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Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a)) Finding 2024-001: Cash Management (Material Weakness) Federal Programs: ALN 19.019 Criteria: According to 2 CFR 200.305, recipients must draw Federal funds only in amounts necessary to meet immediate cash needs for program expenditures. Funds should be disbursed as soon as possible, generally within three business days of receipt. Condition: During our testing of cash management compliance, we noted that ICMEC drew down a total of $233,494 on Federal funds in advance of need. The remaining funds were used for other ICMEC programmatic work. Cause: ICMEC did not have adequate procedures to align Federal drawdown requests with immediate program disbursement requirements. Drawdowns were based on budgeted monthly cash needs rather than actual expenditures. Effect or Potential Effect: Drawing funds in advance of need results in excess Federal cash being held by ICMEC, which is not permitted under Federal regulations. This increases the risk of misuse of Federal funds and may result in ICMEC owing interest to the Federal Government. Questioned Costs: $233,494 Context: Our audit procedures consisted of testwork completed on individual cash receipts and draw downs requests and evaluating the refundable advance analysis prepared by ICMEC as of December 31, 2024. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend ICMEC establish and implement procedures to ensure drawdown requests are limited to actual, immediate cash needs, with monitoring to confirm that Federal funds are disbursed within three business days of receipt.

Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a)) (Continued) Finding 2024-002: Late Submission of Audit Report to the Federal Audit Clearinghouse (Significant Deficiency) Federal Programs: All Federal programs Criteria: The Uniform Guidance, specifically 2 CFR 200.512(a), establishes the filing requirements for the submission of single audits to the Federal audit clearing house and indicates that the single audit reporting package must be submitted 30 days after the date of the auditor's report(s) or 9 months after the end of the fiscal year, whichever comes first. Condition: The single audit reporting package for ICMEC December 31, 2023 year-end audit was due to the Federal audit clearinghouse by September 30, 2024. However, the data collection form was submitted on February 24, 2025. Cause: During the 2023 audit process, fieldwork timelines had to be extended to accommodate the time ICMEC needed to ensure that all schedules were properly reconciled and supported, which caused delays in the audit completion. As a result, the 2023 auditor's report(s) were dated January 30, 2025. Effect or Potential Effect: Not timely filing the single audit reporting package is indicative of timeliness issues with the audit process. Questioned Costs: None noted. Context: As a result of delays in the completion of the 2023 audit, the single audit reporting package for the year ended December 31, 2023, was not submitted timely. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that management implement procedures and control processes to ensure that future audits are completed timely so that the single audit reporting package is submitted by the appropriate deadline of either 30 days after the date of the auditor's report(s) or 9 months after the end of the fiscal year, whichever comes first.

Finding 2024-003: Procurement (Significant Deficiency) Federal Programs ALN 19.019 Criteria: Under 2 CFR 200.318, the Uniform Guidance requires that a recipient of U.S Government funds must use their own documented procurement procedures which reflect the applicable Uniform Guidance requirements to procure goods and services in order to ensure that all purchases are conducted in a manner that provides full and open competition. Condition: During our testing over procurement, we determined that ICMEC did not consistently document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Cause: ICMEC did not follow their established internal procurement policy and that policy did not follow the requirements of the Uniform Guidance for procurement. Effect: Purchases of goods and services could be made above prevailing market rates if the prescribed procurement procedures are not adhered to, and thus, there lies the potential that ICMEC will not receive the best value for its purchases. The procurement process also allows for the evaluation of potential conflicts of interest with prospective vendors and contractors. Failure to perform the proper procurement procedures could result in disallowance of Federal expenditures based on lack of fair competition. Questioned Costs: None noted. Context: Our audit procedures consisted of testwork completed on individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from ICMEC's general ledger (accounting system). We consider our sample to be representative of the population. The condition appeared to be systemic in nature. Identification as a Repeat Finding, if Applicable: Refer to Finding 2023-003. Recommendation: We recommend that ICMEC revise their procurement policy to be align with required Uniform Guidance standards. This policy should be communicated to all employees and enforced during the upcoming year. All procurement records for purchases in excess of the threshold should include the following at a minimum: (a) basis for the contractor/goods selected or (b) justification for lack of competition when quotes or competitive bids are not obtained. Additionally, the conclusion should be clearly documented and accompany the procurement documentation. We also believe that all long-standing contractual engagements should evidence occasional re-evaluation to ensure such relationships are free of conflicts.

Finding 2023-002: Account Reconciliations and Financial Statement Close Process (Significant Deficiency) Federal Programs: All Federal programs Criteria: Under 2 CFR 200.303, Internal Controls, the Uniform Guidance requires that the grantee must: establish, document 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. These internal controls should be in compliance with 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 year-end schedules supporting certain asset and liability accounts were incorrectly prepared and required revision, resulting in adjustments to ICMEC's consolidated financial statements. In addition, the intercompany assets and liabilities were not reconciled. Due to the above, a significant amount of time was spent by management during the audit process reconciling various accounts which resulted in audit delays. The audit delays, in turn, resulted in additional audit work performed after the original end date of field work. Cause: ICMEC's controls are not adequately designed to ensure timely and accurate reconciliation of asset and liability accounts, including the intercompany assets and liabilities. As a result, significant adjustments were proposed by management and the auditors during the audit. Effect: Without the proper reconciliation of all accounts on a monthly basis, in a timely manner, as well as the proper review and approval of such reconciliations, there exists the potential for reporting errors and misappropriation of funds. Additionally, as a result of these delays, ICMEC did not submit its Data Collection Form in time to be in compliance with the due date of September 30, 2024. Questioned Costs: None noted. Context: Our audit procedures consisted of testwork completed on various asset, liability, support and revenue and expense account balances. We consider our sample and testing to be representative of the population. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that all asset and liability account reconciliations, including intercompany assets and liabilities, be performed on a monthly or quarterly (at a minimum) basis. We also recommend detailed reviews and approvals of all supporting schedules (and related consolidated financial statements) be performed and contemporaneously documented in the accounting records. Any discrepancies or other issues should be resolved in a timely manner.

Finding 2023-003: Procurement (Material Weakness) Federal Programs: All Federal programs Criteria: Under 2 CFR 200.318, the Uniform Guidance requires that a recipient of U.S Government funds must use their own documented procurement procedures which reflect the applicable Uniform Guidance requirements to procure goods and services in order to ensure that all purchases are conducted in a manner that provides full and open competition. Condition: During our testing over procurement, we determined that ICMEC did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Cause: ICMEC did not follow their established, internal procurement policy and that policy did not follow the requirements of the Uniform Guidance for procurement. Effect: Purchases of goods and services could be made above prevailing market rates if the prescribed procurement procedures are not adhered to, and thus, there lies the potential that ICMEC will not receive the best value for its purchases. The procurement process also allows for the evaluation of potential conflicts of interest with prospective vendors and contractors. Failure to perform the proper procurement procedures could result in disallowance of Federal expenditures based on lack of fair competition. Questioned Costs: None noted. Context: Our audit procedures consisted of testwork completed on individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from ICMEC's general ledger (accounting system). We consider our sample to be representative of the population. The condition appeared to be systemic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that ICMEC revise their procurement policy to be align with required Uniform Guidance standards. This policy should be communicated to all employees and enforced during the upcoming year. All procurement records for purchases in excess of the threshold should include the following at a minimum: (a) basis for the contractor/goods selected or (b) justification for lack of competition when quotes or competitive bids are not obtained. Additionally, the conclusion should be clearly documented and accompany the procurement documentation. We also believe that all long-standing contractual engagements should evidence occasional re-evaluation to ensure such relationships are free of conflicts.