through either a desk review or an on-site monitoring visit. As such, it is unclear if the monitoring performed was sufficient to ensure that the subrecipient was complying with the terms and conditions of its subrecipient grant agreement. C. During our review over the Department’s review over the subrecipients Uniform Guidance reports, we identified that for 2 of 7 subrecipients selected for testwork, the subrecipients uniform guidance audit was not issued within 9 months of the subrecipients year end. We were unable to obtain any correspondence between the Department or the subrecipient to inquire about the uniform guidance report or when it would be issued. Upon receipt of the report, the Department did issue a management decision letter upon receipt of the report. Cause The cause of the condition found was primarily due to a lack of formal policies and internal controls to ensure that all required subrecipient monitoring compliance procedures are being performed by the Department. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). Questioned Costs None. Recommendation We recommend the Department review its existing policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). This would ensure that the risk assessment is routinely updated for multiyear grants and that the prescribed monitoring procedures take into consideration any additional monitoring procedures that might need to be performed, such as a desk review or on-site visit, if the program is not audited as part of the subrecipient’s uniform guidance audit. In addition, policies and procedures should be established to ensure that if the risk assessment has suggested a particular monitoring procedure be performed, that the Department is adequately documenting its monitoring procedures to ensure that it has performed the required procedures. View of Responsible Officials Management partially concurs with the finding above. Rejoinder As it relates to Bullet A above, we were not able to obtain documentation to support that the suggested procedures outlined within the risk assessment was performed. As it relates to Bullet B above, for of the 4 of the 7 subrecipients selected for testwork consisted of the review and approval of subrecipient invoices. Per review of the invoices, the invoice contained a summary of costs incurred by the subrecipient by category of expense that it was seeking reimbursement for. It was evident through the invoice review that the Department often followed up on inconsistencies on hours worked with the subrecipient to help ensure the accuracy of the invoice reviewed. While this detailed review was performed, the Department did not perform any other monitoring procedures related to these 4 subrecipients to ensure the accuracy of the request made by the subrecipient through either a desk review or an on-site monitoring visit. As such, it is unclear if the monitoring performed was sufficient to ensure that the subrecipient was complying with the terms and conditions of its subrecipient grant agreement.

Finding Reference Number: 2023-018 NH Department of Health and Human Services Child Support Enforcement (ALN #93.563) Federal Award Number: 2201 NHCSES, 2301NHCSES Federal Award Year: 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Period of Performance Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria This program operates on a cash basis and each year’s funding and accounting is discrete; i.e., there is no carry-forward of unobligated funds. To be eligible for federal funding, claims must be submitted to ACF within two years after the calendar quarter in which the state made the expenditure. This limitation does not apply to any claim for an adjustment to prior year costs or resulting from a court-ordered retroactive adjustment (45 CFR sections 95.7, 95.13 and 95.19) 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the period of performance, we identified the following: A. For 3 of 40 payments selected for testwork that was charged during the last 60 days of the federal fiscal year 2022 federal grant, we identified there was no evidence that the payment had been reviewed and approved. All 3 sample items were related to journal entry vouchers charged to the program. As a result, it is unclear if the payment should have been charged to the federal award. B. For 4 of 40 payments selected for testwork that was charged during the first 60 days of the federal fiscal year 2023 federal grant, we identified there was no evidence that the payment had been reviewed and approved. All 4 sample items were related to journal entry vouchers charged to the program. As a result, it is unclear if the payment should have been charged to the federal award. Cause The cause of the condition found is that the Department does not appear to have sufficient internal controls to document the review and approval of journal entry vouchers that are charged to the program to support that the journal entry voucher has been properly authorized to be charged to the federal program. Effect The effect of the condition found is that unauthorized expenses may have been charged inappropriately to grant period based on the period of service in cost was paid. Questioned Costs $3,250 Recommendation We recommend that the Department review its existing policies and procedures related to the review and approval of journal entry vouchers to ensure that internal controls are implemented to document the review and approval of all journal entry vouchers to support that the journal entry voucher has been authorized to be charged to the federal program. View of Responsible Officials: Management concurs with the above finding.

Finding Reference Number: 2023-018 NH Department of Health and Human Services Child Support Enforcement (ALN #93.563) Federal Award Number: 2201 NHCSES, 2301NHCSES Federal Award Year: 2022, 2023 U.S. Department of Health and Human Services Compliance Requirement: Period of Performance Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria This program operates on a cash basis and each year’s funding and accounting is discrete; i.e., there is no carry-forward of unobligated funds. To be eligible for federal funding, claims must be submitted to ACF within two years after the calendar quarter in which the state made the expenditure. This limitation does not apply to any claim for an adjustment to prior year costs or resulting from a court-ordered retroactive adjustment (45 CFR sections 95.7, 95.13 and 95.19) 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the period of performance, we identified the following: A. For 3 of 40 payments selected for testwork that was charged during the last 60 days of the federal fiscal year 2022 federal grant, we identified there was no evidence that the payment had been reviewed and approved. All 3 sample items were related to journal entry vouchers charged to the program. As a result, it is unclear if the payment should have been charged to the federal award. B. For 4 of 40 payments selected for testwork that was charged during the first 60 days of the federal fiscal year 2023 federal grant, we identified there was no evidence that the payment had been reviewed and approved. All 4 sample items were related to journal entry vouchers charged to the program. As a result, it is unclear if the payment should have been charged to the federal award. Cause The cause of the condition found is that the Department does not appear to have sufficient internal controls to document the review and approval of journal entry vouchers that are charged to the program to support that the journal entry voucher has been properly authorized to be charged to the federal program. Effect The effect of the condition found is that unauthorized expenses may have been charged inappropriately to grant period based on the period of service in cost was paid. Questioned Costs $3,250 Recommendation We recommend that the Department review its existing policies and procedures related to the review and approval of journal entry vouchers to ensure that internal controls are implemented to document the review and approval of all journal entry vouchers to support that the journal entry voucher has been authorized to be charged to the federal program. View of Responsible Officials: Management concurs with the above finding.

Finding Reference Number: 2023-019 NH Department of Education Disability Insurance/SSI Cluster: Social Security-Disability (Assistance Listing #96.001) Federal Award Numbers: 1904NHDI00, 2024NHDI00, 2104NHDI00, 2204NHI00, 2304NHDI00 Federal Award Year: 2019, 2020, 2021, 2022, 2023 U.S. Social Security Administration Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No The SSA-4514, Time Report of Personal Services For Disability Determination Services, is due quarterly to account for employee time. The SSA-4513 – State Agency Report of Obligations for SSA Disability Programs – is due quarterly for each fiscal year still open in order to account for program disbursements and unliquidated obligations (POMS DI 39506.202). Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting related to the SSA-4514 quarterly report, we identified the following: A. For the quarter ending September 30, 2022, the SSA-4514 report understated the reported number of hours as follows: a. Examiners duty hours by 241 hours and holiday/leave time by 7.50 hours. b. Hearing officers duty hours of 480 hours and holiday/leave time by 15 hours B. For the quarter ending June 30, 2023, the SSA-4514 report understated the reported number as follows: a. Hearing officers duty hours of 480 hours and holiday/leave time by 7.5 hours. During our testwork over federal reporting related to the SSA-4513 quarterly report, we identified the following: C. For all 10 SSA-4513 reports selected for testwork, line item 7 was not checked to identify if the SSA-871 needed to be attached to the report. It is unclear if this needed to be attached or not. D. For all 10 SSA-4513 reports selected for testwork, the reports did not reconcile to the internal tracking sheets provided to validate the amounts reported. For all reports there were variances between the tracking sheets and the dollar amounts included within the federal report within sections 1, 2, 3 and 4. While variances are identified, we noted that the variances were not material overall to the individual line item. E. For all 10 SSA-4513 reports selected for testwork, we were unable to validate the completeness and accuracy of the amounts reported within Section 1 for Columns (A) for Disbursements, (B) for unliquidated obligations and (C) total obligations for line items 1, 2, 3 and 4. As such, we are not able to validate that the amounts reported are complete and accurate. As we were not able to obtain documentation to validate the obligation balances, we are unable to validate the accuracy of amounts reported within Sections 1, 2, and 3 of the report. F. For all 10 of the SSA-4513 reports selected for testwork, documentation was not provided for all line items contained in the report. Specifically we identified the following: a. For 2 of 10 SSA-4513 reports selected for testing, documentation was not provided for Columns (A), (B) and (C) for the following line items: i. Line 2.a.1 Disability (DI) Claims ii. Line 2.a.2 Supplemental Security Income (SSI) Claims iii. Line 1.a.3 Concurrent DI/SSI Claims iv. Line 2.b.1 Disability (DI) Claims v. Line 2.b.2 Supplemental Security Income (SSI) Claims vi. Line 1.b.3 Concurrent DI/SSI Claims vii. Line 3 Indirect Costs b. For 2 of 10 SSA-4513 reports, documentation was not provided for Line Item Section 2. Other Nonpersonnel Costs per SSA-4513 (Total Obligation) c. For 7 of 10 SSA-4513 reports documentation was not provided for Line Item Section 2 Total Adjusted All Other Nonpersonnel Costs (B) d. For 10 of 10 SSA-4513 documentation was not provided for Line Item Section 2.d, Other: Identify obligation & amount G. For 3 of 10 SSA-4513 reports selected for testwork, we identified while there were no expenditures incurred for the federal grant between October 1, 2022 and June 30, 2023, the expenditures for the quarter selected, June 30, 2022, did not agree to what was reported for the quarter ending September 30, 2023. We were unable to obtain supporting documentation as to why the amounts reported were different. Cause The cause of the condition found related to the SSA-4514 was due to formula errors within the spreadsheet used to calculate the quarterly hours. The formulas were not updated to reflect any new lines of data that may have been added and needed to be includes within the total formulas included in the spreadsheet. While the spreadsheets were reviewed as part of the existing internal control procedures, the review as not at a precision level that detected the formula errors. The cause of the condition found related to the SSA-4513 was due to insufficient policies and procedures to ensure that all necessary documentation is maintained to support the amounts reported for each federal report filed. Based on the documentation that was provided to support the data reported within each quarterly report, it is unclear if the internal control review procedures performed included a detail review over each line item of the report to ensure the amount reported is complete and accurate. Effect The effect of the condition found is the SSA-4514 and SSA-4514 reports were not complete and accurate when they were filed. Questioned Costs None Recommendation We recommend that the existing internal control procedures over the review and approval of the SSA-4514 report are evaluated to ensure that the accuracy of spreadsheet formulas used are appropriate and capture all of the data necessary to accurately prepare the SSA-4514. In addition, we recommend that the existing policies and procedures be developed to ensure that all documentation to support the amounts reported on the SSA-4513 is properly maintained for each quarterly report. In addition, the existing internal control procedures should be evaluated to ensure that as part of the review process, each line item on the federal report is verified against the supporting documentation to ensure the report is complete and accurate. The review performed should also be properly documenting showing that the required review process was performed prior to submitting the SSA-4513. View of Responsible Officials: Managementconcurs with the above finding.

Finding Reference Number: 2023-019 NH Department of Education Disability Insurance/SSI Cluster: Social Security-Disability (Assistance Listing #96.001) Federal Award Numbers: 1904NHDI00, 2024NHDI00, 2104NHDI00, 2204NHI00, 2304NHDI00 Federal Award Year: 2019, 2020, 2021, 2022, 2023 U.S. Social Security Administration Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No The SSA-4514, Time Report of Personal Services For Disability Determination Services, is due quarterly to account for employee time. The SSA-4513 – State Agency Report of Obligations for SSA Disability Programs – is due quarterly for each fiscal year still open in order to account for program disbursements and unliquidated obligations (POMS DI 39506.202). Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting related to the SSA-4514 quarterly report, we identified the following: A. For the quarter ending September 30, 2022, the SSA-4514 report understated the reported number of hours as follows: a. Examiners duty hours by 241 hours and holiday/leave time by 7.50 hours. b. Hearing officers duty hours of 480 hours and holiday/leave time by 15 hours B. For the quarter ending June 30, 2023, the SSA-4514 report understated the reported number as follows: a. Hearing officers duty hours of 480 hours and holiday/leave time by 7.5 hours. During our testwork over federal reporting related to the SSA-4513 quarterly report, we identified the following: C. For all 10 SSA-4513 reports selected for testwork, line item 7 was not checked to identify if the SSA-871 needed to be attached to the report. It is unclear if this needed to be attached or not. D. For all 10 SSA-4513 reports selected for testwork, the reports did not reconcile to the internal tracking sheets provided to validate the amounts reported. For all reports there were variances between the tracking sheets and the dollar amounts included within the federal report within sections 1, 2, 3 and 4. While variances are identified, we noted that the variances were not material overall to the individual line item. E. For all 10 SSA-4513 reports selected for testwork, we were unable to validate the completeness and accuracy of the amounts reported within Section 1 for Columns (A) for Disbursements, (B) for unliquidated obligations and (C) total obligations for line items 1, 2, 3 and 4. As such, we are not able to validate that the amounts reported are complete and accurate. As we were not able to obtain documentation to validate the obligation balances, we are unable to validate the accuracy of amounts reported within Sections 1, 2, and 3 of the report. F. For all 10 of the SSA-4513 reports selected for testwork, documentation was not provided for all line items contained in the report. Specifically we identified the following: a. For 2 of 10 SSA-4513 reports selected for testing, documentation was not provided for Columns (A), (B) and (C) for the following line items: i. Line 2.a.1 Disability (DI) Claims ii. Line 2.a.2 Supplemental Security Income (SSI) Claims iii. Line 1.a.3 Concurrent DI/SSI Claims iv. Line 2.b.1 Disability (DI) Claims v. Line 2.b.2 Supplemental Security Income (SSI) Claims vi. Line 1.b.3 Concurrent DI/SSI Claims vii. Line 3 Indirect Costs b. For 2 of 10 SSA-4513 reports, documentation was not provided for Line Item Section 2. Other Nonpersonnel Costs per SSA-4513 (Total Obligation) c. For 7 of 10 SSA-4513 reports documentation was not provided for Line Item Section 2 Total Adjusted All Other Nonpersonnel Costs (B) d. For 10 of 10 SSA-4513 documentation was not provided for Line Item Section 2.d, Other: Identify obligation & amount G. For 3 of 10 SSA-4513 reports selected for testwork, we identified while there were no expenditures incurred for the federal grant between October 1, 2022 and June 30, 2023, the expenditures for the quarter selected, June 30, 2022, did not agree to what was reported for the quarter ending September 30, 2023. We were unable to obtain supporting documentation as to why the amounts reported were different. Cause The cause of the condition found related to the SSA-4514 was due to formula errors within the spreadsheet used to calculate the quarterly hours. The formulas were not updated to reflect any new lines of data that may have been added and needed to be includes within the total formulas included in the spreadsheet. While the spreadsheets were reviewed as part of the existing internal control procedures, the review as not at a precision level that detected the formula errors. The cause of the condition found related to the SSA-4513 was due to insufficient policies and procedures to ensure that all necessary documentation is maintained to support the amounts reported for each federal report filed. Based on the documentation that was provided to support the data reported within each quarterly report, it is unclear if the internal control review procedures performed included a detail review over each line item of the report to ensure the amount reported is complete and accurate. Effect The effect of the condition found is the SSA-4514 and SSA-4514 reports were not complete and accurate when they were filed. Questioned Costs None Recommendation We recommend that the existing internal control procedures over the review and approval of the SSA-4514 report are evaluated to ensure that the accuracy of spreadsheet formulas used are appropriate and capture all of the data necessary to accurately prepare the SSA-4514. In addition, we recommend that the existing policies and procedures be developed to ensure that all documentation to support the amounts reported on the SSA-4513 is properly maintained for each quarterly report. In addition, the existing internal control procedures should be evaluated to ensure that as part of the review process, each line item on the federal report is verified against the supporting documentation to ensure the report is complete and accurate. The review performed should also be properly documenting showing that the required review process was performed prior to submitting the SSA-4513. View of Responsible Officials: Managementconcurs with the above finding.

Finding Reference Number: 2023-020 NH Department of Education Disability Insurance/SSI Cluster: Social Security-Disability (Assistance Listing #96.001) Federal Award Numbers: 1904NHDI00, 2024NHDI00, 2104NHDI00, 2204NHI00, 2304NHDI00 Federal Award Year: 2019, 2020, 2021, 2022, 2023 U.S. Social Security Administration Compliance Requirement: Special Tests and Provisions – Qualified Providers Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria Each state agency is responsible for comprehensive oversight management of its process and for ensuring accuracy, integrity, and economy of its processes (20 CFR sections 404.519g and 416.919g, and POMS DI 396569.300). As part of these duties, DDSs must have, and follow procedures for performing medical license verifications to ensure that only qualified providers perform DDSs tasks. By “qualified,” SSA means that the medical source must: 1. Be currently licensed in the state and have the training and experience to perform the type of examination or tests DDS requests; and 2. Not be barred from participating in Medicare or Medicaid programs or other federal or federally assisted programs (20 CFR sections 404.5159g and 416.919g). Prior to using the services of any medical provider, the DDS must check the System of Award Management (SAM) website. Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the special test and provision related to qualified providers, we identified the following: A. For all 4 new providers selected for testwork, the SAM.gov website was not utilized to verify the suspension and debarment status for new providers. B. For 7 existing providers selected for testwork, we identified: a. For 4 of 7 annual reviews selected for testwork, there was no documentation maintained to verify that the providers medical license or suspension and debarment status had been reviewed. b. For 2 of 7 annual reviews selected for testwork, there was no documentation maintained that the providers suspension and debarment status had been reviewed. c. For 1 of 7 annual reviews selected for testwork, there was no documentation that an annual review of the provider had been performed. Cause The cause of the condition found is primarily due to insufficient policies and procedures to verify a provider’s suspension and debarment status has been reviewed within SAM.gov as required by the federal regulations. For new providers, the Office of Inspector General’s List of Excluded Individuals/Entities (LEIE) was reviewed, however the review took place after the provider was already hired. In addition, there does not appear to be any policies and procedures in place to document how an annual review should be conducted and what documentation needs to be maintained to support the procedures performed. There does not appear to be any internal controls in place to ensure that reviews are complete and properly documented. Effect The effect of the condition found is that documentation to support the qualifications of providers has not been appropriately maintained and providers could have been used that did not meet the criteria to be a qualified provider. Questioned Costs None Recommendation We recommend that written policies and procedures been developed to outline what the required procedures are related to reviewing professional licenses and suspension and debarment status for new providers and as part of the annual review process for existing providers. The policies should describe how the reviews will be performed, how the review will be documented. Internal controls should be implemented to ensure that an appropriate review over the review is conducted to ensure that the review is complete and accurate. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-020 NH Department of Education Disability Insurance/SSI Cluster: Social Security-Disability (Assistance Listing #96.001) Federal Award Numbers: 1904NHDI00, 2024NHDI00, 2104NHDI00, 2204NHI00, 2304NHDI00 Federal Award Year: 2019, 2020, 2021, 2022, 2023 U.S. Social Security Administration Compliance Requirement: Special Tests and Provisions – Qualified Providers Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria Each state agency is responsible for comprehensive oversight management of its process and for ensuring accuracy, integrity, and economy of its processes (20 CFR sections 404.519g and 416.919g, and POMS DI 396569.300). As part of these duties, DDSs must have, and follow procedures for performing medical license verifications to ensure that only qualified providers perform DDSs tasks. By “qualified,” SSA means that the medical source must: 1. Be currently licensed in the state and have the training and experience to perform the type of examination or tests DDS requests; and 2. Not be barred from participating in Medicare or Medicaid programs or other federal or federally assisted programs (20 CFR sections 404.5159g and 416.919g). Prior to using the services of any medical provider, the DDS must check the System of Award Management (SAM) website. Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the special test and provision related to qualified providers, we identified the following: A. For all 4 new providers selected for testwork, the SAM.gov website was not utilized to verify the suspension and debarment status for new providers. B. For 7 existing providers selected for testwork, we identified: a. For 4 of 7 annual reviews selected for testwork, there was no documentation maintained to verify that the providers medical license or suspension and debarment status had been reviewed. b. For 2 of 7 annual reviews selected for testwork, there was no documentation maintained that the providers suspension and debarment status had been reviewed. c. For 1 of 7 annual reviews selected for testwork, there was no documentation that an annual review of the provider had been performed. Cause The cause of the condition found is primarily due to insufficient policies and procedures to verify a provider’s suspension and debarment status has been reviewed within SAM.gov as required by the federal regulations. For new providers, the Office of Inspector General’s List of Excluded Individuals/Entities (LEIE) was reviewed, however the review took place after the provider was already hired. In addition, there does not appear to be any policies and procedures in place to document how an annual review should be conducted and what documentation needs to be maintained to support the procedures performed. There does not appear to be any internal controls in place to ensure that reviews are complete and properly documented. Effect The effect of the condition found is that documentation to support the qualifications of providers has not been appropriately maintained and providers could have been used that did not meet the criteria to be a qualified provider. Questioned Costs None Recommendation We recommend that written policies and procedures been developed to outline what the required procedures are related to reviewing professional licenses and suspension and debarment status for new providers and as part of the annual review process for existing providers. The policies should describe how the reviews will be performed, how the review will be documented. Internal controls should be implemented to ensure that an appropriate review over the review is conducted to ensure that the review is complete and accurate. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-021 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-December 25, 2022, October 29-November 1, 2017, July 1-2, 2017, January 20, 2020 U.S. Department of Homeland Security Compliance Requirement: Special Tests and Provisions - Project Accounting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria For large projects, the recipient is required to make an accounting to FEMA of eligible costs. Similarly, the subrecipient must make an accounting to the recipient. In submitting the accounting, the entity is required to certify that reported costs were incurred in performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, all grant conditions were met, and that payments for that project were made in accordance with the applicable payment provisions. For improved and alternate projects, if the total cost of the projects does not equal or exceed the approved eligible costs, then the auditor should expect to see an adjustment to reduce eligible costs (44 CFR section 206.205). Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition As part of the Disaster Grants - Public Assistance program (DGPA), the New Hampshire Department of Safety - Homeland Security and Emergency Management (the Department) enters into grant agreements with local municipalities to provide reimbursement for expenditures incurred as a result of New Hampshire declared disasters. During testwork over the Special Test- Project Accounting, the engagement team sampled 7 ongoing, large projects and 3 large, closed projects out of a total of 48 and 10, respectively. The engagement team noted the following: For 5 out of the 7 ongoing projects and for 2 out of the 3 closed projects, the Department could not provide evidence of project accounting reporting to FEMA in compliance with required certification. Specifically, the Department has a process whereby the Project Completion and Certification reports are to be completed and submitted to HSEM by subrecipients within 90 days of the project obligation date. HSEM then submits a certification report on the first of each month on the reports submitted during the previous month. However, the engagement team requested evidence of the certification report to FEMA and it could not be provided. Per discussion with HSEM staff, during the audit period, some of the emails were sent from individual employee state issued email addresses of individuals who no longer are employed by the Department and were not saved. Cause The Department’s internal controls were properly designed; however, the cause of the condition is due to the operating effectiveness of the control not being at a precision level to ensure the accounting certification reports were sent to FEMA and maintained as evidence of control operation. Effect The effect of the condition found is that the Department did not comply with 44 CFR section 206.205 and 45 CFR section 75 303(a). Questioned Costs None. Recommendation We recommend that the Department enhance policies and procedures which include internal controls to ensure project accounting completion and certification reports are sent to FEMA and maintained on file as evidence of compliance with the Project Accounting certification requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-021 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-December 25, 2022, October 29-November 1, 2017, July 1-2, 2017, January 20, 2020 U.S. Department of Homeland Security Compliance Requirement: Special Tests and Provisions - Project Accounting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria For large projects, the recipient is required to make an accounting to FEMA of eligible costs. Similarly, the subrecipient must make an accounting to the recipient. In submitting the accounting, the entity is required to certify that reported costs were incurred in performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, all grant conditions were met, and that payments for that project were made in accordance with the applicable payment provisions. For improved and alternate projects, if the total cost of the projects does not equal or exceed the approved eligible costs, then the auditor should expect to see an adjustment to reduce eligible costs (44 CFR section 206.205). Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition As part of the Disaster Grants - Public Assistance program (DGPA), the New Hampshire Department of Safety - Homeland Security and Emergency Management (the Department) enters into grant agreements with local municipalities to provide reimbursement for expenditures incurred as a result of New Hampshire declared disasters. During testwork over the Special Test- Project Accounting, the engagement team sampled 7 ongoing, large projects and 3 large, closed projects out of a total of 48 and 10, respectively. The engagement team noted the following: For 5 out of the 7 ongoing projects and for 2 out of the 3 closed projects, the Department could not provide evidence of project accounting reporting to FEMA in compliance with required certification. Specifically, the Department has a process whereby the Project Completion and Certification reports are to be completed and submitted to HSEM by subrecipients within 90 days of the project obligation date. HSEM then submits a certification report on the first of each month on the reports submitted during the previous month. However, the engagement team requested evidence of the certification report to FEMA and it could not be provided. Per discussion with HSEM staff, during the audit period, some of the emails were sent from individual employee state issued email addresses of individuals who no longer are employed by the Department and were not saved. Cause The Department’s internal controls were properly designed; however, the cause of the condition is due to the operating effectiveness of the control not being at a precision level to ensure the accounting certification reports were sent to FEMA and maintained as evidence of control operation. Effect The effect of the condition found is that the Department did not comply with 44 CFR section 206.205 and 45 CFR section 75 303(a). Questioned Costs None. Recommendation We recommend that the Department enhance policies and procedures which include internal controls to ensure project accounting completion and certification reports are sent to FEMA and maintained on file as evidence of compliance with the Project Accounting certification requirements. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-022 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-December 25, 2022, October 29-November 1, 2017, July 1-2, 2017, January 20, 2020 U.S. Department of Homeland Security Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-032 Statistically Valid Sample: No Criteria The SF-425, Federal Financial Report, is required to be filed annually. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting as part of the reporting, we noted the following: A. We noted for 1 out of 9 SF-425’s tested the total federal funds authorized (line 10d) per the SF-425 report did not agree to the SAG Smartlink Report. The SF-425 for disaster #4329 for the quarter ended 6/30/23 reported $6,893,951, while Smartlink reported $7,173,317. The Department did not update this amount on the SF 425, as the line should have read $7,173,317. The amount reported was the balance from the prior quarter. B. We noted for an additional 2 out of 9 SF-425s tested the recipient share figures (lines 10i-10k) were incorrectly calculated. When disaster declarations were made for disasters #4622 and #4624, the federal share was 75%. However, on August 8, 2022, amendments were executed that updated the federal share to 90%. When calculating the recipient share amounts on the SF-425s for these two disasters, HSEM utilized the old recipient share of 25%.One SF-425 report for disaster #4622 for the quarter ended 6/30/23 reported $338,319.94 for the total recipient shared required (line 10i) and $305,440.94 for recipient share of expenditures (line 10j). As a result, the remaining recipient share to be provided (line 10k) was reported as $32.879. Using the appropriate recipient share of 10%, we determined that lines 10i, 10j and 10k should have been reported, respectively, as follows $112,773.31, $101,813.65, and $10,959.66. The SF-425 report for disaster #4624 for the quarter ended 12/31/22 reported $204,156.96 for the total recipient shared required (line 10i) and $194,774.41 for recipient share of expenditures (line 10j). As a result, the remaining recipient share to be provided (line 10k) was reported as $9,382.54. Using the appropriate recipient share of 10%, we determined that lines 10i, 10j and 10k should have been reported, respectively, as follows $68,052.32, $64,924.80, and $3,127.52. Cause The cause of the condition found was primarily due to insufficient internal controls related to reporting. Specifically, there were no internal controls in place to detect inaccuracies in amounts reported on the SF-425 reports. Effect The effect of the condition found is that the Department did not file SF-425 reports accurately. Questioned Costs None. Recommendation We recommend that the Department develop policies and procedures and implement internal controls over financial reporting at a precision level sufficient to ensure the accuracy of its federal reporting. We recommend that the Department revise the inaccurate SF-425 reports and resubmit the corrected versions. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-022 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-December 25, 2022, October 29-November 1, 2017, July 1-2, 2017, January 20, 2020 U.S. Department of Homeland Security Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2022-032 Statistically Valid Sample: No Criteria The SF-425, Federal Financial Report, is required to be filed annually. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting as part of the reporting, we noted the following: A. We noted for 1 out of 9 SF-425’s tested the total federal funds authorized (line 10d) per the SF-425 report did not agree to the SAG Smartlink Report. The SF-425 for disaster #4329 for the quarter ended 6/30/23 reported $6,893,951, while Smartlink reported $7,173,317. The Department did not update this amount on the SF 425, as the line should have read $7,173,317. The amount reported was the balance from the prior quarter. B. We noted for an additional 2 out of 9 SF-425s tested the recipient share figures (lines 10i-10k) were incorrectly calculated. When disaster declarations were made for disasters #4622 and #4624, the federal share was 75%. However, on August 8, 2022, amendments were executed that updated the federal share to 90%. When calculating the recipient share amounts on the SF-425s for these two disasters, HSEM utilized the old recipient share of 25%.One SF-425 report for disaster #4622 for the quarter ended 6/30/23 reported $338,319.94 for the total recipient shared required (line 10i) and $305,440.94 for recipient share of expenditures (line 10j). As a result, the remaining recipient share to be provided (line 10k) was reported as $32.879. Using the appropriate recipient share of 10%, we determined that lines 10i, 10j and 10k should have been reported, respectively, as follows $112,773.31, $101,813.65, and $10,959.66. The SF-425 report for disaster #4624 for the quarter ended 12/31/22 reported $204,156.96 for the total recipient shared required (line 10i) and $194,774.41 for recipient share of expenditures (line 10j). As a result, the remaining recipient share to be provided (line 10k) was reported as $9,382.54. Using the appropriate recipient share of 10%, we determined that lines 10i, 10j and 10k should have been reported, respectively, as follows $68,052.32, $64,924.80, and $3,127.52. Cause The cause of the condition found was primarily due to insufficient internal controls related to reporting. Specifically, there were no internal controls in place to detect inaccuracies in amounts reported on the SF-425 reports. Effect The effect of the condition found is that the Department did not file SF-425 reports accurately. Questioned Costs None. Recommendation We recommend that the Department develop policies and procedures and implement internal controls over financial reporting at a precision level sufficient to ensure the accuracy of its federal reporting. We recommend that the Department revise the inaccurate SF-425 reports and resubmit the corrected versions. View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-023 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-December 25, 2022, October 29-November 1, 2017, July 1-2, 2017, January 20, 2020 U.S. Department of Homeland Security Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria A pass-through entity (PTE) must: 1. Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). 2. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 3. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition As part of the Disaster Grants - Public Assistance program (DGPA), the New Hampshire Department of Safety - Homeland Security and Emergency Management (the Department) enters into grant agreements with local municipalities to provide reimbursement for expenditures incurred as a result of New Hampshire declared disasters. During the year ended June 30, 2023, $27,041,873 was passed through to 85 subrecipients. As part of our testwork over the subrecipient monitoring process, we noted the following: A. The Department communicates award information to subrecipients through the approved agreement. Per review of the agreement, for each of the 27 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.332(a). Specifically, the following elements were not communicated: - Subrecipient unique entity identifier (not communicated for 19/27); - Federal Award Identification Number (FAIN) (not communicated for 27/27); - Identification of whether the award is R&D (not communicated for 27/27); and - Indirect cost rate for the federal award (including if the de minimis rate is charged) (not communicated for 27/27) B. The Department evaluated the subrecipient risk of noncompliance through a risk assessment for each of the 13 subrecipients selected for testwork. However, there was no formal risk assessment policy in place that indicated how frequently risk assessments should be performed. As a result, 5 subrecipients did not have risk assessments performed during the current year for purposes of determining the appropriate subrecipient monitoring response. These prior fiscal year(s) risk assessments were performed as of the following dates: September 2019, October and December 2021, May and June 2022. C. For each of the 13 subrecipients selected for testwork, the Department did not perform any during the award monitoring. D. During our testwork over the Department’s review of subrecipient uniform guidance reports, we noted there were no UG report review policies and procedures in place. For the 13 subrecipients selected for testwork, 6 subrecipients were identified in which the Department did not review the most recent uniform guidance report issued. Specifically, we noted: • For 5 of 13 subrecipients, the subrecipient’s uniform guidance was not reviewed due to updated risk assessments not being performed in the current year (refer to item 2 above) • For 1 of 13 subrecipients, the current year risk assessment was performed prior to the receipt of the subrecipient’s uniform guidance report and management did not go back to review the report Cause The cause of the condition found was primarily due to the Department not performing their sub monitoring internal controls in accordance with written formal policies and procedures. Questioned Costs None. Recommendation We recommend that the Department develop policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(a-h) and 2 CFR section 200.501(h). View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2023-023 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-December 25, 2022, October 29-November 1, 2017, July 1-2, 2017, January 20, 2020 U.S. Department of Homeland Security Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria A pass-through entity (PTE) must: 1. Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). 2. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 3. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition As part of the Disaster Grants - Public Assistance program (DGPA), the New Hampshire Department of Safety - Homeland Security and Emergency Management (the Department) enters into grant agreements with local municipalities to provide reimbursement for expenditures incurred as a result of New Hampshire declared disasters. During the year ended June 30, 2023, $27,041,873 was passed through to 85 subrecipients. As part of our testwork over the subrecipient monitoring process, we noted the following: A. The Department communicates award information to subrecipients through the approved agreement. Per review of the agreement, for each of the 27 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.332(a). Specifically, the following elements were not communicated: - Subrecipient unique entity identifier (not communicated for 19/27); - Federal Award Identification Number (FAIN) (not communicated for 27/27); - Identification of whether the award is R&D (not communicated for 27/27); and - Indirect cost rate for the federal award (including if the de minimis rate is charged) (not communicated for 27/27) B. The Department evaluated the subrecipient risk of noncompliance through a risk assessment for each of the 13 subrecipients selected for testwork. However, there was no formal risk assessment policy in place that indicated how frequently risk assessments should be performed. As a result, 5 subrecipients did not have risk assessments performed during the current year for purposes of determining the appropriate subrecipient monitoring response. These prior fiscal year(s) risk assessments were performed as of the following dates: September 2019, October and December 2021, May and June 2022. C. For each of the 13 subrecipients selected for testwork, the Department did not perform any during the award monitoring. D. During our testwork over the Department’s review of subrecipient uniform guidance reports, we noted there were no UG report review policies and procedures in place. For the 13 subrecipients selected for testwork, 6 subrecipients were identified in which the Department did not review the most recent uniform guidance report issued. Specifically, we noted: • For 5 of 13 subrecipients, the subrecipient’s uniform guidance was not reviewed due to updated risk assessments not being performed in the current year (refer to item 2 above) • For 1 of 13 subrecipients, the current year risk assessment was performed prior to the receipt of the subrecipient’s uniform guidance report and management did not go back to review the report Cause The cause of the condition found was primarily due to the Department not performing their sub monitoring internal controls in accordance with written formal policies and procedures. Questioned Costs None. Recommendation We recommend that the Department develop policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(a-h) and 2 CFR section 200.501(h). View of Responsible Officials: Management concurs with the finding above.

Finding Reference Number: 2022-002 NH Department of Administrative Services Federal Transit Cluster and COVID-19 Federal Transit Cluster (Assistance Listing #20.507and #20.526) Airport Improvement Program and COVID-19 Airport Improvement Program (Assistance Listing #20.106) COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing #21.027) Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) and COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Temporary Assistance for Needy Families and COVID-19 Temporary Assistance for Needy Families (Assistance Listing #93.558) Federal Award Numbers 2020G996115, 2021G996115, SLFRP0145, NUK50CK000522, 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4, 2021G996115, 2021G990228, 2022G996115 Federal Award Year: 2019, 2020, 2021 U.S. Department of Transportation, U.S. Department of Treasury, U.S. Department of Health and Human Services Type of Finding: Significant Deficiency Prior Year Finding: None Statistically Valid Sample: No Criteria Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR section 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements, section 200.510(b) states the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with ? 200.502. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition The State of New Hampshire (the State) entered into contracts and subrecipient grant agreements to assist with the administration of its federal awards. As part of the Schedule of Expenditures of Federal Awards (SEFA) preparation process, the Department of Administrative Services requested information from each Department related to federal expenditures made by federal program and the portion of those expenditures that were passed through to subrecipients. For the year ended June 30, 2022, the State reported approximately $3.5 billion in federal expenditures on the SEFA. Of the total expenditures reported, approximately $783 million was reported as amounts passed through to subrecipients. During our audit, we identified several instances where the State inaccurately reported the value of the amounts passed through to subrecipients for certain federal programs. Specifically, we noted the following: A. Federal Transit Cluster - The State reported subrecipient expenditures in the amount of $4,038,163 on the draft SEFA within the amounts provided to subrecipients column. During our testwork over procurement, we noted that 1 of 4 contracts selected for testwork was incorrectly identified as a contract. Upon further review and inquiry of management, the actual subrecipient expenditures for the year ended June 30, 2022 were $375,302, resulting in an overstatement of $3,662,861. This error was subsequently corrected on the final SEFA. B. Airport Improvement Program - The State reported subrecipient expenditures in the amount of $8,275,240 on the draft SEFA within the amounts provided to subrecipients column. Upon further review and inquiry of management, management determined the actual subrecipient expenditures for the year ended June 30, 2022 were $8,168,301, resulting in an overstatement of $106,939. This error was subsequently corrected on the final SEFA. C. Coronavirus State and Local Fiscal Recovery Funds ? The State reported subrecipient expenditures in the amount of $7,435,217 on the draft SEFA within the amounts provided to subrecipients column. During our testwork over subrecipient monitoring, we noted that for 5 of 10 subrecipients selected for testwork that the sample selection had been incorrectly identified as a subrecipient, resulting in an overstatement of $5,326,620. We further noted as part of our testwork over procurement, that 18 of 48 contracts selected for testwork had incorrectly been identified as a contract and instead of a subrecipient grant agreement. There were no expenditures associated with these agreements, and as a result, there was no impact on the amount reported on the SEFA within the amounts provided to subrecipients column. The error was subsequently corrected on the final SEFA to properly present $2,108,597 as passed through to subrecipient. D. Epidemiology and Laboratory Capacity for Infectious Diseases - The State reported subrecipient expenditures in the amount of $4,879,473 on the draft SEFA within the amounts provided to subrecipients column. During our testwork related to FFATA reporting, we noted that 1 of 4 items selected for testwork did not represent a tier-one award but instead was a contract. The impact on the amount reported on the SEFA within the amounts provided to subrecipients column was an overstatement of $8,400. The error was subsequently corrected on the final SEFA to properly present $4,871,073 as passed through to subrecipient. E. Temporary Assistance for Needy Families - The State did not report any subrecipient expenditures on the draft SEFA within the amounts provided to subrecipients column. Upon further review and inquiry of management, management determined the actual subrecipient expenditures for the year ended June 30, 2022 were $3,307,974, resulting in an understatement of $3,307,974. This error was subsequently corrected on the final SEFA. Cause The cause of the condition found is primarily due to insufficient controls related to the determination of vendor versus subrecipient to ensure the proper identification of subrecipients. Effect The effect of the condition found is that subrecipient expenditures were not accurately presented on the SEFA. Questioned Costs None. Recommendation We recommend that the State review its existing statewide internal controls over vendor versus subrecipient determination to ensure they are operating effectively to properly identify a vendor versus a subrecipient. This will ensure that the amounts presented as pass through as subrecipient expenditures on the SEFA are complete and accurate. Views of Responsible Officials The Department of Administrative Services (DAS) concurs. Financial management of individual federal awards is decentralized throughout state agencies which centralizes annually in the culmination of the State?s SEFA. During this process, each agency is required to complete a standardized SEFA analysis and reconciliation tool for review by the DAS prior to the incorporation of the data into the State?s SEFA. This process also includes an annual Single Audit training and update session organized by the DAS. Additionally, the DAS notes all contracts, including subawards, entered by state agencies over a designated threshold are required to be authorized by the State?s Legislative Fiscal Committee and the Governor and Executive Council. The DAS will examine each of these processes to identify additional control activities to improve the accuracy and completeness of the pass through element of the SEFA. Anticipated Completion Date: April 30, 2024 Contact: Steven Giovinelli, Federal Grants and Cost Allocation Administrator, Department of Administrative Services

Finding Reference Number: 2022-003 NH Department of Health and Human Services SNAP Cluster and COVID-19 SNAP (Assistance Listing #10.551 and #10.561) Federal Award Numbers 202020S51444, 204NH403S514, 214NH403S2514, 214NH403S2519 Federal Award Year: 2020, 2021 U.S. Department of Agriculture Compliance Requirement: Special Tests and Provisions: EBT Card Security Type of Finding: Significant Deficiency and Material Noncompliance Prior Year Finding: 2021-004 Statistically Valid Sample: No Criteria The state is required to maintain adequate security over, and documentation/records for, EBT cards, to prevent their theft, embezzlement, loss, damage, destruction, unauthorized transfer, negotiation, or use (7 CFR section 274.8(b)(3)). Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition The New Hampshire Department of Health and Human Services (the Department) contracts with a third party to process all daily EBT transactions associated with the SNAP program. The Department transmits data to the third-party service provider that contains information concerning participants that need a new EBT card issued. The third-party service provider generates the EBT cards based on this request and express mails the EBT cards to the Department. The Department reviews the listing of EBT cards that were delivered to ensure that there are no missing EBT cards and then subsequently mails the EBT cards to the individual participant. During our testwork over the daily reconciliation performed over the EBT cards issued, we were unable to obtain documented evidence that the Department had performed daily reconciliations to ensure that only authorized EBT cards that were issued prior to May 5, 2022. As such, we were unable to test compliance with this requirement for the period of July 1, 2021 to May 5, 2022. Cause The cause of the condition found is that the Department only maintained the support for the daily reconciliation process for a 6-month period. After 6 months, the daily reconciliation was destroyed. The Department implemented a corrective action plan that went into effect on May 5, 2022 to address the condition found. As a result, for all 15 sample items selected that were after May 5, 2022, all sample items were found to be properly supported and no instances of noncompliance were identified. Effect The effect of the condition found is that prior to May 5, 2022, EBT cards could have been generated that were not authorized and the Department may not have been able to identify the error timely. Questioned Costs None. Recommendation We recommend that the Department continue to implement its corrective action plan to ensure that daily EBT reconciliations are appropriately maintained. View of Responsible Officials We concur. The Department has been saving and scanning the inventory sheets that are accompanied with the daily EBT card delivery since May 2022. We believe this current control in place allows us to remain in compliance with all requirements. We currently save the inventory sheets in a folder with the daily date as the title and save them in the correct monthly folder. Those monthly folders will then be kept in a yearly folder. Anticipated Completion Date 02/23/2023 Contact Person Frank Beck, EBT Administrator

Finding Reference Number: 2022-004 NH Governor?s Office of Emergency Relief and Recovery COVID-19 Coronavirus Relief Fund (Assistance Listing #21.019) Federal Award Numbers: Not Applicable Federal Award Year: 2020 U.S. Department of Treasury Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency Prior Year Finding: 2021-011 Statistically Valid Sample: No Criteria A pass-through entity must: 1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.331(a); 2. Evaluate each subrecipient?s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.331(b)); and 3. Issuing a management decision for audit findings pertaining to federal award provided to the subrecipient from the subrecipient as required by 2 CFR section 200.521. Additionally, 2 CFR section 200.303(a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition Under the Coronavirus Relief Fund Program (CRF), the State of New Hampshire (the State) entered into various grant agreements with a third parties to provide program services under the CRF program. As part of our testwork over the subrecipient monitoring process, we noted the following breakdown of internal controls: A. The State communicates award information to the subrecipient through the approved grant agreement. During our testwork over the communication of award information, we noted instances where the State did not communicate all the required award information as outlined in 2 CFR section 200.331. Specifically, we noted the following: a. The indirect cost rate for the federal award, including if the de minimis rate is charged, was not included in each of the 7 grant agreements selected for testwork. b. Identification of whether the award is R&D was not included in 2 of 7 grant agreements selected for testwork. B. For 5 of 7 subrecipients selected for testwork, there was no evidence provided that a risk assessment had been performed for the subrecipient. While a risk assessment was not performed, we noted that for all 7 subrecipients selected for testwork that the State performed during the award monitoring procedures. C. The State did not appear to have policies and procedures over internal controls in place to determine if a subrecipient had a Uniform Guidance report if the amount awarded to the subrecipient under the CRF program was under the audit threshold of $750,000. Based on our independent review of uniform guidance submissions within the Federal Audit Clearinghouse, none of the 7 subrecipients selected for testwork had a submitted uniform guidance report, and as such, a management decision letter would not have been required to be submitted for the each of the 7 subrecipients. Cause The cause of the condition found is due to insufficient policies and internal controls to ensure that grant agreements contain the appropriate award notification information, that documented risk assessments are performed and that a comprehensive review to determine if subrecipients had a uniform guidance submitted regardless of the amount awarded under this federal award. Effect The effect of the condition found is that the State did not have sufficient internal controls in place in accordance with 2 CFR section 200.303(a)) and 200.332.(a). In addition, subrecipients could have had a uniform guidance report issued in which a management decision letter needed to be issued but as the Department does not evaluate this for subrecipient?s that were not granted more than $750,000, they would not be able to recognize the need for a management decision letter timely. Questioned Costs None. Recommendation We recommend that the State review its existing internal controls, policies, and procedures to ensure that the State complies with the provisions of 2 CFR section 200.332(a), 2 CFR section 200.332(b), and 2 CFR section 200.251. This would include ensuring that: 1. All required award information is communicated to subrecipients; 2. Documented risk assessments are performed over all subrecipients; and 3. All subrecipients are reviewed regardless of amount awarded to determine if a uniform guidance report was issued and if a management decision letter should be issued. View of Responsible Officials The State concurs in part with the findings and concurs in part with the recommendations. Given that CARES Act CRF is a funding source that is no longer eligible for use because program obligations were required to be entered into by December 31, 2021, and program expenditures complete by September 30, 2022, there are no ongoing CRF funded projects or programs. As a result, any corrective actions would relate to ensuring any other federal funding sources are achieving compliance requirements. With regard to condition A, the State partially concurs. Federal guidance concerning CARES Act CRF did not allow for charging indirect costs. That guidance indicated ?Payments from the Fund are not administered as part of a traditional grant program and the provisions of the Uniform Guidance, 2 CFR part 200, that are applicable to indirect costs do not apply. Recipients may not apply their indirect costs rates to payments received from the Fund.? Thus, awardees and recipients of funds were not permitted to charge indirect costs against CARES Act CRF. However, the state acknowledges inclusion of language specifically acknowledging the disallowance of indirect costs could have been included in the agreements. With regard to condition B, the State concurs. The four identified subrecipients were awardees of a program that was facilitated at the very end of CARES Act CRF eligibility for the period of performance. This program was run due to updated guidance by U.S. Treasury on December 14, 2021, that extended the deadline for expenditure of funds so long as obligations were entered into by December 31, 2021. That program largely resulted in direct beneficiary awards, but due to the nature of some expenditures awarded some entities received a subaward. Those subawards identified a brief timeline for project completion, between December 2021 and September 2022. Most projects were completed in February and March, with two of the subrecipients finalizing projects in September. Given the nature and timing of the program, those subawardees were closely monitored and regularly interacted with the State in order to receive reimbursement for eligible expenses and complete projects. The State can provide documentation of that monitoring and expense review. However, formal risk assessments were not initially done for those entities. Since then, the State has implemented policies and procedures that help ensure risk assessments are completed for all subrecipients, regardless of the nature of the program. With regard to condition C, the State concurs and has already implemented corrective actions to ensure procedures and policies are in place concerning Uniform Guidance Report review and the issuance of any necessary management decision letters to the extent required and where this deficiency could impact any other sources of federal funding. It is worth noting that the State in most cases has timely conducted risk assessments of subrecipients and reviewed relevant Uniform Guidance Reports, but its corrective action will result in better documentation of that process and protocol. Anticipated Completion Date: The corrective actions indicated above have already been implemented as of the date of this response. Contact Person: Steve Giovinelli and Chase Hagaman

Finding Reference Number: 2022-005 NH Governor?s Office of Emergency Relief and Recovery COVID-19 Emergency Rental Assistance Program (Assistance Listing #21.023) Federal Award Numbers ERA0012-ERA0435, ERAE0119 Federal Award Year: 2020 U.S. Department of Treasury Compliance Requirement: Reporting and Special Tests and Provisions ? ERA 1 Funds Redirection Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria The financial information certified as part of reallocation includes monthly expenditure and cumulative obligations levels, as described in the Treasury reallocation guidance. ERA 1 expenditures reported monthly by the grantee are inputs to Treasury?s reallocation expenditure ratio. ERA1 obligations certified in the Request for Reallocated Funds form (1505-0266), including in the Request for Voluntarily Reallocated Funds, are inputs into determining eligibility to receive reallocated funds. ERA 2 expenditures and obligations reported in quarterly reports by the grantee are inputs to Treasury?s ERA 2 reallocation expenditure and obligation ratios. The reallocation expenditure ratio determines whether the grantee is subject to involuntary reallocation due to an insufficient ratio and the amount of excess funds subject to recapture by Treasury. Auditors should confirm the amounts reported as expended and obligated accurately capture the grantee?s housing activity at the time of submission, as reflected in a grantee?s award and/or financial systems, and that grantees receiving reallocated funds met the Treasury criteria. All ERA grantees must submit quarterly reports with reporting periods of one calendar quarter and several cumulative fields covering all activity from the date of award through the quarter close. These reports provide financial and performance data regarding grantee administration of their ERA projects and capture program design in addition to program status data elements. Quarterly reports are intended to capture standard financial and performance data, as well as detailed information on qualifying direct and indirect expenditures pursuant to the government-wide Federal Funding Accountability and Transparency Act (FFATA) reporting requirements and in accordance with Section 15011 of the CARES Act, as amended and interpreted in Treasury?s reporting and compliance guidance on Treasury.gov. 2 CFR section 334 required financial records, statistical records and all other non-federal entity records pertinent to a federal award to be retained for a period of 3 years from the date of submission of the final expenditure report. The two Monthly Reporting questions are included in the information collection for the Interim Quarterly Reports. Beginning with the monthly report for the April 1 through April 30, 2021, period of performance for ERA 1 generally due to Treasury by May 15, 2021, state, local and territorial grantees receiving ERA 1 awards submit monthly reports. For ERA 2, monthly reporting began with the June 1 through June 30, 2021 period of performance and reports were due to Treasury by July 15, 2021, or where otherwise extended in an approved authorization from EmergencyRentalAssistance@Treasury.gov. Grantees receiving ERA 1 and ERA 2 allocations later in the award cycle as evidenced by award or reallocation dates are not required to submit reports for periods not covered by the assistance agreement. Additionally, 2 CFR section 200.303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testwork over reporting and special tests and provisions, we noted the following: A. On a quarterly basis the New Hampshire Governor?s Office of Emergency Relief and Recovery (the Office) submits the required 1505-0266 quarterly federal reporting through the U.S. Treasury (Treasury) reporting portal. During our testwork over the quarterly reporting process, for 2 of 4 quarterly reports selected for testwork, we were unable to review a copy of the report submitted or the related supporting documentation and evidence of review and approval of the reports. As a result, we were unable to verify if the federal reports were complete and accurately submitted and properly approved in accordance with management?s internal control policies. B. On a monthly basis, the Office submits required federal reports to Treasury that are used by Treasury as part of its reallocation process. To compile the federal report, the Office obtains from its subrecipient the number of participating households that receive ERA assistance of any kind and the total amount of ERA funds expended by the ERA grantee to or for participating households on behalf of eligible households. During our review over the compilation of the monthly report, we noted that the Office does not perform any documented review procedures over the data submitted by the subrecipient to ensure the data is complete and accurate before the reports are submitted. As a result, while the monthly reports agreed to the data provided by the subrecipient, we are not able to determine if the data provided by the subrecipient was complete and accurate. Cause The cause of the condition found related to the quarterly reports was due to the Office not having policies and procedures to ensure that a copy of the federal report submitted is maintained along with the documentation to support the amounts reported and evidence that the report was reviewed and approved prior to submission. The Office anticipated being able to access the information directly from the US Treasury reporting portal however, changes were subsequently made to the portal that no longer allows the Office to download and view the report and related report data for prior quarters. The US Treasury did make changes to its portal in late March of 2023 which allowed the Office to access its prior issued reports but there was insufficient time for the auditor to test the accuracy of these reports. The cause of the condition found related to the monthly reports was due to the Office does not having formal procedures to document at a precision level evidence of review of the data, including the key line items, provided by the subrecipient. Per inquiry of management, we noted that the Office meets weekly with the subrecipient and as part of these meetings, the related data used for reporting purposes is discussed. However, there is no evidence such as meeting minutes or agendas maintained to validate that this review occurred at an appropriate precision level. Effect The effect of the condition found is that the Office submit quarterly and monthly reports that are used in the reallocation process that may not be complete and accurate. Data included within the quarterly reports include cumulative amount obligated by the grantee and the cumulative amount expended by the grantee may not be complete and accurate. Data included within the monthly reports include key line items as the Treasury?s guidance to qualify for receiving a reallocation payment for ERA 1 and grantees are subject to returning funds under reallocation where their expenditure for ERA 1 is less than the requirement in effect at the time, as detailed in the Treasury?s reallocation guidance. Questioned Costs None. Recommendation We recommend that the Office develop and implement written policies and procedures over the federal reporting process that includes: 1. Instructions on how to maintain and store filed reports and supporting documentation so that it is retained for its records. In addition to the retention of the report, the Office should also maintain written documentation of its process over reviewing the report for completeness and accuracy prior to submission to the federal government. 2. Written policies and procedures over its review of data submitted by the subrecipient that is utilized as the basis of federal reports to ensure that the data utilized is complete and accurate. The Office should ensure that its policies and procedures include guidelines that describe how the review is to be performed and documented to provide evidence that the review of the data has been completed. View of Responsible Officials Quarterly Reporting The State concurs in part with the condition and recommendation. A unique challenge with ERA reporting has been changes in the U.S. Treasury portal for that program, which have impacted the State?s ability to download and provide copies of past reports that have been submitted. In addition, this issue in the reporting portal has been inconsistent, as some previously submitted reports were made accessible by Treasury, while others were not, which resulted in the State being able to access some requisite materials but not others. The State did not have documented procedures to ?pull down? copies of reports it had submitted to Treasury because the State has otherwise been able to rely on access to its previously submitted reports within reporting portals in order to enable the testing required during audit for the relevant periods. Meaning, in the State?s experience with COVID-19 related federal funds reporting, it has been able to access and download past reports for purposes of audit. However, also noted above is that the Treasury portal was recently revised and updated to allow for accessing previously submitted ERA reports that were not otherwise available (the communication from Treasury acknowledging this change was provided by the State). However, the reporting portal change did not take place in time for the State?s auditors to reasonably conduct the necessary testing. The State did provide the data and materials it reported to Treasury for the relevant periods, but auditors were unable to test and validate that data because the State could not access and provide a copy of what was actually uploaded into the portal. Nevertheless, to avoid any such potential issues in the future, the State has already implemented a procedure that involves downloading copies of reports as soon as they are submitted and taking screenshots of portions of the portal where perceived necessary to support what the State has submitted to Treasury. This updated procedure will be memorialized in the program?s transaction processing memo during its next update. Monthly Reporting The State concurs in part but has already implemented related corrective action in line with the recommendation above. The State would also like to note that as part of the ERA reallocation process U.S. Treasury has relied on both quarterly and monthly reporting, and that the State has continued to engage in thorough monitoring of its subrecipient and receives regular reports from that subrecipient, including weekly, biweekly, and quarterly data, which also includes quality control reports. This is inclusive of the monthly reports that were required by U.S. Treasury at one time but no longer are. The State reviews and then discusses reports received at standing, calendared, weekly meetings with the subrecipient and often engages in e-mail correspondence concerning those reports, especially if any questions concerning the data provided arise. However, the State has acknowledged that its documentation of those weekly conversations needed to be more formally memorialized. During the current fiscal year, the State began providing agendas and summaries of topics discussed during the weekly check-ins and will ensure that the program?s transaction processing memo adequately documents this requirement and procedure. The very nature of this program and U.S. Treasury?s facilitation of it has required the State and its subrecipient to stay in close contact, make regular decisions on strategies and policies within the program, and closely consider data relative to it. Anticipated Completion Date Quarterly reporting - Corrective action relative to acquisition of submitted federal reports has already been implemented and this revised procedure will be memorialized in the transaction processing memo for the program during its next update in Q1 2023. Monthly Repotting - Corrective action relative to documentation of weekly meetings was already complete as of the State?s response to this finding, and the State will ensure that the transaction processing memo for the program reflects these measures during its next update in Q1 2023. Contact Person Chase Hagaman, Lisa Cota-Robles, and Emily Larson

Finding Reference Number: 2022-006 NH Governor?s Office of Emergency Relief and Recovery COVID-19 Homeowners Assistance Fund Program (Assistance Listing #21.026) Federal Award Numbers: HAFP-0190 Federal Award Year: 2021 U.S. Department of Treasury Compliance Requirement: Cash Management Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). Additionally, 2 CFR section 200.303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition The State of New Hampshire Governor?s Office of Emergency Relief and Recovery (the Office) entered into a subrecipient grant agreement whereby the subrecipient is responsible for determining benefit eligibility as well as calculating the benefit amount that the participant is eligible to receive. During the year ended June 30, 2022, the Department passed through $49,250,000 to its subrecipient. Funds paid under this program were authorized to be paid in advance through a series of executive orders by the Governor?s Office to the subrecipient. While the Office properly advanced the funds, they did not monitor or assess at the time of payment what the subrecipient?s cash needs were to ensure that the Office sufficiently minimized the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes for each of the 2 transactions selected for testwork. Cause The cause of the condition found is that the Office was authorized through executive orders to issue the advance payments to the subrecipient. Given this authorization, the Office management do not consider minimizing the time elapsing between the transfer of federal funds to the subrecipient and their disbursement compliance. Per inquiry of management, we noted that the Office meets weekly with the subrecipient and as part of these meetings, cash on hand at the subrecipient level is discussed. However, there is no evidence such as meeting minutes or agendas maintained to validate that this review occurred at an appropriate precision level. Effect The effect of the condition found is that the subrecipient could have excess cash on hand as the Office did not minimize the time elapsing between the transfer of federal funds to the subrecipient and their disbursement of funds for program purposes. Questioned Costs None. Recommendation We recommend that the Office develop and implement written policies and procedures relating to advancing funds to subrecipients to ensure that excess cash on hand at the subrecipient does not exceed 30 days and that its review over excess cash on hand is properly documented to provide evidence that it has been reviewed. View of Responsible Officials The State concurs in part with the premise of the findings identified, but it does not concur with the characterization of the Governor?s Office for Emergency Relief and Recovery (GOFERR), the process for authorizing the relevant subaward and relevant amendments, the nature of the subaward and amendments, or the recommended corrective action. Moreover, the full $49,250,000 identified in the finding was not provided to the subrecipient in one lump sum. The State was allocated $50,000,000 from U.S. Treasury for the purposes of designing and facilitating the State?s HAF program. The State received $5,000,000 from U.S. Treasury up front and received the remainder after approval of the State?s planned program. As a result, the State?s subrecipient received an initial subaward for administrative and planning purposes from within the initial $5,000,000 delivered to the State. The subrecipient was advanced only a portion of those initial funds and then was provided the remainder upon request and justification. A subsequent amendment to that subaward provided additional funds to the subrecipient as needed for the same purpose and as part of the U.S. Treasury required process of designing and then attaining approval for the State?s HAF program. The State ultimately received approval from U.S. Treasury for the State?s HAF program plan, which is a complex multi-faceted program that provides various forms of assistance to homeowners, and then received approval from State officials to launch the program. The State?s program is run entirely through a single subrecipient, New Hampshire Housing Finance Authority, which is the only entity of its kind as a statewide housing authority. This subrecipient facilitates a variety of larger-scale, federally funded housing programs. While developing the State?s HAF program and as it neared the launch date, the State began receiving preapplications through its subrecipient. Additionally, during this time, the State was facilitating its Emergency Rental Assistance (ERA) program, which has provided assistance to renters as opposed to homeowners and is facilitated by the same subrecipient of the State. Within the context of having received nearly 200 preapplications for the HAF program and witnessing a heavy and increasing demand in the rental assistance program, the decision was made to advance the remainder of the State?s HAF allocation ($45,000,000) to its subrecipient in order to provide prompt and adequate assistance, believing the program would experience high demand at the outset and funding shortfalls would be problematic for its success. Moreover, the amount of funds provided to the subrecipient was consistent with past advances to the same subrecipient under the ERA program, and as with prior delivery of funds, the subrecipient placed the funds in an appropriate account. However, demand for assistance did not unfold as anticipated due to the features of the program and the areas of need ultimately demonstrated by applicants after review and processing of initial applications. As part of the State?s monitoring protocols, and in part because of a lower initial expenditure rate than expected, the subrecipient began providing biweekly reports on the usage of funds, which the State has used as a measure of cash on hand. Moreover, the State also engages in standing, calendared, weekly calls with the subrecipient to discuss these reports. The State has provided documentation to support the process outlined above as well. Finally, as a result of the State?s remaining HAF allocation having already been provided to the subrecipient, the recommended corrective action is not feasible. However, the State acknowledges the need to more formally memorialize its review of the subrecipient?s cash on hand. As a result, the biweekly reports received and reviewed by the State will now include a specific section providing such information; review and discussion of that data will be incorporated into the weekly calls with the subrecipient, and the process and protocols will be documented in the State?s transaction processing memo for the program. Corrective Action Incorporation of cash on hand related data in biweekly reports received and reviewed by the State, documentation of that review as part of the weekly calls with subrecipient, and memorialization of the process and protocols in the State?s transaction processing memo for its HAF program. Anticipated Completion Date: Cash on hand data into biweekly reports and documentation of review said data as part of weekly calls with the subrecipient is being is actively being incorporated as of this response. The State will ensure that the transaction processing memo is updated with the requisite processes and protocols during the next update before the end of Q1 2023. Contact Persons: Chase Hagman, Lisa Cota-Robles, and Michele Zangri-Crean

Finding Reference Number: 2022-007 NH Governor?s Office of Emergency Relief and Recovery COVID-19 Homeowners Assistance Fund Program (Assistance Listing #21.026) Federal Award Numbers: HAFP-0190 Federal Award Year: 2021 U.S. Department of Treasury Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria A pass-through entity must: 1. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means; and 2. Issuing a management decision for audit findings pertaining to federal award provided to the subrecipient from the subrecipient as required by 2 CFR section 200.521. Additionally, 2 CFR section 200.303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition The New Hampshire Governor?s Office of Emergency Relief and Recovery (the Office) entered into a subrecipient grant agreement whereby the subrecipient is responsible for determining benefit eligibility as well as calculating the benefit amount that the participant is eligible to receive. During the year ended June 30, 2022, the Department passed through $49,250,000 to its subrecipient. As part of our testwork over the subrecipient monitoring process, we noted the following: A. The Office obtains bi-weekly reports from the subrecipient that provides information related to cumulative cases, status of the case as well as geographic data surrounding the counties assisted. We selected 1 of the 3 bi-weekly reports received by the Office and noted that while the report was received, there was no documented evidence to support that the Office had reviewed the report as part of its monitoring procedures. B. The subrecipient has a quality control process in place whereby it selects samples of cases to ensure that the eligibility determination for the case was appropriate and there is appropriate documentation to substantiate the amount paid to the participant. The subrecipient submits a QC report to the Office summarizing the results of the review, including any items that require corrective action. We selected 2 of the 4 QC reports received by the Office during the audit period and noted that while the QC reports were received by the Office, there was no documented evidence to support that the Office had reviewed the QC report as part of its monitoring process. C. The Office obtains and reviews the subrecipients uniform guidance report on an annual basis. The Office currently does not have a process in place to track the date in which the audit report was reviewed. As such, we were unable to determine if the Office reviewed the uniform guidance report timely. Per review of the subrecipient uniform guidance report, there were no matters identified within the audit report that would require the Office to issue a management decision letter. D. As part of the Office?s federal reporting requirements, the Office obtains information directly from the subrecipient that is used to compile federal reports. The Department does not perform any documented monitoring procedures over the data submitted by the subrecipient to ensure that the following data used is by the Office within the report is complete and accurate: a. the number of unique homeowners that received assistance and subset that are classified as socially disadvantaged and 100 percent are median income or less b. the number homeowners and the amount of funding homeowners received, disaggregated by program design element are complete and accurate. Cause The cause of the condition found is due to insufficient procedures for ensuring monitoring activities performed are documented. Per inquiry of management, we noted that the Office meets weekly with the subrecipient and as part of these meetings, the bi-weekly reports, the QC reports and the data collected that is used as the basis for federal reporting are discussed. However, there is no evidence such as meeting minutes or agendas maintained to validate that this review occurred at an appropriate precision level. In addition, the review of the subrecipient?s uniform guidance report is documented along with its risk assessment process, which may not correspond with the actual receipt and review of the uniform guidance report. Effect The effect of the condition found is that the Office did not comply with 2 CFR section 200.332(d) through (f) and may not issue a management decision timely as required in accordance with 2 CFR section 200.521. Questioned Costs None. Recommendation We recommend that the Office formalize policies and procedures and implement the necessary internal controls to ensure that the Office complies with the provisions of CFR section 200.332(d) through (f) and 2 CFR section 200.251. This would include ensuring that: 1. During the award monitoring procedures are documented and any items requiring follow up or a corrective action are resolved timely and 2. Ensure that all uniform guidance reports are collected and reviewed timely so that a management decision letter can be issued within the time period required by federal regulations. 3. Data collected from the subrecipient used to compile federal reports is monitored to ensure that the data is complete and accurate. View of Responsible Officials The State concurs in part with the findings and recommended action. The State?s HAF program fully launched in March 2022 of the Fiscal Year under review, which ended June 30, 2022. On the whole, a more robust subrecipient monitoring framework and process is being implemented during the current Fiscal Year for this program. However, the State has engaged in thorough monitoring of its subrecipient, receiving and reviewing recurring biweekly and quarterly reports. As noted, discussion of those reports takes place during weekly conversations with the subrecipient. However, the State has acknowledged that it needs to more formally memorialize the substance of such conversations to demonstrate such review. This change in protocol and procedure has already been implemented during this Fiscal Year. The State has also engaged in a subrecipient risk assessment and review of audited financials for the purposes of uniform guidance report review. However, its process and protocols will be revised to better demonstrate when such reviews/assessments take place moving forward. Moreover, the State relies on its subrecipient to facilitate the State?s HAF program, which includes collecting and processing data, as outlined in the program?s policy guide manual. A key feature of that process is a detailed quality control protocol. Additionally, during this Fiscal Year, the State engaged in a robust, on-site review of the subrecipient?s quality control protocols and methods, including applicant file review, and found them satisfactory and reliable. The State also works closely with its subrecipient during the quarterly and annual U.S. Treasury reporting processes, which involves reviewing and analyzing data provided by the subrecipient for reporting purposes. This review and the resulting communications can result in corrections to data prior to submission to U.S. Treasury. Corrective Action and Anticipated Completion Date: As of this response, the State has already implemented several corrective actions that align with the recommendations above, including documentation of report review during weekly calls with the subrecipient, timestamping procedures for uniform guidance report review, and on site, detailed review of quality control protocols that involved applicant file review. The State will further ensure that such updated protocols and procedures are memorialized in the Programs? transaction processing memo during its Q1 2023 update, including any protocols necessary to ensure timely issuance of any required management decisions relative to the subrecipient. Contact Person: Chase Hagaman, Lisa Cota-Robles, and Michele Zangri-Crean

Finding Reference Number: 2022-008 NH Governor?s Office of Emergency Relief and Recovery COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing #21.027) Federal Award Numbers: SLFRP0145 Federal Award Year: 2021 U.S. Department of Treasury Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency Prior Year Finding: None Statistically Valid Sample: No Criteria A pass-through entity must: 1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a); 2. Evaluate each subrecipient?s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.332(b)); 3. Issuing a management decision for audit findings pertaining to federal award provided to the subrecipient from the subrecipient as required by 2 CFR section 200.521. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Coronavirus State and Local Fiscal Recovery Funds program, the State of New Hampshire (the State) entered into grant agreements with local entities to support allowable activities under the federal program. During the year ended June 30, 2022, the State passed through $2,108,597 to subrecipients. As part of our testwork over the subrecipient monitoring process, we noted the following breakdown of internal controls: A. The State communicates award information to subrecipients through the approved grant agreement. Per review of the grant agreement, for 5 of the 10 subrecipients selected for testwork, the State did not communicate all the required award information as outlined in 2 CFR section 200.332. Specifically, the following elements were not communicated: a. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414) was not communicated for 5 of 10 subrecipients selected for testwork. b. Identification of whether the award is R&D was not communicated for 3 of 10 subrecipients selected for testwork. A. For 2 of 10 subrecipients selected for testwork, there was no documented risk assessment performed over the subrecipient. The State indicated that they had previous experience with these 2 subrecipients and based upon the previous relationship a formal risk assessment was not necessary. As part of our audit, we inquired as to whether a risk assessment was performed in connection with other federal awards that were granted to these entities, but a risk assessment was not able to be provided. While a risk assessment was not performed, we noted that for all each of these 2 subrecipients that the State performed during the award monitoring procedures. B. The State did not appear to have policies and procedures in place to determine if a subrecipient had a Uniform Guidance report if the amount awarded to the subrecipient under this program was under the audit threshold of $750,000. Based on our independent review of uniform guidance submissions within the Federal Audit Clearinghouse, none of the 10 subrecipients selected for testwork had a submitted uniform guidance report, and as such, a management decision letter would not have been required to be submitted for the each of the 10 subrecipients. Cause The cause of the condition found is primarily due to insufficient internal controls and procedures to ensure that award identification information is properly communicated, that risk assessments are performed to ensure sufficient during the awarded monitoring is performed and that all subrecipients are reviewed to determine if a uniform guidance audit was issued regardless of amount awarded to the subrecipient. Given the nature of this program, several Departments within the State entered into subrecipient grants resulting in a decentralized process. Not all Departments within the State are experienced with subrecipient relationships and may not have had developed policies to comply with subrecipient monitoring requirements. Effect The effect of the condition found is that the State did not have sufficient internal controls in place in accordance with 2 CFR section 200.303(a)) and 200.332.(a). In addition, subrecipients could have had a uniform guidance report issued in which a management decision letter needed to be issued but as the Department does not evaluate this for subrecipient?s that were not granted more than $750,000, they would not be able to recognize the need for a management decision letter timely. Questioned Costs None. Recommendation We recommend that the State review its existing internal controls, policies, and procedures to ensure that the State complies with the provisions of 2 CFR section 200.332(a), 2 CFR section 200.332(b), and 2 CFR section 200.251. This would include ensuring that: 1. All required award information is communicated to subrecipients; 2. Documented risk assessments are performed over all subrecipients; and 3. All subrecipients are reviewed regardless of amount awarded to determine if a uniform guidance report was issued and if a management decision letter should be issued. View of Responsible Officials The State largely concurs with the findings and recommendations and has either implemented procedures to address the identified conditions already or will do so. With regard to condition A(a) and (b), although the State illustrated that it includes clauses related to allowed costs in its subawards, including direct and indirect costs, it will work to ensure that agencies entering into such agreements clearly indicate the terms required by Uniform Guidance, including permitted indirect cost rates and whether the award is for R&D. With regard to condition B, the State agrees that risk assessments should have been completed and has since implemented a framework to help ensure that agencies are more consistently conducting and documenting subrecipient risk assessments. With regard to condition C, the State concurs and has already implemented an agency-wide framework to help ensure procedures and policies are in place concerning Uniform Guidance Report review and the issuance of any necessary management decision letters, to the extent required. It is worth noting that the State in most cases has timely conducted risk assessments of subrecipients and reviewed relevant Uniform Guidance Reports, but its corrective actions will result in better documentation and more consistent and timelier follow through. Anticipated Completion Date: The corrective actions indicated above relative to conditions B and C have already been implemented as of the date of this response. The State will work to address Condition A before the end of the current Fiscal Year. Contact Person: Chase Hagaman and Steve Giovinelli

Finding Reference Number: 2022-009 NH Governor?s Office of Emergency Relief and Recovery COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing #21.027) Federal Award Numbers: SLFRP0145 Federal Award Year: 2021 U.S. Department of Treasury Compliance Requirement: Suspension and Debarment Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria Prior to entering into subawards and contracts with award funds, recipients must verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded pursuant to 31 CFR section 19.300. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over suspension and debarment, we noted the following as of the year ending June 30, 2022: A. For 9 of 48 items selected for testwork we associated with statewide consulting contracts. Based on discussions with the New Hampshire Department of Administrative Services, they were unaware of any disbarment provisions for Professional Engineers, Registered Architects, or their consulting firms. As a result, we found no evidence that a suspension and debarment certification had been obtained from the contractor or that an independent search of SAM.gov was performed. B. For 10 of 48 items selected for testwork, the State entered into a grant agreement with municipalities that provided funds for the purchase of equipment. The State indicated that these agreements represented direct beneficiary awards as part of the Locality Equipment Purchase Program and as the municipality was a direct beneficiary, suspension and debarment checks were not required. In reviewing 31 CFR section 19.300 we were unable to validate that these subrecipients were exempt from suspension and debarment requirements. C. For 2 of 48 items selected for testwork, the contract did not include a suspension and debarment certification and the entity was not included in SAM.gov. As a result, it is unclear if these entities were suspended or debarred from receiving federal funds. Cause The cause of the condition found is primarily due to insufficient internal controls and procedures to ensure that for all covered transactions the State determines if the entity covered has been suspended or debarred. Effect The effect of the condition found is that the funds could be paid to an entity that has been suspended or debarred and costs paid to the entity would be unallowable. Questioned Costs Not determinable. Recommendation We recommend that the State review its existing policies and procedures related to suspension and debarment and ensure that all covered transactions with entities are properly reviewed to ensure that the entity has not been suspended and debarred. View of Responsible Officials The State concurs. The State will review and strengthen existing policies and procedures related to suspension and debarment to improve compliance. Anticipated Completion Date: December 2023 Contact Person: Chase Hagaman and Steven Giovinelli

Finding Reference Number: 2022-010 NH Department of Business and Economic Affairs COVID-19 State Small Business Credit Initiative Technical Assistance Grant Program (Assistance Listing #21.031) Federal Award Numbers: NOI-0000178 Federal Award Year: 2022 U.S. Department of Treasury Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include those procurement contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: EPLS is no longer a separate system; however, the OMB guidance and agency implementing regulations still refer to it as EPLS), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Additionally, 2 CFR section 200.303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During the year ended June 30, 2022, we noted that the New Hampshire Department of Business and Economic Affairs (the Department) passed through funds to a subrecipient in the amount of $19,661,597. As part of our testwork over suspension and debarment, we noted the Department was unable to provide documentation to support it had verified whether the single subrecipient it had entered into a grant agreement with was suspended or debarred. Based on our review of the System for Award Management (SAM) Exclusion?s website, the subrecipient was not included within the exclusion list indicating that they had been suspended or debarred. Cause The cause of the condition found was the result of the Department being unaware that the agreement they entered into was a subrecipient relationship and that they were required to document that they verified the subrecipient was not suspended or debarred. Effect The effect of the condition found is that the Department could have entered into an agreement with a subrecipient that had been suspended or debarred from receiving federal funds and would not have the necessary internal controls and procedures to identify the suspended or debarred vendor timely. Additionally, the Department was not in compliance with 2 CFR section 180.300. Questioned Costs None. Recommendation We recommend that the Department review its existing policies, procedures, and related internal controls to ensure signed suspension and debarment certifications are in place or the excluded parties listing is reviewed prior to entering a covered transaction with vendors. The Department should also consider whether procedures should be implemented to independently review the System for Award Management Exclusions website to verify if a vendor has been suspended or debarred. View of Responsible Officials The Department acknowledges the misinterpretation of the agreement as a subaward has led to a failure to comply with 2 CFR section 180. Underlying this misinterpretation was the Department?s failure to differentiate between entering into agreements with other state agencies and entities recognized as component units of state government such as the NH Business Finance Authority; noting suspension and debarment policies and procedures do not apply to agreements between state agencies. Accordingly, the Department will review existing policies and procedures related to suspension and debarment certifications to ensure agreements with component units of state government are properly considered. Anticipated Completion Date: June 30, 2023 Contact Person: Taylor Caswell

Finding Reference Number: 2022-011 NH Department of Business and Economic Affairs COVID-19 State Small Business Credit Initiative Technical Assistance Grant Program (Assistance Listing #21.031) Federal Award Numbers: NOI-0000178 Federal Award Year:2022 U.S. Department of Treasury U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the ?Transparency Act? that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the State Small Business Credit Initiative Technical Assistance Grant Program (SSBCI), the New Hampshire Department of Business and Economic Affairs (the Department) entered into a Memorandum of Understanding with a subrecipient that met the requirements of a first tier subaward under the Transparency Act and as such a FFATA report was required to be filed. During the period ending June 30, 2022, the Department did not file the required FFATA report. Cause The cause of the condition found was the result of the Department being unaware that the agreement they entered was a subrecipient relationship and that they were required to submit a FFATA report. Effect The effect of the condition found is that the Department did not comply with the reporting provisions of the Transparency Act. Questioned Costs None. Recommendation We recommend that the Department implement internal controls, policies, and procedures to ensure that all required FFATA reports are filed and filed timely for all subrecipient grant agreements that meet the definition of a first tier subaward. View of Responsible Officials The Department acknowledges the misinterpretation of the agreement as a subaward has led to a failure to comply with 2 CFR 170. Underlying this misinterpretation was the Department?s failure to differentiate between entering into agreements with other state agencies and entities recognized as component units of state government such as the NH Business Finance Authority; noting FFATA reporting would not apply to agreements between state agencies. Accordingly, the Department will review existing policies and procedures related to FFATA reporting to ensure agreements with component units of state government are properly considered and reported. Anticipated Completion Date: June 30, 2023 Contact Person: Taylor Caswell

Finding Reference Number: 2022-012 NH Department of Business and Economic Affairs COVID-19 State Small Business Credit Initiative Technical Assistance Grant Program (Assistance Listing #21.031) Federal Award Numbers: NOI-0000178 Federal Award Year: 2022 U.S. Department of Treasury Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria In accordance with 2 CFR section 200.1, a subrecipient is an entity, usually but not limited to non-federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A pass-through entity must clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a). The following items are required to be communicated: a. Subrecipient name (which must match the name associated with its unique entity identifier); b. Subrecipient's unique entity identifier; c. Federal Award Identification Number (FAIN); d. Federal Award Date (see ? 200.39 Federal award date) of award to the recipient by the Federal agency; e. Subaward Period of Performance Start and End Date; f. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; g. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current obligation; h. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; i. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); j. Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; k. CFDA Number and Name; the pass-through entity must identify the dollar amount made available under each Federal award and the CFDA number at time of disbursement; l. Identification of whether the award is R&D; and m. Indirect cost rate for the Federal award (including if the de minimis rate is charged per ? 200.414 Indirect (F&A) costs). Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the State Small Business Credit Initiative Technical Assistance Grant Program (SSBCI), the New Hampshire Department of Business and Economic Affairs (the Department) entered into a Memorandum of Understanding (MOU) with a subrecipient that passed through all programmatic and financial responsibilities of the federal award to the subrecipient. The total amount of funds passed through during the period ending June 30, 2022 was $19,661,597. During our review of the MOU, the Department did not communicate any of the required award information outlined within 2 CFR 200.332(a). Cause The cause of the condition found was the result of the Department being unaware that the agreement they entered was a subrecipient relationship and that they were required to communicate the required award information contained within 2 CFR 200.332(a). Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(a). Questioned Costs None. Recommendation We recommend that the Department review its existing internal controls, policies, and procedures to ensure that the Department complies with the provisions of 2 CFR section 200.332(a) by ensuring that all required award information is communicated to subrecipients. View of Responsible Officials The Department acknowledges the misinterpretation of the agreement as a subaward has led to a failure to comply with 2 CFR section 200.332(a). Underlying this misinterpretation was the Department?s failure to differentiate between entering into agreements with other state agencies and entities recognized as component units of state government such as the NH Business Finance Authority; noting agreements between state agencies would not require such compliance. Accordingly, the Department will review existing policies and procedures related to subawarding and subrecipient monitoring to ensure agreements with component units of state government are properly considered. Additionally, the Department will amend the existing agreement to ensure required award information is communicated and ensure all other subrecipient monitoring protocols are applied to the subaward. Anticipated Completion Date: June 30, 2023 Contact Person: Taylor Caswell

Finding Reference Number: 2022-013 NH Department of Education Title I Grants to Local Educational Agencies (Title I, Part A of ESEA (Assistance Listing #84.010)) Federal Award Numbers: S010A200029, S010A210029 Federal Award Year: 2021, 2022 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2021-013 Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the ?Transparency Act? that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2022, we noted the New Hampshire Department of Education (the Department) passed through $42,672,742 in Title I Grants to Local Educational Agencies funds to subrecipients (LEAs). During our testwork over FFATA reporting at the Department for Title I Grants, we selected 60 FFATA reports for testing and noted none were reported. Specifically, we noted the following: See Schedule of Findings and Questioned Costs for Chart/Table Cause The cause of the condition found is due to a lack of policies and procedures, including internal controls, in place to ensure timely and accurate FFATA reporting. Effect The effect of the condition found is that the Department did not comply with the Transparency Act. Questioned Costs None. Recommendation We recommend that the Department implement policies and procedures which include internal controls across the Department programs to which FFATA reporting is applicable, to ensure timely and accurate reporting to the FSRS system to ensure compliance with the Transparency Act reporting requirements. View of Responsible Officials DLS has implemented a procedure across all ESF and ESEA programs to ensure timely and accurate reporting. DLS has also partnered with GSA to resolve issues within the FSRS (FFATA) system, however, there seems to be many technical issues on their end that their developers are currently working through. At the time of this finding, the technical issue on GSA?s side hasn?t been resolved. The procedure includes a flow chart, PowerPoint presentation, FAQ document, and process. Additionally, there have been numerous training opportunities both in person and online across the Division to train as many stakeholders as possible in the reporting and monitoring of FFATA to ensure timeliness and accuracy. In-person and online trainings were held on 01/04/23, 01/26/23, and 02/06/23. The United States Department of Education also recently held a FFATA webinar on 01/18/2023, which all ESF and ESEA program personnel involved in FFATA reporting where required to attend. Anticipated Completion Date: 02/06/2023 Contact Person: Jessica Lescarbeau, Bureau Administrator and Lindsey Labonville, Compliance Administrator

Finding Reference Number: 2022-014 NH Department of Education Special Education Cluster (Assistance Listing #84.027 and #84.173) Federal Award Numbers: H027A210103, H173A210109, H027A180103, H173A180109 Federal Award Year: 2021, 2022 U.S. Department of Education Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria A pass-through entity must clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a); Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2022, the New Hampshire Department of Education (the Department) passed through $50,310,796 of federal funding to 174 subrecipients. As part of our testing related subrecipient monitoring, we noted that the Department communicates to subrecipients through the Grant Award Notifications (GANs). Per review of the GAN, we noted the following: A. For 44 of 44 subrecipients selected for testwork, the Department did not communicate the federal award identification number. B. For 15 of 44 subrecipients selected for testwork, the Department did not communicate the full award amount. Instead, the Department only communicated the subrecipients first installment amount entered into Grant Management System (GMS) which is a portion of the subrecipient?s total federal funding allocation. Cause The cause of the condition found was primarily due to breakdown of internal controls to ensure that the Grant Award Notification sent to subrecipients includes all required award data elements, including federal award identification number and full award amount. Effect The effect of the condition found is that the Department may not be in compliance with 2 CFR section 200.332(a)(1). Questioned Costs Not determinable. Recommendation We recommend that the Department review its existing policies and procedures over subrecipient monitoring award identification requirements and revise procedures and internal controls to ensure that information described in 2 CFR section 200.332(a)(1) is clearly identified to the subrecipient at the time of subaward (or subsequent subaward modification). View of Responsible Officials NHED concurs with the finding identified in section A. This was an oversight on the part of NHED, and a process has been implemented to ensure that when the GAN template is generated, there is a review by 2 separate staff members to ensure all required elements on the GAN are complete. NHED concurs with the finding identified in Section B. The previous Division Director of Learner Support, without understanding the unintended consequences, required that the IDEA allocations be uploaded in separate installments instead of including the full year award amount. This led to a GAN generation that included only the first installment. This procedure has since been corrected and NHED is now uploading the full year allocation amount in GMS, this will then generate a GAN that reflects the full year grant amount. If a reallocation does occur, there is a review by 2 separate staff members to ensure that the amount is verified and that a new GAN is manually generated to include that verified amount, and then the GAN is reissued to the recipient. Anticipated Completion Date: Already completed Contact Person: Lindsey Labonville

Finding Reference Number: 2022-015 NH Department of Education Special Education Cluster (Assistance Listing #84.027 and #84.173) Federal Award Numbers: H027A180103, H027A190103, H027A210103 Federal Award Year: 2018, 2019, 2021 U.S. Department of Education Compliance Requirement: Period of Performance Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria LEAs and SEAs must obligate funds during the 27 months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15-month period of initial availability plus a 12-month period for carryover. For example, funds from the fiscal year 2019 appropriation initially became available on July 1, 2019; and may be obligated by the grantee and subgrantee through September 30, 2021 (Section 421(b) of GEPA (20 USC 1225(b)); 34 CFR sections 76.703 through 76.710). Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over period of performance at the New Hampshire Department of Education (the Department), we noted for 12 of 12 expenditures selected for testing awards that started during the state fiscal year, the Department had charged the expense to the new federal fiscal year grant, however, the date of service on the invoice was for a period prior to the start of that federal award. Furthermore, during our testwork over period of performance at the New Hampshire Department of Education (the Department), we noted for 12 of 40 expenditures selected for testing awards that ended/liquidated during the state fiscal year, the Department had charged the expense to the old federal fiscal year grant, however, the date of service on the invoice was for a period subsequent to the end of that federal award. Lastly, the Department had a breakdown of internal controls to ensure that expenditures are charged to the correct CAN for period of performance tracking. Cause The cause of the condition found is due to how the Department charges costs to federal grants and the breakdown of internal controls to ensure that expenditures are charged to the correct CAN for period of performance tracking. Effect The effect of the condition found is that the Department did not comply with the period of performance regulations. Questioned Costs $117,634 - the amount of expenditures charged to the Fiscal Year 2019 award that related to a date of service subsequent to the end of liquidation period for that award $5,811 - the amount of expenditures charged to the Fiscal Year 2021 award that related to a date of service prior to the start of that federal award $593 - the amount of expenditures charged to the Fiscal Year 2018 award that related to a date of service subsequent to the end of liquidation period for that award Recommendation We recommend that the Department implement internal control and policies and procedures to ensure costs are appropriately charged to federal awards based on the incurred date. View of Responsible Officials The Department does not concur. The Department notes extensions are in place related to COVID-19 and the Tydings Amendment through the Department of Education mitigating the condition noted. The Department will confer with the US DE to clarify the extensions in place and resolve any disparities identified within the finding. Anticipated Completion Date: Completed as of the date of this report Contact Person: Lindsey Labonville, Melissa White Rejoinder Based on the supporting documentation provided by the Department, it did not appear that the expenses identified within the condition found were charged to the correct period of performance during the liquidation period. Subsequently management adjusted the CAN the expenses related to which would correct the condition found.

Finding Reference Number: 2022-016 NH Department of Education COVID-19 Education Stabilization Fund (Assistance Listing #84.425C, #84.425D, #84.425R, #84.425U, #84.425V, and #84.425W) Federal Award Numbers: S425U210017, S425D200017, S425V210041, S425W210030, S425R210041, S425C210032, S425D210017 Federal Award Year: 2020, 2021 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2021-015 Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the ?Transparency Act? that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2022, we noted the New Hampshire Department of Education (the Department) passed through $90,972,223 in Education Stabilization Funds to subrecipients. During out testwork over FFATA reporting at the Department, we selected 60 FFATA reports for testing and noted the following: See Schedule of Findings and Questioned Costs for Chart/Table Cause The cause of the condition found is due to a lack of policies and procedures, including internal controls, in place to ensure timely and accurate FFATA reporting. Effect The effect of the condition found is that the Department did not comply with the Transparency Act. Questioned Costs None. Recommendation We recommend that the Department implement internal controls, policies, and procedures, across all Department programs to which FFATA reporting is applicable, to ensure timely and accurate reporting to the FSRS system to ensure compliance with the Transparency Act reporting requirements. View of Responsible Officials DLS has implemented a procedure across all ESF and ESEA programs to ensure timely and accurate reporting. DLS has also partnered with GSA to resolve issues within the FSRS (FFATA) system, however, there seems to be many technical issues on their end that their developers are currently working through. At the time of this finding, the technical issue on GSA?s side hasn?t been resolved. The procedure includes a flow chart, PowerPoint presentation, FAQ document, and process. Additionally, there have been numerous training opportunities both in person and online across the Division to train as many stakeholders as possible in the reporting and monitoring of FFATA to ensure timeliness and accuracy. In-person and online trainings were held on 01/04/23, 01/26/23, and 02/06/23. The United States Department of Education also recently held a FFATA webinar on 01/18/2023, which all ESF and ESEA program personnel involved in FFATA reporting where required to attend. Anticipated Completion Date: 02/06/2023 Contact Person: Jessica Lescarbeau, Bureau Administrator and Lindsey Labonville, Compliance Administrator

Finding Reference Number: 2022-017 NH Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) and COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Federal Award Numbers: NUK50CK000522 Federal Award Year: 2019 U.S. Department of Health and Human Services Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2021-019 Statistically Valid Sample: No Criteria Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include those procurement contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: EPLS is no longer a separate system; however, the OMB guidance and agency implementing regulations still refer to it as EPLS), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our compliance testwork related to procurement and suspension and debarment, we noted for 5 of 31 agreements selected for testwork, we noted that the New Hampshire Department of Health and Human Services (the Department) was unable to provide documentation to support it had verified whether the contractor or subrecipient was suspended or debarred. For our control testwork we noted 1 of 5 agreements selected for testwork, the Department was unable to provide documentation to support it had verified whether the vendor was suspended or debarred before entering into the contract or grant agreement. Based on our review of the System for Award Management (SAM) Exclusion?s website, none of the vendors selected for testwork were included within the exclusion list indicating that they had been suspended or debarred. Cause The cause of the condition found was the result of insufficient internal controls in place to ensure that Department suspension debarment policies are followed, and adequate documentation is maintained to support the Departments verification. Effect The effect of the condition found is that the Department could have entered into an agreement with a vendor that had been suspended or debarred from receiving federal funds and would not have the necessary internal controls and procedures to identify the suspended or debarred vendor timely. Additionally, the Department was not in compliance with 2 CFR section 180.300. Questioned Costs Not determinable. Recommendation We recommend that the Department continue to review its existing policies, procedures, and related internal controls to ensure signed suspension and debarment certifications are in place or the excluded parties listing is reviewed prior to entering into a covered transaction with vendors. The Department should also consider whether or not procedures should be implemented to independently review the System for Award Management Exclusions website to verify if a vendor has been suspended or debarred. View of Responsible Officials The Department will review existing internal controls to assess whether they are sufficient to provide management with reasonable assurance the Department complies with the 2 CFR section 180.300. It is important to note that between April 2020 and June 2022 the Department was involved in the State?s strategic response to the COVID-19 pandemic. During this time, New Hampshire was under a state of emergency (Executive Order 2020-04), processes were rapidly converted to fully digital overnight, the State?s standard approval processes were suspended and non-standard templates were utilized to respond to the COVID-19 pandemic. The Department worked with other State Departments and the National Guard to create a record number of amendments, contracts, and other agreements (approximately 200% more than standard). The Department is in the process of instituting a new contract life cycle management solution that will utilize conditional logic to include the required attestation for agreements involving federal funds in order to ensure compliance. Implementation is anticipated to be complete in July 2023. As the COVID-19 pandemic strategic response has wound down, the Department has not suspended its regular standard approval or subrecipient risk assessment and monitoring processes and has not used non-standard templates to award federal funding. All standard templates require vendors to sign a certification regarding suspension and debarment. Anticipated Completion Date: July 2023 Contact Person: Melissa Kelleher, Grants Administrator

Finding Reference Number: 2022-018 NH Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) and COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Federal Award Numbers: NUK50CK000522 Federal Award Year: 2019 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2021-021 Statistically Valid Sample: No Criteria A pass-through entity (PTE) must: 1. Identify the Award and Applicable Requirements ? Clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). 2. Evaluate Risk ? Evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 3. Monitor ? Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. 4. Ensure Accountability of For-Profit Subrecipients ? Some federal awards may be passed through to for-profit entities. For-profit subrecipients are accountable to the PTE for the use of the federal funds provided. Because 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient's compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits (2 CFR section 200.501(h)). Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award Condition During the year ended June 30, 2022, the New Hampshire Department of Health and Human Services (the Department) passed through $5,070,789 of federal funding to 56 subrecipients, both for-profit and non-profit. As part of our testing related subrecipient monitoring, we noted the following: A. The Department communicates award information to subrecipients through the approved agreement. Per review of the agreement, for 14 of 14 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.332(a). Specifically, one or all of the following elements were not communicated: - Subrecipient unique entity identifier; - Federal award date; - Name of the federal awarding agency, pass-through entity, and contact information for the awarding official of the pass-through entity; - Identification of whether the award is R&D; and - Indirect cost rate for the federal award B. The Department was unable to provide documentation to support it had evaluated subrecipient risk of noncompliance for all subrecipients for purposes of determining the appropriate subrecipient monitoring related to subawards. C. The Department did not perform any during the award monitoring over the programs subrecipients. D. The Department passed through federal funding to for-profit subrecipients. These subrecipients are not subject to 2 CFR 200 Subpart F and as such, no review over the uniform guidance audit report is performed by the Department. The Department was unable to provide documentation to support it had performed procedures to ensure compliance with the subrecipient agreement in accordance with 2 CFR section 200.501(h). Cause The cause of the condition found was primarily due to a lack of formal policies and internal controls to ensure that all required subrecipient monitoring compliance procedures are being performed by the Department. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(a - h) and 2 CFR section 200.501(h). Questioned Costs None. Recommendation We recommend the Department develop policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(a-h) and 2 CFR section 200.501(h). View of Responsible Officials The Department will review its Sub-recipient Monitoring Policy and assess compliance across the Department. It is important to note that between April 2020 and June 2022 the Department was involved in the State?s strategic response to the COVID-19 pandemic. During this time, New Hampshire was under a state of emergency (Executive Order 2020-04), processes were rapidly converted to fully digital overnight, the State?s standard approval processes were suspended and non-standard templates were utilized to respond to the COVID-19 pandemic. The Department worked with other State Departments and the National Guard to create a record number of amendments, contracts, and other agreements (approximately 200% more than standard). The Department is in the process of instituting a new contract life cycle management solution that will utilize conditional logic to include the required notifications for agreements involving federal funds in order to ensure compliance. Implementation is anticipated to be complete in July 2023. As the COVID-19 pandemic strategic response has wound down, the Department has not suspended its regular standard approval or subrecipient risk assessment and monitoring processes and has not used non-standard templates to award federal funding. The Financial Compliance Unit (FCU) will continue to work with the Business System Analyst of the Cost Allocation Unit in determining the amount of Federal payments made to the vendors. The FCU receives a vendor payment list on a quarterly basis that includes the total amount of Federal funds that were paid to all contracted agencies. We will continue to closely monitor the FAC to obtain all copies of the Single Audits pertaining to the DHHS agencies. In addition, we will devise a spreadsheet that will list all contracts that have been awarded Federal funds and cross check these agencies to vendor payment list. The DHHS updated the policy on risk assessment on November 16, 2020 to ensure that all contracts have a risk assessment performed regardless of funding source. We also have added verbiage in the contracts effective for contracts that begin after November 2021. It states any Contractor that receives an amount equal to or greater than $250,000 from the Department during a single fiscal year, regardless of the funding source, may be required, at a minimum, to submit annual financial audits performed by an independent CPA if the Department?s risk assessment determination indicates the Contractor is high-risk. Finally, effective for any new procurement subsequent to March 2022, all back-up documentation must accompany the invoices and be submitted on a monthly basis. Anticipated Completion Date: July 2023 Contact Person: Melissa Kelleher, Grants Administrator, Ann Driscoll, Financial Compliance Unit

Finding Reference Number: 2022-019 NH Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) and COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Federal Award Numbers: NUK50CK000522 Federal Award Year: 2019 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Significant Deficiency Prior Year Finding: None Statistically Valid Sample: No Criteria Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, the New Hampshire Department of Health and Human Services (the Department) reports financial information to the CDC on a monthly basis including expenditures paid out and the amount of unliquidated obligations for the reporting period. For 11 of 31 monthly reports selected for testwork, there was no documentation maintained to evidence Department review of the monthly reports prior to submission to CDC. Cause The cause of the condition found was the result of insufficient internal controls in place to ensure that Department monthly reporting policies are followed, and documentation of review is maintained. Effect The effect of the condition found is that the Department did not comply with the provisions of the Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a). Questioned Costs None. Recommendation We recommend that the Department review its existing internal controls, policies, and procedures to ensure that all required monthly financial reports are reviewed prior to being filed timely and documentation of review is maintained. View of Responsible Officials We concur. The Department has been reviewing and second reviewing all required monthly financial reports and maintaining documentation since January 2022. We believe this current control in place allows us to remain in compliance with all requirements. Anticipated Completion Date: March 2, 2023 Contact Person: Shelley Swanson, DPHS Finance Director

Finding Reference Number: 2022-020 NH Department of Health and Human Services Temporary Assistance for Needy Families and COVID-19 Temporary Assistance for Needy Families (Assistance Listing #93.558) Federal Award Numbers: 2021G996115, 2021G990228, 2022G996115 Federal Award Year: 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provisions: Child Support Non-Cooperation Type of Finding: Significant Deficiency Prior Year Finding: 2021-023 Statistically Valid Sample: No Criteria If the State agency responsible for administering the State plan under Title IV-D of the Social Security Act determines that an individual is not cooperating with the State in establishing paternity, or in establishing, modifying or enforcing a support order with respect to a child of the individual, and reports that information to the State agency responsible for TANF, the State TANF agency must (1) deduct an amount equal to not less than 25% from the TANF assistance that would otherwise be provided to the family of the individual and (20 may deny the family any TANF assistance. Health and Human Services (HHS) may penalize a State for up to 5% of the SFAG for failure to substantially comply with this required State child support program (45 CFR sections 264.30 and 264.31) Additionally, 45 CFR section 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testwork over sanctions imposed for child support non-cooperation, we noted the following: A. For 1 of 9 cases selected for testwork, we noted that while the date of non-cooperation was September 14, 2021, the Department did not assess the required sanction for non-cooperation until the October 16, 2021 benefit payment period, resulting in the participant being overpaid approximately $222. B. As part of our testwork over sanctions imposed on single custodial parents of children under the age of 6, we noted that for 1 of 7 cases selected for testwork, the participant was not sanctioned due to inability to obtain childcare, but instead the case was sanctioned due to child support non-cooperation. Per review of the participant case file, the letter of non-cooperation required to establish the sanction was not maintained within the case file. As a result, it was unclear if the participant should have been sanctioned. Cause The cause of the condition found was a result of insufficient internal controls in place to ensure that required forms are obtained and maintained within the participant?s case file and to ensure that sanctions are applied timely and appropriately. Effect The effect of the condition found is that a breakdown in internal controls allowed for participant benefit payments to be inaccurate resulting in unallowable costs charged to the federal program or sanctions could have been imposed that were not appropriate. Questioned Costs $222 ? the overpayment in condition A above. Recommendation We recommend that the Department continue to enhance its existing internal controls and procedures to ensure the documentation used to support the beginning and termination of sanction periods is maintained and timely communicated so that sanctions are applied to participant benefit payments timely and appropriately. View of Responsible Officials Condition A We concur. The department received the notice of non-cooperation on 9/14/21 and did not enter the non-cooperation until 9/29/21, which was beyond the 10-day time frame. The case should have then been confirmed to impose the sanction on or before 9/24/21. This resulted in the client being over issued by approximately $222.37. Condition B We concur. The sanction for non-cooperation with Child Support was entered in error as Child Support did not issue a non-compliance. This resulted in the client being under issued by approximately $446.50 Follow-up We will be informing all supervisors of the specific errors found during the audit. We will also require supervisors to include these topics at their next staff meeting. In addition, individual emails will be sent to the staff involved with the errors and provide guidance. Anticipated Completion Date: N/A Contact Person: Karyl Provost

Finding Reference Number: 2022-021 NH Department of Health and Human Services Temporary Assistance for Needy Families and COVID-19 Temporary Assistance for Needy Families (Assistance Listing #93.558) Federal Award Numbers: 2021G996115, 2021G990228, 2022G996115 Federal Award Year: 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: NA Statistically Valid Sample: No Criteria5 A pass-through entity must: 1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a); 2. Evaluate each subrecipient?s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.332(b)); 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means; and 4. Issuing a management decision for audit findings pertaining to federal award provided to the subrecipient from the subrecipient as required by 2 CFR section 200.521. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Temporary Assistance for Needy Families program (TANF), the New Hampshire Department of Health and Human Services (the Department) enters into grant agreements with local entities to provide services to support eligible participants. During the year ended June 30, 2022, the Department passed through $3,307,974 to subrecipients. As part of our testwork over the subrecipient monitoring process, we noted the following: A. For 1 of 7 subrecipients selected for testwork, per review of the grant agreement, we noted that the agreement did not contain any funding to be paid under the TANF program and should not have been identified as a TANF subrecipient. The total amount paid to the entity was $13,530. B. The Department communicates award information to subrecipients through the approved grant agreement. Per review of the grant agreement, for 4 of the remaining 6 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.332. Specifically, the following elements were not communicated: a. The subrecipient?s unique identifier was not communicated for 1 of the remaining 6 subrecipients selected for testwork b. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414) was not communicated for 2 of the remaining 6 subrecipients selected for testwork c. Identification of whether the award is R&D was not communicated for 4 of the remaining 6 subrecipients selected for testwork. C. The Department did not perform a risk assessment for all subrecipients selected for testwork. As a result, it is unclear if any additional targeted subrecipient monitoring should have been performed. D. For 1 of the remaining 6 subrecipients selected for testwork, there was no evidence that a programmatic monitoring review was completed for the subrecipient as required by their subrecipient monitoring policy. As there was no risk assessment performed for the subrecipient, it was unclear as to whether a programmatic monitoring visit should have been performed. Cause The cause of the condition found is primarily due to insufficient internal controls and procedures to ensure that federal reimbursement of expenditures are only disbursed to entities that have an approved subrecipient grant agreement. In addition, there are insufficient internal controls and procedures to ensure that award identification information is properly communicated with grant agreements and that risk assessments are performed to ensure sufficient during the awarded monitoring is performed over all subrecipients. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(a), section 200.332(b), CFR section 200.521 and 2 CFR sections 200.332(d) through (f). Questioned Costs $13,530 ? the amount in bullet A above. Recommendation We recommend that the Department review its existing internal controls, policies, and procedures to ensure that the Department complies with the provisions of 2 CFR section 200.332(a), 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.251. This would include ensuring that: 1. The Department has an approved subrecipient grant agreement prior to making any disbursements to an entity; 2. All required award information is communicated to subrecipients; 3. A documented risk assessment is performed over all subrecipients, and the results of that risk assessment is used to evaluate the types of monitoring procedures that will be performed over the subrecipient; and 4. As a result of the risk assessment performed, monitoring activities are performed over subrecipients to ensure compliance with the terms and conditions of its subrecipient grant agreement. View of Responsible Officials A. We concur with this finding. The Department utilized an internally available copy of the Management Log, which lists vendor?s determinations. This is a copy of the log, not the original, official copy. There is a delay in updating this copy from the original, and incorrect information had been initially entered. The Department is moving this log to software which allows all Department employees to view the same log, while limiting the number of individuals who have access to make changes. Implementation has been completed as of March 2023. B. We concur with this finding. However, we believe this was an isolated incident as the TANF CFDA number (93.558) used was very similar to correct CFDA number (93.778) that should have been documented. C. 200.332 requirements a. We do not concur with this finding. The contract for Mt Prospect became effective 8/4/21, prior to the 4/22 inception of the UEI. The DUNS number, as in effect at that time, is noticed in Exhibit J of the contract. b. We concur with three of the four findings. Two of the four contracts pre-date the template update requiring the notice an indirect cost rate. Indirect cost rate for federal awards (including if the de minimis rate is charged per 2 CFR section 200.414) were added to Exhibit C of the Department?s contracts in April 2020. One of the contracts did not indicate an indirect cost rate as required. One of the contracts notes the indirect cost rate in the Notes of their financial details. c. One of the two contracts pre-dates the template update requiring the notice the identification of R&D. R&D identifications for federal awards were added to Exhibit C of the Department?s contracts in April 2020 One of the two contracts did not identify whether the contract was R&D as required. D. Subrecipient Risk Assessment ? We concur with the finding. We consider the finding to be fully resolved through Department policy Department policy and Department wide implementation. However, it should be noted full compliance will not be achieved for one to two contact cycles due to timing. The Department began addressing the issue of Subrecipient Monitoring issue in June 2017 when the first Grants Administrator was hired. The Department finalized the Subrecipient Monitoring Policy, which encompasses the financial and programmatic risk assessments as well as the subrecipient monitoring, on June 1, 2018. The Department provided user training on the subject in February and September 2018, training over one hundred forty-six staff. However, only brand new procurements utilized this policy during the initial roll out of this policy. The Department hired a new Grants Administrator in May 2019. The full Subrecipient Monitoring policy rolled out to all procurements, including sole source, amendments, and renewals, effective August 1, 2020. The Contracts Unit received specialized subrecipient monitoring training on May 13 and October 28, 2020. Department wide training to all staff occurred weekly between September 8 and November 3, 2020. The Grants Office provided additional targeted training to Program staff through team meetings. Over one hundred fifty Program and Finance staff received training. Annual training will be held in September each year. Refresher training or training for new staff is available upon request from the Grants Office. The Grants Office website offers Program, Finance, and Contracts Bureau staff access to the subrecipient monitoring policy, as well as training modules, slides, and tools. The training has also been recorded and is available on this site. The Subrecipient Monitoring Policy requires Program to determine whether any vendor which receives funds in exchange for goods or services is a Contractor or Subrecipient. Determined subrecipients receive a Management Questionnaire, which includes a ten question questionnaire and requirements for submitting financial data. This information is used to populate the Risk Assessment Tool, which shows any risks pertinent to a subrecipient and the subaward. Based on the risks shown, Program chooses monitoring activities to mitigate the risks and the Contracts Bureau memorializes these choices in the contract. The Grants Office continues to work closely with the Contracts Bureau to ensure compliance with the Subrecipient Monitoring policy. C. and D. It is also important to note that between April 2020 and June 2022 the Department was involved in the State?s strategic response to the COVID-19 pandemic. During this time, New Hampshire was under a state of emergency (Executive Order 2020-04), processes were rapidly converted to fully digital overnight, the State?s standard approval processes were suspended and non-standard templates, which did not include the required notifications under 200.332, were utilized to respond to the COVID-19 pandemic. The Department worked with other State Departments and the National Guard to create a record number of amendments, contracts, and other agreements (approximately 200% more than standard). The Department is in the process of instituting a new contract life cycle management solution that will utilize conditional logic to include the required notifications for agreements involving federal funds in order to ensure compliance. Implementation is anticipated to be complete in July 2023. As the COVID-19 pandemic strategic response has wound down, the Department has not suspended its regular standard approval or subrecipient risk assessment and monitoring processes and has not used non-standard templates to award federal funding. E. We concur there was no formal documentation of any monitoring activity. Due to staff turnover a new administrator has been hired and unable to furnish the monitoring that took place during FY22. However, a program site review during FY23 was performed and financial monitoring of invoices has also taken place. Anticipated Completion Date: July, 2023 Contact Person: Melissa Kelleher, Administrator Rejoinder As documented above in Bullet B of the condition found, the Department did not properly communicate all required award information to the subrecipient. Once aware of the noncompliance, the Department should have timely communicated this information to its subrecipients.

Finding Reference Number: 2022-022 NH Department of Health and Human Services Temporary Assistance for Needy Families and COVID-19 Temporary Assistance for Needy Families (Assistance Listing #93.558) Federal Award Numbers: 2021G996115, 2021G990228, 2022G996115 Federal Award Year: 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Matching, Level of Effort and Earmarking ? Maintenance of Effort Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2021-024 Statistically Valid Sample: No Criteria Every fiscal year, a State must maintain an amount of ?qualified state expenditures? (as defined in 42 US609(a)(7)(B) and 45 CFR section 263.2) for eligible families (as defined in 42 USC 609(a)(7)(B)(i)(IV) and 45 CFR section 263.2(b)) at least at the applicable percentage of the State?s historic State expenditures. Qualified expenditures with respect to eligible families may come from all programs. This requirement may be met through allowable state or local cash expenditures for goods and services, cash donations by non-governmental third parties, or the value of third-party in-kind contributions. A State?s records must show that all costs are verifiable and meet all applicable requirements in 45 CFR sections 263.2 through 263.6.45. Additionally, 45 CFR 75 section 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition For the federal fiscal year end September 30, 2021, the New Hampshire Department of Health and Human Services (the Department) was required to meet an annual maintenance of effort (MOE) requirement of $32,115,003. The Department MOE expenditures during this period of $38,072,519, which exceeded the MOE required amount by $5,957,519. Of the MOE expenditures incurred, $10,957,419 represented in-kind contributions from 15 community organizations. On an annual basis, each community organization completes a Temporary Assistance for Needy Families (TANF) MOE form to report expenses that qualify as TANF expenditures. The form requires a description of the program operations, what TANF purpose the program addresses, the number of families served, and the amount of eligible expenditures in total. The form is signed by the organization and submitted to the Department to serve as the supporting documentation for the in-kind contribution provided by the community organization. No additional documentation is provided by the community organization to support the amount of the expenditures included on the form. The Department does not perform procedures to ensure expenditures reported by the community organization are accurate and represent valid expenditures that were incurred to support the program outlined within the form and in turn to ensure the in-kind contribution used to support the required MOE is appropriate. Cause The cause of the condition found was a result of insufficient internal controls and procedures to ensure the expenditures reported by the community organizations are properly supported by valid expenditures that meet the criteria of qualified TANF expenditures. As the Department enters into a memorandum of understanding (MOU) with each community organization that outlines the types of costs that are allowable sources of MOE and obtains a signed certification from each organization as to the amount of expenditures incurred, the Department indicated that the support provided is sufficient and therefore does not validate the information for accuracy. Effect The effect of the condition found is that the Department may not meet the required annual MOE requirement as in-kind contributions may not be complete or represent qualified expenditures and does not have internal controls and procedures in place to identify noncompliance timely. Questioned Costs Not determinable. Recommendation We recommend that the Department implement internal controls and procedures to ensure that in-kind contributions used to support MOE are reviewed to ensure that the expenditures are accurate and meet the definition of qualifying expenditures. View of Responsible Officials We do not concur. The expenditures outlined are considered verifiable costs via the Memorandum of Understanding (MOU) and the Maintenance of Effort (MOE) forms completed by the third party agency. As part of the June 30, 2018 audit a similar finding is noted which we also did not concur with as part of that audit. The department has since been in contact and had meetings with the Federal Administration for Children and Families (ACF). In addition, a formal response was provided by ACF on August 31, 2022 that stated they are hoping to resolve this outstanding issue soon. We are currently awaiting the Federal Administration for Children and Families (ACF) decision concerning this finding and as such, we do not believe any corrective action is required. Anticipated Completion Date When the decision from ACF is given we will respond accordingly. Until then no corrective action is considered necessary. Contact Person: Mary Calise, Deputy Chief Financial Officer, Depart. of Health and Human Services Rejoinder The Department stated in their response that it verifies the completeness and accuracy of the third-party in-kind match through the MOU entered into and the MOE forms that the providers submit. Per review of the signed certifications (or the MOE forms), we noted the certification contains a description of the general purpose of the program, an identification of the TANF purpose the program addresses, the number of families/individuals served, the expenses incurred under the program, excluding any federal and state funds received. While we were provided with documentation to support that the third-party certifications were received, we were not provided with evidence to support the Department had performed additional procedures to verify the incurred costs were complete and accurate as required by 45 CFR section 263.2(e) and 75.306. We do not agree that a certification alone from a third party meets the definition of a verifiable cost from third -party records.

Finding Reference Number: 2022-023 NH Department of Health and Human Services Temporary Assistance for Needy Families and COVID-19 Temporary Assistance for Needy Families (Assistance Listing #93.558) Federal Award Numbers: 2021G996115, 2021G990228, 2022G996115 Federal Award Year: 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Federal Reporting Type of Finding: Significant Deficiency Prior Year Finding: None Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the ?Transparency Act? that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2022, we noted the New Hampshire Department of Health and Human Services (the Department) passed through $3,307,974 in Temporary Assistance to Needy Families funds to subrecipients. During out testwork over FFATA reporting at the Department, we selected 6 FFATA reports for testing and noted the following: See Schedule of Findings and Questioned Costs for Chart/Table Cause The cause of the condition found is due to a lack of policies and procedures, including internal controls, to ensure timely and accurate FFATA reporting. The Department uses a matrix to assist in the submission of FFATA reports, however, this schedule is not maintained and is overridden each time a new report is filed, resulting in our inability to validate the amount of the award amount reported for reach report tested within our sample. Effect The effect of the condition found is that the Department did not have sufficient internal controls in accordance with 2 CFR section 200.303. Questioned Costs None. Recommendation We recommend that the Department implement internal controls, policies, and procedures, across all Department programs to which FFATA reporting is applicable, to ensure timely and accurate reporting to the FSRS system to ensure compliance with the Transparency Act reporting requirements. View of Responsible Officials The Department partially concurs as follows: The Department?s position is that it maintains compliance with the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the ?Transparency Act? that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The Department agrees that during the year ended June 30, 2022, not all of the tested FFATA reports were deemed complete and accurate due to internal control considerations. The Department will review current practices regarding the internal control of financial information included in the G&C PDF?s which are the basis of the FFATA reporting with the objective of accurately reporting the specific amounts of Federal Funding content by FAIN so as to facilitate the accurate and timely reporting of FFATA in accordance with the Act. Anticipated Completion Date: September 30, 2023 Contact Person: PJ Nadeau, Administrator

Finding Reference Number: 2022-024 NH Department of Health and Human Services Temporary Assistance for Needy Families and COVID-19 Temporary Assistance for Needy Families (Assistance Listing #93.558) Federal Award Numbers: 2021G996115, 2021G990228, 2022G996115 Federal Award Year: 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provisions: Penalty for Failure to Comply with Work Verification Plan Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2021-025 Statistically Valid Sample: No The State agency must maintain adequate documentation, verification, and internal control procedures to ensure the accuracy of the data used in calculating work participation rates. In so doing, it must have in place procedures to (a) determine whether its work activities may count for participation rate purposes; (b) determine how to count and verify reported hours of work; (c) identify who is a work eligible individual; and (d) control internal data transmission and accuracy. Each State agency must comply with its HHS-approved Work Verification Plan in effect for the period that is audited. HHS may penalize the State by an amount not less than one percent and not more than five percent of the SFAG for violation of this provision (42 USC 601, 602, 607, and 609); 45 CFR sections 261.60, 261.61, 261.62, 261.63, 261.64, and 261.65). Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork related to compliance with the New Hampshire Department of Health and Human Services (the Department) work verification plan we noted the following: A. For 5 of 60 participants selected for testwork, the participant did not have a signed active employment plan for the period selected for testwork. As there was no active employment plan, we were unable to verify if the participant was in compliance with their required work requirements for the period tested. B. For 7 of 60 participants selected for testwork, there was insufficient documentation to support the number of hours worked within the New Heights system for the participant. Cause The cause of the condition found was a result of inadequate review internal controls in place to ensure that participants have an active signed employment plan in place, that sufficient documentation is maintained to support the number of work hours reported by participants, and that the hours worked is accurately reported within the New Heights system. Effect The effect of the condition found is that the State may not be in compliance with its work verification plan and would not be able to identify the noncompliance. Questioned Costs Not determinable. Recommendation We recommend that the Department enhance its existing internal controls and procedures to ensure that participant employment plans are obtained, documentation used to support participant work hours is maintained, that the hours reported agree to the documented hours worked and that the work hours are accurately reflected within the New Heights system. View of Responsible Officials We concur with the finding. Corrective Action: Condition A The Bureau of Employment Supports has been undergoing massive programmatic changes over the past 2 to 3 years. As part of those changes, there has been an updated Work Verification Plan submitted which will help to address some areas where errors have occurred. Keeping in mind that for a period of close to 2 years, due to the COVID pandemic, NHEP was not holding participants accountable for not returning signed employment plans to NHEP staff. The focus for that time was to ensure that families were housed, fed and safe, therefore, services focused on their immediate needs. Participants who entered the NHEP program during that time were not held accountable to returning a signed employment plan therefore it did not become part of their routine with NHEP. While COVID restrictions have been lifted, participants seem to have needed some time to reintegrate into the NHEP program and the mandatory expectations. NHEP staff and leadership will continue to remind participants and become more diligent in ensuring that signed employment plans are on the forefront of their daily responsibilities. It should be noted that in a couple of instances, employment plans were created as part of a Service Determination Appointment and very quickly after the participant was deemed exempt from the Work Program (NHEP) so the employment plan was not necessary and became a moot point. A Director?s Memo will be sent out by the end of this week which will allow Employment Plans to be acknowledged and accepted by the participant in multiple ways (not just with a wet signature) thereby increasing the likelihood of participants returning accepted employment plans to NHEP staff. Making this shift will mitigate the difficulties that are causing participants to not return their signed employment plans to NHEP staff and will decrease instances where there is not an accepted employment plan on file. NHEP leadership will hold a state wide mandatory staff training where ways to prioritize the monitoring and obtainment of accepted employment plans will be outlined and discussed. Field Support Managers will continue to monitor their staff on a quarterly basis, however, will add a monthly check on having accepted employment plans to their responsibilities. Condition B Part of the changes that NHEP has implemented have included a new Activity Tracking form which has made tracking hours more efficient and easier for the participant as well as the Employment Counselor. We believe that this activity tracker as well as the decrease in mandatory forms will allow for more accuracy and fewer errors moving forward. Uploading documents into the e-folder was found to be error prone, therefore, on March 1, 2023, NHEP leadership provided guidance and training on a specific process of indexing and scanning documents to ensure that moving forward the Employment Counselors are checking their e-folder?s to ensure that documents are properly uploaded and visible. This process was initially sent out to the field as a suggestion in 9/2022, however, on 3/1/23 this process was sent out as an expected process moving forward. Also, through cursory investigations, we believe that this new process, combined with the new Activity Tracking form, has already shown to be effective in improving the accuracy of supporting and recording hours. NHEP leadership has also been working with the NEW HEIGHTS system to streamline the process of uploading documents to further decrease the potential for errors. A change request form was submitted approximately one year ago. Also during the time period of this audit, NHEP was requiring pay stubs from employed participants and completing ?overrides? of the number of work hours that a participant worked during the week if that number was different than what was auto-populating based on information obtained by and entered by eligibility. NHEP discontinued that practice. NHEP no longer requires pay stubs from participants as that is a function of eligibility. NHEP utilizes the number of hours worked per week based on the number of hours entered by eligibility. This change will ensure that employment hour errors no longer occur. In order to address issues of audit findings, within the next 90 days, NHEP leadership is holding a state wide mandatory staff training where more in-depth information on the audit process will be shared including audit ?tests?, ?questions? and ?corrective action plans?. Historically in NH, the audit process was not shared with the NHEP staff making them unaware of the expectations and/or findings of the audit. NHEP staff were trained to complete certain processes and enter particular data but were never able to connect that back to anything. While we have been introducing this process more and more to our staff, we intend to hold a training to help them more thoroughly understand why they are doing what they are doing and remind them that what they do is reviewed for accuracy as part of the federal audit process. We believe that this transparency will create buy-in from the staff to put systems in place for themselves and to self-monitor more. Anticipated Completion Date: December 31, 2023 Contact: Brigitte Bowmar, Program and Workforce Administrator III

Finding Reference Number: 2022-025 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4 Federal Award Year: 2020, 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2021-027 Statistically Valid Sample: No Criteria A pass-through entity must: 1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a); 2. Evaluate each subrecipient?s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.332(b)); 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means; and 4. Issuing a management decision for audit findings pertaining to federal award provided to the subrecipient from the subrecipient as required by 2 CFR section 200.521. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Low-Income Home Energy Assistance program (LIHEAP), the New Hampshire Department of Energy (the Department) enters into grant agreements with local entities to provide services related to the eligibility determination process for the LIHEAP program (including the calculation of participant benefits) and payment of benefits to fuel providers. During the year ended June 30, 2022, $37,990,873 was passed through to subrecipients. As part of our testwork over the subrecipient monitoring process, we noted the following as of the year ending June 30, 2022: A. The Department communicates award information to subrecipients through the approved grant agreement. Per review of the grant agreement, for each of the 3 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.332. Specifically, the following elements were not communicated: a. Federal Award Identification Number (FAIN) b. Federal award date c. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414) d. Identification of whether the award is R&D B. The Department performed a risk assessment for each of the 3 subrecipients selected for testwork. As part of the risk assessment process, a score was given to each subrecipient with corresponded to a particular risk assessment, such as higher or average risk. The Department however does not have a formal risk assessment policy so it was unclear what additional monitoring procedures should have been performed for each subrecipient based upon their assigned risk. C. For 2 of 3 programmatic monitoring reviews selected for testwork, the Department did not tissue its programmatic monitoring reports to the subrecipient timely after the monitoring review was completed. As a result, there was a delay in the subrecipient implementing its corrective action plan to address the findings identified during the programmatic monitoring review. Specifically, we noted the following: a. For 1 of 2 programmatic monitoring reviews, the monitoring review took place on April 14, 2022, but the report to the subrecipient was not issued until September 2022. Per review of the report that was issued, there were findings identified by the Department that warranted corrective action. Due to the delay in issuing the report, a corrective action plan was not obtained from the subrecipient until 5 months after the date of that the monitoring review took place b. For 1 of 2 programmatic monitoring reviews, the monitoring review took place on April 12, 2022, but the report to the subrecipient was not issued until July 2022. Per review of the report that was issued, there were findings identified by the Department that warranted corrective action. Due to the delay in issuing the report, a corrective action plan was not obtained from the subrecipient until 3 months after the date that the monitoring review took place. D. For all 3 subrecipients selected for testwork, the Department did not complete its annual fiscal monitoring review during the audit period as required by their monitoring policy. E. During our testwork over the Department?s review of subrecipient uniform guidance reports, we noted the following: a. The Department does not track the receipt of uniform guidance reports. As a result, we were unable to determine when the uniform guidance reports were received by the Department to ensure they are reviewed timely. Specifically, we noted: i. For 1 of 3 subrecipients, the subrecipient?s uniform guidance appeared to have been reviewed, but as the Department does not track the receipt of uniform guidance reports, it was unclear if it was reviewed timely. We did note based on the date that the uniform guidance report was issued, the management decision letter was not issued within 6 months of the date of the report being issued as required by 2 CRF 200.521 (d). ii. For 2 of 3 subrecipients selected for testwork, we were unable to obtain evidence to support that the Department had obtained and reviewed the subrecipient?s uniform guidance report. F. The Annual Report on Households Assisted by LIHEAP contains data that is specific to benefits paid to eligible participants. The data that is used to compile the annual report is obtained from case data that is reported to the New Hampshire Department of Energy (the Department) from its subrecipients as the Department has entered into grant agreements with third parties who are responsible for the eligibility determination and benefit payment process. As part of our subrecipient monitoring testwork, we were unable to verify that the Department had performed any monitoring procedures over the data provided by each subrecipient to ensure that the data reported within the annual report was complete and accurate. Cause The cause of the condition found was primarily due to insufficient documented subrecipient policies and procedures to ensure that adequate monitoring is performed over subrecipients to align with the risk assessments performed. The monitoring procedures that are in place to not include the completeness and accuracy of the data submitted by the subrecipient utilized to compile federal reports. Further, the Department does not have sufficient internal controls and procedures to ensure results of monitoring visits are performed and results communicated timely to subrecipient or to ensure that subrecipient uniform guidance reports are obtained and reviewed timely. In addition, there are insufficient internal controls in place to review the grant agreements to ensure that all required data elements are communicated to the subrecipient in accordance with 2 CFR section 300.332(b). Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(a), section 200.332(b) and 2 CFR section 200.521. Questioned Costs None. Recommendation We recommend that the Department formalize, policies and procedures and implement the necessary internal controls to ensure that the Department complies with the provisions of 2 CFR section 200.332(a), 2 CFR section 200.332(b) and 2 CFR section 200.251. This would include ensuring that: 1. All required award information is communicated to subrecipients; 2. A documented risk assessment is performed over all subrecipients and the results of that risk assessment is used to evaluate the types of monitoring procedures that will be performed over the subrecipient including the review of data utilized by the Department to compile federal reports; 3. As a result of the risk assessment performed, monitoring activities are performed over subrecipients to ensure compliance with the terms and conditions of its subrecipient grant agreement. The results of all monitoring reviews should be timely communicated in accordance with the Department?s policies to the subrecipient and actions requiring corrective action plan should be followed up on to ensure that the matter is resolved; and 4. Ensure that all uniform guidance reports are collected and reviewed timely so that a management decision letter can be issued within the time period required by federal regulations. View of Responsible Officials The Department of Energy recognizes the need to include all required information to be communicated to sub-recipients, and that all sub-recipients? risk assessments are thoroughly completed. In addition, uniform guidance reports need to be collected and reviewed to ensure that management letters be issued within the required timeframe. Anticipated Completion Date: Ongoing Contact Person Eileen Smiglowski, NH LIHEAP Administrator

Finding Reference Number: 2022-026 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4 Federal Award Year: 2020, 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2021-028, 2021-029 Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the ?Transparency Act? that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The Low-Income Home Energy Assistance program (LIHEAP), Performance Data Form (OMB No. 0970-0106) is required to be submitted before January 1st indicating the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds. LIHEAP Carryover and Reallotment Report (OMB No. 0970-0106) ? Grantees must submit this report no later than August 1 indicating the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds. Funds in excess of the maximum carryover limit are subject to reallotment to other LIHEAP grantees in the following fiscal year and must also be reported (42 USC 8626). The SF-425, Federal Financial Report, is required to be filed annually. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting as part of the Low-Income Home Energy Assistance program (LIHEAP), we noted the following: A. The New Hampshire Department of Energy (the Department) during the year ended June 30, 2022, $37,990,873 was passed through to subrecipients that met the requirements for first tier subawards under the Transparency Act and as such FFATA reports were required to be filed for each of those subawards. During the period ending June 30, 2022, the Department did not file the required FFATA reports. B. The annual LIHEAP Performance Data Form was not submitted by January 31, 2022. The Department contacted the regulator in May of 2022 requesting an extension which was approved, however as of the date of testwork in December 2022 the report still has not been submitted. C. Per review of the LIHEAP Carryover and Reallotment Report filed during our audit period, we noted that line 1.3 for the regular block grant carryover amount was $530,288, which was less than the maximum allowed carryover amount of $2,771,886. As part of our testwork, we were unable to obtain documentation to support that the amount reported on the federal report was accurate. Based on discussions with the Department, they indicated that the amount reported represented the unobligated balance as of June 30, 2021 as the federal report is due by August 1, 2021. However, we further noted that the unobligated balance for the federal grant as filed on its annual SF-425 report as of September 30, 2021 which would incorporate an additional 3 months of obligations, reported an unobligated balance of $979,648, which is greater than what was reported on the LIHEAP Carryover and Reallotment Report. D. 1 of 3 SF-425 federal reports selected for testwork that the New Hampshire Department of Energy (the Department) did not use the correct indirect cost rate when compiling the report. Instead of using a rate of 30.40%, the Department used a rate of 30.45%, resulting in indirect costs being over reported on the report by approximately $13. Cause The cause of the condition found was primarily due to insufficient resources within the Department to ensure the federal reports were filed or filed timely as well as insufficient policies and procedures to ensure that the documentation to support the amount reported on the LIHEAP Carryover and Reallotment Report. Based on inquiry with management, the Department at the time of the filing of the SF-425 report, the cognizant agency had not approved its proposed indirect cost rate so an older rate was used. The report was not subsequently revised once the rate was approved in April of 2022. Effect The effect of the condition found is that the Department did not file the required FFATA reports and the annual LIHEAP Performance Data Form and the LIHEAP Carryover and Reallotment Report and SF-425 reports may not have been filed accurately. Questioned Costs None. Recommendation We recommend that the Department should review to ensure there is sufficient safeguards in place for professionals to perform when positions are vacant so that necessary processes are completed related to compliance with federal requirements, including federal reporting requirements related to the timely submission of the annual LIHEAP Performance Report and the submission of FFATA reports for first-tier subawards. In addition, we recommend that the Department implement written policies and procedures for the compilation of the annual LIHEAP Carryover and Reallotment report and ensure that the documentation to support the amounts reported is maintained to support that the report is complete and accurate. Finally we recommend that the Department review its policies and procedures to ensure that the appropriate indirect cost rate is used within the SF-425 reports. View of Responsible Officials The Department of Energy recognizes the FFATA reporting requirement was not met due to insufficient resources in FY22 while completing an agency merger. The Department is adjusting our internal procedures and processes where necessary to address any and all deficiencies in our reporting requirements and we are currently training new staff on reporting regulations and processes. The corrective action to ensure that the annual Performance Report is filed timely is recognized. This was due to a lack of staffing to complete the report in a timely manner. A new associate position is being created and staffed at the NH Department of Energy to prevent this situation going forward. For the Carryover and Reallotment report, Additional support staff in both the Fiscal and Program offices for LIHEAP are being recruited and trained. This will ensure that adequate policies and procedures can be developed and implemented. For the SF-425 report, the Department of Energy disagrees with this finding. The expense was calculated at the agency?s calculated and submitted Indirect Cost Rate Proposal (30.45%) to our cognizant agency the US DHHS on December 30, 2020. Our proposal was not reviewed/approved by US DHHS until May 02, 2022 at the rate of 30.40%. Energy calculates and expenses indirect cost on a quarterly basis. At the time that the rate was calculated (after 9/30/2021) for FFY22 Q1, no response was received from US DHHS as to our proposal, therefore, per the recommendation of the Admin Services ? Comptroller?s office, the proposed rate of 30.45% was used to calculate the Indirect Cost expense for FFY22 Q1. The over reported charge was not due to ?insufficient review controls?. I did provide in our backup materials in PBC#38 the late response from US DHHS acknowledging the 30.4% rate to be approved and that acknowledgment is dated April 5, 2022 ? well beyond the time the expense was calculated for FFY22 Q1 expenses. Energy will continue to follow our established processes and procedures to ensure accurate federal grant expensing. Anticipated Completion Date: June 30, 2023 and September 30, 2023 for the Carryover and Reallotment Report Contact Person: Jane Lemire, Business Administrator (PT) and Eileen Smiglowski, NH LIHEAP Administrator

Finding Reference Number: 2022-027 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2001NHLEA, 2001NHLIE4, 2001NH5C3, 2101NHLIEA, 2101NHE5C6, 2201NHLIEA, 2101NHLIE4 Federal Award Year: 2020, 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Cash Management Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria U.S. Department of the Treasury (Treasury) regulations at 31 CFR section 204 part 205 implement the Cash Management Act of 1990 (CMIA). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Catalog of Federal Domestic assistance that meet the funding threshold for a major federal program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over performed over cash management related to the Low-Income Home Energy Assistance program, we noted the following: A. Under the State of New Hampshire?s Cash Management Agreement (CMIA), direct expenditures are to be drawn using the actual draw ? monthly technique. Under this technique, the funds are to be requested monthly based on actual costs incurred during that 1-month period. The funding technique is interest neutral. During our testwork over the cash draw process, we noted the following: a. For 5 of 7 cash draws selected for testwork, the New Hampshire Department of Energy (the Department) did not draw funds timely resulting in the cash draw to be delinquent. Each of the 4 cash draw covered multiple months of activity. b. For 1 of 7 cash draws selected for testwork, the Department drew funds down in advance as the cash draw covered 27 days only for the month of March 2022. We further noted, that during the month of March 2022, the Department completed an additional cash draw that covered 3 days of activity. As the clearance pattern within the CMIA agreement is interest neutral, there was no interest impact because of the cash draws not being performed timely. B. The Department advances payments to subrecipients to ensure that they have sufficient cash on hand to pay for benefit payments. The Department passed through $37,990,873 to subrecipients during the year ended June 30, 2022. During our testwork over compliance with cash management, we noted that for 1 of 3 subrecipients selected for testwork, the Department provided an advance payment to the subrecipient for programmatic expense and the advanced funds were not fully used by the subrecipient for approximately 5 months. The Department?s normal disbursement cycle of every 30 days. As such, it does not appear that the Department sufficiently minimized the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes. In addition to the above, we noted that for the same subrecipient, the advance memo to authorize the advance payment was not signed by the Program and Fiscal Manager as required by the Department?s policies and procedures. Cause The cause of the condition found was primarily due to insufficient resources to monitor and track cash draws to ensure they are performed timely in accordance with the clearance patten established within the CMIA agreement and to ensure that subrecipients either utilize advance funds timely or effectively evaluate the amount of funds they need on hand at the time of the advance payment. Effect The effect of the condition found is that the Department did not comply with the provisions of the CMIA as it relates to the timing of cash draws. In addition, subrecipients had excess cash on hand as the Department did not minimize the time elapsing between the transfer of federal funds to the subrecipient and their disbursement of funds for program purposes. As such the Department was not in compliance with 2 CFR section 200.305(b)(1). Questioned Costs None. Recommendation We recommend that the Department review its existing internal controls, policies, and procedures to ensure that all cash draws are performed timely and in accordance with the CMIA agreement. In addition, we recommend that the Department review its existing internal controls, policies and procedures relating to advancing funds to subrecipients to ensure that excess cash held by the subrecipients does not exceed 30 days. View of Responsible Officials Related to compliance with the CMIA, the Department of Energy acknowledges there were several instances where draws were not completed on a monthly basis for the prior month?s expenditures following the CMIA agreement in FY22. The Department of Energy has hired another staff person to complete business office grant-related tasks and will be reviewing and adjusting our policies and procedures if and where needed in the future. This staff person is still in training, therefore the completion date is not known at this time. Related to the timing of payments to subrecipients, due to staffing issues in both the Administrative and Fiscal offices, this recommendation is acknowledged and accepted. Support staff in both offices are being recruited and trained. This will ensure that adequate supervision and compliance of sub-recipient cash advances procedures are followed. Anticipated Completion Date: Ongoing Contact Person: Jane Lemire Business Administrator IV (PT) and Eileen Smiglowski, NH LIHEAP Administrator

Finding Reference Number: 2022-028 NH Department of Energy Low Income Home Energy Assistance and COVID-19 Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2101NHLIE4 Federal Award Year: 2021 U.S. Department of Health and Human Services Compliance Requirement: Earmarking Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria No more than 10% of a state?s LIHEAP funds for a federal fiscal year may be used for planning and administrative costs, including both direct and indirect costs. This limitation applies, in the aggregate, to planning and administrative costs at both the state and subrecipient levels. This cap may not be exceeded by supplementing with other federal funds (42 USC 8624(b)(9)(A); 45 CFR section 96.88(a)). No more than 15 percent of the greater of the funds allotted or the funds available to the grantee for a federal fiscal year may be used for low-cost residential weatherization or other energy-related home repairs. The secretary may grant a waiver beginning April 1st, and the grantee may then spend up to 25 percent for residential weatherization or energy-related home repairs (42 USC 8624(k)). No more than 5 percent of the LIHEAP funds may be used to provide services that encourage and enable households to reduce their home energy needs and, thereby, the need for energy assistance. Such services may include needs assessments, counseling, and assistance with energy vendors (42 USC 8624(b)(16)). Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition To ensure that the Department had met the required earmarking requirements related to administrative, weatherization and energy reduction service limitations, the New Hampshire Department of Energy (the Department) maintains a tracking sheet for each federal grant that tracks all expenditures by category. At the end of the grant period, the total expenditures are reconciled to the federal grant and costs incurred related to the earmarking requirements are calculated to ensure that the required limitations are not exceeded. During our testwork over earmarking, we noted that for 1 of 2 grants selected for testwork, the grant appeared to have meet the required earmarking requirements, however we were unable to test the completeness and accuracy of the underlying support. Further we were unable to reconcile the total expenditures contained within the underlying support to the final grant close out report (the SF-425) submitted for the grant. Cause The cause of the condition found is due to the Department is unable to submit a final close out report within the federal reporting portal as the portal does not contain an option to complete the required report. As a result, the last federal report filed for this grant was as of September 31, 2021, which was prior to the liquidation of all obligations under the grant. Effect The effect of the condition found is that the expenditures utilized to track compliance with the earmarking requirement may not reconcile to the final expenditures reported within the SF-425 resulting in noncompliance. Questioned Costs Not determinable. Recommendation We recommend that the Department continue to work with the federal government to ensure that all grants that are required to be closed out have a final SF-245 and that the final expenditures reported reconciles to the expenditures used to track the required earmarking requirements. View of Responsible Officials The Department of Energy is currently in contact and working with representatives from the US DHHS to resolve the fact that the SF-425 report is not available for updating at this time for grant #2001NHE5C3. It must be made available for updating within the HHS reporting site by DHHS in order for Grantees to edit and submit a report. Corrective Action We will continue to work with US DHHS for any grant awarded to us that has this same reporting issue in the future. Anticipated Completion Date: Ongoing Contact Person: Jane Lemire Business Administrator IV (PT)

Finding Reference Number: 2022-029 NH Department of Health and Human Services Medicaid Cluster (Assistance Listing #93.775, #93.777, and #93,778) Federal Award Numbers: 2005NH5MAP, 2105NH5MAP, 2205NH5MAP, 2005NH5ADM, 2105NH5ADM, 2205NH5ADM, 2005NHIMPL, 2105NHIMPL, 2205NHIMPL Federal Award Years: 2020, 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provision: Provider Eligibility (Screening and Enrollment) Type of Finding: Significant Deficiency Prior Year Finding: 2021-034 Statistically Valid Sample: No Criteria In order to receive Medicaid payments, providers must: (1) be licensed in accordance with federal, state, and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and 447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make certain disclosures to the state (42 CFR Part 455, Subpart B, sections 455.100 through 455.106). Medicaid managed care network providers are subject to the same disclosure, screening, enrollment, and termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR Part 438, Subpart H. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition The Department assigns risks to each provider based on their provider type. All new provider enrollments and moderate and high-risk revalidations are reviewed and approved by the Department of Health and Human Services (the Department). However, for limited risk revalidations, the Department has outsourced this service to the Department?s Medicaid Management Information System fiscal agent (Fiscal Agent). The Department holds at least bi-weekly meetings with the fiscal agent to discuss issues noted with enrollment, revalidation, trends noted, etc. In addition, the Department has hired the Fiscal Agent to perform a quality assurance review over all new provider and revalidations prior to the notification that they are an eligible provider for State of New Hampshire services to address the accuracy of enrollment. The Department does not currently have a completeness process to ensure the Fiscal Agent reviews all providers for revalidations timely. Specifically, during our testwork over provider eligibility, we noted: 1. For 5 of 65 providers, there was greater than five years, from five to sixteen years, between the Department revalidating the providers eligibility. These providers were due for revalidation prior to the start of the COVID-19 pandemic. All five providers were determined to be eligible upon review of these long outstanding providers. 2. For 1 of 65 providers, the identified providers were enrolled via roster and the Department maintained an attestation that is uploaded with the enrollment with the provider facility. We viewed the attestation from the provider facility, and noted it was uploaded to the MMIS during the audit period but signed in 2012. The agreement should be more current than 2012. We noted the Department did obtain an updated agreement in August of 2022. Cause The Department has internal controls to address accuracy but not completeness which would identify providers that are due revalidation. Effect The effect of the condition found is that the Department does not revalidate providers timely and obtaining all relevant supporting documentation which could lead to ineligible providers billing for Medicaid services. Questioned Costs None. Recommendation We recommend the Department implement monitoring and communication internal controls to continually assess the need for provider revalidation to ensure that it is executed timely and in accordance with the requirements, including a plan to ensure all reviews are performed timely and include obtaining all relevant information. View of Responsible Officials 1. We concur. The Provider enrollment unit (PEU) is currently working on revalidations not completed and have a plan to deposition those providers while ensuring minimal disruption to member services and protecting limited provider networks disciplines such as the mental health network. I, the PEU administrator have been conducting biweekly meetings with Conduent and our business systems analyst to develop a plan and a systematic approach to revalidate all providers in the future. I am currently drafting a policy and procedure memo that will outline the new process for revalidations so that revalidations will be timely and complete in the future. Once the new process is implemented, I intend to review revalidations with Conduent at our biweekly provider enrollment meetings to ensure the revalidation process is conducted in a timely fashion and the implemented process for revalidations is working in that all revalidations are performed timely. As for the past due revalidations, the PEU anticipates all past due provider revalidations, prior to the PHE, to be either completed or be terminated by the beginning of March 2023. 2. We partially agree. The attestation signed in 2012 does not have an expiration and there is no Federal regulation or State law that requires this to be renewed, however, based on the finding last year, the Office of Medicaid Services did a new attestation in 2022. The 2022 attestation also does not have an end date and is not required to be renewed at any time. The attestation ends when the agreement is terminated by either parties. Anticipated Completion Date: March 2023 Contact Person: Stephanie Aulis

Finding Reference Number: 2022-030 NH Department of Health and Human Services Medicaid Cluster (Assistance Listing #93.775, #93.777, and #93,778) Federal Award Numbers: 2005NH5MAP, 2105NH5MAP, 2205NH5MAP, 2005NH5ADM, 2105NH5ADM, 2205NH5ADM, 2005NHIMPL, 2105NHIMPL, 2205NHIMPL Federal Award Years: 2020, 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provision: Medicaid National Correct Coding Initiative Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2021-035 Statistically Valid Sample: No Criteria In accordance with Section 1903(r) of the Social Security Act, effective October 1, 2010, SMAs were required to incorporate NCCI methodologies into the state Medicaid programs pursuant to the requirements of Section 6507 of the Affordable Care Act. In paying applicable Medicaid claims, states? MES are required to completely and correctly implement the following six Medicaid NCCI methodologies to ensure that only proper payments of procedures are reimbursed. a. NCCI Procedure-to-Procedure (PTP) edits for practitioner and ambulatory surgical center (ASC) claims. b. NCCI PTP edits for outpatient hospital services, including emergency department, observation care, and outpatient hospital laboratory services. c. Medically Unlikely Edit (MUE) units of service (UOS) edits for practitioner and ASC services. d. MUE UOS edits for outpatient hospital services including emergency department, observation care, and outpatient hospital laboratory services. e. MUE UOS edits for durable medical equipment (DME) billed by providers. f. NCCI PTP edits for durable medical equipment (added in October 2012). States are also required to use: ? all four components of each Medicaid NCCI methodology; ? the most recent quarterly Medicaid NCCI edit files for states; ? the Medicaid NCCI edits in effect for the date of service on the claim line or claim; ? the claim-adjudication rules in the Medicaid NCCI methodologies; and ? all modifiers for Healthcare Common Procedure Coding System (HCPCS) codes and Current Procedural Terminology (CPT) codes needed for the correct adjudication of applicable Medicaid claims. The NCCI Medicaid Policy Manual and the NCCI Medicaid Technical Guidance Manual contain additional requirements for implementation of the NCCI methodologies. The Medicaid NCCI methodologies must be applied to Medicaid fee-for-service claims submitted with, and reimbursed on the basis of, HCPCS codes and CPT codes. This includes claims reimbursed on a fee-for-service basis in state Medicaid Primary Care Case Management managed care programs. Application of NCCI methodologies to fee-for-service claims processed by other entities, including limited benefit plans or Managed Care Organizations, is not required; however, if SMAs require the application of NCCI methodologies to fee-for-service claims processed by such entities, then such entities must meet NCCI program requirements, including compliance with the NCCI Medicaid Policy Manual and the NCCI Medicaid Technical Guidance Manual. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition Per the Department of Health and Human Services (the Department), the edits required by the above CMS criteria reside in the Medicaid Management Information System (MMIS) and are activated based on responses sent back to MMIS from Cotiviti, a third-party vendor. MMIS is managed by Conduent. Conduent has a SOC1 report prepared to report on the fairness of the presentation of management?s description of the service organization?s system and the suitability of the design of the controls to achieve the related control objectives included in the description as of a specified date. The Conduent SOC1 report for the period July 1, 2021, to June 30, 2022, provided a brief description in the report of the NCCI process with Cotiviti and the related NCCI edits within MMIS, and management indicated that the NCCI edits were included in the control objective testing within the SOC report. However, the NCCI edits were not included in the Change Management population testing and as such, we were unable to rely on the NCCI edits. Based on this, there was no ability for us to validate in accordance with the criteria noted above the NCCI process as the control environment and control objectives were not identified in the SOC report and were not included within all relevant GITC populations. Cause The cause of the condition found was primarily due to the Departments on-going efforts with Conduent and their SOC auditor to ensure the documentation needed to support the testing of the automatic MMIS NCCI edits are contained and clearly documented within the SOC1 report and ensuring the edits were appropriately included in all testing. Effect The six required Medicaid NCCI methodologies to ensure that only proper payments of procedures are reimbursed may not be completely and correctly implemented by the Department?s third-party service organization. Questioned Costs Not determinable. Recommendation We recommend the Department works with the service organization to identify the automated NCCI edit checks and supporting general IT controls to be covered within the SOC 1 report so that it meets federal guidelines for compliance. View of Responsible Officials We concur and have developed a corrective action plan in conjunction with Conduent. See attached plan. The SOC report will include auditing the change management of the quarterly NCCI edit checks. The auditing firm will also update the control objective 5 activities to include a population of claims specifically with NCCI edits. Anticipated Completion Date: The completed 6/30/2023 SOC report. Contact Person: Roger Boissonneau, MMIS Director

Finding Reference Number: 2022-031 NH Department of Health and Human Services Medicaid Cluster (Assistance Listing #93.775, #93.777, and #93,778) Federal Award Numbers: 2005NH5MAP, 2105NH5MAP, 2205NH5MAP, 2005NH5ADM, 2105NH5ADM, 2205NH5ADM, 2005NHIMPL, 2105NHIMPL, 2205NHIMPL Federal Award Years: 2020, 2021, 2022 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provision: Managed Care Financial Audit Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria Effective no later than for rating periods for contracts starting on or after July 1, 2017, the state must periodically, but no less frequently than once every three years, conduct, or contract for an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each MCO, PIHP, and PAHP and post the results of these audits on its website (42 CFR section 438.602(e) and (g); May 6, 2016, Federal Register (81 FR 27497); OMB No. 0938-0920). Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2021, we noted the Department of Health and Human Services (the Department) was in the request for proposal (RFP) process for a vendor to perform the required periodic audits, for the year-ended June 30, 2020, which is within the 3-year cycle, which was to be completed during the year ended June 30, 2021. However, during our year ended June 30, 2022, federal single audit we noted the RFP process was not completed and the required periodic audit had not been conducted. Cause The Department was unable to complete the process to engage a vendor to ensure periodic audits were performed and posted on the State's website. Effect The Department is not in compliance with the requirements of 42 CFR section 438.602(e) and (g); May 6, 2016, Federal Register (81 FR 27497); OMB No. 0938-0920. Questioned Costs None. Recommendation We recommend the Department complete the RFP process to select a vendor to perform the required periodic audits for the period ended June 30, 2020, and going forward as required by the regulations. View of Responsible Officials We concur. The Department has contracted with Myers & Stauffer (M&S) to conduct the periodic audits of all three of its Managed Care plans for State Plan Rate Year 2020. We anticipate the audits will be completed by August 2023. Anticipated Completion Date: September 2023 Contact Person: Shirley Iacopino

Finding Reference Number: 2022-032 NH Department of Safety Disaster Grants ? Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4371-DR, FEMA-4335-DR, FEMA-4329-DR, FEMA-4516-DR-NH Federal Award Year: October 16, 2021, July 11-12, 2019, March 2-8, 2018, March 13-12, 2018, January 2, 2018, October 29-November 1, 2017, July 1-2, 2017, January 20, 2020 U.S. Department of Homeland Security Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria The SF-425, Federal Financial Report, is required to be filed annually. Quarterly progress reports are due from recipients on all open large projects 30 days after the end of each calendar quarter. Additionally, Title 45 U.S. Code of Federal Regulation Part 75 (45 CFR section 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HS Awards, section 75.303(a), Internal Controls, states the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting as part of the reporting, we noted the following: A. We noted for 1 out of 5 SF425's tested the total federal funds authorized (d) per the SF 425 report did not agree to the SAG Smartlink Report. The SF 425 box (d) reported $9,556,675, while Smartlink reported $9,503,026. Per inquiry with the New Hampshire Department of Safety (the Department), there were some projects that were de-obligated during the quarter. The Department did not update this amount on the SF 425, as the line should have read $9,503,025. The amount reported was the balance from the prior quarter. Subsequent to our identification of the error, the Department has revised the report and resubmitted the corrected version B. We noted for 1 of 16 Quarterly Progress Reports (QPR) selected for testwork the subrecipient was listed within the QPR report population provided by Department indicating they were required to file the QPR report. However, no such report was required to be filed and as such we were unable to validate the completeness of the QPR report population to ensure that all required QPR reports were properly filed. C. We noted for 5 of the remaining 15 QPR reports selected for testwork that the Department did not provide sufficient documentation to either support the accuracy of the amounts reported or the support documentation provided did not agree to the amount reported within the QPR. As such we are unable to substantiate the accuracy of the amounts reported to FEMA on the QPR reports. Cause The cause of the condition found was primarily due to insufficient internal controls related to reporting. Specifically, the internal controls in place did not operate at a precision level to detect a overstatement in amounts reported on the SF-425 report. Additionally, management does not have sufficient internal controls in place to track QPR reports and retain appropriate supporting documentation to substantiate amounts reported. Effect The effect of the condition found is that the Department did not file SF-425 reports and QPR reports accurately. Questioned Costs None. Recommendation We recommend that the Department ensure the operating effectiveness of its internal controls over financial and performance reporting are at a precision level sufficient enough to ensure the accuracy of its federal reporting. View of Responsible Officials Corrective actions are currently in development to address the completeness and accuracy of HSEM?s federal reporting. Anticipated Completion Date: June 30, 2023 Contact Person: Matthew Hotchkiss, Financial Manager HSEM, 603-223-3624, Matthew.A.Hotchkiss@dos.nh.gov

Finding Reference Number: 2021-002 Department of Health and Human Services SNAP Cluster (Assistance Listing #10.551 and #10.561) Federal Award Numbers 202020S51444, 204NH403S514, 214NH403S2514, 214NH403S2519 Federal Award Year: 2020, 2021 U.S. Department of Agriculture Compliance Requirement: Reporting ? Schedule of Expenditures of Federal Awards Type of Finding: Significant Deficiency Prior Year Finding: None Statistically Valid Sample: No Criteria Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements, section 200.510(b) states the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with ? 200.502. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the Schedule of Expenditures of Federal Awards (SEFA), we noted that the New Hampshire Department of Health and Human Services (the Department) incorrectly reported $4,714,418 in Pandemic EBT Benefits (Assistance Listing #10.542) as benefits paid under the Supplemental Nutrition Assistance Program (Assistance Listing #10.551) resulting in expenditures incurred under the Supplemental Nutrition Assistance Program to be overstated on the SEFA. The error was subsequently identified and corrected as a result of the audit process. Cause The cause of the condition found is that the Department believed that the funds under the Pandemic EBT program were not available to be paid as such to eligible clients for the month of June 2021 and as such, reported them as benefits paid under the Supplemental Nutrition Assistance Program. Effect The effect of the condition found is that the Schedule of Expenditures of Federal Awards was not accurately prepared. Questioned Costs None. Recommendation We recommend that the Department review its existing policies and procedures for preparing the Schedule of Expenditures of Federal Awards to ensure that it is complete and accurate.

Finding Reference Number: 2021-003 NH Department of Health and Human Services SNAP Cluster (Assistance Listing #10.551 and #10.561) Federal Award Numbers 202020S51444, 204NH403S514, 214NH403S2514, 214NH403S2519 Federal Award Year: 2020, 2021 U.S. Department of Agriculture Compliance Requirement: Special Tests and Provisions: ADP System for SNAP Type of Finding: Significant Deficiency and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria State agencies are required to automate their SNAP operations and computerize their systems for obtaining, maintaining, utilizing, and transmitting information concerning SNAP (7 CFR sections 272.10 and 277.18). This includes: (1) processing and storing all case file information necessary for eligibility determination and benefit calculation, identifying specific elements that affect eligibility, and notifying the certification unit of cases requiring notices of case disposition, adverse action and mass change, and expiration; (2) providing an automatic cutoff of participation for households that have not been recertified at the end of their certification period by reapplying and being determined eligible for a new period (7 CFR sections 272.10(b)(1)(iii) and 273.10(f) and (g)); and (3) generating data necessary to meet federal issuance and reconciliation reporting requirements. Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Criteria The New Hampshire Department of Health and Human Services (the Department) administers the SNAP program and is responsible for determining eligibility for the SNAP program in accordance with federal regulations and New Hampshire policies and procedures. During our testwork over the ADP system used for storing all case file information necessary for eligibility determination and benefit calculations (the New Heights system), we noted the following: A. For 12 of 40 participants selected for testwork, the Department was unable to provide support to verify that the participants social security income had been matched, via a Bendex match, with the Social Security Administration (SSA) because the SSA has not provided New Hampshire authorization to share that information. Therefore, validation that the participants were deemed eligible by the SSA was not able to be reviewed and we were unable to determine if the participant?s benefit calculation was performed accurately. B. For 1 of 40 participants selected for testwork, the incorrect earned income amount was used in support of the eligibility and benefit calculation process. While the amount of earned income was inaccurate, it did not result in an inaccurate eligibility determination or an error in the benefit amount paid. Cause The cause of the condition is that (1) the SSA has not issued a Redisclosure Memorandum for the CMS Single Audit. Without the Memorandum, states do not have permission to disclose SSA data to any auditors and (2) insufficient control procedures to ensure accurate data is entered into the New Heights system to support the participant?s eligibility determination and benefit calculation. Effect The effect of the condition found is that the Department could be providing SNAP benefits to participants who may be ineligible for the program, or the amount paid may be inaccurate. Questioned Costs Not determinable. Recommendation The Department should obtain approval from SSA to share data with the single auditor or work with SSA to provide correspondence to the single auditor confirming eligibility for individuals during the audit process. In addition, the existing internal controls should be reviewed to ensure that there are appropriate controls in place to review the accuracy of the data entered into the New Heights system to support the eligibility determination and benefit calculation process.

Finding Reference Number: 2021-004 NH Department of Health and Human Services SNAP Cluster (Assistance Listing #10.551 and #10.561) Federal Award Numbers 202020S51444, 204NH403S514, 214NH403S2514, 214NH403S2519 Federal Award Year: 2020, 2021 U.S. Department of Agriculture Compliance Requirement: Special Tests and Provisions: EBT Card Security Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria The state is required to maintain adequate security over, and documentation/records for, EBT cards, to prevent their theft, embezzlement, loss, damage, destruction, unauthorized transfer, negotiation, or use (7 CFR section 274.8(b)(3)). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition The New Hampshire Department of Health and Human Services (the Department) contracts with a third party to process all daily EBT transactions associated with the SNAP program. On a daily basis, the Department transmits data to the third-party service provider that contains information concerning participants that need a new EBT card issued. The service provider generates the EBT cards based on this request and express mails the cards to the Department. The Department reviews the listing of EBT cards that were delivered to ensure there are no missing cards and then subsequently mails the cards to the individual participant. During our testwork over the daily reconciliation performed over EBT cards issued, we were unable to obtain documented evidence that the Department had performed a daily reconciliation to ensure that only authorized EBT cards were issued. Cause The cause of the condition found is that the Department only maintains support for the daily reconciliation process for a 6-month period. After 6 months the data is destroyed. Effect The effect of the condition found is that EBT cards could be issued that were not properly authorized. Questioned Costs Not determinable. Recommendation We recommend that the Department review its existing policies and procedures to ensure that documentation to support the activities to properly secure EBT cards is appropriately documented and maintained.

Finding Reference Number: 2021-005 NH Department of Education Child Nutrition Cluster (Assistance Listing #10.553, #10.555, #10.556, #10.559, and #10.579) Federal Award Numbers: 214NH304N1099 Federal Award Year: 2020, 2021 U.S. Department of Agriculture Compliance Requirement: Allowable Costs Type of Finding: Significant Deficiency Prior Year Finding: No Statistically Valid Sample: No Criteria Reimbursement for meals served is not based on costs; it is determined solely by applying the applicable meals times rates formula. For the SFSP, separate rates are used to calculate reimbursement for operating and administrative costs, however a sponsor can use its entire reimbursement payment for any combination of allowable operating and administrative costs. For the FFVP, eligible elementary schools may only use the awarded subgrant funds for allowable costs of purchasing, preparing, and serving the fresh fruits and fresh vegetables during school day; these funds may not be used for the service of school meals. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over allowable costs charged to the program we noted the accuracy of meal counts are typically reviewed during the Department Administrative Reviews, as required by the United States Department of Agriculture (USDA). However, the New Hampshire Department of Education (the Department) received a waiver from the (USDA) to perform Administrative Technical Assistance Meeting (ATAM) reviews in place of the required Administrative Reviews. The waiver was granted with the understanding the Department would review all participating school food authorities (SFA). During our testwork over ATAM reviews we noted the Department did not perform a review for 2 of 7 Summer Food Service Programs SFAs selected for testwork. Cause The cause of the condition found is due to staffing turnover within the Department and inadequate procedures in place to ensure all reviews are competed. Effect The effect of the condition found is a breakdown in the Departments internal control related to the ATAM reviews. Additionally, SFAs may submit inaccurate meal counts which the Department would not know as the reviews were not performed. Questioned Costs Not determinable. Recommendation We recommend the Department review its policies and procedures related to review requirements to ensure they are sufficient to meet federal requirements.

Finding Reference Number: 2021-006 NH Department of Education Child Nutrition Cluster (Assistance Listing #10.553, #10.555, #10.556, #10.559, and #10.579) Federal Award Numbers: 214NH304N1099 Federal Award Year: 2020, 2021 U.S. Department of Agriculture Compliance Requirement: Special Tests and Provisions: Accountability for USDA-Donated Foods Type of Finding: Significant Deficiency and Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria Maintenance of Records - Distributing and subdistributing agencies (as defined at 7 CFR section 250.3) must maintain accurate and complete records with respect to the receipt, distribution, and inventory of USDA-donated foods, including end products processed from donated foods. Failure to maintain records required by 7 CFR section 250.16 shall be considered prima facie evidence of improper distribution or loss of donated foods, and the agency, processor, or entity may be required to pay USDA the value of the food or replace it in kind (7 CFR sections 250.16(a)(6) and 250.15(c)). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2021, the New Hampshire Department of Administrative Services (the Department) reported expenditures related to USDA foods which totaled $4,171,346. During our testwork over accountability for USDA-Donated Foods, we noted the following related to the Departments maintenance of records: ? For 1 of 13 food receipts selected for testwork, the quantity of foods received as reported on the Departments receipt report, which agrees to the Schedule of Expenditures of Federal Awards (SEFA), was greater than the quantity of foods received. The quantity entered into the system after delivery was the correct quantity of foods actually received into the warehouse. As such, the dollar value of foods received was overstated on the SEFA. ? For 5 of the 13 food items selected for testwork, we performed a rollforward of the balance on hand using the donated food records provided by the Department. Based on this rollfoward, the balance varied from the current balance observed per the inventory count. The Department was unable to provide documentation to support these variances. ? For 1 of 40 distributions selected for testwork, the distributions per the distribution report was greater than the distributions actually received by the school. The distribution records maintained by the Department included an original cancelled delivery and its true subsequent delivery without a reversal of the cancelled delivery. The warehouse did not overcharge the school as it issued a credit memo after the initial delivery?s invoice and only charged for the item after it had been delivered. Cause The cause of the condition found is due to the breakdown of internal controls in place relating to accountability for USDA-donated foods. Effect The effect of the condition found is noncompliance with 7 CFR section 250.16. Questioned Costs Overstatement of distributions: $38. Overstatement of receipts: $365. Recommendation We recommend the Department review its policies and procedures for complying with 7 CFR section 250.16 to ensure they are sufficient to meet federal requirements.

Finding Reference Number: 2021-007 NH Department of Health and Human Services Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing #10.557) Federal Award Numbers: 202120W100344 & 202121W100344 Federal Award Year: 2021 U.S. Department of Agriculture Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency and Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over period of performance at the New Hampshire Department of Health and Human Services (the Department), we noted for 1 of 48 expenditures selected for testing, the Department had charged the expense to the new federal fiscal year grant, however, the date of service on the invoice was partially for a period prior to the start of that federal award. Cause The cause of the condition found is due to how the Department charges costs to federal grants. Effect The effect of the condition found is that the Department did not comply with the period of performance regulations. Questioned Costs $30.35 ? the amount of the September portion of the invoice Recommendation We recommend that the Department implement internal control and policies and procedures to ensure costs are appropriately charged to federal awards based on the incurred date.

Finding Reference Number: 2021-008 NH Department of Health and Human Services Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing #10.557) Federal Award Numbers: 202019W100344, 202019W100644, 202020W100344, 202020W100644, 202121W700344, 202120W600644, 202120W600344, 202120W100344, 202120W100644, 202121W100344, 202121W100644, 202121W500344 Federal Award Year: 2019, 2020, 2021 U.S. Department of Agriculture Compliance Requirement: Reporting ? Schedule of Expenditures of Federal Awards Type of Finding: Significant Deficiency Prior Year Finding: No Statistically Valid Sample: No Criteria Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements, section 200.510(b) states the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with ? 200.502. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. Additionally, 2 CFR 200.303states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition The New Hampshire Department of Health and Human Services (the Department) did not have adequate annual management review controls in place at a level of precision necessary to ensure proper classification of the amount of expenditures passed through to subrecipients on the State of New Hampshire Schedule of Expenditures of Federal Awards (SEFA). For the WIC Program, the Department did not classify amounts passed through to subrecipients on the draft SEFA. Specifically, the Department had $2,646,624 in pass-through expenditures which were not properly classified as passed-through expenditures on the draft SEFA. The error was subsequently identified and corrected as a result of the audit process. Cause The cause of the condition found was primarily due to insufficient controls and procedures to ensure that pass-through amounts reported on the SEFA are complete and accurate. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.510(b). Questioned Costs None. Recommendation We recommend the Department enhance its process including its management review control to ensure the proper classification of subrecipient expenditures for SEFA reporting purposes to ensure compliance with 2 CFR 200.510(b).

Finding Reference Number: 2021-009 NH Department of Employment Security Unemployment Insurance (Assistance Listing #17.225) Federal Award Numbers: Not Applicable Federal Award Year: Not Applicable U.S. Department of Labor Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria The ETA 9050, First Payment; ETA 9052, Nonmonetary Determination Time Lapse Detection; and ETA 9055, Appeals Case Aging reports are required to be filed on a monthly basis. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the federal reporting process, we noted the following: A. There does not appear to be a documented review over the accuracy of the ETA 9050, ETA 9052 and ETA 9055 federal reports that was performed prior to submission of the reports to the U.S. Department of Labor. B. For each of the 3 monthly ETA 9052 reports selected for testwork, we were unable to obtain documentation to support that the reports submitted were complete and accurate. Cause The cause of the condition found was primarily due to the New Hampshire Department of Employment Security (the Department) not having sufficient controls in place to document the review and approval of the accuracy of the federal reports prior to submission. In addition, as it relates to the ETA 9052 reports, the Department was unable to reproduce the data using the current production system within the New Hampshire Unemployment Insurance System (NHUIS) which is the system that processes and stores all unemployment related information as it relates to the ETA 9052 reports. The original data that was generated to prepare the reports was not maintained by the Department. Effect The effect of the condition found is that the Department does not have documentation to substantiate that the reports filed were accurate or that the reports were reviewed prior to submission. Questioned Costs None. Recommendation We recommend that the Department review its existing internal controls, policies, and procedures to ensure that documentation to support the data contained on all federal reports is properly maintained and that all reports required to be submitted are subjected to a documented review prior to submission.

Finding Reference Number: 2021-010 NH Department of Employment Security Unemployment Insurance (Assistance Listing #17.225) Federal Award Numbers: Not Applicable Federal Award Year: Not Applicable U.S. Department of Labor Compliance Requirement: Special Tests and Provisions: UI Program Integrity - Overpayments Type of Finding: Material Weakness and Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria States are (1) required to impose a monetary penalty (not less than 15 percent) on claimants whose fraudulent acts resulted in overpayments, and (2) states are prohibited from providing relief from charges to an employer?s UI account when overpayments are the result of the employer?s failure to respond timely or adequately to a request for information. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over overpayments, for 1 of 40 items selected for testwork, we noted that a cause associated with the identified overpayment had not been identified or documented by the New Hampshire Department of Employment Security (the Department). Upon further review of the item, we noted that $500 in earnings were mistakenly entered into the system causing an overpayment to be identified for the claimant. The error resulted in an incorrect identification of an overpayment. Cause The cause of the condition found was due to a staff error that was not identified by the Department due to insufficient review controls in place to review the calculation of the overpayment. Effect The effect of the condition found is that the Department erroneously identified an overpayment and could have incorrectly sought to recoup benefits paid from the claimant. Questioned Costs None. Recommendation We recommend that the Department review its existing internal controls, policies and procedures related to the identification and subsequent review of overpayments to ensure that overpayments are properly identified and tracked.

Finding Reference Number: 2021-011 NH Governor?s Office of Emergency Relief and Recovery Coronavirus Relieve Fund (Assistance Listing #21.019) Federal Award Number: Not Applicable Federal Award Year: 2020 U.S. Department of Treasury Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria A pass-through entity must: 1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a); 2. Evaluate each subrecipient?s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.332(b)); 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means; and 4. Issuing a management decision for audit findings pertaining to federal award provided to the subrecipient from the subrecipient as required by 2 CFR section 200.521. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition Under the Coronavirus Relief Fund Program (CRF), the State of New Hampshire (the State) entered into various grant agreements with third parties to provide program services under the CRF program. As part of our testwork over the subrecipient monitoring process, we noted the following: A. The State communicates award information to the subrecipient through the approved grant agreement. During our testwork over the communication of award information, we noted instances where the State did not communicate all the required award information as outlined in 2 CFR section 200.331. Specifically, we noted the following: a. The subrecipient?s unique identifier was not included in 1 of 28 grant agreements selected for testwork. b. The indirect cost rate for the federal award, including if the de minimis rate is charged, was not included in 1 of 28 grant agreements selected for testwork. c. The federal award identification number, federal award date, federal award project description, assistance listing number and name and name of federal awarding agency was not included in 1 of 28 grant agreements selected for testwork. d. Identification of whether the award is R&D was not included in all 28 grant agreements selected for testwork. B. For 7 of 28 subrecipients selected for testwork, there was no evidence provided that a risk assessment had been performed for the subrecipient. C. For 1 of 28 subrecipients selected for testwork, we noted that the State?s during the award monitoring was primarily composed of periodic meetings. The State provided calendar dates of meetings held, but there were no minutes, notes or agenda items provided for the meetings and as such we were unable to substantiate the items discussed during the meeting to ensure it related to monitoring of the grant. D. For 3 of 28 subrecipients selected for testwork, no evidence was provided of any during the award monitoring activities performed, with the exception of the review of the invoice to be paid to the subrecipient. E. For 12 of 28 subrecipients selected for testwork, we noted that while the State was able to provide the subrecipients annual Uniform Guidance report, it was unclear as to whether or not the State had received the report on time as there was no formal tracking sheet or other documentation provided to support the tracking of the receipt of the reports. We further note that in all instances, the subrecipient?s report did not require the State to issue a management decision letter as there were no findings included within the individual reports. F. For 1 of 28 subrecipients selected for testwork, we noted that the State had performed a compliance monitoring review over the subrecipient. Per review of the report, funds provided under the Coronavirus Relief Fund were not included within the scope of the work performed. As a result, there did not appear to be any during the award monitoring performed over the subrecipient, with the exception of the review of the invoice to be paid to the subrecipient. Cause The cause of the condition found was primarily due to insufficient controls at the Department level to ensure compliance with subrecipient monitoring requirements due to the decentralized nature of how subrecipient grants were entered into by multiple Departments. Effect The effect of the condition found is that the State did not comply with 2 CFR section 200.331(a), 2 CFR section 300.331(b), and 2 CFR sections 200.331(d) through (f). Questioned Costs None. Recommendation We recommend that the State continue to review its existing policies and procedures to ensure there are sufficient controls in place to allow the State to comply with the provisions 2 CFR section 200.331(a), 2 CFR section 300.331(b), and 2 CFR sections 200.331(d) through (f). This would include ensuring that: 1. All required award information is communicated to subrecipients; 2. Document risk assessments are performed over all subrecipients; 3. During the award monitoring activities are properly documented; and 4. Receipt of subrecipient uniform guidance reports are tracked to show that they are received and reviewed timely.

Finding Reference Number: 2021-012 NH Governor?s Office of Emergency Relief and Recovery Emergency Rental Assistance Program (Assistance Listing #21.023) Federal Award Numbers ERA0012-ERA0435 Federal Award Year: 2020 U.S. Department of Treasury Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No Criteria A pass-through entity must clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition Under the Emergency Rental Assistance Program (ERAP), the New Hampshire Governor?s Office of Emergency Relief and Recovery (the Department) entered into one grant agreement with a third party to provide program management services whereby the subrecipient would be responsible for the distribution of ERAP funds, including the eligibility process and determining the amount the applicant was eligible to receive. As part of our testwork over the subrecipient monitoring process, we noted the following: A. The Department communicates award information to the subrecipient through the approved grant agreement. Per review of the grant agreement, the Department did not communicate all the required award information as outlined in 2 CFR section 200.331. Specifically, the grant award did not identify if the grant was a research and development grant. B. Biweekly reports are required to be submitted to the Department that contains information concerning the number and value of awards that have been provided to recipients and certain demographic information as it relates to the program recipients. For the 3 biweekly reports selected for testwork, while it appeared that the Department had collected the required reports from the subrecipient, there was no evidence provided that the Department reviewed the data contained within the report. C. On a periodic basis the subrecipient is required to perform a monitoring review that assesses compliance with participant eligibility requirements and recalculation of the benefit amount paid. Upon completion of the review, a report is sent to the Department outlining the results of the review. During our testwork over subrecipient monitoring we obtained the monitoring report that was issued that covered monitoring activities through June 30, 2021. While it appeared the Department had obtained the monitoring report, there was no evidence provided that the Department reviewed the data contained within the report. Cause The cause of the condition found was primarily due the Department not include the required communication to identify if the grant is a research and development grant and did not appear to have any policies and procedures to formally document its review and approval of reports submitted from the subrecipient. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.331(a) and may not have timely reviewed reports submitted to the Department to ensure that any compliance matters were followed up and resolved timely. Questioned Costs None. Recommendation We recommend that the Department continue to review its existing policies and procedures to ensure that the Department complies with the provisions of 2 CFR section 200.331(a) and to ensure that appropriate controls are in place to ensure compliance with 2 CFR section 200.331(b). This would include ensuring that: 1. All required award information is communicated to subrecipients; and 2. Ensuring that all bi-weekly and monitoring reports provided by the subrecipient are timely reviewed and conclusions reached as a result of the review are formally documented.

Finding Reference Number: 2021-013 NH Department of Education Title I Grants to Local Educational Agencies (Title I, Part A of ESEA (Assistance Listing #84.010)) Federal Award Numbers: S010A190029, S010A200029 Federal Award Year: 2020, 2021 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the ?Transparency Act? that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over FFATA reporting at the New Hampshire Department of Education (the Department), we noted throughout the year ending June 30, 2021, the Department reported their grants in the FSRS system however, each time a change was made to an agreement and reported in the system, the Department reported the new total, rather than just the change in funding, resulting in a significant overreporting of obligated funds to the FSRS system. As the FSRS system doesn?t allow modifications to prior reports, the Department has been unable to correct the reporting within the FSRS system. The Department has been working with the U.S. Department of Education to resolve the errors in the FFATA reporting. Given the severity of the errors reported in the FSRS system, we were unable to perform audit work over the FFATA reporting requirements and related internal controls in place at the Department. Cause The cause of the condition found is due to a misunderstanding in the FFATA reporting requirements and the Departments inability to correct previously reported grants without assistance from the FSRS technical team. Effect The effect of the condition found is that the Department did not comply with the Transparency Act. Questioned Costs None. Recommendation We recommend that the Department implement internal control and policies and procedures, across all Department programs to which FFATA reporting is applicable, to ensure timely and accurate reporting to the FSRS system to ensure compliance with the Transparency Act reporting requirements.

Finding Reference Number: 2021-014 NH Department of Education Title I Grants to Local Educational Agencies (Title I, Part A of ESEA) (Assistance Listing #84.010) Federal Award Numbers: S010A190029, S010A200029 Federal Award Year: 2020, 2021 U.S. Department of Education Compliance Requirement: Special Tests and Provisions ? Assessment System Security Type of Finding: Significant Deficiency and Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria State Educational Agencies (SEAs), in consultation with Local Educational Agencies (LEAs), are required to establish and maintain an assessment system that is valid, reliable, and consistent with relevant professional and technical standards. Within their assessment system, SEAs must have policies and procedures to maintain test security and ensure that LEAs implement those policies and procedures (Title I, Section 1111(b)(2)(B)(iii) of the ESEA (20 USC 6311(b)(2)(B)(iii))). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the Department?s on-site monitoring process, we noted for 1 of 7 LEA?s selected for testwork, the LEA did not submit all of the required documentation to the Department, however, the Department closed their review and noted all required documentation was submitted. Cause The cause of the condition found was primarily due to an oversight at the Department. Effect The effect of the condition found is that the Department may not be in compliance with Title I, Section 1111(b)(2)(B)(iii) of the ESEA (20 USC 6311(b)(2)(B)(iii)). Questioned Costs Not determinable. Recommendation We recommend that the Department review its existing policies and procedures over assessment security requirements and revise procedures and internal controls to ensure that reviews over LEAs are performed each year and appropriate documentation is maintained.

Finding Reference Number: 2021-015 NH Department of Education Education Stabilization Fund (Assistance Listing #84.425) Federal Award Numbers: S425R210041, S425D200017, S425D210017, S425C200032, S425C210032 Federal Award Year: 2020, 2021 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the ?Transparency Act? that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over FFATA reporting at the New Hampshire Department of Education (the Department), we noted throughout the year ending June 30, 2021, the Department reported their grants in the FSRS system however, each time a change was made to an agreement and reported in the system, the Department reported the new total, rather than just the change in funding, resulting in a significant overreporting of obligated funds to the FSRS system. As the FSRS system doesn?t allow modifications to prior reports, the Department has been unable to correct the reporting within the FSRS system. The Department has been working with the U.S. Department of Education to resolve the errors in the FFATA reporting. Given the severity of the errors reported in the FSRS system, we were unable to perform audit work over the FFATA reporting requirements and related internal controls in place at the Department. Cause The cause of the condition found is due to a misunderstanding in the FFATA reporting requirements and the Departments inability to correct previously reported grants without assistance from the FSRS technical team. Effect The effect of the condition found is that the Department did not comply with the Transparency Act. Questioned Costs None. Recommendation We recommend that the Department implement internal control and policies and procedures across all Department programs to which FFATA reporting is applicable, to ensure timely and accurate reporting to the FSRS system to ensure compliance with the Transparency Act reporting requirements.

Finding Reference Number: 2021-016 NH Department of Education Education Stabilization Fund (Assistance Listing #84.425) Federal Award Numbers: S425R210041, S425D200017, S425D210017, S425C200032, S425C210032 Federal Award Year: 2020, 2021 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Significant Deficiency Prior Year Finding: No Statistically Valid Sample: No Criteria Direct recipients of GEER, ESSER I and ESSER II grants must submit an annual report. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting at the New Hampshire Department of Education (the Department), we noted while the Department was able to show the annual GEER and ESSER reports were filed by the required deadline, the Department was unable to provide evidence to support the reports had followed the Departments internal control procedures, including a review and approval of the report prior to submission. Cause The cause of the condition found is due to a lack of proper processes and internal controls in place surrounding the submittal of GEER and ESSER reports. Effect The effect of the condition found is that the Department did not comply with the federal reporting requirements. Questioned Costs None. Recommendation We recommend that the Department review its existing policies and procedures to ensure timely and accurate federal reporting to ensure compliance with the federal reporting requirements.

Finding Reference Number: 2021-017 NH Department of Education Education Stabilization Fund (Assistance Listing #84.425) Federal Award Numbers: S425R210041, S425D200017, S425D210017, S425C200032, S425C210032 Federal Award Year: 2020, 2021 U.S. Department of Education Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria A pass-through entity must: 1. Evaluate each subrecipient?s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)) 2. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (e). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. For programs under ESSER I and GEER I (Assistance Listing 84.425C and D), an LEA that receives funds under one or both of those programs must provide equitable services in the same manner as provided under section 1117 of Title I, Part A of the ESEA (20 USC 6320) (Assistance Listing 84.010) to students and teachers in private schools as determined in consultation with private school officials (section 18005(a) of the CARES Act). To meet this requirement, an LEA must determine the proportional share of ESSER I or GEER I funds available for equitable services in accordance with section 1117(a)(4)(A) of the ESEA (20 USC 6320(a)(4)(A)). Under ESSER I and GEER I, the LEA in which a private school is located is responsible for providing equitable services to students and teachers in the school. With respect to the provision of services, in general all students and teachers in a private school are eligible to receive equitable services under ESSER I and GEER I. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition The New Hampshire Department of Education (the Department) has a formal on-site programmatic monitoring policy that includes both a risk assessment process and procedures to monitor compliance at the LEA level in order to ensure that the LEA as complied with federal requirements concerning the use of Education Stabilization Fund funds. As part of the programmatic on-site monitoring process implemented by the New Hampshire Department of Education (the Department) over LEA?s, the Department was to review and ensure that LEAs that receives funds under the program provided equitable services in the same manner as provided under section 1117 of Title I, Part A of the ESEA. During our testwork over subrecipient monitoring, we noted that the Department did not perform any programmatic risk assessments or monitoring during the year ended June 30, 2021. As a result, the Department did not perform any procedures to ensure LEA compliance with programmatic requirements. We further noted the requirements related to participation of private school children were not monitored. Cause The cause of the condition found was due to the inability of the Department to perform reviews due to the lack of staff and COVID-19. Effect The effect of the condition found is that the Department did not sufficiently monitor the LEA?s compliance with federal regulations applicable to Education Stabilization Fund in accordance with 2 CFR section 200.332(b) and 2 CFR sections 200.332(d) through (e) and the Department did not sufficiently monitor the LEA?s compliance related to private school participation. Questioned Costs None. Recommendation We recommend that the Department continue to review its existing policies and procedures over the monitoring of subrecipients in order to ensure that appropriate procedures to comply with 2 CFR section 300.332(b) and 2 CFR sections 200.332(d) through (e) are consistently performed on an annual basis. Additionally, the Department should review its existing policies and procedures over the monitoring of private school participation to ensure that specific monitoring procedures are developed and implemented to appropriately monitor the federal requirement at the LEA.

Finding Reference Number: 2021-018 NH Department of Health and Human Services Immunization Cooperative Agreements (Assistance Listing #93.268) Federal Award Numbers: Federal Award Year: U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provision ? Control, Accountability and Safeguarding of Vaccine Type of Finding: Significant Deficiency Prior Year Finding: No Statistically Valid Sample: No Criteria Effective control and accountability must be maintained for all vaccine under the Vaccine For Children (VFC) program (42 USC 1396s). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the vaccine ordering process, all enrolled providers are required to submit an electronic request for vaccines by vaccine type and quantity to the New Hampshire Department of Health and Human Services (the Department). Included with the order request is a vaccine reconciliation form that provides detailed information by vaccine concerning the beginning of period vaccine quantity included in inventory, doses administered, ending vaccine balance and number of doses requested for the current order. This information is reviewed by the Department, and if reasonable, the order request is approved. As part of our testwork over the approval process for provider vaccine orders, we noted that for 30 of the 40 orders selected for testwork, we were unable to verify that the vaccine order was reviewed and approved by the Department. Cause The cause of the condition found was due to a new vaccine system being implemented as of April 1, 2021. Once the new system went live, all prior vaccine orders approved in the previous system were no longer accessible. Effect The effect of the condition found is that the Department is unable to demonstrate that provider vaccine orders prior to April 1, 2021 were reviewed in accordance with the Department?s policies and procedures. Questioned Costs None. Recommendation We recommend that the Department review its existing policies and procedures to ensure that documentation is maintained to support the review and approval of all vaccine order requests by the provider to help ensure accountability of all approved and distributed vaccines.

Finding Reference Number: 2021-019 NH Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Federal Award Numbers: NUK50CK000522 Federal Award Year: 2019 U.S. Department of Health and Human Services Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include those procurement contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: EPLS is no longer a separate system; however, the OMB guidance and agency implementing regulations still refer to it as EPLS), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Additionally, 45 CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testwork related to procurement and suspension and debarment, we noted the following: A. For 5 of 22 agreements selected for testwork, we noted that the New Hampshire Department of Health and Human Services (the Department) was unable to provide documentation to support it had verified whether the contractor was suspended or debarred before entering into the covered transaction. Based on our review of the System for Award Management (SAM) Exclusions website, none of the vendors selected for testwork were included within the exclusion list indicating that they had been suspended or debarred. Cause The cause of the condition found was the result of insufficient controls in place to ensure that Department suspension debarment policies are followed, and adequate documentation is maintained to support the process. Effect The effect of the condition found is that the Department was not in compliance with 2 CFR section 180.300 and as such, could have entered into an agreement with a vendor that had been suspended or debarred from receiving federal funds and would not have the necessary controls and procedures to identify the noncompliance timely. Questioned Costs Not determinable. Recommendation We recommend that the Department continue to review its existing policies, procedures and related controls to ensure signed suspension and debarment certifications are in place or the excluded parties listing is reviewed prior to entering into a covered transaction with vendors. The Department should also consider whether or not procedures should be implemented to independently review the System for Award Management Exclusions website to confirm if a vendor has been suspended or debarred.

Finding Reference Number: 2021-020 NH Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Federal Award Numbers: NUK50CK000522 Federal Award Year: 2019 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the ?Transparency Act? that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, the New Hampshire Department of Health and Human Services (the Department) enters into subrecipient agreements that meet the requirements for first tier subawards under the Transparency Act and as such FFATA reports should have been filed for each of those subawards. For 18 of 18 subawards selected for testwork, the Department did not file the required FFATA reports. Cause The cause of the condition found was primarily due insufficient resources and constraints due to COVID-19. Effect The effect of the condition found is that the Department did not comply with the provisions of the Transparency Act. Questioned Costs None. Recommendation We recommend that the Department review its existing internal controls, policies and procedures to ensure that all required FFATA reports are filed and filed timely for all subrecipient grant agreements that meet the definition of a first-tier subaward.

Finding Reference Number: 2021-021 NH Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Federal Award Numbers: NUK50CK000522 Federal Award Year: 2019 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria A pass-through entity (PTE) must: 1. Identify the Award and Applicable Requirements ? Clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). 2. Evaluate Risk ? Evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 3. Monitor ? Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. 4. Ensure Accountability of For-Profit Subrecipients ? Some federal awards may be passed through to for-profit entities. For-profit subrecipients are accountable to the PTE for the use of the federal funds provided. Because 2 CFR Part 200 does not make Subpart F applicable to for-profit subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward. The agreement with the for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient's compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement, and post-award audits (2 CFR section 200.501(h)). Additionally, CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During the year ended June 30, 2021 the New Hampshire Department of Health and Human Services (the Department) passed through $17,946,121 of federal funding to subrecipients, both for-profit and non-profit. As part of our testing related subrecipient monitoring, we noted the following: A. The Department communicates award information to subrecipients through the approved agreement. Per review of the agreement, for 18 of 18 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.332(a). Specifically, the following elements were not communicated: - Subrecipient unique entity identifier; - Federal award date; - Name of the federal awarding agency, pass-through entity, and contact information for the awarding official of the pass-through entity; - Identification of whether the award is R&D; and - Indirect cost rate for the federal award B. For 2 of 11 subrecipients selected for testwork the Department did not perform a review of the Uniform Guidance (UG) report timely. The reports were accepted by the Federal Audit Clearing House in September 2021 and February 2021 and were not reviewed by the Department until May 2022. C. For 14 of 18 subrecipients selected for testwork, the Department was unable to provide documentation to support it had evaluated the subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. D. The Department did not perform any during the award monitoring over the programs subrecipients. E. The Department passed through $5,042,500 in federal funding to for-profit subrecipients. These subrecipients are not subject to 2 CFR 200 Subpart F and as such, no review over the uniform guidance audit report is performed by the Department. The Department was unable to provide documentation to support it had performed procedures to ensure compliance with the subrecipient agreement in accordance with 2 CFR Section 200.501(h). Cause The cause of the condition found was primarily due to insufficient controls and procedures to ensure that all required subrecipient monitoring procedures are being performed by the Department. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(a - h) and 2 CFR section 200.501(h). Questioned Costs None. Recommendation We recommend the Department continue to review its existing policies and procedures to ensure that the Department complies with 2 CFR section 200.332(a-h) and 2 CFR section 200.501(h).

Finding Reference Number: 2021-022 NH Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323) Federal Award Numbers: NUK50CK000522 Federal Award Year: 2019 U.S. Department of Health and Human Services Compliance Requirement: Reporting ? Schedule of Expenditures of Federal Awards Type of Finding: Significant Deficiency Prior Year Finding: No Statistically Valid Sample: No Criteria Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements, section 200.510(b) states the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with ? 200.502. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. Additionally, CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition The New Hampshire Department of Health and Human Services (the Department) did not have adequate annual management review controls in place at a level of precision necessary to ensure proper classification of the amount of expenditures passed through to subrecipients on the State of New Hampshire Schedule of Expenditures of Federal Awards (SEFA). For the ELC Program, the Department did not classify amounts receives as passed through to subrecipients on the draft SEFA. Specifically, the Department had $17,946,121 in pass-through expenditures which were not properly classified as passed-through expenditures on the draft SEFA. Cause The cause of the condition found was primarily due to insufficient controls and procedures to ensure that pass-through amounts reported on the SEFA are complete and accurate. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.510(b). Questioned Costs None. Recommendation We recommend the Department enhance its process including its management review control to ensure the proper classification of subrecipient expenditures for SEFA reporting purposes to ensure compliance with 2 CFR 200.510(b).

Finding Reference Number: 2021-023 NH Department of Health and Human Services Temporary Assistance for Needy Families (Assistance Listing #93.558) Federal Award Numbers: 2020G996115, 2021G996115 Federal Award Year: 2020, 2021 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provisions: Child Support Non-Cooperation Type of Finding: Significant Deficiency and Noncompliance Prior Year Finding: 2020-012 Statistically Valid Sample: No Criteria If the State agency responsible for administering the State plan under Title IV-D of the Social Security Act determines that an individual is not cooperating with the State in establishing paternity, or in establishing, modifying or enforcing a support order with respect to a child of the individual, and reports that information to the State agency responsible for TANF, the State TANF agency must (1) deduct an amount equal to not less than 25% from the TANF assistance that would otherwise be provided to the family of the individual and (20 may deny the family any TANF assistance. Health and Human Services (HHS) may penalize a State for up to 5% of the SFAG for failure to substantially comply with this required State child support program (45 CFR sections 264.30 and 264.31) Additionally, CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testwork related to child support non-cooperation, we noted the following: A. For 1 of 7 participants selected for testwork, a letter of non-cooperation was not maintained in the participants folder. Per review of the documentation in the file, we noted that there was correspondence maintained to indicate that the participant was not cooperating as of December 28, 2020, however the required letter of non-cooperation could not be located. As there was no record of a non-cooperation letter being received, the participant was not sanctioned. As a result, the participant?s benefits may have been overpaid. The amount of the overpayment was $543. B. For 1 of 7 participants selected for testwork, the participant?s file contained a cooperation letter dated in September 2021 indicating that the participant began cooperating as of February 24, 2021, and the letter itself was not sent timely to the TANF agency to notify them of the change in cooperation status. Despite not having received the proper communication, we noted that the case manager had lifted the sanction as of April 15, 2021. The delay resulted in the participant?s benefits being underpaid until the sanction was lifted. The amount of the benefit underpayment was $412. Cause The cause of the condition found was the result of insufficient controls in place to ensure that the participant?s cooperation status is being communicated and communicated timely. Effect The effect of the condition found is that participant benefit payments were not accurately paid and could result in unallowable costs charged to the federal program. Questioned Costs $131 - the net difference between bullet A and B above. Recommendation We recommend that the Department continue to enhance its existing controls and procedures to ensure the documentation used to support the beginning and termination of sanction periods is maintained and timely communicated so that those dates are accurately reflected within the New Heights System, ensuring that the participant?s benefit payment is accurate.

Finding Reference Number: 2021-024 NH Department of Health and Human Services Temporary Assistance for Needy Families (Assistance Listing #93.558) Federal Award Numbers: 2020G996115, 2021G996115 Federal Award Year: 2020, 2021 U.S. Department of Health and Human Services Compliance Requirement: Matching, Level of Effort and Earmarking ? Maintenance of Effort Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2020-016 Statistically Valid Sample: No Criteria Every fiscal year, a State must maintain an amount of ?qualified state expenditures? (as defined in 42 US609(a)(7)(B) and 45 CFR section 263.2) for eligible families (as defined in 42 USC 609(a)(7)(B)(i)(IV) and 45 CFR section 263.2(b)) at least at the applicable percentage of the State?s historic State expenditures. Qualified expenditures with respect to eligible families may come from all programs. This requirement may be met through allowable state or local cash expenditures for goods and services, cash donations by non-governmental third parties, or the value of third-party in-kind contributions. A State?s records must show that all costs are verifiable and meet all applicable requirements in 45 CFR sections 263.2 through 263.6.45. Additionally, CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition For the federal fiscal year end September 30, 2020, the New Hampshire Department of Health and Human Services (the Department) was required to meet an annual maintenance of effort (MOE) requirement of $43,042,138. Of the MOE expenditures incurred, $9,359,555 represented in-kind contributions from 15 community organizations. On an annual basis, each community organization completes a Temporary Assistance for Needy Families (TANF) MOE form to report expenses that qualify as TANF expenditures. The form requires a description of the program operations, what TANF purpose the program addresses, the number of families served, and the amount of eligible expenditures in total. The form is signed by the organization and submitted to the Department to serve as the supporting documentation for the in-kind contribution provided by the community organization. No additional documentation is provided by the community organization to support the amount of the expenditures included on the form. The Department does not perform procedures to ensure expenditures reported by the community organization are accurate and represent valid expenditures that were incurred to support the program outlined within the form and in turn to ensure the in-kind contribution used to support the required MOE is appropriate. Cause The cause of the condition found was a result of insufficient controls and procedures to ensure the expenditures reported by the community organizations are properly supported by valid expenditures that meet the criteria of qualified TANF expenditures. As the Department enters into a memorandum of understanding (MOU) with each community organization that outlines the types of costs that are allowable sources of MOE and obtains a signed certification from each organization as to the amount of expenditures incurred, the Department indicated that the support provided is sufficient and therefore does not validate the information for accuracy. Effect The effect of the condition found is that the Department may not meet the required annual MOE requirement as in-kind contributions may not be complete or represent qualified expenditures and does not have controls and procedures in place to identify noncompliance timely. Questioned Costs Not determinable. Recommendation We recommend that the Department implement controls and procedures to ensure that in-kind contributions used to support MOE are reviewed to ensure that the expenditures are accurate and meet the definition of qualifying expenditures.

Finding Reference Number: 2021-025 NH Department of Health and Human Services Temporary Assistance for Needy Families (Assistance Listing #93.558) Federal Award Numbers: 2020G996115, 2021G996115 Federal Award Year: 2020, 2021 U.S. Department of Health and Human Services Compliance Requirement: Reporting Special Tests and Provisions: Penalty for Failure to Comply with Work Verification Plan Type of Finding: Significant Deficiency and Noncompliance Prior Year Finding: 2020-014 Statistically Valid Sample: No The State agency must maintain adequate documentation, verification, and internal control procedures to ensure the accuracy of the data used in calculating work participation rates. In so doing, it must have in place procedures to (a) determine whether its work activities may count for participation rate purposes; (b) determine how to count and verify reported hours of work; (c) identify who is a work eligible individual; and (d) control internal data transmission and accuracy. Each State agency must comply with its HHS-approved Work Verification Plan in effect for the period that is audited. HHS may penalize the State by an amount not less than one percent and not more than five percent of the SFAG for violation of this provision (42 USC 601, 602, 607, and 609); 45 CFR sections 261.60, 261.61, 261.62, 261.63, 261.64, and 261.65). ACF-199, TANF Data Report (OMB No. 0970-0338) and ACF-343, Tribal TANF Data Report (OMB No. 0970-0215) (65 FR 8545, Appendix A, February 18, 2000) - State agencies must meet or exceed their minimum annual work participation rates. The minimum work participation rates are 50 percent for the overall rate and 90 percent for the two-parent rate. A state?s minimum work participation rate may be reduced by its caseload reduction credit. HHS may penalize the state by an amount of up to 21 percent of the SFAG for violation of this provision (42 USC 609(a)(4); 45 CFR section 262.1(a)(4)). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork related to compliance with the New Hampshire Department of Health and Human Services (the Department) work verification plan we noted the following: A. For 1 of 40 participants selected for testwork, the participant did not have an active employment plan for the period selected for testwork. There was no evidence per review of the case notes maintained for the participant that the Department had made additional efforts to obtain the required employment plan. As there was no active employment plan, we were unable to verify if the participant was in compliance with their required work requirements for the period tested. B. For 1 of 40 participants selected for testwork, there was insufficient documentation to support the number of hours worked within the New Heights system for the participant. Cause The cause of the condition found was a result of inadequate review controls in place to ensure that participants have an active employment plan in place, that sufficient documentation is maintained to support the number of work hours reported by participants, and that the hours worked is accurately reported within the New Heights system. Inaccurate reporting could impact the accuracy of the data submitted within the ACF-199 TANF Data Report. Effect The effect of the condition found is that the State may not be in compliance with its work verification plan and would not be able to identify the noncompliance and related reporting errors within the ACF-199 TANF Data report timely. Questioned Costs Not determinable. Recommendation We recommend that the Department enhance its existing controls and procedures to ensure that participant employment plans are obtained, documentation used to support participant work hours is maintained, that the hours reported agree to the documented hours worked and that the work hours are accurately reflected within the New Heights system so that they are ultimately accurately reported on the ACF-199 TANF Data Report.

Finding Reference Number: 2021-026 NH Department of Health and Human Services Temporary Assistance for Needy Families (Assistance Listing #93.558) Federal Award Numbers: 2020G996115, 2021G996115 Federal Award Year: 2020, 2021 U.S. Department of Health and Human Services Compliance Requirement: Eligibility Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: None Statistically Valid Sample: No The state or tribal plan provides the specifics on the state or tribal area?s definition of financially needy which the state uses in determining eligibility as outlined in 45 CFR section 260.31(a). A state may use funds in any manner reasonably calculated to accomplish the purposes of the program, including providing low-income households with assistance in meeting home heating and cooling costs (42 USC 604(a)(1) and 45 CFR section 263.11(a)(1)). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork related to the eligibility determination process, we noted the following: A. For 2 of 40 participants selected for testwork, the signed Statement of Understanding document was not maintained in the participant?s e-folder. The Statement of Understanding was required to be signed and received as part of the eligibility determination process as it assists in providing support for certain requirements that must be met in order to be determined eligible for the program. B. For 1 of 4 participants selected for testwork, the participant?s redetermination was not completed within the appropriate timeframe. C. For 1 of 40 participants selected for testwork, we noted that there were no work activity hours reported for the month of January and there did not appear to be any sanctions applied to reduce the participant?s benefits for the lack of work. We were unable to obtain any documentation to support that the participant was in compliance with their work participation plan to support why their benefits were not sanctioned. Cause The cause of the condition found was a result of insufficient controls to ensure that support needed to determine eligibility is completely maintained in the participant?s e-folder, to ensure that participants were redetermined eligible for the program within the appropriate time period or that documentation is maintained to support if sanctions are required for noncompliance with work related activities. Effect The effect of the condition found is that participants may have received benefits that they were not eligible to receive, resulting in unallowable costs. Questioned Costs Not determinable. Recommendation We recommend that the Department enhance its existing controls and procedures to ensure that documentation to support eligibility determinations is properly maintained in the participant?s e-file, including compliance with work related requirements. Exceptions or delays in the redetermination process should be documented within the participant?s file.

Finding Reference Number: 2021-027 NH Department of Energy Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2001NHLIE4, 2010NHLIE4 Federal Award Year: 2020, 2021 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria A pass-through entity must: 1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a); 2. Evaluate each subrecipient?s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.332(b)); 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means; and 4. Issuing a management decision for audit findings pertaining to federal award provided to the subrecipient from the subrecipient as required by 2 CFR section 200.521. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Low Income Home Energy Assistance program (LIHEAP), the New Hampshire Department of Energy (the Department) enters into grant agreements with local entities to provide services related to the eligibility determination process for the LIHEAP program (including the calculation of participant benefits) and payment of benefits to fuel providers. As part of our testwork over the subrecipient monitoring process, we noted the following as of the year ending June 30, 2021: A. The Department communicates award information to subrecipients through the approved grant agreement. Per review of the grant agreement, for each of the 2 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.332. Specifically, the following elements were not communicated: a. Federal Award Identification Number (FAIN) b. Federal award date c. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414) d. Identification of whether the award is R&D B. The Department did not perform a risk assessment for each of the 2 subrecipients selected for testwork. As a result, it was unclear what type of during the award monitoring was required to be performed for the 2 subrecipients selected for testwork. C. The Department?s during the award monitoring includes a review of fiscal compliance by the subrecipient. During our testwork over fiscal monitoring, we noted that for each of the 2 subrecipients selected for testwork, a fiscal monitoring review was not conducted for the LIHEAP program. D. The Department?s during the award monitoring includes a review of programmatic compliance of the subrecipient related to the processing of applications, eligibility determinations and benefit amounts paid. During our testwork over programmatic monitoring, we noted that for each of the 2 subrecipients selected for testwork, while a programmatic monitoring review was conducted on March 31, 2021, the report summarizing the results of the review was not issued until September 30, 2021. In addition to the report not being issued timely, we noted that there were findings included within the report and the report indicated that a corrective action plan was to be submitted by the subrecipient within 30 days. As of March 2, 2022, the Department had not followed up and collected the required corrective action plans to ensure that the findings noted were resolved timely. E. The Department documents its review over the subrecipient?s annual uniform guidance report within its fiscal monitoring letter. We noted that while a fiscal monitoring review was not performed for the LIHEAP program, one was performed for a different program that is managed by the Department for the same 2 subrecipients selected for testwork. Per review of the fiscal monitoring reports issued as of August 31, 2021, while the monitoring report contained evidence that the most recent uniform guidance reports had been reviewed, the date of the letter ranged from 8 to 10 months after the subrecipient?s uniform guidance report was issued and as such, the review was not performed timely as required by 2 CFR section 200.521. Cause The cause of the condition found was primarily due to insufficient resources and constraints due to COVID-19 to ensure that timely monitoring and risk assessments were performed over subrecipients. In addition, there appears to be insufficient controls in place to review the grant agreements to ensure that all required data elements are communicated to the subrecipient in accordance with 2 CFR section 300.332(b). Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(a), section 200.332(b) and 2 CFR section 200.521. Questioned Costs None. Recommendation We recommend that the Department review its existing internal controls, policies, and procedures to ensure that the Department complies with the provisions of 2 CFR section 200.332(a), 2 CFR section 200.332(b) and 2 CFR section 200.251. This would include ensuring that: 1. All required award information is communicated to subrecipients; 2. A documented risk assessment is performed over all subrecipients and the results of that risk assessment is used to evaluate the types of monitoring procedures that will be performed over the subrecipient; 3. As a result of the risk assessment performed, monitoring activities are performed over subrecipients to ensure compliance with the terms and conditions of its subrecipient grant agreement. The results of all monitoring reviews should be timely communicated to the subrecipient and actions requiring corrective action plan should be followed up on to ensure that the matter is resolved; and 4. Ensure that all uniform guidance reports are collected and reviewed timely so that a management decision letter can be issued within the time period required by federal regulations.

Finding Reference Number: 2021-028 NH Department of Energy Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2001NHLIE4, 2010NHLIE4 Federal Award Year: 2020, 2021 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the ?Transparency Act? that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Low Income Home Energy Assistance program (LIHEAP), the New Hampshire Department of Energy (the Department) enters into subrecipient grants that meet the requirements for first-tier subawards under the Transparency Act and as such FFATA reports were required to be filed for each of those subawards. During the period ending June 30, 2021, the Department did not file the required FFATA reports. Cause The cause of the condition found was primarily due to insufficient resources and constraints due to COVID-19. Effect The effect of the condition found is that the Department did not comply with the reporting provisions of the Transparency Act. Questioned Costs None. Recommendation We recommend that the Department review its existing internal controls, policies, and procedures to ensure that all required FFATA reports are filed and filed timely for all subrecipient grant agreements that meet the definition of a first-tier subaward.

Finding Reference Number: 2021-029 NH Department of Energy Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2001NHLIE4, 2010NHLIE4 Federal Award Year: 2020, 2021 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Significant Deficiency and Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria The LIHEAP Performance Data Form is required to be submitted before March 26, 2021 regarding the prior fiscal year. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the federal reporting process, we noted that the annual LIHEAP Performance Data Form was not submitted timely. The report was due prior to March 25, 2021, but was not filed until June 14, 2021. Cause The cause of the condition found was primarily due to insufficient resources and constraints due to COVID-19 and insufficient controls to ensure that the federal report was filed timely. Effect The effect of the condition found is that the Department did not comply with the reporting deadline for the LIHEAP Performance Data Form. Questioned Costs None. Recommendation We recommend that the Department review its existing internal controls, policies, and procedures to ensure that all federal reports are filed timely.

Finding Reference Number: 2021-030 NH Department of Energy Low Income Home Energy Assistance (Assistance Listing #93.568) Federal Award Numbers: 2001NHLIE4, 2010NHLIE4 Federal Award Year: 2020, 2021 U.S. Department of Health and Human Services Compliance Requirement: Reporting Type of Finding: Significant Deficiency and Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria Annual Report on Households Assisted by LIHEAP (OMB No. 0970-0060) ? As part of the application for block grant funds each year, a report is required for the preceding fiscal year of (1) the number and income levels of the households assisted for each component and any type of LIHEAP assistance (heating, cooling, crisis, and weatherization); and (2) the number of households served that contained young children, elderly, or persons with disabilities, or any vulnerable household for each component. Territories with annual allotments of less than $200,000 and all Indian tribes are required to report only on the number of households served for each program component (42 USC 8629; 45 CFR section 96.82). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition The Annual Report on Households Assisted by LIHEAP contains data that is specific to benefits paid to eligible participants. The data that is used to compile the annual report is based off of case data that is reported to the New Hampshire Department of Energy (the Department) from its subrecipients as the Department has entered into grant agreements with third parties that are responsible for the eligibility determination and benefit payment process. As part of our testwork, we were unable to verify that the Department had performed any monitoring procedures over the data provided by each subrecipient to ensure that the data reported within the annual report was complete and accurate. Cause The cause of the condition found was primarily due to insufficient resources and constraints due to COVID-19 and insufficient controls to ensure that the documentation reported by the subrecipients is complete and accurate. Effect The effect of the condition found is that the Department may have reported inaccurate data within the Annual Report on Households Assisted by LIHEAP. Questioned Costs None. Recommendation We recommend that the Department review its existing internal controls, policies and procedures over data reported by subrecipients to be utilized in the reporting process. This would include procedures to ensure the data monitored and reviewed for completeness and accuracy.

Finding Reference Number: 2021-031 NH Department of Health and Human Services Foster Care ? Title IV-E (Assistance Listing #93.658) Federal Award Numbers: 2001NHFOST, 2101NHFOST Federal Award Year: 2020, 2021 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provisions ? Payment Rate Setting and Application Type of Finding: Significant Deficiency Prior Year Finding: 2020-018 Statistically Valid Sample: No Criteria Title IV-E agencies establish payment rates for maintenance payments (e.g., payments to foster parents, childcare institutions or directly to youth). Payment rates may also be established for Title IV-E administrative expenditures (e.g., payments to child placement agencies or other contractors, which may be either subrecipients or vendors) and for other services. Payment rates must provide for proper allocation of costs between foster care maintenance payments, administrative expenditures, and other services in conformance with the cost principles. The Title IV-E agency?s plan approved by ACF must provide for periodic review of payment rates for foster care maintenance payments at reasonable, specific, time-limited periods established by the Title IV-E agency to assure the rate?s continuing appropriateness for the administration of the Title IV-E program (42 USC 671(a)(11); 45 CFR section 1356.21(m)(1); 45 CFR section 1356.60(a)(1) and (c)). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During out testwork over the payment rate setting and application process, the Department for Health and Human Services (the Department) conducted an analysis over the reasonableness of existing rates during the quarter ending March 31, 2021. While the Department provided documentation to support that an analysis of the rates was performed, there was no documentation provided to support that the analysis had been reviewed or what the overall conclusions were surrounding the continued appropriateness of the rates contained within the analysis. Cause The cause of the condition found was due to the Department not requiring the Department of Finance to sign off on the rate review that was presented to them during the quarter ending March 31, 2021. Effect The effect of the condition found is that the there was no formal documentation that the rate analysis had been reviewed and what required actions, if any, were required to be taken as a result of the review. The lack of a formal review process could result in rates that are no longer appropriate, based on the rate analysis performed, being utilized in future periods. Questioned Costs None. Recommendation We recommend that the Department continue to review existing policies and procedures and relevant internal controls to ensure that when foster care rates are periodically reviewed there is a formal review process over the rate analysis performed and all actions to be taken as a result of the review are clearly documented.

Finding Reference Number: 2021-032 NH Department of Health and Human Services CCDF Cluster (Assistance Listing #93.575 and #93.596) Federal Award Numbers: 2001NHCCDF, 2101NHCCDF Federal Award Year: 2020, 2021 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provisions ? Payment Rate Setting and Application Type of Finding: Significant Deficiency and Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria As part of their CCDF plans, Lead Agencies must certify that procedures are in effect (e.g., monitoring and enforcement) to ensure that providers serving children who receive subsidies comply with all applicable health and safety requirements. This includes verifying and documenting that childcare providers (unless they meet an exception, e.g., family members who are caregivers or individuals who object to immunization on certain grounds) serving children who receive subsidies meet requirements pertaining to health and safety. These requirements must address eleven specific areas?including first aid and CPR, safe sleeping practices, and administration of medication?and childcare workers must be trained in these areas (42 USC 9858c(c)(2)(I); 45 CFR section 98.41). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During out testwork over the review of childcare providers related to health and safety requirements, we noted that for 2 of 40 providers selected for testwork, the file indicated that the provider did not have sufficient records to support that all required health and safety training requirements had been met. For both providers, the New Hampshire Department of Health and Human Services (the Department) issued a Statement of Findings to the provider that did not include these exceptions as requiring corrective action and the requested corrective action at the time of the visit did not appear to be complete. Cause The cause of the condition found is likely due to additional information being provided to the Department to address the missing training requirement certifications prior to the finalization of the Statement of Findings but record of that information being received was not maintained or could not be located. Effect The effect of the condition found is that childcare providers could have deficiencies in the health and safety training requirements and those deficiencies may not be properly communicated and resolved timely. Questioned Costs Not determinable. Recommendation We recommend that the Department review its existing internal controls and procedures to ensure that all deficiencies identified during health and safety reviews are properly communicated to the provider. These controls and procedures should ensure that corrective action plans are followed up on to ensure that the deficiencies are properly and timely resolved by the provider.

Finding Reference Number: 2021-033 NH Department of Health and Human Services Medicaid Cluster (Assistance Listing #93.775, #93.777, and #93.778) Federal Award Numbers: 1905NH5MAP, 2005NH5MAP, 2105NH5MAP, 1905NH5ADM, 2005NH5ADM, 2105NH5ADM, 1905NHIMPL, 2005NHIMP, 2105NHIMP Federal Award Years: 2019, 2020, 2021 U.S. Department of Health and Human Services Compliance Requirement: Eligibility Type of Finding: Significant Deficiency and Material Noncompliance Prior Year Finding: 2020-023 Statistically Valid Sample: No Criteria Eligibility for Medicaid can be broadly grouped into determinations based on Modified Adjusted Gross Income (MAGI-based determination) and non-MAGI determinations (e.g., Aged, Blind and Disabled). Auditors should test eligibility determinations made for fee-for-service and managed care beneficiaries. The auditors should re-determine eligibility to ensure beneficiaries qualify for the Medicaid program and are in the appropriate enrollment category. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition The Division of Medicaid Services (DMS), with the Department of Health and Human Services (the Department) administers the Medicaid program. The Bureau of Family Assistance (BFA) is responsible for determining eligibility for non-MAGI groups as well as MAGI groups according to New Hampshire policy. One hundred sixty MAGI and non-MAGI participants were selected for review, who fell into four main eligibility types: fee for service, managed care, waiver, and nursing home. During the audit we noted that for 74 of 160 participants, (15 of 40 for fee for service, 2 of 40 for MCO, 19 of 40 waiver and 38 of 40 nursing home) the Department was unable to provide support to verify that the participants social security income had been matched, via a Bendex match, with the Social Security Administration (SSA) because the SSA has not provided New Hampshire authorization to share that information. Therefore, validation that the participants were deemed eligible by the SSA was not able to be determined. Cause The cause of the condition found under paragraph (1) is that the SSA has not issued a Redisclosure Memorandum for the CMS Single Audit. Without the Memorandum, states do not have permission to disclose SSA data to any auditors. Additionally, the cause of the condition found under paragraph (2) is due to inappropriate follow-up on system assigned tasks to ensure timely completion. Effect The Department could be providing Medicaid benefits to participants who may be ineligible for the program. Questioned Costs Not determinable. Recommendation The Department should obtain approval from SSA to share data with the single auditor or work with SSA to provide correspondence to the single auditor confirming eligibility for individuals during the audit process. Additionally, we recommend the Department enhances its internal control procedures to ensure tasks assigned by the system are worked timely.

Finding Reference Number: 2021-034 NH Department of Health and Human Services Medicaid Cluster (Assistance Listing #93.775, #93.777, and #93,778) Federal Award Numbers: 1905NH5MAP, 2005NH5MAP, 2105NH5MAP, 1905NH5ADM, 2005NH5ADM, 2105NH5ADM, 1905NHIMPL, 2005NHIMP, 2105NHIMP Federal Award Years: 2019, 2020, 2021 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provision: Provider Eligibility (Screening and Enrollment) Type of Finding: Significant Deficiency and Noncompliance Prior Year Finding: 2020-022 Statistically Valid Sample: No Criteria In order to receive Medicaid payments, providers must: (1) be licensed in accordance with federal, state, and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and 447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make certain disclosures to the state (42 CFR Part 455, Subpart B, sections 455.100 through 455.106). Medicaid managed care network providers are subject to the same disclosure, screening, enrollment, and termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR Part 438, Subpart H. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition The Department assigns risks to each provider based on their provider type. All new provider enrollments and moderate and high-risk revalidations are reviewed and approved by the Department of Health and Human Services (the Department). However, for limited risk revalidations, the Department has outsourced this service to the Department?s Medicaid Management Information System fiscal agent (Fiscal Agent). The Department holds at least bi-weekly meetings with the fiscal agent to discuss issues noted with enrollment, revalidation, trends noted, etc. In addition, the Department has hired the Fiscal Agent to perform a quality assurance review over all new provider and revalidations prior to the notification that they are an eligible provider for State of New Hampshire services to address the accuracy of enrollment. The Department does not currently have a completeness process to ensure all providers are revalidated timely. During our testwork over provider eligibility, we noted: 1. For 5 of 65 providers, there was greater than five years between the Department revalidating the providers eligibility. These providers were due for revalidation prior to the start of the COVID-19 pandemic. 2. For 2 of 65 providers, the identified providers were enrolled via roster and the Department maintained an attestation that is uploaded with the enrollment with the provider facility. We viewed the attestation from the provider facility, and noted it was uploaded to the MMIS during the audit period but signed in 2012. The agreement should be more current than 2012. Cause The Department controls address accuracy but not completeness which would identify providers that are due revalidation. Effect The effect of the condition found is that the Department does not revalidate providers timely and obtaining all relevant supporting documentation which could lead to ineligible providers billing for Medicaid services. Questioned Costs Not determinable. Recommendation We recommend the Department implement monitoring and communication controls to continually assess the need for provider revalidation to ensure that it is executed timely and in accordance with the requirements, including a plan to ensure all reviews are performed timely and include obtaining all relevant information.

Finding Reference Number: 2021-035 NH Department of Health and Human Services Medicaid Cluster (Assistance Listing #93.775, #93.777, and #93.778) Federal Award Numbers: 1905NH5MAP, 2005NH5MAP, 2105NH5MAP, 1905NH5ADM, 2005NH5ADM, 2105NH5ADM, 1905NHIMPL, 2005NHIMP, 2105NHIMP Federal Award Years: 2019, 2020, 2021 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provision: Medicaid National Correct Coding Initiative Type of Finding: Material Weakness and Scope Limitation Prior Year Finding: 2020-024 Statistically Valid Sample: No Criteria In accordance with Section 1903(r) of the Social Security Act, effective October 1, 2010, SMAs were required to incorporate NCCI methodologies into the state Medicaid programs pursuant to the requirements of Section 6507 of the Affordable Care Act. In paying applicable Medicaid claims, states? MES are required to completely and correctly implement the following six Medicaid NCCI methodologies to ensure that only proper payments of procedures are reimbursed. a. NCCI Procedure-to-Procedure (PTP) edits for practitioner and ambulatory surgical center (ASC) claims. b. NCCI PTP edits for outpatient hospital services, including emergency department, observation care, and outpatient hospital laboratory services. c. Medically Unlikely Edit (MUE) units of service (UOS) edits for practitioner and ASC services. d. MUE UOS edits for outpatient hospital services including emergency department, observation care, and outpatient hospital laboratory services. e. MUE UOS edits for durable medical equipment (DME) billed by providers. f. NCCI PTP edits for durable medical equipment (added in October 2012). States are also required to use: ? all four components of each Medicaid NCCI methodology; ? the most recent quarterly Medicaid NCCI edit files for states; ? the Medicaid NCCI edits in effect for the date of service on the claim line or claim; ? the claim-adjudication rules in the Medicaid NCCI methodologies; and ? all modifiers for Healthcare Common Procedure Coding System (HCPCS) codes and Current Procedural Terminology (CPT) codes needed for the correct adjudication of applicable Medicaid claims. The NCCI Medicaid Policy Manual and the NCCI Medicaid Technical Guidance Manual contain additional requirements for implementation of the NCCI methodologies. The Medicaid NCCI methodologies must be applied to Medicaid fee-for-service claims submitted with, and reimbursed on the basis of, HCPCS codes and CPT codes. This includes claims reimbursed on a fee-for-service basis in state Medicaid Primary Care Case Management managed care programs. Application of NCCI methodologies to fee-for-service claims processed by other entities, including limited benefit plans or Managed Care Organizations, is not required; however, if SMAs require the application of NCCI methodologies to fee-for-service claims processed by such entities, then such entities must meet NCCI program requirements, including compliance with the NCCI Medicaid Policy Manual and the NCCI Medicaid Technical Guidance Manual. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition Per the Department of Health and Human Services (the Department), the edits required by the above criteria reside in the Medicaid Management Information System (MMIS) and are activated based on responses sent back to MMIS from Cotiviti, a third-party vendor. MMIS is managed by Conduent. Conduent has a SOC1 report prepared to report on the fairness of the presentation of management?s description of the service organization?s system and the suitability of the design of the controls to achieve the related control objectives included in the description as of a specified date. The Conduent SOC1 report for the period July 1, 2020 to June 30, 2021 did not include consideration of the NCCI process with Cotiviti and the related NCCI edits within MMIS, outside of a brief description in the report. Based on this, there is no ability to validate the NCCI process as the control environment and control objectives were not included the SOC report. Cause The cause of the condition found was primarily due to the Departments lack of recognizing and notifying Conduent of the requirement to test the automatic MMIS NCCI edits within the SOC1 report. Effect The six required Medicaid NCCI methodologies to ensure that only proper payments of procedures are reimbursed may not be completely and correctly implemented by the Department. Questioned Costs Not determinable. Recommendation We recommend the Conduent SOC1 report for the period July 1, 2021 to June 30, 2022, the Department implement a process to ensure the auditor of MMIS tests the automatic NCCI edits for the suitability of the design of the controls to achieve the related control objectives and properly includes any additional general control environment.

Finding Reference Number: 2021-036 NH Department of Health and Human Services State Targeted Response to the Opioid Crisis (Assistance Listing #93.788) Federal Award Numbers: 1H79TI083326-01 Federal Award Year: 2021 U.S. Department of Health and Human Services Compliance Requirement: Reporting ? Schedule of Assistance of Federal Awards Type of Finding: Significant Deficiency Prior Year Finding: None Statistically Valid Sample: No Criteria Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements, section 200.510(b) states the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with ? 200.502. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the Schedule of Expenditures of Federal Awards (SEFA), we noted that the New Hampshire Department of Health and Human Services (Department) incorrectly reported the value of subrecipient expenditures included within the subrecipient expenditure column. For the year ended June 30, 2021, the Department incurred $23,186,264 in subrecipient expenditures for this program and incorrectly reported that there were no subrecipient expenditures on the draft SEFA. The error was subsequently identified and corrected as a result of the audit process. While the subrecipient expenditure column was not accurate, the total expenditure column was accurately reported. Cause The cause of the condition found is due to the Department not having information regarding the total subrecipient expenditures at the time the draft SEFA was prepared. Subsequent to the submission of the draft information, the Department did not follow up to ensure that the subrecipient expenditure data was updated so it was reported accurately. Effect The effect of the condition found is that the Schedule of Expenditures of Federal Awards was not accurately prepared. Questioned Costs None. Recommendation We recommend that the Department review its existing policies and procedures for preparing the Schedule of Expenditures of Federal Awards to ensure that it is complete and accurate.

Finding Reference Number: 2020-002 NH Department of Justice Crime Victim Assistance (16.575) Federal Award Numbers: 2016-VA-GX-0061, 2017-VA-GX-0044, 2018-V2-GX-0036 Federal Award Year: 2016, 2017, 2018 U.S. Department of Justice Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2019-005 Statistically Valid Sample: No Criteria Federal Financial Report (FFR) (SF-425/SF-425A (OMB No. 0348-0061)). Recipients use the FFR as a standardized format to report expenditures under Federal awards, as well as, when applicable, cash status (Lines 10.a, 10.b, and 10c). References to this report include its applicability as both an expenditure and a cash status report unless otherwise indicated. Electronic versions of the standard forms are located on agency?s home page. Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the federal reporting process, we were unable to agree the current period expenditures reported to external supporting documentation for each of the 5 reports selected for testwork. The Department prepared each federal financial report (FFR) using internally prepared spreadsheets, referred to as VOCA spreadsheets. The Department continuously updates these spreadsheets and did not save the version that was used to prepare the FFR. In addition, the Department did not maintain documentation of a formal reconciliation between the VOCA spreadsheets and the State of New Hampshire?s centralized accounting system, NH First, at the time of filing. As such, we were unable to agree the amounts reported on the FFR to the underlying supporting records or verify whether the federal reports filed were complete and accurate. The Department did provide an additional reconciliation file to support the completeness and accuracy of the federal reports but we were unable to agree this file to the NH First detail provided by the Department to support reporting of expenditures on the schedule of expenditures of federal awards. The Department also provided guidance from the United States Department of Justice, Office of the Chief Financial Officer, indicating that previously submitted FFR?s are unable to be modified to fix any errors. Changes to previous FFR?s must be indicated in the most recently filed FFR. Cause The cause of the condition found was primarily due to the lack of internal controls and procedures in place to ensure documentation to support the FFR, as filed, is maintained by the Department and that the internal spreadsheets used to prepare the FFR reconcile to NH First. Effect The effect of the condition found is that the Department may not have filed accurate federal reports. Questioned Costs Not determinable. Recommendation We recommend the Department review its existing policies and implement internal control procedures to ensure it complies with federal financial reporting requirements. These procedures should include that for each FFR filed, the Department maintains accounting records which support the amounts reported. We also recommend that the Department take steps to ensure the records maintained internally agree to the State?s accounting system of record, NH First. View of Responsible Officials The Department of Justice agrees with this recommendation. The internal controls involved with the FFR process have been enhanced since the end of the audit period, to include reporting FFR?s from the grant spreadsheets after they are reconciled to NH First data. All grant expenditures and revenues, including administrative costs, are now tracked using activity codes that correlate to each grant. The Grants Management Unit (GMU) reconciles the data each month and reports into the FFR?s quarterly, as required. The spreadsheets that are used for reporting the FFR are now saved for each reporting period. The GMU Policy and Procedures have been updated to reflect these changes. Anticipated Completion Date Complete Contact Person Thomas Kaempfer Finding Reference Number: 2020-002 NH Department of Justice Crime Victim Assistance (16.575) Federal Award Numbers: 2016-VA-GX-0061, 2017-VA-GX-0044, 2018-V2-GX-0036 Federal Award Year: 2016, 2017, 2018 U.S. Department of Justice Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2019-005 Statistically Valid Sample: No Criteria Federal Financial Report (FFR) (SF-425/SF-425A (OMB No. 0348-0061)). Recipients use the FFR as a standardized format to report expenditures under Federal awards, as well as, when applicable, cash status (Lines 10.a, 10.b, and 10c). References to this report include its applicability as both an expenditure and a cash status report unless otherwise indicated. Electronic versions of the standard forms are located on agency?s home page. Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the federal reporting process, we were unable to agree the current period expenditures reported to external supporting documentation for each of the 5 reports selected for testwork. The Department prepared each federal financial report (FFR) using internally prepared spreadsheets, referred to as VOCA spreadsheets. The Department continuously updates these spreadsheets and did not save the version that was used to prepare the FFR. In addition, the Department did not maintain documentation of a formal reconciliation between the VOCA spreadsheets and the State of New Hampshire?s centralized accounting system, NH First, at the time of filing. As such, we were unable to agree the amounts reported on the FFR to the underlying supporting records or verify whether the federal reports filed were complete and accurate. The Department did provide an additional reconciliation file to support the completeness and accuracy of the federal reports but we were unable to agree this file to the NH First detail provided by the Department to support reporting of expenditures on the schedule of expenditures of federal awards. The Department also provided guidance from the United States Department of Justice, Office of the Chief Financial Officer, indicating that previously submitted FFR?s are unable to be modified to fix any errors. Changes to previous FFR?s must be indicated in the most recently filed FFR. Cause The cause of the condition found was primarily due to the lack of internal controls and procedures in place to ensure documentation to support the FFR, as filed, is maintained by the Department and that the internal spreadsheets used to prepare the FFR reconcile to NH First. Effect The effect of the condition found is that the Department may not have filed accurate federal reports. Questioned Costs Not determinable. Recommendation We recommend the Department review its existing policies and implement internal control procedures to ensure it complies with federal financial reporting requirements. These procedures should include that for each FFR filed, the Department maintains accounting records which support the amounts reported. We also recommend that the Department take steps to ensure the records maintained internally agree to the State?s accounting system of record, NH First. View of Responsible Officials The Department of Justice agrees with this recommendation. The internal controls involved with the FFR process have been enhanced since the end of the audit period, to include reporting FFR?s from the grant spreadsheets after they are reconciled to NH First data. All grant expenditures and revenues, including administrative costs, are now tracked using activity codes that correlate to each grant. The Grants Management Unit (GMU) reconciles the data each month and reports into the FFR?s quarterly, as required. The spreadsheets that are used for reporting the FFR are now saved for each reporting period. The GMU Policy and Procedures have been updated to reflect these changes. Anticipated Completion Date Complete Contact Person Thomas Kaempfer

Finding Reference Number: 2020-003 NH Department of Employment Security Unemployment Insurance (17.225) Federal Award Numbers: Not Applicable Federal Award Year: Not Applicable U.S. Department of Labor Compliance Requirement: Special Tests and Provisions: UI Program Integrity - Overpayments Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria Pub. L. No. 112-40, enacted on October 21, 2011, and effective October 21, 2013, amended sections 303(a) and 453A of the Social Security Act and sections 3303, 3304, and 3309 of FUTA to improve program integrity and reduce overpayments. (See UIPL Nos. 02-12, Changes 1 and 2 https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=6707.) States are (1) required to impose a monetary penalty (not less than 15 percent) on claimants whose fraudulent acts resulted in overpayments, and (2) states are prohibited from providing relief from charges to an employer?s UI account when overpayments are the result of the employer?s failure to respond timely or adequately to a request for information. States may continue to waive recovery of overpayments in certain situations and must continue to offer the individual a fair hearing prior to recovery. Section 2103 of Pub. L. No. 112-96 amended FUTA and the Social Security Act to require states to recover overpayments through an offset against UC payments. States must enter into two agreements prior to commencing the recoveries: the Cross Program Offset and Recovery Agreement (see UIPL No. 05-13), which allows states to offset state UI from federal UI overpayments, and the Interstate Reciprocal Overpayment Recovery Agreement, which allows states to recover overpayments from benefits being administered by another state. States that recover EUC08 and EB overpayments must ensure that the recovered payments are returned to EUCA in chronological order from the date the overpayment was established, identifying the program source (EUC08 or EB) when the funds are returned to the UTF. In addition, any Federal Additional Compensation (FAC) that is re- covered must be returned to the UTF. The Bipartisan Budget Act of 2013 (Pub. L. No. 113-67) amended Section 303 of the Social Security Act to require states to utilize the Treasury Offset Program (TOP), authorized by Section 6402(f)(4), Internal Revenue Code (IRC), to recover covered unemployment compensation debts that remain uncollected one year after the debt was determined to be due. Covered unemployment compensation debts include benefit overpayments due to fraud and benefit overpayments due to a claimant?s failure to report earnings. Some states may need to amend their UI law in order to have the authority to collect overpayments through TOP. In addition, states will also need to enter into an agreement with Treasury. See UIPL No. 02-19 and UIPL No. 12-14 for guidance on the implementation of the TOP requirement. Please note that IRC 6103(l)(10) restricts access to TOP federal tax information (FTI). The access limitation extends to contractors employed by the state, including those managing state technology systems that process and store TOP FTI, and to auditors engaged to conduct the Single Audit process, whether they are contractors or employees of the state. DOL recognizes that this restriction to accessing TOP FTI used for benefit administration prevents state auditors from meeting the audit objectives concerning a state?s use of TOP for the recovery of UI improper payments. Because of this legal restriction, DOL does not expect auditors to create an audit issue or finding based on their lack of access to TOP FTI. 45 CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition New Hampshire Employment Security (NHES or the Department) is responsible for (a) properly identifying and handling overpayments, including, as applicable, assessment and deposit of penalties and not relieving employers of charges when their untimely or inaccurate responses cause improper payments and (b) offsetting all debts resulting from an overpayment of the individual?s benefit payments. The New Hampshire Unemployment Insurance System (NHUIS) actively reviews benefit claims for authenticity and establishes overpayments if it finds that a claimant was paid benefits they were not entitled to and it is the Department?s responsibility to further investigate these overpayments to determine legitimacy. During our testwork over overpayments, we noted the following: A. For 1 of 40 items selected for testwork, NHES was unable to initially identify the cause of an overpayment. Once NHES received additional information from the claimant verifying the authenticity of their separation from unemployment, NHES did not appropriately waive the overpayment and incorrectly sought a recoupment from the claimant. B. For 1 of 40 items selected for testwork, NHUIS erroneously reestablished an overpayment for a benefit paid on 1/9/2010. This benefit was paid during the first week of the claimant?s Benefit Year as the waiting week requirement had not been implemented at that time. In response to the pandemic and as dictated by the CARES Act, NHES waived the waiting week requirement for any claims filed subsequent to Benefit Week Ending (BWE) 3/14/2020 through a system change in the NHUIS system. As a result of the system change, NHUIS identified any payment made in the first week of a claimant?s benefit year prior to 3/21/2020 as an overpayment. To help identify the overpayment errors created by NHUIS, NHES ran a query to identify and expunge similar overpayments which were erroneously generated by the system. The item identified as part of our testwork however was not identified as part of the query that NHES ran and has been outstanding since as an inaccurate overpayment. C. For 1 of 40 items selected for testwork, the claimant was required to offset future benefit payments to repay an overpayment which occurred due to a system error. The NHUIS system change to waive the waiting week requirement was initially coded incorrectly to take effect for BWE 3/14/2020, when it should have been coded to take effect for BWE 3/21/2020. This claimant submitted their initial application for benefits during BWE 3/14/2020 and received a payment rather than serving a waiting week. When NHES discovered the programming error, NHUIS identified any claimant who was paid benefits for BWE 3/14/2020 who should have been serving their waiting week to be overpaid and issued a determination requiring repayment. The selected claimant had their overpayment offset with subsequent weeks? benefit payments. The claimant should not have been required to repay this overpayment as it was created due to no fault of their own and was an improper recoupment of benefits. D. For 1 of 40 items selected for testwork, NHES was unable to identifying the cause of an overpayment within NHUIS because NHUIS does not allow NHES to identify a cause when an overpayment is established due to a monetary redetermination. The claimant had sufficient regular wages to establish a regular UI monetary rate, but they also had self-employment wages. NHES staff incorrectly entered the claimant?s regular wages and self-employment wages into NHUIS, which caused NHUIS to incorrectly default to establishing a Pandemic Unemployment Assistance (PUA) monetary rate for the claimant, rather than a regular UI benefit rate which should have been established. When the mistake was identified, NHUIS issued a monetary redetermination and identified all PUA benefit payments to have been overpaid. Since the claimant had no fault in creating the overpayment, and the PUA and UI benefit rates were the same, NHES issued a manual no fault determination to correct the overpayment resulting from the monetary redetermination. Cause The cause of the condition found was a result of unforeseen side effects of system changes made to NHUIS. During the period ending June 30, 2020, in response to the COVID-19 pandemic, NHES made system changes to NHUIS to waive the waiting week eligibility requirement and implement other pandemic-related monetary programs. These changes however triggered several unintended side effects within NHUIS that NHES had not anticipated as NHUIS took these system changes and applied them to every benefit ever paid to ensure compliance with the new criteria. Effect The effect of the condition found is that NHUIS identified erroneous overpayments which were inappropriately recouped from the claimant. Questioned Costs Not determinable. Recommendation We recommend that the Department enhance its existing controls and procedures to ensure the authenticity of overpayments identified by NHUIS and implement procedures to ensure that overpayments that are inaccurately identified are closed timely in order to prevent an inappropriate recoupment of benefits paid to the claimant. In addition, NHES should review its existing policies and procedures for implementing system changes to ensure that NHES analyzes future system changes to NHUIS prior to implementation to assist with the understanding and identification of unintended consequences to that they can be timely addressed. View of Responsible Officials New Hampshire confirms the validity of these findings. A: This is the result of a staff error in processing the claim. As a result of the Pandemic, we have had to hire and train a significant number of new staff. Due to workload demands, many of these staff did not receive the level of training we would normally consider adequate in order to begin adjudication. We are now providing additional training to all of our new adjudication staff and are also requiring all adjudicators to participate in the National Association of State Workforce Agencies (NASWA) offered adjudication training. New adjudicators have completed this NASWA training and experienced adjudicators are expected to begin next week, 5/23-29/2021. Unfortunately, due to the nature of the error, we are unable to identify claimants that may have this same experience. We consider this item to be resolved. B: Two system issues resulted in this claimant being found overpaid for a week occurring in 2010. The first, when a claimant files a new claim or when a new monetary is issued, the system completes a ?pay adjustment?. This pay adjustment caused the system to do a look back and correct any possible payment errors on any previous claims. We have since programmed our system to look back no further than five years when completing a pay adjustment. The second issue involves an oversight in the initial programming of the waiting week. The waiting week was incorporated into our law in 2010 with an effective date after this claimant had initially filed for benefits. This claimant should not have been subject to a waiting week. Our system had been programmed to recognize the week being paid, and do a look back to the beginning of the benefit year. If a waiting week had not been served the system would identify the first payable week to serve as the waiting week. In so doing, it neglected the fact that this claimant?s effective date was prior to the legislation requiring a waiting week be served. We have since added another parameter. The system will also now consider the effective date of the claim. It is a rather simple solution ? the system will identify whether or not the effective date of the claim falls within a period in which a waiting week is required. If this first criteria is met, the system will then allocate the first payable week as the waiting week. This one correction will prevent the system from identifying a waiting week during a period in which no waiting week should have been served. We will consider this item to be resolved as of June 19, 2021, expected implementation of this new code. C: At the onset of the pandemic, guidance was slow to come out. Initial DOL guidance allowed for flexibilities in the provision of a waiting week. NH implemented the waiver of the waiting week with the assumption the waiting week could be waived as far back as 2/8/2020, the effective date of the PUA program. Later guidance contradicted this assumption. Instead, we were only able to waive waiting weeks after execution of our agreement with the DOL. This resulted in us having to reverse the code waiving the waiting week for week ended 3/15. This did result in some claimants being found overpaid. While we immediately waived the overpayment where overpayments existed, we had not run a query to determine if claimants had repaid these overpayments. We have since run that query and will be crediting these repayments where appropriate. In all of the cases identified thus far, claimants have exhausted all of their entitlement to benefits for the period in question. If a claimant is found overpaid and pays that money back, it is restored to their MBA balance. If they then proceed to exhaust all of the benefits available to them, they have, essentially, received this money. There is no additional money to return to them. We consider this item to be resolved. D: New Hampshire has identified two situations in which this can occur. The first pertains to monetary determinations (as was the situation with this claimant). Prior to the Pandemic, a redetermination of a monetary decision which resulted in an overpayment, was always the fault of the claimant. Usually the result of wages being added based upon claimant affidavit which later turns out to be an inaccurate representation. As a result we did not have code in our system to allow for fault determinations or waivers if they are related to monetary determinations. With the addition of PUA, it became quite likely that a change in programs could result in an overpayment for the claimant where the claimant is not at fault. This occurs when the minimum PUA WBA is higher than the claimant UI WBA. We have redesigned the operation of our monetary determination process in our benefit payment system and expect to promote this new code to production by June 30, 2021. This code will allow for the system to determine fault in certain circumstances but will also allow for staff to indicate fault and waive resulting overpayments when issuing the monetary redetermination. We will no longer need to issue manual monetary redeterminations indicating fault. The second instance in which this can occur is with PUA determinations. The overpayment and collections activities for the PUA program was last in the order of development. We have since completed the development of these components. For both of these situations, New Hampshire is engaged in a ?clean-up? process. We have run queries to identify all who may fall into these situations and will waive the corresponding overpayments and refund any moneys that are due the claimant. This will be an ongoing effort. We will continue to run these queries through the duration of the program to ensure we include all individuals this may affect. NH will consider the coding portion of this item to be resolved as of June 30, 2021. We expect the clean-up process to continue through the end of the year, 12/31/2021. Anticipated Completion Date A: Resolved B: June 19, 2021 C: Resolved D: System Coding ? 06/30/2021; Clean-up activities will continue through 12/31/2021. Contact Person Michael Burke Michael.h.burke@nhes.nh.gov 603-447-1463

Finding Reference Number: 2020-004 NH Department of Employment Security Unemployment Insurance (17.225) Federal Award Numbers: Not Applicable Federal Award Year: Not Applicable U.S. Department of Labor Compliance Requirement: Special Tests and Provisions: UI Reemployment Programs: Worker Profiling and Reemployment Service and Eligibility Assessments Type of Finding: Significant Deficiency Prior Year Finding: No Statistically Valid Sample: No Criteria Reemployment Services and Eligibility Assessments (RESEA) is authorized by Section 306 of the Social Security Act and builds on the success of RESEA?s predecessor, the former UI Reemployment and Eligibility Assessment (REA) program. RESEA uses an evidence-based integrated approach that combines an eligibility assessment for continuing UI eligibility and the provision of reemployment services. RESEA is a voluntary program. Operating guidance for the RESEA program is updated annually. UIPL 7-19 provides RESEA operating Guidance for FY 2019. 45 CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition New Hampshire Employment Security (NHES) is responsible for administering the Reemployment Services and Eligibility Assessments (RESEA) program, including the compilation of quarterly reports. These reports detail the total number of cases scheduled, completed, and other performance indicators. Prior to submission to the US Department of Labor, the quarterly reports are reviewed by responsible staff. NHES states that the reports are reviewed on an informal and ongoing basis, but the review is not consistently evidenced. Cause The cause of the condition is a primarily due to a lack of formalized procedures over the review process and inconsistent evidence of review having been performed. Effect The effect of the condition found is that without formalized procedures, NHES is at risk of inconsistently performing reviews or applying different review criteria over each quarterly RESEA report. Questioned Costs None. Recommendation We recommend that NHES implement appropriate controls and procedures to ensure that each quarterly RESEA report is subject to a documented review, that the review performed is consistent and reviews the completeness and accuracy of the data submitted. View of Responsible Officials The Operations Unit within the Employment Service Bureau has hired a Program Specialist I to work within the unit and to perform duties associated with a Quality Assurance role. This individual will be trained on the Reemployment Services and Eligibility Assessment Program (RESEA) and will be involved in the quarterly review process associated with the Program. This Program Specialist I will receive the quarterly reports that are compiled by the Program Specialist III in the Operations Unit that helps to oversee the RESEA Program. Both the Program Specialist III and Program Specialist I will review the quarterly reports to ensure that the reports are complete and that they are reviewed on a formal, ongoing basis. The review will focus on ensuring that the information in the report reflects accurate and complete data. The Program Specialist III or the Program Specialist I will document that he/she has completed the review of the compiled quarterly reports for the RESEA Program prior to the reports being submitted to the US Department of Labor. This review process will be two steps, 1. Reviewed by which the Program Specialist I will review each of the 22 reportable items with a developed excel process that will be kept on file and then 2. Either the Program Specialist III or the Program Specialist I will sign off on the review. Anticipated Completion Date June 30, 2021 Contact Person Sarah Morrissey, Employment Services Bureau Director

Finding Reference Number: 2020-005 NH Department of Employment Security Unemployment Insurance (17.225) Federal Award Numbers: Not Applicable Federal Award Year: Not Applicable U.S. Department of Labor Compliance Requirement: Special Tests and Provisions: UI Benefit Payments Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria The Improper Payments Elimination and Recovery Act (IPERA) of 2010 codified the requirement for valid statistical estimates of improper payments. SWAs are required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is DOL?s quality control system designed to assess the accuracy of UI benefit payments and denied claims, unless the SWA is excepted from such requirement (20 CFR section 602.22). The program estimates error rates, that is, numbers of claims improperly paid or denied and dollar amounts of benefits improperly paid or denied, by projecting the results from investigations of small random samples to the universe of all claims paid and denied in a state. Specifically, the SWA?s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt, and in-depth investigations to determine the degree of accuracy in the administration of the state UC and federal law (20 CFR section 602.21(d)). DOL has promulgated investigational requirements and instructions in ET Handbook No. 395 (see below), pursuant to 20 CFR section 602.30(a). As presented in the handbook, the investigation involves a review of the records, and contacting the claimant, employers, and third parties (either in-person, by telephone, or by fax) to complete standard questionnaires and conduct new and original fact-finding to assess all of the information pertinent to the paid or denied claim that was sampled. BAM investigators review cases for adherence to state law as well as federal law and official policy. For claims that were overpaid, underpaid, or erroneously denied, the BAM investigator determines the amount of payment error or, for erroneously denied claims, the potential eligibility of the claimant; the cause of and the responsibility for any payment error; the point in the UI claims process at which the error was detected; and actions taken by the agency and employer prior to the payment or denial decision that is in error. BAM covers state UC, UCFE, and UCX. 45 CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testwork over the Benefit Accuracy Management Process (BAM) within New Hampshire Employment Services (NHES or Department), we noted the following: A. For 1 of 40 BAM reviews selected for testwork, NHES was unable to locate the documentation to support that the case review had been conducted. B. For 1 of 40 BAM reviews selected for testwork, the case review did not include the Summary Sheet that is required to be completed. The Summary Sheet contains the summary of the investigation and is required to be signed and dated by the investigator that completed the review. C. For 2 of 40 BAM reviews selected for testwork, the investigator did not sign the Summary Sheet indicating that the investigation was complete and contained all the necessary elements that are required to be reviewed. Cause The cause of the condition found is primarily due to the vacancy of the Quality Control Unit (QCU) Supervisor position. The QCU Supervisor position was vacant from April 2019 through September 2019. A former investigator served as the acting Supervisor until a permanent replacement was found. Also, during this time, an investigator departed the unit and left several open cases which the acting supervisor was responsible for completing. The acting supervisor was unable to ensure each case met the required components of BAM case reviews. Effect The effect of the condition found is that BAM reviews may not have been performed in accordance with federal regulations and errors identified as a result of the BAM review may not be followed up on timely. Questioned Costs Not determinable. Recommendation We recommend that the Department review its existing policies and procedures and implement controls to ensure that all BAM reviews are properly reviewed for completeness and accuracy by a supervisor. This review should help ensure that all required documentation is maintained to support that the BAM review has been completed and all appropriate actions that need to be taken as a result of the review are performed timely. View of Responsible Officials The Department agrees with the finding above. A. For 1 of 40 cases selected for testwork, NHES was unable to locate the documentation to support that the case review had been conducted. The QC Supervisor acknowledges they were unable to locate the physical case file (despite the fact that the case review was indeed completed and had been used by a new QC Investigator as a reference and training tool). It should be noted that upon completion of the case review, the QC Investigator is required to enter the case coding into the USDOL software via the Interface, commonly referred to as the Sun System. The results can be retrieved in a Coding Summary format for examination at any time and the QC Unit has the ability to show the results in the Sun System to demonstrate that this review was in fact conducted and completed. The Department agrees that for audit purposes, the entire case file must be provided so that it can be reviewed in its entirety for accuracy and completeness. A copy of the Benefit Accuracy Measurement Denied Claims Accuracy Data Collection Instrument (DCI) Report associated with the missing case file is provided as an attachment to this response for the sole purpose of verifying that the review was, in fact, completed. B. For 1 of the 40 BAM reviews selected, the case review did not include the Summary Sheet that is required to be completed. This omission was a direct result of the departure of a QC Investigator who had 12 incomplete cases remaining that needed to be completed. These 12 cases were divided up among the remaining Investigators who were already carrying full caseloads of their own. The case was completed but the Summary Sheet was unfortunately left undone, no doubt due to the time and workload constraints. The Department agrees that the inclusion of a completed and signed Summary Sheet is required for all BAM investigations and that the missing Summary Sheet should have been noted and addressed by the designated supervisor during the case review process. The QC Supervisor will ensure that every case is thoroughly reviewed for completeness and accuracy and includes a completed and signed Summary Sheet in accordance with its internal QC Procedures manual and the USDOL ETA HB 395 Benefit Accuracy Measurement State Operations Handbook. C. For 2 of the 40 BAM Reviews selected, the investigator did not sign the Summary Sheet indicating that the investigation was complete and contained all the necessary elements that are required to be reviewed. While the Supervisor reviewing the case overlooked the fact that the Summary sheets were not physically signed by the Investigator, the cases were signed off by the Investigator in the Sun System, indicating completeness. The Investigator would not have been able to produce the Coding summary sheet if all of the elements requiring review had not been completed and the QC Supervisor would not have been able to give final approval to the case in the Sun System unless the Investigator had completed their sign off there. There are checks and balances within the BAM software that prevent an incomplete case from being entered. The Department agrees that the Summary Sheets should have been signed and that the missing signatures should have been noted and addressed by the designated supervisor during the case review process. To prevent future errors or omissions, the QC Supervisor will ensure that every case is thoroughly reviewed for completeness and accuracy and includes a completed and signed Summary Sheet in accordance with its internal QC Procedures Manual and the USDOL ETA HB 395 Benefit Accuracy Measurement State Operations Handbook. We concur that the vacancy of the QC Supervisor position, together with the departure of a seasoned investigator leaving several open cases were contributing factors. The QC Supervisor position was vacant from May 2019 through September 2019 following the retirement of the former QC Supervisor on April 30, 2019 following 15 + years in the position. The Claims Representative Program Supervisor, who was the regular back-up supervisor for the QC Supervisor and regularly assisted with the case review and sign-off process, assumed this back-up role, in addition to her regular duties, until the position was filled. The back-up supervisor had 3.5 years of experience as QC Investigator prior to her promotion to the Claims Rep. Program Supervisor position. This information is provided for clarification purposes only and does not in any way counter our agreement that administrative errors did, in fact, occur. The Department and USDOL regularly review existing policies and procedures and implement controls to ensure all BAM reviews are properly reviewed for completeness and accuracy by a supervisor. Steps have already been taken to implement the corrective action recommended with the hiring of a new Quality Control Supervisor on September 27, 2019 and the hiring of a new Quality Control Investigator on January 31, 2020. The new QC Supervisor continues participate in ongoing training to include the review of BAM Supervisory case review requirements and regulations per the NH QC Procedures Manual and the USDOL ETA HB 395. Anticipated Completion Date Resolved, effective June 30, 2020. Contact Person Colleen O?Neill, Assistant to the Commissioner

Finding Reference Number: 2020-006 NH Department of Transportation Highway Planning and Construction Cluster (20.205, 20.219, 20.224) Federal Award Numbers: 2017G996115 Federal Award Year: 2017 U.S. Department of Transportation Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency Prior Year Finding: No Statistically Valid Sample: No Criteria Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include those procurement contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: EPLS is no longer a separate system; however, the OMB guidance and agency implementing regulations still refer to it as EPLS), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over suspension and debarment, for 8 of 9 subrecipients selected for testwork, we noted that the New Hampshire Department of Transportation (the Department) did not verify whether its subrecipients were suspended or debarred before entering into covered transactions. Based on our review of the System for Award Management (SAM) Exclusions website, none of the subrecipients selected for testwork were included within the exclusion list indicating that they had been suspended or debarred. Cause The cause of the condition found is that the Department began including a suspension and debarment certification in municipal agreements for all new grant agreements entered into during fiscal year 2018. However, the certification was not retroactively obtained, and the agreements reviewed as part of our audit were entered into prior to the implementation of the Department?s change in policy. Effect The effect of the condition found is that the Department could have entered into an agreement with a subrecipient that had been suspended or debarred from receiving federal funds and would not have the necessary controls and procedures to identify the noncompliance timely. Questioned Costs Not determinable. Recommendation We recommend that the Department continue to review its existing policies, procedures and related controls to ensure a signed suspension and debarment certification is in place or the excluded parties listing is reviewed prior to entering into a covered transaction with subrecipients. The Department should also consider whether or not procedures should be implemented to independently review the System for Award Management Exclusions website to confirm if a subrecipient has been suspended or debarred for active subrecipient grant agreements in which the agreement was entered into prior to the date of implementing the new vendor suspension and debarment certification form. View of Responsible Officials NHDOT had added a suspension and debarment certification to the Municipal Agreement to be attested to by the sub-recipient in 2018 after the prior Single Audit finding in 2017. As noted the only test sample signed since 2018 does have the certification included in the agreement. Previously signed agreements were prior to the audit period and were not included in our scope for adjustment. As recommended, the Department will review its existing policies and procedures and consider whether to independently review the SAM exclusions website to confirm if a sub-recipient has been suspended or debarred for those active grant agreements that were entered into prior to July 1, 2018. Anticipated Completion Date Previously completed in 2018. Review to be completed by December 2021. Contact Person Bill Watson, Administrator, Bureau of Planning and Community Assistance

Finding Reference Number: 2020-007 NH Department of Transportation Highway Planning and Construction Cluster (20.205, 20.219, 20.224) Federal Award Numbers: 2020G996115, 2021G996115 Federal Award Year: 2020,2021 U.S. Department of Transportation Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency and Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria A pass-through entity must: 1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.331(a); and 2. Evaluate each subrecipient?s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.331(b)) Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition The New Hampshire Department of Transportation (the Department) enters into subrecipient agreements primarily with local municipalities to provide funding to assist the municipality with allowable local transportation projects (such as road paving, culverts, etc). During our testwork over subrecipient monitoring, we noted the following: A. The Department did not communicate all the required elements as required by CFR 200.331(a) to each of the 9 subrecipients selected for testwork. Specifically, the following elements were not communicated: a. Federal Award Identification Number (FAIN) b. Federal Award Date of award to the recipient by the Federal Agency c. Subaward period of performance start and end date d. CFDA number and name e. Identification of whether the award is R&D f. Indirect cost rate for the federal award B. The Department does not have any formal policies, procedures and related internal controls over evaluating a subrecipient?s risk of non-compliance with federal requirements. Further, we noted that the Department did not perform any evaluations over the 9 subrecipients selected for testwork. Cause The cause of the condition found is that the Department began utilizing a risk assessment questionnaire on July 1, 2020 for all subrecipients in which a municipal agreement is entered into. The implementation of the new policy and procedure was subsequent to the period under audit. In addition, the Department does not have policies and procedures in place to ensure that all required information as outlined in 2 CFR section 200.331(a) is communicated to the subrecipient. Effect The effect of the condition found is that the Department did not comply with the 2 CFR sections 200.331(a) and 200.331(b). Questioned Costs Not determinable. Recommendation We recommend that the Department continues to review its existing policies, procedures and internal controls to ensure that the Department complies with the provisions of 2 CFR section 200.331(a) and 2 CFR section 200.331(b). This would include ensuring that: 1. All required award information is communicated to subrecipients; and 2. A documented risk assessment is performed over all subrecipients and the results of that risk assessment is used to evaluate the types of monitoring procedures that will be performed over the subrecipient. View of Responsible Officials 1. The Department did modify its documentation to incorporate the needed items when identified in a previous audit. The Department assigns both a unique state project number and federal project number as identification for each project and includes both in the Municipal Agreement. Commencement and completion time frames are listed in the Municipal Agreement with specific dates triggered by the first notice to proceed. The CFDA number and name is included in each reimbursement request letter the sub-recipient receives. Our projects are not R&D but would be identified as such in the Municipal Agreement. Neither Municipalities nor the Department charge an indirect cost on Municipal projects. However, the Department will review the grant agreement to ensure that all required information is included although not utilized. 2. The Department has added the risk assessment questionnaire as of July 1, 2020. Anticipated Completion Date 1. July 1, 2018. Review to be completed by December 2021. 2. July 1, 2020 Contact Person Bill Watson, Administrator, Bureau of Planning and Community Assistance

Finding Reference Number: 2020-008 N.H. Department of Environmental Services Clean Water State Revolving Fund Cluster: (CFDA 66.458) Federal Award Numbers: CS33000119 Federal Award Year: 2019 U.S. Environmental Protection Agency Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency and Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria A non-federal entity may charge to the federal award only allowable costs incurred during the period of performance and any costs incurred before the federal awarding agency or passthrough entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR section 200.309). Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over period of performance, we noted the New Hampshire Department of Environmental Services (the Department) appeared to have charged expenditures to the federal fiscal year 2019 award that had a service period prior to the start date of the award period of October 1, 2019. The Department did not appear to verify whether these expenses had been incurred within the period of performance before including the expenses within the Department?s request for federal reimbursement. Cause The cause of the condition found is that the Department indicated that while the service period was incurred prior to the start of the federal award period, the Department did not pay for the services until after the federal award period began. As the Department reports based upon cash basis expenditures, the Department believed that the costs would be allowable. Effect The effect of the condition found is that costs incurred prior to the start of the federal award period were inappropriately charged to the federal grant resulting in unallowable costs being incurred. Questioned Costs Not determinable. Recommendation We recommend the Department develop and implement policies, procedures and internal controls to ensure all expenses charged to a federal award are incurred within the period of performance of the grant award prior to requesting federal reimbursement. This would include ensuring that the service period associated with the cost also relates to a service period within the awards period of performance. View of Responsible Officials The Department does not concur with this finding. When DES was presented this finding, the department reached out to its federal Cognizant Agency (EPA) for guidance on this issue. Their response was: ?EPA does not feel this is a valid finding based on the nature of the CWSRF. The Clean Water Act (CWA) provides an ?allowance? of up to four percent of the cumulative awards. As long as the administrative expense charged does not bring the total cumulative admin costs in excess of 4 percent of the cumulative awards, the expense is eligible. The statute doesn?t limit the CWSRF admin expenses to the timing of project/budget period of the individual annual grants ? just the reverse, it makes it clear that it is cumulative. In our reviews, this transaction would not have been an improper payment. We find this is an eligible expense and can be reimbursed from the 2019 Cap Grant.? DES will continue to work with both the auditors and EPA to ensure that all parties come to a mutual understanding of the rules and regulations. Anticipated Completion Date N/A Contact Person Susan Carlson, Chief Operations Officer Rejoinder Title 30, section 35.3120(g)(1) states the money in the SRF may be used for the reasonable costs of administering the SRF, provided that the amount does not exceed 4% of all grant awards receive by the SRF. Expenses of the SRF in excess of the amount permitted under this section must be paid for from sources outside the SRF. The condition found however does not question whether federal funds can be used to support administrative costs. The condition found identified that administrative costs were charged and drawn under the federal fiscal year 2019 grant that were incurred or paid for by the State of New Hampshire prior to the start of the performance period for this grant which was October 1, 2019. As the costs were incurred prior to when the federal funds became available for use, the costs do not appear to be allowable under the federal fiscal year 2019 grant.

Finding Reference Number: 2020-009 NH Department of Education Title I Grants to Local Educational Agencies (Title I, Part A of ESEA (84.010) Federal Award Numbers: S010A180029, S010A190029 Federal Award Year: 2019, 2020 U.S. Department of Education Compliance Requirement: Special Tests and Provisions ? Annual Report Card, High School Graduation Rates Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2019-008 Statistically Valid Sample: No Criteria A State Educational Agency (SEA) and its Local Educational Agencies (LEAs) must report graduation rate data for all public high schools at the school, LEA, and State levels using the 4-year adjusted cohort rate and, at an SEA?s or LEA?s discretion, extended-year adjusted cohort rates. Graduation rate data must be reported both in the aggregate and disaggregated by subgroup in section 1111(c)(2) of the ESEA using a 4-year adjusted cohort graduation rate (and any extended-year adjusted cohort rates). (ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(25), (23)). Except as noted below, only students who earn a regular high school diploma may be counted as a graduate for purposes of calculating graduation rates. The term ?regular high school diploma means the standard high school diploma that is awarded to the preponderance students in the State and that is fully aligned with the State standards (but not to alternate academic achievement standards for students with the most significant cognitive disabilities) or a higher diploma. A regular high school diploma does not include a recognized equivalent of a diploma, such as a general equivalency diploma, certificate of completion, certificate of attendance, or similar lesser credential (ESEA section 8101(43). A SEA may, but is not required to, award a State-defined alternate diploma for students with the most significant cognitive disabilities who take an alternate assessment aligned with alternate academic achievement standards. That the diploma must be standards based, aligned with the State?s requirements for a regular high school diploma, and obtained within the time period for which the State ensure the availability of a free appropriate public education. If a SEA awards an alternate diploma, the SEA may count those students in its four-year and any extended-year adjusted cohort graduation rate, even if the student takes more than four years to receive the alternate diploma. To remove a student from the cohort, a school or LEA must confirm, in writing, that the student transferred out, emigrated to another country, transferred to a prison or juvenile facility, or is deceased. To confirm that a student transferred out, the school or LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. A student who is retained in grade, enrolls in a GED program, or leaves school for any other reason may not be counted as having transferred out for the purpose of calculating the graduation rate and must remain in the adjusted cohort (ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(25), (23)). Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the programmatic on-site monitoring process implemented by the New Hampshire Department of Education (the Department) over LEA?s, the Department was to review and ensure that there were policies and procedures in place at the LEA related to the removal of students from the cohort. During our testwork over the Department?s programmatic on-site monitoring reviews, we noted that no programmatic on-site monitoring reviews were conducted during the year ended June 30, 2020 and as a result, the requirements related to the removal of students from the cohort were not monitored. Cause The cause of the condition found is due to the fact that the Department had scheduled its on-site monitoring visits to be performed in the spring of 2020. Due to the COVID-19 pandemic, no programmatic monitoring procedures were performed. Effect The effect of the condition found is that the Department did not sufficiently monitor the LEA?s compliance related to the removal of students from the cohort to ensure that graduation rates are accurately reported to the Department. Questioned Costs None. Recommendation We recommend that the Department continue to review its existing policies and procedures over the monitoring of the accuracy of the cohort at the LEA and related accuracy of graduation rates to ensure that specific monitoring procedures are developed and implemented to appropriately monitor the federal requirement at the LEA. View of Responsible Officials The NHDOE concurs with this finding, but believes no further action is required as explained below. The NHDOE planned to conduct subrecipient monitoring and programmatic risk assessment of LEAs for the 19-20 grant year in the spring of 2020, but was forced to postpone due to the COVID-19 pandemic and declaration of national emergency. The 19-20 funds and spending were monitored as soon as possible, with 20 LEAs monitored and assessed for compliance with programmatic requirements in the fall and winter 2020-2021 when schools began to reopen. This postponement was necessary for health and safety and in practicality, but also enabled NHDOE to pilot desktop review and provide necessary technical assistance to LEAs related to monitoring as well as novel issues in serving educationally disadvantaged students resulting from school closures and remote instruction. Looking forward, the NHDOE will commence the subrecipient monitoring and programmatic risk assessment of 20-21 grants in the spring of 2021 as is regularly planned, including monitoring for LEA compliance related to the removal of students from the cohort. Anticipated Completion Date No further action required. Contact Person Lindsey Labonville

Finding Reference Number: 2020-010 NH Department of Education Title I Grants to Local Educational Agencies (Title I, Part A of ESEA (84.010) Federal Award Numbers: S010A180029, S010A190029 Federal Award Year: 2019, 2020 U.S. Department of Education Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria A pass-through entity must: 1. Evaluate each subrecipient?s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.331(b)) 2. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.331(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. This includes reviewing to ensure Local Education Authorities (LEAs) compliance with Part A supplement not supplant provisions. Condition The New Hampshire Department of Education (the Department) has a formal on-site programmatic monitoring policy that includes both a risk assessment process and procedures to monitor compliance at the LEA level in order to ensure that the LEA as complied with federal requirements concerning the use of Title 1 funds. This includes reviewing the LEA?s supplement not supplant methodology. During our testwork over subrecipient monitoring, we noted that the Department did not perform any programmatic risk assessments or monitoring during the year ended June 30, 2020. As a result, the Department did not perform any procedures to ensure LEA compliance with programmatic requirements, including supplement not supplant. Cause The cause of the condition found was due to the fact that the Department had scheduled its on-site monitoring visits to be performed in the spring of 2020. Due to the COVID-19 pandemic, no programmatic risk assessments or monitoring procedures were performed. Effect The effect of the condition found is that the Department did not sufficiently monitor the LEA?s compliance with federal regulations applicable to Title 1 in accordance with 2 CFR section 300.331(b) and 2 CFR sections 200.331(d) through (f). This would include monitoring procedures surrounding the LEA?s process related to supplement not supplant. Questioned Costs None. Recommendation We recommend that the Department continue to review its existing policies and procedures over the monitoring of subrecipients in order to ensure that appropriate procedures to comply with 2 CFR section 300.331(b) and 2 CFR sections 200.331(d) through (f) are consistently performed on an annual basis. View of Responsible Officials The NHDOE concurs with this finding, but believes no further action is required as explained below. The NHDOE planned to conduct subrecipient monitoring and programmatic risk assessment of LEAs for the 19-20 grant year in the spring of 2020, but was forced to postpone due to the COVID-19 pandemic and declaration of national emergency. The 19-20 funds and spending were monitored as soon as possible, with 20 LEAs monitored and assessed for compliance with programmatic requirements in the fall and winter 2020-2021 when schools began to reopen. This postponement was necessary for health and safety and in practicality, but also enabled NHDOE to pilot desktop review and provide necessary technical assistance to LEAs related to monitoring as well as novel issues in serving educationally disadvantaged students resulting from school closures and remote instruction. Looking forward, the NHDOE will commence the subrecipient monitoring and programmatic risk assessment of 20-21 grants in the spring of 2021 as is regularly planned, including supplement not supplant requirements. Anticipated Completion Date No further action required. Contact Person Lindsey Labonville

Finding Reference Number: 2020-011 NH Department of Education Title I Grants to Local Educational Agencies (Title I, Part A of ESEA (84.010) Federal Award Numbers: S010A180029, S010A190029 Federal Award Year: 2019, 2020 U.S. Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Type of Finding: Significant Deficiency and Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria An LEA may receive funds only if the SEA finds that the combined fiscal effort per student or the aggregate expenditures of the LEA from state and local funds for free public education for the preceding year was not less than 90 percent of the combined fiscal effort or aggregate expenditure for the second preceding year, unless specifically waived by ED. If an LEA fails to maintain fiscal effort, an SEA must reduce an LEA?s allocation under a covered program (Section 8521 of ESA(20 USC) 7901); 34 CFR section 299.5) 45 CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testwork over the annual maintenance of effort (MOE) calculation performed by the New Hampshire Department of Education (the Department), we noted that 1 of 25 LEAs selected for testwork did not meet the annual MOE calculation. While the LEA did not meet the required MOE requirement, the Department did not issue a waiver or reduce the LEA?s annual allocation as required under federal regulations. Cause The cause of the condition found was primarily due to a lack of controls and procedures to ensure that appropriate follow up action is taken when a LEA does not meet the required MOE requirement. Effect The effect of the condition found is that the Department did not properly reduce the LEA?s annual allocation, due to its failure to meet the annual MOE requirement, and received a grant amount larger than it should have. Questioned Costs Not determinable. Recommendation We recommend that the Department develop written policies and procedures to ensure there are appropriate controls in place that identify when a LEA fails to meet the required MOE and that appropriate action is taken to reduce the LEA?s annual allotment of funds. View of Responsible Officials The NHDOE concurs with this finding. NHDOE calculated but failed to apply for a waiver or proportionally reduce a LEA?s grant award based on failure to meet MOE requirements. To ensure resiliency and proper implementation of NHDOE?s written policies and procedures around responding to potential LEA failures to meet MOE, the NHDOE has reviewed and provided professional development to employees supporting its administration of Title I, Part A. Additionally, NHDOE?s MOE procedure is being updated to include a description of the above-mentioned employee training as well as the implementation of a process monitoring function by the NHDOE?s Bureau of Federal Compliance (BFC) to monitor the completion of the MOE process throughout the year. Implementation of this additional internal control will address any remaining risk of improper administration of the MOE process moving forward. Anticipated Completion Date April 2, 2021 Contact Person Lindsey Labonville

Finding Reference Number: 2020-012 NH Department of Human Services Temporary Assistance for Needy Families (93.558) Federal Award Numbers: 2019G996115, 2020G996115 Federal Award Year: 2019, 2020 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provisions: Child Support Non-Cooperation Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2019-015 Statistically Valid Sample: No Criteria If the State agency responsible for administering the State plan under Title IV-D of the Social Security Act determines that an individual is not cooperating with the State in establishing paternity, or in establishing, modifying or enforcing a support order with respect to a child of the individual, and reports that information to the State agency responsible for TANF, the State TANF agency must (1) deduct an amount equal to not less than 25% from the TANF assistance that would otherwise be provided to the family of the individual and (20 may deny the family any TANF assistance. Health and Human Services (HHS) may penalize a State for up to 5% of the SFAG for failure to substantially comply with this required State child support program (45 CFR sections 264.30 and 264.31) 45 CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testwork related to child support non-cooperation, we noted the following: A. For 2 of 40 participants selected for testwork, while the participant had been correctly sanctioned due to non-cooperation, the sanction was not applied timely, resulting in a delay in applying the sanction against the participants benefit payment. B. For 1 of 40 participants selected for testwork, while the participant had been correctly sanctioned due to non-cooperation, the sanction was lifted earlier than it should have been resulting in the participant?s benefit payment being larger than it should have. C. For 4 of 40 participants selected for testwork, while the participant should have been sanctioned due to non-cooperation, the sanction was never applied to the participant?s benefit payment, resulting in the participant being overpaid. D. For 7 of 40 participants selected for testwork, the participant was incorrectly sanctioned for non-cooperation and their benefits should not have been reduced. Cause The cause of the condition found was a result of inadequate review controls in place to ensure sufficient documentation is maintained to support the beginning and termination of sanction periods related to child support non-cooperation and ensuring that the New Heights system is updated timely to reflect the correct sanction dates. In addition, there appears to be inadequate controls in place to ensure that the sanction imposed is valid. Effect The effect of the condition found is that participant benefit payments may not be accurately paid and could result in unallowable costs charged to the federal program. Questioned Costs Not determinable. Recommendation We recommend that the New Hampshire Department of Health and Human Services (the Department) enhance its existing controls and procedures to ensure the documentation used to support the beginning and termination of sanction periods is maintained and that those dates are accurately reflected within the New Heights system. In addition, controls and procedures should be implemented so that sanctions are properly reviewed and approved prior to implementation to ensure that the sanction being imposed is valid. View of Responsible Officials While that the Department concurs with most of the errors included in the findings, we do not concur with all of them. See below for details. A. We concur that the sanction for non-cooperation was not applied timely. B. We concur that the sanction for non-cooperation was lifted earlier than it should have been. C. We concur, the participant should have been sanctioned due to non-cooperation, resulting in the participant being overpaid. D. We concur with this finding. However, we wanted to note that while the clients in these cases were properly reported as non-cooperation by BCSS, the action taken by the BFA worker was done incorrectly. The Policy change in 2018 SR-18-29 for FAP cases allows us to close these cases for failing to cooperate and exploring other benefits the household is entitled to when the parent or relative was not included in the assistance group. Although the errors for Conditions A ? D are valid, the cases were pulled before the 2019 KPMG audit was completed and the department?s corrective action plan was in place. The pulls during this period of time do not provide a true reflection of the progress made since implementing the department?s corrective action plan which was put in place June 2020 in response to the 2019 KPMG audit findings. We believe the corrective action plan may have prevented some of the errors. The previous corrective action plan included: ? coaching discussions between the supervisors and workers directly associated with each of the findings, ? a state wide staff meeting where all of the findings from the 2019 KPMG audit (which include the same findings of the Conditions stated above) were reviewed, and ? The New Hire training presentation regarding how to properly sanction a case for non-cooperation was updated. In addition: ? The Bureau of Family Assistance (BFA) has partnered with the Bureau of Child Support Services (BCSS) for quarterly meetings. To date, these meetings have resulted in a uniform Non Cooperation/Cooperation process to address concerns of the 608 forms being properly placed in the clients file as well as a clear process for all staff to follow to ensure proper action on cases occurs timely. ? BFA is currently working with the BCSS DoIT department to create a report that will be utilized to do quarterly quality assurance reviews on cases that are listed with BCSS as being under sanction. ? Quarterly quality assurance reviews will be performed to ensure: ? non-cooperation/cooperation protocols put in place in June 2020 are being followed and applied correctly ? non-cooperation/cooperation protocols are being executed timely. ? The above action plans for Condition A, B, and C, will also apply for Condition D. However, in addition to this, BFA will also be creating a refresher training. The training will include the proper way to act on a non-cooperation request from BCSS based on the FANF Cash program that is open, how to fill out HEIGHTS screens appropriately, and how to utilize NECSES (BCSS computer system) to verify whether BCSS has a sanction on the parent/relative for the case they are working on. ? BFA anticipates having this training developed by September 30, 2021 and take place during the fall. Anticipated Completion Date January 2022 Contact Person Karyl Provost, Administrator III

Finding Reference Number: 2020-013 NH Department of Human Services Temporary Assistance for Needy Families (93.558) Federal Award Numbers: 2019G996115, 2020G996115 Federal Award Year: 2019, 2020 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provisions Lack of Child Care for Single Custodial Parent of Child under Age Six Child Support Non-Cooperation Penalty for Refusal to Work Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2019-016 Statistically Valid Sample: No Criteria If an individual is a single custodial parent caring for a child under the age of six, the State may not reduce or terminate assistance for the individual?s refusal to engage in required work if the individual demonstrates to the State an inability to obtain needed child care for one or more of the following reasons: (a) unavailability of appropriate child care within a reasonable distance from the individual?s home or work site; (b) unavailability or unsuitability of informal child care by a relative or under other arrangements; or (c) unavailability of appropriate and affordable formal child care arrangements. The determination of inability to find child care is made by the State. HHS may penalize a State for up to five percent of the SFAG for violation of this provision (42 USC 607(e)(2) and 609(a)(11); 45 CFR sections 261.15, 261.56, and 261.57). If the State agency responsible for administering the State plan under Title IV-D of the Social Security Act determines that an individual is not cooperating with the State in establishing paternity, or in establishing, modifying or enforcing a support order with respect to a child of the individual, and reports that information to the State agency responsible for TANF, the State TANF agency must (1) deduct an amount equal to not less than 25% from the TANF assistance that would otherwise be provided to the family of the individual and (20 may deny the family any TANF assistance. Health and Human Services (HHS) may penalize a State for up to 5% of the SFAG for failure to substantially comply with this required State child support program (45 CFR sections 264.30 and 264.31) State agency must reduce or terminate the assistance payable to the family if an individual in a family receiving assistance refuses to work, subject to any good cause or other exemptions established by the state. HHS may penalize the state by an amount not less than 1 percent and not more than 5 percent of the SFAG for violation of this provision (42 USC 609(a)(14); 45 CFR sections 261.14, 261.16, and 261.54). 45 CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testwork related to sanctions imposed against single custodial parents caring for a child under the age of 6, we noted the following: A. For 1 of 40 participants selected for testwork, the participant had been sanctioned for reasons other than the inability to find childcare (child support non-cooperation). Per review of the documentation within the file there was insufficient evidence to support that the sanction for child support non-cooperation was appropriate. As a result, the participant did not appear to be properly sanctioned causing the participant to be underpaid. B. For 3 of 40 participants selected for testwork, the participants had been sanctioned for reasons other than the inability to find childcare (child support non-cooperation). Participants appeared to have been incorrectly sanctioned for child support non-cooperation and their benefits should not have been reduced. C. For 1 of 40 participants selected for testwork, the participant was appropriately sanctioned for reasons other than the inability to find childcare (failure to comply with work related requirements). However, the sanction was not applied timely to the participant?s benefits, resulting in a potential overpayment to the participant. In addition, the participant was also sanctioned for non-cooperation with child support however there was no documentation in the file to support that the participant was non-compliant with the child support requirements. As such, we are unable to determine if the participant was appropriately sanctioned. D. For 1 of 40 participants selected for testwork, the participant was sanctioned for reasons other than the inability to find childcare (child support non-cooperation). Per review of the file documentation, it appeared that the during the audit period, the sanction imposed on the participant was lifted due to an error and the participant?s sanction should have remained in effect, resulting in a potential overpayment to the participant. E. For 1 of 40 participants selected for testwork, there was insufficient documentation maintained in the file to support why the participant was sanctioned. As a result, we are unable to determine if the sanction was appropriate and the benefit amount paid was accurate. F. For 1 of 40 participants selected for testwork the, the participant had been sanctioned for reasons other than the inability to find childcare (child support non-cooperation and failure to comply with work requirements). Based on the documentation in the file, the participant was not eligible for benefit payments and should not have received any benefit payments. Cause The cause of the condition found was a result of inadequate review controls in place to ensure sufficient documentation is maintained to support the beginning and termination of sanction periods, that the cause of the sanction is appropriate and ensuring that the New Heights system is updated timely to reflect the correct sanction dates. Effect The effect of the condition found is that participant benefit payments may not be accurately paid and could result in unallowable costs charged to the federal program. Questioned Costs Not determinable. Recommendation We recommend that the New Hampshire Department of Health and Human Services (the Department) enhance its existing controls and procedures to ensure the documentation used to support the beginning and termination of sanction periods is maintained and that those dates are accurately reflected within the New Heights system. In addition, controls and procedures should be implemented to ensure that sanctions are properly reviewed and approved prior to implementation to so that that the sanction being imposed is valid. View of Responsible Officials While that the Department concurs with most of the errors included in the findings, we do not concur with all of them. See below for details. A. We concur, the participant did not appear to be properly sanctioned causing an underpayment. B. We concur, the participants were improperly sanctioned for child support non-cooperation even though they were IDP. C. We concur, the participant should have been sanctioned for failure to comply with work related requirements. D. We concur, the sanction imposed on the participant was lifted due to an error and the participant?s sanction should have remained in effect. E. We concur, there was insufficient documentation why the participant was sanctioned. F. We concur, the participant was not eligible for benefits payments and should not have received any benefit payments. Due to the timing of when the fiscal year 2019 audit was finished, the Department did not have sufficient time to implement its corrective action plan due to the fact that fiscal year 2020 was approximately 2/3 completed before the corrective action had been implemented. We believe the corrective action plan may have prevented some of the errors identified during the fiscal year 2020 audit. The previous corrective action plan included: ? coaching discussions between the supervisors and workers directly associated with each of the findings, ? a state wide staff meeting where all of the findings from the 2019 KPMG audit (which include the same findings of the 2020-001 Conditions stated above) were reviewed, and ? the New Hire training presentation regarding how to properly sanction a case for non-cooperation was updated. In addition: ? The Bureau of Family Assistance (BFA) has partnered with the Bureau of Child Support Services (BCSS) for quarterly meetings. To date, these meetings have resulted in a uniform Non Cooperation/Cooperation process to address concerns of the 608 forms being properly placed in the clients file as well as a clear process for all staff to follow to ensure proper action on cases occurs timely. ? BFA is currently working with the BCSS DoIT department to create a report that will be utilized to do quarterly quality assurance reviews on cases that are listed with BCSS as being under sanction. ? Quarterly quality assurance reviews will be performed to ensure: ? non-cooperation/cooperation protocols put in place in June 2020 are being followed, ? non-cooperation/cooperation protocols are being executed timely, and ? BFA will also be creating a refresher training. The training will include the proper way to act on a non-cooperation request from BCSS based on the FANF Cash program that is open, how to fill out HEIGHTS screens appropriately, and how to utilize NECSES (BCSS computer system) to verify whether BCSS has a sanction on the parent/relative for the case they are working on. ? BFA anticipates having this training developed by September 30, 2021 and take place during the fall. Anticipated Completion Date: January 2022 Contact Person: Karyl Provost, Administrator III

Finding Reference Number: 2020-014 NH Department of Human Services Temporary Assistance for Needy Families (93.558) Federal Award Numbers: 2019G996115, 2020G996115 Federal Award Year: 2019, 2020 U.S. Department of Health and Human Services Compliance Requirement: Reporting Special Tests and Provisions: Penalty for Failure to Comply with Work Verification Plan Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2019-017 Statistically Valid Sample: No Criteria The State agency must maintain adequate documentation, verification, and internal control procedures to ensure the accuracy of the data used in calculating work participation rates. In so doing, it must have in place procedures to (a) determine whether its work activities may count for participation rate purposes; (b) determine how to count and verify reported hours of work; (c) identify who is a work eligible individual; and (d) control internal data transmission and accuracy. Each State agency must comply with its HHS-approved Work Verification Plan in effect for the period that is audited. HHS may penalize the State by an amount not less than one percent and not more than five percent of the SFAG for violation of this provision (42 USC 601, 602, 607, and 609); 45 CFR sections 261.60, 261.61, 261.62, 261.63, 261.64, and 261.65). ACF-199, TANF Data Report (OMB No. 0970-0338) and ACF-343, Tribal TANF Data Report (OMB No. 0970-0215) (65 FR 8545, Appendix A, February 18, 2000) - State agencies must meet or exceed their minimum annual work participation rates. The minimum work participation rates are 50 percent for the overall rate and 90 percent for the two-parent rate. A state?s minimum work participation rate may be reduced by its caseload reduction credit. HHS may penalize the state by an amount of up to 21 percent of the SFAG for violation of this provision (42 USC 609(a)(4); 45 CFR section 262.1(a)(4)). 45 CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testwork related to compliance with the New Hampshire Department of Human Services (the Department) work verification plan we noted the following: A. For 1 of 40 participants selected for testwork, the documentation used to support the hours worked for the participant did not agree to the New Heights system and as a result, the hours for the participant were under reported. B. For 1 of 40 participants selected for testwork, the participant did not have an active employment plan for the period selected for testwork. In addition, the hours reported worked for the participant were based on outdated employment information and did not represent the actual hours worked by the participant. As a result, we were unable to verify if the participant complied with their work verification plan or if the hours reported worked were accurate. C. For 1 of 40 participants selected for testwork, there was insufficient documentation to support the number of hours worked within the New Heights system for the participant. D. For 1 of 40 participants selected for testwork, the participant was enrolled in multiple activities which were supported with work logs of hours worked. However, per review of the New Heights system, only part of the participant?s hours were reported. Cause The cause of the condition found was a result of inadequate review controls in place to ensure sufficient documentation is maintained to support the number of work hours reported by participants and that the hours worked are accurately reported within the New Heights system. The inaccurate reporting also impacted the accuracy of the data submitted within the ACF-199 TANF Data Report. Effect The effect of the condition found is that the State may not be in compliance with its work verification plan and would not be able to identify the noncompliance and related reporting errors within the ACF-199 TANF Data report timely. Questioned Costs None. Recommendation We recommend that the Department enhance its existing controls and procedures to ensure the documentation used to support participant work hours is maintained, that the hours reported agree to the documented hours worked and that the work hours are accurately reflected within the New Heights system so that they are ultimately accurately reported on the ACF-199 TANF Data Report. View of Responsible Officials While that the Department concurs with most of the errors included in the findings, we do not concur with all of them. See below for details. A. We concur. There were unreported hours in a job readiness activity when the verification was entered into the New Heights verification screen. B. We concur. The Department agrees that there is not a current Employment plan for the period of April 2020. While an Employment Plan was mailed to the participant, it was not returned to the Department. The Department also agrees that the hours reported worked for the participant was based on outdated employment information and did not represent the actual hours worked by the participant. C. We concur. The Department agrees that one of the participants had insufficient documentation to support the number of hours worked. D. We concur with this error. The Department agrees that the number of participant?s hours reported were not correct. To address these issues, an audit training power point presentation was created for an all staff training event which was held on March 19, 2021. Anticipated Completion Date March 19, 2021 Contact Person Kim Runion, Bureau Chief of Employment Services

Finding Reference Number: 2020-015 NH Department of Human Services Temporary Assistance for Needy Families (93.558) Federal Award Numbers: 2019G996115, 2020G996115 Federal Award Year: 2019, 2020 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provisions: Penalty for Refusal to Work Type of Finding: Significant Deficiency Prior Year Finding: No Statistically Valid Sample: No Criteria State agency must reduce or terminate the assistance payable to the family if an individual in a family receiving assistance refuses to work, subject to any good cause or other exemptions established by the state. HHS may penalize the state by an amount not less than 1 percent and not more than 5 percent of the SFAG for violation of this provision (42 USC 609(a)(14); 45 CFR sections 261.14, 261.16, and 261.54). 45 CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testwork over compliance with requirements related to penalties for refusal to work, we noted that for 1 of 40 participants selected for testwork, the participant was not required to be working as the participant was enrolled in work activity programs. The participant was required to report a minimum number of hours to satisfy their work activity program requirement. During our review of the participant file, we noted that the number of hours reported by the participant did not agree with the hours reported within the New Heights system that is used to track the participant?s participation to satisfy the required work activities. Cause The cause of the condition found was a result of inadequate review controls in place to ensure that the hours reported by the participant is properly reconciled to the New Heights system to ensure the data entered is accurate. Effect The effect of the condition found is that the participant may not meet their work activity program requirements and the New Hampshire Department of Health and Human Services (the Department) may not be able to identify the matter timely. Questioned Costs None. Recommendation We recommend that the Department enhance its existing controls and procedures to ensure the documentation used to support participant work activities is maintained and that the hours reported agree to the documented hours worked and are accurately reflected within the New Heights system. View of Responsible Officials We concur with the finding. The error was attributed to new Employment Counselor who is no longer with the Department. We analyzed all of the errors included in the findings. We discovered most of them are attributed to new staff. Because of this, we are enhancing the entire training program for new staff. We have a new Training Coordinator (the position has been vacant) and created a new position called a Quality Assurance specialist. We hope this position will provide additional guidance and training to new staff, review monitoring reports and work with the staff to teach, review errors and retrain. We created an Audit Training Power point for an all staff training held on March 19, 2021. Anticipated Completion Date January 2022 Contact Person Kim Runion, Bureau Chief of Employment Services

Finding Reference Number: 2020-016 NH Department of Human Services Temporary Assistance for Needy Families (93.558) Federal Award Numbers: 2019G996115, 2020G996115 Federal Award Year: 2019, 2020 U.S. Department of Health and Human Services Compliance Requirement: Matching, Level of Effort and Earmarking ? Maintenance of Effort Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria Every fiscal year, a State must maintain an amount of ?qualified state expenditures? (as defined in 42 US609(a)(7)(B) and 45 CFR section 263.2) for eligible families (as defined in 42 USC 609(a)(7)(B)(i)(IV) and 45 CFR section 263.2(b)) at least at the applicable percentage of the State?s historic State expenditures. Qualified expenditures with respect to eligible families may come from all programs. This requirement may be met through allowable state or local cash expenditures for goods and services, cash donations by non-governmental third parties, or the value of third-party in-kind contributions. A State?s records must show that all costs are verifiable and meet all applicable requirements in 45 CFR sections 263.2 through 263.6.45 CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition For the federal fiscal year end September 30, 2019, the New Hampshire Department of Health and Human Services (the Department) is required to meet an annual maintenance of effort (MOE) requirement of $32,115,003. In total, the Department incurred $38,813,585 in eligible MOE expenditures, which exceeded the amount required. Of the MOE expenditures incurred, $11,627,710 represented in-kind contributions from 15 community organizations. On an annual basis, each community organization completes a TANF MOE form to report expenses that qualify as TANF expenditures. The form requires a description of the program operations, what TANF purpose the program addresses, the number of families served, and the amount of eligible expenditures in total. The form is signed by the organization and submitted to the Department to serve as the supporting documentation for the in-kind contribution provided by the community organization. No additional documentation is provided by the community organization to support the amount of the expenditures included on the form. The Department does not perform procedures to ensure expenditures reported by the community organization are accurate and represent valid expenditures that were incurred to support the program outlined within the form and in turn to ensure the in-kind contribution used to support the required MOE is appropriate. Cause The cause of the condition found was a result of insufficient controls and procedures to ensure the expenditures reported by the community organization are properly supported by valid expenditures that meet the criteria of qualified TANF expenditures. As the Department enters into a memorandum of understanding (MOU) with each community organization that outlines the types of costs that are allowable sources of MOE and obtains a signed certification from each organization as to the amount of expenditures incurred, the Department indicated that the support provided is sufficient and therefore does not validate the information for accuracy. Effect The effect of the condition found is that the Department may not meet the required annual MOE requirement as in-kind contributions may not be complete or represent qualified expenditures does not have controls and procedures in place to identify the noncompliance timely. Questioned Costs Not determinable. Recommendation We recommend that the Department implement controls and procedures to ensure that in-kind contributions used to support MOE are reviewed to ensure that the expenditures are accurate and meet the definition of qualifying expenditures. View of Responsible Officials We do not concur. The expenditures outlined are considered verifiable costs via the Memorandum of Understanding (MOU) and the Maintenance of Effort (MOE) forms completed by the third party agency. As part of the June 30, 2018 audit a similar finding is noted which we also did not concur with as part of that audit. As of May 2021, the Federal Administration for Children and Families (ACF) has not rendered a decision yet concerning this finding and as such, we do not believe any corrective action is required. Anticipated Completion Date No corrective action is considered necessary Rejoinder The Department stated in their response that it verifies the completeness and accuracy of the third-party in-kind match through the MOU entered into and the MOE forms that the providers submit. Per review of the signed certifications (or the MOE forms), we noted the certification contains a description of the general purpose of the program, an identification of the TANF purpose the program addresses, the number of families/individuals served, the expenses incurred under the program, excluding any federal and state funds received. While we were provided with documentation to support that the third party certifications were received, we were not provided with evidence to support the Department had performed additional procedures to verify the incurred costs were complete and accurate as required by 45 CFR section 263.2(e) and 75.306. We do not agree that a certification alone from a third party meets the definition of a verifiable cost from third -party records.

Finding Reference Number: 2020-017 NH Department of Human Services Foster Care ? Title IV-E (93.658) Federal Award Numbers: 2001NHFOST Federal Award Year: 2020 U.S. Department of Health and Human Services Compliance Requirement: Eligibility Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria Funds may be expended for foster care maintenance payments on behalf of eligible children, in accordance with the Title IV- E agency?s foster care maintenance payment rate schedule and in accordance with 45 CFR section 1356.21, to individuals serving as foster family homes, to child- care institutions, or to public or private child-placement or child-care agencies. Such payments may include the cost of (and the cost of providing, including certain associated administrative and operating costs of a child care institution) food, clothing, shelter, daily supervision, school supplies, personal incidentals, liability insurance with respect to a child, and reasonable travel to the child?s home for visitation, as well as reasonable travel for the child to remain in the same school he or she was attending prior to placement in foster care (42 USC 672(b)(1) and (2), (c)(2), and 675(4)). A judicial determination regarding reasonable efforts to finalize the permanency plan must be made within twelve months of the date on which the child is considered to have entered foster care and at least once every twelve months thereafter while the child is in foster care. The judicial determination must be explicitly documented and made on a case by case basis. If a judicial determination regarding reasonable efforts to finalize a permanency plan is not made within this timeframe, the child is ineligible at the end of the twelfth month from the date the child was considered to have entered foster care or at the end of the month in which the subsequent judicial determination of reasonable efforts was due, and the child remains ineligible until such a judicial determination is made (45 CFR section 1356.21(b)(2)). For a child who enters foster care on or after March 27, 2000, the judicial determination of reasonable efforts to finalize the permanency plan must be made no later than twelve months from the date the child is considered to have entered foster care (45 CFR section 1356.21(b)(2). Acceptable documentation is a court order containing a judicial determination regarding reasonable efforts to finalize a permanency plan or a transcript of the court proceedings reflecting this determination (45 CFR section 1356.21(d)). Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During out testwork over the eligibility process for the Foster Care program, we noted the following: A. The New Hampshire Department for Health and Human Service (the Department) was unable to locate the eligibility file for 1 of 40 participants selected for testwork. As a result, we were unable to determine if the child was eligible for Foster Care IV-E services. B. For 1 of 40 participants selected for testwork, there was no documentation to support that a judicial determination of reasonable efforts to finalize the permanency plan was obtained once at least every twelve months. As a result, it was unclear if the child remained eligible to receive Foster Care IV-E services. C. For 1 of 40 participants selected for testwork, we noted that that a judicial determination of reasonable efforts to finalize the permanency plan was not obtained for the 12-month period ending May 2019 and therefore the participant was no longer eligible to receive Foster Care IV-E services. The Department continued to charge Foster Care IV-E for the participants future subsidy payments. In April 2020, the Department discovered the error and refunded the Foster Care IV-E funds received for this participant back to the federal government. While the error was identified by the Department, it was identified almost a year after the child became ineligible. As a result, it does not appear that the Department has sufficient controls in place to timely identify lapses in eligibility for continuing Foster Care IV-E cases. Cause The cause of the condition found was primarily due to insufficient controls to ensure that the required judicial determination of reasonable efforts to finalize a permanency plan is obtained within the appropriate time period allowed and that all appropriate documentation is maintained for each participant documenting that they are eligible to receive Foster Care IV-E services. Effect The effect of the condition found is that the Department may have charged subsidy payments to the Foster Care program that were not eligible for federal reimbursement. Questioned Costs Not determinable. Recommendation We recommend that the Department review its existing policies and procedures surrounding obtaining a judicial determination of reasonable efforts to finalize a permanency plan to ensure that it is obtained timely and in compliance with the required time period allowed under federal regulations. Additionally, the Department should review its existing policies and procedures to ensure a complete and accurate eligibility file is maintained for each participant. View of Responsible Officials A. The Department concurs with the finding under Condition A. Closed eligibility case files are returned to the district office to be archived by the district office. (This was temporarily halted due to COVID protocols.) We have not found record of this file being returned to the district office. The Department is currently compiling all of the closed foster care case files and returning those files their respective district offices. As we move to electronic records, there will be less risk of not having the necessary documentation to support a child?s eligibility. All new documentation required for children?s eligibility case files is being stored electronically. Existing files are a combination of a paper eligibility files and electronic records. Closed paper eligibility case files that have been returned to their respective district office, will be tracked with the date it was returned. B. The Department concurs with the finding under Condition B. The Department did not have documentation to support that a judicial determination of reasonable efforts to finalize the permanency plan was obtained within 12 months of the previous permanency plan. The Department will ensure adherences to their ?REP Process Memo? to prevent occurrences like this in the future. C. There are processes in place to track the receipt of judicial determination of reasonable efforts to finalize the permanency plans. Monthly reports are generated from NH Bridges that compile clients that are missing or are in need of an updated reasonable efforts to finalize the permanency plan.? Anticipated Completion Date May 31, 2021 Contact Person Elizabeth Lafontaine, DCYF Financial Manager

Finding Reference Number: 2020-018 NH Department of Human Services Foster Care ? Title IV-E (93.658) Federal Award Numbers: 2001NHFOST Federal Award Year: 2020 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provisions ? Payment Rate Setting and Application Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria Title IV-E agencies establish payment rates for maintenance payments (e.g., payments to foster parents, childcare institutions or directly to youth).Payment rates may also be established for Title IV-E administrative expenditures (e.g., payments to child placement agencies or other contractors, which may be either subrecipients or vendors) and for other services. Payment rates must provide for proper allocation of costs between foster care maintenance payments, administrative expenditures, and other services in conformance with the cost principles. The Title IV-E agency?s plan approved by ACF must provide for periodic review of payment rates for foster care maintenance payments at reasonable, specific, time-limited periods established by the Title IV-E agency to assure the rate?s continuing appropriateness for the administration of the Title IV-E program (42 USC 671(a)(11); 45 CFR section 1356.21(m)(1); 45 CFR section 1356.60(a)(1) and (c)). Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the payment rate setting and application process, the Department for Health and Human Services (the Department) did not appear to have a periodic schedule to review and determine the continued appropriateness of amounts paid as foster care maintenance rates. It did not appear that foster care maintenance rates had been reviewed since 2017. Cause The cause of the condition found was primarily due to insufficient controls and lack of written documentation to support the process for reviewing foster care maintenance rates and a lack of a documented schedule for when the maintenance rates would be reviewed. Effect The effect of the condition found is that the Department?s maintenance rates that are utilized for the Foster Care program may not be appropriate. Questioned Costs Not determinable. Recommendation We recommend that the Department develop policies, procedures and relevant internal controls to ensure that foster care maintenance rates are periodically reviewed to determine their continued appropriateness. The policy should also outline the frequency of when maintenance rates will be reviewed. View of Responsible Officials The Department concurs. Previously, rate setting was the responsibility of individual divisions before moving to a centralized function. Due to that transition, new procedures need to be created and implemented to ensure rates are reviewed regularly based on state and federal requirements. Procedures have been drafted by the Department?s Rate Setting Unit which is responsible for initiating the review of rates. The rate review process is to begin in the first quarter of each calendar year. Foster Care and Residential Treatment Facility rate review responsibilities are a combined effort with the Rate Setting Unit, DCYF Finance, and the Division?s Certification teams. Anticipated Completion Date October 31, 2021 Contact Person Christy Roy, Administrator III

Finding Reference Number: 2020-019 NH Department of Human Services Social Services Block Grant (93.667) Federal Award Numbers: 2017G992342, 2018G992342, 2019G992342 Federal Award Year: 2017, 2018, 2019 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2019-019 Statistically Valid Sample: No Criteria A pass-through entity must: 1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.331(a); 2. Evaluate each subrecipient?s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.331(b)); and 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.331(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Social Services Block Grant program, the New Hampshire Department of Health and Human Services (the Department) enters into grant agreements with local entities to provide a variety of services, including meals, adult day services and comprehensive family services. On a periodic basis, the subrecipient submits a request for reimbursement for the services that are rendered that is reviewed and approved by the Department prior to payment. As part of our testwork over the subrecipient monitoring process, we noted the following for the year ended June 30, 2020: A. The Department communicates award information to subrecipients through the approved contract. Per review of the contract, for all 10 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.331(a). Specifically, the following elements were not communicated: a. Federal Award Identification Number (FAIN); b. Federal award date; c. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414); and d. Identification of whether the award is R&D. B. The Department did not perform a risk assessment for each of the 10 subrecipients selected for testwork. As a result, it was unclear as to what type of during the award monitoring was required to be performed over the 10 subrecipients selected for testwork. C. The Department?s during the award monitoring is primarily composed of the Department?s review over requests for reimbursement submitted by the subrecipient. The Department reviews the invoices prior to payment indicating that the invoice appears reasonable and allowable under federal regulations. For each of the 10 subrecipients selected for testwork, the Department was unable to provide documentation to support that it had performed additional monitoring procedures over the subrecipients to address whether or not the subrecipient had sufficient documentation to support that the costs requested for reimbursement were allowable or whether the subrecipient had determined participant eligibility accurately if eligibility requirements were applicable. As the Department does not have a formal subrecipient monitoring policy that outlines the types and frequency of monitoring activities to be performed and there was no risk assessment performed for these subrecipients, it was unclear whether the exclusion of these types of monitoring activities was appropriate. Cause The cause of the condition found was primarily due to the following: ? The Department is in the process of modifying its subrecipient grant agreements in response to a corrective action plan that is being implemented as a result of a similar finding identified in the prior year. As new grant agreements are executed, the required information will be communicated to subrecipients. The 10 grant agreements reviewed as part of our testwork were not newly executed agreements as the subrecipient grant expenditures incurred during the audit period were associated with amendments on existing agreements. The changes being implemented on new subrecipient agreements are not being made to amendments to existing agreements. ? The Department requires a risk assessment to be performed prior to entering into a subrecipient grant agreement. For each of the 10 subrecipient selected for testwork, the grant agreements were entered into prior to the date in which the Department?s risk assessment policy went into effect in June of 2018. The Department has made some changes to its risk assessments process; however, those changes did not go into effect until State fiscal year 2021. ? The Department currently does not have a documented subrecipient monitoring policy that outlines the types and frequency of monitoring procedures that will be performed over this federal program and how those monitoring procedures will be documented. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.331(a), 2 CFR section 200.331(b) and 2 CFR sections 200.331(d) through (f). In addition, as there is no documented subrecipient monitoring policy for this program, fiscal and programmatic monitoring requirements that the subrecipient is required to comply with may not be appropriately or timely monitored for compliance by the Department, resulting in potential unallowable costs being charged to the program. Questioned Costs Not determinable. Recommendation We recommend that the Department continue to review its existing policies and procedures to ensure that the Department complies with the provisions of 2 CFR section 200.331(a), 2 CFR section 200.331(b) and 2 CFR sections 200.331(d) through (f). This would include ensuring that: 1. All required award information is communicated to subrecipients; 2. A documented risk assessment is performed over all subrecipients and the results of that risk assessment is used to evaluate the types of monitoring procedures that will be performed over the subrecipient; and 3. As a result of the risk assessment performed, monitoring activities are performed over subrecipients to ensure compliance with the terms and conditions of its subrecipient grant agreement. The procedures that are to be performed based upon the assessed level for of risk should be outlined in a documented subrecipient monitoring policy that is specific to this program. The subrecipient monitoring policy should document the types and frequency of monitoring activities that will be performed. View of Responsible Officials A. We concur the Department did not communicate award information to subrecipients through the approved contract as required by 2 CFR 200.331 (a). The remedy has already been implemented. a. Federal Award Identification Number (FAIN) ? In November 2019, the Department added the FAIN number to the letter for the Governor and Council requesting approval. Further, the FAIN number was also added to Exhibit C of the Department?s contracts in February 2020. b. Federal award date ? The Federal Award Date was added to Exhibit C of the Department?s contracts. c. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414) ? Indirect cost rates were added to Exhibit C of the Department?s contracts in April 2020. d. Identification of whether the award is R&D ? R&D identification was added to Exhibit C of the Department?s contracts in February 2020. B. and C. We concur with the finding. We consider the finding to be fully resolved through Department policy and Department wide implementation. However, it should be noted full compliance will not be achieved for one to two contact cycles due to timing. The Department began addressing the issue of Subrecipient Monitoring issue in June 2017 when the first Grants Administrator was hired. The Department finalized the Subrecipient Monitoring Policy, which encompasses the financial and programmatic risk assessments as well as the subrecipient monitoring, on June 1, 2018. The Department provided user training on the subject in February and September 2018, training over one hundred forty-six staff. However, only brand new procurements utilized this policy during the initial roll out of this policy. The Department hired a new Grants Administrator in May 2019. The full Subrecipient Monitoring policy rolled out to all procurements, including sole source, amendments, and renewals, effective August 1, 2020. The Contracts Unit received specialized subrecipient monitoring training on May 13 and October 28, 2020. Department wide training to all staff occurred weekly between September 8 and November 3, 2020. The Grants Office provided additional targeted training to Program staff through team meetings. Over one hundred fifty Program and Finance staff received training. Annual training will be held in September each year. Refresher training or training for new staff is available upon request from the Grants Office. Additionally, the Grants Office website launched in June 2020, which offers Program, Finance, and Contracts Unit staff access to the all the Grants Office policies, including the subrecipient monitoring policy, as well as training modules, slides, and tools. The training has also been recorded and is available on this site. The Subrecipient Monitoring Policy requires Program to determine whether any vendor which receives funds in exchange for goods or services is a Contractor or Subrecipient. Determined subrecipients receive an Appendix B, which includes an eighteen question questionnaire and requirements for submitting financial data. This information is used to populate the Risk Assessment Tool, which shows any risks pertinent to a subrecipient and the subaward. Based on the risks shown, Program chooses monitoring activities to mitigate the risks and the Contracts Unit memorializes these choices in the contract. The Grants Office works closely with the Contracts Unit to ensure compliance with the Subrecipient Monitoring policy. Anticipated Completion Date A. Completed. B. Policy implementation complete. C. Policy implementation complete. Contact Person Melissa Kelleher, Grants Administrator

Finding Reference Number: 2020-020 NH Department of Human Services Social Services Block Grant (93.667) Federal Award Numbers: 2018G992342, 2019G992342 Federal Award Year: 2018, 2019 U.S. Department of Health and Human Services Compliance Requirement: Cash Management Type of Finding: Significant Deficiency and Noncompliance Prior Year Finding: No Statistically Valid Sample: No Criteria U.S. Department of the Treasury (Treasury) regulations at 31 CFR 204 part 205 implement the Cash Management Act of 1990 (CMIA). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Catalog of Federal Domestic assistance that meet the funding threshold for a major federal program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition Under the Treasury ? State Agreement (TSA) that was entered into by the State of New Hampshire and the U.S. Department of the Treasury for the period ending June 30, 2020, the funding technique that was approved to be used for the Social Services Block Grant program is the Cost Allocation Plans-Quarterly-Other technique. Under this technique, the State shall request funds no less than quarterly once Cost Allocation is available to fund activity of the prior quarter and is considered to be interest neutral. During our testwork over the cash management process, we noted that for 2 of 3 cash draws selected for testwork, the cash draw was not made in accordance with the technique outlined within the CMIA agreement, but instead used the technique of actual draw ? monthly. Under this technique the draw is based on the actual expenditures over the prior month. This technique is also interest neutral. Cause The cause of the condition found was primarily due to the human error. The Department of Human Services had requested that the Treasury- State Agreement be updated to change the technique for the Social Services Block Grant to actual-draw monthly. While the change was approved, it not updated within the TSA until the fiscal year ending June 30, 2021. Effect The effect of the condition found is that the Department did not request funds for reimbursement in accordance with the approved TSA. As both techniques are interest neutral, there was no CMIA impact on the noncompliance. Questioned Costs None. Recommendation We recommend that the Department review its existing policies and procedures to review the approved TSA annually to ensure the funding techniques utilized for those federal programs covered under the Agreement are utilized in order to comply with the provisions of the Agreement. View of Responsible Officials The Department concurs. The Department will review its existing policies and procedures for the annual review of the Treasury-State Agreement. The Department changed the funding techniques across all grants so that the costs outside of CMIA are drawn on a monthly basis. Anticipated Completion Date June 30, 2021 Contact Person Hannah Glines ? Revenue Director

Finding Reference Number: 2020-021 NH Department of Health and Human Services Medicaid Cluster (CFDA 93.775, 93.777, 93,778) Federal Award Numbers: 1805NH5MAP, 1905NH5MAP, 2005NH5MAP, 1805NH5ADM, 1905NH5ADM, 2005NH5ADM, 1805NHIMPL, 1905NHIMP, 2005NHIMP Federal Award Years: 2018, 2019, 2020 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provision: Utilization Control and Program Integrity Type of Finding: Significant Deficiency and Noncompliance Prior Year Finding: 2019-020 Statistically Valid Sample: No Criteria The State Plan must provide methods and procedures to safeguard against unnecessary utilization of care and services. In addition, the State must have (1) methods of determining criteria for identifying suspected fraud cases; (2) methods for investigating these cases; and (3) procedures, developed in cooperation with legal authorities, for referring suspected fraud cases to law enforcement officials (42 CFR Parts 455, 456, and 1002). Per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition The Bureau of Improvement and Integrity, Program Integrity Unit (PIU) within the Department of Health and Human Services (the Department), is responsible for establishing and using written criteria for evaluating the appropriateness and quality of Medicaid services as a means of detecting and correcting potential occurrences of provider fraud, waste and abuse. The PIU managed the Department?s contract with the external quality improvement organization (QIO), which performs all in-state, border and specialty retrospective inpatient reviews on the fee for service population during fiscal year 2019. However, due to performance issues as noted in 2019, PIU brought the QIO process in-house during the first quarter of the 2020 fiscal year. Procedures were developed but the Department was unable to hire a QIO reviewer during the year. As such, no QIO reviews were performed during fiscal year ended June 30, 2020. Cause The cause of the condition found was primarily due to the Departments inability to hire a QIO reviewer to perform the required QIO reviews. Effect The Department did not perform utilization reviews for in-state, border and specialty retrospective inpatient reviews on the fee for service population during fiscal year 2020. Questioned Costs None. Recommendation We recommend the Department ensures adequate controls and processes have been established to address utilization methodology execution and review of results. In addition, the Department should hire the resources to execute the methodology. View of Responsible Officials As previously stated, the Program Integrity Unit made the decision to bring the QIO function to perform utilization reviews in house. To that end, PIU has developed policy/procedure to guide the in-house QIO function. Further, the Department created two staff positions in the State Fiscal Year 20/21 budget to perform the quality reviews; however, they remain unfilled at this time. Due to these vacancies, Program Integrity has assigned this function to an existing position and has begun the review of the backlogged cases. In addition, the PIU has developed a tracking sheet for this purpose. It is the intent of the Program Integrity unit to ensure all months are sampled and reviewed from the end of the QIO contract moving forward. Anticipated Completion Date March 31, 2022 Contact Person Francesca Hennessy

Finding Reference Number: 2020-022 NH Department of Health and Human Services Medicaid Cluster (CFDA 93.775, 93.777, 93,778) Federal Award Numbers: 1805NH5MAP, 1905NH5MAP, 2005NH5MAP, 1805NH5ADM, 1905NH5ADM, 2005NH5ADM, 1805NHIMPL, 1905NHIMP, 2005NHIMP Federal Award Years: 2018, 2019, 2020 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provision: Provider Eligibility (Screening and Enrollment) Type of Finding: Significant Deficiency and Noncompliance Prior Year Finding: 2019-021 Statistically Valid Sample: No Criteria In order to receive Medicaid payments, providers must: (1) be licensed in accordance with Federal, State, and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and 447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make certain disclosures to the State (42 CFR part 455, subpart B, sections 455.100 through 455.106). Medicaid managed care network providers are subject to the same disclosure, screening, enrollment, and termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR Part 438, Subpart H. Per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition The Department assigns risks to each provider based on their provider type. All new provider enrollments and moderate and high-risk revalidations are reviewed and approved by the Department of Health and Human Services (the Department). However, for limited risk revalidations, the Department has outsourced this service to the Department?s Medicaid Management Information System fiscal agent (Fiscal Agent). The Department holds at least bi-weekly meetings with the fiscal agent to discuss issues noted with enrollment, revalidation, trends noted, etc. In addition, the Department has hired the Fiscal Agent to perform a quality assurance review over all new provider and revalidations prior to the notification that they are an eligible provider for State of New Hampshire services to address the accuracy of enrollment. During 2019, the Department modified their process such that the Fiscal Agency received all results from the vendor screenings for revalidations. During our testwork over the above monitoring controls, the Department provided minutes of the meetings that demonstrated review of enrollment and revalidation processes and discussion of resulting trends and efficiencies on a consistent basis. The feedback from the Fiscal Agent regarding the quality assurance process is less formalized and more ad-hoc in nature not allowing for audit evidence throughout the fiscal year of the accuracy and operating effectiveness of the monitoring controls. During our testwork over provider eligibility, we noted for 7 of 65 providers, there was greater than six years between the Department revalidating the providers eligibility. COVID-19 waivers extended prior authorizations for 12 months. However, as these providers were not revalidated in six years, there appears to have been an issue with compliance with the revalidation process prior to COVID-19. Cause With regard to the monitoring controls, the condition noted is due to lack of a formalized process to receive information on a regular basis from the Fiscal Agent resulting in the control not being effectively designed. The main cause for the delay in revalidation was funding priorities to start the project and the length of time it took to implement the project which included proper notification to providers of the requirement. Effect The effect of the condition found is that the Department does not revalidate providers timely. Questioned Costs None. Recommendation We recommend the Department implement monitoring and communication controls to continually assess the need for provider revalidation to ensure that it is executed timely and in accordance with the requirements, including a plan to become current on older reviews. View of Responsible Officials DHHS knew that we were behind in establishing the system processes for revalidation. DHHS established a team of DHHS staff, MMIS, DoIT staff and fiscal agent staff to establish a project plan and implementation of the revalidation process. This required system updates, new provider revalidation application, provider notification, and how to handle revalidations that were past due. DHHS approved all decision regarding this project. DHHS also reached out to CMS for technical assistance to perform revalidations including the electronic data exchange of duel providers that are enrolled with Medicare and Medicaid to expect the revalidation screening process, which allowed DHHS to screen thousands of providers quickly and efficiently expediting the process. DHHS and the fiscal agent are actively performing revalidation monthly and the process is being reviewed and updated as needed to ensure all revalidations are done correctly and timely. As such, starting in July 2019, revalidations are reviewed and approved by the Department which includes a DEX lookup for each provider and the Fiscal Agent changed the screening reporting with their vendor to send all screening results to the Fiscal Agent, not just the negative results. The Fiscal Agent does not approve the revalidation until all screenings are complete, including the Department review and properly documented in the provider?s electronic case file. All older reviews have been processed and notices have been sent. However, based on the restrictions on revalidation and enrollment due to COVID, we will not be able to terminate any providers for not completing revalidation until the emergency has ended. During this time, DHHS receives a Work List Report of providers selected for revalidation that have not submitted their revalidation application. DHHS is diligently reaching out to these providers to obtain revalidation applications and documentation to reduce the number of outstanding revalidations during COVID. DHHS and the Fiscal Agent has also established a plan to address non-compliant revalidations once the emergency period has ended. DHHS will ensure current procedures cover all required regulations for provider enrollment. DHHS will establish with the Fiscal Agent, quarterly reporting of the Fiscal Agent?s Quality Assurance unit to monitor errors and trends for correction. Anticipated Completion Date Outstanding revalidations and process changes will be completed within 6 months of the end of the Federal Emergency Order (EO) as required under the EO Contact Person Francessca Hennessy

Finding Reference Number: 2020-023 NH Department of Health and Human Services Medicaid Cluster (CFDA 93.775, 93.777, 93,778) Federal Award Numbers: 1805NH5MAP, 1905NH5MAP, 2005NH5MAP, 1805NH5ADM, 1905NH5ADM, 2005NH5ADM, 1805NHIMPL, 1905NHIMP, 2005NHIMP Federal Award Years: 2018, 2019, 2020 U.S. Department of Health and Human Services Compliance Requirement: Eligibility Type of Finding: Significant Deficiency and Material Noncompliance Prior Year Finding: 2019-022 Statistically Valid Sample: No Criteria Eligibility for Medicaid can be broadly grouped into determinations based on Modified Adjusted Gross Income (MAGI-based determination) and non-MAGI determinations (e.g. Aged, Blind and Disabled). Auditors should test eligibility determinations made for fee-for-service and managed care beneficiaries. The auditors should re-determine eligibility to ensure beneficiaries qualify for the Medicaid program and are in the appropriate enrollment category. 45 CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition The Division of Medicaid Services (DMS), with the Department of Health and Human Services (the Department) administers the Medicaid program. The Bureau of Family Assistance (BFA) is responsible for determining eligibility for non-MAGI groups as well as MAGI groups according to New Hampshire policy. One hundred sixty MAGI and non-MAGI participants were selected for review, who fell into four main eligibility types: fee for service, managed care, waiver, and nursing home. During the audit, for 64 of 160 participants, (7 of 40 for fee for service, 7 of 40 for MCO, 12 of 40 waiver and 38 of 40 nursing home) the Department was unable to provide support to verify that the participants social security income had been matched, via a Bendex match, with the Social Security Administration (SSA) because the SSA has not provided New Hampshire authorization to share that information. Therefore, validation that the participants were deemed eligible by the SSA was not able to be determined. Cause The cause of the condition is that the SSA has not issued a Redisclosure Memorandum for the CMS Single Audit. Without the Memorandum, states do not have permission to disclose SSA data to any auditors. Effect The Department could be providing Medicaid benefits to participants who may be ineligible for the program. Questioned Costs Not determinable. Recommendation The Department should obtain approval from SSA to share data with the single auditor or work with SSA to provide correspondence to the single auditor confirming eligibility for individuals during the audit process. View of Responsible Officials We concur. We are in the process of updating the Informational Exchange Agreement (IEA) between the Social Security Administration (SSA) and the New Hampshire Department of Health and Human Services (DHHS). This will include obtaining authorization for KPMG, as a contractor, to receive access to the necessary data to complete the Single Audit of the department. Anticipated Completion Date Approval of Updated IEA Contact Person Elizabeth Gillett

Finding Reference Number: 2020-024 NH Department of Health and Human Services Medicaid Cluster (CFDA 93.775, 93.777, 93,778) Federal Award Numbers: 1805NH5MAP, 1905NH5MAP, 2005NH5MAP, 1805NH5ADM, 1905NH5ADM, 2005NH5ADM, 1805NHIMPL, 1905NHIMP, 2005NHIMP Federal Award Years: 2018, 2019, 2020 U.S. Department of Health and Human Services Compliance Requirement: Special Tests and Provision: Medicaid National Correct Coding Initiative Type of Finding: Material Weakness and Scope Limitation Prior Year Finding: No Statistically Valid Sample: No Criteria In accordance with Section 1903(r) of the Social Security Act, effective October 1, 2010, SMAs were required to incorporate NCCI methodologies into the state Medicaid programs pursuant to the requirements of Section 6507 of the Affordable Care Act. In paying applicable Medicaid claims, states? MES are required to completely and correctly implement the following six Medicaid NCCI methodologies to ensure that only proper payments of procedures are reimbursed. a. NCCI Procedure-to-Procedure (PTP) edits for practitioner and ambulatory surgical center (ASC) claims. b. NCCI PTP edits for outpatient hospital services, including emergency department, observation care, and outpatient hospital laboratory services. c. Medically Unlikely Edit (MUE) units of service (UOS) edits for practitioner and ASC services. d. MUE UOS edits for outpatient hospital services including emergency department, observation care, and outpatient hospital laboratory services. e. MUE UOS edits for durable medical equipment (DME) billed by providers. f. NCCI PTP edits for durable medical equipment (added in October 2012). States are also required to use: ? all four components of each Medicaid NCCI methodology; ? the most recent quarterly Medicaid NCCI edit files for states; ? the Medicaid NCCI edits in effect for the date of service on the claim line or claim; ? the claim-adjudication rules in the Medicaid NCCI methodologies; and ? all modifiers for Healthcare Common Procedure Coding System (HCPCS) codes and Current Procedural Terminology (CPT) codes needed for the correct adjudication of applicable Medicaid claims. The NCCI Medicaid Policy Manual and the NCCI Medicaid Technical Guidance Manual contain additional requirements for implementation of the NCCI methodologies. The Medicaid NCCI methodologies must be applied to Medicaid fee-for-service claims submitted with, and reimbursed on the basis of, HCPCS codes and CPT codes. This includes claims reimbursed on a fee-for-service basis in state Medicaid Primary Care Case Management managed care programs. Application of NCCI methodologies to fee-for-service claims processed by other entities, including limited benefit plans or Managed Care Organizations, is not required; however, if SMAs require the application of NCCI methodologies to fee-for-service claims processed by such entities, then such entities must meet NCCI program requirements, including compliance with the NCCI Medicaid Policy Manual and the NCCI Medicaid Technical Guidance Manual. 45 CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Per the Department of Health and Human Services (the Department), the edits required by the above criteria reside in the Medicaid Management Information System (MMIS) and are activated based on responses sent back to MMIS from Cotiviti, a third-party vendor. MMIS is managed by Conduent. Conduent has a SOC1 report prepared to report on the fairness of the presentation of management?s description of the service organization?s system and the suitability of the design of the controls to achieve the related control objectives included in the description as of a specified date. The Conduent SOC1 report for the period July 1, 2019 to June 30, 2020 did not include consideration of the NCCI process with Cotiviti and the related NCCI edits within MMIS. Based on this, there is no ability to validate the NCCI process as the control environment and control objectives were not included the SOC report. Cause The cause of the condition found was primarily due to the Departments lack of recognizing and notifying Conduent of the requirement to test the automatic MMIS NCCI edits within the SOC1 report. Effect The six required Medicaid NCCI methodologies to ensure that only proper payments of procedures are reimbursed may not be completely and correctly implemented by the Department. Questioned Costs None. Recommendation We recommend for the Conduent SOC1 report for the period July 1, 2020 to June 30, 2021, the Department implement a process to ensure the auditor of MMIS tests the automatic NCCI edits for the suitability of the design of the controls to achieve the related control objectives and properly includes any additional general control environment. View of Responsible Officials We concur. Conduent will update the narrative within the SOC 1 document for Claims Processing Control Objective 5 to include NCCI editing from SOC1 2021 audit (audit period July 1, 2020 to June 30, 2021) onwards. The auditing firm will update the objective tracker to include a sample selection of claims that would have NCCI edits on them. The SOC1 report will be provided to the State. Anticipated Completion Date Completion of the FY2021 SOC audit. Contact Person Ken Gagne, MMIS Technology Manager

Finding Reference Number: 2020-025 NH Department of Human Services Opioid STR (93.788) Federal Award Numbers: 3H79T1081685-01, 6H79T1081685-01M003, 1H79T1080246-01 Federal Award Year: 2018, 2019 U.S. Department of Health and Human Services Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2019-023 Statistically Valid Sample: No Criteria A pass-through entity must: 1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.331(a); 2. Evaluate each subrecipient?s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.331(b)); and 3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.331(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition Under the State Targeted Response to the Opioid Crisis (STR) program, the New Hampshire Department of Health and Human Services (the Department) enters into grant agreements with third parties to provide evaluation and treatment services to individuals with an opioid substance abuse disorder. On a monthly basis, the subrecipient submits a request for reimbursement for services that were rendered under that month. As part of our testwork over the subrecipient monitoring process, we noted the following as of the year ending June 30, 2019: A. The Department communicates award information to subrecipients through the approved agreement. Per review of the agreement, for all 9 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.331. Specifically, the following elements were not communicated: a. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414); b. Identification of whether the award is R&D; and c. The federal award date. B. We were unable to obtain documentation to support that a risk assessment had been performed for each of the 9 subrecipients selected for testwork. As a result, it was unclear as to what type of during the award monitoring was required to be performed over the 9 subrecipients selected for testwork. Cause The cause of the condition found was primarily due to the following: ? The Department is in the process of modifying its subrecipient grant agreements in response to a corrective action plan that is being implemented as a result of a similar finding identified in the prior year. As new grant agreements are executed, the required information will be communicated to subrecipients. The 9 grant agreements reviewed as part of our testwork were not newly executed agreements as the subrecipient grant expenditures incurred during the audit period were associated with amendments on existing agreements. The changes being implemented on new subrecipient agreements are not being made to amendments to existing agreements. ? The Department requires a risk assessment to be performed prior to entering into a subrecipient contact. For each of the 9 subrecipient selected for testwork, the contracts were entered into prior to the date in which the Department?s risk assessment policy went into effect in June of 2018. The Department has made some changes to its risk assessments process; however, those changes did not go into effect until State fiscal year 2021. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.331(a) and 2 CFR section 200.331(b). Questioned Costs Not determinable. Recommendation We recommend that the Department continue to review its existing policies and procedures to ensure that the Department complies with the provisions of 2 CFR section 200.331(a) and 2 CFR section 200.331(b). This would include ensuring that: 1. All required award information is communicated to subrecipients; 2. A documented risk assessment is performed over all subrecipients and the results of that risk assessment is used to evaluate the types of monitoring procedures that will be performed over the subrecipient; and View of Responsible Officials A. We concur the Department did not communicate award information to subrecipients through the approved contract as required by 2 CFR 200.331 (a). The remedy has already been implemented. a. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414) ? Indirect cost rates were added to Exhibit C of the Department?s contracts in April 2020. b. Identification of whether the award is R&D ? R&D identification was added to Exhibit C of the Department?s contracts in February 2020. c. Federal award date ? The Federal Award Date was added to Exhibit C of the Department?s contracts. B. We concur with the finding. We consider the finding to be fully resolved through Department policy and Department wide implementation. However, it should be noted full compliance will not be achieved for one to two contact cycles due to timing. The Department began addressing the issue of Subrecipient Monitoring issue in June 2017 when the first Grants Administrator was hired. The Department finalized the Subrecipient Monitoring Policy, which encompasses the financial and programmatic risk assessments as well as the subrecipient monitoring, on June 1, 2018. The Department provided user training on the subject in February and September 2018, training over one hundred forty-six staff. However, only brand new procurements utilized this policy during the initial roll out of this policy. The Department hired a new Grants Administrator in May 2019. The full Subrecipient Monitoring policy rolled out to all procurements, including sole source, amendments, and renewals, effective August 1, 2020. The Contracts Unit received specialized subrecipient monitoring training on May 13 and October 28, 2020. Department wide training to all staff occurred weekly between September 8 and November 3, 2020. The Grants Office provided additional targeted training to Program staff through team meetings. Over one hundred fifty Program and Finance staff received training. Annual training will be held in September each year. Refresher training or training for new staff is available upon request from the Grants Office. Additionally, the Grants Office website launched in June 2020, which offers Program, Finance, and Contracts Unit staff access to the all the Grants Office policies, including the subrecipient monitoring policy, as well as training modules, slides, and tools. The training has also been recorded and is available on this site. The Subrecipient Monitoring Policy requires Program to determine whether any vendor which receives funds in exchange for goods or services is a Contractor or Subrecipient. Determined subrecipients receive an Appendix B, which includes an eighteen question questionnaire and requirements for submitting financial data. This information is used to populate the Risk Assessment Tool, which shows any risks pertinent to a subrecipient and the subaward. Based on the risks shown, Program chooses monitoring activities to mitigate the risks and the Contracts Unit memorializes these choices in the contract. The Grants Office works closely with the Contracts Unit to ensure compliance with the Subrecipient Monitoring policy. Anticipated Completion Date A. Completed. B. Policy implementation complete. Contact Person Melissa Kelleher, Grants Administrator

Finding Reference Number: 2019-003NH Department of JusticeCrime Victim Assistance (16.575)Federal Award Numbers: 2015-VA-GX-0007, 2016-VA-GX-0061, 2017-VA-GX-0044Federal Award Year: 2014, 2015, 2016U.S. Department of JusticeCompliance Requirement: Subrecipient MonitoringType of Finding: Significant Deficiency and NoncompliancePrior Year Finding: NoStatistically Valid Sample: NoCriteriaA pass-through entity must: monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.331(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means.The recipient must assure that the its subrecipients will comply with the conditions of the Victims of Crime Act (VOCA) of 1984 section, 1404(a)(2), and 1404(b)(1) and (2), 42 U.S.C. 10603(a)(2) and (b)(1) and (2) (and the applicable program guidelines and regulations), as required. Specifically, the State certifies that funds under this award will not be used to supplant state and local public funds that would otherwise be available or crime victim assistance, 42 U.S.C. 10603(a)(2).Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ConditionAs part of the Crime Victim Assistance program, the New Hampshire Department Justice (the Department) enters into grant agreements with local entities to provide services to victims of various types of crimes. As part of our testwork over the subrecipient monitoring process, we noted the following as of the year ending June 30, 2019:A. The Department maintains a spreadsheet as a tracking mechanism to document whether or not their subrecipients are required to submit Uniform Guidance reports. However, outside of a ?findings? column the Department does not have a documented process in place over the review of Uniform Guidance reports that outlines specifically the types of procedures performed over each Uniform Guidance report received, how they follow up on uncollected reports and how management decision letters are issued. As a result for 5 of the subrecipients selected for testwork, we were unable to verify whether or not the subrecipients Uniform Guidance was appropriately reviewed.B. As part of the grant agreement process, subrecipients are required to sign the agreement, attesting to supplement not supplant assurances. While these assurances are obtained for 20 of the subrecipients selected for testwork, we were unable to identify any documented procedures performed by the Department to ensure the subrecipient is in fact not supplanting funds.CauseThe cause of the condition found was primarily due to the controls in place not being properly designed and operating effectively as well as the following:? While the Department does have formal policies and procedures related to the review of subrecipients Uniform Guidance reports, there are no policies or guidelines on how that review should be documented, what it should encompass, and what documentation should be maintained.? The Department does not have any formal policies or procedures in place to monitor for compliance with supplement not supplant requirements.EffectThe effect of the condition found is that the Department may not have complied with 2 CFR section 200.331(f), and 42 U.S.C. 10603(a)(2).Questioned CostsNot determinableRecommendationWe recommend that the Department continue to review its existing policies and procedures to implement controls to ensure it complies with the provisions of 2 CFR section 200.331(a), 2 CFR section 200.331(f) and 42 U.S.C. 10603(a)(2). This would include ensuring that:1. All required uniform guidance reports are obtained and reviewed by the Department and findings noted in the report are followed up on and resolved by the Department; and2. All subrecipients are reviewed to ensure the subrecipient is in fact not supplanting funds.View of Responsible OfficialsThe New Hampshire Department of Justice ("DOJ") concurs. While the tracking spreadsheet did not have the questions suggested in this finding, no Single Audit findings have occurred that affected a subaward from the DOJ. As such, there is nothing for DOJ to report regarding this issue. In order to provide more information in our records, DOJ has added columns to the DOJ tracking sheet for single audits that indicates the date of receipt, date of review, and who reviewed it.In reference to the supplanting finding, the DOJ does require each subrecipient to attest that the agency is not supplanting funds at the time of award. On a yearly basis, budgets are reviewed for each subrecipient as part of the annual VOCA renewal application. At the time that subrecipients submit their budgets, if their budgets changed from previous years, they are asked to explain that change. For example, if a subrecipient moved personnel costs from match to federal, they are specifically asked about supplanting by making that change. This information is confirmed in writing and often leads DOJ to request that subrecipients modify their budgets to ensure supplanting is not taking place. This information will be maintained in the subrecipients? grant award file. Going forward, the question of supplanting will be asked, again, during on-site monitoring of each subrecipient and the response and appropriate financial documentation will be reviewed and recorded.Anticipated Completion DateCompletedContact PersonThomas Kaempfer, Grants Unit AdministratorTanya Pitman, VOCA Grant AdministratorAnne Edwards, Associate Attorney General

Finding Reference Number: 2019-004NH Department of JusticeCrime Victim Assistance (16.575)Federal Award Numbers: 2015-VA-GX-0007, 2016-VA-GX-0061, 2017-VA-GX-0044Federal Award Year: 2014, 2015, 2016U.S. Department of JusticeCompliance Requirement: Eligibility, Suspension and Debarment, Subrecipient MonitoringType of Finding: Material Weakness and Material NoncompliancePrior Year Finding: NoStatistically Valid Sample: NoCriteriaThe recipient must assure that its subrecipients will comply with the conditions of the Victims of Crime Act (VOCA) of 1984 section, 1404(a)(2), and 1404(b)(1) and (2), 42 U.S.C. 10603(a)(2) and (b)(1) and (2) (and the applicable program guidelines and regulations), as required. Specifically, the State certifies that funds under this award will:(a) Be awarded only to eligible victim assistance organizations, 42 U.S.C. 10603(a)(2);(b) Not be used to supplant state and local public funds that would otherwise be available or crime victim assistance, 42 U.S.C. 10603(a)(2); andNon-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a passthrough entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215.A pass-through entity must: clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)).A pass-through entity must: Evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.331(b)).A pass-through entity must: monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.331(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means.Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ConditionDuring our testwork over allowability, we noted that 4 of 40 payments selected for testwork related to payments made for technology upgrades that were paid directly to 4 different subgrantees of one of the Department?s subrecipient for this program. While the amounts incurred appeared to be allowable under federal regulations, we noted that the Department did not enter into grant agreements with each of these 4 entities that outlined the scope of work. As a result, there was no documentation to support the Department:(a) verified subrecipient eligibility;(b) obtained a suspension and debarment clause;(c) made the required award notification communications;(d) reviewed the A-133 report;(e) performed a risk assessment;(f) assigned monitoring procedures; or(g) obtained a supplement not supplant clause.CauseThe cause of the condition found was primarily due to insufficient controls and procedures to ensure that all payment are made to eligible subrecipients with active agreements that have been approved by the Department.EffectThe effect of the condition found is that the Department did not comply with the eligibility, suspension and debarment and subrecipient monitoring requirements.Questioned CostsNoneRecommendationWe recommend that the Department review its existing policies and procedures and enhance internal control in place to ensure that the Department complies with the provisions 42 U.S.C. 10603(a) (2) and enters into formal agreement with vendors before expending federal dollars. The agreement is important as it outlines the requirements to use Federal funds and the expectations related to the program funding. The Department should maintain documentation to support executed a formal grant agreement, including the Departmental approvals, the subrecipient attestations, and the executed grant agreementView of Responsible OfficialsThe DOJ concurs with this finding. DOJ has reviewed all of its existing policies and procedures and has made necessary changes. The grant referred to in this finding was a one-time grant to reimburse existing subrecipients for technology upgrades. An award document should have been sent at the time the awards were determined and not sending an award document was an oversight. All award documents have since been provided to the subrecipients that received funding under these technology grants. DOJ concurs that it erred and did not follow its internal policy. DOJ has updated the subrecipient monitoring form for agencies that subaward funding to ensure that eligibility for awards is monitored and documented.Anticipated Completion DateCompletedContact PersonThomas Kaempfer, Grants Unit AdministratorTanya Pitman, VOCA Grant AdministratorAnne Edwards, Associate Attorney General

Finding Reference Number: 2019-005NH Department of JusticeCrime Victim Assistance (16.575)Federal Award Numbers: 2015-VA-GX-0007, 2016-VA-GX-0061, 2017-VA-GX-0044Federal Award Year: 2014, 2015, 2016U.S. Department of JusticeCompliance Requirement: ReportingType of Finding: Material Weakness and Material NoncompliancePrior Year Finding: NoStatistically Valid Sample: NoCriteriaFederal Financial Report (FFR) (SF-425/SF-425A (OMB No. 0348-0061)). Recipients use the FFR as a standardized format to report expenditures under Federal awards, as well as, when applicable, cash status (Lines 10.a, 10.b, and 10c). References to this report include its applicability as both an expenditure and a cash status report unless otherwise indicated. Electronic versions of the standard forms are located on agency?s home page.Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ConditionDuring our testwork over the federal reporting process, we were unable to agree the current period expenditures reported to external supporting documentation for 5 reports selected for testwork. The Department prepares the federal report using internally prepared spreadsheets, referred to as VOCA spreadsheets. The Department continuously updates these spreadsheets and does not save the version that was used to prepare the FFR. In addition, the Department does not perform a formal reconciliation between the VOCA spreadsheets and the State of New Hampshire?s centralized accounting system, NHFirst. As such, we were unable to agree the amounts on the FFR to the underlying supporting records. As a result, we were unable to verify whether or not the federal reports filed were complete and accurateCauseThe cause of the condition found was primarily due to the lack of internal controls and procedures in place to ensure documentation to support the FFR, as filed, is maintained by the Department and that the internal spreadsheets used to prepare the FFR is reconciled to NHFirst.EffectThe effect of the condition found is that the Department may not have filed accurate federal reports.Questioned CostsNot determinableRecommendationWe recommend the Department review its existing policies and procedures to implement policies and controls to ensure it complies with the federal financial reporting requirements. These procedures should include that for each FFR filed, the Department maintains accounting records which support the amounts reported. We also recommend that the Department take steps to ensure the records maintained internally agree to the State?s accounting system of record, NHFirst.View of Responsible OfficialsThe DOJ concurs with this Finding. The Federal Financial Reports filed at the time with the US Department of Justice were correct. However, subsequent adjustments and reconciliations to the awards ultimately indicted previous reporting to be incorrect. Each FFR filed with US DOJ indicates that the FFR is ?updated? and that the cumulative numbers are accurate. The FFR website does not allow data entry into the cumulative numbers section, only the reporting period. This causes data entry to be skewed to report numbers to match the cumulative amounts. This information was provided to the auditors during the audit. Due to systemic improvements in the accounting and reconciliation of federal programs, this should no longer be an issue going forward. VOCA Spreadsheets utilized to report the FFR are now being kept as historical back up information to the FFR.Expenditures reported into the VOCA tracking spreadsheets are now entered into the spreadsheet only after posting into the State?s system of record, NHFirst, by the Grants Management Unit accountant. This was a system that was not in place at the beginning of the audit period.Anticipated Completion DateCompletedContact PersonThomas Kaempfer, Interim Director of AdministrationTanya Pitman, VOCA Grant AdministratorAnne Edwards, Associate Attorney General

Finding Reference Number: 2019-006NH Department of JusticeCrime Victim Assistance (16.575)Federal Award Numbers: 2015-VA-GX-0007, 2016-VA-GX-0061, 2017-VA-GX-0044Federal Award Year: 2014, 2015, 2016U.S. Department of JusticeCompliance Requirement: Cash ManagementType of Finding: Material Weakness and Material NoncompliancePrior Year Finding: NoStatistically Valid Sample: NoCriteriaNon-Federal entities must establish written procedures to implement the requirements of 2 CFR section 200.305 (2 CFR section 200.302(b)(6)).Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ConditionDuring our testwork over cash management for the Crime Victim Assistance program we noted the New Hampshire Department Justice (the Department) utilizes the State?s New Hampshire First (NHFirst) accounting system to complete and their monthly cash draws. We noted for 3 of 5 cash draws selected for testwork that the Department was unable to reconcile the amount drawn back the underlying expenditures. As a result, we were unable to conclude whether or not the balances drawn were complete and accurate. Overall, it appeared that the Department was in a net underdrawn position for the 3 draws noted above.CauseThe cause of the condition found was primarily due to the lack of internal controls and procedures in place to ensure documentation to support the cash draw is maintained by the Department and that the documentation maintained agrees to the States NHFirst system, the State accounting system of record.EffectThe effect of the condition found is that the Department may not have drawn down the appropriate amount of funds based on the federal expenditures incurred, resulting in potential unallowable costs.Questioned CostsNot determinableRecommendationWe recommend the Department review its existing policies and procedures to implement policies and controls to ensure it complies with the cash management requirements, including maintaining accounting records which support the amounts drawn on each federal draw.View of Responsible OfficialsThe DOJ concurs. At the time the draws were completed for each of the samples selected they were correct. However, subsequent adjustments and reconciliations ultimately provided reporting for those periods to be no longer correct. Reconciliations after the fact corrected previous cash draws. Cumulative cash draws are accurate. Due to systemic improvements since June 30, 2018, in the accounting and reconciliation of federal programs, this inaccuracy should no longer be a concern going forward. Existing policies and procedures on cash draws were last updated to reflect these policy improvements. Improved reconciliation practices performed by the accountant will reduce future problems with cash draws.Anticipated Completion DateCompletedContact PersonThomas Kaempfer, Interim Director of AdministrationTanya Pitman, VOCA Grant AdministratorAnne Edwards, Associate Attorney General

Finding Reference Number: 2019-007NH Department of EducationTitle I Grants to Local Educational Agencies (84.010)Federal Award Numbers: S010A170029, S010A180029Federal Award Year: 2018, 2019U.S. Department of EducationCompliance Requirement: Special Tests and Provisions ? Assessment System SecurityType of Finding: Material Weakness and Material NoncompliancePrior Year Finding: 2018-026Statistically Valid Sample: NoCriteriaStates, in consultation with Local Educational Agencies (LEAs), are required to establish and maintain an assessment system that is valid, reliable, and consistent with relevant professional and technical standards. Within their assessment system, State Educational Agencies (SEA) must have policies and procedures to maintain test security and ensure that LEAs implement those policies and procedures (Section 1111(b)(2)(B)(iii) of the ESEA (20 USC 6311(b)(2)(B)(iii))).Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ConditionDuring the year ending June 30, 2019, the New Hampshire Department of Education (the Department) implemented an on-site monitoring process over LEA?s to ensure that the LEA had appropriately implemented required policies and procedures related to assessment security requirements. During our testwork over the Department?s on-site monitoring process, we noted that for 4 of 9 on-site monitoring reviews selected for testwork the Department was unable to provide documentation to support that the on-site monitoring review had been performed. As a result, we were unable to determine that the Department had complied with its policies and procedures and if any deficiencies were noted as a result of the on-site monitoring review, that the deficiencies were followed up on to ensure timely correction action was taken by the LEA.CauseThe cause of the condition found was primarily due to employee turnover within the Department. The 4 on-site monitoring visits had been performed by 1 employee that subsequently left the Department and their electronic files were not maintained to support that the on-site monitoring visit had been performed. The Department did not have sufficient internal controls to ensure that documentation to support it had performed the required on-site monitoring procedures related to assessment security as required by its policies and procedures was properly maintained and was unable to determine whether or not any deficiencies identified during the on-site review had been timely corrected by the LEA to ensure compliance with federal regulations.EffectThe effect of the condition found is that the LEAs may not be in compliance with system security assessment requirements and the Department may not have taken timely action to ensure that corrective action was appropriately taken by the LEA.Questioned CostsNoneRecommendationWe recommend that the Department continue to review its existing policies and procedures over assessment security requirements and implement internal controls to ensure that documentation related to its on-site monitoring reviews over LEAs is properly maintained to support the results of the on-site monitoring review and that deficiencies identified during the review are followed up on timely.View of Responsible OfficialsWe concurThis finding is a repeat finding (Finding 2018-026). The NHDOE Division of Learner Support had committed to developing and implementing a procedure document no later than March 31, 2020.Anticipated Completion DateMarch 31, 2020Contact PersonLindsey Scribner, Agency Audit Manager, Bureau of Federal Compliance

Finding Reference Number: 2019-008NH Department of EducationTitle I Grants to Local Educational Agencies (84.010)Federal Award Numbers: S010A170029, S010A180029Federal Award Year: 2018, 2019U.S. Department of EducationCompliance Requirement: Special Tests and Provisions - Annual Report Card, High School Graduation RateType of Finding: Material Weakness and Material NoncompliancePrior Year Finding: 2018-030Statistically Valid Sample: NoCriteriaA State Educational Agency (SEA) and its Local Educational Agencies (LEAs) must report graduation rate data for all public high schools at the school, LEA, and State levels using the 4-year adjusted cohort rate and, at an SEA?s or LEA?s discretion, extended-year adjusted cohort rates. Graduation rate data must be reported both in the aggregate and disaggregated by subgroup in section 1111(c)(2) of the ESEA using a 4-year adjusted cohort graduation rate (and any extended-year adjusted cohort rates). (ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(25), (23)). Except as noted below, only students who earn a regular high school diploma may be counted as a graduate for purposes of calculating graduation rates. The term ?regular high school diploma means the standard high school diploma that is awarded to the preponderance students in the State and that is fully aligned with the State standards (but not to alternate academic achievement standards for students with the most significant cognitive disabilities) or a higher diploma. A regular high school diploma does not include a recognized equivalent of a diploma, such as a general equivalency diploma, certificate of completion, certificate of attendance, or similar lesser credential (ESEA section 8101(43). An SEA may, but is not required to, award a State-defined alternate diploma for students with the most significant cognitive disabilities who take an alternate assessment aligned with alternate academic achievement standards. That the diploma must be standards based, aligned with the State?s requirements for a regular high school diploma, and obtained within the time period for which the State ensure the availability of a free appropriate public education. If an SEA awards an alternate diploma, the SEA may count those students in its four-year and any extended-year adjusted cohort graduation rate, even if the student takes more than four years to receive the alternate diploma.To remove a student from the cohort, a school or LEA must confirm, in writing, that the student transferred out, emigrated to another country, transferred to a prison or juvenile facility, or is deceased. To confirm that a student transferred out, the school or LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. A student who is retained in grade, enrolls in a GED program, or leaves school for any other reason may not be counted as having transferred out for the purpose of calculating the graduation rate and must remain in the adjusted cohort (ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(25), (23)).Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ConditionDuring the year ending June 30, 2019, the New Hampshire Department of Education (the Department) implemented an on-site programmatic monitoring process over LEAs to ensure that the LEA had appropriately complied with the terms and conditions of their grant agreement and with federal regulations. As part of the programmatic on-site monitoring review process, the Department was to review and ensure that there were policies and procedures in place at the LEA related to the removal of students from the cohort. During our testwork over the Department?s programmatic on-site monitoring reviews, we noted that for all 3 of the on-site monitoring reviews selected for testwork the requirement related to the removal of students from the cohort was not monitored.CauseThe cause of the condition found was primarily due to the fact that the Department is in the process of implementing its new programmatic on-site monitoring process. While the monitoring tool used by the Department included a component to review the LEA?s process for removing students from the cohort, the Department has not yet developed and implemented specific internal controls and procedures that it will perform to monitor this component of compliance.EffectThe effect of the condition found is that the Department did not sufficiently monitor the LEA?s compliance with policies and procedures related to the removal of students from the cohort to ensure that graduation rates are accurately reported to the Department.Questioned CostsNoneRecommendationWe recommend that the Department continue to review its existing policies and implement controls and procedures over the monitoring of the accuracy of the cohort at the LEA and related accuracy of graduation rates to ensure that specific monitoring procedures are developed and implemented to appropriately monitor the federal requirement at the LEA.View of Responsible OfficialsWe concurThis finding is a repeat finding (Finding 2018-030). The NHDOE Division of Learner Support intends to include confirming that LEAs are maintaining the appropriate student documentation as part of the Established Title I, Part A subrecipient monitoring program. Title I, Part A program monitoring was completed by Division staff during the spring of 2019. While the current Title I, Part A Program Compliance Monitoring Guide 2018-2019 documents speak to the requirement that an LEA must have written documentation that a student transferred out, it does not direct the LEA to provide any supporting documentation or describes how the NHDOE will confirm the existence of the documentation.Anticipated Completion DateMarch 31, 2020Contact PersonLindsey Scribner, Agency Audit Manager, Bureau of Federal Compliance

Finding Reference Number: 2019-009NH Department of EducationSpecial Education Cluster (84.027, 84.173)Federal Award Numbers: H027A160103-16A, H027A160103-16B, H027A170103-17A, H027A170103-17B, H027A180103-18A, H027A180103-18BFederal Award Year: 2017, 2018, 2019U.S. Department of EducationCompliance Requirement: Subrecipient MonitoringType of Finding: Significant Deficiency and NoncompliancePrior Year Finding: NoStatistically Valid Sample: NoCriteriaA pass-through entity must clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.331(a).Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ConditionAs part of the IDEA cluster, the New Hampshire Department of Education (the Department) enters into grant agreements with local educational agencies to provide special education and related services to eligible children with disabilities. As part of our testwork over the subrecipient monitoring process, we noted that the Department communicates award information to subrecipients through a grant award notice. Per review of the grant award notices issued during the year ending June 30, 2019, we noted that for all 25 subrecipients selected for testwork that the grant award notice did not communicate the following required elements:a. Subrecipient?s unique entity identifierb. Federal Award Identification Numberc. Federal award date of the award to the recipient by the federal agencyd. Subaward period of performance start and end datee. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414)f. Identification of whether the award is R&Dg. Appropriate terms and conditions concerning the close out of the subawardCauseThe cause of the condition found was primarily due to insufficient control procedures in place to ensure that the grant award notifications issued by the Department contained all of the required elements outlined in 2 CFR section 200.331(a).EffectThe effect of the condition found is that the Department did not comply with 2 CFR section 200.331(a).Questioned CostsNoneRecommendationWe recommend that the Department review its existing policies and procedures and implement the appropriate controls to ensure that the Department communicates all required award identification information to subrecipients as outlined within the provisions of 2 CFR section 200.331(a).View of Responsible OfficialsWe concurThe NHDOE Division of Learner Support, Bureau of Student Support is committed to correcting this issue of insufficient controls and noncompliance related to providing award identification information to subrecipients. The Bureau will develop procedures and timelines to address the finding and to ensure all districts receive a Grant Award Notification (GAN). The NHDOE is also going through a Grants Management System (GMS) update which will hopefully send out GANS to districts upon grant approval.Anticipated Completion DateApril 1, 2020Contact PersonLindsey Scribner, Agency Audit Manager, Bureau of Federal Compliance

Finding Reference Number: 2019-010NH Department of EducationCareer and Technical Education ? Basic Grants to States (84.048)Federal Award Numbers: V048A160029-16BFederal Award Year: 2017U.S. Department of EducationCompliance Requirement: Subrecipient MonitoringType of Finding: Material Weakness and Material NoncompliancePrior Year Finding: NoStatistically Valid Sample: NoCriteriaA pass-through entity must:1. Evaluate each subrecipient?s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.331(b)); and2. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.331(d) through (f). This would include ensuring that subrecipients only used funds for career and technical education activities that supplement, not supplant, non-federal funds expended to carry out career and technical education activities and tech-prep activities (Section 311(a) of Perkins IV(20 USC2391(a)).3. In addition to procedures identified as necessary based on the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal awarded provided to the subrecipient from the pass through entity detected through audits, on-site reviews, and other means.Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ConditionThe New Hampshire Department of Education (the Department) enters into grant agreements with local educational agencies (subrecipients) to provide funds to develop the career, technical, and academic skills of secondary and postsecondary schools. As part of our testwork over the subrecipient monitoring process, we noted the following as of the year ending June 30, 2019:A. On an annual basis the Department performs a risk assessment rubric to determine which subrecipients should be subjected to an in-depth programmatic monitoring visit. For 8 of 18 subrecipients selected for testwork, the Department was unable to provide the risk assessment rubric that was completed as part of the programmatic monitoring process.B. For all 3 subrecipients selected for testwork, we were unable to identify any monitoring procedures, either at the time that the grant was awarded or as part of its subrecipient monitoring process, the Department performed to ensure that subrecipients had used funds to supplement and not supplant non-federal funds to carry out career and technical education activities.C. For 2 of 3 programmatic monitoring visits selected for testwork, there was no documentation to support that the Department had sent a formal letter to the subrecipient outlining the results of the programmatic monitoring review or whether or not the Department had ensured that corrective action was taken if required.CauseThe cause of the condition found was primarily due to the insufficient controls and procedures in place over the subrecipient monitoring process to ensure that all required programmatic risk assessments are performed, that supplement not supplant considerations are reviewed as part of the monitoring process and that letters are issued upon conclusion of programmatic monitoring visits.EffectThe effect of the condition found is that noncompliance could exist at the subrecipient level and there would not be controls and procedures in place for the Department to identify the noncompliance timely.Questioned CostsNoneRecommendationWe recommend that the Department review its existing policies and procedures to ensure that the Department complies with the provisions 2 CFR section 200.331(b) and 2 CFR section 200.331(d) through (f). This would include implementing controls and procedures to ensure that:1. A documented programmatic risk assessment is performed over all subrecipients and the results of that risk assessment is used to evaluate the types of monitoring procedures that will be performed over the subrecipient;2. As part of the subrecipient monitoring process the Department should review compliance with supplement not supplant requirements; and3. A formal letter be issued as a result of all programmatic monitoring visits that outlines, if applicable, all items requiring corrective action and that all items that require corrective action are followed up on to ensure the matters identified are resolved timely by the subrecipient.View of Responsible OfficialsWe concur1 A documented programmatic risk assessment is performed over all subrecipients and the results of that risk assessment is used to evaluate the types of monitoring procedures that will be performed over the subrecipient.? Bureau of Career Development is in the process of reworking the risk assessment rubric used to assess risk factors associated with CTE programs funded by Perkins of not meeting performance goals (Core Indicators of Performance).? Annual applications for funds forms submitted for Perkins funds granted to eligible CTE programs will be part of the determination process for targeted monitoring of programs. The Bureau of Career Development will look closely at costs associated with required uses of Perkins funds, and as part of monitoring, we will look at such spending in the programs to be monitored.2 As part of the subrecipient monitoring process the Department reviews compliance with supplement not supplant requirements? The annual application for Perkins funds implemented in February 2020, with a due date of May 31, 2020 includes a justification line for each cost. This line includes items about previous sources of funding, including a question about whether or not the spending is new, was previously funded by Perkins, or was previously funded from other sources. The answer for these items gives reviewers of the annual application for funds the opportunity to question the costs, and not test for supplement, not supplant.3 A formal letter is issued as a result of all programmatic monitoring? As part of a new, two-tiered monitoring process the Bureau of Career Development will issue a monitoring letter to each Perkins subrecipient in April of each year. The letter will include CTE center-wide (non-Federal) findings, recommendations, and corrective actions, and the results, including findings, recommendations, and corrective actions for programs selected as part of the programmatic monitoring (Perkins, Federal).? Follow up on the letter will take the form of a corrective action plan, developed by the Bureau of Career Development in collaboration with the CTE director of the center with programs monitored. This corrective action plan will include steps taken to address compliance issues identified in the program monitoring letter, along with due dates for completion of activities to resolve the issues.Anticipated Completion DateJune 1, 2020Contact PersonLindsey Scribner, Agency Audit Manager, Bureau of Federal Compliance

Finding Reference Number: 2019-011NH Department of Human ServicesAging Cluster (93.044, 93.045, 93.053)Federal Award Numbers: 18AANHT3SS, 18AANHT3CM, 18AANHT3HD, 18AANHNSIP, 1901NHOANSFederal Award Year: 2018, 2019U.S. Department of Health and Human ServicesCompliance Requirement: Subrecipient MonitoringType of Finding: Material Weakness and Material NoncompliancePrior Year Finding: NoStatistically Valid Sample: NoCriteriaA pass-through entity must:1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.331(a);2. Evaluate each subrecipient?s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.331(b)); and3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.331(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means.Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ConditionAs part of the Aging Cluster, the New Hampshire Department of Health and Human Services (the Department) enters into grant agreements with local entities to provide congregate and home delivery meals to program participants. On a monthly basis, the subrecipient submits a request for reimbursement that is composed of the number of meals served during that month and the subrecipient is reimbursed a set rate for each meal served. As part of our testwork over the subrecipient monitoring process, we noted the following as of the year ending June 30, 2019:A. The Department communicates award information to subrecipients through the approved contract. Per review of the contract, for all 5 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.331(a). Specifically the following elements were not communicated:a. Federal award dateb. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414)c. Identification of whether the award is research and development (R&D)B. The Department did not perform a risk assessment for each of the 5 subrecipients selected for testwork. As a result, it was unclear what type of during the award monitoring was required to be performed over the 5 subrecipients selected for testwork.C. The Department?s during the award monitoring is primarily composed of the Department?s review process over monthly invoices submitted for reimbursement by the subrecipient. The Department reviews the invoices prior to payment indicating that the invoice appears reasonable and allowable under federal regulations. In addition, the Department also reviews meal count trends for each subrecipient to look for trends in number of meals provided. While this review is performed at the invoice level, for each of the 5 subrecipients selected for testwork, the Department was unable to provide any documentation to support that it had performed any monitoring procedures to ensure that the actual meal count information submitted by the subrecipient is accurate and that there is sufficient documentation maintained by the subrecipient to support the meals served. As the Department does not have a formal subrecipient monitoring policy that outlines the types and frequency of monitoring activities to be performed and there was no risk assessment performed for these subrecipients, it was unclear whether or not the exclusion of these types of monitoring activities was appropriate.CauseThe cause of the condition found was primarily due to the following:? Insufficient controls and procedures to ensure that all required federal award information has been communicated to subrecipients. As this program does not allow for an indirect cost reimbursement and is not R&D, the Department was unaware that it was required to formally communicate that these items are not applicable to the federal award.? The Department requires a risk assessment to be performed prior to entering into a subrecipient contact. For each of the 5 subrecipient selected for testwork, the contracts were 5 years old and were entered into before the Department?s risk assessment policy was implemented. The original contracts reviewed as part of our audit were for a 3 year period with 2 one year renewal options exercised. The Department?s risk assessment policy went into effect in June of 2018 and as a result, these existing agreements are not subject to the provisions of the risk assessment policy.? The Department currently does not have a documented subrecipient monitoring policy that outlines the types and frequency of monitoring procedures that will be performed over this federal program and how those monitoring procedures will be documented.EffectThe effect of the condition found is that the Department did not comply with 2 CFR section 200.331(a) and 2 CFR section 200.331(b). In addition, as there is no documented subrecipient monitoring policy for this program, fiscal and programmatic monitoring requirements that the subrecipient is required to comply with may not be appropriately or timely monitored for compliance by the Department, resulting in potential unallowable costs being charged to the program.Questioned CostsNoneRecommendationWe recommend that the Department continue to review its existing policies and procedures to ensure that the Department complies with the provisions of 2 CFR section 200.331(a), 2 CFR section 200.331(b) and 2 CFR section 200.251. This would include implementing controls and procedures to ensure that:1. All required award information is communicated to subrecipients;2. A documented risk assessment is performed over all subrecipients and the results of that risk assessment is used to evaluate the types of monitoring procedures that will be performed over the subrecipient; and3. As a result of the risk assessment performed, monitoring activities are performed over subrecipients to ensure compliance with the terms and conditions of its subrecipient grant agreement. The procedures that are to be performed based upon the assessed level for of risk should be outlined in a documented subrecipient monitoring policy that is specific to this program. The subrecipient monitoring policy should document the types and frequency of monitoring activities that will be performed.View of Responsible OfficialsWe partially concur with the findings.1. The Department has developed an exhibit to address the required notification under 2 CFR 200.331. This exhibit will be included in all procurements with Federal Funding, and will be implemented in the Spring of 2020.2. The Department finalized the Subrecipient Monitoring Policy, which encompasses the financial and programmatic risk assessments as well as the subrecipient monitoring, on June 1, 2018. The Department provided user training on the subject in February 2018. However, only brand new competitively bid procurements utilized this policy during the initial roll out of this policy. The audited procurements were amendments, not new procurements, and therefore were not included in the roll out of the Subrecipient Monitoring policy at that time.3. The Department is currently rolling out the Subrecipient Monitoring policy to all procurements. Combined with the subrecipient training module and tools, staff have been trained on contract management and monitoring tools to better ensure compliance with Uniform Guidance requirements. This is to be followed by ongoing specialized trainings, supporting tools, and procedures for expenditure testing, site visits, files reviews, and corrective action planning.Anticipated Completion DateJune 30, 2020Contact PersonMelissa Kelleher, Grants Administrator

Finding Reference Number: 2019-012NH Department of Human ServicesAging Cluster (93.044, 93.045, 93.053)Federal Award Numbers: 18AANHT3SS, 18AANHT3CM, 18AANHT3HD, 18AANHNSIP, 1901NHOANSFederal Award Year: 2018, 2019U.S. Department of Health and Human ServicesCompliance Requirement: Matching, Level of Effort, EarmarkingType of Finding: Significant DeficiencyPrior Year Finding: NoStatistically Valid Sample: NoCriteriaThe State Agency must spend for both services and administration at least the average amount of State funds it spent under the State plan for these activities for the 3 previous fiscal years. If the State Agency spends less than this amount, the Assistant Secretary for Aging reduces the State?s allotments for supportive and nutrition services under this part by a percentage equal to the percentage by which the State reduced its expenditures (42 USC 3029 (c); 45 CFR section 1321.49).Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ConditionAs part of the process to track and monitor compliance with federal maintenance of effort requirements, the New Hampshire Department of Health and Human Services (the Department) maintains a spreadsheet called the Maintenance of Effort Worksheet (the Worksheet). The Worksheet is updated quarterly and contains quarterly expenditure data from the Department?s cost allocation plan to support the expenditures used to track compliance. During our testwork over compliance with maintenance of effort requirements, we noted that the expenditure data contained within the quarter ending September 30, 2018 Worksheet was not accurate and the Department was unaware of the error. Upon request the Department updated the Worksheet and was able to show that while the expenditure data had been incorrect, the Department maintained compliance with the required maintenance of effort requirement.CauseThe cause of the condition found was primarily due to insufficient review controls over the accuracy of the Worksheet to detect errors with the expenditure data used to track the maintenance of effort requirement.EffectThe effect of the condition found is that the Department may not meet its annual maintenance of effort requirement and the noncompliance would not be timely identified due to errors within the Worksheet.Questioned CostsNoneRecommendationWe recommend that the Department review its existing procedures to track annual maintenance of effort requirements and implement necessary management review controls over the Worksheet to ensure that the Worksheet is complete and accurate.View of Responsible OfficialsThe Department concurs. Although the error did not produce any erroneous outcomes regarding meeting the Maintenance of Effort, the spreadsheet detailing expenditures did contain a calculation error. As a secondary control, a signature block has been added to the spreadsheet for the preparer to sign, as well as a place for the Supervisor to sign after review. The first signatures will appear on the MOE spreadsheet that is due to be updated mid-April 2020 for the quarter ended March 31, 2020.Anticipated Completion DateApril 30, 2020Contact PersonJayne Jackson, Finance Director ? DLTSS

Finding Reference Number: 2019-013NH Department of Human ServicesAging Cluster (93.044, 93.045, 93.053)Federal Award Numbers: 18AANHT3SS, 18AANHT3CM, 18AANHT3HD, 18AANHNSIP, 1901NHOANSFederal Award Year: 2018, 2019U.S. Department of Health and Human ServicesCompliance Requirement: Special Tests and Provisions ? Distribution of CashType of Finding: Significant DeficiencyPrior Year Finding: NoStatistically Valid Sample: NoCriteriaStates are required to promptly and equitably distribute NSIP cash to recipients of grants or contracts under OAA Title C1 and C2 (42 USC 3030a(d)(4)).Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ConditionOn a monthly basis, subrecipients are required to submit a claim for reimbursement for the Nutritional Services Incentive Program (NSIP). As part of the request for reimbursement, the service providers (subrecipients) are required to submit a ?Meals Unit Summary? report which is completed and certified by the subrecipient?s chief executive. The report breaks out the total number of served meals into eligible and ineligible meals. Each report is submitted to the Business Administrator II for review and approval. During our testwork over NSIP claims paid, for 2 of 15 items selected for testwork the Meals Unit Summary coversheet was not provided. As a result, we were unable to conclude that the accuracy of the meals claimed had been reviewed.CauseThe cause of the condition found was a result of insufficient controls and procedures to ensure a copy of the Meals Unit Summary was retained to support the claim paid.EffectThe effect of the condition found is that the New Hampshire Department of Health and Human Services (the Department) may not maintain sufficient documentation to support the review over the accuracy of the claims paid which could result in unallowable costs being charged to the federal program.Questioned CostsNot determinableRecommendationWe recommend that the Department review its existing policies procedures over the review and approval of claims paid and implement controls to ensure that all appropriate documentation to support claims paid is maintained.View of Responsible OfficialsThe Department concurs. The division does have a procedure in place to require proper documentation for claims reimbursed. The two missing coversheets may have been mislaid. Staff have been reminded to securely attach and maintain all documentation supporting claims paid. As a secondary control, a signature block has been added to the coversheet to allow for the preparer and the supervisor to sign before being sent for processing. This block has been added beginning with the February submissions which will be processed in late March or early April 2020.Anticipated Completion DateApril 30, 2020Contact PersonJayne Jackson, Finance Director ? DLTSS

Finding Reference Number: 2019-014NH Department of Human ServicesTANF Cluster (93.558, 93.714)Federal Award Numbers: 2018G996115, 2019G996115Federal Award Year: 2018, 2019U.S. Department of Health and Human ServicesCompliance Requirement: AllowabilityType of Finding: Significant Deficiency and NoncompliancePrior Year Finding: NoStatistically Valid Sample: NoCriteriaFunds may be used in any manner reasonably calculated to accomplish the purposes of the program as specified in 45 CFR section 260.20.45 CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.ConditionAs part of the benefit eligibility process, the New Hampshire Department of Health and Human Services (the Department) calculates the amount of benefits that a participant is eligible to receive based upon a variety of factors, including a participant?s family size, gross earned income, certain income disallowances and standard deductions. During our testwork over the eligibility process we noted the following:A. For 1 of 40 participants selected for testwork, the participant case was in pending status as the case was being modified to add another member to the assistance group. As the case was in pending status, when a system upgrade was made to the New Heights System, the Department?s eligibility benefit maintenance system, the income limit amount was not appropriately updated. As the income limit had increased, once the participant?s benefit amount had been calculated, the system incorrectly calculated the wrong benefit amount and as such, the participant was underpaid.B. For 1 of 40 participants selected for testwork, we were unable to substantiate the amount used for the dependent child care deduction used to calculate the participant?s benefit payment and as such, we were unable to conclude the amount paid was accurate.CauseThe cause of the condition found was a result of inadequate review controls in place to ensure the accuracy of the data used to support the calculation of participant benefit payments.EffectThe effect of the condition found is that participant benefit payments may not be accurately paid and could result in unallowable costs charged to the federal program.Questioned CostsNot determinableRecommendationWe recommend that the Department enhance its existing controls and procedures to ensure the data that is utilized by the New Heights system to calculate participant benefit payments is complete, accurate, and supported by the appropriate external documentation.View of Responsible OfficialsWe partially concur. While there are errors regarding the benefit payment, we believe they are isolated occurrences. There are sufficient procedures in place to ensure the calculation of benefits is complete.We will be informing all supervisors of the specific errors found during the audit. We will require the supervisors to include these topics at their next staff meeting.In addition, individual emails will be sent to the staff involved with the errors for additional guidance.Anticipated Completion DateJune 1, 2020Contact PersonColleen McKinlay, Program Specialist IV

Finding Reference Number: 2019-015NH Department of Human ServicesTANF Cluster (93.558, 93.714)Federal Award Numbers: 2018G996115, 2019G996115Federal Award Year: 2018, 2019U.S. Department of Health and Human ServicesCompliance Requirement: Special Tests and Provisions: Child Support Non-CooperationType of Finding: Material Weakness and Material NoncompliancePrior Year Finding: 2018-007Statistically Valid Sample: NoCriteriaIf the State agency responsible for administering the State plan under Title IV-D of the Social Security Act determines that an individual is not cooperating with the State in establishing paternity, or in establishing, modifying or enforcing a support order with respect to a child of the individual, and reports that information to the State agency responsible for TANF, the State TANF agency must (1) deduct an amount equal to not less than 25% from the TANF assistance that would otherwise be provided to the family of the individual and (20 may deny the family any TANF assistance. Health and Human Services (HHS) may penalize a State for up to 5% of the SFAG for failure to substantially comply with this required State child support program (45 CFR sections 264.30 and 264.31)45 CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.ConditionDuring our testwork related to child support non-cooperation, we noted the following:A. For 2 of 40 participants selected for testwork, while the participant had been correctly sanctioned due to non-cooperation, there was documentation maintained within the file that the participant?s sanction should have been lifted due to future cooperation. While the sanction was authorized to be lifted, New Heights, the eligibility maintenance system, was not properly updated and the sanction remained in effect, resulting in an inappropriate reduction of the participant?s benefits.B. For 6 of 40 participants selected for testwork, there was insufficient support maintained within the file to document that the participant had not been cooperating and as a result, it was unclear if the participant?s benefits should have been sanctioned.C. For 1 of 40 participants selected for testwork, the participant?s case file indicated that the participant was issued a letter of non-compliance in July 2017, however the participant was not sanctioned until May 2019. It was unclear why the sanction was not imposed as of July 2017 and if the participant?s benefit payment was accurate during this time period.CauseThe cause of the condition found was a result of inadequate review controls in place to ensure sufficient documentation is maintained to support the beginning and termination of sanction periods related to child support non-cooperation and ensuring that the New Heights system is updated timely to reflect the correct sanction dates.EffectThe effect of the condition found is that participant benefit payments may not be accurately paid and could result in unallowable costs charged to the federal program.Questioned CostsNot determinableRecommendationWe recommend that the Department enhance its existing controls and procedures to ensure the documentation used to support the beginning and termination of sanction periods is maintained and that those dates are accurately reflected within the New Heights System.View of Responsible OfficialsWe partially concur. While there are errors regarding insufficient documentation for child support sanctions, we believe there are sufficient processes in place to ensure documentation is maintained to support these sanctions.We believe that additional communication needs to be given to all staff to reiterate these procedures.We will notify all supervisors in an email explaining the errors that were found during the audit. We will require the supervisors to include these topics at their next staff meeting.Individual emails will be sent to the staff involved with the errors for additional guidance.We have also added an additional slide in our Power Point presentation for new staff.Anticipated Completion DateJune 1, 2020Contact PersonColleen McKinlay, Program Specialist IV

Finding Reference Number: 2019-016NH Department of Human ServicesTANF Cluster (93.558, 93.714)Federal Award Numbers: 2018G996115, 2019G996115Federal Award Year: 2018, 2019U.S. Department of Health and Human ServicesCompliance Requirement: Special Tests and Provisions: Lack of Child Care for Single Custodial Parent of Child under Age SixType of Finding: Material Weakness and Material NoncompliancePrior Year Finding: 2018-007Statistically Valid Sample: NoCriteriaIf an individual is a single custodial parent caring for a child under the age of six, the State may not reduce or terminate assistance for the individual?s refusal to engage in required work if the individual demonstrates to the State an inability to obtain needed child care for one or more of the following reasons: (a) unavailability of appropriate child care within a reasonable distance from the individual?s home or work site; (b) unavailability or unsuitability of informal child care by a relative or under other arrangements; or (c) unavailability of appropriate and affordable formal child care arrangements. The determination of inability to find child care is made by the State. HHS may penalize a State for up to five percent of the SFAG for violation of this provision (42 USC 607(e)(2) and 609(a)(11); 45 CFR sections 261.15, 261.56, and 261.57).45 CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.ConditionDuring our testwork related to sanctions imposed against single custodial parents caring for a child under the age of 6, we noted the following:A. For 2 of 40 participants selected for testwork, there was insufficient documentation in the file to support that the participants should have been sanctioned. As such we were unable to conclude if the sanction was appropriate.B. For 2 of 40 participants selected for testwork, the participant had been appropriately sanctioned for reasons other than inability to find child care. However, subsequently the sanction had been lifted but there was insufficient documentation to support that it was appropriate that the sanction had been lifted.C. For 6 of 40 participants selected for testwork, the participants had been incorrectly sanctioned for reasons other than inability to find child care and as such their benefits were inappropriately reduced.D. For 2 of 40 participants selected for testwork, the participants were appropriately sanctioned for reasons other than inability to find child care, however the sanction when applied to the participants benefit was not applied timely.E. For 2 of 40 participants selected for testwork, the participant was appropriately sanctioned for reasons other than inability to find child care, however the period of time in which the sanction was applied to the participant?s benefits was not accurate based upon the beginning and termination dates documented within the case file.CauseThe cause of the condition found was a result of inadequate review controls in place to ensure sufficient documentation is maintained to support the beginning and termination of sanction periods, that the cause of the sanction is appropriate and ensuring that the New Heights system is updated timely to reflect the correct sanction dates.EffectThe effect of the condition found is that participant benefit payments may not be accurately paid and could result in unallowable costs charged to the federal program.Questioned CostsNot determinableRecommendationWe recommend that the Department enhance its existing controls and procedures to ensure the documentation used to support the beginning and termination of sanction periods is maintained and that those dates are accurately reflected within the New Heights System. In addition, controls and procedures should be implemented to ensure that sanctions are properly reviewed and approved prior to implementation to ensure that that the sanction being imposed is valid.View of Responsible OfficialsWe partially concur. While there are errors regarding sanctions applied to participants benefits, we believe they are isolated occurrences. There are sufficient procedures in place to ensure that proper documentation regarding these sanctions is maintained.Although there are processes in place, additional communication will occur.We will notify all supervisors in an email explaining the errors that were found during the audit. We will require the supervisors to include these topics at their next staff meeting.Individual emails will be sent to the staff involved with the errors for additional guidance.We have also added an additional slide in our Power Point presentation for new staffAnticipated Completion Date:June 1, 2020Contact Person:Colleen McKinlay, Program Specialist IV

Finding Reference Number: 2019-017NH Department of Human ServicesTANF Cluster (93.558, 93.714)Federal Award Numbers: 2018G996115, 2019G996115Federal Award Year: 2018, 2019U.S. Department of Health and Human ServicesCompliance Requirement: Special Tests and Provisions: Penalty for Failure to Comply with Work Verification PlanType of Finding: Material Weakness and Material NoncompliancePrior Year Finding: 2018-009Statistically Valid Sample: NoCriteriaThe State agency must maintain adequate documentation, verification, and internal control procedures to ensure the accuracy of the data used in calculating work participation rates. In so doing, it must have in place procedures to (a) determine whether its work activities may count for participation rate purposes; (b) determine how to count and verify reported hours of work; (c) identify who is a work eligible individual; and (d) control internal data transmission and accuracy. Each State agency must comply with its HHS-approved Work Verification Plan in effect for the period that is audited. HHS may penalize the State by an amount not less than one percent and not more than five percent of the SFAG for violation of this provision (42 USC 601, 602, 607, and 609); 45 CFR sections 261.60, 261.61, 261.62, 261.63, 261.64, and 261.65).45 CFR 75 303(a) states the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.ConditionDuring our testwork related to the compliance with the State?s work verification plan we noted the following:A. For 10 of 40 participants selected for testwork, the documentation to support the hours worked for each participant did not agree to the New Height?s system and as a result, the hours for each participant were under reported.B. For 1 of 40 participants selected for testwork, the participant?s work hours were auto populated within the New Heights system and were not properly adjusted once supporting documentation such as paystubs were received. As a result, the participant?s work hours were over reported.C. For 3 of 40 participants selected for testwork, there was insufficient documentation to support the number of hours worked within the New Heights system for each participant.CauseThe cause of the condition found was a result of inadequate review controls in place to ensure sufficient documentation is maintained to support the number of work hours reported by participants and that the hours worked is accurately reported within the New Heights system.EffectThe effect of the condition found is that the State may not be in compliance with its work verification plan and would not be able to identify the noncompliance timely.Questioned CostsNot determinableRecommendationWe recommend that the Department enhance its existing controls and procedures to ensure the documentation used to support participant workhours is maintained and that the hours reported agree to the documented hours worked and are accurately reflected within the New Heights System.View of Responsible OfficialsWe concur with the findings listed above. The following actions to mitigate future issues have been put in place.? We have redesigned the WPS Activity Tracking Sheet. This will be implemented for the month of March 2020.? A memo was created highlighting the errors found during the audit reminding all staff to follow procedures to prevent errors.? We will be adding additional slides in the Quality Assurance Section of the Core Power Point Training for new staff.Anticipated Completion DateJune 30, 2020Contact PersonKim Runion, Bureau Chief

Finding Reference Number: 2019-018NH Department of Human ServicesCommunity Services Block Grant (93.569)Federal Award Numbers: G-18B1NHCOSR, G-1901NHCOSRFederal Award Year: 2018, 2019U.S. Department of Health and Human ServicesCompliance Requirement: Subrecipient MonitoringType of Finding: Significant Deficiency and NoncompliancePrior Year Finding: NoStatistically Valid Sample: NoCriteriaA pass-through entity must:1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.331(a)2. Evaluate each subrecipient?s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.331(b))Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ConditionAs part of the Community Services Block Grant program, the New Hampshire Department of Health and Human Services (the Department) enters into grant agreements with local entities to provide services to eligible participants. As part of our testwork over the subrecipient monitoring process, we noted the following as of the year ending June 30, 2019:A. The Department communicates award information to subrecipients through the approved contract. Per review of the contract, for each of the 2 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.331(a). Specifically the following elements were not communicated:a. Federal award dateb. Federal Award Identification Number (FAIN)c. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414)d. Identification of whether the award is research and development (R&D)B. The Department was unable to provide support that a programmatic risk assessment was completed for each of the 2 subrecipients selected for testwork as required under the Department?s Subrecipient Monitoring Policy dated March 5, 2018. As a result, it was unclear what type of during the award monitoring was required to be performed over the 2 subrecipients selected for testwork.CauseThe cause of the condition found was primarily due to:? Insufficient controls and procedures to ensure that all required federal award information has been communicated to subrecipients. As this program does not allow for an indirect cost reimbursement and is not R&D, the Department was unaware that it was required to formally communicate that these items are not applicable to the federal award.? The Department requires a risk assessment to be performed prior to entering into a subrecipient contact. There does not appear to be sufficient controls and procedures to ensure that the required risk assessments have been performed or if they are performed that they are retained and used to support the subrecipient monitoring process.EffectThe effect of the condition found is that the Department did not comply with 2 CFR section 200.331(a) and 2 CFR section 200.331(b).Questioned CostsNoneRecommendationWe recommend that the Department continue to review its existing policies and procedures to ensure that the Department complies with the provisions of 2 CFR section 200.331(a) and 2 CFR section 200.331(b). This would include implementing controls and procedures to ensure that t:1. All required award information is communicated to subrecipients;2. A documented risk assessment is performed over all subrecipients and the results of that risk assessment is used to evaluate the types of monitoring procedures that will be performed over the subrecipient.View of Responsible OfficialsWe concur.1. The Department has developed an exhibit to address the required notification under 2 CFR 200.331. This exhibit will be included in all procurements with Federal Funding, and will be implemented in the Spring of 2020.2. The Department finalized the Subrecipient Monitoring Policy, which, encompasses the financial and programmatic risk assessments as well as the subrecipient monitoring, on June 1, 2018. The Department provided user training on the subject in February 2018. However, only brand new competitively bid procurements utilized this policy during the initial roll out of this policy. The audited procurements were amendments, not new procurements, and therefore were not included in the roll out of the Subrecipient Monitoring policy at that time.3. The Department is currently rolling out the Subrecipient Monitoring policy to all procurements. Combined with the subrecipient training module and tools, staff have been trained on contract management and monitoring tools to better ensure compliance with Uniform Guidance requirements. This is to be followed by ongoing specialized trainings, supporting tools, and procedures for expenditure testing, site visits, files reviews, and corrective action planning.Anticipated Completion DateJune 30, 2020Contact PersonMelissa Kelleher, Grants Administrator

Finding Reference Number: 2019-019NH Department of Human ServicesSocial Services Block Grant (93.667)Federal Award Numbers: 2017G992342, 2018G992342, 2019G992342Federal Award Year: 2017, 2018, 2019U.S. Department of Health and Human ServicesCompliance Requirement: Subrecipient MonitoringType of Finding: Material Weakness and Material NoncompliancePrior Year Finding: NoStatistically Valid Sample: NoCriteriaA pass-through entity must:1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.331(a);2. Evaluate each subrecipient?s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.331(b)); and3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.331(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means.Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ConditionAs part of the Social Services Block Grant program, the New Hampshire Department of Health and Human Services (the Department) enters into grant agreements with local entities to provide a variety of services, including meals, adult day services and comprehensive family services. On a periodic basis, the subrecipient submits a request for reimbursement for the services that are rendered which is reviewed and approved by the Department prior to payment. As part of our testwork over the subrecipient monitoring process, we noted the following as of the year ending June 30, 2019:A. The Department communicates award information to subrecipients through the approved contract. Per review of the contract, for all 6 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.331(a). Specifically the following elements were not communicated:a. Federal award dateb. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414)c. Identification of whether the award is research and development (R&D)B. The Department did not perform a risk assessment for each of the 6 subrecipients selected for testwork. As a result, it was unclear what type of during the award monitoring was required to be performed over the 6 subrecipients selected for testwork.D. The Department?s during the award monitoring is primarily composed of the Department?s review process related to requests for reimbursement submitted by the subrecipient. The Department reviews the invoices prior to payment indicating that the invoice appears reasonable and allowable under federal regulations. For each of the 6 subrecipients selected for testwork, the Department was unable to provide documentation to support that it had performed additional monitoring procedures over its subrecipients to address whether or not the subrecipient had sufficient documentation to support that the costs requested for reimbursement were allowable or whether or not the subrecipient had determined participant eligibility accurately if eligibility requirements were applicable. As the Department does not have a formal subrecipient monitoring policy that outlines the types and frequency of monitoring activities to be performed and there was no risk assessment performed for these subrecipients, it was unclear whether or not the exclusion of these types of monitoring activities was appropriate.CauseThe cause of the condition found was primarily due to:? Insufficient controls and procedures to ensure that all required federal award information has been communicated to subrecipients. As this program does not allow for an indirect cost reimbursement and is not R&D, the Department was unaware that it was required to formally communicate that these items are not applicable to the federal award.? The Department requires a risk assessment to be performed prior to entering into a subrecipient contact. For each of the 6 subrecipient selected for testwork, the contracts were entered into prior to the date in which the Department?s risk assessment policy went into effect in June of 2018.? The Department currently does not have a documented subrecipient monitoring policy that outlines the types and frequency of monitoring procedures that will be performed over this federal program and how those monitoring procedures will be documented.EffectThe effect of the condition found is that the Department did not comply with 2 CFR section 200.331(a) and 2 CFR section 200.331(b). In addition, as there is no documented subrecipient monitoring policy for this program, fiscal and programmatic monitoring requirements that the subrecipient is required to comply with may not be appropriately or timely monitored for compliance by the Department, resulting in potential unallowable costs being charged to the program.Questioned CostsNot determinableRecommendationWe recommend that the Department continue to review its existing policies and procedures to ensure that the Department complies with the provisions of 2 CFR section 200.331(a), 2 CFR section 200.331(b) and 2 CFR section 200.251. This would include implementing controls and procedures to ensure that:1. All required award information is communicated to subrecipients;2. A documented risk assessment is performed over all subrecipients and the results of that risk assessment is used to evaluate the types of monitoring procedures that will be performed over the subrecipient; and3. As a result of the risk assessment performed, monitoring activities are performed over subrecipients to ensure compliance with the terms and conditions of its subrecipient grant agreement. The procedures that are to be performed based upon the assessed level for of risk should be outlined in a documented subrecipient monitoring policy that is specific to this program. The subrecipient monitoring policy should document the types and frequency of monitoring activities that will be performed.View of Responsible OfficialsWe concur.1. The Department has developed an exhibit to address the required notification under 2 CFR 200.331. This exhibit will be included in all procurements with Federal Funding, and will be implemented in the Spring of 2020.2. The Department finalized the Subrecipient Monitoring Policy, which, encompasses the financial and programmatic risk assessments as well as the subrecipient monitoring, on June 1, 2018. The Department provided user training on the subject in February 2018. However, only brand new competitively bid procurements utilized this policy during the initial roll out of this policy. The audited procurements were amendments, not new procurements, and therefore were not included in the roll out of the Subrecipient Monitoring policy at that time.3. The Department is currently rolling out the Subrecipient Monitoring policy to all procurements. Combined with the subrecipient training module and tools, staff have been trained on contract management and monitoring tools to better ensure compliance with Uniform Guidance requirements. This is to be followed by ongoing specialized trainings, supporting tools, and procedures for expenditure testing, site visits, files reviews, and corrective action planning.Anticipated Completion DateJune 30, 2020Contact PersonMelissa Kelleher, Grants Administrator

Finding Reference Number: 2019-020NH Department of Health and Human ServicesMedicaid Cluster (CFDA 93.775, 93.777, 93,778)Federal Award Numbers: 1805NH5MAP, 1905NH5MAP, 1805NH5ADM, 1905NH5ADM, 1805NHIMPL, 1905NHIMPFederal Award Years: 2018, 2019U.S. Department of Health and Human ServicesCompliance Requirement: Special Tests and Provision: Utilization Control and Program IntegrityType of Finding: Significant Deficiency and NoncompliancePrior Year Finding: 2018-002Statistically Valid Sample: NoCriteriaThe State Plan must provide methods and procedures to safeguard against unnecessary utilization of care and services. In addition, the State must have (1) methods of determining criteria for identifying suspected fraud cases; (2) methods for investigating these cases; and (3) procedures, developed in cooperation with legal authorities, for referring suspected fraud cases to law enforcement officials (42 CFR Parts 455, 456, and 1002).Per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ConditionThe Bureau of Improvement and Integrity, Program Integrity Unit (PIU) within the Department of Health and Human Services (the Department), is responsible for establishing and using written criteria for evaluating the appropriateness and quality of Medicaid services as a means of detecting and correcting potential occurrences of provider fraud, waste and abuse. The PIU manages the Department?s contract with the external quality improvement organization (QIO), which performs all in-state, border and specialty retrospective inpatient reviews on the fee for service population. In accordance with the approved contract, the QIO was required to perform 8,000 reviews with half being focused on the prior fiscal years and the remaining portion for 2019 claims.The Department does not have procedures in place to monitor that the conclusions the QIO reached in their review, with the exception of denials, were accurate based on the claims information reviewed. The QIO did not provide sufficient documentation to the Department for acceptances. For 3 of 65 claim denials selected for testwork, the Department was unable to provide the documentation for the denial.Completeness was monitored through the monthly invoice approval process which included cumulative totals of claims reviewed. However, the QIO did not meet their required claim review target and did not review cases throughout state fiscal year 2019. The Department was unable to determine the exact number of cases reviewed but estimated 4,000 cases were outstanding as of June 30, 2019, the end of the contract period with the QIO. Documentation from the QIO was not available.CauseThe cause of the condition found was primarily due to the QIO?s inability to provide the Department with the documentation required for them to review the work performed.EffectThe Department is unable to validate the QIO is performing adequate utilization reviews.Questioned CostsNoneRecommendationThe Department has represented that these utilization reviews are no longer outsourced to a QIO. Effective July 1, 2019, the utilization reviews will be performed by the Department. The Department needs to ensure adequate controls and processes have been established to address utilization methodology execution and review of results.View of Responsible OfficialsWe concur with the finding. Program Integrity has made the decision to bring the QIO function to perform utilization reviews in house. To that end, PIU is actively working on an internal process for the Department to perform utilization reviews going forward. PIU is in the process of writing policies and procedures to guide the in-house QIO function. This includes developing a process and methodology to perform utilization reviews. Further, the Department created two staff positions in the State Fiscal Year 20/21 budget to perform the quality reviews. DHHS is in the process of obtaining access to a system that will assist in determining whether a paid claim was medically necessary and accurate. Until this function is started, claim universe reports are being run monthly and stored for sampling. It is the intent of the Program Integrity unit to ensure all months are sampled and reviewed from the end of the QIO contract.Anticipated Completion DateDecember 31, 2020Contact PersonKaren Carleton, RN PIU Administrator

Finding Reference Number: 2019-021NH Department of Health and Human ServicesMedicaid Cluster (CFDA 93.775, 93.777, 93,778)Federal Award Numbers: 1805NH5MAP, 1905NH5MAP, 1805NH5ADM, 1905NH5ADM, 1805NHIMPL, 1905NHIMPFederal Award Years: 2018, 2019U.S. Department of Health and Human ServicesCompliance Requirement: Special Tests and Provision: Provider Eligibility (Screening and Enrollment)Type of Finding: Significant Deficiency and NoncompliancePrior Year Finding: NoStatistically Valid Sample: NoCriteriaIn order to receive Medicaid payments, providers must: (1) be licensed in accordance with Federal, State, and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and 447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make certain disclosures to the State (42 CFR part 455, subpart B, sections 455.100 through 455.106). Medicaid managed care network providers are subject to the same disclosure, screening, enrollment, and termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR Part 438, Subpart H.Per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ConditionThe Department assigns risks to each provider based on their provider type. All new provider enrollments and moderate and high risk revalidations are reviewed and approved by the Department of Health and Human Services (the Department). However, for limited risk revalidations, the Department has outsourced this service to the Department?s Medicaid Management Information System fiscal agent (Fiscal Agent). The Department holds at least bi-weekly meetings with the fiscal agent to discuss issues noted with enrollment, revalidation, trends noted, etc. In addition, the Department has hired the Fiscal Agent to perform a quality assurance review over all provider new and revalidations prior to the notification that they are an eligible provider for State of New Hampshire services to address the accuracy of enrollment. During the year the Department noted issues and inconsistencies in the revalidations which were performed by the Fiscal Agent and decided as of July 1, 2019 all new enrollments and revalidations are reviewed and approved by the Department before the Fiscal Agent completes the application or revalidation process.During our test work over the above monitoring controls, the Department provided minutes of the meetings that demonstrated review of enrollment and revalidation processes and discussion of resulting trends and efficiencies on a consistent basis. The feedback from the Fiscal Agent regarding the quality assurance process is less formalized and more ad-hoc in nature not allowing for audit evidence throughout the fiscal year of the accuracy monitoring control.During our testwork over provider eligibility we noted:(a) For 6 of 105 providers selected for testwork, there was a discrepancy between the risk noted in the MMIS and the risk per the Department?s ?Provider application fee and type of screening required for NH Medicaid Program? (risk chart) file.a. For 4 of 6, the provider was coded as a Moderate risk provider per the risk chart, but was coded limited risk in MMIS. For these 4 provider, we noted the risk per the risk chart was incorrect. As MMIS was correct, the procedures performed were in accordance with policy.b. For 1 of 6, the provider was coded a Limited risk provider in MMIS although the provider was coded moderate risk per the risk chart. The Department performed the review as if the provider was Moderate, however, the coded risk in MMIS was inaccurate.c. For 1 of 6, this provider was coded a moderate risk provider in MMIS, but per the risk chart should have been a limited risk provider. Moderate procedures were performed.(b) For 41 of 105 providers selected for testwork, the Department did not revalidate the provider within the required 5 year timeframe. Timeframes ranged from 5.1 to 6.9 years.(c) For 3 of 105 providers selected for testwork, the providers did not have a most recent revalidation date completed within MMIS. The Department noted the revalidation was still being investigated due to issues noted on the license. The documentation reflected an outstanding license, however, there didn?t appear to be an update related to the investigations in over 9 months. Additionally, as the provider has not yet been revalidated, the provider did not have a risk assigned in MMIS.CauseWith regard to the monitoring controls, the condition noted is due to lack of a formalized process to receive information on a regular basis from the Fiscal Agent resulting in the control not being effectively designed. The cause of the noncompliance conditions found was primarily due to the following:(a) inconsistent documentation maintained related to provider risk assignment, and;(b) System updates causing delays in the revalidation process.EffectThe effect of the condition found is that the Department does not revalidate providers timely and does not have steps to ensure provider revalidates are documented accurately.Questioned CostsNoneRecommendationThe Department has represented that review and approval are required of the limited risk revalidations and new provider enrollment effective July 1, 2019. For the monitoring control, the Department should implement a more formal process for receiving quality assurance feedback from the Fiscal Agent such that the Department has adequate documentation on a defined periodic basis that can be reviewed.With regard to compliance, the Department should consistently apply provider risk as noted per the risk chart and implement procedures to ensure provider revalidations are completed timely.View of Responsible OfficialsWe concur with the finding. DHHS knew that we were behind in establishing the system processes for revalidation. DHHS established a team of DHHS staff, MMIS, DoIT staff, and fiscal agent staff to establish a project plan and implementation of the revalidation process. This requires system updates, new provider revalidation application, and provider notification. DHHS also reached out to CMS for technical assistance to perform revalidations including the electronic data exchange of duel providers that are enrolled with Medicare and Medicaid to expect the revalidation screening process which allowed DHHS to screen thousands of providers quickly and efficiently expediting the process. DHHS and the fiscal agent are actively performing revalidation monthly and the process is being reviewed and updated as needed to ensure all revalidations are done correctly and timely.DHHS will ensure current procedures cover all required regulations for provider enrollment. DHHS will ensure there is documentation of our periodic, systematic oversight of the fiscal agent?s quality review process.Anticipated Completion DateMarch 2021Contact PersonFrancesca Hennessy

Finding Reference Number: 2019-022NH Department of Health and Human ServicesMedicaid Cluster (CFDA 93.775, 93.777, 93,778)Federal Award Numbers: 1805NH5MAP, 1905NH5MAP, 1805NH5ADM, 1905NH5ADM, 1805NHIMPL, 1905NHIMPFederal Award Years: 2018, 2019U.S. Department of Health and Human ServicesCompliance Requirement: EligibilityType of Finding: Significant Deficiency and Material NoncompliancePrior Year Finding: NoStatistically Valid Sample: NoCriteriaEligibility for Medicaid can be broadly grouped into determinations based on Modified Adjusted Gross Income (MAGI-based determination) and non-MAGI determinations (e.g. Aged, Blind and Disabled). Auditors should test eligibility determinations made for fee-for-service and managed care beneficiaries. The auditors should re-determine eligibility to ensure beneficiaries qualify for the Medicaid program and are in the appropriate enrollment category.ConditionThe Division of Medicaid Services (DMS), with the Department of Health and Human Services (DHHS) administers the Medicaid program. The Bureau of Family Assistance (BFA) is responsible for determining eligibility for non-MAGI groups as well as MAGI groups according to New Hampshire policy.One hundred sixty MAGI and non-MAGI participants were selected for review, who fell into four main eligibility types: fee for service, managed care, waiver, and nursing home. During the audit, the following was noted:(a) For 1 of 40 managed care participants, the State did not take steps to ensure the participant was a New Hampshire resident and the participants income verification was not verified via the verify current income (VCI) match (<10%) or New Hampshire employment Security (NHES) verification. We noted that pursuant to NH?s CMS approved MAGI-based verification plan, residency is a ?self-attest? factor of eligibility for New Hampshire Medicaid, however, when this participant applied they indicated they would be moving to New Hampshire and never attested they had in fact moved to New Hampshire and the application for funding showed they attested to not living in New Hampshire. In addition the participant failed the data match for income. However when updated income information was received, the DHHS trainee case worker did not properly process the case and the trainee?s supervisor did not review, correct, and confirm the case. The New HEIGHTS system enrolled the participant. DHHS requires the case workers to review and uncheck the eligibility notation applied by the system. In this case, the case worker inadvertently did not uncheck the MAGI-eligible notation and the person received Medicaid benefits for a period of approximately a year without appropriate income support. The Department?s control to have all trainee cases reviewed and confirmed by a supervisor was not conducted and failed to prevent the beneficiary from becoming enrolled.(b) For 96 of 160 participants, (21 of 40 fee for service, 6 of 40 managed care, 30 of 40 waiver, and 39 of 40 nursing home) the Department was unable to provide support to verify that the participants social security income had been matched, via a Bendex match, with the Social Security Administration (SSA) because the SSA has not provided New Hampshire authorization to share that information. Therefore validation that the participants were deemed eligible by the SSA was not able to be determined.CauseThe cause of the condition found under paragraph (a) was primarily due to a trainee not properly processing the case combined with improper oversight of the trainee?s case, i.e., the supervisor not correcting and confirming the case before processing is an ineffective control.The cause of the condition under paragraph (b) is that the SSA has not issued a Redisclosure Memorandum for the CMS Single Audit. Without the Memorandum, states do not have permission to disclose SSA data to any auditors. There is no control failure attached to this compliance issue as there are conflicting federal regulations that prevented the information from being shared.EffectThe Department is providing Medicaid benefits to participants who may be ineligible for the program.Questioned CostsNot determinableRecommendationThe Department should implement a process to ensure all participants meet all eligibility requirements before being awarded benefits. In addition, the Department should obtain approval from SSA to share data with the single auditor or work with SSA to provide correspondence to the single auditor confirming eligibility for individuals during the audit process.View of Responsible OfficialsWe concur.This was an isolated incident which has been discussed thoroughly with the supervisor, both via email and over the phone. The supervisor went over the error with the trainee. Management will review other procedures performed at other District Office to determine whether other processes should be implemented to ensure supervisors know the cases completed by trainees and verify they have reviewed the cases to ensure accurate eligibility determinations.However, the Department would point out that there was no issue with the self-attestation of residency. Federal regulations permit states to choose to accept self-attestation for residency of the individual?s information for all factors of eligibility except where otherwise required by law (e.g. citizenship and immigration status). Self-attestation can be accepted from the individual applying, an adult who is in the applicant?s household, an authorized representative, or if the individual is a minor or incapacitated, someone acting responsibly for the individual. States must accept self-attestation of pregnancy unless the state has information that is not reasonably compatible with such attestation (see Self-attestation (?435.945)).The Department has contacted the Social Security Administration (SSA) and has requested written permission from SSA to authorize KPMG access for the Single Audit. The Department of Health and Human Services is governed by the Computer Match Agreement (CMA) it has executed with SSA, which governs the safeguarding of its data. This is an open request with SSA and the DHHS will continue to follow-up until a written decision is received from the SSA.Anticipated Completion DateSeptember 30, 2020Contact PersonDebra Sorli, Bureau Chief, Bureau of Family AssistanceElizabeth Gillett, Deputy Information Security Officer

Finding Reference Number: 2019-023NH Department of Human ServicesOpioid STR (93.788)Federal Award Numbers: 3H79T1081685-01, 6H79T1081685-01M003, 1H79T1080246-01Federal Award Year: 2018, 2019U.S. Department of Health and Human ServicesCompliance Requirement: Subrecipient MonitoringType of Finding: Material Weakness and Material NoncompliancePrior Year Finding: NoStatistically Valid Sample: NoCriteriaA pass-through entity must:1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.331(a);2. Evaluate each subrecipient?s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.331(b)); and3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.331(d) through (f). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required through the terms and conditions of the award, subaward monitoring must include following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means.Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ConditionUnder the State Targeted Response to the Opioid Crisis (SOR) program, the New Hampshire Department of Health and Human Services (the Department) enters into grant agreements with third parties to provide evaluation and treatment services to individuals with an opioid substance abuse disorder. On a monthly basis, the subrecipient submits a request for reimbursement for services that were rendered. As part of our testwork over the subrecipient monitoring process, we noted the following as of the year ending June 30, 2019:A. The Department communicates award information to subrecipients through the approved contract. Per review of the contract, for all 5 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.331(a). Specifically the following elements were not communicated:a. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414)b. Identification of whether the award is research and development (R&D)c. The federal award dateB. We were unable to obtain documentation to support that a risk assessment had been performed for each of the 5 subrecipients selected for testwork. As a result, it was unclear what type of during the award monitoring was required to be performed over the 5 subrecipients selected for testwork.E. The Department?s during the award monitoring is primarily composed of the Department?s review process over monthly invoices submitted for reimbursement by the subrecipient. The Department reviews the invoices prior to payment along with documentation that is submitted by the subrecipient to support the costs that are being claimed for reimbursement. Under this program, only individuals that have an opioid substance abuse disorder can receive services. The determination of this is performed at the subrecipient level. As part of our testwork, for each of the 5 subrecipients selected for testwork we were unable to identify any procedures that the Department had performed to monitor the eligibility assessment performed by the subrecipient to ensure that the services that were being claimed for reimbursement were only for services rendered on behalf of eligible participants. As the Department does not have a formal subrecipient monitoring policy that outlines the types and frequency of monitoring activities to be performed and there was no risk assessment performed for these subrecipients, it was unclear whether or not the exclusion of these types of monitoring activities was appropriate.CauseThe cause of the condition found was primarily due to:? Insufficient controls and procedures to ensure that all required federal award information has been communicated to subrecipients. As this program does not allow for an indirect cost reimbursement and is not R&D, the Department was unaware that it was required to formally communicate that these items are not applicable to the federal award.? The Department requires a risk assessment to be performed prior to entering into a subrecipient contact. There does not appear to be sufficient controls and procedures to ensure that the required risk assessments have been performed or if they are performed that they are retained and used to support the subrecipient monitoring process.? The Department currently does not have a documented subrecipient monitoring policy that outlines the types and frequency of monitoring procedures that will be performed over this federal program and how those monitoring procedures will be documented.EffectThe effect of the condition found is that the Department did not comply with 2 CFR section 200.331(a) and 2 CFR section 200.331(b). In addition, as there is no documented subrecipient monitoring policy for this program, fiscal and programmatic monitoring requirements that the subrecipient is required to comply with may not be appropriately or timely monitored for compliance by the Department, resulting in potential unallowable costs being charged to the program.Questioned CostsNot determinableRecommendationWe recommend that the Department continue to review its existing policies and procedures to ensure that the Department complies with the provisions of 2 CFR section 200.331(a), 2 CFR section 200.331(b) and 2 CFR section 200.251. This would include implementing controls and procedures to ensure that:1. All required award information is communicated to subrecipients;2. A documented risk assessment is performed over all subrecipients and the results of that risk assessment is used to evaluate the types of monitoring procedures that will be performed over the subrecipient; and3. As a result of the risk assessment performed, monitoring activities are performed over subrecipients to ensure compliance with the terms and conditions of its subrecipient grant agreement. The procedures that are to be performed based upon the assessed level for of risk should be outlined in a documented subrecipient monitoring policy that is specific to this program. The subrecipient monitoring policy should document the types and frequency of monitoring activities that will be performed.View of Responsible OfficialsWe concur.1. The Department has developed the attached spreadsheet to address the required notification under 2 CFR 200.331. This spreadsheet will be attached to procurements with Federal Funding, and will be implemented in Spring 2020.2 and 3a. The Department finalized the Subrecipient Monitoring Policy, which, encompasses the financial and programmatic risk assessments as well as the subrecipient monitoring, on June 1, 2018. The Department provided user training on the subject in February 2018. However, only brand new procurements utilized this policy during the initial roll out of this policy. The audited procurements were amendments, not new procurements, and therefore were not included in the roll out of the Subrecipient Monitoring policy at that time.The Department is currently rolling out the Subrecipient Monitoring policy to all procurements. Combined with the subrecipient training module and tools, staff have been trained on contract management and monitoring tools to better ensure compliance with Uniform Guidance requirements. This is to be followed by ongoing specialized trainings, supporting tools, and procedures for expenditure testing, site visits, files reviews, and corrective action planning.3b. We concur and that formal process to monitor sub-recipients was not in place during SFY 19. The department did conduct site reviews on several of the State Opioid Response (SOR) providers during the subsequent period, during which documentation showing a diagnosis of ?opioid substance abuse disorder? was reviewed. It was determined by the review team that only individuals with this specific diagnosis were treated with SOR funding. The SOR Executive Director is working with the DHHS Grant Coordinator to establish specific procedures to document the monitoring of future site visits to be completed in the following months.Anticipated Completion Date1. June 30, 20202. June 30, 20203a. June 30, 20203b. September 1, 2020Contact PersonMelissa Kelleher, Grants AdministratorJayne Jackson, DBH Finance Director

Finding Reference Number: 2019-024NH Department of SafetyDisaster Grants ?Public Assistance (Presidentially Declared Disasters) (97.036)Federal Award Numbers: FEMA-4329-DR, FEMA-4355-DR, FEMA-4370-DR, FEMA-4371-DRFederal Award Year: 2017, 2018U.S. Department of Homeland SecurityCompliance Requirement: Subrecipient MonitoringType of Finding: Significant Deficiency and NoncompliancePrior Year Finding: NoStatistically Valid Sample: NoCriteriaA pass-through entity must:1. Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.331(a);2. Evaluate each subrecipient?s risk of noncompliance for the purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 300.331(b)); and3. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as required by 2 CFR section 200.521.Non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ConditionAs part of the Disaster Grants ? Public Assistance program, the New Hampshire Department of Public Safety (the Department) enters into grant agreements with eligible local entities for disaster related projects that have been approved for funding under the federal disaster declaration. As part of our testwork over the subrecipient monitoring process, we noted the following as of the year ending June 30, 2019:A. The Department communicates award information to subrecipients through an award package. Per review of the award package, for all 20 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.331(a). Specifically the following elements were not communicated:a. Federal Award Identification Number (FAIN)b. Subaward period of performance start and end datec. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2 CFR section 200.414)d. Identification of whether the award is R&De. Appropriate terms and conditions concerning the close out of the subawardB. The Department did not perform a risk assessment for each of the 20 subrecipients selected for testwork.C. The Department did not monitor to determine whether or not each of the 20 subrecipients selected for testwork had a recent audit performed in accordance with the Uniform Guidance in order to obtain the issued report and issue timely management decision letters if applicable.CauseThe cause of the condition found was primarily due to insufficient controls in place during the audit period as the Department was in the process of revising their existing policies and procedures related to subrecipient monitoring. Due to employee turnover within the Department, existing policies and procedures were being reviewed and revisions being made in order to ensure that the policies in effect over subrecipient monitoring were consistent with what was required under federal regulations.EffectThe effect of the condition found is that the Department did not comply with 2 CFR section 200.331(a), 2 CFR section 200.331(b) and 2 CFR section 200.251.Questioned CostsNot determinableRecommendationWe recommend that the Department continue to review its existing policies and procedures to ensure that the Department complies with the provisions of 2 CFR section 200.331(a), 2 CFR section 200.331(b) and 2 CFR section 200.251. This would include implementing controls and procedures to ensure that:1. All required award information is communicated to subrecipients;2. A documented risk assessment is performed over all subrecipients and the results of that risk assessment is used to evaluate the types of monitoring procedures that will be performed over the subrecipient; and3. All subrecipients are reviewed annually to determine if the subrecipient has had an annual uniform guidance audit, and that those audit reports are obtained and reviewed and a management decision letter is issued if required.View of Responsible OfficialsWe concurCondition AIn order to maintain transparency within the Public Assistance (PA) Grant Program, it is necessary to provide all of the award information required in 2 C.F.R. ? 200.331 in the award notification email that the Recipient of the grant (NH Homeland Security and Emergency Management ? HSEM) send to the Subrecipient.HSEM previously had no full or part time staff dedicated to the management of the PA Grant program prior to CY 2018. Since that time, one full time and one part time staff member have been hired and trained to maintain the program. These staff members have been methodically overhauling the management of the grant in order to become more compliant.Prior to this audit, HSEM created an award notification template that addressed the majority of the elements of information required by 2 C.F.R. ? 200.331. This most recent audit identified elements that were missing from this award letter template. Since being notified of this finding, HSEM staff have added the required information to the award notification package and will be implementing the changes with all award letters moving forward.Conditions B and CIn order to ensure that proper oversight of the PA Grant is completed to prevent potential noncompliance of Applicants, it is necessary to complete the required Subrecipient Risk Assessments and Subrecipient Monitoring. This process allows the Recipient to identify areas of the grant where Subrecipients are experiencing issues and provide technical assistance to ensure grant compliance is maintained.Prior to the hire of dedicated PA Program staff at HSEM, risk assessments and Subrecipient monitoring were not completed consistently. Following these hires, HSEM staff created a new process to complete Subrecipient risk assessments and monitoring to move the program into compliance in this area. At the time of the SFY 2019 audit, HSEM had already completed restructuring of its risk assessment procedures and had begun applying them retroactively to all applicants under four previous disasters declared between CYs 2017-2018, and had just started using the new process on a disaster declared in CY 2019 (declaration date outside of SFY 2019 that was audited). Additionally, HSEM staff was completing an overhaul of the Subrecipient monitoring procedures to accompany the new risk assessment, but had not implemented the procedures at the time of the audit.HSEM intends to complete the last phase of Subrecipient monitoring procedure development within SFY 2020 (low and medium risk Subrecipient procedures are complete and high risk procedures are in progress). A method for tracking the Subrecipient monitoring has been created for low and medium risk Subrecipients, and an online form is in progress to track the in person site visits that will take place for high risk Subrecipients.The use of these updated risk assessment and Subrecipient Monitoring procedures, along with new tracking mechanisms, will rectify the findings of this audit report. Additionally, HSEM PA staff will work with the State Business Office to create procedures to issue timely management decision letters, if applicable, to Subrecipients with recent audit findings that will impact their performance in the PA Program. This new procedure will go into effect immediately after it is completed and approved.Anticipated Completion DateCondition A ? CompletedConditions B and C ? June 30, 2020Contact PersonVanesa Urango, State Public Assistance CoordinatorMeghan Wells, Public Assistance Program Assistant II

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GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION