GTI ENERGY AND SUBSIDIARIES

Assistance Listing, Federal Agency, and Program Name 81.086, 81.087, 81.089, and 81.255, U.S. Department of Energy, Research and Development Cluster. Federal Award Identification Number and Year 81.086 DE EE0010847 81.087 DE EE0009625 and DE EE0011103 81.089 DE FE0028979, DE FE0032172, DE FE0032176, DE FE0032239, DE FE0032287, and DE FE0032351 81.255 DE CD0000038 Pass through Entity 81.086 N/A Direct Award 81.087 N/A Direct Award 81.089 N/A Direct Award 81.255 HyVelocity LLC Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria In accordance with 2 CFR 200.305(b), for recipients and subrecipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the pass through entity and the disbursement of funds by the recipient or subrecipient regardless of whether the payment is made by electronic funds transfer or by other means. In accordance with 2 CFR 200.305(b)(3), when the reimbursement method is used, the federal awarding agency or pass through entity must make payment within 30 calendar days after receipt of billing, unless it is believed the request to be improper. Condition Controls in place were not sufficient to ensure subrecipients were paid consistently within 30 days of a request for reimbursement. Questioned Costs N/A If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed N/A Context Due to staff turnover during the year, controls and procedures designed to ensure subrecipients were reimbursed within 30 days were not consistently operating throughout the period. Out of a sample of 40 subrecipient disbursements tested, we noted 17 were not paid within 30 days of the organization receiving the request for reimbursement and 11 were not properly tracked on management's internal subrecipient payment tracking spreadsheet. Cause and Effect Controls were established to ensure subrecipient reimbursement requests were processed within 30 days; however, due to staff turnover during the year, these controls were not consistently performed. As a result, reimbursement requests were not always processed timely, leading to instances of noncompliance with the 30 day requirement. Recommendation We recommend management reinforce and consistently execute existing controls over the review and processing of subrecipient reimbursement requests, including clear assignment of responsibilities and oversight procedures during periods of staff transition, to ensure payments are made within the 30 day requirement. Views of Responsible Officials and Corrective Action Plan Management acknowledges the finding. Delays in approvals may occur due to multiple internal and external parties involved. to prevent recurrence, management will monitor all parties, issue email reminders with clear deadlines, and enforce compliance with the 30 day requirement.

Assistance Listing, Federal Agency, and Program Name 81.087, U.S. Department of Energy, Research and Development Cluster Federal Award Identification Number and Year DE EE0009755 Pass through Entity N/A Direct award Finding Type Significant deficiency Repeat Finding No Criteria Under the terms and conditions of certain Department of Energy (DOE) award agreements, if the recipient anticipates involving foreign nationals in the performance of the award, the recipient must, upon DOE’s request, provide DOE with specific information about each foreign national to ensure compliance with the requirements for participation and access approval. GTI Energy's policies and procedures require project managers to inform the Contracts Manager when a foreign national will begin work on a project irrespective of whether it requires DOE approval. The Contracts Manager will input the foreign national employee's name into the internal foreign national tracking system and initiate the communication to the DOE, if required under the agreement. Condition Controls in place did not ensure a foreign national employee's involvement on a project were communicated to the Contracts Manager for tracking. Questioned Costs None Identification of How Questioned Costs Were Computed N/A There were no questioned costs identified. Context In one out of seven employees sampled for testing, the contracts manager was not informed of the employee's involvement on a DOE project. Although the contract did not require DOE approval, GTI Energy did not follow its procedures and controls to ensure the completeness and accuracy of foreign nationals working on projects. Cause and Effect GTI Energy's controls failed to track a foreign national employee's involvement before they charged time to the project. Without proper tracking of foreign national employees working on federal grants, there is an increased risk that the DOE is not notified and does not provide approval for the employee to work on the grant, which can result in unallowable costs being charged to the grant. Recommendation We recommend that GTI Energy review its procedures and controls to ensure that the involvement of foreign national employees is tracked and communicated internally in a timely manner to ensure communication to the Department of Energy (DOE) in a timely manner, when required. Additionally, we suggest that GTI Energy assess whether program managers need further training to help identify and appropriately track foreign national employees. Views of Responsible Officials and Corrective Action Plan Management takes its responsibility to comply with the terms and conditions of awards seriously, and, while this particular finding did not result in noncompliance with the terms of an award, a repeat occurrence could result in noncompliance. To prevent future occurrences, management will enhance internal controls to ensure consistent tracking and reporting of foreign nationals working on Department of Energy sponsored projects by taking the following corrective actions by July 31, 2025: 1) Update the company’s policy for tracking and reporting foreign nationals to include: a) A requirement that all team members must be approved by Contract Services before starting work on a DOE project. b) A requirement that Contract Services review a payroll report monthly to ensure all individuals who charged time to DOE projects were pre approved. 2) Train business unit leaders, project managers, and contract services staff on the revised policy and procedures for tracking and reporting foreign nationals.

Assistance Listing, Federal Agency, and Program Name 81.087 and 81.089, U.S. Department of Energy, Research and Development Cluster Federal Award Identification Number and Year DE EE0009755 and DE FE0032176 Pass through Entity N/A Direct award Finding Type Significant deficiency Repeat Finding No Criteria Recipients of federal grant funds must establish and maintain effective internal controls that provide reasonable assurance that grant funds are being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award, according to the Code of Federal Regulations (CFR). GTI Energy policies and procedures require that every sole source procurement above the micro purchase threshold of $10,000 must be documented and approved prior to the purchase. Condition Controls in place did not ensure the procurement policy was followed consistently. Questioned Costs None Identification of How Questioned Costs Were Computed N/A There were no questioned costs identified. Context In our sample of 40 purchase orders (POs), we found two issues. One PO had sufficient procurement documentation for the estimated purchase, however, through our walk through of the blanket PO procedures, we noted a lack of controls to identify when a blanket PO exceeds the micropurchase threshold. Another PO had sole source documentation provided by the GTI Energy, but it was not approved before the purchase. Cause and Effect GTI Energy lacks controls to identify blanket purchase orders (POs) exceeding $10,000, which require documentation to prove competition standards were met. Additionally, the controls failed to detect that a sole source justification was not approved before payment. These lack of controls increases the risk of noncompliance and may result in noncompliance instances not being identified in a timely manner. Recommendation We recommend that GTI Energy review its procurement procedures and controls to ensure they address the issues mentioned above, including evaluating the need for preventive or detective controls specific to blanket purchase orders (POs). Additionally, GTI Energy should redistribute its existing procurement policy to relevant personnel and provide adequate training. To ensure compliance with the policy, GTI Energy should establish monitoring procedures to verify that purchasers are adhering to it. Furthermore, we recommend that GTI Energy implement a system limitation requiring approval of certain procurement documentation before submission for payment. Views of Responsible Officials and Planned Corrective Actions Management acknowledges the importance of adhering to the procurement policy and takes its compliance obligations seriously. Although this particular finding did not result in noncompliance, management recognizes that a recurrence could lead to noncompliance. To prevent future occurrences, management is committed to enhancing internal controls. The following corrective actions will be implemented to ensure consistent adherence to procurement standards: 1. Update purchasing policies, procedures, forms, and job aides to enhance the clarity of requirements, particularly requirements for blanket purchase orders. Target completion date: 6/30/2025 2. Retrain agency staff, purchasing staff, and accounts payable staff on their roles and responsibilities related to purchasing policies. Target completion date: 7/31/2025 3. Implement a monthly review process for all vouchers posted against blanket POs to verify compliance. Target completion date: 7/31/2025 4. Update standard terms and conditions for blanket purchase orders (POs) to prohibit any purchase under a blanket PO from exceeding $10,000, and communicate this limit to all vendors with open blanket POs, requiring an acknowledgement of this change of terms. Failure to return the acknowledgement will result in closure of the blanket PO. Target completion date: 9/31/2025 5. Investigate the feasibility of implementing a system control within the purchasing system to require review and approval of requisitions by senior staff or management prior to PO issuance. Target completion date: 8/31/2025

Assistance Listing Number, Federal Agency, and Program Name 81.087, U.S. Department of Energy, Research and Development Cluster Federal Award Identification Number and Year DE EE0008507 Pass through Entity N/A Direct award Finding Type Significant deficiency Repeat Finding Yes 2021-001 Criteria In accordance with 45 CFR 75.305 2(b), for nonfederal entities other than states, payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass through entity and the disbursement by the nonfederal entity whether the payment is made by electronic funds transfers or issuance or redemption of checks, warrants, or payments by other means. In accordance with 45 CFR 75.305(3), when the reimbursement method is used, the federal awarding agency or pass through entity must make payment within 30 calendar days after receipt of billing, unless it is believed the request to be improper. Condition Controls in place did not minimize the time elapsing between the transfer of funds and disbursement to a GTI subrecipient. Questioned Costs None Identification of How Questioned Costs Were Computed Not applicable, as there are no questioned costs. Context In 1 out of 29 transactions sampled for testing, it took GTI greater than 30 calendar days to make payment to the subrecipient after receipt of billing. The days in excess amounted to 19 calendar days. GTI's subrecipient billings totaled 176 during 2022. Cause and Effect Controls in place did not result in GTI making payment within 30 calendar days to a subrecipient, after receipt of billing. It took GTI 49 days to pay the subrecipient. Recommendation We recommend that GTI review its procedures and controls to ensure disbursement of funds to its subrecipients is consistent with applicable laws and regulations.

Assistance Listing Number, Federal Agency, and Program Name 81.086; 81.089; 81.RD, U.S. Department of Energy, Various - Research and Development Cluster Federal Award Identification Number and Year DE-EE0007996, DE-FE0024292, DE-FE0031630, AC36-08-GO28308 Pass through Entity N/A Direct award Finding Type Significant deficiency Repeat Finding Yes 2020-001 Criteria In accordance with 45 CFR 75.305 2(b), for nonfederal entities other than states, payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass through entity and the disbursement by the nonfederal entity whether the payment is made by electronic funds transfers or issuance or redemption of checks, warrants, or payments by other means. In accordance with 45 CFR 75.305(3), when the reimbursement method is used, the federal awarding agency or pass through entity must make payment within 30 calendar days after receipt of billing, unless it is believed the request to be improper. Condition Controls in place did not minimize the time elapsing between the transfer of funds and disbursement to GTI subrecipients. Questioned Costs None Identification of How Questioned Costs Were Computed Not applicable, as there are no questioned costs. Context In 4 out of 27 transactions sampled for testing, it took GTI greater than 30 calendar days to make payment to the subrecipient after receipt of billing. The days in excess ranged from 7 to 18 calendar days. GTI's subrecipient billings totaled 165 during 2021. Cause and Effect Controls in place did not result in GTI making payment within 30 calendar days to some of its subrecipients, after receipt of billing. It took GTI 37 to 48 days to pay the subrecipients. Recommendation We recommend that GTI review its procedures and controls to ensure disbursement of funds to its subrecipients is consistent with applicable laws and regulations. Views of Responsible Officials and Corrective Action Plan GTI management will develop a process to track and report the subrecipient invoices received, but not yet paid. This report will be run and reviewed by contract services, purchasing and accounts payable staff, to identify and prioritize any remaining action items relevant to payment of the invoices. The report will also be reviewed weekly by the accounts payable supervisor to ensure the invoices are prioritized by the accounts payable staff and any issues are escalated, if needed, to ensure timely payment. Further, management will continue to conduct a review of subrecipient invoice payments to ensure the 30 day requirement is being achieved.

Assistance Listing Number, Federal Agency, and Program Name 81.RD, U.S. Department of Energy, Smart CNG Station Research and Development Cluster Federal Award Identification Number and Year DE-AC36-08GO28308 Pass through Entity National Renewable Energy Laboratory Finding Type Significant deficiency Repeat Finding No Criteria In accordance with 2 CFR 200.308(c)(2), recipients must request prior approvals from federal awarding agencies for a change in a key person specified in the application or the federal award. Condition Controls in place did not identify that an amendment for a change in a key person was necessary after the key person was terminated. Questioned Costs None Identification of How Questioned Costs Were Computed Not applicable, as there are no questioned costs. Context In 1 out of 2 transactions sampled for testing, the amendment for the change in key person was not filed as of our testing date. There were 5 key person changes during 2021. Cause and Effect Controls in place did not ensure timely notification of a key person change to the federal awarding agency. Recommendation We recommend that GTI review its procedures and controls to ensure revision of budget and program plans is in accordance with applicable laws and regulations. Views of Responsible Officials and Planned Corrective Actions An amendment approving the change in the key personnel was executed on April 5, 2022. Key personnel will be entered into the contract management system, and a report will be created to identify the active projects for which key personnel have been terminated. This report will be distributed weekly via system generated email to the relevant project and administrative personnel to ensure the amendments are initiated timely.

CFDA Number, Federal Agency, and Program Name - 81.089, U.S. Department of Energy, Fossil Energy Research and Development Research and Development Cluster Federal Award Identification Number and Year - DE FE0031630 Pass through Entity - N/A - direct award Finding Type - Significant deficiency Repeat Finding - No Criteria - In accordance with 45 CFR 75.305 2(b), for nonfederal entities other than states, payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass through entity and the disbursement by the nonfederal entity whether the payment is made by electronic funds transfers, or issuance or redemption of checks, warrants, or payments by other means. In accordance with 45 CFR 75.305(3), when the reimbursement method is used, the federal awarding agency or pass through entity must make payment within 30 calendar days after receipt of billing, unless it is believed the request to be improper. Condition - Controls in place did not minimize the time elapsing between the transfer of funds and disbursement to a GTI subrecipient. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable as there are no questioned costs. Context - In one out of 17 transactions sampled for testing, it took GTI greater than 30 calendar days to make payment to a subrecipients after receipt of billing. The days in excess was 19 calendar days. GTI's subrecipient billings totaled 164 during 2020. Cause and Effect - Controls in place did not result in GTI making payment within 30 calendar days, to its subrecipient, after receipt of billing. It took GTI 49 days to make payment to its subrecipient. Recommendation - We recommend that GTI review its procedures and controls to ensure disbursement of funds to its subrecipients is consistent with applicable laws and regulations. Views of Responsible Officials and Corrective Action Plan - In early January of 2020, GTI experienced sudden and unusually high turnover in the accounts payable department at the supervisory and staff levels. It was during the recovery from this turnover that the exception occurred. GTI management will conduct training to ensure the accounts payable staff prioritize the processing of subrecipient invoices to allow payment within 30 days of receipt of a proper invoice. GTI management is also enhancing a report to make it easier for the accounts payable staff to identify invoices from subrecipients. Further, management will conduct a review of subrecipient invoice payments to ensure the 30 day requirement is being achieved.

CFDA Number, Federal Agency, and Program Name - Research and Development Cluster; U.S. Department of Energy, U.S. Department of Defense, U.S. Department of Transportation; all research and development programs Federal Award Identification Number and Year - All research and development awards Pass through Entity - Various Finding Type - Significant deficiency Repeat Finding - No Criteria - Recipients of federal grant funds must establish and maintain effective internal controls that provide reasonable assurance that grant funds are being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award, according to the Code of Federal Regulations (CFR). All nonfederal entities must follow sections 200.318 (General Procurement Standards) through 200.326 (Contract Provisions) of Title 2 of the CFR in order to provide reasonable assurance that the entities are in compliance with procurement standards established by 2 CFR 200. Condition - GTI's procurement policy was not fully implemented. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable, as no questioned costs were identified Context - GTI established a procurement policy consistent with the Uniform Guidance that included the methods of procurement prescribed by 2 CFR 200.320. Despite the established policy, the procurement policy was not consistently followed for activities between the micropurchase threshold and $25,000. In our initial sample of 25, we identified four samples that did not have evidence of price or rate quotations from an adequate number of qualified sources. Management subsequently obtained price quotations from an adequate number of qualified sources. As a result, we selected 15 additional samples, increasing our sample size to 40. Of the additional 15 sampled, management subsequently obtained quotations for three procurements to evidence that the price was reasonable; the additional evidence was related to purchases between the micropurchase threshold and $25,000. Cause and Effect - GTI adopted a procurement policy consistent with the Uniform Guidance on January 1, 2018. Upon adoption, staff continued to perform procurement procedures under the previous policy, which did not require price or rate quotations for procurements less than $25,000. As a result, purchases between the micropurchase threshold and $25,000 were not in compliance with GTI's procurement policy. Recommendation - We recommend GTI redistribute its existing procurement policy to the appropriate personnel and provide adequate training. To ensure that the policy is fully implemented, we recommend that GTI establish monitoring procedures to ensure purchasers are following the policy. We further recommend that GTI review its micropurchase threshold to determine whether it should be increased. Views of Responsible Officials and Corrective Action Plan - Subsequent to year end, management established a plan to ensure the existing procurement policy is fully implemented. GTI management will distribute the procurement policy to all staff and provide training to purchasing staff and appropriate personnel. GTI has reviewed its micropurchase threshold and increased it to $10,000. GTI management will conduct a review of purchases between the micropurchase threshold and $25,000 to ensure that purchasers are following the policy and conduct additional training if results indicate that it is required.