GOVERNMENT OF THE DISTRICT OF COLUMBIA

Finding Number: 2025-001 Prior Year Finding Number: 2024-002 Compliance Requirement: Special Tests and Provisions – ADP System for SNAP Program: U.S. Department of Agriculture Supplemental Nutrition Assistance Program Cluster ALN: 10.551, 10.561 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: Department of Human Services (DHS)/ Department of Health Care Finance (DHCF) DC Access System (DCAS) Program Management Administration Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 7 CFR Section 272.10(a), “All State agencies are required to sufficiently automate their SNAP operations and computerize their systems for obtaining, maintaining, utilizing, and transmitting information concerning SNAP.” Per 7 CFR Section 272.10(b), “In order to meet the requirements of the Act and ensure the efficient and effective administration of the program, a SNAP system, at a minimum, shall be automated in each of the following program areas (1) Certification and (2) Issuance Reconciliation and Reporting. Under Certification – States agencies must determine eligibility and calculate benefits or validate the eligibility worker’s calculations by processing and storing all casefile information necessary for the eligibility determination and benefit computation (including but not limited to all household members’ names, addresses, dates of birth, social security numbers, individual household members’ earned and unearned income by source, deductions, resources and household size). Also, State agencies must redetermine or revalidate eligibility and benefits based on notices of change in households’ circumstances.” Condition – The District is self-reporting findings it noted from its ongoing efforts to resolve issues with the ADP system for SNAP. The issues identified and the estimated impact follows: 1. Failure to Send Correct and Timely Notices to SNAP Households - Notices pertaining to SNAP eligibility contain incorrect information, and/or SNAP applicants and recipients fail to receive proper notices. For example, in the Federal Fiscal Year (FFY) 2018 Local Program Access Review (PAR), Food and Nutrition Service (FNS) cited that SNAP applicants did not receive a Notice of Eligibility or notice contained incorrect information, no notice of required verification, and the notice of adverse action was incorrect. 2. Untimely Processing of SNAP Applications and Periodic Reports - On October 23, 2017, FNS advised DHS that its application processing timeliness (APT) rate between October 2016 and March 2017 was 88.45%, which triggered corrective action per FNS policy. Moreover, between that last APT report and now, DHS has disclosed that it has experienced processing backlogs of varying severity and persistence to FNS via ongoing communications and as part of waiver requests. DHS also provided a report to FNS in August 2022 that indicated significant application processing backlogs. 3. Establishment of Duplicate Accounts - DHS discovered that duplicate Product Delivery Cases (PDC) were being created in DCAS. One PDC was active and the other closed, but the closed PDC was still receiving benefits. 4. Issuance of Duplicate Payment - As a result of duplicate accounts in Deficiency 3, duplicate payments may have been issued to the same household when a caseworker reactivated a closed case. There is also a possibility that customers who received duplicate electronic benefits transfer (EBT) cards from different EBT vendors may have received duplicate payments. 5. Failure to Implement Computer Matching System - Based on the FFY18 Program Integrity Management Evaluation (ME) review, DHS failed to process Prisoner Verification System (PVS) matches, deceased matches, and National Directory of New Hires (NDNH) matches in accordance with federal requirements. 6. Failure to Produce System Computations to Support Recipient Claims - DCAS does not have the ability to calculate overpayments or send a demand letter. FNS correspondence letters dated October 18, 2017, and September 20, 2018, advised DHS to suspend the establishment of DCAS claims but allowed DHS to continue servicing ACEDS claims. 7. Treasury Offset Program (TOP) Reporting and Maintenance Decertified - FNS conducted a TOP Technical Review in June 2021 and DHS was decertified from TOP due to the following: • Referral of customers to TOP that are undergoing recoupment. • Incorrect determination of the date of delinquency. • Incorrect debt balance and debt status in TOP. 8. Failure to Initiate Recoupment on Active Households - When DCAS launched in October 2016, more than 3,000 claim cases with outstanding balances originating from SNAP overpayments were converted from ACEDS to DCAS. Some claims were not properly converted or activated in DCAS. As a result, DHS failed to take the required recovery actions, including TOP recovery or activation of the recoupment process through EBT cards. 9. Recipient and Benefit Integrity Report Update Required - DHS must provide an update on the target completion dates for system generation of all SNAP-related reports currently being created through manual intervention. The plan must include the procedures for reviewing and ensuring the accuracy of the data being submitted to Food Programs Reporting System (FPRS) with particular emphasis on the FNS-209 and the FNS-366B reports. DHS experienced some technical challenges in processing and retrieving claim and recoupment information accurately since the launch of DCAS in October 2016, which affected the FNS-209 quarterly reports. The Payment and Collections Division (PCD) and the DCAS report development team have made concerted efforts to improve the ability to generate data for the reports but continue to have difficulties in verifying the accuracy of data due in part to the laborious manual processes involved. Based on the FFY 2018 Program Integrity ME review, lines 3b, 10, and 14 of the FNS-209 failed to reconcile with the detailed documentation. 10. Work Requirements Have Not Been Properly Implemented - DHS is not in compliance with the requirement to accurately report on the FNS 583. DHS is unprepared to implement the work requirement and time limit for able-bodied adults without dependents when the current suspension mandated by the Families First Coronavirus Response Act ends and/or its waiver ends. Additionally, the District is not prepared to apply the Able-Bodied Adults Without Dependents (ABAWD) time limits when their ABAWD waiver expires. 11. Failure to Analyze Client Complaints and Include in the State’s Corrective Action Plans (CAP) Where Appropriate - DHS is failing to analyze client complaints and include in the State’s CAP where appropriate, per 7 CFR 271.6(a)(3) and 275.16. 12. The SNAP Application Does Not Clearly Explain Which Questions Are Required for SNAP - FNS reviewers found that the District’s SNAP application does not provide clear directions about which questions are required for SNAP, versus Cash or Medical Assistance. For example, Step 5 of the application asks “Does anyone in your household (including non-applicants) have any income? Yes – complete below; No – skip to step 6 (Complete if you are applying for Food, Medical, or Cash Assistance).” The directions are confusing and may be difficult to understand. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements resulting from a system implementation. Effect – Without an effectively designed and operated system in place, ineligible beneficiaries may receive benefits under the SNAP grant and DHS may make payments on behalf of those beneficiaries resulting in noncompliance with the eligibility requirements. Inaccurate beneficiary allotment payments could result in participants receiving benefits that they are not entitled to receive under the program. Cause – DHS did not effectively design and operate the ADP system for SNAP which resulted to inaccurate benefit payments. Recommendation – We recommend that DHS continue to evaluate and improve the new ADP system for SNAP to ensure that it addresses all the administration requirements of the SNAP program. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – The DHS and DHCF DCAS team agree with the findings noted in this report. DHS self-reported these findings as part of the agency’s ongoing effort to maintain integrity with all eligibility determinations. The root cause of each of the twelve (12) case issues with the ADP system for SNAP varied. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-002 Prior Year Finding Number: 2024-003 Compliance Requirement: Special Tests and Provisions – EBT Card Security Program: U.S. Department of Agriculture Supplemental Nutrition Assistance Program Cluster ALN: 10.551, 10.561 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: Department of Human Services (DHS)/ Office of the Chief Financial Officer/Office of Finance and Treasury (OCFO/OFT) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 7 CFR Section 274.8(b)(3), As an addition to or component of the Security Program required of Automated Data Processing (ADP) systems, the State agency shall ensure that the following electronic benefits transfer (EBT) security requirements are established: (i) Storage and control measures to control blank unissued EBT cards and PINs, and unused or spare POS devices; (ii) Measures to ensure communication access control. Communication controls shall include the transmission of transaction data and issuance information from POS terminals to work-stations and terminals at the data processing center; (iii) Message validation; (iv) Administrative and operational procedures; (v) A separate EBT security component shall be incorporated into the State agency Security Program for ADP systems. The periodic risk analyses required by the Security Program shall address the following items specific to an EBT system – (B) Completeness and timeliness of the reconciliation system; and (vi) The State agency shall incorporate the contingency plan approved by FNS into the Security Program. Condition – OCFO/OFT for DHS are 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. OCFO/OFT have contracted with Fidelity National Information Service (FIS) for the issuance and security of the EBT cards; however, it is OCFO/OFT’s ultimate responsibility to ensure the contractor has controls in place to maintain adequate security over, and documentation/records of EBT cards in accordance with 7 CFR Section 274.8(b)(3). During our tests of the design and implementation of internal controls and compliance requirements in accordance with 7 CFR Section 274.8(b)(3), we noted the following issues: • For sixteen (16) out of the sixty (60) samples, out of a population of 496 days from two EBT card centers, although both EBT Balance Sheets reconciled with the EBT Card Issuance Logs included in the package, we noted the following deficiencies: o For eleven (11) out of the samples, we noted various issues including (a) the ID type for identification purposes was missing or incorrect, (b) the customer case number was missing, (c) the Photo ID Program Referral Form was missing, (d) the identification type was noted as referral on the EBT Intake Form, but no referral form was attached, (e) the UPO EBT Center Intake Form was not signed by staff who created the card, and (f) the EBT Card Referral Form for the EBT Summer Program was missing the eligibility staff name and signature verification although e-signed by the supervisor. o For five (5) out of the samples, we noted various issues including (a) illegible information on the UPO EBT Training Center Intake Form, (b) the customer name on the UPO EBT Training Center Intake Form did not agree with the name on the EBT Card Issuance Log and a nominee name was not indicated (we were therefore unable to trace and agree the beneficiary names on the UPO EBT Center Intake Forms in the reconciliation package to the EBT Card Issuance Log for (a) or (b)), (c) summary reconciliation sheet (an EBT Balance Sheet) was prepared and agreed to the EBT Card Issuance Log for the day selected for each workstation but the EBT Card Issuance Log was only initialed by the CPS and none initialed by the Witness, and (d) the EBT Card Issuance Log had incorrect page numbers and at least one customer documented on different page and line numbers when we compared the EBT Card Issuance Log to the UPO EBT Training Center Intake Form. • In addition, for one (1) out of the sixty (60) samples, we noted that the information on the summary reconciliation sheet did not agree to the Card Issuance Log. The summary reconciliation sheet shows 121 cards issued while the Card Issuance Log shows a total of 111 cards issued. These exceptions resulted in the Agency not being in compliance with 7 CFR Section 274.8(b)(3). Questioned Costs – None. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without adequate internal controls to ensure compliance with EBT Card Security requirements, there is an increased risk that the inventory of EBT cards will not be properly maintained and accounted for, or that the program will not be in compliance with program requirements. Cause – OCFO/OFT for DHS does not have adequate policies and procedures in place to ensure adequate safeguarding, documentation over issuance and monitoring of EBT cards. Recommendation - We recommend that OCFO/OFT for DHS strengthen formal policies and procedures to maintain adequate security over, and documentation/records for EBT Cards. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – The OCFO/OFT for DHS concurs with this finding. The process to manage card distribution is supported by established policies and procedures documented within the EBT Program Manual. While these controls have been formalized, recent audit results indicate that opportunities for improvement remain, particularly in consistent adherence to defined processes. Accordingly, the focus for the current period is on strengthening compliance with existing policy and procedures rather than further policy development. Emphasis will be placed on reinforcing expectations, enhancing oversight, and ensuring accountability for adherence among staff. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-003 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Agriculture Child Nutrition Cluster ALN: 10.553, 10.555, 10.559 and 10.582 Award #: 11131-028 Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: Office of the State Superintendent of Education (OSSE) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Federal Funding Accountability and Transparency Act (FFATA) Reporting Compliance: In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System (FSRS) or System for Award Management (sam.gov) website from March 8, 2025 onwards. FFATA reports are submitted no later than the month following the month in which this Federal award is made, and annually after that. In accordance with the requirements of 2 CFR Section 1402.300(b), the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR Part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR Part 170 Reporting Subaward and Executive Compensation Information. Schedule of Expenditures of Federal Awards (SEFA) Reporting Compliance: Requirements, Cost Principles, and Audit Requirements, 2 CFR 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. Condition – For one (1) subaward sample selected for FFATA testing, we noted that OSSE failed to submit the FFATA report within the required timeframe. Transactions tested - 8 Subaward not reported - 0 Report not timely - 1 Subaward amount incorrect - Not applicable – subaward amount was correct. Subaward missing key elements - Not applicable – no missing key elements. Dollar amount of tested 2025 subawards - $8,900,559 Subaward not reported - $ - Report not timely - $ 38,487 Subaward amount incorrect - Not applicable – subaward amount was correct. Subaward missing key elements - Not applicable – no missing key elements. Additionally, during our testing of the SEFA, we noted that OSSE incorrectly reported the value of subrecipient expenditures included within the subrecipient expenditure column. For the year ended September 30, 2025, OSSE incurred $25.7 million in subrecipient expenditures for this program and incorrectly reported that there were no subrecipient expenditures on the preliminary SEFA. While the subrecipient expenditure amount was not accurate, the total expenditures amount was accurately reported. The error in the subrecipient expenditures amount was subsequently identified and corrected as a result of the audit process. Questioned Costs – None. Context – This is a condition identified per review of OSSE’s compliance with reporting requirements. Effect – Failure to properly submit the FFATA report and failure to properly review and present expenditure can result in noncompliance with reporting requirements. Cause – OSSE did not have proper internal controls and policies and procedures in place to fulfill the FFATA reporting requirements. In addition, OCFO did not comply with their policies and procedures to ensure accuracy of the SEFA. Recommendation – We recommend that OSSE evaluate its Transparency Act reporting control procedures and update them as necessary to ensure they promote compliance with the Federal regulations. These procedures should include a supervisory review of the report to be submitted timely. In addition, we recommend that OCFO adhere to instituted policies and procedures to ensure accuracy of the SEFA. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – OSSE concurs with the auditor’s finding and recommendations related to this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-004 Prior Year Finding Number: N/A Compliance Requirement: Cash Management; Reporting Program: U.S. Department of Defense National Guard Military Operations and Maintenance (O&M) Projects ALN: 12.401 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: District of Columbia National Guard (DCNG) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The Uniform Guidance at 2 CFR Section 200.305 requires payment methods to align with actual, immediate cash requirements and support allowability of costs. Additionally, 2 CFR Section 200.305(b) requires non-Federal entities to minimize the time elapsing between the transfer of funds from the Federal government and the disbursement of those funds for program purposes. 2 CFR Section 200.302(b)(6) requires financial management systems to provide accurate, current, and complete disclosure of financial results, including proper recording of cash transactions. When entities are funded on a reimbursement basis, program costs must be incurred prior to the date of the reimbursement request (2 CFR Section 200.305(b)(3)). Federal awarding agency regulations and grant award terms require recipients to submit the Request for Advance or Reimbursement (SF-270) timely to support reimbursement requests and proper cash management under the award. Condition – BDO selected four (4) out of twelve (12) months for cash management testing and identified a total of 44 drawdowns within the sampled period. The following findings were noted during testing: • Twenty-four (24) out of forty-four (44) sampled drawdowns were not submitted on a timely or regular basis, occurring beyond the grant period and inconsistent with prescribed monthly timelines. • In three (3) out of forty-four (44) instances, no drawdowns were submitted for the Facility Sustainment Restoration Modernization project (main Federal grant), indicating incomplete initiation of reimbursement requests. • In twenty-three (23) out of forty-four (44) instances, no evidence of submission of reimbursement requests (SF-270) to the Federal officers was available, and forms lacked DCNG Director approval. In addition, in 2 instances (out of 3 noted), although DCNG Director approval existed, no evidence of submission was available. • In three (3) instances, amounts in billing authorization did not match the amounts requested on SF-270, indicating lack of reconciliation control. • In one (1) instance, a grant award was excluded from the billing authorization worksheet, but a corresponding SF-270 existed, which was neither Director-approved nor supported by submission evidence, indicating drawdowns processed outside the established authorization framework. • Evidence of cash receipt was available for only six (6) out of forty-four (44) instances; for the remaining instances, no supporting documentation was provided, and funds were reportedly not received. Questioned Costs – Not determinable. Context – These deficiencies were identified during testing of forty-four (44) cash drawdown and reimbursement transactions performed as part of the audit of internal control over compliance and compliance with Federal cash management requirements. Effect – The identified deficiencies result in noncompliance with Federal cash management requirements and increase the risk of delayed reimbursements. They also create a heightened risk of unsupported, inaccurate, or unauthorized drawdowns being processed. Furthermore, the lack of adequate documentation and controls over cash receipts and grant activity weakens tracking mechanisms, thereby impacting the reliability and accuracy of financial reporting. Cause – These issues are primarily due to a lack of adherence to established controls over the review and approval of drawdowns, along with inadequate monitoring of timelines and completeness across grants. Additionally, the absence of effective reconciliation controls between billing authorizations, SF-270 forms, and cash receipts contributes to inconsistencies. Weak implementation of approval workflows and insufficient documentation retention practices further exacerbate the control deficiencies. Recommendation – We recommend that DCNG strengthen internal controls over Federal reporting compliance by: • Establishing and enforcing a formal drawdown schedule aligned with actual cash needs. • Ensuring all eligible expenditures are included in billing authorizations and drawdowns. • Requiring documented supervisory review and certification of SF-270 prior to submission. • Strengthening approval workflows (e.g., BOX routing) with complete audit trails. • Performing routine reconciliations between billing authorizations, drawdowns, and recorded receipts. • Implementing procedures to track and document receipt of funds for all submitted drawdowns. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DC Government Operations concurs with this finding and acknowledges the deficiencies identified during the audit period. We want to provide important operational context that speaks to the shared nature of the SF-270 drawdown process and how corrective actions will be distributed across responsible parties. The SF-270 reimbursement cycle is a multi-agency process. The Office of the Chief Financial Officer is responsible for generating the drawdown reports that serve as the prerequisite data source for DC Government Operations’ Grants Management Specialist to develop and route SF-270 forms for Director approval and submission to the Grants Officer Representative and U.S. Property and Fiscal Officer. Deficiencies identified in this finding reflect breakdowns at multiple points across that workflow. The corrective action plan assigns responsibility accordingly and includes a designated section for OCFO’s response. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-005 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Defense National Guard Military Operations and Maintenance (O&M) Projects ALN: 12.401 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: District of Columbia National Guard (DCNG) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, 2 CFR Section 200.302(a) requires that the financial management system of each non-Federal entity be sufficient to permit the preparation and timely submission of required financial reports, including those required by program-specific terms and conditions. Federal awarding agency regulations and the terms of the award require recipients to accurately prepare and timely submit required financial reports, including the Federal Financial Report (SF-425). Condition – Management did not submit the annually required SF-425 Federal Financial Report for the National Guard Military Operations and Maintenance (O&M) Projects grant within the reporting periods required by the terms and conditions of the award. Questioned Costs – Not determinable. Context – This deficiency was identified during the audit as part of our review of DCNG’s internal control over compliance and compliance with Federal reporting requirements, including the submission of required financial reports under the program. Effect – Failure to properly review and present expenditures can result in noncompliance with Federal reporting requirements. Cause – DCNG did not adhere to established policies and procedures designed to ensure the timely preparation, supervisory review, and submission of required Federal financial reports. Specifically, controls to monitor reporting deadlines and ensure accountability for report submission were not operating as designed. Recommendation – We recommend that DCNG strengthen internal controls over Federal reporting compliance by: • Assigning responsibility for the preparation and submission of all required Federal reports. • Ensuring required reports, including the SF-425, are reviewed and submitted timely in accordance with grant requirements. • Implementing documented supervisory review procedures and a formal reporting calendar to monitor compliance with reporting deadlines. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DC Government Operations concurs with the finding. We acknowledge that the SF-425 Federal Financial Report is required and that it was not completed. While we do not contest the finding, we offer the following context. The Capital Guardian Youth ChalleNGe Academy (Appendix 4001) agreement has been subject to multiple formal inspections and audits conducted by the National Guard Bureau, the federal oversight authority for DC Government Operations’ thirteen appendices. These inspections were comprehensive and detailed, including a review of grant compliance and financial management practices. At no point during any of these reviews did the National Guard Bureau, the Grants Officer Representative, or the U.S. Property and Fiscal Officer identify SF-425 submission as a deficiency, issue a recommendation for corrective action, or communicate to DC Government Operations that this report was an outstanding requirement under the award. This context does not change the compliance obligation. It is offered because it directly informs the corrective actions below, which are designed to ensure this requirement is memorialized in our internal controls and reporting calendar rather than dependent on external notifications from our federal partners. DC Government Operations is committed to full compliance going forward and has developed corrective action plan in coordination with the Office of the Chief Financial Officer. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-006 Prior Year Finding Number: 2024-009 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of the Treasury COVID-19 – Coronavirus Capital Projects Fund ALN: 21.029 Award #: CPFFN0167 Award Year: 02/09/2022 – 12/31/2026 Government Department/Agency: Office of the Deputy Mayor for Planning and Economic Development (DMPED) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.403, “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented.” In addition, the U.S. Department of Treasury, Guidance for the Coronavirus Capital Projects Fund For States, Territories & Freely Associated States (CPF), Section D. Eligible and Ineligible Cost: states that “Allowable costs are determined in accordance with the cost principles identified in 2 CFR Part 200, Subpart E. Federal funds committed to an award may only be used to cover allowable costs incurred during the period of performance and for allowable closeout costs incurred during the grant closeout process. Cost sharing is not a requirement for the use of these funds” Section C. Project Eligibility: also states the following, “Capital Project or Project means the construction, purchase, and installation of, and/or improvements to capital assets where the costs of such assets are capitalized or depreciated, including ancillary costs necessary to put the capital asset to use. Examples of capital assets include buildings, towers, digital devices and equipment, fiber-optic lines, and broadband networks. Examples of ancillary costs include project costs related to project planning and feasibility, broadband installation, and community engagement, broadband adoption, digital literacy, and training associated with a planned or completed Project funded by the Capital Projects Fund program.” Condition – During our examination of Activities Allowed or Unallowed and Allowable Costs/Cost Principles, we observed that the agency used federal funds to reimburse their subrecipient for $4,100,000 in improvement allowances paid to subtenants at the Max Robinson Center facility in connection with their leases of the space. The subtenant improvement allowances do not appear to align with the definition of ancillary costs as outlined by the CPF guidance mentioned earlier, which describes ancillary costs as project costs related to project planning and feasibility, community engagement, and training associated with a planned or completed Project. BDO deemed this a recurrence of the same substantive issue identified in prior year Finding 2024-009 where the agency charged rent payments to the program reported as ancillary costs, which was identified as questioned cost and was later on disallowed by Treasury in its management decision letter dated December 22, 2025. The prior-year rent payments and the current-year subtenant improvement allowances are both lease and occupancy-related costs charged to the program intended to fund capital project costs, both of which do not appear to meet the definition of ancillary cost. Additionally, the U.S. Department of the Treasury issued an Information Document Request (IDR) that included a request for a detailed explanation of the $4,100,000 in ancillary costs charged to the program. On May 28, 2026, Treasury notified the agency that the IDR was closed based on the agency’s response, however, did not include an affirmative determination that the $4,100,000 in subtenant improvement allowances are allowable as charged under the program. Further response from Treasury on June 1, 2026, noted “no additional questions or concerns about these issues” with regards the Agency asking for Treasury to approve the $4,100,000 to be used as ancillary costs. This further response from Treasury does not give an affirmative determination regarding the allowability of the subtenant improvement allowances charged to the program. Based on the procedures performed and review of relevant guidance, BDO notes that these costs do not meet the requirements to be considered allowable under the program. Questioned Costs – Known amount $4,100,000. Context – This is a condition identified per review of DMPED’s compliance with specified requirements using a statistically valid sample. Total subrecipient expenditures reported as allowable costs were $8,100,000. Effect – DMPED was unable to demonstrate that the subtenant improvement allowance charged was approved by the Department of Treasury and was an allowable cost under the guidance. Cause – DMPED did not have proper internal controls and policies and procedures in place to identify allowable costs and activities. Recommendation – We recommend that DMPED evaluate its procedures to ensure only allowable expenses are charged to the program as required under 2 CFR Section 200.403. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DMPED does not concur with the auditor’s finding regarding the allowability of subtenant improvement allowance per the CPF guidance. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section. BDO’s Response – We have reviewed management’s response, and our finding remains as indicated.

Finding Number: 2025-007 Prior Year Finding Number: N/A Compliance Requirement: Procurement and Suspension and Debarment Program: U.S. Department of the Treasury COVID-19 – Coronavirus Capital Projects Fund ALN: 21.029 Award #: CPFFN0167 Award Year: 02/09/2022 – 12/31/2026 Government Department/Agency: Department of General Services (DGS), on behalf of the Department of Parks and Recreation (DPR) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Section 180.300, Suspension and Debarment, non-federal entities cannot enter into awards, subawards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Non-federal entities must either check for exclusions in the System for Award Management (SAM); collect a certification from the entity, or add a clause or condition to the covered transaction with the entity prior to entering into a covered transaction with a non-federal entity. In addition, in accordance with 2 CFR Section 180.415(b), non-federal entities cannot renew or extend covered transactions (other than no-cost time extension) with any excluded person, or under which an excluded person is a principal, unless the non-federal entity obtains an exception under 2 CFR Section 180.135. Condition – During our testing of procurement and suspension and debarment requirements, we examined seven (7) procurement contracts, valued at $24,796,728, out of a total population of eleven (11), valued at $25,329,758. We noted that DGS did not maintain documentation evidencing the suspension and debarment check for two (2) separate procurement contracts, valued at $97,508, involving the same contractor, hence, performance of the required suspension and debarment check could not be verified. Questioned Costs – Not determinable. Context – DPR owns and maintains budget authority over the project property, while DGS is responsible for managing construction and conducting all procurement activities for the project on DPR’s behalf. As such, DGS performs all required suspension and debarment checks for the project’s procurement transactions. This is a condition identified per review of DGS’s compliance, on behalf of DPR, with the specified procurement and suspension and debarment requirements using a statistically valid sample. Effect – Failure to adhere to the procurement procedures specified in the Uniform Administrative Requirements may lead to the Federal agency disallowing the procurement and associated costs. Cause – DGS did not maintain documentation of the suspension and debarment check as required by 2 CFR Section 180.300 and 2 CFR Section 200.318(i) listed above, preventing verification that the required check was performed prior to accepting the contractor. Recommendation – We recommend that management ensure consistent adherence to federal procurement requirements (2 CFR Section 180.300 and 2 CFR Section 200.318(i)) to perform the suspension and debarment verification for all covered transactions and to retain documentation evidencing the verification in the procurement file. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DGS and DPR management concur with the finding. DGS acknowledges that documentation of the required suspension and debarment checks was not retained in two procurement files. While the checks were performed, the absence of supporting documentation does not meet federal record-retention standards. DGS and DPR remain committed to full compliance with 2 CFR Section 180.300 and 2 CFR Section 200.318(i) and will strengthen internal controls to ensure complete and consistent documentation of all verification activities. The hard copies of the tax compliance documentation may have been filed in the paper records, which are currently unavailable for review. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-008 Prior Year Finding Number: 2024-011 Compliance Requirement: Reporting Program: U.S. Department of the Treasury COVID-19 – Coronavirus Capital Projects Fund ALN: 21.029 Award #: CPFFN0167 Award Year: 02/09/2022 – 12/31/2026 Government Department/Agency: Office of the Deputy Mayor for Planning and Economic Development (DMPED) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System (FSRS) or System for Award Management (sam.gov) website from March 8, 2025, onwards. FFATA reports are submitted no later than the month following the month in which this Federal award is made, and annually after that. In accordance with the requirements of 2 CFR Section 1402.300(b), the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR Part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR Part 170 Reporting Subaward and Executive Compensation Information. Condition – DMPED had a single subrecipient through which $8.1 million in grant funds was expended. During our audit, we noted that DMPED did not submit the required FFATA report for its subrecipient through the FSRS or the sam.gov website for the one subaward issued in fiscal year 2025. Questioned Costs – None. Context – This is a condition identified per review of DMPED’s compliance with reporting requirements. Effect – Failure to properly submit the FFATA report results in noncompliance for the Coronavirus Capital Projects Fund program. Cause – DMPED did not have proper internal controls and policies and procedures in place to fulfill the FFATA reporting requirements. Recommendation – We recommend that DMPED evaluate its Transparency Act reporting control procedures and update them as necessary to ensure they promote compliance with the Federal regulations. These procedures should include a supervisory review of the report information before it is submitted to the System for Award Management (sam.gov) website. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DMPED concurs with the auditor’s findings and recommendations. DMPED will take steps to ensure full reporting compliance with federal awards. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-009 Prior Year Finding Number: N/A Compliance Requirement: Reporting – Common Origination and Disbursement System Program: U.S. Department of Education Student Financial Assistance Cluster ALN: 84.007, 84.033, 84.063, 84.268 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: University of the District of Columbia (UDC) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Federal Register, Volume 86, Number 119 and 34 CFR 690.83; FSA Handbook, technical references on Common Origination and Disbursement (COD) Reports can be found in the 2024-2025 COD Technical Reference in Volume VI, Section 6 outlines the following compliance requirements for originations records and disbursement records reporting to Common Origination and Disbursement (COD) System: Institutions submit Federal Direct Loan Program, Federal Pell Grant Program, and TEACH Grant origination records and disbursement records to the COD system. Origination records can be sent well in advance of any disbursements, as early as the institution chooses to submit them for any student the institution reasonably believes will be eligible for a payment. An institution follows up with a disbursement record for that student no earlier than (1) seven calendar days prior to the disbursement date under the Advance or Heightened Cash Monitoring 1 payment methods, or (2) the date of the disbursement under the Reimbursement or Heightened Cash Monitoring 2 Payment Method. The disbursement record reports the actual disbursement date and the amount of the disbursement. The U.S. Department of Education (the “ED”) processes origination and/or disbursement records and returns acknowledgments to the institution. The acknowledgments identify the processing status of each record: Rejected, Accepted with Corrections, or Accepted. Institutions must report student disbursement data within 15 calendar days after the institution makes a disbursement or becomes aware of the need to make an adjustment to previously reported student disbursement data or expected student disbursement data. Institutions may do this by reporting once every 15 calendar days, bi-weekly or weekly, or may set up their own system to ensure that changes are reported in a timely manner. Key items to test on origination records for the fiscal year are: award amount, enrollment date, verification status code (when the applicant is selected for verification), transaction number, cost of attendance, and the “Academic Start Date” and “Academic End Date”. Key items to test on disbursement records are disbursement date and amount. The information may be accessed by the institution for the auditor. Condition – During our testing, we noted the following issues: • For fourteen (14) of twenty-five (25) COD origination records tested, we identified certain instances in which key items (cost of attendance) for origination records were not correctly reported. • For six (6) of twenty-five (25) COD disbursement records tested, UDC did not report the disbursement to COD within the required timeframe. Questioned Costs – None. Context – This is a condition identified per review of UDC’s compliance with the specified requirements using a statistically valid sample. Effect – UDC was not in compliance with the required federal guidelines over COD disbursement and origination reporting from student financial assistance program. Cause – Insufficient internal control and administrative oversight with respect to COD disbursement and origination reporting. Recommendation – We recommend that UDC enhance its internal controls, policies and procedures to ensure that COD disbursement and origination reporting is performed accurately and timely. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – UDC agrees with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-010 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions – Disbursements to or on Behalf of Students (Notification of Disbursement) Program: U.S. Department of Education Student Financial Assistance Cluster ALN: 84.007, 84.033, 84.063, 84.268 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: University of the District of Columbia (UDC) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 34 CFR Section 668.165(a)(1)(2)(3) outlines the following compliance requirements for award disbursement notifications: (a) Notices. (1) Before an institution disburses title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each title IV, HEA program, and how and when those funds will be disbursed. If those funds include Direct Loan program funds, the notice must indicate which funds are from subsidized loans, which are from unsubsidized loans, and which are from PLUS loans. (2) Except in the case of a post-withdrawal disbursement made in accordance with Section 668.22(a)(5), if an institution credits a student ledger account with Direct Loan, Federal Perkins Loan, or TEACH Grant program funds, the institution must notify the student or parent of— (i) The anticipated date and amount of the disbursement; (ii) The student's or parent's right to cancel all or a portion of that loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement and have the loan proceeds or TEACH Grant proceeds returned to the Secretary; and (iii) The procedures and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement. (3) The institution must provide the notice described in paragraph (a)(2) of this section in writing— (i) No earlier than 30 days before, and no later than 30 days after, crediting the student's ledger account at the institution, if the institution obtains affirmative confirmation from the student under paragraph (a)(6)(i) of this section; or (ii) No earlier than 30 days before, and no later than seven days after, crediting the student's ledger account at the institution, if the institution does not obtain affirmative confirmation from the student under paragraph (a)(6)(i) of this section. Condition – During our testing, we noted the following issues: • For twenty-three (23) of twenty-five (25) Title IV disbursements tested, UDC did not provide evidence of award letter communication to the students of the amount and type of Title IV funds the student could expect to receive, including how and when disbursements would be made, prior to making a disbursement of funds. • For eleven (11) out of twenty-five (25) direct loan disbursements tested, UDC did not send disbursement notification to the students/parents. • For two (2) out of twenty-five (25) direct loan disbursements tested, the disbursement notification sent to the students/parents was not performed within allowable timeframe. Questioned Costs – None. Context – This is a condition identified per review of UDC’s compliance with the specified requirements using a statistically valid sample. Effect – UDC was not in compliance with the required federal guidelines over notification of disbursements compliance requirement. Cause – Insufficient administrative oversight with respect to the notification of disbursements compliance requirement. Recommendation – We recommend that UDC enhance its internal controls, policies and procedures surrounding the disbursement of federal student aid to ensure compliance with the notification of disbursements requirements. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – UDC agrees with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-011 Prior Year Finding Number: 2024-012 Compliance Requirement: Special Tests and Provisions – Disbursements to or on Behalf of Students (Credit Balances) Program: U.S. Department of Education Student Financial Assistance Cluster ALN: 84.007, 84.033, 84.063, 84.268 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: University of the District of Columbia (UDC) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 34 CFR Section 668.164(c)(3)(i) and (h)(1)(2) outlines the following compliance requirements for Title IV credit balances: (c) Crediting a student’s ledger account. (i) An institution may include in one or more payment periods for the current year, prior year charges of not more than $200 for— (A) Tuition, fees, and institutionally provided room and board, as provided under paragraph (c)(1)(i) of this section, without obtaining the student's or parent's authorization; and (B) Educationally related goods and services provided by the institution, as described in paragraph (c)(1)(ii) of this section, if the institution obtains the student's or parent's authorization under Section 668.165(b). (h) Title IV, Higher Education Act (HEA) credit balances. (1) A title IV, HEA credit balance occurs whenever the amount of title IV, HEA program funds credited to a student's ledger account for a payment period exceeds the amount assessed the student for allowable charges associated with that payment period as provided under paragraph (c) of this section. (2) A title IV, HEA credit balance must be paid directly to the student or parent as soon as possible, but no later than— (i) Fourteen (14) days after the balance occurred if the credit balance occurred after the first day of class of a payment period; or (ii) Fourteen (14) days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period. Condition – During our testing, we noted the following issues: • For six (6) of forty (40) credit balances selected for testing, the credit balance created by the disbursement of Title IV awards was not refunded to the student within the required 14-day timeframe. • For one (1) of forty (40) credit balances selected for testing, a prior year charge in excess of $200 was resolved using federal funds disbursed in current year. Questioned Costs – None. Context – This is a condition identified per review of UDC’s compliance with the specified requirements using a statistically valid sample. Effect – UDC was not in compliance with the required federal guidelines over credit balances from student financial assistance. Cause – Insufficient internal control and administrative oversight with respect to the disbursement of federal awards. Recommendation – We recommend that UDC enhance its internal controls, policies and procedures to ensure that Title IV credit balances are paid timely to students. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – UDC agrees with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-012 Prior Year Finding Number: 2024-013 Compliance Requirement: Special Tests and Provisions – Return of Title IV Funds Program: U.S. Department of Education Student Financial Assistance Cluster ALN: 84.007, 84.033, 84.063, 84.268 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: University of the District of Columbia (UDC) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 34 CFR Section 668.173(b)(1) outlines the following compliance requirements for Title IV refunds. (b) Timely return of title IV, Higher Education Act (HEA) program funds. In accordance with procedures established by the Secretary or FFEL Program lender, an institution returns unearned title IV, HEA program funds timely if— (1) The institution deposits or transfers the funds into the bank account it maintains under Section 668.163 no later than 45 days after the date it determines that the student withdrew. Condition – During our testing, we noted the following exception: • For one (1) of seven (7) students selected for Title IV refund calculation testing, the required Title IV refund was not adjusted in the U.S. Department of Education's Common Origination and Disbursement (COD) system within the required timeframe. Questioned Costs – None. Context – This is a condition identified per review of UDC’s compliance with the specified requirements using a statistically valid sample. Effect – UDC was not compliant with the Return of Title IV Funds compliance requirements. Cause – Insufficient administrative oversight with respect to Return of Title IV Funds requirements. Recommendation – We recommend that UDC enhance its process surrounding the disbursement of federal student aid to ensure compliance with the Return of Title IV Funds requirements. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – UDC agrees with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-013 Prior Year Finding Number: 2024-014 Compliance Requirement: Special Tests and Provisions – NSLDS Reporting Program: U.S. Department of Education Student Financial Assistance Cluster ALN: 84.007, 84.033, 84.063, 84.268 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: University of the District of Columbia (UDC) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Institutions are required to report enrollment information under the Pell grant and the Direct and Federal Family Education Loan (“FFEL”) loan programs via the National Student Loan Data System (“NSLDS”) (OMB No. 1845-0035), although FFEL loans are no longer made or a part of the Student Financial Assistance Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309; Perkins 34 CFR 674.19(f)). The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (“NSLDSFAP”) website which the financial aid administrator can access for the auditor. The data on the institution’s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment information. There are two categories of enrollment information, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. The NSLDS Enrollment Reporting Guide provides the requirements and guidance for reporting enrollment details using the NSLDS Enrollment Reporting Process. Institutions are responsible for accurately reporting all Campus-Level Record data elements. ED considers the following data elements to be high risk: • Office of Postsecondary Education Identification (OPEID) Number – This is the OPEID for the location that the student is actually attending. • Enrollment Effective Date – The date that the current enrollment status reported for a student was first effective. (See 4.4.2 of the NSLDS Enrollment Reporting Guide for the specific requirements for reporting the Enrollment Effective Date. Also see 4.4.3 of the NSLDS Enrollment Reporting Guide for additional guidance on effective dates for Withdrawal versus Graduation and Electronic Announcement titled – NSLDS Enrollment Reporting – Submission Dates, Effective Dates and Certification Dates, dated April 20, 2017, for additional information and examples at https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2017-04-20/general-subject-nslds¬enrollment-reporting-submission-dates-effective-dates-and-certification-dates.) • Enrollment Status – The student’s enrollment status as of the reporting date; full-time (F), three-quarter time (Q), half-time (H), less than half-time (L), leave of absence (A), graduated (G), withdrawn (W), deceased (D), never attended (X) and record not found (Z). (See 4.4.4 of the NSLDS Enrollment Reporting Guide for additional guidance on reporting graduated and withdrawn for the Campus-Level Record versus the Program Level Record and 4.4.10 for further guidance on Enrollment Status reporting at the Campus-Level Record and the Program-Level Record.) • Certification Date – The Date enrollment certified by institution. At a minimum, institutions are required to certify enrollment every 60 days or every other month. Institutions are responsible for accurately reporting all Program-Level Record data elements. ED considers the following data elements to be high risk: • OPEID Number – This is the OPEID for the location that the student is actually attending. • CIP Code – The Classification of Instructional Programs (CIP) is a set of codes that define fields of study. CIP Codes are maintained by ED's National Center for Education Statistics (NCES). They were most recently updated in 2020 and are usually updated every ten years. A listing of current CIP codes is available at: https://nces.ed.gov/ipeds/cipcode/resources.aspx?y=56. • CIP Year – Year for the corresponding CIP code. The CIP Year for the codes currently used by NSLDS is 2020. • Credential Level – Indicates the level of a credential the student will receive for the program the student is attending, for example undergraduate certificate, associate degree, or bachelor’s degree. (See 4.4.7 of the NSLDS Enrollment Reporting Guide for additional guidance on reporting the Credential Level.) • Published Program Length Measurement – The institution identifies whether the Published Program Length is in days, weeks, or years. • Published Program Length - Published Program Length should be reported based on the definition of “normal time” to completion in the regulations at 34 CFR 668.41(a), • Program Begin Date – The Program Begin Date is the date the student first began attending the program being reported. Typically, this would be the first day of the term in which the student began enrollment in the program, unless the student enrolled in the program on an earlier date. (See 4.4.8 of the NSLDS Enrollment Reporting Guide for additional guidance.) • Program Enrollment Status – The student’s enrollment status as of the reporting date; full-time (F), three-quarter time (Q), half-time (H), less than half-time (L), leave of absence (A), graduated (G), withdrawn (W), deceased (D), never attended (X) and record not found (Z). (See 4.4.4 of the NSLDS Enrollment Reporting Guide for additional guidance on reporting graduated and withdrawn for the Campus-Level Record versus the Program Level Record and 4.4.10 for further guidance on Enrollment Status reporting at the Campus-Level Record and the Program-Level Record.) • Program Enrollment Effective Date – The date when the student's current program status first took effect. Condition – UDC did not submit an accurate status change notification or failed to submit timely notification to the NSLDS website for certain students who graduated, withdrew or had a change in their enrollment status (full time, half time or less than half time) during the year. BDO selected a random sample of forty (40) students used to evaluate both campus and program level enrollment reporting compliance requirements. For campus level enrollment, we noted the following exceptions: • For five (5) of forty (40) campus level records tested, UDC did not certify the students’ enrollment data within 60 days. • For four (4) of forty (40) campus level records tested, UDC did not accurately report the students’ enrollment effective date. • For three (3) of forty (40) campus level records tested, UDC did not correctly report the students’ enrollment status. For program level enrollment, we noted the following exceptions: • For four (4) of forty (40) program level records tested, UDC did not accurately report the program begin date. • For eleven (11) of forty (40) program level records tested, UDC did not accurately report the students’ enrollment effective date. • For two (2) of forty (40) program level records tested, UDC did not accurately report the students’ enrollment status. Questioned Costs – None. Context – This is a condition identified per review of UDC’s compliance with the specified enrollment requirements using a statistically valid sample. Effect – UDC is not in compliance with enrollment reporting requirements. Failure to promptly report accurate and timely changes in enrollment status may adversely impact the repayment status for student loan borrowers. Cause – Insufficient internal controls and administrative oversight with respect to enrollment reporting requirements. Recommendation – We recommend that UDC enhance its procedures and internal controls over enrollment reporting to ensure that significant data elements under both campus-level and program-level records are reported accurately and timely to NSLDS. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – UDC agrees with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-014 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Immunization Cooperative Agreements ALN: 93.268 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: Department of Health (DC Health) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.403, “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented.” Condition – During our testwork over nonpayroll transactions for the Activities Allowed or Unallowed and Allowable Costs/Cost Principles, we noted that for one (1) out of forty-two (42) samples, the transaction was charged twice to the program. Total amount of nonpayroll transactions is $11,925,998, and the amount of exception is $95,827. Questioned Costs – Known amount is $95,827. Context – This is a condition identified per review of DC Health’s compliance with specified requirements using a statistically valid sample. Total amount of samples selected for testing amounted to $6,817,550. Effect – Lack of proper review of expenditures could result to unallowable costs charged to the program. Cause – DC Health does not have adequate controls in place to ensure that only allowable costs are charged to the program. Recommendation – We recommend that DC Health strengthen internal control procedures to ensure that expenditures are allowable, and that sufficient documentation is retained to support that allowability. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DC Health concurs with the finding. The expenditure in question was an allowable cost journalized to the grant. The error occurred when the journal was duplicated. To correct the issue, other allowable expenditures were journalized from the grant to local and therefore prevented a duplicate drawdown in PMS. Also note that the vendor did not receive duplicate payment. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-015 Prior Year Finding Number: 2024-016 Compliance Requirement: Eligibility; Special Tests and Provisions – Income Eligibility and Verification Sytem Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. For TANF, per 45 CFR Section 205.60 (a), “The State agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of financial assistance, and the use of any information obtained under Section 205.55, with respect to individual applications denied, recipients whose benefits have been terminated, recipients whose benefits have been modified, and the dollar value of these denials, terminations and modifications. Under this requirement, the agency will keep individual records which contain pertinent facts about each applicant and recipient. The records will include information concerning the date of application and the date and basis of its disposition; facts essential to the determination of initial and continuing eligibility (including the individual's social security number, need for, and provision of financial assistance); and the basis for discontinuing assistance.” Per 45 CFR Section 205.56(a)(1)(i), “The State agency shall review and compare the information obtained from each data exchange against information contained in the case record to determine whether it affects the applicant’s or the recipient’s eligibility or the amount of assistance.” Per 45 CFR Section 205.60 (a), “The State agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of financial assistance, and the use of any information obtained under Section 205.55, with respect to individual applications denied, recipients whose benefits have been terminated, recipients whose benefits have been modified, and the dollar value of these denials, terminations and modifications. Under this requirement, the agency will keep individual records which contain pertinent facts about each applicant and recipient. The records will include information concerning the date of application and the date and basis of its disposition; facts essential to the determination of initial and continuing eligibility (including the individual's social security number, need for, and provision of financial assistance); and the basis for discontinuing assistance.” Condition – During our testing over beneficiary eligibility compliance requirements of the Temporary Assistance for Needy Families (TANF) program, we selected a sample of sixty (60) beneficiaries in fiscal year 2025 to test DHS’ compliance with TANF eligibility requirements. There were a total of 56,211 payments in the population, with a total dollar amount of $43,036,388. We noted the following: • For three (3) out of sixty (60) samples, DHS was unable to provide support that would allow us to test that cash assistance was not provided to an individual during the 10-year period that began on the date the individual was convicted in Federal or State court of having made a fraudulent statement or representation with respect to place of residence. In addition, for these three (3) samples, DHS was unable to locate the customer's application that was submitted prior to the sample month tested. • For three (3) out of sixty (60) samples, DHS was unable to provide the most recent application form that was submitted by the customer prior to the month tested. We were therefore unable to determine whether cash assistance was provided to an individual who was deemed eligible to receive TANF benefits prior to the approval of the application by the Social Service Representatives (SSR). • For all six (6) of these samples above, we noted that the SSR did not ensure that all required information was received prior to approving the application. These exceptions happened due to inadequate review of the application for cash assistance by the SSR. The questioned costs for the above issues amounted to $44,618, which represents 10.50% of the total TANF federal benefits paid to the 60 sampled items of $425,045. In addition, while testing the same sixty (60) samples for the Special Tests and Provisions – Income Eligibility and Verification System compliance requirement, although all evidence provided supported the use of the Bendex system during the eligibility process, for one (1) of sixty (60) the application, which included an adult in the case, was not provided. Questioned Costs – Known amount is $44,618. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without properly maintaining documentation to support eligibility determinations, ineligible beneficiaries may receive benefits under the TANF grant and DHS may make payments on behalf of those beneficiaries resulting in noncompliance with the eligibility requirements. Cause – DHS did not consistently adhere to its established policies and procedures requiring it to maintain documentation supporting participant eligibility. Recommendation - We recommend that DHS strengthen its existing policies and procedures over the review and maintenance of appropriate documentation to ensure compliance with eligibility requirements. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – The Division of Program Operations (DPO) of DHS acknowledges and agrees with the audit findings and related observations. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-016 Prior Year Finding Number: 2024-017 Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: Department of Human Services (DHS) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to Title IV-A, Section 411 of the Social Security Act (the Act), 45 CFR 265.3, and the American Recovery and Reinvestment Act (ARRA) of 2009, (Public Law 111-5), each State must file an annual report containing information on the TANF program and the State’s maintenance-of-effort (MOE) program(s) for that year, including strategies to implement the Family Violence Option, State diversion programs, and other program characteristics. States are required to submit the ACF-196R report quarterly, beginning in Federal Fiscal Year (FFY) 2015, in lieu of the SF-425, Federal Financial Report (financial status). Each State files quarterly expenditure data on the State’s use of Federal TANF funds, State TANF MOE expenditures, and State expenditures of MOE funds in separate State programs. If a State is expending Federal TANF funds received in prior fiscal years, it must file a separate quarterly TANF Financial Report for each fiscal year that provides information on the expenditures of that year’s TANF funds. This form must be used for reporting regular TANF grant funds, Contingency Funds, and ARRA-Emergency Fund for TANF State Programs funds. See TANF-ACF-PI-2014-02, available at http://www.acf.hhs.gov/programs/ofa/resource/tanf-acf-pi-2014-02, for more information. Condition – During our test work over the quarterly ACF-196R report, we noted for Grant Identifying number 2501DCTANF/2501DCTAN3, the ACF-196R filed for the 4th quarter in fiscal year 2025 showed a variance of $164,659, between the cumulative amount reported on the ACF-196R amounting to $67,867,001, and the sum of federal and contingency funds as reported in the SEFA detail amounting to $67,702,342. DHS was unable to provide support for the variance. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without proper internal controls and policies and procedures in place to ensure that correct amounts were reported and were properly reviewed, DHS may report incorrect amounts on the quarterly ACF-196R reports. Cause – Management did not have proper internal controls and policies and procedures in place to ensure that the amounts on the ACF-196R were properly reported, and the reports were properly reviewed and approved. Recommendation - We recommend that DHS implement policies, procedures and controls that will enable accurate reconciliation between the data sources used in the preparation of the ACF-196R reports to ensure proper reporting of TANF expenditures. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS concurs with the finding. The SEFA submitted was correct, but the amount reported on the ACR-196 was incorrect because there was an undetected change in a formula in the workbook. This resulted in an error not being detected. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-017 Prior Year Finding Number: 2024-018 Compliance Requirement: Reporting; Special Tests and Provisions – Penalty for Failure to Comply with Work Verification Plan Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: Department of Human Services (DHS)/ Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 261.60 (a), “A State must report the actual hours that an individual participates in an activity, subject to the qualifications in paragraphs (b) and (c) of this section and Section 261.61(c). It is not sufficient to report the hours an individual is scheduled to participate in an activity. (b) For the purposes of calculating the work participation rates for a month, actual hours may include the hours for which an individual was paid, including paid holidays and sick leave. For participation in unpaid work activities, it may include excused absences for hours missed due to a maximum of 10 holidays in the preceding 12-month period and up to 80 hours of additional excused absences in the preceding 12-month period, no more than 16 of which may occur in a month, for each work-eligible individual. Each State must designate the days that it wishes to count as holidays for those in unpaid activities in its Work Verification Plan. It may designate no more than 10 such days. In order to count an excused absence as actual hours of participation, the individual must have been scheduled to participate in a countable work activity for the period of the absence that the State reports as participation. A State must describe its excused absence policies and definitions as part of its Work Verification Plan, specified at Section 261.62. (c) For unsubsidized employment, subsidized employment, and OJT, a State may report projected actual hours of employment participation for up to six months based on current, documented actual hours of work. Any time a State receives information that the client's actual hours of work have changed, or no later than the end of any six-month period, the State must re-verify the client's current actual average hours of work, and may report these projected actual hours of participation for another six-month period. (d) A State may not count more hours toward the participation rate for a self-employed individual than the number derived by dividing the individual's self-employment income (gross income less business expenses) by the Federal minimum wage. A State may propose an alternative method of determining self-employment hours as part of its Work Verification Plan. (e) A State may count supervised homework time and up to one hour of unsupervised homework time for each hour of class time. Total homework time counted for participation cannot exceed the hours required or advised by a particular educational program.” Per 45 CFR Section 261.61 (a), “A State must support each individual’s hours of participation with documentation in the case file. In accordance with Section 261.62, a State must describe in its Work Verification Plan the documentation it uses to verify hours of participation in each activity.” According to the DC State Verification Plan, the D.C. Department of Human Services (DHS), Department of Human Services Monitoring Unit reviews and audits all documentation submitted by vendors reflecting the activities of recipients in TANF Employment program. This documentation includes time sheets, activity logs, school records, pay stubs, and verification of employment, work experience and on-the-job training. The Monitoring Unit completes this audit process to determine if sufficient documentation exists to substantiate reported time and attendance data, to warrant a payment to TANF Employment program vendors, and submission of countable hours for federal reporting purposes. The District projects hours of participation in unsubsidized, self-employment for six months or until the recipient's next scheduled recertification, whichever is sooner. Per 45 CFR Section 265.7 (a)-(c), “Each State’s quarterly reports (the TANF Data Report, the TANF Financial Report (or Territorial Financial Report), and the SSP-MOE Data Report) must be complete and accurate and filed by the due date.” For disaggregated data report, ‘a complete and accurate report’ means that: (1) The reported data accurately reflect information available to the State in case records, financial records, and automated data systems, and include correction of the quarterly data by the end of the fiscal year reporting period; (2) The data are free from computational errors and are internally consistent (e.g., items that should add to totals do so); (3) The State reports data for all required elements (i.e., no data are missing); (4)(i) The State provides data on all families; or (ii) if the State opts to use sampling, the State reports data on all families selected in a sample that meets the specification and procedures in the TANF Sampling Manual (except for families listed in error); and (5) Where estimates are necessary (e.g., some types of assistance may require cost estimates), the State uses reasonable methods to develop these estimates. For an aggregated data report, “a complete and accurate report” means that: (1) The reported data accurately reflect information available to the State in case records, financial records, and automated data systems; (2) The data are free from computational errors and are internally consistent (e.g., items that should add to totals do so); (3) The State reports data on all applicable elements; and (4) Monthly totals are unduplicated counts for all families (e.g., the number of families and the number of out-of-wedlock births are unduplicated counts).” 45 CFR Section 265.7 (g) states that “States must maintain records to adequately support any report, in accordance with 2 CFR Section 200.334 through 200.338.” Condition – During our test work over a sample of sixty (60) out of 5,549 participants for Special Tests and Provisions - Penalty for Failure to Comply with Work Verification Plan and Reporting, we noted: • For seven (7) instances, we noted that although the hours reported on the ACF-199 report met or exceeded the required hours, the hours reported did not agree with the average hours reported in CATCH, or were not supported by documentation (audited timesheets or work documentation). In addition, for three (3) of these instances, the supported hours did not meet the required hours. • For four (4) instances, we noted that the hours reported in the ACF-199 were less than the hours required; however, we noted that the customer was not sanctioned for work requirement non-compliance. In addition, for one (1) of these instances, the hours reported were not supported. • For thirteen (13) instances, we noted that the average hours reported in the ACF-199 were not properly supported. In addition, for eight (8) of these instances, the customer was not sanctioned for work requirement non-compliance. We further noted that for one (1) of these instances, additional support was provided but it was related to four (4) months after the sample selected and was not valid for the month being tested. • For two (2) instances, we noted that although participant work activity was adequately documented and properly supported by audited timesheets or work documentation support, the participant did not meet the work participation weekly hours requirement. In addition, for these samples, we noted that the hours reported on the ACF-199 report do not agree with the average hours in CATCH. • For four (4) instances, we noted that for a customer with unsubsidized employment, although the reported hours and the support met or exceeded the required hours, the reported hours on the ACF-199 report do not agree with the documentation provided (hours reported were less than actual support). • For one (1) instance, this customer was not found in CATCH, therefore there were no required hours included in CATCH. We reviewed the timesheet provided for one week during the month tested. We noted that the reported hours were not supported. • For one (1) instance, the hours reported for the Week 1 timesheet covered a two-week period that crossed two months. However, all the hours on the timesheet were improperly allocated to Week 1 of the month being tested instead of being allocated to the two weeks. We noted that the average hours reported on the ACF-199 report do not agree with the hours approved in CATCH, however, the average hours calculated using the correct hours agree with what was reported on the ACF-199 report. BDO noted that the approved hours for Week 1 in CATCH appear to be incorrect but the reported hours for the month appear to be correct. • For one (1) instance, the hours reported for one week did not agree with the hours on the approved hardcopy timesheet. As a result of the variance in the hours for that week, the hours reported did not agree with the recalculated hours, and the required hours were not met. The information tested in our sample represents the underlying data used in Reporting for the 1st and 4th quarters of fiscal year 2025. Consequently, DHS incorrectly reported data in the ACF-199 report for the 1st and 4th quarters of fiscal year 2025. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Data within the ACF-199 report may not be complete and accurate. Specifically, if the work participation data is not substantiated, or inconsistencies are noted, it may result in inaccurate data being reported and may lead to an incorrect ACF-199 report and could result in an incorrect allocation of Federal Funds to the state. Cause – Controls are not operating effectively over the documentation of work participation data to ensure that adequate evidence of the work participation is maintained. Recommendation - We recommend that DHS enforce existing policies and procedures and implement additional controls to ensure that adequate documentation is maintained to substantiate the work participation data reported in the ACF-199 report in accordance with the District of Columbia Work Verification Plan. We also recommend that DHS implement policies, procedures and controls that will enable an accurate reconciliation between the data sources used in the preparation of the ACF-199 report to ensure proper reporting of data elements. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS agrees with the findings and will work with the DC Access System (DCAS) and Division of Innovation and Change Management (DICM) teams to mitigate the causes of the findings. These findings are mostly residual issues with the tables in DHS/ESA DCAS system. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-018 Prior Year Finding Number: 2024-019 Compliance Requirement: Special Tests and Provisions – Child Support Non-Cooperation Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 264.30 (a) (1) The State agency must refer all appropriate individuals in the family of a child, for whom paternity has not been established or for whom a child support order needs to be established, modified or enforced, to the child support enforcement agency (i.e., the IV-D agency). (2) Referred individuals must cooperate in establishing paternity and in establishing, modifying, or enforcing a support order with respect to the child. Per 45 CFR Section 264.30 (c) The IV-A agency must then take appropriate action by: (1) Deducting from the assistance that would otherwise be provided to the family of the individual an amount equal to not less than 25 percent of the amount of such assistance; or (2) Denying the family any assistance under the program. Per the Code of the District of Columbia - Section 4–205.55. (a) The Mayor shall give timely and adequate notice in cases of intended action to discontinue, withhold, terminate, suspend, reduce assistance, or make assistance subject to additional conditions, or to change the manner or form of payment to a protective, vendor, or 2-party payment. (1) “Timely” means that the notice is postmarked at least 15 days before the date upon which the action would become effective, except as provided in Section 4-205.54(d). (2) “Adequate” means that the written notice includes a statement of what action the Mayor intends to take, the reasons for the intended action, the specific law and regulations supporting the action, an explanation of the individual’s right to request a hearing, and the circumstances under which assistance will be continued if a hearing is requested. Condition – During our compliance test work for the Special Tests and Provisions – Child Support Non-Cooperation compliance requirement, we tested sixty (60) out of a population of 534 child support cases referred by the Child Support Enforcement Division (CSED) within the DC Office of the Attorney General to the TANF program as having not cooperated with Child Support. We noted the following: • For ten (10) cases, we reviewed the customer's file noting that the customer was not sanctioned although requested by the DC Office of the Attorney General. We reviewed the customer's file and noted insufficient documentation explaining why customer was not sanctioned. DHS was unable to provide support to explain why the individual was not sanctioned. • For two (2) cases, we reviewed the District of Columbia Access System (DCAS) noting the amount the customer was sanctioned was 25% of the eligible amount. However, the letter sent to the customer in September 2025 did not reflect the upcoming Cost of Living Adjustment for the period starting October 2025; therefore, the benefit amount that was included in the letter was incorrect. • For one (1) case, we reviewed DCAS noting the amount the customer was sanctioned was 25% of the eligible amount. However, the letter sent to the customer did not reflect the correct sanction amount. • For one (1) case, we reviewed the sanction letter in DCAS noting that the action taken was accurate but not timely, by comparing the date the notice was printed and the date the sanction was effective to the Case Action Date submitted by CSED. We noted that the customer was sanctioned as requested by the DC Office of the Attorney General, but DHS - ESA was unable to locate documentation to explain why the customer was not sanctioned for the month of May 2025. The sanction started in June 2025. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without properly maintaining documentation to support not imposing sanctions to individuals may result to noncompliance with TANF Child Support Non-Cooperation compliance requirements. Cause – DHS did not consistently adhere to its established policies and procedures requiring it to maintain documentation supporting compliance with TANF Child Support Non-Cooperation compliance requirements. Recommendation - We recommend that DHS strengthen its existing policies and procedures over enforcement of sanctions and maintenance of appropriate documentation to ensure compliance with TANF Child Support Non-Cooperation compliance requirements. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS/ESA agree with the auditor’s findings regarding the lack of completion of requests from the Child Support Enforcement (CSE) to the TANF program to impose a child support on parents who have not cooperated with child support compliance requirements. The incomplete work was due to staff transitions occurring during the review period which impacted the oversight and productivity of DHS/ESA staff working on the child support sanction process. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-019 Prior Year Finding Number: 2024-020 Compliance Requirement: Special Tests and Provisions – Penalty for Refusal to Work Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 261.14 (a) and (b) “(a) If an individual refuses to engage in work required under section 407 of the Act, the State must reduce or terminate the amount of assistance payable to the family, subject to any good cause or other exceptions the State may establish. Such a reduction is governed by the provisions of Section 261.16. The State must, at a minimum, reduce the amount of assistance otherwise payable to the family pro rata with respect to any period during the month in which the individual refuses to work. The State may impose a greater reduction, including terminating assistance.” Condition – During our testing of Special Tests and Provisions – Penalty for Refusal to Work, we selected a sample of sixty (60) cases in fiscal year 2025 to test DHS’ compliance with specified requirements. Total population is comprised of 5,911 case numbers for individuals that received payments for months where they did not meet the work requirements. We noted that a customer must have four weeks of noncompliance, mandated communication from the TANF Employment and Education Program provider, and be given at least 15 days’ notice before a sanction could be imposed. Total dollar amount is $27,545,791. We noted the following: • For one (1) instance, there were no hours reported in CATCH for October 2024 through June 2025 and August to September 2025. Per review of DCAS the customer had hours recorded for July 2025 only. However, there was no sanction for this customer in DCAS for December 2024 to June 2025 and October 2025 going forward for the hours not worked in August to September 2025. DHS indicated that no action was taken after Sanction flag. DHS was unable to provide support to explain why the customer was not sanctioned. • For one (1) instance, there were no hours reported in CATCH for May 2025 through July 2025. Per review of DCAS there was no documentation to explain why there was no sanction for the month of July 2025. DHS was unable to provide support to explain why the customer was not sanctioned. • For one (1) instance, there were no hours reported in CATCH for February to April 2025 and no sanction imposed in April 2025. Per response from DHS-ESA/OPM "Customer was assigned to CATCH 3.0 (JP)". However, DHS was unable to provide support to explain why the customer was not sanctioned. Total payments made to these three (3) individuals during the periods in question was $25,151. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without properly maintaining documentation to support exemptions or justifications for not imposing sanctions to individuals, individuals may be given full benefits instead of reduced federal benefits under the TANF program. In addition, miscoding of hours or amounts paid may result to providing inappropriate benefits to individuals. Cause – DHS did not consistently adhere to its established policies and procedures requiring it to maintain documentation to support exemptions or justifications for individuals who refuse to fulfill the minimum working requirements to receive or maintain benefits under the TANF program. In addition, controls are not operating effectively over the supervisory review of transactions posted in DCAS to ensure accuracy. Recommendation - We recommend that DHS enforce existing policies and procedures over review and maintenance of appropriate documentation to ensure compliance with Penalty for Refusal to Work compliance requirements. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS agrees with the findings and will work within the Division of Customer Workforce Employment and Training (DCWET) team to mitigate the causes of the findings. These findings are mostly caused by inconsistency of caseload management practices. Another mitigating factor is attributable to glitches in information technology around the sanction process. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-020 Prior Year Finding Number: 2024-023 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Foster Care – Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.405, a cost is allocable to a Federal award if it is assignable to that award in accordance with the relative benefits received. In addition, under 2 CFR Section 200.403, allowable costs must be adequately documented. Per 2 CFR Section 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and must be incorporated into the official records of the recipient or subrecipient. The regulation also allows certain alternative approaches when properly documented and approved by the appropriate Federal agency or cognizant agency, as applicable. Based on CFSA’s Human Resources Administration Issuance: HR-06-1 dated May 12, 2006, staff must seek and receive advance written approval prior to working overtime. It also indicates that in emergency situations requiring an immediate response, the employee shall make every reasonable attempt to obtain advance approval by an appropriate manager or supervisor. Per District Personnel Issuance No. 2018-00 (Annual Leave) effective April 21, 2018 “Using Annual Leave” - An employee may use accrued annual leave at any time during the leave year if they receive approval from their immediate supervisor or the agency head responsible for the employee’s timesheet. If an employee wishes to use their accrued annual leave, they must: 1. Submit a request in advance to use annual leave to their manager or supervisor. 2. Receive approval from the manager or supervisor; and 3. Record the approved leave taken on their timesheet in PeopleSoft. Per CFSA’s guidelines dated May 15, 2021, employees must file a written request within agency’s prescribed time limits to use sick leave. Employees should consult their agency for specific guidelines on how to request sick leave. If no specific guidelines exist, employees should submit their leave requests through PeopleSoft. For doctor’s appointment, employees must make sick leave requests at least 24 hours in advance for medical, dental, or eye examinations or treatments. Employees should also be prepared to submit supporting evidence of the appointment according to their agency’s policy. CFSA uses a Random Moment Study (RMS) to allocate the administrative costs to the Foster Care program. The study entails selecting a sample of social workers on a quarterly basis to participate in the RMS study where the social workers are required to notate what they were doing at the sample moment. Subsequently, the supervisors of these social workers review and validate their responses. Validation of the responses adds an extra layer of reliability to the data collected. It ensures that the information provided by social workers is accurate and reflective of their actual activities. This validation process helps maintain the integrity of the study and ensures that the results are trustworthy in making decisions when determining the RMS percentage utilization in the allocation of the administrative costs. Condition – The following issues were observed: 1. During our review of the Activities Allowed or Unallowed and Allowable Costs/Cost Principles, we noted that CFSA was unable to provide sufficient supporting documentation to substantiate the allocation methodology for three (3) of the sixty (60) non-payroll expenditure samples selected for testing. 2. During our review of the payroll process regarding the review and approval of time and attendance, we noted the following in our sample of sixty (60) payroll items: • For two (2) samples, CFSA failed to provide documentation evidencing the approval of overtime paid. • For thirteen (13) samples, CFSA failed to provide documentation evidencing the approval of scheduled sick leave and annual leave taken. In addition one (1) of the thirteen (13) samples was coded as scheduled sick leave; however, per documentation provided, it was indicated that the timesheet should have coded the time as military leave. BDO did not receive documentation showing approval for either military leave or scheduled sick leave. • For two (2) samples, the employee's response to the RMS moment sample was not validated by the supervisor. Questioned Costs – Not determinable. Context – This is a condition identified per review of CFSA’s compliance with specified requirements using a statistically valid sample. Effect – Without sufficient documentation to support the cost allocation methodology, CFSA cannot demonstrate that costs charged to the Foster Care program were allowable and properly allocated, increasing the risk of unallowable costs being charged to the federal award. Additionally, without adequate internal controls and procedures for record maintenance, there is a risk of disputes between the agency and its employees regarding the accuracy of pay, leave and overtime. Furthermore, supervisor validation was not completed and documented for two of the moments selected for testing. Although CFSA’s control of over-assigning moments mitigates the risk of not meeting the aggregate 10% validation requirement, the two deviations noted reduce assurance that the 10% validation requirement was met. Cause – CFSA did not have proper internal controls and policies and procedures in place to ensure that documentation supporting the cost allocation methodology was retained and readily available for review. Additionally, CFSA did not have proper internal controls and policies and procedures in place to ensure that authorization forms evidencing the preapproval of overtime, scheduled sick leave and annual leave were maintained. Furthermore, although CFSA maintains an established validation process, supervisor validation was not completed for two of the moments selected for testing. Recommendation - We recommend that CFSA strengthen its policies, procedures, and controls to ensure that costs are accurately reported and claimed, and that documentation supporting the cost allocation methodology is maintained and readily available to substantiate the amounts allocated to the Foster Care program. We also recommend that pre-authorization of overtime, scheduled sick leave and annual leave is maintained. Furthermore, we recommend that CFSA ensure that the validation control is consistently performed for all moments selected for validation. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – CFSA concurs with the findings of Condition 1 and Condition 2. For Condition 1, although CFSA provided documents (including invoices) requested by and provided by the Office of the Chief Information Officer (OCTO) for the sampled items referenced, OCTO was unable to provide the specific documentation requested by the auditors documenting the allocation methodology of the expenditures assigned to CFSA and used for Title IV-E claiming purposes. For Condition 2, bullet 3, CFSA would simply note that, as is denoted in our federally approved cost allocation plan, CFSA adheres to HHS’ requirements for statistical significance in its entire RMS operation. The standard for supervisor validation of random moments is 10% of all accepted moments. CFSA’s internal controls involve oversampling moments requiring validation, and it consistently hits the 10% validation requirement in the aggregate. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-021 Prior Year Finding Number: 2024-024 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Foster Care – Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 29 CFR Section 97.20(b)(2), Accounting records. “Grantees and sub grantees must maintain records which adequately identify the source and application of funds provided for financially assisted activities. These records must contain information pertaining to grant or subgrant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays or expenditures, and income.” Per 45 CFR Section 1356.30(b), “The Title IV-E agency may not approve or license any prospective foster or adoptive parent, nor may the Title IV-E agency claim Federal Financial Participation (FFP) for any foster care maintenance or adoption assistance payment made on behalf of a child placed in a foster home operated under the auspices of a child placing agency or on behalf of a child placed in an adoptive home through a private adoption agency, if the Title IV-E agency finds that, based on a criminal records check conducted in accordance with paragraph (a) of this section, a court of competent jurisdiction has determined that the prospective foster or adoptive parent has been convicted of a felony involving: (1) Child abuse or neglect; (2) Spousal abuse; (3) A crime against a child or children (including child pornography); or, (4) A crime involving violence, including rape, sexual assault, or homicide, but not including other physical assault or battery.” Per 45 CFR Section 1356.30(f), "In order for a childcare institution to be eligible for Title IV-E funding, the licensing file for the institution must contain documentation which verifies that safety considerations with respect to the staff of the institution have been addressed.” Furthermore, per 45 CFR Section 1356.21(a), “Statutory and regulatory requirements of the Federal foster care program, To implement the foster care maintenance payments program provisions of the Title IV-E plan and to be eligible to receive FFP for foster care maintenance payments under this part, a Title IV-E agency must meet the requirements of this section, 45 CFR 1356.22, 45 CFR 1356.30, and Parts 472, 475(1), 475(4), 475(5), 475(6).” Per CFSA policy 6008.1, “As part of the home study process, an agency shall ensure that each applicant and any other person eighteen (18) years of age or older residing in the home comply with the requirements for a criminal records check established by the Adoption and Safe Families Amendment Act of 2000, effective June 27, 2000, D.C. Law 13-136.” Condition – For the fiscal year 2025, the Foster Care program had total disbursements of $3,094,192 for 3,280 maintenance payments. We selected a sample of sixty (60) participants representing disbursed federal funds totaling $60,436 and noted the following deficiencies: • For one (1) of sixty (60) samples, CFSA was unable to provide valid provider license as required by CFR 1356.30 (b). • For two (2) of sixty (60) samples, CFSA did not provide a copy of the registry check which is part of the criminal records check required by CFSA policy 6008.1. • For two (2) of sixty (60) samples, CFSA did not provide background checks such as criminal record checks and fingerprint-based checks from the national crime information databases or check registry for all adults in the household as required by the District as detailed in CFSA policy 6008.1. These deficiencies represent 1% of the total disbursements tested. Questioned Costs – Known amount is $825. Context – This is a condition identified per review of CFSA’s compliance with specified requirements using a statistically valid sample. Effect – CFSA was not in compliance with the eligibility requirements of the Foster Care program. Cause – CFSA does not have adequate controls in place to ensure that the required eligibility documentation is maintained to evidence compliance with eligibility requirements. Recommendation - We recommend CFSA reevaluate and strengthen its existing policies and procedures over the review and maintenance of appropriate documentation to ensure compliance with eligibility requirements in accordance with the program. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – CFSA concurs with the finding. CFSA notes that bullets 2 and 3 of the condition are federal “State Plan” and local regulatory requirements (respectively) and therefore are not subject to questioned costs. Bullet 1 involved a IV-E payment made to a provider with a lapsed license. It was processed through CFSA’s previous management information system, FACES. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-022 Prior Year Finding Number: 2024-026 Compliance Requirement: Special Tests and Provisions – Payment Rate Setting and Application Program: U.S. Department of Health and Human Services Foster Care – Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per CFSA’s internal policies and procedures, providers must submit quarterly reports within 45 days of the end of each Federal fiscal year quarter. Upon receipt of quarterly reports from the provider, the Business Services Administration Program Manager reviews each Expenditure Detail Spreadsheet for compliance, accuracy and reasonableness. Condition – Our assessment of the special tests and provisions requirement revealed that while the selected providers’ quarterly reports displayed no deficiencies, CFSA was unable to provide documentation evidencing the review and approval of the quarterly reports relating to all sixty (60) transactions that were tested. Questioned Costs – Not determinable. Context – This is a condition identified per review of CFSA’s compliance with specified requirements using a statistically valid sample. Effect – The absence of documentation specifying who reviews and approves the quarterly reports compromises accountability and creates ambiguity in identifying the responsible parties in instances of errors or discrepancies. Cause – CFSA does not have adequate controls in place to ensure that review and approval of provider’s quarterly reports are documented. Recommendation - We recommend CFSA strengthen its policies and procedures to address the review and approval process for the provider’s quarterly reports. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – CFSA concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-023 Prior Year Finding Number: 2024-027 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Medicaid Cluster ALN: 93.775, 93.777, 93.778 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: Department of Health Care Finance (DHCF)/Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The Medicaid State Plan: Citation 42 CFR Section 431.17AT-79-29. Section 4.7 (Maintenance of Records) states, “The Medicaid agency maintains or supervises the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of medical assistance, and administrative costs and statistical, fiscal and other records necessary for reporting and accountability, and retains these records in accordance with Federal requirements. All requirements of 42 CFR 431.17 are met.” Economic Security Administration (ESA) Policy Manual, Section 1.3, “All eligibility criteria and clarifying information are documented on the Record of Case Action, form 1052. The case record should speak for itself. An outside reviewer shall be able to follow the chronology of events in the case be reading the narrative. All application documents including verification and correspondence must be date-stamped. For working recipients, the record should include the dates pay is received and how often the recipient is paid. When the recipient’s statement is the best available source, the record should include the application/recipient and agency efforts to verify the information. All address changes should be documented.” In accordance with 42 CFR Section 435.912(c)(3), Timeliness and performance standard requirements - Standard for new applications and transferred accounts. Except as provided in paragraph (e) of this section, the determination of eligibility for any applicant or individual whose account was transferred from another insurance affordability program may not exceed — (i) 90 calendar days for applicants who apply for Medicaid on the basis of disability; and (ii) 45 calendar days for all other applicants. 42 CFR Section 435.912 (c)(4) Standard for renewals. The redetermination of eligibility at a beneficiary's regularly scheduled renewal may not exceed the end of the beneficiary's eligibility period, except as provided in paragraphs (e) and (c)(4)(i) and (ii) of this section. (i) In the case of a beneficiary who returns a renewal form less than 30 calendar days prior to the end of the beneficiary's eligibility period, the redetermination of eligibility may not exceed the end of the month following the end of the beneficiary's eligibility period. (ii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis, the eligibility determination on the new basis may not exceed— (A) 90 calendar days for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days for all other beneficiaries. 42 CFR Section 435.912 (c)(5) Standard for redeterminations based on changes in circumstances. Except as provided in paragraph (e) of this section, the redetermination of eligibility for a beneficiary based on a change in circumstances reported by the beneficiary or received from a third party may not exceed the end of the month that occurs — (i) 30 calendar days following the agency's receipt of information related to the change in circumstances, unless the agency needs to request additional information from the beneficiary; (ii) 60 calendar days following the agency's receipt of information related to the change in circumstances if the agency must request additional information from the beneficiary; or (iii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis — (A) 90 calendar days following the determination of ineligibility on the current basis, for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days following the determination of ineligibility on the current basis for all other beneficiaries. 42 CFR Section 435.912 (c)(6) Standard for redeterminations based on anticipated changes. The redetermination of eligibility for a beneficiary based on an anticipated change in circumstances may not exceed the end of the month in which the anticipated change occurs, except as provided in paragraphs (e) and (c)(6)(i) and (ii) of this section. (i) In the case of a beneficiary who returns information or documentation requested pursuant to Section 435.919(b)(6) less than 30 calendar days prior to the end of the month in which the anticipated change occurs, the redetermination of eligibility may not exceed the end of the month following the month in which the anticipated change occurs. (ii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis, the eligibility determination on the new basis may not exceed — (A) 90 calendar days for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days for all other beneficiaries. Condition – During testing over beneficiary eligibility for the Medicaid benefits, we noted that the District’s Economic Security Administration (ESA) was unable to provide sufficient documentation to support the beneficiary’s eligibility determination during the fiscal year 2025 audit. Specifically, out of a sample of 132 participant files tested, we noted the following exceptions: • For four (4) participant files, ESA did not process the application within the required timeframe. The Department of Health Care Finance, as the State Medicaid Agency, lacks a quality control oversight system to ensure that eligibility documentation and verification is maintained to support the eligibility decision. Questioned Costs – Not determinable. Context – This is a condition identified per review of ESA’s compliance with specified requirements using a statistically valid sample. Effect – Lack of supporting documentation for program services and noncompliance with program requirements could result in disallowances of costs and participants could be receiving benefits that they are not entitled to receive under the program. Cause – DHCF and ESA did not appear to adhere to internal control procedures to ensure that applications are properly processed in accordance with Federal Regulations. Recommendation - We recommend that ESA strictly implement internal control procedures to ensure that documentation is maintained to support the beneficiary determinations. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – ESA concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-024 Prior Year Finding Number: 2024-030 Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Years: 09/30/2022 – 09/29/2025 09/30/2024 – 09/29/2027 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Federal Funding Accountability and Transparency Act (FFATA) Reporting Compliance: In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System (FSRS) or System for Award Management (sam.gov) website from March 8, 2025, onwards. FFATA reports are submitted no later than the month following the month in which this Federal award is made, and annually after that. In accordance with the requirements of 2 CFR Section 1402.300(b), the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR Part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR Part 170 Reporting Subaward and Executive Compensation Information. Schedule of Expenditures of Federal Awards (SEFA) Reporting Compliance: Requirements, Cost Principles, and Audit Requirements, 2 CFR 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. Condition – During our testing of the reporting compliance requirement, we noted the following: • FFATA Reporting Compliance: During our testing of FFATA reporting, it was noted that reports were submitted late by the DBH program management due to staffing shortage. The FFATA reporting for all nine subawards selected for testing was submitted late, i.e., beyond the deadline of within 30 days of the subaward or subaward modification date. • SEFA Reporting Compliance: During our testing of the SEFA, we noted that DBH incorrectly reported the value of subrecipient expenditures included within the subrecipient expenditure column. For the year ended September 30, 2025, DBH incurred $12.4 million in subrecipient expenditures for this program and incorrectly reported $11.7 million subrecipient expenditures on the preliminary SEFA. While the subrecipient expenditure amount was not accurate, the total expenditures amount was accurately reported. The error in the subrecipient expenditures amount was subsequently identified and corrected as a result of the audit process. Questioned Costs – None. Context – This is a condition identified per review of DBH’s compliance with specified reporting requirements using a statistically valid sample. Effect – Without proper internal controls and policies and procedures in place to ensure timely reporting and that correct amounts were reported and were properly reviewed as it relates to the Opioid STR program: • FFATA Reporting Compliance: Failure to submit FFATA reports within the deadline of 30 days of the subaward or subaward modification date results in noncompliance for the DBH program. • SEFA Reporting Compliance: The effect of the condition is that the SEFA was not accurately prepared. Cause – Management did not have proper internal controls and policies and procedures in place to ensure that FFATA reports were submitted timely and the amounts on the SEFA were properly reported. Recommendation – We recommend the following: • FFATA Reporting Compliance: We recommend DBH to strengthen its internal control and procedures to ensure submission of FFATA reports within the deadline of 30 days of the subaward or subaward modification date. • SEFA Reporting Compliance: We recommend DBH to ensure that agency personnel receive proper training on subrecipient versus vendor determination; as well as review existing policies and procedures for preparing the SEFA to ensure that it is complete and accurate. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – The DBH Office of the Chief Financial Officer (OCFO) concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-025 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions – Key Employees Program: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Years: 09/30/2022 – 09/29/2025 09/30/2024 – 09/29/2027 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.508(d) says an auditee must “provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.” The grant agreements provide that the State must maintain certain key personnel. Key personnel are organization staff members or consultants/subrecipients who must be part of the project regardless of whether they receive a salary or compensation from the project. These individuals must make a substantial contribution to the execution of the project. Key personnel for this program are the Project Director, Project Coordinator, and Data Coordinator. The Project Director, Project Coordinator, and Data Coordinator cannot be the same person. No more than two people can share a position. The Project Director is responsible for oversight of the entire project, including overseeing, monitoring, and managing the award, with a level of effort of 100% (1.0 FTE). The Project Coordinator is responsible for the day-to-day operations of the project, with a level of effort of 100% (1.0 FTE). The Data Coordinator is responsible for all aspects of data collection and reporting, ensuring complete, accurate, and timely data entry into SPARS and/or other data systems as directed by SAMHSA. The Data Coordinator is also responsible for monitoring client-level intake and follow-up rates, to ensure that recipients are meeting the target numbers reported in the application. The level of effort is 100% (1.0 FTE) for all awards $4 million and above, and 50% (0.5 FTE) for all awards less than $4 million. Any changes to key personnel, including level of effort involving separation from the project for more than three months or a 25 percent reduction in time dedicated to the project, requires prior approval, and must be submitted as a post-award amendment. Condition – During our testing of the key personnel requirement, we noted that for all four (4) samples selected for testing, we were unable to obtain and review documentation to support that the key personnel met the level of effort on the awards as required by the grant agreement. Questioned Costs – None. Context – This is a condition identified per review of DBH’s compliance with specified requirements using a statistically valid sample. Effect – There is a risk that employees are working on the program that are not approved by the granting agency. Cause – Management has not established internal control policies and procedures to ensure that key personnel met the level of effort on the awards as required by the grant agreement. Recommendation – We recommend that DBH develop and implement policies, procedures and controls to ensure proper documentation of the required and actual time and effort from key personnel in accordance with grant requirements. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH agrees with the findings and will put controls into place to resolve the issues. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-026 Prior Year Finding Number: 2024-036 Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Block Grants for Substance Use Prevention, Treatment, and Recovery Services ALN: 93.959 Award #: Various Award Years: 10/01/2022 – 09/30/2025; 09/01/2021 – 09/30/2025; 03/15/2021 – 03/14/2025 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Federal Funding Accountability and Transparency Act (FFATA) Reporting Compliance: In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System (FSRS) or System for Award Management (sam.gov) website from March 8, 2025, onwards. FFATA reports are submitted no later than the month following the month in which this Federal award is made, and annually after that. In accordance with the requirements of 2 CFR Section 1402.300(b), the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR Part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR Part 170 Reporting Subaward and Executive Compensation Information. Schedule of Expenditures of Federal Awards (SEFA) Reporting Compliance: Requirements, Cost Principles, and Audit Requirements, 2 CFR 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. Condition – During our testing of the reporting compliance requirement, we noted the following: • FFATA Reporting Compliance: During our testing of FFATA reporting, it was noted that reports were submitted late by the DBH program management due to staffing shortage. The FFATA reporting for all four subawards selected for testing was submitted late, i.e., beyond the deadline of within 30 days of the subaward or subaward modification date. • SEFA Reporting Compliance: During our testing of the SEFA, we noted that DBH incorrectly reported the value of subrecipient expenditures included within the subrecipient expenditure column. For the year ended September 30, 2025, DBH incurred $1.2 million in subrecipient expenditures for this program and incorrectly reported $1.4 million subrecipient expenditures on the preliminary SEFA. While the subrecipient expenditure amount was not accurate, the total expenditures amount was accurately reported. The error in the subrecipient expenditures amount was subsequently identified and corrected as a result of the audit process. Questioned Costs – None. Context – This is a condition identified per review of DBH’s compliance with specified reporting requirements using a statistically valid sample. Effect – Without proper internal controls and policies and procedures in place to ensure timely reporting and that correct amounts were reported and were properly reviewed as it relates to the Block Grants for Substance Use Prevention, Treatment, and Recovery Services program: • FFATA Reporting Compliance: Failure to submit FFATA reports within the deadline of 30 days of the subaward or subaward modification date results in noncompliance for the DBH program. • SEFA Reporting Compliance: The effect of the condition is that the SEFA was not accurately prepared. Cause – Management did not have proper internal controls and policies and procedures in place to ensure that FFATA reports were submitted timely and the amounts on the SEFA were properly reported. Recommendation – We recommend the following: • FFATA Reporting Compliance: We recommend DBH to strengthen its internal control and procedures to ensure submission of FFATA reports within the deadline of 30 days of the subaward or subaward modification date. • SEFA Reporting Compliance: We recommend DBH to ensure that agency personnel receive proper training on subrecipient versus vendor determination; as well as review existing policies and procedures for preparing the SEFA to ensure that it is complete and accurate. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – The DBH Office of the Chief Financial Officer (OCFO) concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2025-027 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Homeland Security COVID-19 – Disaster Grants - Public Assistance (Presidentially Declared Disasters) ALN: 97.036 Award #: Various Award Year: 10/01/2024 – 09/30/2025 Government Department/Agency: Homeland Security and Emergency Management Agency (HSEMA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 200.302(a), Financial Management, states that each state must expend and account for the federal award in accordance with state laws and procedures for expending and accounting for the state’s own funds. In addition, the state’s and the other non-federal entity’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. Schedule of Expenditures of Federal Awards (SEFA) Reporting Compliance: Requirements, Cost Principles, and Audit Requirements, 2 CFR 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. Condition – During our testing of federal reporting and the Schedule of Expenditures of Federal Awards (SEFA), we noted that the cumulative federal expenditures reported on two (2) quarterly Federal Financial Report (SF-425) did not reconcile the total expenditures claimed on the SEFA for the life of the award. Specifically, the SF-425 submitted for the period ended September 30, 2025 reported a cumulative total of approximately $924 million, whereas the SEFA recorded lifetime expenditures of approximately $1.051 billion, resulting in an unreconciled variance of approximately $127 million. Additionally, during our testing of the SEFA, we noted that HSEMA incorrectly reported the value of subrecipient expenditures included within the subrecipient expenditure column. For the year ended September 30, 2025, HSEMA had a negative $0.7 million in subrecipient expenditures for this program and incorrectly reported $37.9 million subrecipient expenditures on the preliminary SEFA. While the subrecipient expenditure amount was not accurate, the total expenditures amount was accurately reported. The error in the subrecipient expenditures amount was subsequently identified and corrected as a result of the audit process. Questioned Costs – None. Context – This is a condition identified per review of HSEMA’s compliance with reporting requirements. Effect – Failure to properly review and present expenditures can result in noncompliance with reporting requirements. Cause – HSEMA did not comply with their policies and procedures to ensure accuracy of the SEFA and other reports necessary to meet compliance requirements. Recommendation – We recommend that HSEMA adheres to instituted policies and procedures to ensure the accuracy of the SF-425 and the SEFA. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – HSEMA agrees with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-001 Prior Year Finding Number: 2023-002 Compliance Requirement: Matching, Level of Effort, Earmarking Program: U.S. Department of Agriculture Supplemental Nutrition Assistance Program (SNAP) Cluster ALN: 10.551, 10.561 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Human Services (DHS)/ Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 277.4(b), Federal reimbursement rate, states that the base percentage for Federal payment shall be 50 percent of State agencies’ allowable SNAP administrative costs. Per review of the Settlement Agreement from the U.S. Department of Health and Human Services Departmental Appeals Board dated September 13, 1999, the District of Columbia is required to spend an additional $1,620,000 in local funds for the SNAP grant match each year by making an adjustment of $1,620,000 to the expenditures charged to the federal grant. Condition – During the testing of the SNAP Matching, Level of Effort, Earmarking compliance requirement, we noted that two (2) out of four (4) quarterly SF-425 reports tested, which were for quarters ended March 30, 2024 and June 30, 2024, had the issues that resulted in this finding. The SF-425 reports tested were approved and certified, and DHS/ESA exceeded the required SNAP Matching amount of $41,509,067. However, the Office of the Chief Financial Officer (OCFO) for DHS/ESA was unable to provide supporting documentation that would allow us to agree specific amounts reported for (1) Quality Control, (2) Fraud Control, (3) ADP Operations, and (4) Outreach. The total calculated amount by OCFO for DHS/ESA reported as the actual match on the SF-425 report, excluding New Investment, was $43,129,064. However, the total recalculated amount by auditors to be reported as the actual match was $43,199,416. Variance between these two amounts was $70,352. In addition, during the testing of the SNAP Matching, Level of Effort, Earmarking compliance requirement, we noted that the OCFO team for Human Support Services Cluster inadvertently failed to deduct the $1,620,000 adjustment from the Federal Share of Administrative Expenditures on the SEFA to comply with the Settlement Agreement with the U.S. Department of Health and Human Services Departmental Appeals Board dated September 13, 1999. The Settlement Agreement requires the District of Columbia to spend $1,620,000 in local funds for the SNAP grant each year, which the Agency decided to reflect as a deduction from the Federal Share of Administrative Expenditures on the SEFA. Furthermore, as a result of the Random Movement Time Study, the Agency needed to move expenses from the SNAP bucket in the DIFS System and the Agency inadvertently moved $158,834 less expenses. Consequently, the Federal Share of Administrative Expenditures on the SEFA is higher compared to the Federal Share of Administrative Expenditures reported on SF-425 report.  Questioned Costs – None. Context – This is a condition identified per review of DHS/ESA’s compliance through the OCFO team with specified requirements using a statistically valid sample. Effect – OCFO for DHS/ESA is not in compliance with the stated provisions. Without adequate internal controls to ensure reconciliation of the amounts reported for the matching requirements and other pertinent information, there is an increased risk that matching and other pertinent information will not be properly reported. Cause – OCFO for DHS/ESA does not appear to have adequate policies and procedures in place to ensure that the amounts reported for the matching requirement and other pertinent information are accurate and supported. Recommendation – We recommend that OCFO for DHS/ESA strengthen its policies and procedures to ensure that amounts for SNAP matching requirements and other pertinent information are properly reported and that related reports are reviewed for compliance with program requirements as well as completeness and accuracy prior to submission. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS concurs with the finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-002 Prior Year Finding Number: 2023-003 Compliance Requirement: Special Tests and Provisions – ADP System for SNAP Program: U.S. Department of Agriculture Supplemental Nutrition Assistance Program (SNAP) Cluster ALN: 10.551, 10.561 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Human Services (DHS)/ Department of Health Care Finance (DHCF) DC Access System (DCAS) Program Management Administration Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 7 CFR Section 272.10(a), “All State agencies are required to sufficiently automate their SNAP operations and computerize their systems for obtaining, maintaining, utilizing, and transmitting information concerning SNAP.” Per 7 CFR Section 272.10(b), “In order to meet the requirements of the Act and ensure the efficient and effective administration of the program, a SNAP system, at a minimum, shall be automated in each of the following program areas (1) Certification and (2) Issuance Reconciliation and Reporting. Under Certification – States agencies must determine eligibility and calculate benefits or validate the eligibility worker’s calculations by processing and storing all casefile information necessary for the eligibility determination and benefit computation (including but not limited to all household members’ names, addresses, dates of birth, social security numbers, individual household members’ earned and unearned income by source, deductions, resources and household size). Also, State agencies must redetermine or revalidate eligibility and benefits based on notices of change in households’ circumstances.” Condition – The District is self-reporting findings it noted from its ongoing efforts to resolve issues with the ADP system for SNAP. The issues identified and the estimated impact follows: 1. Failure to Send Correct and Timely Notices to SNAP Households - Notices pertaining to SNAP eligibility contain incorrect information, and/or SNAP applicants and recipients fail to receive proper notices. For example, in the Federal Fiscal Year (FFY) 2018 Local Program Access Review (PAR), Food and Nutrition Service (FNS) cited that SNAP applicants did not receive a Notice of Eligibility or notice contained incorrect information, no notice of required verification, and the notice of adverse action was incorrect. 2. Untimely Processing of SNAP Applications and Periodic Reports - On October 23, 2017, FNS advised DHS that its application processing timeliness (APT) rate between October 2016 and March 2017 was 88.45%, which triggered corrective action per FNS policy. Moreover, between that last APT report and now, DHS has disclosed that it has experienced processing backlogs of varying severity and persistence to FNS via ongoing communications and as part of waiver requests. DHS also provided a report to FNS in August 2022 that indicated significant application processing backlogs. 3. Establishment of Duplicate Accounts - DHS discovered that duplicate Product Delivery Cases (PDC) were being created in DCAS. One PDC was active and the other closed, but the closed PDC was still receiving benefits. 4. Issuance of Duplicate Payment - As a result of duplicate accounts in Deficiency 3, duplicate payments may have been issued to the same household when a caseworker reactivated a closed case. There is also a possibility that customers who received duplicate electronic benefits transfer (EBT) cards from different EBT vendors may have received duplicate payments. 5. Failure to Implement Computer Matching System - Based on the FFY18 Program Integrity Management Evaluation (ME) review, DHS failed to process Prisoner Verification System (PVS) matches, deceased matches, and National Directory of New Hires (NDNH) matches in accordance with federal requirements. 6. Failure to Produce System Computations to Support Recipient Claims - DCAS does not have the ability to calculate overpayments or send a demand letter. FNS correspondence letters dated October 18, 2017, and September 20, 2018, advised DHS to suspend the establishment of DCAS claims but allowed DHS to continue servicing ACEDS claims. 7. Treasury Offset Program (TOP) Reporting and Maintenance Decertified - FNS conducted a TOP Technical Review in June 2021 and DHS was decertified from TOP due to the following: • Referral of customers to TOP that are undergoing recoupment. • Incorrect determination of the date of delinquency. • Incorrect debt balance and debt status in TOP. 8. Failure to Initiate Recoupment on Active Households - When DCAS launched in October 2016, more than 3,000 claim cases with outstanding balances originating from SNAP overpayments were converted from ACEDS to DCAS. Some claims were not properly converted or activated in DCAS. As a result, DHS failed to take the required recovery actions, including TOP recovery or activation of the recoupment process through EBT cards. 9. Recipient and Benefit Integrity Report Update Required - DHS must provide an update on the target completion dates for system generation of all SNAP-related reports currently being created through manual intervention. The plan must include the procedures for reviewing and ensuring the accuracy of the data being submitted to Food Programs Reporting System (FPRS) with particular emphasis on the FNS-209 and the FNS-366B reports. DHS experienced some technical challenges in processing and retrieving claim and recoupment information accurately since the launch of DCAS in October 2016, which affected the FNS-209 quarterly reports. The Payment and Collections Division (PCD) and the DCAS report development team have made concerted efforts to improve the ability to generate data for the reports but continue to have difficulties in verifying the accuracy of data due in part to the laborious manual processes involved. Based on the FFY 2018 Program Integrity ME review, lines 3b, 10, and 14 of the FNS-209 failed to reconcile with the detailed documentation. 10. Work Requirements Have Not Been Properly Implemented - DHS is not in compliance with the requirement to accurately report on the FNS 583. DHS is unprepared to implement the work requirement and time limit for able-bodied adults without dependents when the current suspension mandated by the Families First Coronavirus Response Act ends and/or its waiver ends. Additionally, the District is not prepared to apply the Able-Bodied Adults Without Dependents (ABAWD) time limits when their ABAWD waiver expires. 11. Failure to Analyze Client Complaints and Include in the State’s Corrective Action Plans (CAP) Where Appropriate - DHS is failing to analyze client complaints and include in the State’s CAP where appropriate, per 7 CFR 271.6(a)(3) and 275.16. 12. The SNAP Application Does Not Clearly Explain Which Questions Are Required for SNAP - FNS reviewers found that the District’s SNAP application does not provide clear directions about which questions are required for SNAP, versus Cash or Medical Assistance. For example, Step 5 of the application asks “Does anyone in your household (including non-applicants) have any income? Yes – complete below; No – skip to step 6 (Complete if you are applying for Food, Medical, or Cash Assistance).” The directions are confusing and may be difficult to understand. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements resulting from a system implementation. Effect – Without an effectively designed and operated system in place, ineligible beneficiaries may receive benefits under the SNAP grant and DHS may make payments on behalf of those beneficiaries resulting in noncompliance with the eligibility requirements. Inaccurate beneficiary allotment payments could result in participants receiving benefits that they are not entitled to receive under the program. Cause – DHS did not effectively design and operate the ADP system for SNAP which resulted to inaccurate benefit payments. Recommendation – We recommend that DHS continue to evaluate and improve the new ADP system for SNAP to ensure that it addresses all the administration requirements of the SNAP program. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – The DHS and DHCF DCAS team agree with the findings noted in this report. DHS self-reported these findings as part of the agency’s ongoing effort to maintain integrity with all eligibility determinations. The root cause of each of the twelve (12) case issues with the ADP system for SNAP varied. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-003 Prior Year Finding Number: 2023-004 Compliance Requirement: Special Tests and Provisions – EBT Card Security Program: U.S. Department of Agriculture Supplemental Nutrition Assistance Program (SNAP) Cluster ALN: 10.551, 10.561 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Human Services (DHS)/ Office of the Chief Financial Officer/Office of Finance and Treasury (OCFO/OFT) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 7 CFR Section 274.8(b)(3), As an addition to or component of the Security Program required of Automated Data Processing (ADP) systems, the State agency shall ensure that the following electronic benefits transfer (EBT) security requirements are established: (i) Storage and control measures to control blank unissued EBT cards and PINs, and unused or spare POS devices; (ii) Measures to ensure communication access control. Communication controls shall include the transmission of transaction data and issuance information from POS terminals to work-stations and terminals at the data processing center; (iii) Message validation; (iv) Administrative and operational procedures; (v) A separate EBT security component shall be incorporated into the State agency Security Program for ADP systems. The periodic risk analyses required by the Security Program shall address the following items specific to an EBT system – (B) Completeness and timeliness of the reconciliation system; and (vi) The State agency shall incorporate the contingency plan approved by FNS into the Security Program. Condition – OCFO/OFT for DHS are 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. OCFO/OFT have contracted with Fidelity National Information Service (FIS) for the issuance and security of the EBT cards; however, it is OCFO/OFT’s ultimate responsibility to ensure the contractor has controls in place to maintain adequate security over, and documentation/records of EBT cards in accordance with 7 CFR Section 274.8(b)(3). During our tests of the design and implementation of internal controls and compliance requirements in accordance with 7 CFR Section 274.8(b)(3), we noted the following issues: • For seventeen (17) out of the 60 samples, out of a population of 496 days from two EBT card centers, although both EBT Balance Sheets reconciled with the EBT Card Issuance Logs included in the package, we noted the following deficiencies: o For fourteen (14) out of the samples, we noted various issues including (a) the ID type for identification purposes was missing, (b) the customer case number was missing, (c) the Photo ID Program Referral Form was missing, (d) the identification type was noted as referral on the EBT Intake Form, but no referral form was attached, (e) the UPO EBT Center Intake Form was not signed by staff who created the card, and (f) the EBT Card Destruction log was missing. o For two (2) out of the samples, we noted that the required authorizations by a DHS Supervisor and eligibility staff was missing. o For one (1) out of the samples, we noted that the EBT Card Issuance Log had a wrong date. • In addition, for one (1) out of the 60 samples, we noted that the information on the summary reconciliation sheet did not agree to the Card Issuance Log. The summary reconciliation sheet shows 40 cards issued while the Card Issuance Log shows a total of 39 cards issued. These exceptions resulted in the Agency not being in compliance with 7 CFR Section 274.8(b)(3). Questioned Costs – None. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without adequate internal controls to ensure compliance with EBT Card Security requirements, there is an increased risk that the inventory of EBT cards will not be properly maintained and accounted for, or that the program will not be in compliance with program requirements. Cause – OCFO/OFT for DHS does not have adequate policies and procedures in place to ensure adequate safeguarding, documentation over issuance and monitoring of EBT cards. Recommendation - We recommend that OCFO/OFT for DHS strengthen formal policies and procedures to maintain adequate security over, and documentation/records for EBT Cards. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – The OCFO/OFT for DHS concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-004 Prior Year Finding Number: 2023-011 Compliance Requirement: Reporting Program: U.S. Department of the Treasury COVID-19 – Emergency Rental Assistance (ERA) Program ALN: 21.023 Award #: N/A Award Year: 12/27/2020 – 09/30/2025 Government Department/Agency: Department of Human Services (DHS) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.302(a), Financial Management, states that each state must expend and account for the federal award in accordance with state laws and procedures for expending and accounting for the state’s own funds. In addition, the state’s and the other non-federal entity’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. Condition – Subrecipient expenditures, totaling approximately $29.8 million, which are required to be presented in the Schedule of Expenditures of Federal Awards (SEFA), were improperly excluded from the initial SEFA prepared by management. Subsequently, the SEFA was adjusted by DHS to reflect the subrecipient expenditures incurred for the program. Questioned Costs – None. Context – This is a condition identified per review of DHS’ compliance with reporting requirements. Effect – Failure to properly review and present expenditures can result in noncompliance with reporting requirements. Cause – DHS did not comply with their policies and procedures to ensure accuracy of the SEFA. Recommendation – We recommend that DHS adhere to instituted policies and procedures to ensure the accuracy of the SEFA. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – The DHS Office of the Chief Financial Officer (OCFO) concurs with the finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-005 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of the Treasury COVID-19 - Homeowner Assistance Fund ALN: 21.026 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Housing and Community Development (DHCD) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.406(a) defines credits as transactions that offset or reduce direct or indirect costs allocable to a Federal award. Examples of such transactions are purchase discounts, rebates or allowances, recoveries or indemnities on losses, insurance refunds or rebates, and adjustments of overpayments or erroneous charges. To the extent that such credits accruing to or received by the recipient or subrecipient relate to allowable costs, they must be credited to the Federal award either as a cost reduction or cash refund, as appropriate. Condition – During the review of benefit payments for the sixty (60) eligibility samples, we noted the following: • One payment made to the utility company where it was later determined that the homeowner was not eligible when additional information became available. • One instance where a duplicate payment was issued to the mortgage loan servicer. • One instance where the mortgage loan servicer noted the payment was no longer needed. For the conditions noted above, refunds are due to DHCD. Questioned Costs – Known amount is $42,289. Context – This is a condition identified per review of DHCD’s compliance with specified requirements using a statistically valid sample. Effect – Without adequate internal controls in place to ensure overpayments are identified and tracked by program and accounting personnel, DHCD could be noncompliant with the requirement to refund the agency for credits. Cause – DHCD did not have a process in place to identify and track credits. Recommendation – We recommend that DHCD implement a control to identify and track credits, such as refunds and duplicate payments, so that these amounts can be refunded to the agency. This includes strengthening communication between the program and accounting teams to ensure an awareness of possible refunds so adjustments can be made if necessary. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHCD concurs with the findings. DHCD will review and pursue repayment from these expenditures. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-006 Prior Year Finding Number: 2023-013 Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of the Treasury COVID-19 - Homeowner Assistance Fund ALN: 21.026 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Housing and Community Development (DHCD) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Additionally, 2 CFR Section 200.332 specifies that pass-through entities must evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Based upon the pass-through entity's assessment of risk posed by the subrecipient, auditee management determined that onsite reviews of the subrecipient’s program operations were appropriate and designed the following control: DHCD performs desk audits, scheduled site visits and unscheduled site visits during the fiscal year. Reports are prepared at the site visits and properly documented. The reports include deficiencies, recommendations, and proposed corrective action and are reviewed and approved by the Project Managers, Program Managers, and Supervisory Program Managers. Condition – During our review of four (4) subrecipient samples from a total population of seven (7) subrecipients, we noted the following: • For one (1) subrecipient, DHCD provided plans to perform a review, but was unable to provide evidence of the review or a finalized report. • For three (3) subrecipients, DHCD neither performed an onsite review nor a desk audit. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHCD’s compliance with the subrecipient monitoring requirements using a statistically valid sample. Effect – DHCD did not comply with the subrecipient monitoring requirements of the Homeowner Assistance Fund program. Cause – DHCD does not have fully effective internal controls over compliance with respect to the onsite review process. Recommendation – We recommend that DHCD strictly adhere to its policies and procedures to ensure that onsite reviews are properly performed and documented for subrecipients. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHCD concurs with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-007 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of the Treasury COVID-19 – Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award #: N/A Award Year: 10/01/2021 – 09/20/2024 Government Department/Agency: Office of the Deputy Mayor for Planning and Economic Development (DMPED); Office of the State Superintendent of Education (OSSE); Department of Employment Services (DOES); Department of Energy and Environment (DOEE); Department of Behavioral Health (DBH); Office of Neighborhood Safety and Engagement (ONSE) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 200.302(a), Financial Management, states that each state must expend and account for the federal award in accordance with state laws and procedures for expending and accounting for the state’s own funds. In addition, the state’s and the other non-federal entity’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. Condition – During the audit, of the total amounts passed through to subrecipients of $69.6 million, we noted that certain grant expenditures totaling approximately $14.8 million were erroneously reflected as amounts passed through to subrecipients on the initial Schedule of Expenditures Federal Awards (SEFA) under ALN 21.027, COVID-19 - Coronavirus State and Local Fiscal Recovery Funds. Total amounts passed through to subrecipients should have been $54.8 million. OCFO subsequently adjusted the SEFA to reflect the correct amounts passed through to subrecipients for the major program. Questioned Costs – None. Context – This is a condition identified per review of various agencies’ compliance with specified requirements. Effect – Failure to properly review and present expenditures can result in noncompliance with reporting requirements. Cause – The District agencies did not comply with their policies and procedures to ensure accuracy of the SEFA. Recommendation – We recommend that the District agencies adhere to instituted policies and procedures to ensure accuracy of the SEFA. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – The District agencies agree with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-008 Prior Year Finding Number: 2023-015 Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of the Treasury COVID-19 – Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award #: N/A Award Year: 10/01/2021 – 09/20/2024 Government Department/Agency: Office of the Deputy Mayor for Public Safety and Justice (DMPSJ); Office of Neighborhood Safety and Engagement (ONSE) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331(a) Requirements for Pass-Through Entities requires that pass-through entities must: Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information outlined in the section noted above, pre-award assessment, indirect cost rated for the award, assistance listing number, finding and award follow-up and other pertinent actions. In accordance with the Uniform Guidance in 2 CFR Section 200.332 Requirements for Pass-Through Entities requires that pass-through entities Verify that the subrecipient is not excluded or disqualified in accordance with Section 180.300. Verification methods are provided in Section 180.300, which include confirming in SAM.gov that a potential subrecipient is not suspended, debarred, or otherwise excluded from receiving Federal funds. In accordance with the Uniform Guidance in 2 CFR Section 200.332(e) Requirements for Pass-Through Entities requires that pass-through entities 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: • Review financial and performance reports • 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. • 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 Section 200.521. • 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 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. Condition – The program’s documented subrecipient monitoring requirements includes risk assessments, monitoring of subrecipients and the submission and review of monthly financial and performance reports. During our testing of the subrecipient’s compliance requirements, we noted the following issues: • Our testing of the program’s subrecipient monitoring requirements includes submission and review of monthly financial and performance reports. We noted for one (1) out of 17 samples, the subrecipient failed to submit their monthly financial and performance reports. • For one (1) out of 17 samples, the agency had no evidence to support it had performed the mandatory follow up on reported audit findings in the subrecipient’s audit report for the Corrective Action taken by the subrecipient to remediate the finding. • For one (1) out of 17 samples, the agency had no evidence that a debarment check was performed before the contract was entered into. The agency’s documented policies and the procurement procedures mandate a debarment check before entering into new contracts. Questioned Costs – Not determinable. Context – This is a condition identified per review of various District agencies’ compliance with specified monitoring requirements on the program’s subrecipients using a statistically valid sample. Effect – Subrecipients may not be properly monitored, which may result in subawards being used for unauthorized purposes in violation of the terms and conditions of the subawards or that the subaward performance goals were not achieved. Cause – There is lack of sufficient documentary evidence to support that the controls are operating as designed related to subrecipient monitoring compliance. Recommendation – We recommend that the agencies maintain sufficient documentation to evidence its internal controls over the risk assessment and monitoring of subrecipients. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – While DMPSJ doesn’t agree that it is out of compliance, DMPSJ will ensure documentation is maintained regarding its oversight of grant management. ONSE acknowledges and accepts the finding that the subrecipient failed to submit their monthly and performance reports. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section. BDO’s Response – We have reviewed management’s response and our finding remains as indicated.

Finding Number: 2024-009 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of the Treasury COVID-19 – Coronavirus Capital Projects Fund ALN: 21.029 Award #: CPFFN0167 Award Year: 02/09/2022 – 12/31/2026 Government Department/Agency: Office of the Deputy Mayor for Planning and Economic Development (DMPED) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.403, “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented.” In addition, the U.S. Department of Treasury, Guidance for the Coronavirus Capital Projects Fund For States, Territories & Freely Associated States (CPF), Section D. Eligible and Ineligible Cost: states that “Allowable costs are determined in accordance with the cost principles identified in 2 CFR Part 200, Subpart E. Federal funds committed to an award may only be used to cover allowable costs incurred during the period of performance and for allowable closeout costs incurred during the grant closeout process. Cost sharing is not a requirement for the use of these funds” Section C. Project Eligibility: also states the following, “Capital Project or Project means the construction, purchase, and installation of, and/or improvements to capital assets where the costs of such assets are capitalized or depreciated, including ancillary costs necessary to put the capital asset to use. Examples of capital assets include buildings, towers, digital devices and equipment, fiber-optic lines, and broadband networks. Examples of ancillary costs include project costs related to project planning and feasibility, broadband installation, and community engagement, broadband adoption, digital literacy, and training associated with a planned or completed Project funded by the Capital Projects Fund program.” Condition – During our examination of Activities Allowed or Unallowed and Allowable Costs/Cost Principles, we observed that the agency used federal funds to reimburse their subrecipient for lease rent of $3,242,953 invoiced from August 2023 through May 2024. This amount was reported to the Federal agency as ancillary costs. However, upon reviewing the supporting documentation, it was found that the rent charged to the grant pertained to the period following the substantial completion of the capital project's construction. Additionally, the leased rent does not appear to align with the definition of ancillary costs as outlined by the CFP guidance mentioned earlier. Furthermore, the agency was unable to provide documentation from the U.S. Treasury approving the leased rent or indicating its knowledge that it was included as part of ancillary costs. Based on the procedures performed and the review of relevant guidance, BDO notes that these costs do not meet the requirements to be considered allowable under the program. Questioned Costs – Known amount $3,242,953. Context – This is a condition identified per review of DMPED’s compliance with specified requirements using a statistically valid sample. Total subrecipient expenditures reported as allowable costs were $14,400,000. Effect – DMPED was unable to demonstrate that the rent charged was approved by the Department of Treasury and was an allowable cost under the guidance. Cause – DMPED did not have proper internal controls and policies and procedures in place to identify allowable costs and activities. Recommendation – We recommend that DMPED evaluate its procedures to ensure only allowable expenses are charged to the program as required under 2 CFR Section 200.403. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DMPED does not concur with the auditor’s finding regarding the allowability of rent per the CPF guidance. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section. BDO’s Response – We have reviewed management’s response and our finding remains as indicated.

Finding Number: 2024-010 Prior Year Finding Number: N/A Compliance Requirement: Procurement and Suspension and Debarment Program: U.S. Department of the Treasury COVID-19 – Coronavirus Capital Projects Fund ALN: 21.029 Award #: CPFFN0167 Award Year: 02/09/2022 – 12/31/2026 Government Department/Agency: District of Columbia Public Library (DCPL) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Section 200.318(a), General Procurement Standards, the non-federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, 2 CFR Section 200.318(i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to include but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. All procurement transactions must be conducted in a manner providing full and open competition consistent in accordance with 2 CFR Section 200.319 and must be performed using the appropriate procurement method as outlined in 2 CFR Section 200.320. In accordance with 2 CFR Section 200.320(c), Noncompetitive procurement. There are specific circumstances in which the recipient or subrecipient may use a noncompetitive procurement method. The noncompetitive procurement method may only be used if one of the following circumstances applies: (1) The aggregate amount of the procurement transaction does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be fulfilled by a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from providing public notice of a competitive solicitation; (4) The recipient or subrecipient requests in writing to use a noncompetitive procurement method, and the Federal agency or pass-through entity provides written approval; or (5) After soliciting several sources, competition is determined inadequate. Condition – During our testing of procurement and suspension and debarment requirements, we examined the two (2) procurement contracts that comprised the entire procurement population. Based on the procedures performed, we identified one (1) contract, valued at $278,259, out of the two (2) contracts totaling $8,185,708, in which DCPL used a single source or sole source justification for the selection rationale. However, this justification did not comply with the requirements set forth in 2 CFR Section 200.320(c). Questioned Costs – Not determinable. Context – This is a condition identified per review of DCPL’s compliance with the specified requirements using a statistically valid sample. Effect – Failure to adhere to the procurement procedures specified in the Uniform Administrative Requirements may lead to the Federal agency disallowing the procurement and associated costs. Cause – While DCPL adhered to their policies and procedures for private expenditures, the agency did not adhere to federal procurement requirements (2 CFR Section 200.320(c)) listed above to support noncompetitive procurement on the requirements to use sole source. Recommendation – We recommend that management establish the requisite internal control policies and procedures to ensure that all procurements reported under the federal program are in compliance. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DCPL concurs with the auditor’s findings and recommendations. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-011 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of the Treasury COVID-19 – Coronavirus Capital Projects Fund ALN: 21.029 Award #: CPFFN0167 Award Year: 02/09/2022 – 12/31/2026 Government Department/Agency: Office of the Deputy Mayor for Planning and Economic Development (DMPED) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System (FSRS) or System for Award Management (sam.gov) website from March 8, 2025 onwards. In accordance with the requirements of 2 CFR Section 1402.300(b), the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR Part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR Part 170 Reporting Subaward and Executive Compensation Information. Condition – DMPED had a single subrecipient through which $14.4 million in grant funds was expended. During our audit, we noted that DMPED did not submit the required FFATA report for its subrecipient through the FSRS or the sam.gov website for the one subaward issued in fiscal year 2024. Questioned Costs – None. Context – This is a condition identified per review of DMPED’s compliance with reporting requirements. Effect – Failure to properly submit the FFATA report results in noncompliance for the Coronavirus Capital Projects Fund program. Cause – DMPED did not have proper internal controls and policies and procedures in place to fulfill the FFATA reporting requirements. Recommendation – We recommend that DMPED evaluate its Transparency Act reporting control procedures and update them as necessary to ensure they promote compliance with the Federal regulations. These procedures should include a supervisory review of the report information before it is submitted to the System for Award Management (sam.gov) website. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DMPED concurs with the auditor’s findings and recommendations related to Grant Reporting. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-012 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions – Disbursements to or on Behalf of Students (Credit Balances) Program: U.S. Department of Education Student Financial Assistance Cluster ALN: 84.007, 84.033, 84.063, 84.268 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: University of the District of Columbia (UDC) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. 34 CFR Section 668.164(h) outlines the following compliance requirements for Title IV credit balances: (6) Title IV, HEA credit balances. (1) A title IV, HEA credit balance occurs whenever the amount of title IV, HEA program funds credited to a student's ledger account for a payment period exceeds the amount assessed the student for allowable charges associated with that payment period as provided under paragraph (c) of this section. (2) A title IV, HEA credit balance must be paid directly to the student or parent as soon as possible, but no later than— (i) Fourteen (14) days after the balance occurred if the credit balance occurred after the first day of class of a payment period; or (ii) Fourteen (14) days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period. Condition – During our testing, we noted the following issues: • For eight (8) of twenty-five (25) credit balances selected for testing, the credit balance created by the disbursement of Title IV awards was not refunded to the student within the required 14-day timeframe. Questioned Costs – None. Context – This is a condition identified per review of UDC’s compliance with the specified requirements using a statistically valid sample. Effect – UDC was not in compliance with the required federal guidelines over credit balances from student financial assistance. Cause – Insufficient internal control and administrative oversight with respect to the disbursement of federal awards. Recommendation – We recommend that UDC enhance its internal controls, policies and procedures to ensure that Title IV credit balances are paid timely to students. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – UDC agrees with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-013 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions – Return of Title IV Funds Program: U.S. Department of Education Student Financial Assistance Cluster ALN: 84.007, 84.033, 84.063, 84.268 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: University of the District of Columbia (UDC) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. 34 CFR Section 668.173(b)(1) outlines the following compliance requirements for Title IV refunds. (b) Timely return of title IV, HEA program funds. In accordance with procedures established by the Secretary or FFEL Program lender, an institution returns unearned title IV, HEA program funds timely if— (1) The institution deposits or transfers the funds into the bank account it maintains under Section 668.163 no later than 45 days after the date it determines that the student withdrew. Condition – During our testing, we noted the following exception: • For one (1) of nineteen (19) students selected for Title IV refund calculation testing, the required Title IV refund was not adjusted in the U.S. Department of Education's Common Origination and Disbursement (COD) system within the required timeframe. Questioned Costs – None. Context – This is a condition identified per review of UDC’s compliance with the specified requirements using a statistically valid sample. Effect – UDC was not compliant with the Return of Title IV Funds compliance requirements. Cause – Insufficient administrative oversight with respect to Return of Title IV Funds requirements. Recommendation – We recommend that UDC enhance its process surrounding the disbursement of federal student aid to ensure compliance with the Return of Title IV Funds requirements. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – UDC agrees with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-014 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions – Enrollment Reporting Program: U.S. Department of Education Student Financial Assistance Cluster ALN: 84.007, 84.033, 84.063, 84.268 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: University of the District of Columbia (UDC) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Institutions are required to report enrollment information under the Pell grant and the Direct and Federal Family Education Loan (“FFEL”) loan programs via the National Student Loan Data System (“NSLDS”) (OMB No. 1845-0035), although FFEL loans are no longer made or a part of the Student Financial Assistance Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309). The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (“NSLDSFAP”) website which the financial aid administrator can access for the auditor. The data on the institution’s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment information. There are two categories of enrollment information, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. The NSLDS Enrollment Reporting Guide provides the requirements and guidance for reporting enrollment details using the NSLDS Enrollment Reporting Process. Institutions are responsible for accurately reporting all Campus-Level Record data elements. ED considers the following data elements to be high risk: • OPEID Number – This is the OPEID for the location that the student is actually attending. • Enrollment Effective Date – The date that the current enrollment status reported for a student was first effective. (See 4.4.2 of the NSLDS Enrollment Reporting Guide for the specific requirements for reporting the Enrollment Effective Date. Also see 4.4.3 of the NSLDS Enrollment Reporting Guide for additional guidance on effective dates for Withdrawal versus Graduation and Electronic Announcement titled – NSLDS Enrollment Reporting – Submission Dates, Effective Dates and Certification Dates, dated April 20, 2017, for additional information and examples at https://fsapartners.ed.gov/knowledge¬center/library/electronic-announcements/2017-04-20/general-subject-nslds¬enrollment-reporting-submission-dates-effective-dates-and-certification-dates.) • Enrollment Status – The student’s enrollment status as of the reporting date; full-time (F), three-quarter time (Q), half-time (H), less than half-time (L), leave of absence (A), graduated (G), withdrawn (W), deceased (D), never attended (X) and record not found (Z). (See 4.4.4 of the NSLDS Enrollment Reporting Guide for additional guidance on reporting graduated and withdrawn for the Campus-Level Record versus the Program Level Record and 4.4.10 for further guidance on Enrollment Status reporting at the Campus-Level Record and the Program-Level Record.) • Certification Date – The Date enrollment certified by institution. At a minimum, institutions are required to certify enrollment every 60 days or every other month. Institutions are responsible for accurately reporting all Program-Level Record data elements. ED considers the following data elements to be high risk: • OPEID Number – This is the OPEID for the location that the student is actually attending. • CIP Code – The Classification of Instructional Programs (CIP) is a set of codes that define fields of study. CIP Codes are maintained by ED's National Center for Education Statistics (NCES). They were most recently updated in 2020 and are usually updated every ten years. A listing of current CIP codes is available at: https://nces.ed.gov/ipeds/cipcode/resources.aspx?y=56. • CIP Year – Year for the corresponding CIP code. The CIP Year for the codes currently used by NSLDS is 2020. • Credential Level – Indicates the level of a credential the student will receive for the program the student is attending, for example undergraduate certificate, associate degree, or bachelor’s degree. (See 4.4.7 of the NSLDS Enrollment Reporting Guide for additional guidance on reporting the Credential Level.) • Published Program Length Measurement – The institution identifies whether the Published Program Length is in days, weeks, or years. • Published Program Length - Published Program Length should be reported based on the definition of “normal time” to completion in the regulations at 34 CFR 668.41(a), • Program Begin Date – The Program Begin Date is the date the student first began attending the program being reported. Typically, this would be the first day of the term in which the student began enrollment in the program, unless the student enrolled in the program on an earlier date. (See 4.4.8 of the NSLDS Enrollment Reporting Guide for additional guidance.) • Program Enrollment Status – The student’s enrollment status as of the reporting date; full-time (F), three-quarter time (Q), half-time (H), less than half-time (L), leave of absence (A), graduated (G), withdrawn (W), deceased (D), never attended (X) and record not found (Z). (See 4.4.4 of the NSLDS Enrollment Reporting Guide for additional guidance on reporting graduated and withdrawn for the Campus-Level Record versus the Program Level Record and 4.4.10 for further guidance on Enrollment Status reporting at the Campus-Level Record and the Program-Level Record.) • Program Enrollment Effective Date – The date when the student's current program status first took effect. Condition – UDC did not submit an accurate status change notification or failed to submit timely notification to the NSLDS website for certain students who graduated, withdrew or had a change in their enrollment status (full time, half time or less than half time) during the year. BDO selected a random sample of twenty-five (25) students used to evaluate both campus and program level enrollment reporting compliance requirements. For campus level enrollment, we noted the following exceptions: • For five (5) of twenty-five (25) campus level records tested, UDC did not certify the students’ enrollment data within 60 days. • For ten (10) of twenty-five (25) campus level records tested, UDC did not accurately report the students’ enrollment effective date. • For two (2) of twenty-five (25) campus level records tested, UDC did not correctly report the students’ enrollment status. For program level enrollment, we noted the following exceptions: • For one (1) of twenty-five (25) program level records tested, UDC did not accurately report the Published Program Length. • For ten (10) of twenty-five (25) program level records tested, UDC did not accurately report the students’ enrollment effective date. • For two (2) of twenty-five (25) program level records tested, UDC did not accurately report the students’ enrollment Status. Questioned Costs – None. Context – This is a condition identified per review of UDC’s compliance with the specified enrollment requirements using a statistically valid sample. Effect – UDC is not in compliance with enrollment reporting requirements. Failure to promptly report accurate and timely changes in enrollment status may adversely impact the repayment status for student loan borrowers. Cause – Insufficient internal controls and administrative oversight with respect to enrollment reporting requirements. Recommendation – We recommend that UDC enhance its procedures and internal controls over enrollment reporting to ensure that significant data elements under both campus-level and program-level records are reported accurately and timely to NSLDS. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – UDC agrees with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-015 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions – Annual Report Card, High School Graduation Rate Program: U.S. Department of Education Title I Grants to Local Educational Agencies ALN: 84.010 Award #: S010A230051; S010A220051-22A Award Year: 07/01/2023 – 09/30/2024 Government Department/Agency: District of Columbia Public Schools (DCPS) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. 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 four-year adjusted cohort rate and, at an SEA’s or LEA’s discretion, one or more extended-year adjusted cohort rates. Graduation rate data must be reported both in the aggregate and disaggregated by the subgroups in Section 1111(c)(2) of the Elementary and Secondary Act of 1965 (ESEA), homeless status, status as a child in foster care using a four-year adjusted cohort graduation rate (and any extended-year adjusted cohort rates) (ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(23), (25) (20 USC 6311(h)(1)(C)(iii)(II) and 7801(23), (25))). 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 General Education Development program, or leaves school for any other reason may not be counted as having transferred out for the purpose of calculating graduation rate and must remain in the adjusted cohort (ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(23), (25) (20 USC 6311(h)(1)(C)(iii)(II) and 7801(23), (25))). Condition – During the audit, we noted the following out of forty (40) samples tested: • For two (2) samples, there were no supporting documentation for the removal from the cohort of students who voluntarily dropped their enrollment. • For two (2) samples, students who graduated under DCPS school were incorrectly removed from the cohort. • For ten (10) samples, there were no evidence of review and approval on the documentation maintained for the removal of the student from the cohort. Questioned Costs – Not determinable. Context – This is a condition identified per review of DCPS’ compliance with specified requirements using a statistically valid sample. Effect – Failure to maintain appropriate documentation supporting the approval and removal of a student from the cohort report results in noncompliance for the Title I Part A Grants to LEA program. Cause – DCPS is unable to consistently apply existing policy on documenting review and approval of written documentation supporting the removal of students from the cohort due to lack of consistent communication, coordination and oversight over this process. Recommendation – We recommend that DCPS strengthen its policies, procedures and controls to ensure review and approval are documented and maintained with regards to removal of students from the cohort. We also recommend that training is conducted for employees to ensure that the process is implemented and consistently applied across all DCPS schools. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DCPS agrees with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-016 Prior Year Finding Number: 2023-020 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. For TANF, per 45 CFR Section 205.60 (a), “The State agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of financial assistance, and the use of any information obtained under Section 205.55, with respect to individual applications denied, recipients whose benefits have been terminated, recipients whose benefits have been modified, and the dollar value of these denials, terminations and modifications. Under this requirement, the agency will keep individual records which contain pertinent facts about each applicant and recipient. The records will include information concerning the date of application and the date and basis of its disposition; facts essential to the determination of initial and continuing eligibility (including the individual's social security number, need for, and provision of financial assistance); and the basis for discontinuing assistance.” Condition – During our testing over beneficiary eligibility compliance requirements of the Temporary Assistance for Needy Families (TANF) program, we selected a sample of 60 beneficiaries in fiscal year 2024 to test DHS’ compliance with TANF eligibility requirements. Total number of payments in the population is 46,856, and total dollar amount from which we selected the samples is $34,639,375. We noted the following: • For ten (10) out of 60 samples, DHS was unable to provide support that would allow us to test that cash assistance was not provided to an individual during the 10-year period that began on the date the individual was convicted in Federal or State court of having made a fraudulent statement or representation with respect to place of residence. In addition, one (1) of these ten (10) samples, DHS was unable to include the individual’s Social Security Number (SSN) in DCAS. Consequently, we were unable to verify the following information in DCAS: household composition, income, proof of residency, and SSNs for all individuals included in the application. Further, one (1) of these ten (10) samples, DHS was unable to provide support that would allow us to test that assistance was not provided to any individual who was fleeing to avoid prosecution, or custody or confinement after conviction, for a felony or attempt to commit a felony, or who is violating a condition of probation or parole imposed under Federal or State law. These exceptions happened due to inadequate review of application for cash assistance by the Social Service Representatives. The questioned costs for the above issues amounted to $107,137, which represents 26.22% of the total eligibility amounts tested related to the 60 sampled items of $408,555. Questioned Costs – Known amount is $107,137. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without properly maintaining documentation to support eligibility determinations, ineligible beneficiaries may receive benefits under the TANF grant and DHS may make payments on behalf of those beneficiaries resulting in noncompliance with the eligibility requirements. Cause – DHS did not consistently adhere to its established policies and procedures requiring it to maintain documentation supporting participant eligibility. Recommendation - We recommend that DHS strengthen its existing policies and procedures over the review and maintenance of appropriate documentation to ensure compliance with eligibility requirements. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS/ESA concur with the findings. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-017 Prior Year Finding Number: 2023-021 Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Human Services (DHS) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. According to Title IV-A, Section 411 of the Social Security Act (the Act), 45 CFR 265.3, and the American Recovery and Reinvestment Act (ARRA) of 2009, (Public Law 111-5), each State must file an annual report containing information on the TANF program and the State’s maintenance-of-effort (MOE) program(s) for that year, including strategies to implement the Family Violence Option, State diversion programs, and other program characteristics. States are required to submit the ACF-196R report quarterly, beginning in Federal Fiscal Year (FFY) 2015, in lieu of the SF-425, Federal Financial Report (financial status). Each State files quarterly expenditure data on the State’s use of Federal TANF funds, State TANF MOE expenditures, and State expenditures of MOE funds in separate State programs. If a State is expending Federal TANF funds received in prior fiscal years, it must file a separate quarterly TANF Financial Report for each fiscal year that provides information on the expenditures of that year’s TANF funds. This form must be used for reporting regular TANF grant funds, Contingency Funds, and ARRA-Emergency Fund for TANF State Programs funds. See TANF-ACF-PI-2014-02, available at http://www.acf.hhs.gov/programs/ofa/resource/tanf-acf-pi-2014-02, for more information. Condition – During our test work over the quarterly ACF-196R report, we noted that for Grant Identifying numbers G-2101DCTANF, G-2201DCTANF and G-2301DCTANF, the ACF-196R filed for 4th quarter in fiscal year 2024 showed a variance of $86,958, $375,033 and $2,648,441, respectively, between the amounts reported on the ACF-196R and the amounts included in DIFS. In addition, for Grant Identifying number G-2401DCTANF, we noted that there was a variance of ($4,637,270) between the amount included in the SEFA detail including Indirect Costs ($64,708,667) and the cumulative amount reported on the ACF-196R for the fiscal year 2024 grant for the sum of federal and contingency funds ($60,071,397). DHS was unable to provide support for the variance. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without proper internal controls and policies and procedures in place to ensure that correct amounts were reported and were properly reviewed, DHS may report incorrect amounts on the quarterly ACF-196R reports. Cause – Management did not have proper internal controls and policies and procedures in place to ensure that the amounts on the ACF-196R were properly reported and the reports were properly reviewed and approved. Recommendation - We recommend that DHS implement policies, procedures and controls that will enable an accurate reconciliation between the data sources used in the preparation of the ACF-196R reports to ensure proper reporting of TANF expenditures. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS OCFO concurs with the finding. The variances identified specifically relate to administrative costs incurred on the fiscal year 2024 grant that were moved to prior year grants. The fiscal year 2024 TANF administrative expenditure exceeded the TANF administrative cap for fiscal year 2024 and to correct the issue, the excess administrative cost was reallocated to prior open fiscal years (fiscal years 2021, 2022 and 2023). The administrative cap limit for fiscal years 2021, 2022 and 2023 were not fully utilized and so the Agency decided to charge the excess fiscal year 2024 administrative expenses to those grants. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-018 Prior Year Finding Number: 2023-022 Compliance Requirement: Reporting; Special Tests and Provisions – Penalty for Failure to Comply with Work Verification Plan Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Human Services (DHS)/ Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 261.60 (a), “A State must report the actual hours that an individual participates in an activity, subject to the qualifications in paragraphs (b) and (c) of this section and Section 261.61(c). It is not sufficient to report the hours an individual is scheduled to participate in an activity. (b) For the purposes of calculating the work participation rates for a month, actual hours may include the hours for which an individual was paid, including paid holidays and sick leave. For participation in unpaid work activities, it may include excused absences for hours missed due to a maximum of 10 holidays in the preceding 12-month period and up to 80 hours of additional excused absences in the preceding 12-month period, no more than 16 of which may occur in a month, for each work-eligible individual. Each State must designate the days that it wishes to count as holidays for those in unpaid activities in its Work Verification Plan. It may designate no more than 10 such days. In order to count an excused absence as actual hours of participation, the individual must have been scheduled to participate in a countable work activity for the period of the absence that the State reports as participation. A State must describe its excused absence policies and definitions as part of its Work Verification Plan, specified at Section 261.62. (c) For unsubsidized employment, subsidized employment, and OJT, a State may report projected actual hours of employment participation for up to six months based on current, documented actual hours of work. Any time a State receives information that the client's actual hours of work have changed, or no later than the end of any six-month period, the State must re-verify the client's current actual average hours of work, and may report these projected actual hours of participation for another six-month period. (d) A State may not count more hours toward the participation rate for a self-employed individual than the number derived by dividing the individual's self-employment income (gross income less business expenses) by the Federal minimum wage. A State may propose an alternative method of determining self-employment hours as part of its Work Verification Plan. (e) A State may count supervised homework time and up to one hour of unsupervised homework time for each hour of class time. Total homework time counted for participation cannot exceed the hours required or advised by a particular educational program.” Per 45 CFR Section 261.61 (a), “A State must support each individual’s hours of participation with documentation in the case file. In accordance with Section 261.62, a State must describe in its Work Verification Plan the documentation it uses to verify hours of participation in each activity.”   According to the DC State Verification Plan, the D.C. Department of Human Services (DHS), Department of Human Services Monitoring Unit reviews and audits all documentation submitted by vendors reflecting the activities of recipients in TANF Employment program. This documentation includes time sheets, activity logs, school records, pay stubs, and verification of employment, work experience and on-the-job training. The Monitoring Unit completes this audit process to determine if sufficient documentation exists to substantiate reported time and attendance data, to warrant a payment to TANF Employment program vendors, and submission of countable hours for federal reporting purposes. The District projects hours of participation in unsubsidized, self-employment for six months or until the recipient's next scheduled recertification, whichever is sooner. Per 45 CFR Section 265.7 (a)-(c), “Each State’s quarterly reports (the TANF Data Report, the TANF Financial Report (or Territorial Financial Report), and the SSP-MOE Data Report) must be complete and accurate and filed by the due date.” For disaggregated data report, ‘a complete and accurate report’ means that: (1) The reported data accurately reflect information available to the State in case records, financial records, and automated data systems, and include correction of the quarterly data by the end of the fiscal year reporting period; (2) The data are free from computational errors and are internally consistent (e.g., items that should add to totals do so); (3) The State reports data for all required elements (i.e., no data are missing); (4)(i) The State provides data on all families; or (ii) if the State opts to use sampling, the State reports data on all families selected in a sample that meets the specification and procedures in the TANF Sampling Manual (except for families listed in error); and (5) Where estimates are necessary (e.g., some types of assistance may require cost estimates), the State uses reasonable methods to develop these estimates. For an aggregated data report, “a complete and accurate report” means that: (1) The reported data accurately reflect information available to the State in case records, financial records, and automated data systems; (2) The data are free from computational errors and are internally consistent (e.g., items that should add to totals do so); (3) The State reports data on all applicable elements; and (4) Monthly totals are unduplicated counts for all families (e.g., the number of families and the number of out-of-wedlock births are unduplicated counts).” 45 CFR Section 265.7 (f) states that “States must maintain records to adequately support any report, in accordance with Section 75.361 through 75.370 of this title.” Condition – During our test work over a sample of 60 participants for Special Tests and Provisions - Penalty for Failure to Comply with Work Verification Plan and Reporting, we noted: • For six (6) instances, we noted that although the hours reported on the ACF-199 report met or exceeded the required hours, the hours reported did not agree with the average hours reported in CATCH. • For seven (7) instances, we noted that although participant work activity was adequately documented and properly supported by audited timesheets, the participant did not meet the work participation weekly hours requirement. In addition, for four (4) of these samples, we noted that the hours reported on the ACF-199 report do not agree with the average hours in CATCH. • For nine (9) instances, we noted that for a customer with unsubsidized employment, although the hours reported on the ACF-199 report met or exceeded the required hours, the hours reported did not agree with the projected hours per the support. • For ten (10) instances, we noted that although the reported hours met or exceeded the required hours, no documentation support was provided to support the ACF-199 report. • For one (1) instance, we noted that although the hours on the support provided met or exceeded the required hours and the hours reported in the ACF-199 report agree with the average hours reported in CATCH, the hours entered in CATCH should initially have been denied by TANF Office of Performance Monitoring and then re-entered by provider because the hours were entered incorrectly. • For one (1) instance, we noted that the number of audited hours per timesheet did not agree with the approved hours in CATCH. In addition, although the hours reported on the ACF-199 report met or exceeded the required hours, the hours reported did not agree with the actual hours per the CATCH support. • For one (1) instance, we noted that for a customer with unsubsidized employment, the support provided was for more than six months before the sample month. Therefore, the hours reported were not properly supported. In addition, although the hours reported on the ACF-199 report met or exceeded the required hours, the hours reported did not agree with the projected hours per the support. • For one (1) instance, we noted that although the hours reported in the ACF-199 report met or exceeded the required hours, a review of the Work documentation support provided detailing employment, noted no hours were included on the documentation. Therefore, the hours reported and projected were not supported. The information tested in our sample represents the underlying data used in Reporting for the 2nd and 4th quarters of fiscal year 2024. Consequently, DHS incorrectly reported data in the ACF-199 report for the 2nd and 4th quarters of fiscal year 2024. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Data within the ACF-199 report may not be complete and accurate. Specifically, if the work participation data is not substantiated, or inconsistencies are noted, it may result in inaccurate data being reported and may lead to an incorrect ACF-199 report and could result in an incorrect allocation of Federal Funds to the state. Cause – Controls are not operating effectively over the documentation of work participation data to ensure that adequate evidence of the work participation is maintained. Recommendation - We recommend that DHS enforce existing policies and procedures and implement additional controls to ensure that adequate documentation is maintained to substantiate the work participation data reported in the ACF-199 report in accordance with the District of Columbia Work Verification Plan. We also recommend that DHS implement policies, procedures and controls that will enable an accurate reconciliation between the data sources used in the preparation of the ACF-199 report to ensure proper reporting of data elements. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS agrees with the findings and will work with the DC Access System (DCAS) and Division of Innovation and Change Management (DICM) teams to mitigate the causes of the findings. These findings are mostly residual issues with the tables in DHS/ESA DCAS system. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-019 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions – Child Support Non-Cooperation Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 264.30 (a) (1) The State agency must refer all appropriate individuals in the family of a child, for whom paternity has not been established or for whom a child support order needs to be established, modified or enforced, to the child support enforcement agency (i.e., the IV-D agency). (2) Referred individuals must cooperate in establishing paternity and in establishing, modifying, or enforcing a support order with respect to the child. Per 45 CFR Section 264.30 (c) The IV-A agency must then take appropriate action by: (1) Deducting from the assistance that would otherwise be provided to the family of the individual an amount equal to not less than 25 percent of the amount of such assistance; or (2) Denying the family any assistance under the program. Per the Code of the District of Columbia - Section 4–205.55. (a) The Mayor shall give timely and adequate notice in cases of intended action to discontinue, withhold, terminate, suspend, reduce assistance, or make assistance subject to additional conditions, or to change the manner or form of payment to a protective, vendor, or 2-party payment. (1) “Timely” means that the notice is postmarked at least 15 days before the date upon which the action would become effective, except as provided in Section 4-205.54(d). (2) “Adequate” means that the written notice includes a statement of what action the Mayor intends to take, the reasons for the intended action, the specific law and regulations supporting the action, an explanation of the individual’s right to request a hearing, and the circumstances under which assistance will be continued if a hearing is requested. Condition – During our compliance test work for the Special Tests and Provisions – Child Support Non-Cooperation compliance requirement, we tested forty (40) out of a population of 295 child support cases referred by Child Support Enforcement (CSE) to the TANF program as having not cooperated with Child Support. We noted that for four (4) out of 40 samples, DHS was unable to provide support why the individual was not sanctioned. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without properly maintaining documentation to support not imposing sanctions to individuals may result to noncompliance with TANF Child Support Non-Cooperation compliance requirements. Cause – DHS did not consistently adhere to its established policies and procedures requiring it to maintain documentation supporting compliance with TANF Child Support Non-Cooperation compliance requirements. Recommendation - We recommend that DHS strengthen its existing policies and procedures over enforcement of sanctions and maintenance of appropriate documentation to ensure compliance with TANF Child Support Non-Cooperation compliance requirements. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS/ESA agree with the auditor’s findings regarding the lack of completion of requests from the Child Support Enforcement (CSE) to the TANF program to impose a child support on parents who have not cooperated with child support compliance requirements. The incomplete work was due to staff transitions occurring during the review period which impacted the oversight and productivity of DHS/ESA staff working on the child support sanction process. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-020 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions – Penalty for Refusal to Work Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 261.14 (a) and (b) “(a) If an individual refuses to engage in work required under section 407 of the Act, the State must reduce or terminate the amount of assistance payable to the family, subject to any good cause or other exceptions the State may establish. Such a reduction is governed by the provisions of Section 261.16. The State must, at a minimum, reduce the amount of assistance otherwise payable to the family pro rata with respect to any period during the month in which the individual refuses to work. The State may impose a greater reduction, including terminating assistance.” Condition – During our testing of Special Tests and Provisions – Penalty for Refusal to Work, we selected a sample of 60 cases in fiscal year 2024 to test DHS’ compliance with specified requirements. Total population is comprised of 4,812 case numbers for individuals that received payments for months where they did not meet the work requirements. Total dollar amount is $19,993,065. We noted the following: • For eight (8) instances, we noted that an individual had no participation hours in CATCH for various dates during fiscal year 2024 and DHS/ESA was unable to provide supporting exemptions or justifications for not sanctioning the individual during the period in question. • For one (1) instance, we noted that an individual had no participation hours reported in CATCH for period October 2023 through April 2024 but a review of DCAS showed that the individual was partially engaged during this period. The individual’s required hours increased to 30 but was coded to Outreach rather than Noncompliance, thus, there was miscoding of hours. Consequently, the individual was not sanctioned as required, and the benefits were not properly reduced. • For one (1) instance, we noted that an individual had no participation hours reported in CATCH for period April 2024 through September 2024 and a review of DCAS showed that the individual was paid twice for period March 2024 to September 2024, which resulted to potential overpayment of $3,528. DHS-ESA was unable to provide support to confirm whether the duplicate payment was necessary or was properly reversed. Total payments made to these ten (10) individuals during the periods in question was $59,874. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without properly maintaining documentation to support exemptions or justifications for not imposing sanctions to individuals, individuals may be given full benefits instead of reduced federal benefits under the TANF program. In addition, miscoding of hours or amounts paid may result to providing inappropriate benefits to individuals. Cause – DHS did not consistently adhere to its established policies and procedures requiring it to maintain documentation to support exemptions or justifications for individuals who refuse to fulfill the minimum working requirements to receive or maintain benefits under the TANF program. In addition, controls are not operating effectively over the supervisory review of transactions posted in DCAS to ensure accuracy. Recommendation - We recommend that DHS enforce existing policies and procedures over review and maintenance of appropriate documentation to ensure compliance with Penalty for Refusal to Work compliance requirements. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS agrees with the findings and will work within the Division of Customer Workforce Employment and Training (DCWET) team to mitigate the causes of the findings. These findings are mostly residual issues caused by inconsistency of caseload management practices. Another mitigating factor is attributable to inadequate training of staff involved in the sanction process. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-021 Prior Year Finding Number: 2023-024 Compliance Requirement: Special Tests and Provisions – Lack of Child Care for Single Custodial Parent of Child Under Age Six Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 261.15 “Can a family be penalized if a parent refuses to work because he or she cannot find child care? (a) No, the State may not reduce or terminate assistance based on an individual’s refusal to engage in required work if the individual is a single custodial parent caring for a child under age six who has a demonstrated inability to obtain needed child care, as specified at Section 261.56.” Per 45 CFR Section 261.16 “Does the imposition of a penalty affect an individual’s work requirement? A penalty imposed by a State against the family of an individual by reason of the failure of the individual to comply with a requirement under TANF shall not be construed to be a reduction in any wage paid to the individual.” Per 45 CFR Section 261.56 “What happens if a parent cannot obtain needed child care? (a)(1) If the individual is a single custodial parent caring for a child under age six, the State may not reduce or terminate assistance based on the parent's refusal to engage in required work if he or she demonstrates an inability to obtain needed child care for one or more of the following reasons: (i) Appropriate child care within a reasonable distance from the home or work site is unavailable; (ii) Informal child care by a relative or under other arrangements is unavailable or unsuitable; or (iii) Appropriate and affordable formal child care arrangements are unavailable. (2) Refusal to work when an acceptable form of child care is available is not protected from sanctioning. Per 45 CFR Section 261.57 What happens if a State sanctions a single parent of a child under six who cannot get needed child care? (a) If we determine that a State has not complied with the requirements of Section 261.56, we will reduce the SFAG payable to the State by no more than five percent for the immediately succeeding fiscal year unless the State demonstrates to our satisfaction that it had reasonable cause or it achieves compliance under a corrective compliance plan pursuant to Section 262.5 and 262.6 of this chapter. (b) We will impose the maximum penalty if: (1) The State does not have a statewide process in place to inform parents about the exception to the work requirement and enable them to demonstrate that they have been unable to obtain child care; or (2) There is a pattern of substantiated complaints from parents or organizations verifying that a State has reduced or terminated assistance in violation of this requirement. (c) We may impose a reduced penalty if the State demonstrates that the violations were isolated or that they affected a minimal number of families. Condition – During our test work over a sample of twenty-nine (29) out of a population of 275 childcare cases reviewed by supervisors and included on two quarterly reports submitted to the DC Office of the State Superintendent of Education (OSSE), for Special Tests and Provisions - Lack of Child Care of Single Custodial Parent of Child under Age Six, we noted that all files sampled were reviewed by the supervisors. However, for one child care case, we noted the following: (1) the Date the discussion was held with the Eligibility worker, the date the Eligibility worker made corrections, and Eligibility Review completed date were not included; and (2) no comments were included by the supervisor to explain the “No” responses on various questions, or the status of the “No” responses. Consequently, we were unable to verify that the required follow-up occurred for this one sample. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without following the internal controls and policies and procedures already in place to ensure that eligibility for child care is being properly determined by staff, it may result in inaccurate decisions for child care cases or inaccurate information being reported to OSSE. Cause – Controls are not operating effectively over the documentation of the supervisory review of child care cases before submission of the quarterly report to OSSE. Recommendation - We recommend that DHS/ESA enforce existing policies and procedures and implement additional controls to ensure that all Supervisory Case Record Review forms are properly completed and reviewed, signed and dated by the supervisor before the report is submitted to OSSE. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS agrees with the findings that appropriate actions were taken to approve the case, however, the reviewing supervisor failed to update the Supervisory Case Review form with 1) date the discussion was held with the eligibility worker, the date the eligibility worker made corrections, and the date the eligibility worker review was completed and 2) failed to enter comments on “No” responses on various questions. DHS will enforce current policies and procedures and will ensure that Supervisory Case Reviews are updated and double-checked by the supervisor once the eligibility worker make the corrections prior to OSSE’s report being submitted to reflect the accurate information. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-022 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Child Care and Development Fund Cluster ALN: 93.575, 93.596 Award #: 2401DCCDD; 2101DCCDC6 Award Years: 10/01/2023 – 09/30/2026 10/01/2020 – 09/30/2024 Government Department/Agency: Office of the State Superintendent of Education (OSSE) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System (FSRS) or System for Award Management (sam.gov) website from March 8, 2025 onwards. In accordance with the requirements of 2 CFR Section 1402.300(b), the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR Part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR Part 170 Reporting Subaward and Executive Compensation Information. Condition – For one (1) subaward sample selected for FFATA testing, we noted that OSSE failed to provide evidence that it reported the subaward information through the FSRS or sam.gov website to fulfill the FFATA requirements. Questioned Costs – None. Context – This is a condition identified per review of OSSE’s compliance with reporting requirements. Effect – Failure to properly submit the FFATA report results in noncompliance for the Child Care and Development Block Grant program. Cause – OSSE did not have proper internal controls and policies and procedures in place to fulfill the FFATA reporting requirements. Recommendation – We recommend that OSSE evaluate its Transparency Act reporting control procedures and update them as necessary to ensure they promote compliance with the Federal regulations. These procedures should include a supervisory review of the report information before it is submitted to the System for Award Management (sam.gov) website. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – OSSE concurs with the auditor’s finding and recommendations related to this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-023 Prior Year Finding Number: 2023-027 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Foster Care – Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Based on CFSA’s Human Resources Administration Issuance: HR-06-1 dated May 12, 2006, staff must seek and receive advance written approval prior to working overtime. It also indicates that in emergency situations requiring an immediate response, the employee shall make every reasonable attempt to obtain advance approval by an appropriate manager or supervisor. Per District Personnel Issuance No. 2018-00 (Annual Leave) effective April 21, 2018 “Using Annual Leave” - An employee may use accrued annual leave at any time during the leave year if they receive approval from their immediate supervisor or the agency head responsible for the employee’s timesheet. If an employee wishes to use their accrued annual leave, they must: 1. Submit a request in advance to use annual leave to their manager or supervisor. 2. Receive approval from the manager or supervisor; and 3. Record the approved leave taken on their timesheet in PeopleSoft. CFSA uses a Random Moment Study (RMS) to allocate the administrative costs to the Foster Care program. The study entails selecting a sample of social workers on a quarterly basis to participate in the RMS study where the social workers are required to notate what they were doing at the sample moment. Subsequently, the supervisors of these social workers review and validate their responses. validation of the responses adds an extra layer of reliability to the data collected. It ensures that the information provided by social workers is accurate and reflective of their actual activities. This validation process helps maintain the integrity of the study and ensures that the results are trustworthy in making decisions when determining the RMS percentage utilization in the allocation of the administrative costs. Condition – The following issues were observed: 1. Our procedures revealed that CFSA had erroneously included fiscal year 2025 expenditures totaling $2,571,560 in the fiscal year 2024 cost allocation, thereby overstating expenses reported and claimed. The financial impact based on the allocation calculation to the Foster Care program was $724,724. 2. During our review of the payroll process regarding the review and approval of time and attendance, we noted the following in our sample of 60 payroll items: • For two (2) samples, CFSA failed to provide documentation evidencing the approval of overtime paid and annual leave taken. • For three (3) samples, we noted that there were differences between the approved hours of overtime and annual leave paid and the actual hours taken. CFSA failed to provide documentation for the actual hours taken. • For one (1) sample, validation of the Random Moment Study was not performed. Questioned Costs – Known amount is $724,724. Context – This is a condition identified per review of CFSA’s compliance with specified requirements using a statistically valid sample and review of the detail expenses database compared to the SEFA. Effect – CFSA reported and claimed fiscal year 2025 costs, which resulted into questioned costs. Additionally, without adequate internal controls and procedures for record maintenance, there is a risk of disputes between the agency and its employee’s accuracy of leave and overtime. Furthermore, failing to validate the Random Moment Study (RMS) may result in inaccurate outcomes, compromising the study's effectiveness in allocating administrative costs. Cause – CFSA did not have proper internal controls and policies and procedures in place to ensure that the correct fiscal year costs were submitted and claimed, and that authorization forms evidencing the preapproval of overtime and annual leave were maintained. Additionally, CFSA did not follow its internal controls, policies, and procedures to ensure the accuracy and consistent documentation of the RMS validation. Recommendation - We recommend that CFSA strengthen its policies, procedures, and controls to ensure that costs are accurately reported and claimed. We also recommend that pre-authorization of overtime and annual leave is maintained. Furthermore, we recommend that CFSA enhance its procedures to ensure the verification process is performed and maintained and the supervisors maintain consistent documentation of the RMS validation. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – CFSA concurs with the findings as stated. Regarding Condition 2 above, Differences in pre-approved leave or overtime and actual leave or overtime taken are not uncommon in light of changing circumstances. CFSA notes that for one sample involving overtime charges, the situation involved a social worker performing field work and the difference between pre-approved overtime and actual overtime taken was 30 minutes. Regarding the RMS, CFSA notes that the statistical standard for supervisory validation of RMS responses is 10%. Across fiscal year 2024 as a whole, CFSA’s validation rate of accepted responses was 10% and therefore met this standard. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-024 Prior Year Finding Number: 2023-028 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Foster Care – Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. 29 CFR Section 97.20(b)(2), Accounting records. “Grantees and sub grantees must maintain records which adequately identify the source and application of funds provided for financially assisted activities. These records must contain information pertaining to grant or subgrant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays or expenditures, and income.” Per 45 CFR Section 1356.30(b), “The Title IV-E agency may not approve or license any prospective foster or adoptive parent, nor may the Title IV-E agency claim Federal Financial Participation (FFP) for any foster care maintenance or adoption assistance payment made on behalf of a child placed in a foster home operated under the auspices of a child placing agency or on behalf of a child placed in an adoptive home through a private adoption agency, if the Title IV-E agency finds that, based on a criminal records check conducted in accordance with paragraph (a) of this section, a court of competent jurisdiction has determined that the prospective foster or adoptive parent has been convicted of a felony involving: (1) Child abuse or neglect; (2) Spousal abuse; (3) A crime against a child or children (including child pornography); or, (4) A crime involving violence, including rape, sexual assault, or homicide, but not including other physical assault or battery.” Per 45 CFR Section 1356.30(f), "In order for a childcare institution to be eligible for Title IV-E funding, the licensing file for the institution must contain documentation which verifies that safety considerations with respect to the staff of the institution have been addressed.” Furthermore, per 45 CFR Section 1356.21(a), “Statutory and regulatory requirements of the Federal foster care program, To implement the foster care maintenance payments program provisions of the Title IV-E plan and to be eligible to receive FFP for foster care maintenance payments under this part, a Title IV-E agency must meet the requirements of this section, 45 CFR 1356.22, 45 CFR 1356.30, and Parts 472, 475(1), 475(4), 475(5), 475(6).” Per CFSA policy 6008.1, “As part of the home study process, an agency shall ensure that each applicant and any other person eighteen (18) years of age or older residing in the home comply with the requirements for a criminal records check established by the Adoption and Safe Families Amendment Act of 2000, effective June 27, 2000, D.C. Law 13-136.” Condition – For the fiscal year 2024, the Foster Care program had total disbursements of $2,390,443 for 3,008 maintenance payments. We selected a sample of 60 participants representing disbursed federal funds totaling $43,656, we noted the following deficiencies: • For one (1) of 60 samples, CFSA was unable to provide valid providers licenses as required by CFR 1356.30 (b) and background check information. • For one (1) of 60 samples, CFSA did not provide copy of the registry check which is part of the criminal records check required by CFR 1356.30 (b) and CFSA policy 6008.1. • For one (1) of 60 samples, CFSA did not provide complete documentation for adult member that resided in the home; therefore, we were unable to determine whether background checks such as criminal record checks and fingerprint-based checks from the national crime information databases was properly performed as required by the District of Columbia as detailed in CFSA policy 6008.1. These deficiencies represent 4% of the total disbursements tested. Questioned Costs – Known amount is $1,583. Context – This is a condition identified per review of CFSA’s compliance with specified requirements using a statistically valid sample. Effect – CFSA was not in compliance with the eligibility requirements of the Foster Care program. Cause – CFSA does not have adequate controls in place to ensure that the required eligibility documentation is maintained to evidence compliance with eligibility requirements. Recommendation - We recommend CFSA reevaluate and strengthen its existing policies and procedures over the review and maintenance of appropriate documentation to ensure compliance with eligibility requirements in accordance with the program. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – CFSA concurs with the findings. The licensure issue involved a provider who was in process of permanently closing her home as a foster care provider (and the existing license expired in the meantime), and the other item involved a brief lapse in the child protection register check. Corrective action will involve improved automation within the claiming process. CFSA also acknowledges that the third bullet regarding the legibility of the background criminal check document for the “other adult in the home” is an internal control issue for which there are no questioned costs.   The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-025 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Foster Care – Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per OMB No. 0970-0205, Form CB-496, Title IV-E Programs Quarterly Financial Report, “is required to be submitted at the end of each fiscal quarter by each State or Tribe with an approved plan under the Title IV-E of the Social Security act to administer the Foster Care, Adoption Assistance, and Guardianship Assistance programs. In submitting this form, each State or Tribal grantee meets its statutory and regulatory requirements to report actual program expenditures made in the preceding fiscal quarter and to provide an estimate of program expenditures anticipate in the upcoming fiscal quarter. Condition – The following conditions were observed: 1. Based on reconciliation review of Form CB-496 for all the quarterly reports in fiscal year 2024, it was observed that CFSA incorrectly calculated the family-based rate adjustment claims for quarters 2, 3 & 4. CFSA failed to apply the Federal Medical Assistance Percentage (FMAP) rate of 76.2% to net adjusted IV-E maintenance costs. Instead, the gross amount was reported and claimed, resulting in an overstatement of $412,808 for claims reported - $140,209 related to quarter 2, $135,819 related to quarter 3, and $136,780 related to quarter 4. 2. During the reconciliation of the SEFA to the claimed program expenditures, as reported on Form CB-496, we noted that expenditures totaling $791,224 were charged to the incorrect grant years for the Title IV-E Foster Care grant. Although these costs were not claimed by the agency, as a result of the error relating to the incorrect grant years, the SEFA did not reconcile to the submitted CB-496 reports. Questioned Costs – Known amount is $412,808. Context – This is a condition identified per review of CFSA’s compliance with specified requirements using a statistically valid sample. Effect – Without proper internal controls and policies and procedures in place to ensure that correct amounts were reported, CFSA can report incorrect amounts on the quarterly federal claims submissions. Cause – CFSA did not have proper internal controls and policies and procedures in place to ensure that the amounts on the quarterly claims submissions were properly reported. Recommendation - We recommend that CFSA implement policies, procedures and controls that will enable an accurate preparation of quarterly reporting. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – CFSA concurs with the findings. The finding involved a recurring formula error in the workbook CFSA uses to calculate its lapsing quarter family-based rate adjustment. The issue stemmed from the pandemic-era stimulus funding that increased the District’s FMAP percentage from the standard 70% to 76.2%, which CFSA accommodated in its family-based rate adjustment claiming tools with manual entries. Corrective action is outlined in the Management’s Section, but in the meantime the District has returned to the standard 70% FMAP, which precludes recurrence. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-026 Prior Year Finding Number: 2023-029 Compliance Requirement: Special Tests and Provisions – Payment Rate Setting and Application Program: U.S. Department of Health and Human Services Foster Care – Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per CFSA’s internal policies and procedures, providers must submit quarterly reports within 45 days of the end of each Federal fiscal year quarter. Upon receipt of quarterly reports from the provider, the Business Services Administration Program Manager reviews each Expenditure Detail Spreadsheet for compliance, accuracy and reasonableness. Condition – Our assessment of the special tests and provisions requirement, revealed that while the selected providers’ quarterly reports displayed no deficiencies, CFSA was unable to provide documentation evidencing the review and approval of the quarterly reports relating to all 40 transactions that were tested. Questioned Costs – Not determinable. Context – This is a condition identified per review of CFSA’s compliance with specified requirements using a statistically valid sample. Effect – The absence of documentation specifying who reviews and approves the quarterly reports compromises accountability and creates ambiguity in identifying the responsible parties in instances of errors or discrepancies. Cause – CFSA does not have adequate controls in place to ensure that review and approval of provider’s quarterly reports are documented. Recommendation - We recommend CFSA strengthen its policies and procedures to address the review and approval process for the provider’s quarterly reports. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – CFSA concurs with this finding as stated. The analysis of provider quarterly reports was performed consistently, but CFSA was inconsistent in demonstrating through formal correspondence back to the provider community that their quarterly reports were acceptable and approved as submitted. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-027 Prior Year Finding Number: 2023-032 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Medicaid Cluster ALN: 93.775, 93.777, 93.778 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Health Care Finance (DHCF)/Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Medicaid State Plan: Citation 42 CFR Section 431.17AT-79-29. Section 4.7 (Maintenance of Records) states, “The Medicaid agency maintains or supervises the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of medical assistance, and administrative costs and statistical, fiscal and other records necessary for reporting and accountability, and retains these records in accordance with Federal requirements. All requirements of 42 CFR 431.17 are met.” Economic Security Administration (ESA) Policy Manual, Section 1.3, “All eligibility criteria and clarifying information are documented on the Record of Case Action, form 1052. The case record should speak for itself. An outside reviewer shall be able to follow the chronology of events in the case be reading the narrative. All application documents including verification and correspondence must be date-stamped. For working recipients, the record should include the dates pay is received and how often the recipient is paid. When the recipient’s statement is the best available source, the record should include the application/recipient and agency efforts to verify the information. All address changes should be documented.” In accordance with 42 CRF Section 435.912(c)(3), Timeliness and performance standard requirements - Standard for new applications and transferred accounts. Except as provided in paragraph (e) of this section, the determination of eligibility for any applicant or individual whose account was transferred from another insurance affordability program may not exceed — (i) 90 calendar days for applicants who apply for Medicaid on the basis of disability; and (ii) 45 calendar days for all other applicants. 42 CRF Section 435.912 (c)(4) Standard for renewals. The redetermination of eligibility at a beneficiary's regularly scheduled renewal may not exceed the end of the beneficiary's eligibility period, except as provided in paragraphs (e) and (c)(4)(i) and (ii) of this section. (i) In the case of a beneficiary who returns a renewal form less than 30 calendar days prior to the end of the beneficiary's eligibility period, the redetermination of eligibility may not exceed the end of the month following the end of the beneficiary's eligibility period. (ii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis, the eligibility determination on the new basis may not exceed— (A) 90 calendar days for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days for all other beneficiaries. 42 CRF Section 435.912 (c)(5) Standard for redeterminations based on changes in circumstances. Except as provided in paragraph (e) of this section, the redetermination of eligibility for a beneficiary based on a change in circumstances reported by the beneficiary or received from a third party may not exceed the end of the month that occurs — (i) 30 calendar days following the agency's receipt of information related to the change in circumstances, unless the agency needs to request additional information from the beneficiary; (ii) 60 calendar days following the agency's receipt of information related to the change in circumstances if the agency must request additional information from the beneficiary; or (iii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis — (A) 90 calendar days following the determination of ineligibility on the current basis, for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days following the determination of ineligibility on the current basis for all other beneficiaries. 42 CRF Section 435.912 (c)(6) Standard for redeterminations based on anticipated changes. The redetermination of eligibility for a beneficiary based on an anticipated change in circumstances may not exceed the end of the month in which the anticipated change occurs, except as provided in paragraphs (e) and (c)(6)(i) and (ii) of this section. (i) In the case of a beneficiary who returns information or documentation requested pursuant to Section 435.919(b)(6) less than 30 calendar days prior to the end of the month in which the anticipated change occurs, the redetermination of eligibility may not exceed the end of the month following the month in which the anticipated change occurs. (ii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis, the eligibility determination on the new basis may not exceed — (A) 90 calendar days for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days for all other beneficiaries. Condition – During testing over beneficiary eligibility for the Medicaid benefits, we noted that the District’s Economic Security Administration (ESA) was unable to provide sufficient documentation to support the beneficiary’s eligibility determination totaling 283,898 total population during the fiscal year 2024 audit. Specifically, out of a sample of 132 participant files tested, we noted the following exception: • For three (3) participant files, ESA did not process the application within the required timeframe. The Department of Health Care Finance, as the State Medicaid Agency, lacks a quality control oversight system to ensure that eligibility documentation and verification is maintained to support the eligibility decision. Questioned Costs – Not determinable. Context – This is a condition identified per review of ESA’s compliance with specified requirements using a statistically valid sample. Effect – Lack of supporting documentation for program services and noncompliance with program requirements could result in disallowances of costs and participants could be receiving benefits that they are not entitled to receive under the program. Cause – DHCF and ESA did not appear to adhere to internal control procedures to ensure that applications are properly processed in accordance with Federal Regulations. Recommendation - We recommend that ESA strictly implement internal control procedures to ensure that documentation is maintained to support the beneficiary determinations. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – ESA concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-028 Prior Year Finding Number: 2023-033 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Year: 09/30/2020 – 09/29/2024 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.403, “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented.” Condition – During our testwork over nonpayroll transactions for the Activities Allowed or Unallowed and Allowable Costs/Cost Principles, we noted that for one (1) out of sixty-two (62) samples, the transaction was charged twice to the program. Total amount of nonpayroll transactions is $19,095,189, and the amount of exception is $122,311. Questioned Costs – Known amount is $122,311. Context – This is a condition identified per review of DBH’s compliance with specified requirements using a statistically valid sample. Total amount of samples selected for testing amounted to $5,633,513. Effect – Lack of proper review of expenditures could result to unallowable costs charged to the program. Cause – DBH does not have adequate controls in place to ensure that only allowable costs are charged to the program. Recommendation – We recommend that DBH strengthen internal control procedures to ensure that expenditures are allowable, and that sufficient documentation is retained to support that allowability. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH concurs with the finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-029 Prior Year Finding Number: N/A Compliance Requirement: Cash Management Program: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Year: 09/30/2020 – 09/29/2024 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. When entities are funded on a reimbursement basis, program costs must be incurred prior to the date of the reimbursement request (2 CFR Section 200.305(b)(3)). US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). 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 Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Condition – During our testing of individual draws of federal funds, we noted that for one (1) sample selected and tested, the review of drawdown was made after it has been requested. Questioned Costs – Not determinable. Context – This is a condition identified per review of DBH’s compliance with specified requirements using a statistically valid sample. The sample drawdown, which is related to expenditures incurred during fiscal year 2024, was requested on December 24, 2024 but the review of the drawdown request did not happen until January 28, 2025. The total drawdown selected for testing amounted to $19,381,854. Effect – DBH is not in compliance with cash management requirements. Failure to timely review cash draw requests could result in cash draws that do not accurately reflect eligible program costs. Cause – DBH did not appear to adhere to internal control procedures to ensure the timely review of cash draws. Recommendation – We recommend DBH evaluate its existing cash management control procedures and ensure all federal draw requests are reviewed timely. We also recommend DBH establish procedures to periodically monitor its compliance with the cash management requirements and initiate necessary actions to resolve any noncompliance that results. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH concurs with the finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-030 Prior Year Finding Number: 2023-035 Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Year: 09/30/2020 – 09/29/2024 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Federal Financial Report (FFR) Controls over Reporting Compliance: 2 CFR 200.333 requires that financial records, supporting documents, statistical records, and all other non-federal entity records pertinent to a federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the federal awarding agency or pass-through entity in the case of a subrecipient. Performance Progress Report (PPR) Underlying Data: The audit objective for the Reporting compliance requirement stated in the 2 CFR Part 200, appendix XI Compliance Supplement is as follows: Determine whether required reports for Federal awards include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. Schedule of Expenditures of Federal Awards (SEFA) Reporting Compliance: 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. Condition – During our testing of the reporting compliance requirement, we noted the following: • FFR Controls over Reporting Compliance: DBH’s control over compliance for financial reporting is as follows: “All reports are reviewed by the Accounting Officer or Agency Fiscal Officer prior to submission to the Federal government. DBH Program and Fiscal Services staff review programmatic and financial reports.” We noted DBH did not timely review and approve the annual Financial Reporting Report (FFR or SF-425) prior to submission to the Federal government. Total population is one (1) report and sample selected is one (1). • PPR Reporting Compliance: We noted DBH did not have documentation for the information, as well as the source of the information, it used in the Opioid STR’s Performance Progress Report. Information as reported in the reports was unsupported as management did not retain the underlying data. Total population is two (2) reports and sample selected is one (1). • SEFA Reporting Compliance: During our testing for the SEFA, we noted that DBH incorrectly reported the value of subrecipient expenditures included within the subrecipient expenditure column. For the year ended September 30, 2024, DBH incurred $12.0 million in subrecipient expenditures for this program and incorrectly reported that there were no subrecipient expenditures on the initial SEFA. While the subrecipient expenditures amount was not accurate, the total expenditures amount was accurately reported. The error in the subrecipient expenditures amount was subsequently identified and corrected as a result of the audit process. Questioned Costs – None. Context – This is a condition identified per review of DBH’s compliance with specified reporting requirements using a statistically valid sample. Effect – Without proper internal controls and policies and procedures in place to ensure that correct amounts were reported and were properly reviewed as it relates to the Opioid STR program: • FFR Controls over Reporting Compliance: There is an increased risk of errors occurring and being undetected, or errors being present in reports if no review and approval occurred. • PPR Reporting Compliance: DBH cannot be assured that it reported complete and accurate information to enable the Substance Abuse and Mental Health Services Administration (SAMHSA), an operating division of the Department of Health and Human Services (HHS), to assess the outcomes of the State’s use of Opioid program funding. • SEFA Reporting Compliance: The effect of the condition is that the SEFA was not accurately prepared. Cause – Management did not have proper internal controls and policies and procedures in place to ensure that the amounts on the FFR and SEFA were properly reported, and the reports were properly reviewed and approved. Recommendation – We recommend the following: • FFR Controls over Reporting Compliance: We recommend DBH strengthen its internal control to ensure timely review and approval of the FFR before report submission. • PPR Reporting Compliance: We recommend DBH develop formal, written procedures to identify the sources of information necessary and steps needed to compile accurate and complete information for the Opioid program performance reports; and retain in a central location all documentation that it used to support information included in each performance report it submits to the federal government. • SEFA Reporting Compliance: We recommend DBH ensure that agency personnel receive proper training on subrecipient versus vendor determination; as well as review existing policies and procedures for preparing the Schedule of Expenditures of Federal Awards to ensure that it is complete and accurate. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – The DBH Office of the Chief Financial Officer (OCFO) concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-031 Prior Year Finding Number: 2023-036 Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Year: 09/30/2020 – 09/29/2024 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Earmarking Requirements for Subrecipients: Award recipients must comply with the requirements for subrecipients monitoring and management as outlined in the provisions of 45 CFR Section 75.351-352 and should ensure written subaward/subcontract agreements are in place. The written agreement must require that subrecipients comply with the same terms and conditions as the prime recipient, as applicable (i.e., financial management requirements, audit requirements, etc.) and should describe the scope of work, deliverables, etc. The grant agreements provide that the District may use no more than ten (10) percent of the total grant award for administrative costs and developing the infrastructure necessary for expansion of services. Also, no more than ten (10) percent of the total grant award may be used for data collection, performance measurement, and performance assessment, including incentives for participating in the required data collection follow-up. Condition – During our testing of the Subrecipient Monitoring compliance requirement, we noted the following: Earmarking Requirements for Subrecipients: During our testing of the State Targeted Response to the Opioid Crisis Program, we noted that the agency used a different established indirect cost rate in monitoring the earmarking of awardees than the maximum administrative costs/indirect costs. For two (2) out of eleven (11) samples selected for testing, the awardees exceeded the ten (10) percent funding limitation for administrative costs/indirect costs. In addition, DBH does not have a process to monitor the ten (10) percent earmarking requirement for costs of developing the infrastructure necessary for expansion of services; and for data collection, performance measurement, and performance assessment, including incentives for participating in the required data collection follow-up. Total amount of population is $11,977,624, and the total amount of exceptions for two (2) samples is $524,658. Questioned Costs – Not determinable. Context – This is a condition identified per review of DBH’s compliance with specified subrecipient monitoring requirements using a statistically valid sample. Effect – Subrecipients may not be properly monitored, which may result in subawards being used for unauthorized purposes in violation of the terms and conditions of the subawards or that the subaward performance goals were not achieved. Cause – There is lack of sufficient documentary evidence to support that the controls are operating as designed related to subrecipient monitoring compliance. Recommendation – We recommend that DBH maintain sufficient documentation to evidence its internal controls over the risk assessment and monitoring of subrecipients. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-032 Prior Year Finding Number: N/A Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services HIV Care Formula Grants ALN: 93.917 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Health (DC Health) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. To be eligible to receive assistance in the form of therapeutics, an individual must meet the following requirement: 42 U.S. Code Section 300ff-26 - Provision of treatments: (b) Eligible individual. To be eligible to receive assistance from a State under this section an individual shall— (1) have a medical diagnosis of HIV/AIDS; and (2) be a low-income individual, as defined by the State. Condition – During our review of forty (40) participant eligibility files out of population of 875, under the HIV Care Formula Grants, we noted the following: • For all forty (40) participant eligibility files tested, we noted absence of secondary supervisory review as required. Specifically, eligibility determinations are made solely by the eligibility specialist without documented supervisory review or sign-off. • For two (2) participant files reviewed, we noted that there was no documentation pertaining to the proof of HIV diagnosis, verification of income and/or residency in the Ramsell Eligibility System. Questioned Costs – Not determinable. Context – This is a condition identified per review of DC Health’s compliance with specified requirements for eligibility using a statistically valid sample. Effect – The lack of a secondary review or maintenance of eligibility documents increases the risk of noncompliance with federal eligibility requirements, potentially leading to questioned costs. Cause – DC Health does not have a formal supervisory review process in place to verify the completeness and accuracy of eligibility determinations. Recommendation – We recommend that DC Health strengthen its existing policies and procedures by establishing a formal supervisory review process that includes a documented secondary review and approval of all eligibility files prior to participant enrollment. Additionally, we recommend that DC Health enhance its internal control procedures to ensure that all documentation supporting eligibility determinations is properly maintained in accordance with program requirements. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DC Health concurs with the finding. The HIV/AIDS, Hepatitis, STD and TB Administration (HAHSTA) has done a preliminary assessment of the root cause and conditions that created the exceptions noted in the testing of eligibility samples. DC Health agrees that the infrequency of reviews and lack of documented secondary supervisory reviews are contributing factors. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-033 Prior Year Finding Number: N/A Compliance Requirement: Matching, Level of Effort, Earmarking Program: U.S. Department of Health and Human Services HIV Care Formula Grants ALN: 93.917 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Health (DC Health) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Matching States and territories (excluding Puerto Rico) with greater than one percent of the aggregate number of national cases of HIV/AIDS in the two-year period preceding the federal fiscal year in which the state is applying for a grant must, depending on the number of years in which this threshold requirement has been met, provide matching funds as follows (42 USC 300ff-27(d)): All recipients are subject to a matching requirement for ADAP supplemental funds in an amount equal to $1 for every $4 of federal funds (42 USC 300ff-28(a)(2)(F)(ii)(III)). Those recipients that are required to match the base formula funds may request and receive a waiver from this additional matching requirement. Level of Effort The state/territory will maintain HIV-related activities at a level that is equal to not less than the level of such expenditures by the state/territory for the one-year period preceding the fiscal year for which the state/territory is applying for RWHAP Part B funds (42 USC 300ff- 27(b)(7)(E)). Maintenance of Effort (MOE) requirement: The recipient must maintain non-federal funding for HIV-related activities at a level that is not less than the expenditures for such activities during the fiscal year prior to receiving the award (see Section 2617(b)(7)(E) of the PHS Act). Condition – DC Health did not provide the necessary documentation to support the computation of the required matching and level of effort amounts. As a result, we were unable to verify whether DC Health met the required thresholds or performed the appropriate calculations. Questioned Costs – Not determinable. Context – This is a condition identified per review of DC Health’s compliance with specified requirements. Effect – Without adequate internal controls to ensure proper documentation of the requirements, it may increase the risk that matching costs will be questioned. Cause – DC Health does not have adequate internal controls requiring the retention of documentation related to matching and level of effort compliance. Recommendation – We recommend that DC Health strengthen its policies and procedures to ensure that all matching contributions and level of effort requirements thresholds are properly documented. DC Health should ensure that detailed reconciliations, expenditure reports, and applicable source documents are maintained for audit purposes. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DC Health concurs with the finding. While DC Health reported match and level of effort expenditures in total, there was not sufficient documentation to distinguish 100% of the components of the match and LOE required. This detail included account-types/classifications, account numbers, allocation amounts and service areas needed to total the match and LOE requirements. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-034 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Block Grants for Substance Use Prevention, Treatment, and Recovery Services ALN: 93.959 Award #: Various Award Years: 10/01/2022 – 09/30/2024; 03/15/2021 – 03/14/2025 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430 (g): Standards for Documentation of Personnel Expenses. (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient; (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition – We noted that the DBH allocated payroll expenditures to the Block Grants for Substance Use Prevention, Treatment and Recovery Services (SUPTRS) during fiscal year 2024 based on budgeted percentages. These percentages were entered into the PeopleSoft Human Resources/Payroll System (PeopleSoft) at the beginning of the fiscal year and were based on management’s estimate of the respective employee’s level of effort for each program. PeopleSoft calculated the payroll costs every payroll cycle for each employee and program based on the predetermined percentage, and reported it through the Labor Distribution Report (485 Report). However, management cannot provide supporting documentation regarding the periodic comparison of actual costs to the budgeted costs as required by 2 CFR Section 200.430. Specifically, 17 out of 60 sampled payroll items tested for the SUPTRS program were recorded based on estimated hours and not actual hours. For the other 43 sampled items, these individuals worked 100% of their time on SUPTRS, therefore, there is no possibility of error. Questioned Costs – Known amount is $43,235. Context – This is a condition identified per review of DBH’s compliance with specified requirements using a statistically valid sample. Payroll costs, including fringe benefits, for the SUPTRS program in fiscal year 2024 totaled $4,667,478. Effect – DBH was unable to demonstrate that the payroll expenditures charged to the SUPTRS program accurately reflected the actual time incurred on the program and such expenditures were properly supported in accordance with 2 CFR Section 200.430, Compensation – Personal Services. Cause – DBH does not have policies and procedures in place to review and reconcile the estimated amount of payroll expenditures charged to the SUPTRS Program to the actual expenditures incurred. Recommendation – We recommend that DBH deploy policies and procedures to periodically compare employees’ estimated hours per the 485 Report to the actual hours incurred, and make any necessary adjustments as required by 2 CFR Section 200.430. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH agrees with the findings and will put controls in place to resolve the issue. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-035 Prior Year Finding Number: N/A Compliance Requirement: Matching, Level of Effort, Earmarking Program: U.S. Department of Health and Human Services Block Grants for Substance Use Prevention, Treatment, and Recovery Services ALN: 93.959 Award #: Various Award Years: 10/01/2022 – 09/30/2024; 03/15/2021 – 03/14/2025 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Earmarking requirement: a) The state shall expend not less than 20 percent of Substance Use Prevention, Treatment and Recovery Services Block Grant (SUPTRS BG) for primary prevention programs for individuals who do not require treatment for Substance Use Disorder (SUD). The programs should educate and counsel the individuals on such SUD and provide for activities to reduce the risk of such SUD by the individuals (42 USC 300x-22; 45 CFR Sections 96.124 (b)(1) and 96.125). b) Designated states (i.e., any state whose cases of Acquired Immunodeficiency Syndrome (AIDS) is 10 or more per 100,000 individuals (as indicated by the number of such cases reported to and confirmed by the Centers for Disease Control and Prevention for the most recent calendar year for which data are available)), shall expend not less than two percent and not more than five percent of the award amount to carry out one or more projects to make available to individuals early intervention services for HIV disease (EIS HIV) at the sites where the individuals are undergoing SUD treatment. c) The state may not expend more than five percent of the grant to pay the costs of administering the grant (42 USC 300x-31; 45 CFR Section 96.135 (b)(1)). Condition – DBH did not provide the necessary documentation to support compliance with earmarking requirements as described above. As a result, we were unable to verify whether DBH met the required thresholds. Questioned Costs – Not determinable. Context – This is a condition identified per review of DBH’s compliance with earmarking requirements. Effect – Without adequate internal controls to ensure proper documentation of the requirements, it may increase the risk that earmarking requirements may not be met. Cause – DBH does not have adequate internal controls requiring the retention of documentation related to earmarking compliance requirements. Recommendation – We recommend that DBH strengthen its policies and procedures to ensure that all earmarking requirements thresholds are properly documented. DBH should ensure that detailed reconciliations, expenditure reports, and applicable source documents are maintained for audit purposes. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2024-036 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Block Grants for Substance Use Prevention, Treatment, and Recovery Services ALN: 93.959 Award #: Various Award Years: 10/01/2022 – 09/30/2024; 03/15/2021 – 03/14/2025 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 200.302(a), Financial Management, states that each state must expend and account for the federal award in accordance with state laws and procedures for expending and accounting for the state’s own funds. In addition, the state’s and the other non-federal entity’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. Condition – Subrecipient expenditures, totaling approximately $1.1 million, which are required to be presented in the Schedule of Expenditures of Federal Awards (SEFA), were improperly excluded from the initial SEFA prepared by management. Subsequently, the SEFA was adjusted by DBH to reflect the subrecipient expenditures incurred for the program. Questioned Costs – None. Context – This is a condition identified per review of DBH’s compliance with reporting requirements. Effect – Failure to properly review and present expenditures can result in noncompliance with reporting requirements. Cause – DBH did not comply with their policies and procedures to ensure accuracy of the SEFA. Recommendation – We recommend that DBH adhere to instituted policies and procedures to ensure the accuracy of the SEFA. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – The DBH Office of the Chief Financial Officer (OCFO) concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Homeland Security Homeland Security Grant Program ALN: 97.067 Award #: EMW-2021-SS-00078-S01, EMW-2022-SS-00084-S01, EMW-2023-SS-00056-S01 Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Homeland Security and Emergency Management Agency (HSEMA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System (FSRS) or System for Award Management (sam.gov) website from March 8, 2025 onwards. In accordance with the requirements of 2 CFR Section 1402.300(b), the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR Part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR Part 170 Reporting Subaward and Executive Compensation Information. Condition – For all nine (9) first tier subawards samples selected for FFATA testing, we noted that HSEMA failed to provide evidence that it reported the subaward information through the FSRS or sam.gov website to fulfill the FFATA requirements. Questioned Costs – None. Context – This is a condition identified per review of HSEMA’s compliance with reporting requirements using a statistically valid sample. Effect – Failure to properly submit the FFATA report results in noncompliance for the Homeland Security Grant program. Cause – HSEMA did not have proper internal controls and policies and procedures in place to fulfill the FFATA reporting requirements. Recommendation – We recommend that HSEMA evaluate its Transparency Act reporting control procedures and update them as necessary to ensure they promote compliance with the Federal regulations. These procedures should include a supervisory review of the report information before it is submitted to the System for Award Management (sam.gov) website. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – HSEMA concurs that the subaward reporting required by FFATA is not currently complete and up to date in sam.gov website. Due to the transition to sam.gov and the FSRS system being terminated, the record of prior FFATA reports submitted that encountered errors and were left in partially complete status is no longer retrievable from the FSRS system to demonstrate that the report had been submitted. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-001 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: Government Department/Agency: U.S. Department of Agriculture Supplemental Nutrition Assistance Program Cluster (SNAP) ALN: 10.551, 10.561 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Human Services (DHS)/ Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430(i): “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Per District Personnel Issuance No. 2021-10 (Approval Required) - "Overtime work must be officially ordered and approved in advance. Agency heads and their designees are authorized to order and approve overtime work provided the agency has sufficient funding available. Employees may submit overtime requests in PeopleSoft. To submit a request, go to the main employee self-service page and access the navigator. Click “Self Service,” next “Time Reporting,” then “Report Time,” and finally “Overtime Requests.” Once an employee submits an overtime request, the employee’s supervisor and, if required by PeopleSoft any additional designated agency personnel, must review and approve the request in PeopleSoft for the employee to be authorized to receive overtime pay.” Per District Personnel Issuance No. 2018-00 (Annual Leave) effective April 21, 2018 “Using Annual Leave” - An employee may use accrued annual leave at any time during the leave year if they receive approval from their immediate supervisor or the agency head responsible for the employee’s timesheet. If an employee wishes to use their accrued annual leave, they must: 1. Submit a request in advance to use annual leave to their manager or supervisor. 2. Receive approval from the manager or supervisor; and 3. Record the approved leave taken on their timesheet in PeopleSoft. Condition – We noted that for six (6) out of a sample of seven (7) employees tested of total costs sampled of $30,993, although the employee's timesheet was approved by the supervisor, DHS/ESA was unable to provide documentation to show the preapproval of the scheduled leave and overtime approved on the timesheet. Questioned Costs – Known amount is $28,093. Context – This is a condition identified per review of DHS/ESA’s compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits, for the SNAP program in fiscal year 2023 were $16,063,809. Effect – Without adequate internal controls in place to ensure costs are properly reviewed for allowability, DHS/ESA could be noncompliant with the allowability requirement and could request funds for costs that are unallowed. Cause – DHS/ESA did not follow its own internal controls and policies and procedures to ensure that documentation to show the preapproval of the scheduled leave and overtime approved on the timesheet is obtained and maintained. Recommendation – We recommend that DHS/ESA follow its own policies, procedures and controls to ensure that pre-authorization of scheduled leave or overtime is obtained and maintained. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS concurs with the finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-002 Prior Year Finding Number: N/A Compliance Requirement: Matching, Level of Effort, Earmarking Program: Government Department/Agency: U.S. Department of Agriculture Supplemental Nutrition Assistance Program Cluster (SNAP) ALN: 10.551, 10.561 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Human Services (DHS)/ Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 277.4(b), Federal reimbursement rate, states that the base percentage for Federal payment shall be 50 percent of State agencies’ allowable SNAP administrative costs. Condition – During the testing of the SNAP Matching, Level of Effort, Earmarking compliance requirement, we noted that the quarterly SF-425 reports were approved and certified, and DHS/ESA exceeded the required SNAP Matching amount of $34,983,777. However, OCFO for DHS/ESA was unable to provide supporting documentation that would allow us to agree specific amounts reported as the match for fiscal year 2023. OCFO for DHS/ESA was unable to provide support to enable recalculation of the exact amounts reported for (1) Certification for the 4th quarter, (2) Education and Training (E&T) 50% Grant for each of the four quarters, and (3) for New Investment for the 4th quarter, which is not allowed to be included as a match but must be spent by the agency. The total calculated amount by OCFO for DHS/ESA to be reported as the required match on the SF-425 report, excluding New investment, was $36,603,773. However, the total recalculated amount by auditors to be reported as the required match was $37,315,738. Variance between these two amounts was $711,965. Questioned Costs – None. Context – This is a condition identified per review of DHS/ESA’s compliance through the OCFO team with specified requirements using a statistically valid sample. Effect – OCFO for DHS/ESA is not in compliance with the stated provisions. Without adequate internal controls to ensure reconciliation of the amounts reported for the matching requirements, there is an increased risk that matching will not be properly reported. Cause – OCFO for DHS/ESA does not have appear to have adequate policies and procedures in place to ensure that the amounts reported for the matching requirement agreed to the support. Recommendation – We recommend that OCFO for DHS/ESA strengthen its policies and procedures to ensure that amounts reported for SNAP matching requirements are properly reported. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS concurs with the finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-003 Prior Year Finding Number: 2022-001 Compliance Requirement: Special Tests and Provisions – ADP System for SNAP Program: Government Department/Agency: U.S. Department of Agriculture Supplemental Nutrition Assistance Program Cluster (SNAP) ALN: 10.551, 10.561 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Human Services (DHS)/ Department of Health Care Finance (DHCF) DC Access System (DCAS) Program Management Administration Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 272.10(a), “All State agencies are required to sufficiently automate their SNAP operations and computerize their systems for obtaining, maintaining, utilizing, and transmitting information concerning SNAP.” Per 2 CFR Section 272.10(b), “In order to meet the requirements of the Act and ensure the efficient and effective administration of the program, a SNAP system, at a minimum, shall be automated in each of the following program areas (1) Certification and (2) Issuance Reconciliation and Reporting. Under Certification – States agencies must determine eligibility and calculate benefits or validate the eligibility worker’s calculations by processing and storing all casefile information necessary for the eligibility determination and benefit computation (including but not limited to all household members’ names, addresses, dates of birth, social security numbers, individual household members’ earned and unearned income by source, deductions, resources and household size). Also, State agencies must redetermine or revalidate eligibility and benefits based on notices of change in households’ circumstances.” Condition – The District is self-reporting findings it noted from its ongoing efforts to resolve issues with the ADP system for SNAP. The issues identified and the estimated impact follows: 1. Failure to Send Correct and Timely Notices to SNAP Households - Notices pertaining to SNAP eligibility contain incorrect information, and/or SNAP applicants and recipients fail to receive proper notices. For example, in the Federal Fiscal Year (FFY) 2018 Local Program Access Review (PAR), Food and Nutrition Service (FNS) cited that SNAP applicants did not receive a Notice of Eligibility or notice contained incorrect information, no notice of required verification, and the notice of adverse action was incorrect. 2. Untimely Processing of SNAP Applications and Periodic Reports - On October 23, 2017, FNS advised DHS that its application processing timeliness (APT) rate between October 2016 and March 2017 was 88.45%, which triggered corrective action per FNS policy. Moreover, between that last APT report and now, DHS has disclosed that it has experienced processing backlogs of varying severity and persistence to FNS via ongoing communications and as part of waiver requests. DHS also provided a report to FNS in August 2022 that indicated significant application processing backlogs. 3. Establishment of Duplicate Accounts - DHS discovered that duplicate Product Delivery Cases (PDC) were being created in DCAS. One PDC was active and the other closed, but the closed PDC was still receiving benefits. 4. Issuance of Duplicate Payment - As a result of duplicate accounts in Deficiency 3, duplicate payments may have been issued to the same household when a caseworker reactivated a closed case. There is also a possibility that customers who received duplicate EBT cards from different EBT vendors may have received duplicate payments. 5. Failure to Implement Computer Matching System - Based on the FFY18 Program Integrity Management Evaluation (ME) review, DHS failed to process Prisoner Verification System (PVS) matches, deceased matches, and National Directory of New Hires (NDNH) matches in accordance with federal requirements. 6. Failure to Produce System Computations to Support Recipient Claims - DCAS does not have the ability to calculate overpayments or send a demand letter. FNS correspondence letters dated October 18, 2017, and September 20, 2018, advised DHS to suspend the establishment of DCAS claims but allowed DHS to continue servicing ACEDS claims. 7. Recipient Fraud Investigations, Hearings and Tracking System Unvalidated - As reported by DHS in the Advance Warning Letter (AWL) CAP, DHS has been using manual and other electronic systems, such as QuickBase, to meet federal recipient fraud requirements and related notices. Since then, DHS has been working on creating a fraud management system called Thomas Reuters (formerly Pondera), which went live on October 11, 2022. This finding remains open until FNS validates the system, including viewing a demo. 8. Treasury Offset Program (TOP) Reporting and Maintenance Decertified - FNS conducted a TOP Technical Review in June 2021 and DHS was decertified from TOP due to the following: • Referral of customers to TOP that are undergoing recoupment. • Incorrect determination of the date of delinquency. • Incorrect debt balance and debt status in TOP. 9. Failure to Initiate Recoupment on Active Households - When DCAS launched in October 2016, more than 3,000 claim cases with outstanding balances originating from SNAP overpayments were converted from ACEDS to DCAS. Some claims were not properly converted or activated in DCAS. As a result, DHS failed to take the required recovery actions, including TOP recovery or activation of the recoupment process through EBT cards. 10. Recipient and Benefit Integrity Report Update Required - DHS must provide an update on the target completion dates for system generation of all SNAP-related reports currently being created through manual intervention. The plan must include the procedures for reviewing and ensuring the accuracy of the data being submitted to Food Programs Reporting System (FPRS) with particular emphasis on the FNS-209 and the FNS-366B reports. DHS experienced some technical challenges in processing and retrieving claim and recoupment information accurately since the launch of DCAS in October 2016, which affected the FNS-209 quarterly reports. The Payment and Collections Division (PCD) and the DCAS report development team have made concerted efforts to improve the ability to generate data for the reports but continue to have difficulties in verifying the accuracy of data due in part to the laborious manual processes involved. Based on the FFY 2018 Program Integrity ME review, lines 3b, 10, and 14 of the FNS-209 failed to reconcile with the detailed documentation. 11. Work Requirements Have Not Been Properly Implemented - DHS is not in compliance with the requirement to accurately report on the FNS 583. DHS is unprepared to implement the work requirement and time limit for able-bodied adults without dependents when the current suspension mandated by the Families First Coronavirus Response Act ends and/or its waiver ends. Additionally, the District is not prepared to apply the Able-Bodied Adults Without Dependents (ABAWD) time limits when their ABAWD waiver expires. 12. Minimum Benefit for Non-Categorically Eligible One/Two Person Households Not Issued to Eligible Households - As reported by DHS, the Federal minimum SNAP benefit is not issued to eligible one or two-person households unless those households are categorically eligible. As a result, one or two-person households that are not categorically eligible will not receive benefits to which they are entitled. 13. Medical Expense Deduction for Elderly and Disabled Households Not Configured in DCAS - As reported by DHS, certain allowable medical expense evidence is not configured in DCAS to allow a medical expense deduction. Certain allowable disability statuses selected in DCAS are not configured to allow a medical expense deduction. As a result, certain households with elderly or disabled members are not receiving a medical expense deduction. 14. Failure to Analyze Client Complaints and Include in the State’s Corrective Action Plans (CAP) Where Appropriate - DHS is failing to analyze client complaints and include in the State’s CAP where appropriate, per 7 CFR 271.6(a)(3) and 275.16. 15. The SNAP Application Does Not Clearly Explain Which Questions Are Required for SNAP - FNS reviewers found that the District’s SNAP application does not provide clear directions about which questions are required for SNAP, versus Cash or Medical Assistance. For example, Step 5 of the application asks “Does anyone in your household (including non-applicants) have any income? Yes – complete below; No – skip to step 6 (Complete if you are applying for Food, Medical, or Cash Assistance).” The directions are confusing and may be difficult to understand. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements resulting from a system implementation. Effect – Without an effectively designed and operated system in place, ineligible beneficiaries may receive benefits under the SNAP grant and DHS may make payments on behalf of those beneficiaries resulting in noncompliance with the eligibility requirements. Inaccurate beneficiary allotment payments could result in participants receiving benefits that they are not entitled to receive under the program. Cause – DHS did not effectively design and operate the ADP system for SNAP which resulted to inaccurate benefit payments. Recommendation – We recommend that DHS continue to evaluate and improve the new ADP system for SNAP to ensure that it addresses all the administration requirements of the SNAP program. Related Noncompliance – Material noncompliance.   Views of Responsible Officials and Planned Corrective Actions – The DHS and DHCF DCAS team agree with the findings noted in this report. DHS self-reported these findings as part of the agency’s ongoing effort to maintain integrity with all eligibility determinations. The root cause of each of the fifteen (15) case issues with the ADP system for SNAP varied. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-004 Prior Year Finding Number: 2022-002 Compliance Requirement: Special Tests and Provisions – EBT Card Security Program: Government Department/Agency: U.S. Department of Agriculture Supplemental Nutrition Assistance Program Cluster (SNAP) ALN: 10.551, 10.561 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Human Services (DHS)/ Office of the Chief Financial Officer/Office of Finance and Treasury (OCFO/OFT) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 7 CFR Section 274.8(b)(3), As an addition to or component of the Security Program required of Automated Data Processing (ADP) systems, the State agency shall ensure that the following electronic benefits transfer (EBT) security requirements are established: (i) Storage and control measures to control blank unissued EBT cards and PINs, and unused or spare POS devices; (ii) Measures to ensure communication access control. Communication controls shall include the transmission of transaction data and issuance information from POS terminals to work-stations and terminals at the data processing center; (iii) Message validation; (iv) Administrative and operational procedures; (v) A separate EBT security component shall be incorporated into the State agency Security Program for ADP systems. The periodic risk analyses required by the Security Program shall address the following items specific to an EBT system – (B) Completeness and timeliness of the reconciliation system; and (vi) The State agency shall incorporate the contingency plan approved by FNS into the Security Program. Condition – OCFO/OFT for DHS are 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. OCFO/OFT have contracted with Fidelity National Information Service (FIS) for the issuance and security of the EBT cards; however, it is OCFO/OFT’s ultimate responsibility to ensure the contractor has controls in place to maintain adequate security over, and documentation/records of EBT cards. During our tests of the design and implementation of internal controls, we noted the following issues: • For nine (9) out of the 60 samples, although both EBT Balance Sheets reconciled with the EBT Card Issuance Logs included in the package, we noted the following deficiencies: o For one (1) out of the samples, we noted that for at least one (1) customer, the client’s name was missing from the EBT Intake Form. o For two (2) out of the samples, we noted that for at least one (1) customer on the United Planning Organization (UPO) Intake Form, the ID type for identification purposes was missing. o For two (2) out of the samples, we noted that for at least one (1) customer the case number was cancelled but no new/correct case number indicated on the EBT Intake Form. o For two (2) out of the samples, we noted that for at least one (1) customer the identification type was noted as referral on the EBT Intake Form, but no referral form was attached. o For one (1) out of the samples, we noted that for at least one (1) customer the DHS Photo ID Program Referral Form was missing the supervisor's signature and only had the eligibility staff’s signature. o For one (1) out of the samples, we noted that for at least one (1) customer, the name of the beneficiary in the intake forms does not agree with the EBT Issuance Log. Questioned Costs – None. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without adequate internal controls to ensure compliance with EBT Card Security requirements, there is an increased risk that the inventory of EBT cards will not be properly maintained and accounted for. Cause – OCFO/OFT for DHS does not have adequate policies and procedures in place to ensure adequate safeguarding, documentation over issuance and monitoring of EBT cards. Recommendation - We recommend that OCFO/OFT for DHS strengthen formal policies and procedures to maintain adequate security over, and documentation/records for EBT Cards. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – The OCFO/OFT for DHS concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-005 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: Government Department/Agency: U.S. Department of Agriculture Special Supplemental Nutrition Program for Women, Infants and Children (WIC) ALN: 10.557 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Health (DC Health) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430(i): “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition – From a sample of 40 payroll transactions, we noted five (5) transactions for one employee that did not work on the program, thus, there should be no hours charged to the program during the year. Per review of the total payroll charged to the program for the year for this employee, we noted $32,290 that should not have been charged to the program. Questioned Costs – Known amount is $32,290. Context – This is a condition identified per review of DC Health’s compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits, for the WIC program in fiscal year 2023 were $1,073,965. Effect – DC Health was unable to demonstrate that the payroll expenditures charged to the WIC program were allowable expenses in accordance with 2 CFR Part 200.430. Cause – DC Health did not adhere to its internal control policies and procedures for reviewing the eligibility and allowability of payroll expenditures charged to the WIC program. Recommendation – We recommend that DC Health strengthen its policies and procedures to ensure that only allowable expenses are charged to the program as required by 2 CFR 200.430. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DC Health concurs with the finding. DC Health complies with local and federal requirements for regular and routine review of budgeted employee time and alignment with allowable costs and hours worked. Staff duties are documented in performance plans, SMART goals, logs/calendars and reports revised by supervisors. The exception found in the sample was corrected in January 2024 when the employee was found to be budgeted partly on the WIC grant. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-006 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: Government Department/Agency: U.S. Department of Agriculture Special Supplemental Nutrition Program for Women, Infants and Children (WIC) ALN: 10.557 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Health (DC Health) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 7 CFR 246.16a (c) Rebate contracts with infant formula manufacturers are authorized as a cost containment measure. Rebates represent a reduction of expenditures previously incurred for WIC food benefit costs. Applying the rebates received to such costs enabled the DC Health to extend program benefits to more participants than could have been serviced this fiscal year in the absence of the rebate contract. Condition – During our review of five (5) rebate samples, we found that for one (1) rebate amounting to $4,639, DC Health was unable to provide the invoice to support the rebate credit received in October 2022. Questioned Costs – Not determinable. Context – This is a condition identified per review of DC Health’s compliance with specified requirements using a statistically valid sample. We sampled $1,085,404 of the population of $3,351,591. Effect – Without strict adherence to policies and procedures, there is no assurance that food rebates are accurately reviewed and approved before being claimed for credit. Cause – DC Health did not follow its own internal control policies and procedures for reviewing rebates submitted for credit. Recommendation – We recommend that DC Health strictly adhere to its policies and procedures to ensure that rebates are reviewed and approved before claiming for credit. Related Noncompliance – Noncompliance.   Views of Responsible Officials and Planned Corrective Actions – DC Health concurs with the finding. Contributing factors include absence of an internal policy and procedure outlining the annual process for the service provider, to submit supporting documentation to DC WIC for review and approval prior to receipt of the annual rebate. This internal control would have alerted WIC staff to contact the service provider last year, when they did not email a cover letter to DC WIC as supporting documentation for the annual vendor’s rebate. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-007 Prior Year Finding Number: N/A Compliance Requirement: Eligibility Program: Government Department/Agency: U.S. Department of Agriculture Special Supplemental Nutrition Program for Women, Infants and Children (WIC) ALN: 10.557 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Health (DC Health) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 7 CFR § 246.7 - Certification of participants: “246.7 (d)(v) - (v) Are applicants required to document income eligibility? (A) Adjunctively/automatically income eligible applicants. The State or local agency must require applicants determined to be adjunctively or automatically income eligible to document their eligibility for the program that makes them income eligible as set forth in paragraph (d)(2)(vi) of this section. (B) Other applicants. The State or local agency must require all other applicants to provide documentation of family income at certification.” Condition – During testing over individual eligibility for the WIC program benefits, we noted the following exception: • BDO identified one (1) instance out of forty (40) samples where "COVID Self-declared" was accepted as proof of income for determining eligibility under the WIC program, which is no longer valid for income determination. Questioned Costs – Not determinable. Context – This is a condition identified per review of DC Health’s compliance with specified requirements using a statistically valid sample. Effect – Due to lack of operating effectiveness of controls and non-compliance with program requirements, there is no assurance over income eligibility under the WIC program for individual participants. Cause – DC Health did not adhere to the required internal control procedures over income eligibility determinations to ensure that certifications are issued to eligible individuals. Recommendation – We recommend that DC Health implement internal control procedures to ensure income eligibility determinations are made accurately in compliance with the program requirements. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DC Health concurs with the finding. The internal control deficiencies identified are a result of a combination of grantee staff turnover, change in federal WIC policy after the end of the public health emergency and the continued existence of pandemic era terminology in DC WIC’s management information system. In fiscal year 2024, The DC WIC Program implemented several quality assurance activities that are aimed at resetting the program back to normal operations pre-pandemic. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-008 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: Government Department/Agency: U.S. Department of Housing and Urban Development Community Development Block Grants Section 108 Loan Guarantees ALN: 14.248 Award #: 2000150 Award Year: 10/01/2022 – 09/30/2023 Department of Housing and Community Development (DHCD) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. 2 CFR Part 170 Appendix A, “Unless you are exempt as provided in paragraph d. of this award term, you must report each action that equals or exceeds $30,000 in Federal funds for a subaward to a non-Federal entity or Federal agency (see definitions in paragraph e. of this award term). The non-Federal entity or Federal agency must report each obligating action described in paragraph a.1. of this award term to http://www.fsrs.gov. For subaward information, report no later than the end of the month following the month in which the obligation was made. (For example, if the obligation was made on November 7, 2010, the obligation must be reported by no later than December 31, 2010.) You must report the information about each obligating action that the submission instructions posted at http://www.fsrs.gov specify.” Condition – During our audit, we noted the Agency did not submit the required Federal Financial Assistance Subject to the Transparency Act (FFATA) Report through Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) website. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHCD’s compliance with specified requirements. Effect – Failure to properly submit the FFATA report results in noncompliance for the Community Development Block Grants Section 108 Loan Guarantees program. Cause – Per discussion with Grants Manager and Compliance Officer, DHCD was unable to enter the data into FSRS as a result of a system error. In lieu of reporting to FSRS, DHCD keeps track of the FFATA amounts by memo and aging schedule approved by Agency Fiscal Officer. Recommendation – We recommend that DHCD resolve issues preventing them from properly submitting the FFATA Report through FSRS. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHCD concurs with the conditions and recommendations of this finding. DHCD could not submit its Community Development Block Grants Section 108 Loan Guarantees program FFATA Report in the FSRS. The District’s Department of Human Services (DHS)’ Data Universal Numbering System (DUNS)/Unique Entity (UEI) number was used on all District’s Housing and Urban Development (HUD) grant agreements for the fiscal year. DHCD notified HUD Field Office of the error, which was corrected on the District’s fiscal year 2024 federal grant agreements with HUD. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-009 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: Government Department/Agency: U.S. Department of Labor Unemployment Insurance ALN: 17.225 Award #: UI-37216-22-55-A-11 Award Year: 10/01/2021 – 12/31/2024 Department of Employment Services (DOES) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 200.510(b), Schedule of Expenditures of Federal awards, states that 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 2 CFR section 200.502, Basis for determining Federal Awards expended. Condition – During our review of grant carryover analysis in relation to the fiscal year 2023 audit, we noted that DOES recorded $3.3 million of federal administrative expenditures in the current year SEFA in excess of the overall grant award amount for Unemployment Insurance program Award #UI-37216-22-55-A-11. BDO noted that the amount is related to the year-end closing entry reconciling DIFS R100 vs. R51 and should have been reversed in fiscal year 2023. The SEFA was adjusted to reflect the correct amount of expenditures incurred for the program. Questioned Costs – Not determinable. Context – This is a condition identified per review of the actual vs. budgeted expenditure for the Unemployment Insurance grant. Effect – DOES is not in compliance with the stated provisions. Failure to properly review and support expenditures can result in noncompliance with laws and regulations along with loss of funding. Cause – DOES did not adhere to internal control procedures to reasonably ensure that the SEFA be fairly presented. Recommendation – We recommend that DOES adhere to internal control procedures to reasonably ensure that expenditures do not exceed budget or grant award amounts. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DOES concurs with this finding. The introduction of the new financial system resulted in the creation of several clearing accounts, necessitating ongoing monitoring and adjustments. One such account is the PNG Clearing Account. The specific transaction in question arose from a general ledger adjustment made during the fiscal year 2023 year-end close to reconcile outstanding balances within the PNG clearing account. This adjustment occurred subsequent to the closure of the subledger, prompting corrections at the source and resulting in discrepancies between subledger and general ledger balances. Management has taken prompt action to address this issue by rectifying discrepancies in the SEFA. Additionally, as part of a agency-wide remediation, we have implemented enhanced controls to facilitate timely reconciliation of subledgers with the general ledger, thus mitigating the risk of future discrepancies. It is important to highlight that this incident is an isolated occurrence within the context of the grant program, stemming from the transition to a new financial system, process changes, and the introduction of subledgers. Importantly, this discrepancy pertains solely to the initial SEFA amount based on general ledger reporting and does not impact federal reporting to the grantor, which is based on subledger data. Furthermore, it does not indicate overspending of federal resources. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-010 Prior Year Finding Number: 2022-004 Compliance Requirement: Eligibility Program: Government Department/Agency: U.S. Department of the Treasury COVID-19 – Emergency Rental Assistance (ERA) Program ALN: 21.023 Award #: N/A Award Year: 12/27/2020 – 09/30/2025 Department of Human Services (DHS) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Treasury Department ERA FAQ 8-25-21, question 1, states that grantees must require all applications for assistance to include an attestation from the applicant that all information included is correct and complete. The Treasury Department ERA FAQ 8-25-21, question 4, states that the statutes establishing ERA1 and ERA2 limit eligibility to households based on certain income criteria. For purposes of ERA1, the area median income for a household is the same as the income limits for families published by the Department of Housing and Urban Development (HUD) in accordance with 42 U.S.C. 1437a(b)(2), available under the heading for “Access Individual Income Limits Areas” at https://www.huduser.gov/portal/datasets/il.html. If a grantee in ERA1 uses a household’s monthly income to determine eligibility, the grantee should review the monthly income information provided at the time of application and extrapolate over a 12-month period to determine whether household income exceeds 80 percent of area median income. For example, if the applicant provides income information for two months, the grantee should multiply it by six to determine the annual amount. If a household qualifies based on monthly income, the grantee must redetermine the household income eligibility every three months for the duration of assistance. Grantees in ERA1 and ERA2 must have a reasonable basis under the circumstances for determining income. A grantee may support its determination with both a written attestation from the applicant as to household income and also documentation available to the applicant, such as paystubs, W-2s or other wage statements, tax filings, bank statements demonstrating regular income, or an attestation from an employer. In appropriate cases, grantees may rely on an attestation from a caseworker or other professional with knowledge of a household’s circumstances to certify that an applicant’s household income qualifies for assistance. Under categorical eligibility, if an applicant’s household income has been verified to be at or below 80 percent of the area median income (for ERA1) or if an applicant’s household has been verified as a low-income family as defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)) (for ERA2) in connection with another local, state, or federal government assistance program, grantees are permitted to rely on a determination letter from the government agency that verified the applicant’s household income or status as a low-income family, provided that the determination for such program was made on or after January 1, 2020.  The Treasury Department ERA FAQ 8-25-21, question 5, states grantees must obtain, if available, a current lease, signed by the applicant and the landlord or sublessor, that identifies the unit where the applicant resides and establishes the rental payment amount. If a household does not have a signed lease, documentation of residence may include evidence of paying utilities for the residential unit, an attestation by a landlord who can be identified as the verified owner or management agent of the unit, or other reasonable documentation as determined by the grantee. In the absence of a signed lease, evidence of the amount of a rental payment may include bank statements, check stubs, or other documentation that reasonably establishes a pattern of paying rent, a written attestation by a landlord who can be verified as the legitimate owner or management agent of the unit, or other reasonable documentation as defined by the grantee in its policies and procedures. Condition – During testing over rental beneficiary eligibility for the Emergency Rental Assistance Program, we noted that the District Department of Human Services, Family Services Agency (FSA) (“the Agency”) was unable to provide sufficient documentation to support the beneficiaries’ determination for rent payments during the fiscal year 2023 audit. Specifically, out of a sample of 60 transactions tested, we noted the following exceptions: • For four (4) participants, the amount the Agency paid for rental assistance did not agree to the various documentation provided. The total payment not fully supported totaled $7,165, representing known questioned costs. • For thirteen (13) participants, the Agency did not follow their documented policies and procedures such that the rental calculation worksheets were not provided, or these were not signed by the participants or by the housing support provider. • For nine (9) participants, there are no evidence of a formal approval of the participant eligibility by the Agency. The DC Department of Human Services, Family Services Agency, lacks a quality control oversight system to ensure that eligibility documentation is maintained to support eligibility decisions. Questioned Costs – $7,165 Context – This is a condition identified per review of the Agency’s compliance with specified requirements using a statistically valid sample. Effect – Lack of supporting documentation for program services and noncompliance with program requirements could result in disallowances of costs and participants could be receiving benefits that they are not entitled to receive under the program. Cause – The Agency did not appear to adhere to internal control procedures to ensure that applications are properly completed and retained. Recommendation – We recommend that the Agency strictly implement internal control procedures to ensure that documentation is maintained to support the beneficiary determinations. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – The Department of Human Services (DHS) agrees that for four (4) participants, the amount the Agency paid for rental assistance did not agree to the various documentation provided. DHS has reviewed these participants’ files and concluded that although these represent gaps in program controls, all four households meet general ERA eligibility criteria. Three (3) participants enrolled in Temporary Assistance for Needy Families (TANF) and/or Supplemental Nutrition Assistance Program (SNAP) and one (1) participant provided income documentation to support that all were well within the 80% AMI and eligible for ERA assistance. In the cases where more subsidy was paid on behalf of households than was documented in the Family Rehousing and Stabilization Program (FRSP) rent calculation worksheet, ERA regulations permitted payment up to full rent and therefore the amounts paid out were eligible under ERA. DHS agrees with the finding that thirteen (13) participants were missing rental subsidy calculation worksheets or were missing signatures on their rental calculation worksheet and that nine (9) participants were missing formal approval of participant eligibility. These participants were enrolled in the FRSP, also known as Rapid Re-housing (RRH). FRSP is a key program within the District’s continuum of care to support families who are experiencing homelessness or are at imminent risk of experiencing homelessness. The rental calculation worksheet is used to determine the amount an FRSP household contributes towards monthly rent based on household income and makeup. The remaining monthly rent is covered by a subsidy, paid out of ERA funds. In situations where participants were missing the formal approval form or signature, DHS has confirmed that they came from a homeless/imminent risk of homelessness situation through other records such as case notes within Homeless Management Information System (HMIS). Gaps in documentation were due to rapidly expanding caseloads during the pandemic and new safety protocols that required certain changes to case management protocols. To improve controls, DHS introduced new Standard Operating Procedures (SOPs) for FRSP in fiscal year 2023. The new SOP implements stricter internal control procedures, conducting regular audits, and streamlining the eligibility determination process. The majority of findings were for participants enrolled into FRSP before the new SOPs took effect. DHS will continue execution of the stricter SOPs to ensure there are no documentation gaps moving forward. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-011 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: Government Department/Agency: U.S. Department of the Treasury COVID-19 – Emergency Rental Assistance (ERA) Program ALN: 21.023 Award #: N/A Award Year: 12/27/2020 – 09/30/2025 Department of Human Services (DHS) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 2 CFR Section 200.302(a), Financial Management, states that each state must expend and account for the federal award in accordance with state laws and procedures for expending and accounting for the state’s own funds. In addition, the state’s and the other non-federal entity’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. Condition – Certain grant expenditures amounting to approximately $42.4 million, had erroneously been reflected as expenditures under assistance listing number 21.023, COVID-19 – Emergency Rental Assistance Program. Subsequently, DHS adjusted the SEFA to reflect the actual amount of expenditures incurred for the program. Questioned Costs – None. Context – This is a condition identified per review of the DHS’ compliance with the specified requirements. Effect – DHS is not in compliance with the stated provisions. Failure to properly review and support expenditures can result in noncompliance with laws and regulations along with loss of funding. Cause – DHS did not appear to have adequate policies and procedures in place to ensure accuracy of the SEFA. Recommendation – We recommend that DHS adhere to instituted policies and procedures to ensure the accuracy of the SEFA. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – The DHS OCFO concurs with the finding. Initially, the expenditures were inadvertently categorized to the incorrect program. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-012 Prior Year Finding Number: N/A Compliance Requirement: Eligibility Program: Government Department/Agency: U.S. Department of the Treasury COVID-19 - Homeowner Assistance Fund ALN: 21.026 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Housing and Community Development (DHCD) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The OMB Compliance Supplement states that Homeowner Assistance Fund participants must establish and adhere to reasonable policies and procedures for evaluating homeowners’ applications in accordance with the HAF Guidance maintained by the U.S. Department of the Treasury. In addition, Homeowner Assistance Fund participants are expected to have policies and procedures to determine homeowner eligibility based on the following criteria: 1) financial hardship, and 2) income determination. Condition – During our review of DHCD’s internal control over compliance with eligibility requirements, we noted that the agency outsources the eligibility determination process to a third-party administrator to ensure that all applicants meet the necessary criteria. The internal controls at the agency level are limited to validating applications with exceptions and are not robust enough to verify the eligibility of all applications or to confirm the accuracy of the eligibility determinations made by the administrator. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHCD’s internal control over compliance with respect to eligibility requirements. Effect – DHCD did not comply with eligibility requirements of the Homeowner Assistance Fund program. Cause – DHCD does not have fully effective internal controls over compliance with respect to eligibility requirements. Recommendation – We recommend that DHCD implement policies and procedures to ensure that key controls exist at the agency to verify all applicants meet eligibility requirements. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHCD concurs with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-013 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: Government Department/Agency: U.S. Department of the Treasury COVID-19 - Homeowner Assistance Fund ALN: 21.026 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Housing and Community Development (DHCD) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Additionally, 2 CFR 200.332 specifies that pass-through entities must evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Based upon the pass-through entity's assessment of risk posed by the subrecipient, auditee management determined that onsite reviews of the subrecipient’s program operations were appropriate and designed the following control: DHCD performs desk audits, scheduled site visits and unscheduled site visits during the fiscal year. Reports are prepared at the site visits and properly documented. The reports include deficiencies, recommendations, and proposed corrective action and are reviewed and approved by the Project Managers, Program Managers, and Supervisory Program Managers. Condition – During our review of four (4) subrecipient samples, we noted the following: • For two (2) subrecipients, DHCD conducted onsite reviews for the Community Development Block Grants program. However, these reviews did not specifically address the Homeowner Assistance Fund program as required by the guidance and controls outlined. • For one (1) subrecipient, DHCD conducted a review, but was unable to provide evidence of a finalized report. • For one (1) subrecipient, DHCD neither performed an onsite review nor a desk audit. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHCD’s compliance with the subrecipient monitoring requirements using a statistically valid sample. Effect – DHCD did not comply with the subrecipient monitoring requirements of the Homeowner Assistance Fund program. Cause – DHCD does not have fully effective internal controls over compliance with respect to the onsite review process. Recommendation – We recommend that DHCD strictly adhere to its policies and procedures to ensure that onsite reviews are properly performed and documented for subrecipients. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHCD concurs with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-014 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: Government Department/Agency: U.S. Department of the Treasury COVID-19 – Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award #: N/A Award Year: 10/01/2021 – 09/20/2023 Department of Behavioral Health (DBH); Department of Energy and Environment (DOEE) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430(i): “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition – During our tests of the design and implementation of internal controls, we noted the following issues: DBH did not effectively implement controls over employee premium pay benefits. • For two (2) out of 60 samples, we identified exceptions to the hours charged to the program. In one instance, there were 24 hours charged to the program on a single day for one employee. In addition, we also noted an instance of charging of hours within the “not worked” code and incorrect hours were charged to the project. At DOEE, employees charge hours worked each pay period on a time sheet to specific cost centers or combo codes as referred by the agency. • For one (1) out of 60 samples, we noted that the holiday hours have not been allocated between programs proportionally as required by the District’s policies, as such, incorrect hours were charged to the projects. Questioned Costs – Not determinable. Context – This is a condition identified per review of the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits, for the Coronavirus State and Local Fiscal Recovery Funds program in fiscal year 2023 were $40,106,238. Effect – Without internal controls operating as designed, the CSLFRF program was unable to demonstrate that the payroll expenditures charged to the program accurately reflected the costs incurred for the program. Cause – The CSLFRF program did not follow its own internal control policies, procedures and controls to ensure that payroll costs recorded are properly reviewed and approved. Recommendation – We recommend that the CSLFRF program fully implement its plan to deploy policies and procedures to ensure that payroll costs are recorded accurately. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH and DOEE concur with the findings. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-015 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: Government Department/Agency: U.S. Department of the Treasury COVID-19 – Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award #: N/A Award Year: 10/01/2021 – 09/20/2023 Department of Energy and Environment (DOEE); Office of Neighborhood Safety and Engagement (ONSE); Various Other District Agencies Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331(a) Requirements for Pass-Through Entities requires that pass-through entities must: Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information outlined in the section noted above, pre-award assessment, indirect cost rated for the award, assistance listing number, finding and award follow-up and other pertinent actions. In accordance with the requirements of 2 CFR Section 1402.300, the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR part 170 Reporting Subaward and Executive Compensation Information. Condition – The program’s documented subrecipient monitoring requirements includes risk assessments, monitoring of subrecipients and the submission and review of monthly financial and performance reports. During our testing of the subrecipient’s compliance requirements, we noted the following issues: • Our examination of the program’s subrecipient monitoring requirements includes submission and review of monthly financial and performance reports. We noted for one (1) out of 41 samples, the subrecipient failed to submit their monthly financial and performance reports. • For one (1) out of 41 samples the agency had no evidence to support it had performed the mandatory follow up on reported audit findings in the subrecipient’s audit report for the Corrective Action taken by the subrecipient to remediate the finding. In addition, grant expenditures totaling approximately $1.9 million were erroneously excluded as subrecipient expenditures on the Schedule of Federal Awards under assistance listing number 21.027, COVID-19 - Coronavirus State and Local Fiscal Recovery Funds. The District subsequently adjusted the SEFA to reflect the correct amount of subrecipient expenditures incurred for the program. Questioned Costs – Not determinable. Context – This is a condition identified per review of the agencies’ compliance with specified monitoring requirements on the program’s subrecipients using a statistically valid sample. Effect – Subrecipients may not be properly monitored, which may result in subawards being used for unauthorized purposes in violation of the terms and conditions of the subawards or that the subaward performance goals were not achieved. Also, the District is not in compliance with the stated provisions. Failure to properly review and support expenditures can result in noncompliance with laws and regulations along with loss of funding. Cause – There is lack of sufficient documentary evidence to support that the controls are operating as designed related to subrecipient monitoring compliance. In addition, the District did not appear to have adequate policies and procedures in place to ensure accuracy of the SEFA. Recommendation – We recommend that the agencies maintain sufficient documentation to evidence its internal controls over the risk assessment and monitoring of subrecipients, and to adhere to instituted policies and procedures to ensure the accuracy of the SEFA. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DOEE, ONSE and various other District agencies agree with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-016 Prior Year Finding Number: 2022-007 Compliance Requirement: Equipment and Real Property Management Program: Government Department/Agency: U.S. Department of Education COVID-19 – Education Stabilization Fund Elementary and Secondary School Emergency Relief (ESSER) Fund ALN: 84.425D Award #: S425D210034 Award Year: 05/07/2020 – 09/30/2023 COVID-19 – Education Stabilization Fund American Rescue Plan - Elementary and Secondary Schools Emergency Relief Fund (ARP-ESSER) ALN: 84.425U Award #: S425U210034-21A Award Year: 03/24/2021 – 09/30/2023 District of Columbia Public Schools (DCPS) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Also, a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Condition – We noted that there is no formally documented physical count for equipment purchased using federal funds in 2023. Questioned Costs – Not determinable. Context – This is a condition identified per review of DCPS’ compliance with the specified requirements using a statistically valid sample. Effect – There is a risk that a lack of physical count could lead to misappropriation of assets and noncompliance with Federal regulations resulting in a return of Federal awards received. Cause – Due to a lack of formal process and policy regarding physical count, DCPS was unable to adequately support compliance with its policies and procedures regarding monitoring of equipment acquired with Federal funds. Recommendation – We recommend that DCPS implement policies, procedures and controls that will ensure that equipment counts are conducted, that evidence of a count is formally documented and an authorized individual formally approves the result of the count and the related reconciliation to equipment records, in order to adhere to Federal regulations related to equipment and its related maintenance. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DCPS agrees with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-017 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: Government Department/Agency: U.S. Department of Education COVID-19 – Education Stabilization Fund Elementary and Secondary School Emergency Relief (ESSER) Fund ALN: 84.425D Award #: S425D210034 Award Year: 05/07/2020 – 09/30/2023 COVID-19 – Education Stabilization Fund American Rescue Plan - Elementary and Secondary Schools Emergency Relief Fund (ARP-ESSER) ALN: 84.425U Award #: S425U210034-21A Award Year: 03/24/2021 – 09/30/2023 Office of the State Superintendent of Education (OSSE) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 2 CFR Section 200.302(a), Financial Management, states that each state must expend and account for the federal award in accordance with state laws and procedures for expending and accounting for the state’s own funds. In addition, the state’s and the other non-federal entity’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. Condition – Certain grant expenditures amounting to approximately $9.7 million, had erroneously been reflected as expenditures under assistance listing number 84.425D, Elementary and Secondary School Emergency Relief (ESSER) Fund. Subsequently, OSSE adjusted the SEFA to reflect the expenditure to 84.425U, American Rescue Plan - Elementary and Secondary Schools Emergency Relief Fund. Further, the amount of subrecipient expenses initially reported is overstated by $269,140. Subsequently, OSSE adjusted the SEFA to reflect the actual amount of subrecipient expenditures incurred for the program. Questioned Costs – None. Context – This is a condition identified per review of OSSE’s compliance with the specified requirements. Effect – OSSE is not in compliance with the stated provisions. Failure to properly review and support expenditures can result in noncompliance with laws and regulations along with loss of funding. Cause – OSSE did not appear to have adequate policies and procedures in place to ensure accuracy of the SEFA. Recommendation – We recommend that OSSE adhere to instituted policies and procedures to ensure the accuracy of the SEFA. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – OSSE agrees with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-018 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: Government Department/Agency: U.S. Department of Education COVID-19 – Education Stabilization Fund Elementary and Secondary School Emergency Relief (ESSER) Fund ALN: 84.425D Award #: S425D210034 Award Year: 05/07/2020 - 09/30/2023 COVID-19 – Education Stabilization Fund Emergency Assistance for Non-Public Schools ALN: 84.425R Award #: S425R210015 Award Year: 02/08/2021 - 09/30/2023 COVID-19 – Education Stabilization Fund American Rescue Plan – Elementary and Secondary Schools Emergency Relief Fund (ARP-ESSER) ALN: 84.425U Award #: S425U210034 - 21A Award Year: 03/24/2021 - 09/30/2023 COVID-19 – Education Stabilization Fund American Rescue Plan – Emergency Assistance to Non-Public Schools ALN: 84.425V Award #: S425V210015 Award Year: 09/24/2021 - 09/30/2024 COVID-19 – Education Stabilization Fund American Rescue Plan Elementary and Secondary Schools Emergency Relief Fund – Homeless Children and Youth (ARP-HCY) ALN: 84.425W Award #: S425W210009 Award Year: 04/23/2021 - 09/30/2023 Office of the State Superintendent of Education (OSSE) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System. In accordance with the requirements of 2 CFR Section 1402.300, the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR part 170 Reporting Subaward and Executive Compensation Information. Condition – Management represented that there are no required FFATA filings during fiscal year 2023 since all subawards were granted in 2022 and prior. However, OSSE was not able to provide supporting documentation for eight (8) subawards with expenses during the fiscal year 2023 that would allow us to verify that the subawards were granted prior to fiscal year 2023. Questioned Costs – None. Context – This is a condition identified per review of OSSE’s compliance with reporting requirements. Effect – OSSE is not in compliance with reporting requirements as it failed to provide evidence of identifying and reporting FFATA reporting requirements. Cause – OSSE did not have proper internal controls and policies and procedures in place to fulfill the FFATA reporting requirement. Recommendation – We recommend that OSSE implement policies, procedures and controls that will ensure compliance with all the required laws, guidelines and requirement under the award. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – OSSE concurs with the auditor’s finding and recommendations. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-019 Prior Year Finding Number: 2022-010 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: Government Department/Agency: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430(i): “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Per District Personnel Issuance No. 2021-10 (Approval Required) - "Overtime work must be officially ordered and approved in advance. Agency heads and their designees are authorized to order and approve overtime work provided the agency has sufficient funding available. Employees may submit overtime requests in PeopleSoft. To submit a request, go to the main employee self-service page and access the navigator. Click “Self Service,” next “Time Reporting,” then “Report Time,” and finally “Overtime Requests.” Once an employee submits an overtime request, the employee’s supervisor and, if required by PeopleSoft any additional designated agency personnel, must review and approve the request in PeopleSoft for the employee to be authorized to receive overtime pay.” Per District Personnel Issuance No. 2018-00 (Annual Leave) effective April 21, 2018 “Using Annual Leave” - An employee may use accrued annual leave at any time during the leave year if they receive approval from their immediate supervisor or the agency head responsible for the employee’s timesheet. If an employee wishes to use their accrued annual leave, they must: 1. Submit a request in advance to use annual leave to their manager or supervisor. 2. Receive approval from the manager or supervisor; and 3. Record the approved leave taken on their timesheet in PeopleSoft. Condition – During our testwork for Activities Allowed or Unallowed and Allowable Costs/Cost Principles (Payroll), we noted: • For seventeen (17) out of a sample of 40 employees tested, although the employee's timesheet was approved by the supervisor, DHS/ESA was unable to provide documentation that the annual leave or overtime hours worked by the employee during the selected payperiods were preapproved. • For one (1) out of a sample of 40 employees tested, DHS/ESA was unable to provide an explanation of the identified variance between the salary earned and the amount included on the paystub. • For one (1) out of a sample of 40 employees tested, DHS/ESA was unable to provide an explanation and support for the benefit refund taxable included on the paystub and the variance between the hours on the timesheet and on the pay stub. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS/ESA’s compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits, for the TANF program in fiscal year 2023 were $15,577,889. Effect – DHS/ESA was unable to demonstrate that annual leave or overtime hours charged to the federal program was approved in advance in accordance with the internal policies and procedures of the agency. In addition, without adequate internal controls in place to ensure that documentation that supports the costs are properly maintained, costs could be charged that are not properly approved. Cause – DHS/ESA did not follow its own internal controls and policies and procedures to ensure that authorization forms evidencing the preapproval of annual leave or overtime hours are obtained and maintained as well as support of salary and benefits earned. Recommendation – We recommend that DHS/ESA follow its own policies, procedures and controls to ensure that pre-authorization of annual leave or overtime hours is obtained and maintained. In addition, we recommend that the agency strengthen their policies and procedures to ensure that transactions are properly supported. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS concurs with the finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-020 Prior Year Finding Number: 2022-011 Compliance Requirement: Eligibility Program: Government Department/Agency: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. For TANF, per 45 CFR Section 205.60 (a), “The State agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of financial assistance, and the use of any information obtained under Section 205.55, with respect to individual applications denied, recipients whose benefits have been terminated, recipients whose benefits have been modified, and the dollar value of these denials, terminations and modifications. Under this requirement, the agency will keep individual records which contain pertinent facts about each applicant and recipient. The records will include information concerning the date of application and the date and basis of its disposition; facts essential to the determination of initial and continuing eligibility (including the individual's social security number, need for, and provision of financial assistance); and the basis for discontinuing assistance.” Condition – During our testing over beneficiary eligibility compliance requirements of the Temporary Assistance for Needy Families (TANF) program, we selected a sample of 60 beneficiaries in fiscal year 2023 to test DHS’ compliance with TANF eligibility requirements. We noted the following: • For five (5) out of 60, DHS was unable to provide support that would allow us to test that cash assistance was not provided to an individual during the 10-year period that began on the date the individual was convicted in Federal or State court of having made a fraudulent statement or representation with respect to place of residence. In addition, for these five (5) samples, DHS was unable to provide support that would allow us to test that assistance was not provided to any individual who was fleeing to avoid prosecution, or custody or confinement after conviction, for a felony or attempt to commit a felony, or who is violating a condition of probation or parole imposed under Federal or State law. The questioned costs for the above issues amounted to $22,279, which represents 7.75% of the total eligibility amounts tested related to the 60 sampled items of $287,436. Questioned Costs – Known amount is $22,279. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without properly maintaining documentation to support eligibility determinations, ineligible beneficiaries may receive benefits under the TANF grant and DHS may make payments on behalf of those beneficiaries resulting in noncompliance with the eligibility requirements. Cause – DHS did not consistently adhere to its established policies and procedures requiring it to maintain documentation supporting participant eligibility. Recommendation - We recommend that DHS strengthen its existing policies and procedures over the review and maintenance of appropriate documentation to ensure compliance with eligibility requirements. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS/ESA concur with the findings. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-021 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: Government Department/Agency: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Human Services (DHS) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. According to Title IV-A, Section 411 of the Social Security Act (the Act), 45 CFR 265.3, and the American Recovery and Reinvestment Act (ARRA) of 2009, (Public Law 111-5), each State must file an annual report containing information on the TANF program and the State’s maintenance-of-effort (MOE) program(s) for that year, including strategies to implement the Family Violence Option, State diversion programs, and other program characteristics. States are required to submit the ACF-196R report quarterly, beginning in Federal Fiscal Year (FFY) 2015, in lieu of the SF-425, Federal Financial Report (financial status). Each State files quarterly expenditure data on the State’s use of Federal TANF funds, State TANF MOE expenditures, and State expenditures of MOE funds in separate State programs. If a State is expending Federal TANF funds received in prior fiscal years, it must file a separate quarterly TANF Financial Report for each fiscal year that provides information on the expenditures of that year’s TANF funds. This form must be used for reporting regular TANF grant funds, Contingency Funds, and ARRA-Emergency Fund for TANF State Programs funds. See TANF-ACF-PI-2014-02, available at http://www.acf.hhs.gov/programs/ofa/resource/tanf-acf-pi-2014-02, for more information. For the ACF-204 report (Special Reporting), according to 45 CFR 265.9, 45 CFR 265.10, 45 CFR 263, Subpart A, and TANF-ACF-PI-01-06 dated October 24, 2001, Each State must file an annual report containing information on the TANF program and the State’s maintenance-of-effort (MOE) program(s) for that year, including strategies to implement the Family Violence Option, State diversion programs, and other program characteristics. Each State must complete the Annual Report including the Annual Report on State Maintenance-of-Effort Programs (ACF-204) for each program for which the State has claimed basic MOE expenditures for the fiscal year. States may submit this report as a freestanding report or as an addendum to the fourth quarter TANF Data Report. The total MOE expenditures reported in item 5 of the ACF-204 should equal the total MOE expenditures reported in line 24, columns (B) plus (C) of the 4th quarter ACF-196R TANF Financial Report; or line 17, column (B) of the ACF-196-TR, Territorial Financial Report. For the ACF-196P (Special Reporting), on March 11, 2021, the President signed the American Rescue Plan Act of 2021, now known as Public Law 117-2, into law establishing the Pandemic Emergency Assistance Fund (PEAF) in section 403(c) of the Social Security Act. 42 U.S.C. § 603(c). PEAF provided $1 billion in funding to states, tribes, and five U.S. territories to assist families impacted by the Coronavirus Disease 2019 by providing non-recurrent, short-term benefits. PEAF provided states and tribes until September 30, 2022, to spend an initial allotment of funds. 42 U.S.C. § 603(c)(6)(D)(i). Any unused funds were to be reallotted among the states or tribes that had used all their funds. 42 U.S.C. § 603(c)(4)(B). Effective FFY 2021, all grantees administering the TANF PEAF grant must complete reporting in accordance with these ACF-196P instructions. As well, state, territory and tribal lead agencies must complete and submit this report (or 477 narrative report) in accordance with the terms and conditions of the TANF PEAF grant authorized by the American Rescue Plan Act of 2021. Expenditures (for lines 2 through 4) on the ACF-196P mean the payments made with Pandemic Emergency Assistance Fund dollars. A grantee must not include obligations not yet paid (i.e., unliquidated funds) on these line items. Condition – We noted the following: • During our test work over the quarterly ACF-196R report, we noted that for Grant Identifying number - G-2301DCTANF the 4th quarter report was not adequately reviewed. Specifically, we noted that the report reflected that DHS had Maintenance of Effort (MOE) expenditures of $304,608,961. However, based on the supporting documentation provided, the expenditures should have been $304,558,961 thus overstating the report by $50,000. In addition, we noted that there was a variance of ($9,589,251) between the amount included in the SEFA detail including Indirect Costs ($67,483,475) and the cumulative amount reported on the ACF-196R for the fiscal year 2023 grant for the sum of federal and contingency funds ($77,072,726). DHS was unable to provide support for the variance. • During our test work over the Matching, Level of Effort, Earmarking compliance requirement, we noted that although the Cumulative Administrative Costs reported on ACF-196R for the G-2301DCTANF ($9,736,237) did not exceed the Maximum Allowed for the G-2301DCTANF grant (15% of $88,381,274 which equals $13,257,191), the amount reported as Cumulative Administrative Costs on ACF-196R for the period October 1, 2022 to September 30, 2023 did not agree with the amounts included in the supporting documentation ($16,805,114). • During our test work over the annual ACF-204 report, we noted the report was not adequately reviewed. Specifically, we noted that the report reflected that DHS had MOE expenditures of $287,422,679. However, based on the supporting documentation provided, the expenditures should have been $304,558,961 thus understating the report by $17,136,282. • During our test work over the annual ACF-196P report, we noted the report was not adequately reviewed. Specifically, we noted that the report reflected that DHS had PEAF expenditures of $1,446,322. However, based on the supporting documentation provided, the expenditures should have been $1,360,500, thus overstating the report by $85,822. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without proper internal controls and policies and procedures in place to ensure that correct amounts were reported and were properly reviewed, the TANF program: • Incorrectly reported MOE expenditures on the ACF-204 report which resulted in an understatement of $17,136,282, • Incorrectly reported MOE expenditures on the ACF-196R report which resulted in an overstatement of $50,000, and • Incorrectly reported PEAF expenditures on the ACF-196P report which resulted in an overstatement of $85,822. Cause – Management did not have proper internal controls and policies and procedures in place to ensure that the amounts on the ACF-196R, ACF-204 and the ACF-196P were properly reported and the reports were properly reviewed and approved. Recommendation - We recommend that DHS implement policies, procedures and controls that will enable an accurate reconciliation between the data sources used in the preparation of the ACF-196R, ACF-196P and ACF-204 reports to ensure proper reporting of the MOE amounts and PEAF expenditures. In addition, DHS management should establish controls over the preparation of the ACF-204 to ensure that the report is reviewed by DHS personnel prior to the report being certified and submitted by program personnel. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS concurs with the findings. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-022 Prior Year Finding Number: 2022-012 Compliance Requirement: Reporting; Special Tests and Provisions – Penalty for Failure to Comply With Work Verification Plan Program: Government Department/Agency: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Human Services (DHS)/ Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 261.60 (a), “A State must report the actual hours that an individual participates in an activity, subject to the qualifications in paragraphs (b) and (c) of this section and Section 261.61(c). It is not sufficient to report the hours an individual is scheduled to participate in an activity. (b) For the purposes of calculating the work participation rates for a month, actual hours may include the hours for which an individual was paid, including paid holidays and sick leave. For participation in unpaid work activities, it may include excused absences for hours missed due to a maximum of 10 holidays in the preceding 12-month period and up to 80 hours of additional excused absences in the preceding 12-month period, no more than 16 of which may occur in a month, for each work-eligible individual. Each State must designate the days that it wishes to count as holidays for those in unpaid activities in its Work Verification Plan. It may designate no more than 10 such days. In order to count an excused absence as actual hours of participation, the individual must have been scheduled to participate in a countable work activity for the period of the absence that the State reports as participation. A State must describe its excused absence policies and definitions as part of its Work Verification Plan, specified at Section 261.62. (c) For unsubsidized employment, subsidized employment, and OJT, a State may report projected actual hours of employment participation for up to six months based on current, documented actual hours of work. Any time a State receives information that the client's actual hours of work have changed, or no later than the end of any six-month period, the State must re-verify the client's current actual average hours of work, and may report these projected actual hours of participation for another six-month period. (d) A State may not count more hours toward the participation rate for a self-employed individual than the number derived by dividing the individual's self-employment income (gross income less business expenses) by the Federal minimum wage. A State may propose an alternative method of determining self-employment hours as part of its Work Verification Plan. (e) A State may count supervised homework time and up to one hour of unsupervised homework time for each hour of class time. Total homework time counted for participation cannot exceed the hours required or advised by a particular educational program.” Per 45 CFR Section 261.61 (a), “A State must support each individual’s hours of participation with documentation in the case file. In accordance with Section 261.62, a State must describe in its Work Verification Plan the documentation it uses to verify hours of participation in each activity.”   According to the DC State Verification Plan, the D.C. Department of Human Services (DHS), Department of Human Services Monitoring Unit reviews and audits all documentation submitted by vendors reflecting the activities of recipients in TANF Employment program. This documentation includes time sheets, activity logs, school records, pay stubs, and verification of employment, work experience and on-the-job training. The Monitoring Unit completes this audit process to determine if sufficient documentation exists to substantiate reported time and attendance data, to warrant a payment to TANF Employment program vendors, and submission of countable hours for federal reporting purposes. The District projects hours of participation in unsubsidized, self-employment for six months or until the recipient's next scheduled recertification, whichever is sooner. Per 45 CFR Section 265.7 (a)-(c), “Each State’s quarterly reports (the TANF Data Report, the TANF Financial Report (or Territorial Financial Report), and the SSP-MOE Data Report) must be complete and accurate and filed by the due date.” For disaggregated data report, ‘a complete and accurate report’ means that: (1) The reported data accurately reflect information available to the State in case records, financial records, and automated data systems, and include correction of the quarterly data by the end of the fiscal year reporting period; (2) The data are free from computational errors and are internally consistent (e.g., items that should add to totals do so); (3) The State reports data for all required elements (i.e., no data are missing); (4)(i) The State provides data on all families; or (ii) if the State opts to use sampling, the State reports data on all families selected in a sample that meets the specification and procedures in the TANF Sampling Manual (except for families listed in error); and (5) Where estimates are necessary (e.g., some types of assistance may require cost estimates), the State uses reasonable methods to develop these estimates. For an aggregated data report, “a complete and accurate report” means that: (1) The reported data accurately reflect information available to the State in case records, financial records, and automated data systems; (2) The data are free from computational errors and are internally consistent (e.g., items that should add to totals do so); (3) The State reports data on all applicable elements; and (4) Monthly totals are unduplicated counts for all families (e.g., the number of families and the number of out-of-wedlock births are unduplicated counts).” 45 CFR Section 265.7 (f) states that “States must maintain records to adequately support any report, in accordance with Section 75.361 through 75.370 of this title.” Condition – During our test work over a sample of 60 participants for Special Tests and Provisions - Penalty for Failure to Comply with Work Verification Plan and Reporting, we noted: • For nine (9) instances, we noted that although the hours reported on the ACF-199 report met or exceeded the required hours, the hours reported did not agree with the projected hours per the support provided. • For nine (9) instances, we noted that although the hours reported on the ACF-199 report met or exceeded the required hours, DHS/ESA was unable to provide support for the hours reported on the ACF-199 report. • For two (2) instances, we noted that although the hours on the support provided met or exceeded the required hours, the hours reported in the ACF-199 report do not agree with the average hours in CATCH or the support provided. • For two (2) instances, we noted that the support provided was for more than six months before the sample month. Therefore, the hours were not properly supported. • For one (1) instance, although the hours on the support provided met or exceeded the required hours, the hours reported in the ACF-199 report do not agree with the average hours in CATCH. Therefore, the support does not agree with the hours reported. In addition, we noted that although the Work Number documentation indicated that the customer was fully engaged (at least 30 hours per payperiod) for at least three months during fiscal year 2023 and the customer was required to work 20 hours per week, DHS/ESA did not lift the Work Requirement Noncompliance sanction that has been imposed since 5/1/2016. • For one (1) instance, although the hours on the support provided met or exceeded the required hours, and the hours reported in the ACF-199 report agree with the average hours reported in CATCH, the hours entered in CATCH should initially have been denied by OPM and then re-entered by provider because the hours were entered incorrectly. The information tested in our sample represents the underlying data used in Reporting for the 1st and 4th quarters of fiscal year 2023. Consequently, DHS incorrectly reported data in the ACF-199 report for the 1st and 4th quarters of fiscal year 2023. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Data within the ACF-199 report may not be complete and accurate. Specifically, if the work participation data is not substantiated, or inconsistencies are noted, it may result in inaccurate data being reported and may lead to an incorrect ACF-199 report and could result in an incorrect allocation of Federal Funds to the state. Cause – Controls are not operating effectively over the documentation of work participation data to ensure that adequate evidence of the work participation is maintained. Recommendation - We recommend that DHS enforce existing policies and procedures and implement additional controls to ensure that adequate documentation is maintained to substantiate the work participation data reported in the ACF-199 report in accordance with the District of Columbia Work Verification Plan. We also recommend that DHS implement policies, procedures and controls that will enable an accurate reconciliation between the data sources used in the preparation of the ACF-199 report to ensure proper reporting of data elements. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS agrees with the findings. ESA agrees with the documentation issue, which is compounded by the lack of interface between the reporting data systems. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-023 Prior Year Finding Number: 2022-013 Compliance Requirement: Special Tests and Provisions – Income Eligibility and Verification System Program: Government Department/Agency: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Human Services (DHS)/ Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 205.56(a)(1)(i), “The State agency shall review and compare the information obtained from each data exchange against information contained in the case record to determine whether it affects the applicant’s or the recipient’s eligibility or the amount of assistance.” Per 45 CFR Section 205.60 (a), “The State agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of financial assistance, and the use of any information obtained under Section 205.55, with respect to individual applications denied, recipients whose benefits have been terminated, recipients whose benefits have been modified, and the dollar value of these denials, terminations and modifications. Under this requirement, the agency will keep individual records which contain pertinent facts about each applicant and recipient. The records will include information concerning the date of application and the date and basis of its disposition; facts essential to the determination of initial and continuing eligibility (including the individual's social security number, need for, and provision of financial assistance); and the basis for discontinuing assistance.” For the Pandemic Emergency Assistance Fund (PEAF), per TANF-ACF-IM-2022-01 (Guidance for Use of the Pandemic Emergency Assistance Fund Appropriated in the American Rescue Plan (ARP) Act of 2021 (Pub. L. 117-2); Accompaniment to ACF-IOAS-DCL-22-01) “We remind grantees that the Income Eligibility Verification System (IEVS) does apply to the PEAF, as it is funded under Title IV-A; however, tribes are not subject to the IEVS requirements.” Condition – During our test work of 60 cases selected to test the Special Tests and Provisions – Income Eligibility and Verification System (IEVS) for TANF, we noted that DHS was unable to provide sufficient documentation to support all eligibility determinations tested during the fiscal year 2023 audit. Specifically, out of the 60 beneficiary disbursements tested, we noted the following exceptions: • For one (1) out of 60, although Outbound and Inbound activity was provided showing that the agency used IEVS, the Outbound and Inbound activity occurred months after the payment selected. Therefore DHS/ESA was unable to provide evidence of use of IEVS to determine eligibility. • For one (1) out of 60, although Outbound and Inbound activity was provided, the Inbound activity occurred years before the payment selected. Therefore DHS/ESA was unable to provide evidence of use of IEVS to determine eligibility. In addition, during our test work of 60 cases selected to test the Special Tests and Provisions – Income Eligibility and Verification System (IEVS) for PEAF, we noted that DHS was unable to provide sufficient documentation to support all eligibility determinations tested during the fiscal year 2023 audit. The sample size consisted of 55 of the TANF Eligibility sample customers that received PEAF and 5 additional sample customers that received PEAF. We noted the following for the additional 5 samples tested for PEAF: • For three (3) out of 5, DHS/ESA was unable to provide evidence of use of IEVS to determine eligibility. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – The District is not in full compliance with its policies and with Federal program compliance requirements surrounding records maintenance. Further, ineligible TANF beneficiaries may receive benefits under the TANF grant and the District may make payments on behalf of those beneficiaries. Cause – Controls are not adequate to ensure that the District adheres to its established policies and procedures requiring it to maintain documentation supporting participant eligibility. Recommendation - We recommend that DHS enforce existing policies and procedures and implement additional policies and procedures for maintaining and monitoring case record documentation to ensure that Income Eligibility and Verification System requirements are complied with. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS agrees with the finding in this report. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-024 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions – Lack of Child Care for Single Custodial Parent of Child Under Age Six Program: Government Department/Agency: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Human Services (DHS)/ Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 261.15 “Can a family be penalized if a parent refuses to work because he or she cannot find child care? (a) No, the State may not reduce or terminate assistance based on an individual’s refusal to engage in required work if the individual is a single custodial parent caring for a child under age six who has a demonstrated inability to obtain needed child care, as specified at §261.56.” Per 45 CFR Section 261.16 “Does the imposition of a penalty affect an individual’s work requirement? A penalty imposed by a State against the family of an individual by reason of the failure of the individual to comply with a requirement under TANF shall not be construed to be a reduction in any wage paid to the individual.” Per 45 CFR Section 261.56 “What happens if a parent cannot obtain needed child care? (a)(1) If the individual is a single custodial parent caring for a child under age six, the State may not reduce or terminate assistance based on the parent's refusal to engage in required work if he or she demonstrates an inability to obtain needed child care for one or more of the following reasons: (i) Appropriate child care within a reasonable distance from the home or work site is unavailable; (ii) Informal child care by a relative or under other arrangements is unavailable or unsuitable; or (iii) Appropriate and affordable formal child care arrangements are unavailable. (2) Refusal to work when an acceptable form of child care is available is not protected from sanctioning. Per 45 CFR Section 261.57 What happens if a State sanctions a single parent of a child under six who cannot get needed child care? (a) If we determine that a State has not complied with the requirements of §261.56, we will reduce the SFAG payable to the State by no more than five percent for the immediately succeeding fiscal year unless the State demonstrates to our satisfaction that it had reasonable cause or it achieves compliance under a corrective compliance plan pursuant to §§262.5 and 262.6 of this chapter. (b) We will impose the maximum penalty if: (1) The State does not have a statewide process in place to inform parents about the exception to the work requirement and enable them to demonstrate that they have been unable to obtain child care; or (2) There is a pattern of substantiated complaints from parents or organizations verifying that a State has reduced or terminated assistance in violation of this requirement. (c) We may impose a reduced penalty if the State demonstrates that the violations were isolated or that they affected a minimal number of families. Condition – During our test work over a sample of twenty (20) out of a population of 194 childcare cases reviewed by supervisors and included on two quarterly reports submitted to the DC Office of the State Superintendent of Education (OSSE), for Special Tests and Provisions - Lack of Child Care for Single Custodial Parent of Child Under Age Six, we noted for one child care case reviewed, the Supervisory Case Record Review form was not signed or dated by the supervisor. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without following the internal controls and policies and procedures already in place to ensure that eligibility for child care is being properly determined by staff, it may result in inaccurate decisions for child care cases or inaccurate information being reported to OSSE. Cause – Controls are not operating effectively over the documentation of the supervisory review of child care cases before submission of the quarterly report to OSSE. Recommendation - We recommend that DHS/ESA enforce existing policies and procedures and implement additional controls to ensure that all Supervisory Case Record Review forms are properly signed and dated by the supervisor before the report is submitted to OSSE. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS agrees with the finding noting that appropriate actions were taken to approve the case, however, the reviewing supervisor failed to sign the document after conducting the supervisory audit. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-025 Prior Year Finding Number: 2022-014 Compliance Requirement: Eligibility Program: Government Department/Agency: U.S. Department of Health and Human Services Low Income Home Energy Assistance Program ALN: 93.568 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Energy and Environment (DOEE) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The OMB Compliance Supplement states that “Grant recipients may provide assistance to (a) households in which one or more individuals are receiving Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP) benefits, or certain needs-tested veterans’ benefits; or (b) households with incomes which do not exceed the greater of 150 percent of the state’s established poverty level, or 60 percent of the state median income. Grantees may establish lower income eligibility criteria, but no household may be excluded solely on the basis of income if the household income is less than 110 percent of the state’s poverty level (42 USC 8624(b)(2)). Grantees must give priority to those households with the highest home energy costs or needs in relation to income and household size (42 USC 8624(b)(5)).” Per 42 U.S. Code Section 8624(b)(2): “The chief executive officer of each State shall certify that the State agrees to make payments under this subchapter only with respect to: (A) Households in which 1 or more individuals are receiving: (i) Assistance under the State program foundered under part A of the title IV of the Social Security Act; (ii) supplemental security income payments under title XVI of the Social Security Act; (iii) supplemental nutrition assistance program benefits under the Food and Nutrition Act of 2008; or (iv) payments under section 1315, 1521, 1541, or 1542 of title 38, or under section 306 of the Veterans’ and Survivors’ Pension Improvement Act of 1978; or (B) Households with incomes which do not exceed the greater of: (i) An amount equal to 150 percent of the poverty level for such State; or (ii) An amount equal to 60 percent of the State median income.” Condition – During our review of 60 eligibility samples, we noted the following exceptions: • DOEE is not performing review of all individual's application. DOEE's policy is to perform secondary reviews of a minimum of 25% of all applications each fiscal year, however, there is no documentation how these policies and procedures were implemented and how they are covering 25% minimum of the population. • The total population initially provided did not reconcile to SEFA. • For 1 sample selected, DOEE was not able to provide sufficient supports to verify that the address mentioned on the beneficiary letter and the gas bill belongs to the same person. Questioned Costs – Not determinable. Context – This is a condition identified per review of DOEE’s compliance with specified requirements for eligibility using a statistically valid sample. Effect – Without proper review, inaccurate benefit amount or ineligible participant may receive benefits even if not eligible. Also, the total eligibility population may not be complete. Cause – It appears that DOEE’s internal controls were not operating effectively over the eligibility household income population. Recommendation – We recommend that DOEE strengthen their existing policies and procedures to ensure the review of the initial application household information including household incomes, household sizes, etc. are correctly recorded into the system based on supporting documentation. In addition, proper supporting documentation should be put in place to document the department’s control over review of applicant’s benefit application. Further, DOEE should review the eligibility population and reconcile to SEFA. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DOEE agrees with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-026 Prior Year Finding Number: 2022-015 Compliance Requirement: Matching, Level of Effort, Earmarking Program: Government Department/Agency: U.S. Department of Health and Human Services Low Income Home Energy Assistance Program ALN: 93.568 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Energy and Environment (DOEE) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per Compliance Supplement on earmarking requirement, a) Planning and Administrative Costs, (1) No more than 10 percent 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)). b) Weatherization – No more than 15 percent of the greater of the funds allotted or the funds available to the grant recipient 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 grant recipient may then obligate and spend up to 25 percent for residential weatherization or energy-related home repairs (42 USC 8624(k)). c) Energy Need Reduction Services – 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)). Condition – During our review of two (2) samples, although DOEE met the earmarking requirement, there was no evidence of review was performed. Questioned Costs – Not determinable. Context – This is a condition identified per review of DOEE’s compliance with specified requirements for earmarking calculations. Effect – Without proper internal controls and policies and procedures in place to monitor and review, DOEE was not in compliance with the earmarking requirements. Cause – DOEE does not have adequate controls in place to ensure that earmarking requirements are being properly calculated and reviewed and the required documentation is not being maintained to evidence compliance with the requirements. Recommendation – We recommend that DOEE strengthen their existing policies and procedures to ensure the review of the earmarking calculations are performed. Further, proper supporting documentation should be put in place to document the department’s control over review of such calculations. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DOEE agrees with the conditions and recommendations of this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-027 Prior Year Finding Number: 2022-016 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: Government Department/Agency: U.S. Department of Health and Human Services Foster Care – Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Based on CFSA’s Human Resources Administration Issuance: HR-06-1 dated May 12, 2006, staff must seek and receive advance written approval prior to working overtime. It also indicates that in emergency situations requiring an immediate response, the employee shall make every reasonable attempt to obtain advance approval by an appropriate manager or supervisor. CFSA uses a Random Moment Study (RMS) to allocate the administrative costs to the Foster Care program. The study entails selecting a sample of social workers on a quarterly basis to participate in the RMS study where the social workers are required to notate what they were doing at the sample moment. Subsequently, the supervisors of these social workers review and validate their responses. validation of the responses adds an extra layer of reliability to the data collected. It ensures that the information provided by social workers is accurate and reflective of their actual activities. This validation process helps maintain the integrity of the study and ensures that the results are trustworthy in making decisions when determining the RMS percentage utilization in the allocation of the administrative costs. Condition – During our review of the payroll process regarding the review and approval of time and attendance, we noted the following in our sample of 60 items: • For three (3) out of the sample, CFSA did not have proper internal controls and policies and procedures in place to ensure that authorization forms evidencing the preapproval of overtime are maintained. • For five (5) out of the sample, validation of the Random Moment Study was not performed. Questioned Costs – Not determinable. Context – This is a condition identified per review of CFSA’s compliance with specified requirements using a statistically valid sample. Effect – Without proper internal controls and policies and procedures in place to ensure maintenance of records increase the risk of disagreements between employer and employee regarding the employee’s correct payment. Additionally, the failure to validate the RMS could lead to inaccurate results, impacting the study’s effectiveness in allocating administrative costs. Cause – CFSA did not have proper internal controls and policies and procedures in place to ensure that authorization forms evidencing the preapproval of overtime are maintained. Additionally, CFSA did not follow its internal controls, policies and procedures to ensure the accuracy and consistent documentation of the RMS validation. Recommendation - We recommend that CFSA strengthen its policies, procedures, and controls to ensure that pre-authorization of overtime is maintained. Furthermore, we recommend that CFSA enhance its procedures to ensure the verification process is performed and maintained and the supervisors maintain consistent documentation of the RMS validation. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – CFSA concurs with the finding. The issues related to pre-approval of overtime for the three employees in question pertained to pay periods that pre-dated CFSA’s corrective action on this same issue that resulted from the fiscal year 2022 Single Audit. Corrective action on this issue, therefore, has already been taken. With respect to the RMS, the Agency notes that while supervisory social worker validation response rates must improve, CFSA’s contracted cost allocation partner performs a 100% quality assurance review of each and every response to verify internal consistency and accuracy. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-028 Prior Year Finding Number: 2022-017 Compliance Requirement: Eligibility Program: Government Department/Agency: U.S. Department of Health and Human Services Foster Care – Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. 45 CFR Section 92.20(b)(2), “Accounting records, "Grantees and sub grantees must maintain records which adequately identify the source and application of funds provided for financially assisted activities. These records must contain information pertaining to grant or subgrant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays or expenditures, and income.” 45 CFR Section 1356.30(a) states, “The Title IV-E agency must provide documentation that criminal records checks have been conducted with respect to prospective foster and adoptive parents.” 42 U.S. Code Section 671(a)(20)(A), “In order for a State to be eligible for payments under this part, it shall have a plan approved by the Secretary which provides procedures for criminal records checks of national crime information databases for any prospective foster or adoptive parent before the foster or adoptive parent may be finally approved for placement of a child regardless of whether foster care maintenance payments or adoption assistance payments are to be made on behalf of the child under the State plan.” Furthermore, per 45 CFR Section 1356.21(a), “Statutory and regulatory requirements of the Federal foster care program, To implement the foster care maintenance payments program provisions of the title IV-E plan and to be eligible to receive Federal financial participation (FFP) for foster care maintenance payments under this part, a Title IV-E agency must meet the requirements of this section, 45 CFR 1356.22, 45 CFR 1356.30, and Parts 472, 475(1), 475(4), 475(5), 475(6).” Condition – During our audit we noted that in fiscal year 2023, the Foster Care program had total disbursements of $2,825,300 for 3,438 maintenance payments. We selected a sample of 60 participants representing disbursed federal funds totaling $48,217, we noted the following deficiencies: • For two (2) of 60 samples, CFSA was unable to provide valid providers licenses for verification. • For twenty-three (23) of 60 samples, CFSA did not provide complete evidence of the household composition; therefore, we were unable to determine whether background checks such as criminal record checks and fingerprint-based checks from the national crime information databases was performed for each member residing the home. These deficiencies represent 43% of the total disbursements tested. Questioned Costs – Known amount is $20,856. Context – This is a condition identified per review of CFSA’s compliance with specified requirements using a statistically valid sample. Effect – CFSA was not in compliance with the eligibility requirements of the Foster Care program. Cause – CFSA does not have adequate controls in place to ensure that the required eligibility documentation is maintained to evidence compliance with eligibility requirements. Recommendation - We recommend CFSA reevaluate and strengthen its existing policies and procedures over the review and maintenance of appropriate documentation to ensure compliance with eligibility requirements in accordance with the program. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – CFSA concurs with the findings pertaining to the two licensing issues. In both instances, the foster care providers in question had indeed met all applicable licensing requirements and were licensed in the FACES.net interim Comprehensive Child Welfare Information System (CCWIS), but the certificates themselves were not issued. Regarding the issue related to household composition, CFSA concurs with the finding. The finding is in reference to other adults residing in the foster home and not the licensed foster parents themselves. The District’s local licensing regulations require that CFSA conduct criminal background checks of other adults in the home during initial licensure of foster parents and then during each re-licensure cycle. CFSA provided background check documentation for other adults in homes in which they were applicable, but the household composition checklists, which delineate “other adults” residing in the home, were in some cases incomplete or unsigned by the licensing worker. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-029 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions – Payment Rate Setting and Application Program: Government Department/Agency: U.S. Department of Health and Human Services Foster Care – Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per CFSA’s policies and procedures, providers must submit quarterly reports within 45 days of the end of each Federal fiscal year quarter. Upon receipt of quarterly reports from the provider, the Business Services Administration Program Manager reviews each Expenditure Detail Spreadsheet for compliance, accuracy and reasonableness. Condition – Our assessment of the special tests and provisions requirement, revealed that while the selected providers’ quarterly reports displayed no deficiencies, CFSA was unable to provide documentation evidencing the review and approval of the quarterly reports for all 40 transactions that were tested. Questioned Costs – Not determinable. Context – This is a condition identified per review of CFSA’s compliance with specified requirements using a statistically valid sample. Effect – The absence of documentation specifying who reviews and approves the quarterly reports compromises accountability and creates ambiguity in identifying the responsible parties in instances of errors or discrepancies. Cause – CFSA does not have adequate controls in place to ensure that review and approval of provider’s quarterly reports are documented. Recommendation - We recommend CFSA strengthen its policies and procedures to address the review and approval process for the provider’s quarterly reports. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – CFSA concurs with this finding. The Agency also notes that quarterly cost reports are submitted to a central repository email inbox that is staffed by the five members of the BSA invoicing/cost reporting team. Each member maintains a provider-specific portfolio and is responsible for review and approval of provider cost reports within that portfolio. Moreover, the providers prepare these cost reports in close collaboration with CFSA’s Business Services Administration such that issues and questions are generally already addressed prior to submission. There is correspondence when corrections or inconsistencies need to be addressed, but there has been no formal correspondence when the reports are acceptable as submitted. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-030 Prior Year Finding Number: N/A Compliance Requirement: Eligibility Program: Government Department/Agency: U.S. Department of Health and Human Services Children’s Health Insurance Program ALN: 93.767 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Health Care Finance (DHCF)/Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Medicaid State Plan: Citation 42 CFR Section 431.17AT-79-29. Section 4.7 (Maintenance of Records) states, “The Medicaid agency maintains or supervises the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of medical assistance, and administrative costs and statistical, fiscal and other records necessary for reporting and accountability, and retains these records in accordance with Federal requirements. All requirements of 42 CFR 431.17 are met.” Economic Security Administration (ESA) Policy Manual, Section 1.3, “All eligibility criteria and clarifying information are documented on the Record of Case Action, form 1052. The case record should speak for itself. An outside reviewer shall be able to follow the chronology of events in the case be reading the narrative. All application documents including verification and correspondence must be date-stamped. For working recipients, the record should include the dates pay is received and how often the recipient is paid. When the recipient’s statement is the best available source, the record should include the application/recipient and agency efforts to verify the information. All address changes should be documented.” Condition – During testing over beneficiary eligibility for the CHIP benefits, we noted that the District’s Economic Security Administration (ESA) was unable to provide sufficient documentation to support the beneficiary’s eligibility determination during the fiscal year 2023 audit. Specifically, out of a sample of 40 participant files tested, we noted the following exception: • For one (1) participant file, ESA did not process the application within the required timeframe. The Department of Health Care Finance, as the State Medicaid Agency, lacks a quality control oversight system to ensure that eligibility documentation and verification is maintained to support the eligibility decision. Questioned Costs – Not determinable. Context – This is a condition identified per review of ESA’s compliance with specified requirements using a statistically valid sample. Effect – Lack of supporting documentation for program services and noncompliance with program requirements could result in disallowances of costs and participants could be receiving benefits that they are not entitled to receive under the program. Cause – DHCF and ESA did not appear to adhere to internal control procedures to ensure that applications are properly processed in accordance with Federal Regulations. Recommendation - We recommend that ESA strictly implement internal control procedures to ensure that documentation is maintained to support the beneficiary determinations. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – ESA concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-031 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: Government Department/Agency: U.S. Department of Health and Human Services Medicaid Cluster ALN 93.775, 93.777, 93.778 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Health Care Finance (DHCF) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per Section 1927 of the Social Security Act (42 USC 1396r-8): Drug manufacturers are required to provide a listing to CMS of all covered outpatient drugs and; and on a quarterly basis, are required to provide their average manufacturer’s price and their best prices for each covered outpatient drug. Based on these data, CMS calculates a unit rebate amount for each drug, which it then provides to States. Each State agency under this subchapter shall report to each manufacturer not later than 60 days after the end of each rebate period and in a form consistent with a standard reporting format established by the Secretary, information on the total number of units of each dosage form and strength and package size of each covered outpatient drug dispensed after December 31, 1990, for which payment was made under the plan during the period, and shall promptly transmit a copy of such report to the Secretary. The CMS Medicaid Drug Rebate Data Guide requires that upon receipt of a quarterly invoice, labelers have 37 calendar days from the invoice postmark date to pay rebates before interest begins to accrue. In those instances where states have used a meter to postmark the envelope and the United States Postal Service (USPS) or common mail carrier has also postmarked the envelope, the postmark date of the USPS or common mail carrier should be used to track the interest start date. For invoices that are submitted electronically, states should be able to identify the date on which the electronic invoice was received in order to properly track the interest start date. Interest stops accruing on the postmark date of the labeler’s mailed check, the date the state applies a credit to the labeler, or the date on which a state provides written acknowledgment to the labeler of the resolution. On the 38th day from the date interest originally began accruing, any unpaid interest becomes principal and interest accrues on the new principal amount beginning on the 38th day after that. Condition – During our review of 60 samples of drug rebates, we noted that for one (1) rebate, the manufacturer did not pay the rebate within 37 days after receiving the invoice from the DHCF, however, no interest was calculated and charged to the drug manufacturer. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHCF’s compliance with the drug rebates requirements using a statistically valid sample. Effect – Without adequate policies and procedures in place, there is no assurance that drug rebates are paid, or interest is assessed when rebates are not paid timely. Cause – The manufacturer didn’t receive their invoice and the contractor reproduced it for them. The mail date was not updated correctly in their system thus causing no interest to be calculated. Recommendation - We recommend that DHCF establish policies and procedures to ensure that the mail date of invoices to manufacturers are correctly updated in the system to ensure interest is calculated and assessed when drug rebates are not paid timely. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHCF agrees with the finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-032 Prior Year Finding Number: 2022-020 Compliance Requirement: Eligibility Program: Government Department/Agency: U.S. Department of Health and Human Services Medicaid Cluster ALN: 93.775, 93.777, 93.778 Award #: Various Award Year: 10/01/2022 – 09/30/2023 Department of Health Care Finance (DHCF)/Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Medicaid State Plan: Citation 42 CFR Section 431.17AT-79-29. Section 4.7 (Maintenance of Records) states, “The Medicaid agency maintains or supervises the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of medical assistance, and administrative costs and statistical, fiscal and other records necessary for reporting and accountability, and retains these records in accordance with Federal requirements. All requirements of 42 CFR 431.17 are met.” Economic Security Administration (ESA) Policy Manual, Section 1.3, “All eligibility criteria and clarifying information are documented on the Record of Case Action, form 1052. The case record should speak for itself. An outside reviewer shall be able to follow the chronology of events in the case be reading the narrative. All application documents including verification and correspondence must be date-stamped. For working recipients, the record should include the dates pay is received and how often the recipient is paid. When the recipient’s statement is the best available source, the record should include the application/recipient and agency efforts to verify the information. All address changes should be documented.” Condition – During testing over beneficiary eligibility for the Medicaid benefits, we noted that the District’s Economic Security Administration (ESA) was unable to provide sufficient documentation to support the beneficiary’s eligibility determination during the fiscal year 2023 audit. Specifically, out of a sample of 132 participant files tested, we noted the following exception: • For twenty (20) participant files, ESA did not process the application within the required timeframe. The Department of Health Care Finance, as the State Medicaid Agency, lacks a quality control oversight system to ensure that eligibility documentation and verification is maintained to support the eligibility decision. Questioned Costs – Not determinable. Context – This is a condition identified per review of ESA’s compliance with specified requirements using a statistically valid sample. Effect – Lack of supporting documentation for program services and noncompliance with program requirements could result in disallowances of costs and participants could be receiving benefits that they are not entitled to receive under the program. Cause – DHCF and ESA did not appear to adhere to internal control procedures to ensure that applications are properly processed in accordance with Federal Regulations. Recommendation - We recommend that ESA strictly implement internal control procedures to ensure that documentation is maintained to support the beneficiary determinations. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – ESA concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-033 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: Government Department/Agency: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Year: 09/30/2020 – 09/29/2024 Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.403, “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented.” Condition – During our testwork for the Activities Allowed or Unallowed and Allowable Costs/Cost Principles, we noted the following in our sample of sixty-four (64) items: • For one (1) out of the 64 samples, DBH did not provide adequate supporting documentation for year-end accrual for subrecipient expenditures amounting to $238,548. Questioned Costs – Known amount is $238,548. Context – This is a condition identified per review of DBH’s compliance with specified requirements using a statistically valid sample. Total amount of samples selected for testing amounted to $7,294,191. Effect – Lack of supporting documentation could result in disallowances of costs and DBH may have drawn down federal monies in excess of the expenditures incurred. Cause – DBH did not have adequate controls in place to ensure that expenditures accrued were actually incurred by the subrecipient. Recommendation – We recommend that DBH strengthen internal control procedures to ensure that expenditures are allowable, and that sufficient documentation is retained to support that allowability. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH concurs with the finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-034 Prior Year Finding Number: N/A Compliance Requirement: Cash Management Program: Government Department/Agency: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Year: 09/30/2020 – 09/29/2024 Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The OMB Compliance Supplement states that when entities are funded on a reimbursement basis, program costs must be incurred prior to the date of the reimbursement request. Condition – During our testing of individual draws of federal funds, we noted that for one (1) of three (3) samples tested, the amount drawn exceeded the expenditures incurred. Cash draws appear to have exceed expenditures and DBH remitted $0 interest and/or refunds were remitted to the Federal government by DBH. In addition, we noted management did not provide a complete reconciliation between the cash drawdown schedule to the Schedule of Expenditures of Federal Awards (SEFA). Questioned Costs – Not determinable. Context – This is a condition identified per review of DBH’s compliance with specified requirements using a statistically valid sample. The sample drawdown was $9,262,365 and only supported by expenditures of $9,161,518, thus overdrawing by $100,847. Total drawdowns selected for testing amounted to $24,170,641. Effect – DBH is not in compliance with cash management requirements. Requests for federal funds for the program were not based on the amount of actual disbursements and requests did not support the actual expenditures. This could subject DBH to sanctions, other penalties, or a repayment of part of the grant award amounts. In addition, noncompliance could subject the agency to paying interest charges on these draws. Cause – DBH did not have adequate controls in place to ensure that expenditures accrued were actually incurred by the subrecipient. Recommendation – We recommend that DBH strengthen internal control procedures to ensure that expenditures are allowable, and that sufficient documentation is retained to support that allowability. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH concurs with the finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-035 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: Government Department/Agency: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Year: 09/30/2020 – 09/29/2024 Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Federal Awardee Performance and Integrity Information System (FAPIIS) Reporting Compliance: In accordance with the regulatory requirements provided at 45 CFR 75.113 and Appendix XII to 45 CFR Part 75, recipients that have currently active Federal grants, cooperative agreements, and procurement contracts with cumulative total value greater than $10,000,000 must report and maintain information in the System for Award Management (SAM) about civil, criminal, and administrative proceedings in connection with the award or performance of a Federal award that reached final disposition within the most recent five-year period or affirm that there is no new information to report. The recipient must also make semiannual disclosures regarding such proceedings. Proceedings information will be made publicly available in the designated integrity and performance system (currently the FAPIIS). Federal Funding Accountability and Transparency Act (FFATA) Reporting Compliance: The 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) requires prime recipients of federal awards who make first-tier subawards to report the subaward on the Federal Funding Accountability and Transparency Subaward Reporting System (FSRS) website maintained by the federal Office of Management and Budget. Under the requirements of 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 on the FSRS website. Prime recipients must report by the end of the month following the month in which the obligation is made. It is management’s responsibility to design and implement internal controls to reasonably ensure compliance with laws and regulations and to ensure management’s objectives are achieved. Federal Financial Report (FFR) Controls over Reporting Compliance: In addition, 2 CFR 200.333 requires that financial records, supporting documents, statistical records, and all other non-federal entity records pertinent to a federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the federal awarding agency or pass-through entity in the case of a subrecipient. Performance Progress Report (PPR) Underlying Data: The audit objective for the Reporting compliance requirement stated in the 2 CFR Part 200, appendix XI Compliance Supplement is as follows: Determine whether required reports for Federal awards include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. Schedule of Expenditures of Federal Awards (SEFA) Reporting Compliance: 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. Condition – During our testing of the reporting compliance requirement, we noted the following: • FAPIIS Reporting Compliance: During our testing of FAPIIS reporting for fiscal year ended September 30, 2023, it was noted that the program’s reporting regarding civil, criminal, and administrative proceedings in connection with the award or performance of a Federal award that reached final disposition within the most recent five-year period or affirmation that there was no new information to report was not submitted by the DBH program management. • FFATA Reporting Compliance: During our testing of FFATA reporting, it was noted that reports were not submitted by the DBH program management. DBH program management was not aware of FFATA reporting requirement and did not report subawards within the FSRS website during the award year. None of the ten subawards selected for testing were reported to FSRS. Total subawards tested were $3,559,912, and $0 was reported as required by FFATA requirements. • FFR Controls over Reporting Compliance: DBH’s control over compliance for financial reporting is as follows: “All reports are reviewed by the Accounting Officer or Agency Fiscal Officer prior to submission to the Federal government. DBH Program and Fiscal Services staff review programmatic and financial reports.” We noted DBH did not have documentation of the control over compliance, as well as the review and approval of the Financial Reporting Report (FFR or SF-425). • PPR Reporting Compliance: We found DBH did not have documentation for the information, and the source of the information, it used in its Opioid program’s Performance Progress Report. Information as reported on the reports is unsupported as management did not retain the underlying data. • SEFA Reporting Compliance: During our testing for the SEFA, we noted that DBH incorrectly reported the value of subrecipient expenditures included within the subrecipient expenditure column. For the year ended September 30, 2023, DBH incurred $12,800,130 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. Questioned Costs – None. Context – This is a condition identified per review of DBH’s compliance with specified reporting requirements using a statistically valid sample. Effect – Without proper internal controls and policies and procedures in place to ensure that correct amounts were reported and were properly reviewed, the Opioid STR program: • FAPIIS Reporting Compliance: DBH management did not report the necessary FAPIIS information for Opioid STR in accordance with Federal requirements. • FFATA Reporting Compliance: DBH management did not report the necessary FFATA report for Opioid STR first-tier subawards over $30,000 to the FFATA Subaward Reporting System in accordance with FFATA requirements. • FFR Controls over Reporting Compliance: There is an increased risk of errors occurring and going undetected, or errors being present in reports if no review and approval occurred. • PPR Reporting Compliance: DBH cannot be assured that it reported complete and accurate information to enable the Substance Abuse and Mental Health Services Administration (SAMHSA), an operating division of the Department of Health and Human Services (HHS), to assess the outcomes of the State’s use of Opioid program funding. • SEFA Reporting Compliance: The effect of the condition found is that the SEFA was not accurately prepared. Cause – Management did not have proper internal controls and policies and procedures in place to ensure that the amounts on the FAPIIS, FFATA, FFR, PPR and SEFA were properly reported, and the reports were properly reviewed and approved. Recommendation – We recommend the following: • FAPIIS Reporting Compliance: We recommend DBH to evaluate its reporting control procedures and update them as necessary to ensure they promote compliance with the Federal regulations. These procedures should include a supervisory review of the report information before it is submitted. Further, we recommend that DBH collect, and report complete and accurate information regarding FAPIIS. • FFATA Reporting Compliance: We recommend DBH to evaluate its Transparency Act reporting control procedures and update them as necessary to ensure they promote compliance with the Federal regulations. These procedures should include a supervisory review of the report information before it is submitted on the FSRS website. Further, we recommend DBH collect and report on the FSRS website complete and accurate information regarding subawards made for all programs subject to the Transparency Act. • FFR Controls over Reporting Compliance: We recommend DBH to design and implement procedures to ensure sufficient documentation is maintained that supports the review and approval of the FFR. • PPR Reporting Compliance: We recommend DBH to develop formal, written procedures to identify the sources of information necessary and steps needed to compile accurate and complete information for the Opioid program performance reports; and retain in a central location all documentation that it used to support information included in each performance report it submits to the federal government. • SEFA Reporting Compliance: We recommend DBH to ensure that agency personnel receive proper training on subrecipient versus vendor determination; as well as review its existing policies and procedures for preparing the Schedule of Expenditures of Federal Awards to ensure that it is complete and accurate. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH agrees with these findings and plans to address reporting requirements to ensure that the FAPIIS, FFATA, FFR, PPR and SEFA are completed accurately and on the required schedule. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-036 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: Government Department/Agency: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Year: 09/30/2020 – 09/29/2024 Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Eligibility of Subrecipients: The Substance Abuse and Mental Health Services Administration (SAMHSA) promulgated the Funding Opportunity Announcement (FOA) No. TI-20-012 to seek applicants for the Opioid STR federal program. Page 67 of the FOA states “Subrecipient means a non-Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal award, including a portion of the scope of work or objectives. Grant recipients are responsible for ensuring that all subrecipients comply with the terms and conditions of the award, per 45 CFR Section 75.101.” This provision indicates that 45 CFR Section 75.202 applies to all grant agreements, including subawards. 45 CFR Section 75.202(b) requires the federal awarding agency must provide certain information about the federal award and states, in part (5), General Eligibility Requirements, The statutory, regulatory or other eligibility factors or considerations that determine the applicant’s qualification for Federal awards under the program (e.g., type of non-Federal entity). Earmarking Requirements for Subrecipients: Award recipients must continue to comply with the requirements for subrecipients monitoring and management as outlined in the provisions of 45 CFR Section 75.351-352 and should ensure written subaward/subcontract agreements are in place. The written agreement must require that subrecipients comply with the same terms and conditions as the prime recipient, as applicable (i.e., financial management requirements, audit requirements, etc.) and should describe the scope of work, deliverables, etc. The grant agreements provide that the District may use no more than ten (10) percent of the total grant award for administrative costs and developing the infrastructure necessary for expansion of services. Also, no more than ten (10) percent of the total grant award may be used for data collection, performance measurement, and performance assessment, including incentives for participating in the required data collection follow-up. Monitoring of Subrecipients: Uniform Guidance in 2 CFR Section 200.331(a) requires that pass-through entities must: ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information outlined in the section noted above, pre-award assessment, indirect cost rated for the award, assistance listing number, finding and award follow-up and other pertinent actions. Also, in accordance with the requirements of 2 CFR Section 1402.300, the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR part 170 Reporting Subaward and Executive Compensation Information. Condition – During our testing of Subrecipient Monitoring compliance requirement, we noted the following: For Eligibility of Subrecipients: We identified ten (10) instances out of ten (10) tested, in which the subrecipients’ eligibility determination was not documented or maintained. Earmarking Requirements for Subrecipients: During our testing of the State Targeted Response to the Opioid Crisis Program, we noted that the agency used a different established indirect cost rate in monitoring the earmarking of awardees than the maximum administrative costs/indirect costs. For three (3) out of ten (10) samples selected for testing, the awardees exceeded the ten (10) percent funding limitation for administrative costs/indirect costs. Also, DBH does not have a process to monitor the ten (10) percent earmarking requirement for costs of developing the infrastructure necessary for expansion of services; and for data collection, performance measurement, and performance assessment, including incentives for participating in the required data collection follow-up. Monitoring of Subrecipients: Although, DBH performs risk assessment and site visits to monitor subrecipients, we noted three (3) instances out of ten (10) samples, in which the subrecipients’ site visit and/or risk assessment was not documented or maintained. In addition, DBH did not track subrecipient costs versus vendor costs within their financial reporting system, which resulted to issues in verifying the completeness and accuracy of subrecipient population. Questioned Costs – Not determinable. Context – This is a condition identified per review of DBH’s compliance with specified subrecipient monitoring requirements using a statistically valid sample. Effect – Subrecipients may not be properly monitored, which may result in subawards being used for unauthorized purposes in violation of the terms and conditions of the subawards or that the subaward performance goals were not achieved. Cause – There is lack of sufficient documentary evidence to support that the controls are operating as designed related to subrecipient monitoring compliance. Recommendation – We recommend that DBH maintain sufficient documentation to evidence its internal controls over the risk assessment and monitoring of subrecipients. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH agrees with the findings and will put controls into place to resolve the issues. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2023-037 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions – Key Employees Program: Government Department/Agency: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Year: 09/30/2020 – 09/29/2024 Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. 2 CFR 200.508(d) says an auditee must “provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.” The grant agreements provide that the State must maintain certain key personnel. Key personnel are organization staff members or consultants/subrecipients who must be part of the project regardless of whether they receive a salary or compensation from the project. These individuals must make a substantial contribution to the execution of the project. Key Personnel for this program are the Project Director, Project Coordinator, and Data Coordinator at a 1.0 FTE (100 percent level of effort) for each position. This position requires prior approval by SAMHSA after a review of staff credentials and job descriptions. Any changes to key personnel, including level of effort involving separation from the project for more than three months or a 25 percent reduction in time dedicated to the project, requires prior approval, and must be submitted as a post-award amendment. Condition – During our testing of the key personnel requirement, we noted that for three (3) key employees tested out of three (3), we were unable to review documentation to support that the employee worked 100% on the award as required by the grant agreement. Questioned Costs – None. Context – This is a condition identified per review of DBH’s compliance with specified requirements using a statistically valid sample. Effect – There is a risk that employees are working on the program that are not approved by the granting agency. Cause – Management has not established internal control policies and procedures around communicating to the employees that they are being assigned to the Opioid program. Recommendation – We recommend that DBH develop and implement policies, procedures and controls to ensure proper documentation of the required and actual time and effort from key employees in accordance with grant requirements. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH agrees with the findings and will put controls into place to resolve the issues. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.

Finding Number: 2022-001 Prior Year Finding Number: 2021-001 Compliance Requirement: Special Tests and Provisions ? ADP System for SNAP Program: U.S. Department of Agriculture Supplemental Nutrition Assistance Program Cluster (SNAP) ALN: 10.551, 10.561 Award #: Various Award Year: 10/01/2021 ? 09/30/2022 Government Department/Agency: Department of Human Services (DHS)/ Department of Health Care Finance (DHCF) DC Access System (DCAS) Program Management Administration Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 272.10(a), ?All State agencies are required to sufficiently automate their SNAP operations and computerize their systems for obtaining, maintaining, utilizing, and transmitting information concerning SNAP.? Per 2 CFR Section 272.10(b), ?In order to meet the requirements of the Act and ensure the efficient and effective administration of the program, a SNAP system, at a minimum, shall be automated in each of the following program areas (1) Certification and (2) Issuance Reconciliation and Reporting. Under Certification ? States agencies must determine eligibility and calculate benefits or validate the eligibility worker?s calculations by processing and storing all casefile information necessary for the eligibility determination and benefit computation (including but not limited to all household members? names, addresses, dates of birth, social security numbers, individual household members? earned and unearned income by source, deductions, resources and household size). Also, State agencies must redetermine or revalidate eligibility and benefits based on notices of change in households? circumstances.? Condition ? The District is self-reporting findings it noted from its ongoing efforts to resolve issues with the ADP system for SNAP. The issues identified and the estimated impact follows: 1. The SNAP net and gross income tests are applied to households who are categorically eligible through receipt or authorization to receive non-cash benefits under the District?s Temporary Assistance for Needy Families (TANF) program operated to meet 7 CFR 273.2(j)(2)(i)(C). As a result, SNAP applications are being improperly denied for failing the net or gross income test. The cost of this underpayment is currently unknown. 2. The SNAP gross income test is applied to applicants that contain an elderly or disabled member. As a result, SNAP applications are being improperly denied for failing the gross income test. The cost of this underpayment is currently unknown. 3. SNAP benefits are issued for the initial month of the certification period if the prorated amount is less than $10. As a result, SNAP benefits are being improperly overissued to some households. The cost of this overpayment is $48,592. 4. The Federal minimum SNAP benefit is not issued to eligible one or two person households unless those households are categorically eligible. As a result, one or two person households that are not categorically eligible will not receive benefits they are entitled to. The cost of this underpayment is currently unknown. 5. Certain allowable medical expenses are not configured in DCAS to allow a medical expense deduction. As a result, certain households with elderly or disabled members are not receiving a medical expense deduction. The cost of this underpayment is currently unknown. 6. DCAS is excluding retirement benefits from ?Civil Service Retirement and Disability? as unearned income when determining eligibility and benefits levels. As a result, some households may be determined eligible even if these retirement benefits would make them ineligible and some households will receive overpayments for failing to include these retirement benefits in the SNAP benefit calculation. The cost of this overpayment is $126,574. 7. Certain SNAP applicants/household members verified as students but not meeting a student exemption are included as household members. As a result, ineligible students are included in SNAP households resulting in overpayments. The cost of this overpayment is $57,785. 8. ESA is not providing the mandatory homeless shelter deduction for SNAP households experiencing homelessness with allowable shelter costs that do not opt to claim an excess shelter deduction. The cost of this underpayment is currently unknown. 9. ESA is not terminating customers who refuse to cooperate with the District Quality Control (QC) reviewers. The District?s interviews with QC staff and examples of recent cases referred by QC to ESA for termination revealed that in two instances, a request to terminate a SNAP household was not acted on by ESA, and in one instance, a request to terminate a SNAP household was acted on but ESA issued a termination notice with an incorrect termination reason. The cost of this overpayment is currently unknown. 10. ESA is not acting on Electronic Disqualified Recipient System (eDRS) matches at initial application or when a new household member is added. The cost of this overpayment is currently unknown. 11. SNAP does not have a systemic way to identify SNAP customers subject to the Able-Bodied Adult Without Dependents (ABAWD) work requirements. The cost of this overpayment is currently $18,500 per month or $222,000 for fiscal year 2022. These amounts represent 0.09% of the total amounts paid by DHS in claims for beneficiary payments. DHS paid a total of $506,630,102 in beneficiary payments to all SNAP beneficiaries in fiscal year 2022. Questioned Costs ? Known amount is $454,951. Context ? This is a condition identified per review of DHS? compliance with specified requirements resulting from a system implementation. Effect ? Without an effectively designed and operated system in place, ineligible beneficiaries may receive benefits under the SNAP grant and DHS may make payments on behalf of those beneficiaries resulting in noncompliance with the eligibility requirements. Inaccurate beneficiary allotment payments could result in participants receiving benefits that they are not entitled to receive under the program. Cause ? DHS did not effectively design and operate the ADP system for SNAP which resulted to inaccurate benefit payments. Recommendation ? We recommend that DHS continue to evaluate and improve the new ADP system for SNAP to ensure that it addresses all the administration requirements of the SNAP program. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The DHS and DHCF DCAS team agree with the findings noted in this report. DHS self-reported these findings as part of the Agencies ongoing effort to maintain integrity with all eligibility determinations. The root cause for each of the eleven (11) issues with the ADP system for SNAP varied. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-002 Prior Year Finding Number: 2021-002 Compliance Requirement: Special Tests and Provisions ? EBT Card Security Program: U.S. Department of Agriculture Supplemental Nutrition Assistance Program Cluster (SNAP) ALN: 10.551, 10.561 Award #: Various Award Year: 10/01/2021 ? 09/30/2022 Government Department/Agency: Department of Human Services (DHS)/ Office of the Chief Financial Officer/Office of Finance and Treasury (OCFO/OFT) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 7 CFR Section 274.8(b)(3), As an addition to or component of the Security Program required of Automated Data Processing (ADP) systems, the State agency shall ensure that the following electronic benefits transfer (EBT) security requirements are established: (i) Storage and control measures to control blank unissued EBT cards and PINs, and unused or spare POS devices; (ii) Measures to ensure communication access control. Communication controls shall include the transmission of transaction data and issuance information from POS terminals to work-stations and terminals at the data processing center; (iii) Message validation; (iv) Administrative and operational procedures; (v) A separate EBT security component shall be incorporated into the State agency Security Program for ADP systems. The periodic risk analyses required by the Security Program shall address the following items specific to an EBT system ? (B) Completeness and timeliness of the reconciliation system; and (vi) The State agency shall incorporate the contingency plan approved by FNS into the Security Program. Condition ? OCFO/OFT for DHS are 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. OCFO/OFT have contracted with Fidelity National Information Service (FIS) for the issuance and security of the EBT cards; however, it is OCFO/OFT?s ultimate responsibility to ensure the contractor has controls in place to maintain adequate security over, and documentation/records of EBT cards. During our tests of the design and implementation of internal controls, we noted the following issues: ? For five (5) out of the 60 samples, although both EBT Balance Sheets reconciled with the EBT Card Issuance Logs included in the package, we noted the following deficiencies: o For one (1) of the samples, we noted that for at least one (1) customer the client signature was missing from the EBT Intake Form. o For three (3) of the samples, we noted that for at least one (1) customer on the UPO EBT Intake Form, the ID type for identification purposes was missing. o For one (1) of the samples, we noted that for at least one (1) customer the identification type was noted as referral on the EBT Intake Form, but no referral form was attached. Questioned Costs ? None. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? Without adequate internal controls to ensure compliance with EBT Card Security requirements, there is an increased risk that the inventory of EBT cards will not be properly maintained and accounted for. Cause ? OCFO/OFT for DHS does not have adequate policies and procedures in place to ensure adequate safeguarding, documentation over issuance and monitoring of EBT cards. Recommendation - We recommend that OCFO/OFT for DHS strengthen formal policies and procedures to maintain adequate security over, and documentation/records for EBT Cards. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The OCFO/OFT for DHS concurs with this finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-003 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Agriculture Child Nutrition Cluster ALN: 10.553, 10.555, 10.559 and 10.582 Award #: 1DC300302 Award Year: 10/01/2021 ? 09/30/2022 Government Department/Agency: District of Columbia Public Schools (DCPS) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. 7 CFR Section 210.8 Claims for Reimbursement states: (a) Internal controls. The school food authority shall establish internal controls which ensure the accuracy of meal counts prior to the submission of the monthly Claim for Reimbursement. At a minimum, these internal controls shall include: an on-site review of the meal counting and claiming system employed by each school within the jurisdiction of the school food authority; comparisons of daily free, reduced price and paid meal counts against data which will assist in the identification of meal counts in excess of the number of free, reduced price and paid meals served each day to children eligible for such meals; and a system for following up on those meal counts which suggest the likelihood of meal counting problems. (1) ?On-site reviews. Every school year, each school food authority with more than one school shall perform no less than one on-site review of the counting and claiming system and the readily observable general areas of review cited under Section 210.18(h), as prescribed by FNS for each school under its jurisdiction. The on-site review shall take place prior to February 1 of each school year. Further, if the review discloses problems with a school's meal counting or claiming procedures or general review areas, the school food authority shall: ensure that the school implements corrective action; and, within 45 days of the review, conducts a follow-up on-site review to determine that the corrective action resolved the problems. Each on-site review shall ensure that the school's claim is based on the counting system authorized by the State agency under Section 210.7(c) of this part and that the counting system, as implemented, yields the actual number of reimbursable free, reduced price and paid meals, respectively, served for each day of operation.? Condition ? DCPS conducted 158 on-site reviews in fiscal year 2022. We selected a sample of sixteen (16) on-site reviews and noted that DCPS is unable to provide evidence to support that a review took place on two (2) of the samples where DCPS assessed that the schools passed the on-site review. These on-site reviews are the main control of DCPS to ensure that the meal counts reported and eventually claimed for reimbursement to the Office of the State Superintendent of Education (OSSE) is accurate. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DCPS? compliance with specified requirements using a statistically valid sample. Effect ? DCPS did not comply with the reporting requirements of the Child Nutrition Cluster. Cause ? DCPS does not have a fully effective internal controls over record keeping of on-site review process. Recommendation ? We recommend DCPS to continue to enhance its controls over reporting to ensure compliance with the requirements of the Child Nutrition Cluster. This should include policies and procedures relating to record keeping of support for any on-site review conducted and enhance monitoring controls to ensure all supporting documentation over the on-site review are filed and available for inspection at any time. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DCPS agrees with the conditions and recommendations of this finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-004 Prior Year Finding Number: 2021-004 Compliance Requirement: Eligibility Program: U.S. Department of the Treasury COVID-19 ? Emergency Rental Assistance (ERA) Program ALN: 21.023 Award #: N/A Award Year: 12/27/2020 ? 09/30/2025 Government Department/Agency: Department of Human Services Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Treasury Department ERA FAQ 8-25-21, question 1, states that grantees must require all applications for assistance to include an attestation from the applicant that all information included is correct and complete. The Treasury Department ERA FAQ 8-25-21, question 4, states that the statutes establishing ERA1 and ERA2 limit eligibility to households based on certain income criteria. For purposes of ERA1, the area median income for a household is the same as the income limits for families published by the Department of Housing and Urban Development (HUD) in accordance with 42 U.S.C. 1437a(b)(2), available under the heading for ?Access Individual Income Limits Areas? at https://www.huduser.gov/portal/datasets/il.html. If a grantee in ERA1 uses a household?s monthly income to determine eligibility, the grantee should review the monthly income information provided at the time of application and extrapolate over a 12-month period to determine whether household income exceeds 80 percent of area median income. For example, if the applicant provides income information for two months, the grantee should multiply it by six to determine the annual amount. If a household qualifies based on monthly income, the grantee must redetermine the household income eligibility every three months for the duration of assistance. Grantees in ERA1 and ERA2 must have a reasonable basis under the circumstances for determining income. A grantee may support its determination with both a written attestation from the applicant as to household income and also documentation available to the applicant, such as paystubs, W-2s or other wage statements, tax filings, bank statements demonstrating regular income, or an attestation from an employer. In appropriate cases, grantees may rely on an attestation from a caseworker or other professional with knowledge of a household?s circumstances to certify that an applicant?s household income qualifies for assistance. Under categorical eligibility, if an applicant?s household income has been verified to be at or below 80 percent of the area median income (for ERA1) or if an applicant?s household has been verified as a low-income family as defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)) (for ERA2) in connection with another local, state, or federal government assistance program, grantees are permitted to rely on a determination letter from the government agency that verified the applicant?s household income or status as a low-income family, provided that the determination for such program was made on or after January 1, 2020. The Treasury Department ERA FAQ 8-25-21, question 5, states grantees must obtain, if available, a current lease, signed by the applicant and the landlord or sublessor, that identifies the unit where the applicant resides and establishes the rental payment amount. If a household does not have a signed lease, documentation of residence may include evidence of paying utilities for the residential unit, an attestation by a landlord who can be identified as the verified owner or management agent of the unit, or other reasonable documentation as determined by the grantee. In the absence of a signed lease, evidence of the amount of a rental payment may include bank statements, check stubs, or other documentation that reasonably establishes a pattern of paying rent, a written attestation by a landlord who can be verified as the legitimate owner or management agent of the unit, or other reasonable documentation as defined by the grantee in its policies and procedures. Condition ? During testing over rental and utility beneficiary eligibility for the Emergency Rental Assistance Program, we noted that the District Department of Human Services, Family Services Agency (FSA) (?the Agency?) was unable to provide sufficient documentation to support the beneficiaries? determination for rent paid and utility payments during the fiscal year 2022 audit. Specifically, out of a sample of 60 transactions tested, we noted the following exceptions: ? For one (1) participant, in the participant?s second application, the Agency paid $4,011 in rental assistance for the months from October to December 2021. Per further review of the applicant?s history, in the initial application, the Agency paid rent for eight months (April to November 2021) with rent ranging from $610 to $1,360. The approval of the second application resulted in improper double payment for the months of October and November 2021 totaling $2,674, representing known questioned costs. ? For one (1) participant, the amount the Agency paid for rental assistance did not agree to the documentation provided. The rental agreement of $1,635 did not match the payment of $1,798 per month for three months. The total payment not supported totaled $489, representing known questioned costs. ? For one (1) participant, in the initial application, the Agency paid rent for October 2021 totaling $1,600, which was not supported by the agreement which was $1,327. Per further review of the participant?s history, we noted under a second application, the Agency paid $3,297 in rent for the months of November and December 2021, however, per the rent agreement the rent amount supported was $2,654. For the months of October through December 2021, the amount paid for rental assistance totaled $4,897, however the rent amount supported totaled $3,981. The total amount not supported totaled $916, representing known questioned costs. ? For one (1) participant, the amount the Agency paid for utility did not agree to the documentation provided. The utility payment of $1,622 did not agree to the supported amount of $1,509. The total amount not supported totaled $113, representing known questioned costs. ? For six (6) participants, the Agency did not follow their documented policies and procedures such that the rental calculation worksheets were not provided, or these were not signed by the participants or by the housing support provider. During our tests of completeness for the eligibility population we noted payments that were labeled as duplicate payments and payments sent to the wrong recipients, that have not been refunded. Given that the Agency noted that these payments were sent in error, they should not have been included in the schedule of expenditures of federal awards. The total payments sent in error during 2022 totaled $315,572, representing known questioned costs. The DC Department of Human Services, Family Services Agency, lacks a quality control oversight system to ensure that eligibility documentation is maintained to support eligibility decisions. Questioned Costs ? $319,764. Context ? This is a condition identified per review of the Agency?s compliance with specified requirements using a statistically valid sample. Effect ? Lack of supporting documentation for program services and noncompliance with program requirements could result in disallowances of costs and participants could be receiving benefits that they are not entitled to receive under the program. Cause ? The Agency did not appear to adhere to internal control procedures to ensure that applications are properly completed and retained. Recommendation ? We recommend that the Agency strictly implement internal control procedures to ensure that documentation is maintained to support the beneficiary determinations. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The Department of Human Services (DHS) agrees with the findings that for four (4) STAY DC participants, the amount paid was not fully supported by lease or utility arrears documentation, resulting in improper payments totaling $4,192. DHS will reach out to the payees to formally request the return of improper payments to the District of Columbia. This will be tracked to ensure the return is recorded against ERA within the District?s financial system. DHS agrees with the finding that six (6) participants were missing rental subsidy calculation worksheets or were missing signatures on their rental calculation worksheet. These participants were enrolled in the Family Rehousing and Stabilization Program (FRSP), also known as Rapid Re-housing (RRH). FRSP is a key program within the District?s continuum of care to support families who are experiencing homelessness or are at imminent risk of experiencing homelessness. The rental calculation worksheet is used to determine the amount an FRSP household contributes towards monthly rent based on household income and makeup. The remaining monthly rent is covered by a subsidy, paid out of ERA funds. Gaps in rental subsidy calculation worksheet documentations were due to rapidly expanding caseloads during the pandemic and new safety protocols that required certain changes to case management protocols. To address any documentation gaps, DHS introduced new Standard Operating Procedures (SOPs) for FRSP in fiscal year 2023. The new SOP implements stricter internal control procedures, conducting regular audits, and streamlining the eligibility determination process. DHS agrees with the finding that $315,572 in STAY DC payments were sent in error during 2022. In Jan. 2023, DHS conducted an in-depth review of the STAY DC program comparing every rental assistance payment made via the District?s financial management system to applications approved for payment by the STAY DC program. This process reviewed $120.1M in fiscal year 2022 STAY DC rental assistance payments and identified $315.6K of payments made in error that were not later refunded to the District. The District will reclass all identified errored payments off of the ERA fund to Local funds by the closeout of fiscal year 2023, Sept. 30, 2023. DHS also completed a reconciliation of data reported to U.S. Treasury for ERA1 closeout reporting and ERA2 2023 Q2 reporting to ensure that no errored payments were included in reported data. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-005 Prior Year Finding Number: 2021-005 Compliance Requirement: Reporting Program: U.S. Department of the Treasury COVID-19 ? Emergency Rental Assistance (ERA) Program ALN: 21.023 Award #: N/A Award Year: 12/27/2020 ? 09/30/2025 Government Department/Agency: Department of Human Services Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.328 Financial Reporting: ?Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future, OMB-approved, governmentwide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting. The Federal awarding agency must use OMB-approved common information collections, as applicable, when providing financial and performance reporting information.? The 2022 Compliance Supplement outlines the Special Reports required under the Emergency Rental Assistances program, and the key data elements, and the submission requirements. The Reporting Guidance is located on the Treasury?s website for the ERA program. Monthly Special Reports were required to be submitted on a monthly basis, beginning in April 2021 for ERA1 and June 2021 for ERA2, generally by the 15th of the following month unless otherwise specified within the Reporting Guidance. As outlined in the 2022 Compliance Supplement, the key data elements for the monthly reports included (1) the total number of participant households that received ERA assistance of any kind and (2) the total amount of ERA funds expended by the ERA grantee to or for participating households on behalf of eligible households. The program also requires ERA recipients to certify the reports submitted. As outlined in the 2022 Compliance Supplement, the key data elements for the quarterly reports included (1) the cumulative amount obligated by the grantee; and (2) the cumulative amount expended by the grantee. The program also requires ERA recipients to certify the reports submitted. Condition ? We noted the following for one of nine quarterly and monthly reports tested: ? For one quarterly report (the ERA1 Quarter 1 2022 Report), the key data elements (1) the cumulative amount obligated by the grantee; and (2) the cumulative amount expended by the grantee were not included in the quarterly report. Questioned Costs ? None. Context ? This is a condition identified per review of the Department of Human Services? compliance with specified requirements using a statistically valid sample. Effect ? Without proper internal controls and policies and procedures in place, the required financial and special reports are either not submitted or not submitted with accurate information. Cause ? Per discussion with management, it was noted that at the time the report was submitted they didn?t have access to key data elements to be input into the quarterly report. However, BDO could not verify that this was the case as there was no documentation around the same. Management did not establish controls to make sure that all the required information as noted in the compliance supplement was submitted to the Treasury Department. Recommendation ? We recommend that the Department of Human Services fully implement its current corrective action plan to deploy policies and procedures and controls to ensure reports are submitted with accurate information. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The Department of Human Services (DHS) concurs with the finding that we could not substantiate that cumulative expenditure and obligation data were included in the ERA1 Quarter 1 2022 Report, which was submitted on April 15, 2022 in the U.S. Department of the Treasury?s COVID-19 Relief Hub reporting portal. DHS believes that updates in the reporting format and fields caused this issue. U.S. Treasury Reporting staff has confirmed that when new fields are added or changed to reports within the reporting portal, these changes override prior submitted reports. In response to a similar finding for the fiscal year 2021 ERA single audit where original submission data was overridden by formatting updates, DHS began saving screen shots of reported data within Treasury?s reporting portal. This practice began in June 2022 and will continue for the duration of the ERA program, through ERA2 closeout reporting. This will ensure that even if Treasury reporting portal functionality changes in the future, there is clear supporting documentation of the information submitted. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-006 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of the Treasury COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award #: N/A Award Year: 10/01/2021 ? 09/20/2022 Government Department/Agency: Office of the Chief Financial Officer (OCFO) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 2 CFR Section 200.302(a), Financial Management, states that each state must expend and account for the federal award in accordance with state laws and procedures for expending and accounting for the state?s own funds. In addition, the state?s and the other non-federal entity?s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. Condition ? Certain grant expenditures related to the PAY-AS-You-Go (PAYGO Capital) program, amounting to approximately $36.4 million, had erroneously been reflected as expenditures under assistance listing number 21.027, COVID-19 - Coronavirus State and Local Fiscal Recovery Funds. Subsequently, OCFO adjusted the SEFA to reflect the actual amount of expenditures incurred for the program. Questioned Costs ? None. Context ? This is a condition identified per review of the OCFO?s compliance with the specified requirements. Effect ? OCFO is not in compliance with the stated provisions. Failure to properly review and support expenditures can result in noncompliance with laws and regulations along with loss of funding. Cause ? OCFO did not appear to have adequate policies and procedures in place to ensure accuracy of the SEFA. Recommendation ? We recommend that OCFO adhere to instituted policies and procedures to ensure the accuracy of the SEFA. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? OCFO concurs with the finding. In the compilation and reconciliation of the SEFA, the PAYGO ARPA Local Revenue Replacement expenditures component was inadvertently included in the draft District fiscal year 2022 SEFA presented to the external auditors. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-007 Prior Year Finding Number: 2021-008 Compliance Requirement: Equipment and Real Property Management Program: U.S. Department of Education COVID-19 ? Education Stabilization Fund Elementary and Secondary School Emergency Relief (ESSER) Fund ALN: 84.425D Award #: S425D210034 Award Year: 01/05/2021 ? 09/30/2022 COVID-19 ? Education Stabilization Fund American Rescue Plan - Elementary and Secondary Schools Emergency Relief Fund (ARP-ESSER) ALN: 84.425U Award #: S425U210034-21A Award Year: 03/24/2021 ? 09/30/2023 Government Department/Agency: District of Columbia Public Schools Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Additionally, per the Uniform Guidance in 2 CFR Section 200.313, Equipment, property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Further, a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Condition ? We noted that DCPS has a policy to track and maintain a list of equipment purchased using federal funds with a single unit cost of $200 or more; and to conduct periodic equipment inventory count twice a year. Of the 56 out of 60 samples tested for equipment real property management requirements, we noted that: (1) Equipment purchased using federal funds with a single unit cost of $200 or more is tracked in the TIPWeb-IT system; however, there is no linkage between assets tracked in TIPWeb-IT and the funding source or Purchase Order. As a result, we were not able to verify that the equipment purchased using federal funds was being tracked in the TIPWeb-IT system. (2) There is no separate listing of equipment purchased using federal funds being maintained. (3) No physical inventory count was performed for equipment purchased using federal funds in 2022. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of District of Columbia Public School (DCPS)?s compliance with the specified requirements using a statistically valid sample. Effect ? There is a risk that inadequate recordkeeping of equipment could lead to misappropriation of assets and noncompliance with Federal regulations resulting in a return of Federal awards received. Cause ? Due to a lack of linkage between procurement systems and asset management systems and COVID related concerns, DCPS was unable to adequately support compliance with its policies and procedures regarding monitoring of equipment acquired with Federal funds. Recommendation ? We recommend that DCPS implement policies, procedures and controls that will ensure that equipment purchased using federal funds are tracked and maintained, in order to adhere to Federal regulations related to equipment and its related maintenance. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The District of Columbia Public School (DCPS) agrees with the conditions and recommendations of this finding. While DCPS has implemented and follows stringent asset procurement and management policies, we have adopted separate systems to track the purchasing, receiving, and the lifecycle of assets. The Procurement and ERP systems, PASS/SOAR are used to track purchases of assets, while the Warehouse receiving system captures a record of assets received by DCPS. The DCPS?s Asset Management System, TIPWeb tracks a device throughout its lifecycle (deployment/assignment, condition, location, disposal, etc.). This split system functionality contributes to the conditions noted in the audit findings. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-008 Prior Year Finding Number: 2021-010 Compliance Requirement: Reporting Program: U.S. Department of Education COVID-19 ? Education Stabilization Fund Higher Education Emergency Relief Fund (HEERF) Student Aid Portion ALN #: 84.425E Award #: P425E201913 - 20B Award Year: 04/24/2020 ? 06/30/2023 COVID-19 ? Education Stabilization Fund HEERF Institutional Aid Portion ALN: 84.425F Award #: P425F202580 - 20B Award Year: 05/07/2020 ? 06/30/2023 COVID-19 ? Education Stabilization Fund HEERF Historically Black Colleges and Universities (HBCUs) ALN: 84.425J Award #: P425J200098 - 20C Award Year: 05/01/2020 ? 06/30/2023 Government Department/Agency: University of the District of Columbia Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. There are three components to reporting for HEERF: 1) public reporting on the (a)(1) Student Aid Portion; 2) public reporting on the (a)(1) Institutional Portion (a)(2) and (a)(3) subprograms (Quarterly Reporting Form), as applicable; and 3) the annual report. The CARES Act 18004(e) and the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) 314(e) requires an institution receiving funds under HEERF I and HEERF II to submit a report to the secretary, at such time in such a manner as the secretary may require. While ARP does not explicitly identify procedures by which institutions must report on their uses of HEERF grant funds, Education Department exercises this reporting authority under 2 CFR section 200.328 and 2 CFR section 200.329. Condition ? During our testing of the quarterly public reporting requirements for HEERF Student Aid Portion and HEERF Institutional Portion, we noted the following: ? For three (3) out of six (6) reports, University of the District of Columbia (UDC) was not able to provide evidence of the timely posting of the quarterly public reports to the UDC website because the webmaster?s web posting audit log, which expires after 60 days, had not been retained by UDC. ? For three (3) out of six (6) reports, UDC was not able to provide evidence that the quarterly public reports were reviewed prior to posting to the UDC website because the evidence had not been retained by UDC. UDC implemented its corrective action plan on June 30, 2022, and the exceptions identified above relate to reporting transactions made prior to the above-mentioned implementation date. We also examined one report made post the above-mentioned implementation date and we noted that UDC had kept all evidence of review of the report and the evidence of the report being published in the UDC website. Questioned Costs ? None. Context ? This is a condition identified per review of UDC?s compliance with specified reporting requirements related to the program using a statistically valid sample. Effect ? Without adequate controls in place to ensure that reports are posted timely and proof that the reports were reviewed leads to noncompliance of the reporting requirements under the program. Cause ? UDC does not have adequate controls in place to ensure that documents are maintained related to the review and the timely posting of reports to the UDC website. Recommendation ? We recommend for UDC to continue to maintain documentation of the timely submission of reports and proof of review of reports as required to ensure compliance with reporting requirements. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? UDC OCFO agrees with the conditions and recommendations of this finding. As noted in the condition above, UDC implemented corrective action to remediate the conditions and recommendations reported in the prior year when findings were issued. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-009 Prior Year Finding Number: 2021-011 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Immunization Cooperative Agreements ALN: 93.268 Award #: 1 NH23IP922596-02-02 to NH23IP922596-02-11 Award Year: 08/01/2019 ? 06/30/2024 Government Department/Agency: Department of Health (DC Health) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? We noted that the District Department of Health (DC Health) continued to allocate payroll expenditures to the Immunization Cooperative Agreements (ICA) program during fiscal year 2022 based on budgeted percentages. These percentages were entered into the PeopleSoft Human Resources/Payroll System (PeopleSoft) at the beginning of the fiscal year and were based on management?s estimate of the respective employee?s level of effort for each program. PeopleSoft calculated the payroll costs every payroll cycle for each employee and program based on the predetermined percentage, and reported it through the Labor Distribution Report (485 Report). However, management did not perform a periodic comparison of actual costs to the budgeted costs and make any necessary adjustment as required by 2 CFR Section 200.430. Specifically, 11 out of 60 sampled payroll items tested for the ICA grant were recorded based on estimated hours and not actual hours. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DC Health?s compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits, for the ICA program in fiscal year 2022 were $2,646,210. Effect ? DC Health was unable to demonstrate that the payroll expenditures charged to the ICA grant accurately reflected the time incurred on the program and were properly supported in accordance with 2 CFR Part 200.430 time and effort reporting requirements. Cause ? DC Health did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the ICA program to the actual expenditures incurred. Per corrective action plans and status updates submitted by DC Health to BDO in fiscal year 2022, significant milestones have been achieved however due to several change management tasks, the corrective action plan is still progressing into fiscal year 2023 and is expected to fully implement by September 30, 2023. Recommendation ? We recommend that DC Health fully implement its current corrective action plan to deploy policies and procedures to periodically compare employees? estimated hours per the 485 Report to the actual hours incurred, and make any necessary adjustments as required by 2 CFR 200.430. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The District Department of Health (DC Health) concurs with the finding, causes and recommendations cited in the fiscal year 2022 single audit for the Immunization Cooperative Agreements (ICA) program. The current corrective action plan (CAP), originating from the prior year's finding had been actively implemented in fiscal year 2022 and reached significant milestones. DC Health asserts that while a process was implemented to obtain a regular schedule of payroll and budget- to-actual data for personnel, and supervisors were provided a tool and process for delivering ?time and effort certifications?, there were still some errors and omissions. DC Health concurs with the auditor on the need to continue implementation of the current CAP, but DC Health will modify processes and tools to ensure that there is the required periodic comparison of actual costs to the budgeted costs of personnel per the requirements of 2 CFR 200.430. Contributing factors were delays in distributing and receiving the required certifications, provision of technical assistance and training, and managing manual errors. Additionally, there were missing certifications due to a large turnover of staff, including many supervisors assigned to complete time and effort certification forms. In fiscal year 2022, reporting templates and reporting repositories were being revised and further developed and continued in fiscal year 2023. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-010 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2021 ? 09/30/2022 Government Department/Agency: Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Per District Personnel Issuance No. 2019-07 (Approval Required - page 10) ? ?Overtime work must be officially ordered and approved in advance. Agency heads and their designees are authorized to order and approve overtime work provided the agency has sufficient funding available. Overtime should be approved using DCSF No. 11B-12, Request for Authorization of Overtime Work. However, when responding to an immediate operational need, pre-approval may be memorialized in any written form, such as e-mail, and followed-up with the official overtime approval. Completed overtime forms and any supporting documentation should be submitted to the employee?s timekeeper for processing.? Condition ? We noted that for three (3) out of a sample of 25 employees tested, although the employee's timesheet was approved by the supervisor, DHS/ESA was unable to provide documentation that the overtime hours worked by the employee during the selected payperiods were preapproved. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DHS/ESA?s compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits, for the TANF program in fiscal year 2022 were $15,092,248. Effect ? DHS/ESA was unable to demonstrate that overtime charged to the federal program was approved in advanced in accordance with the internal policies and procedures of the agency. Cause ? DHS/ESA did not follow its own internal controls and policies and procedures to ensure that authorization forms evidencing the preapproval of overtime are obtained and maintained. Recommendation ? We recommend that DHS/ESA follow its own policies, procedures and controls to ensure that pre-authorization of overtime are obtained and maintained. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS concurs with the finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-011 Prior Year Finding Number: 2021-014 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2021 ? 09/30/2022 Government Department/Agency: Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. For TANF, per 45 CFR Section 205.60 (a), ?The State agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of financial assistance, and the use of any information obtained under Section 205.55, with respect to individual applications denied, recipients whose benefits have been terminated, recipients whose benefits have been modified, and the dollar value of these denials, terminations and modifications. Under this requirement, the agency will keep individual records which contain pertinent facts about each applicant and recipient. The records will include information concerning the date of application and the date and basis of its disposition; facts essential to the determination of initial and continuing eligibility (including the individual's social security number, need for, and provision of financial assistance); and the basis for discontinuing assistance.? For the Pandemic Emergency Assistance Fund (PEAF), per TANF-ACF-IM-2022-01 (Guidance for Use of the Pandemic Emergency Assistance Fund Appropriated in the American Rescue Plan (ARP) Act of 2021 (Pub. L. 117-2); Accompaniment to ACF-IOAS-DCL-22-01) ?For the purposes of the Pandemic Emergency Assistance Fund, Non-Recurrent, Short Term (NRST) benefits mean cash payments or other benefits that meet the regulatory definition (45 CFR 260.31(b)(1)), but are limited to those that fall into the specific expenditure reporting category mentioned in the legislation (line 15 of the ACF-196R (PDF), the state financial reporting form for the TANF program). In other words, for this fund, NRST benefits, like all NRSTs under TANF, must: ? be designed to deal with a specific crisis situation or episode of need; ? not be intended to meet on-going needs; and ? not extend beyond four months. And (as explained in the instructions for reporting on line 15 of the ACF-196R) NRSTs paid for with PEAF funds: ? must only include expenditures such as emergency assistance and diversion payments, emergency housing and short-term homelessness assistance, emergency food aid, short-term utilities payments, burial assistance, clothing allowances, and back-to-school payments; and ? may not include tax credits, childcare, transportation, or short-term education and training. In addition, ?The recipients of PEAF-funded NRSTs must be needy families with children but they do not necessarily have to be eligible for TANF cash assistance. A grantee has the flexibility to determine what needy means for each NRST and may wish to set a higher standard than it does for TANF cash assistance, such as aligning with SNAP or Medicaid income eligibility criteria.? Condition ? During our testing over beneficiary eligibility compliance requirements of the Temporary Assistance for Needy Families (TANF) program, we selected a sample of 60 beneficiaries in fiscal year 2022 to test DHS? compliance with TANF eligibility requirements. We noted the following: ? For one (1) out of 60, we noted that the application/recertification submitted on April 19, 2022, as identified in DCAS, could not be located in DIMS. We were therefore unable to test the following: o There was a completed and signed application that agreed to the information in DCAS: household composition, income, proof of residency, and Social Security Numbers for all individuals included on the application. o The family included a minor child who lives with a parent or other adult caretaker relative, or pregnant woman. o The family met state?s income requirements to be considered eligible as financially ?needy?. Only the financially ?needy? are eligible for services, benefits, or ?assistance?. Financially ?needy? for TANF and MOE purposes means financial deprivation, i.e., lacking adequate income and resources. For example, a needy family or a needy parent is one who is financially eligible according to the State's quantified financial eligibility criteria. o Assistance was not provided to an individual who was under age 18, was unmarried, had a minor child at least 12 weeks old, and had not successfully completed high school or its equivalent unless the individual either participates in education activities directed toward attainment of a high school diploma or its equivalent, or participates in an alternative education or training program approved by the District. o Assistance was not provided to an unmarried individual under 18 caring for a child, if the minor parent and child are not residing with a parent, legal guardian, or other adult relative, unless one of the statutory exceptions applies (42 USC 608(a)(5)). o Assistance was not provided for a minor child who had been or was expected to be absent from the home for a period of 45 consecutive days or, at the option of the State, such period of not less than 30 and not more than 180 consecutive days unless the State grants a good cause exception, as provided in its State Plan. o Assistance was not provided for an individual who was a parent (or other caretaker relative) of a minor child who fails to notify the State agency of the absence of the minor child from the home, as in paragraph e. immediately above, within five days of the date that it becomes clear to that individual that the child will be absent for the specified period of time (42 USC 608(a)(10)(C)). o That cash assistance was not provided to an individual during the 10-year period that began on the date the individual was convicted in Federal or State court of having made a fraudulent statement or representation with respect to place of residence in order to simultaneously receive assistance from two or more States under TANF, Title XIX, or the Food Stamp Act of 1977, or benefits in two or more States under the Supplemental Security Income program under Title XVI of the Social Security Act. o Assistance was not provided to any individual who was fleeing to avoid prosecution, or custody or confinement after conviction, for a felony or attempt to commit a felony, or who is violating a condition of probation or parole imposed under Federal or State law. o An individual convicted under Federal or State law of any offense which is classified as a felony and which involves the possession, use, or distribution of a controlled substance (as defined the Controlled Substances Act (21 USC 802(6)) is ineligible for assistance if the conviction was based on conduct occurring after August 22, 1996. A State shall require each individual applying for TANF assistance to state in writing whether the individual or any member of their household has been convicted of such a felony involving a controlled substance. However, a State may by law enacted after August 22, 1996, exempt any or all individuals from this prohibition or limit the time period that this prohibition applies to any or all individuals 21 USC 862a). o Qualified aliens, as defined at 8 USC 1641b (unless exempt) entering the United States on or after August 22, 1996, who were not eligible for Federal public benefits, as defined in 8 USC 1611(c), for a period of five years beginning on the date of the alien?s entry into the United States, unless they met an exception at 8 USC 1612(b)(2) or 1613 did not receive benefits. o Verified that for any TANF recipient that received subsidized child care, the District ensured that a completed application was submitted by the applicant prior to receiving the child care subsidy. ? For ten (10) out of 60, DHS was unable to provide support that would allow us to test that cash assistance was not provided to an individual during the 10-year period that began on the date the individual was convicted in Federal or State court of having made a fraudulent statement or representation with respect to place of residence in order to simultaneously receive assistance from two or more States under TANF, Title XIX, or the Food Stamp Act of 1977, or benefits in two or more States under the Supplemental Security Income program under Title XVI of the Social Security Act. In addition, for two (2) of these samples, DHS was unable to provide support that would allow us to test that assistance was not provided to any individual who was fleeing to avoid prosecution, or custody or confinement after conviction, for a felony or attempt to commit a felony, or who is violating a condition of probation or parole imposed under Federal or State law. ? For one (1) out of 60, we noted that the application consisted of a household comprised of 1 adult and 2 children but the amount paid was only $452 (not $665). Further review shows that it is an only child case (as one child did not meet school attendance requirement); however, the household was paid $452 instead of $418. DHS/ESA was unable to determine why the amount reported did not agree with the maximum amount for one individual. The questioned costs for the above issues amounted to $44,067, which represent 14.7% of the total eligibility amounts tested related to the 60 sampled items of $299,727. In addition, during our testing over beneficiary eligibility compliance requirements of the PEAF program for TANF, we selected a sample of 60 beneficiaries in fiscal year 2022 to test DHS? compliance with PEAF eligibility requirements (50 of the TANF Eligibility sample customers that received PEAF and 10 additional sample customers that received PEAF). We noted the following for the 50 samples already tested for TANF: ? For one (1) out of 50, we noted that DHS/ESA was unable to locate the correct TANF application. We were therefore unable to test the following: o A completed and signed application existed and agreed the information in DCAS for: household composition, income, proof of residency, and Social Security Numbers for all individuals included on the application, and o Whether the family met state's income requirements to be considered eligible as financially "needy". Only the financially ?needy? are eligible for services, benefits, or ?assistance?. Financially ?needy? for TANF and MOE purposes means financial deprivation, i.e., lacking adequate income and resources. For example, a needy family or a needy parent is one who is financially eligible according to the State?s quantified financial eligibility criteria. We noted the following for the additional 10 samples tested for PEAF: ? For one (1) out of 10, we noted that per review of DCAS the client tested was identified as ineligible for TANF for 11/1/2020 to 11/1/2022 as household had no eligible members; however, we noted that the PEAF payment of $1,038 was made to the customer during fiscal year 2022. DHS ESA was unable to support how eligibility was determined. The questioned costs for the above issues for PEAF amounted to $2,076, which represent 3.33% of the total eligibility amounts tested related to the 60 sampled items of $62,288. Questioned Costs ? Known amount is $46,143. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? Without properly maintaining documentation to support eligibility determinations, ineligible beneficiaries may receive benefits under the TANF grant and DHS may make payments on behalf of those beneficiaries resulting in noncompliance with the eligibility requirements. Cause ? DHS did not consistently adhere to its established policies and procedures requiring it to maintain documentation supporting participant eligibility. Recommendation - We recommend that DHS strengthen its existing policies and procedures over the review and maintenance of appropriate documentation to ensure compliance with eligibility requirements. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS/ESA concur with the findings. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-012 Prior Year Finding Number: 2021-017 Compliance Requirement: Reporting; Special Tests and Provisions ? Penalty for Failure to Comply With Work Verification Plan Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2021 ? 09/30/2022 Government Department/Agency: Department of Human Services (DHS)/ Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 261.60 (a), ?A State must report the actual hours that an individual participates in an activity, subject to the qualifications in paragraphs (b) and (c) of this section and Section 261.61(c). It is not sufficient to report the hours an individual is scheduled to participate in an activity. (b) For the purposes of calculating the work participation rates for a month, actual hours may include the hours for which an individual was paid, including paid holidays and sick leave. For participation in unpaid work activities, it may include excused absences for hours missed due to a maximum of 10 holidays in the preceding 12-month period and up to 80 hours of additional excused absences in the preceding 12-month period, no more than 16 of which may occur in a month, for each work-eligible individual. Each State must designate the days that it wishes to count as holidays for those in unpaid activities in its Work Verification Plan. It may designate no more than 10 such days. In order to count an excused absence as actual hours of participation, the individual must have been scheduled to participate in a countable work activity for the period of the absence that the State reports as participation. A State must describe its excused absence policies and definitions as part of its Work Verification Plan, specified at Section 261.62. (c) For unsubsidized employment, subsidized employment, and OJT, a State may report projected actual hours of employment participation for up to six months based on current, documented actual hours of work. Any time a State receives information that the client's actual hours of work have changed, or no later than the end of any six-month period, the State must re-verify the client's current actual average hours of work, and may report these projected actual hours of participation for another six-month period. (d) A State may not count more hours toward the participation rate for a self-employed individual than the number derived by dividing the individual's self-employment income (gross income less business expenses) by the Federal minimum wage. A State may propose an alternative method of determining self-employment hours as part of its Work Verification Plan. (e) A State may count supervised homework time and up to one hour of unsupervised homework time for each hour of class time. Total homework time counted for participation cannot exceed the hours required or advised by a particular educational program.? Per 45 CFR Section 261.61 (a), ?A State must support each individual?s hours of participation with documentation in the case file. In accordance with Section 261.62, a State must describe in its Work Verification Plan the documentation it uses to verify hours of participation in each activity.? According to the DC State Verification Plan, the D.C. Department of Human Services (DHS), Department of Human Services Monitoring Unit reviews and audits all documentation submitted by vendors reflecting the activities of recipients in TANF Employment program. This documentation includes time sheets, activity logs, school records, pay stubs, and verification of employment, work experience and on-the-job training. The Monitoring Unit completes this audit process to determine if sufficient documentation exists to substantiate reported time and attendance data, to warrant a payment to TANF Employment program vendors, and submission of countable hours for federal reporting purposes. The District projects hours of participation in unsubsidized, self-employment for six months or until the recipient's next scheduled recertification, whichever is sooner. Per 45 CFR Section 265.7 (a)-(c), ?Each State?s quarterly reports (the TANF Data Report, the TANF Financial Report (or Territorial Financial Report), and the SSP-MOE Data Report) must be complete and accurate and filed by the due date.? For disaggregated data report, `a complete and accurate report? means that: (1) The reported data accurately reflect information available to the State in case records, financial records, and automated data systems, and include correction of the quarterly data by the end of the fiscal year reporting period; (2) The data are free from computational errors and are internally consistent (e.g., items that should add to totals do so); (3) The State reports data for all required elements (i.e., no data are missing); (4)(i) The State provides data on all families; or (ii) if the State opts to use sampling, the State reports data on all families selected in a sample that meets the specification and procedures in the TANF Sampling Manual (except for families listed in error); and (5) Where estimates are necessary (e.g., some types of assistance may require cost estimates), the State uses reasonable methods to develop these estimates. For an aggregated data report, ?a complete and accurate report? means that: (1) The reported data accurately reflect information available to the State in case records, financial records, and automated data systems; (2) The data are free from computational errors and are internally consistent (e.g., items that should add to totals do so); (3) The State reports data on all applicable elements; and (4) Monthly totals are unduplicated counts for all families (e.g., the number of families and the number of out-of-wedlock births are unduplicated counts).? 45 CFR Section 265.7 (f) states that ?States must maintain records to adequately support any report, in accordance with Section 75.361 through 75.370 of this title.? Condition ? During our test work over a sample of 60 participants for Special Tests and Provisions - Penalty for Failure to Comply with Work Verification Plan and Reporting, we noted: ? For eight (8) instances, we noted that although the hours reported met or exceeded the required work participation hours, and the customer met the requirement, DHS/ESA was unable to provide documentation to support the hours reported. Therefore, we were unable to confirm that approved hours were properly supported. ? For two (2) instances, we noted that although the hours reported met or exceeded the required work participation hours, the customer did not meet the requirement, and the hours reported did not agree with the recalculated hours. ? For eleven (11) instances, we noted that although the hours reported met or exceeded the required work participation hours, the hours reported did not agree with the projected hours for unsubsidized employment for the customer. ? For one (1) instance, we noted that although the participant had no recorded participation hours in CATCH and a medical letter of patient admission dated two months prior to the month selected stating the customer?s inability to work, DHS/ESA was unable to provide documentation to support the hours reported on the ACF-199 report. ? For one (1) instance, we noted that the participant had no recorded participation hours in CATCH and had a child under one making her exempt from the work requirement. We noted we noted that although the hours reported met or exceeded the required work participation hours. The information tested in our sample represents the underlying data used in Reporting for the 1st and 3rd quarters of fiscal year 2022. Consequently, DHS incorrectly reported data in the ACF-199 report for the 1st and 3rd quarters of fiscal year 2022. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? Data within the ACF-199 report may not be complete and accurate. Specifically, if the work participation data is not substantiated, or inconsistencies are noted, it may result in inaccurate data being reported and may lead to an incorrect ACF-199 report and could result in an incorrect allocation of Federal Funds to the state. Cause ? Controls are not operating effectively over the documentation of work participation data to ensure that adequate evidence of the work participation is maintained. Recommendation - We recommend that DHS enforce existing policies and procedures and implement additional controls to ensure that adequate documentation is maintained to substantiate the work participation data reported in the ACF-199 report in accordance with the District of Columbia Work Verification Plan. We also recommend that DHS implement policies, procedures and controls that will enable an accurate reconciliation between the data sources used in the preparation of the ACF-199 report to ensure proper reporting of data elements. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS agrees with the findings and will work with the DCAS and the Division of Innovation and Change Management (DICM) teams to mitigate the causes of the findings. These findings are mostly residual issues with the tables in DHS/ESA DCAS system. ? For the eight (8) cases, where DHS/ESA was unable to provide documentation to support the hours reported, customer participation hours were not updated/closed when employment ended so there were no supporting documents in DIMS. Customer did not have participation hours in CATCH however shown in DCAS. ? For the two (2) instances, where the hours reported did not agree with the recalculated hours, this is intentional, as it ?preserves? caped federal hours. DHS is updating the work verification plan to document this. ? For the eleven (11) cases where the hours reported did not agree with the projected hours for unsubsidized employment for the customer. These were DCAS hours that were not updated timely in the employment record. Customer participation hours were not updated/closed when employment ended so there were no supporting documents in DIMS. ? For the one (1) instance, where DHS/ESA was unable to provide documentation to support the hours reported on the ACF-199 report. This was also a DCAS issue because the income evidence was not end dated once the employment evidence was end dated. ? For the one (1) instance where a customer had a child under one making her exempt from the work requirement. However, the hours reported met or exceeded the required work participation hours. Customer had participation hours in ACF when employed. Customer was exempt due to pregnancy for the report month/year however the employment hours were not end dated in the ACF. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-013 Prior Year Finding Number: 2021-016 Compliance Requirement: Special Tests and Provisions ? Income Eligibility and Verification System Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2021 ? 09/30/2022 Government Department/Agency: Department of Human Services (DHS)/ Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 205.56(a)(1)(i), ?The State agency shall review and compare the information obtained from each data exchange against information contained in the case record to determine whether it affects the applicant?s or the recipient?s eligibility or the amount of assistance.? Per 45 CFR Section 205.60 (a), ?The State agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of financial assistance, and the use of any information obtained under Section 205.55, with respect to individual applications denied, recipients whose benefits have been terminated, recipients whose benefits have been modified, and the dollar value of these denials, terminations and modifications. Under this requirement, the agency will keep individual records which contain pertinent facts about each applicant and recipient. The records will include information concerning the date of application and the date and basis of its disposition; facts essential to the determination of initial and continuing eligibility (including the individual's social security number, need for, and provision of financial assistance); and the basis for discontinuing assistance.? For the Pandemic Emergency Assistance Fund (PEAF), per TANF-ACF-IM-2022-01 (Guidance for Use of the Pandemic Emergency Assistance Fund Appropriated in the American Rescue Plan (ARP) Act of 2021 (Pub. L. 117-2); Accompaniment to ACF-IOAS-DCL-22-01) ?We remind grantees that the Income Eligibility Verification System (IEVS) does apply to the PEAF, as it is funded under Title IV-A; however, tribes are not subject to the IEVS requirements.? Condition ? During our test work of 60 cases selected to test the Special Tests and Provisions ? Income Eligibility and Verification Systems (IEVS) for TANF, we noted that DHS was unable to provide sufficient documentation to support all eligibility determinations tested during the fiscal year 2022 audit. Specifically, out of the 60 beneficiary disbursements tested, we noted the following exceptions: ? For three (3) out of 60, DHS was unable to provide evidence of use of IEVS to determine eligibility. ? For one (1) out of 60, DHS did not provide evidence that Social Security monthly disability payment of $758, was considered when determining eligibility and the related eligibility payments. Furthermore, DCAS sent request to the Social Security Administration and received a termination payment status code, however no reduction in benefit amount was made. In addition, during our test work of 60 cases selected to test the Special Tests and Provisions ? Income Eligibility and Verification Systems (IEVS) for PEAF, we noted that DHS was unable to provide sufficient documentation to support all eligibility determinations tested during the fiscal year 2022 audit. Specifically, out of the 60 beneficiary disbursements tested, we noted the following exception: ? For three (3) out of 60, DHS did not provide evidence of use of IEVS to determine eligibility. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? The District is not in full compliance with its policies and with Federal program compliance requirements surrounding records maintenance. Further, ineligible TANF beneficiaries may receive benefits under the TANF grant and the District may make payments on behalf of those beneficiaries. Cause ? Controls are not adequate to ensure that the District adheres to its established policies and procedures requiring it to maintain documentation supporting participant eligibility. Recommendation - We recommend that DHS enforce existing policies and procedures and implement additional policies and procedures for maintaining and monitoring case record documentation to ensure that Income Eligibility and Verification System requirements are complied with. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS agrees with the finding in this report. DHS in collaboration with DHCF DCAS project teams is taking efforts to address the issues identified. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-014 Prior Year Finding Number: N/A Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Low Income Home Energy Assistance ALN: 93.568 Award #: Various Award Year: 10/01/2021 ? 09/30/2022 Government Department/Agency: Department of Energy and Environment (DOEE) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The OMB Compliance Supplement states that ?Grantees may provide assistance to (a) households in which one or more individuals are receiving Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP) benefits, or certain needs-tested veterans? benefits; or (b) households with incomes which do not exceed the greater of 150 percent of the state?s established poverty level, or 60 percent of the state median income. Grantees may establish lower income eligibility criteria, but no household may be excluded solely on the basis of income if the household income is less than 110 percent of the state?s poverty level (42 USC 8624(b)(2)). Grantees must give priority to those households with the highest home energy costs or needs in relation to income and household size (42 USC 8624(b)(5)).? Per 42 U.S. Code Section 8624(b)(2): ?The chief executive officer of each State shall certify that the State agrees to make payments under this subchapter only with respect to: (A) Households in which 1 or more individuals are receiving: (i) Assistance under the State program foundered under part A of the title IV of the Social Security Act; (ii) supplemental security income payments under title XVI of the Social Security Act; (iii) supplemental nutrition assistance program benefits under the Food and Nutrition Act of 2008; or (iv) payments under section 1315, 1521, 1541, or 1542 of title 38, or under section 306 of the Veterans? and Survivors? Pension Improvement Act of 1978; or (B) Households with incomes which do not exceed the greater of: (i) An amount equal to 150 percent of the poverty level for such State; or (ii) An amount equal to 60 percent of the State median income.? Condition ? During our review of 60 eligibility samples, we noted the following exceptions: ? For two (2) samples, the benefit paid to the participant was more than the actual benefit amount allowed per the benefit table. This was due to an error in the program database system, which resulted in the incorrect income being reported by the system. ? DOEE is not performing review of all individual?s application. DOEE?s policy is to perform secondary reviews of a minimum of 25% of all applications each fiscal year, as well as supervisors will conduct detailed reviews of 5 applications per processor per month, however, there is no documentation how these policies and procedures were actually implemented. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DOEE?s compliance with specified requirements using a statistically valid sample. Effect ? Without proper review, inaccurate benefit amount is paid to the beneficiary which resulted in higher payment made. Cause ? It appears that DOEE?s internal controls were not operating effectively over the eligibility household income calculation process which resulted in accurate amount being paid. Recommendation ? We recommend that DOEE strengthen their existing policies and procedures to ensure the review of the initial application household information including household incomes, household sizes, etc. are correctly recorded into the system based on supporting documentation. Further, proper supporting documentation should be put in place to document the department?s control over review of applicant?s benefit application. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DOEE agrees with the conditions and recommendations of this finding. DOEE is committed to operating an efficient and effective LIHEAP program in the District. DOEE notes that out of 60 samples reviewed, the eligibility criteria stated above was met as none of the households reviewed had incomes that exceeded 60 percent of the State median income per 42 U.S Code Section 8624(b)(2). Vendor agreements are in place that require the refund of a benefit amount if the benefit cannot be applied to the account (due to moving, death, conversion to other heating or cooling source, or a payment made in error). DOEE has requested a refund from utilities of the two (2) samples in question. The two (2) samples in question were a result of a database error generated after a benefit payment batching and not the result of inaccurate income input by the processor. It is standard practice for DOEE to perform 1st level reviews of individual applications before, during and after certification. Twenty-five percent of secondary reviews are conducted by staff who did not process the application and are performed after the first review and captured by signature on one form within the database. Supervisory level reviews of 5 applications per processor per month is documented in our Operations Manual. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-015 Prior Year Finding Number: N/A Compliance Requirement: Matching, Level of Effort, Earmarking Program: U.S. Department of Health and Human Services Low Income Home Energy Assistance ALN: 93.568 Award #: Various Award Year: 10/01/2021 ? 09/30/2022 Government Department/Agency: Department of Energy and Environment (DOEE) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per Compliance Supplement on earmarking requirement, a. Planning and Administrative Costs, (1) No more than 10 percent 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)). Energy Need Reduction Services ? 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)). Condition ? During our review of two (2) samples, although DOEE met the earmarking requirement, there was no evidence of review was performed. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DOEE?s compliance with specified requirements for earmarking calculations. Effect ? Without proper internal controls and policies and procedures in place to monitor and review, DOEE was not in compliance with the earmarking requirements. Cause ? DOEE does not have adequate controls in place to ensure that earmarking requirements are being properly reviewed and the required documentation is being maintained to evidence compliance with the requirements. Recommendation ? We recommend that DOEE strengthen their existing policies and procedures to ensure the review of the earmarking calculations are performed. Further, proper supporting documentation should be put in place to document the department?s control over review of such calculations. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DOEE agrees with the conditions and recommendations of this finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-016 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Foster Care ? Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2021 ? 09/30/2022 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Based on CFSA?s Human Resources Administration Issuance: HR-06-1 dated May 12, 2006, staff must seek and receive advance written approval prior to working overtime. It also indicate that in emergency situations requiring an immediate response, the employee shall make every reasonable attempt to obtain advance approval by an appropriate manager or supervisor. Condition ? During our review of the payroll process regarding the review and approval of time and attendance, we noted that the Agency was unable to provide documentation supporting the preapproval of overtime for three (3) employees. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of CFSA?s compliance with specified requirements using a statistically valid sample. Effect ? Without proper internal controls and policies and procedures in place to ensure maintenance of records increase the risk of disagreements between employer and employee regarding the employee?s correct payment. Cause ? CFSA did not have proper internal controls and policies and procedures in place to ensure that authorization forms evidencing the preapproval of overtime are maintained. Recommendation - We recommend that CFSA strengthen its policies, procedures and controls to ensure that pre-authorization of overtime is maintained. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? CFSA concurs with the finding as stated. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-017 Prior Year Finding Number: 2021-018 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Foster Care ? Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2021 ? 09/30/2022 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. 45 CFR Section 92.20(b)(2), ?Accounting records, "Grantees and sub grantees must maintain records which adequately identify the source and application of funds provided for financially assisted activities. These records must contain information pertaining to grant or subgrant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays or expenditures, and income.? 45 CFR Section 1356.30(a) states, ?The Title IV-E agency must provide documentation that criminal records checks have been conducted with respect to prospective foster and adoptive parents.? 42 U.S. Code Section 671(a)(20)(A), ?In order for a State to be eligible for payments under this part, it shall have a plan approved by the Secretary which provides procedures for criminal records checks of national crime information databases for any prospective foster or adoptive parent before the foster or adoptive parent may be finally approved for placement of a child regardless of whether foster care maintenance payments or adoption assistance payments are to be made on behalf of the child under the State plan.? Furthermore, per 45 CFR Section 1356.21(a), ?Statutory and regulatory requirements of the Federal foster care program, To implement the foster care maintenance payments program provisions of the title IV-E plan and to be eligible to receive Federal financial participation (FFP) for foster care maintenance payments under this part, a Title IV-E agency must meet the requirements of this section, 45 CFR 1356.22, 45 CFR 1356.30, and Parts 472, 475(1), 475(4), 475(5), 475(6).? Condition ? During our audit we noted that in fiscal year 2022, the Foster Care program had total disbursements of $2,851,787 for 3,754 maintenance payments. We selected a sample of 60 participants representing disbursed federal funds totaling $47,395, we noted the following deficiencies: ? For one (1) of 60 samples, the redetermination form provided indicated that claim billed and included in the population and samples selected included amounts with eligibility status of ?Eligible Not Reimbursable?. ? For two (2) of 60 samples, CFSA was unable to provide documentation supporting that a child over the age of 18 was enrolled as a full-time student expected to complete secondary schooling or equivalent vocational or technical training. ? For seven (7) of 60 samples, CFSA did not always provide complete evidence of background checks such as criminal record checks and fingerprint-based checks from the national crime information databases. These deficiencies represent 15% of the total disbursements tested. Questioned Costs ? Known amount is $7,249. Context ? This is a condition identified per review of CFSA?s compliance with specified requirements using a statistically valid sample. Effect ? CFSA was not in compliance with the eligibility requirements of the Foster Care program. Cause ? CFSA does not have adequate controls in place to ensure that eligibility files are being properly reviewed and the required documentation is being maintained to evidence compliance with eligibility requirements. Recommendation - We recommend CFSA reevaluate and strengthen its existing policies and procedures over the review and maintenance of appropriate documentation to ensure compliance with eligibility requirements in accordance with the program. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? CFSA concurs with the findings as stated. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-018 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Foster Care ? Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2021 ? 09/30/2022 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Condition ? During our review and reconciliation of program expenditures charged to the grant, we noted that certain expenditures were inaccurately reported in fiscal year 2022. Per review of the general ledger, it was discovered that $32,325 incurred from February 2018 through September 2020 were incorrectly reported in the SEFA. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of CFSA?s compliance with specified requirements. Effect ? Without proper internal controls and policies and procedures in place to ensure that costs were properly reported in the SF-425, the Foster Care program expenditures were overstated. Lack of proper internal controls over the review of the financial report may lead to incorrect reporting of financial data. Cause ? CFSA overstated expenditures reported as a result of the inclusion of transactions that were incurred outside of the grant award reporting period. Thus, management did not have proper internal controls and policies and procedures in place to ensure that the SF-425 was properly reviewed prior to approval. Recommendation - We recommend that CFSA strengthen its policies, procedures and controls to ensure the amounts reported in the SF-425 annual report are properly review prior to approval and submission to the federal agency. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? CFSA concurs with the finding as stated. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-019 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Medicaid Cluster ALN 93.775, 93.777, 93.778 Award #: Various Award Year: 10/01/2021 ? 09/30/2022 Government Department/Agency: Department of Human Services (DHS) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? During our review of 15 payroll transactions totaling $84,519, we noted that for 1 of the 15 payroll transactions, the hourly and annual employee pay amount was not supported by the Personnel Action Form or the People Soft payroll system. Department personnel could not explain the difference in pay between the amount noted on the Personnel Action form and the PeopleSoft Human Resources/Payroll System. In addition, management did not perform a reconciliation between the payroll amount in the PeopleSoft payroll system and the actual amount being paid to the employee. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits, for the Medicaid Program in fiscal year 2022 were $48,126,394. Effect ? DHS was unable to provide support for the payroll expenditure charged to the Medicaid Program for fiscal year 2022. Cause ? DHS did not have policies and procedures in place to review and reconcile payroll expenditures posted in the People Soft system with the pay amount identified in the Personnel Action Form. In addition, the payroll expenses charged to the Medicaid program were not accurately stated for fiscal year 2022. Recommendation - We recommend that DHS implement policies and procedures to support payroll expenses charged to the Medicaid program. In addition, we recommend that DHS perform reconciliations of the employee?s pay noted on their Personnel Action Form to the payroll amount posted in the PeopleSoft payroll system. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS agrees with the finding that for one payroll transaction, the hourly and annual employee pay amount was not supported by the Personnel Action Form of the PeopleSoft payroll system. DHS agrees with the finding that DHS did not perform a reconciliation between the payroll amount in PeopleSoft payroll system and the actual amount being paid to the employee. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-020 Prior Year Finding Number: 2021-020 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Medicaid Cluster ALN: 93.775, 93.777, 93.778 Award #: Various Award Year: 10/01/2021 ? 09/30/2022 Government Department/Agency: Department of Health Care Finance (DHCF)/Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Medicaid State Plan: Citation 42 CFR Section 431.17AT-79-29. Section 4.7 (Maintenance of Records) states, ?The Medicaid agency maintains or supervises the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of medical assistance, and administrative costs and statistical, fiscal and other records necessary for reporting and accountability, and retains these records in accordance with Federal requirements. All requirements of 42 CFR 431.17 are met.? Economic Security Administration (ESA) Policy Manual, Section 1.3, ?All eligibility criteria and clarifying information are documented on the Record of Case Action, form 1052. The case record should speak for itself. An outside reviewer shall be able to follow the chronology of events in the case be reading the narrative. All application documents including verification and correspondence must be date-stamped. For working recipients, the record should include the dates pay is received and how often the recipient is paid. When the recipient?s statement is the best available source, the record should include the application/recipient and agency efforts to verify the information. All address changes should be documented.? Condition ? During testing over beneficiary eligibility for the Medicaid benefits, we noted that the District?s Economic Security Administration (ESA) was unable to provide sufficient documentation to support the beneficiary?s eligibility determination during the fiscal year 2022 audit. Specifically, out of a sample of 132 participant files tested, we noted the following exceptions: ? For fourteen (14) participant files where ESA did not process the application within the required timeframe. ? For one (1) participant file, ESA did not verify the applicant?s Social Security Number. ? For two (2) participant files, ESA did not verify the applicant?s citizenship. The Department of Health Care Finance, as the State Medicaid Agency, lacks a quality control oversight system to ensure that eligibility documentation and verification is maintained to support the eligibility decision. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of ESA?s compliance with specified requirements using a statistically valid sample. Effect ? Lack of supporting documentation for program services and noncompliance with program requirements could result in disallowances of costs and participants could be receiving benefits that they are not entitled to receive under the program. Cause ? DHCF and ESA did not appear to adhere to internal control procedures to ensure that applications are properly processed in accordance with Federal Regulations. Recommendation - We recommend that ESA strictly implement internal control procedures to ensure that documentation is maintained to support the beneficiary determinations. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHCF and DHS concur with these findings. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-021 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions ? Utilization Control and Program Integrity Program: U.S. Department of Health and Human Services Medicaid Cluster ALN 93.775, 93.777, 93.778 Award #: Various Award Year: 10/01/2021 ? 09/30/2022 Government Department/Agency: Department of Health Care Finance (DHCF) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Condition ? During our testing of Utilization Control and Program Integrity for Quality Improvement Organization (QIO) invoices, for fourteen (14) out of forty (40) samples tested, we noted discrepancies between the price per review in the contract and the price per review in the actual vendor invoices, and such differences were not detected during the review of the invoice. This is an internal control deficiency. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of QIO contracts and vendor invoices using a statistically valid sample. Effect ? The review of these QIO invoices contracted price failed to properly detect the price variances. Control Deficiency noted. Cause ? DHCF did not appear to adhere to internal control procedures to ensure that contract prices and vendor invoices agree. Recommendation - We recommend that DHCF implement internal control procedures to ensure that QIO invoices are properly reviewed and the amount in the contract agrees to the amount in the invoice. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHCF concurs with these findings. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-022 Prior Year Finding Number: 2021-021 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services HIV Emergency Relief Project Grants ALN: 93.914 Award #: 2 H89HA00012-32-00, 2 H89HA00012-31-00 Award Year: 03/01/2022 ? 02/28/2025, 03/01/2021 ? 02/28/2022 Government Department/Agency: Department of Health (DC Health) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? We noted that the District Department of Health (DC Health) continued to allocate payroll expenditures to the HIV Emergency Relief Project Grants (HIVER) program during fiscal year 2022 based on budgeted percentages. These percentages were entered into the PeopleSoft Human Resources/Payroll System (PeopleSoft) at the beginning of the fiscal year and were based on management?s estimate of the respective employee?s level of effort for each program. PeopleSoft calculated the payroll costs every payroll cycle for each employee and program based on the predetermined percentage, and reported it through the Labor Distribution Report (485 Report). However, management did not perform a periodic comparison of actual costs to the budgeted costs and make any necessary adjustment as required by 2 CFR Section 200.430. Specifically, 41 out of 60 sampled payroll items tested for the HIVER grant were recorded based on estimated hours and not actual hours. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DC Health?s compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits, for the HIVER program in fiscal year 2022 were $3,470,982. Effect ? DC Health was unable to demonstrate that the payroll expenditures charged to the HIVER grant accurately reflected the time incurred on the program and were properly supported in accordance with 2 CFR Part 200.430 time and effort reporting requirements. Cause ? DC Health did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the HIVER program to the actual expenditures incurred. Per corrective action plans and status updates submitted by DC Health to BDO in fiscal year 2022, significant milestones have been achieved however due to several change management tasks, the corrective action plan is still progressing into fiscal year 2023 and is expected to fully implement by September 30, 2023. Recommendation ? We recommend that DC Health fully implement its current corrective action plan to deploy policies and procedures to periodically compare employees? estimated hours per the 485 Report to the actual hours incurred, and make any necessary adjustments as required by 2 CFR 200.430. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The District Department of Health (DC Health) concurs with the finding, causes and recommendations cited in the fiscal year 2022 single audit for the HIV Emergency Relief Project Grants (HIVER) program. The current corrective action plan (CAP), originating from the prior year's finding had been actively implemented in fiscal year 2022 and reached significant milestones. DC Health asserts that while a process was implemented to obtain a regular schedule of payroll and budget- to-actual data for personnel, and supervisors were provided a tool and process for delivering ?time and effort certifications?, there were still some errors and omissions. DC Health concurs with the auditor on the need to continue implementation of the current CAP, but DC Health will modify processes and tools to ensure that there is the required periodic comparison of actual costs to the budgeted costs of personnel per the requirements of 2 CFR 200.430. Contributing factors were delays in distributing and receiving the required certifications, provision of technical assistance and training, and managing manual errors. Additionally, there were missing certifications due to a large turnover of staff, including many supervisors assigned to complete time and effort certification forms. In fiscal year 2022, reporting templates and reporting repositories were being revised and further developed and continued in fiscal year 2023. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-023 Prior Year Finding Number: 2021-023 Compliance Requirement: Reporting Program: U.S. Department of Homeland Security Federal Emergency Management Agency (FEMA) Public Assistance - Presidentially Declared Disaster ALN: 97.036 Award #: FEMA-4502-DR-DC and FEMA-3553-EM-DC Award Year: 10/01/2021 ? 09/30/2022 Government Department/Agency: Homeland Security and Emergency Management Agency (HSEMA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System. In accordance with the requirements of 2 CFR Section 1402.300, the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR part 170 Reporting Subaward and Executive Compensation Information. Condition ? Our examination of the program?s reporting requirements identified that Homeland Security and Emergency Management Agency failed to collect and report information on subawards or amendments of $30,000 or more in federal funds in the FFATA Subaward Reporting System to fulfil the FFATA requirements for the entire year under audit. Questioned Costs ? None. Context ? This is a condition identified per review of HSEMA?s compliance with reporting requirements. No sampling was performed as no FFATA reporting was completed by HSEMA during the year under audit. Effect ? HSEMA is not in compliance with reporting requirements as it failed to provide evidence of identifying and reporting FFATA reporting requirements. Cause ? HSEMA did not have proper internal controls and policies and procedures in place to fulfill the FFATA reporting requirement. Recommendation ? We recommend that HSEMA should implement policies, procedures and controls that will ensure compliance with all the required laws, guidelines and requirement under the award. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? HSEMA concurs with the substance of the finding. The FFATA report for this grant is currently incomplete. HSEMA has procedures in place to file FFATA reports and does so for the other grants it manages. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2022-024 Prior Year Finding Number: N/A Compliance Requirement: Data Collection Form and Single Audit Reporting Package Programs: ALN: 10.551, 10.561 Supplemental Nutrition Assistance Program Cluster ALN: 10.553, 10.555, 10.559, 10.582 Child Nutrition Cluster ALN: 10.558 Child and Adult Care Food Program ALN: 14.218 Community Development Block Grants/Entitlement Grants Cluster ALN: 21.023 COVID-19 ? Emergency Rental Assistance Program ALN: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Relief Funds ALN: 84.027, 84.173 Special Education Cluster ALN: 84.126 Rehabilitation Services - Vocational Rehabilitation Grants to States ALN: 84.425 COVID-19 ? Education Stabilization Fund ALN: 93.268 Immunization Cooperative Agreements ALN: 93.498 COVID-19 ? Provider Relief Fund ALN: 93.558 Temporary Assistance for Needy Families ALN: 93.568 Low Income Home Energy Assistance ALN: 93.569 Community Services Block Grant ALN: 93.658 Foster Care ? Title IV-E ALN: 93.775, 93.777, 93.778 Medicaid Cluster ALN: 93.914 HIV Emergency Relief Project Grants ALN: 97.036 Public Assistance - Presidentially Declared Disaster Criteria - The Uniform Guidance in 2 CFR Section 200.512, Report Submission, states that the audit must be completed and the data collection form and reporting package must be submitted to the Federal Audit Clearinghouse (FAC) within the earlier of 30 calendar days after receipt of the auditor?s report or nine (9) months after the end of the audit period, unless a longer period is agreed to in advance by the cognizant or oversight agency for audit. Condition ? The District did not comply with the required submission date of the data collection form and reporting package to the FAC for the fiscal year ended September 30, 2022. Questioned Costs ? None. Context ? This is a condition identified per review of the District?s compliance with the specified requirements. Effect ? The District could be exposed to a reduction or elimination of funds by the Federal awarding agencies. Cause ? The District did not comply with the controls in place to ensure that the reporting package was submitted to the FAC within the required timeframe. Recommendation ? We recommend that the District closely monitor and comply to the established controls to ensure the reporting package is submitted to the FAC annually within the required timeframe. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The District concurs with the auditor?s findings and recommendations. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-001 Prior Year Finding Number: 2020-002 Compliance Requirement: Special Tests and Provisions ? ADP System for SNAP Program: U.S. Department of Agriculture Supplemental Nutrition Assistance Program Cluster (SNAP) ALN: 10.551, 10.561 Award #: Various Award Year: 10/01/2020 ? 09/30/2021 Government Department/Agency: Department of Human Services (DHS)/ Department of Health Care Finance (DHCF) DC Access System (DCAS) Program Management Administration Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 272.10(a), ?All State agencies are required to sufficiently automate their SNAP operations and computerize their systems for obtaining, maintaining, utilizing, and transmitting information concerning SNAP.? Per 2 CFR Section 272.10(b), ?In order to meet the requirements of the Act and ensure the efficient and effective administration of the program, a SNAP system, at a minimum, shall be automated in each of the following program areas (1) Certification and (2) Issuance Reconciliation and Reporting. Under Certification ? States agencies must determine eligibility and calculate benefits or validate the eligibility worker?s calculations by processing and storing all casefile information necessary for the eligibility determination and benefit computation (including but not limited to all household members? names, addresses, dates of birth, social security numbers, individual household members? earned and unearned income by source, deductions, resources and household size). Also, State agencies must redetermine or revalidate eligibility and benefits based on notices of change in households? circumstances.? Condition ? The District is self-reporting findings it noted from its ongoing efforts to resolve issues with the ADP system for SNAP. The issues identified and the estimated impact follows: 1. The SNAP net and gross income tests are applied to households who are categorically eligible through receipt or authorization to receive non-cash benefits under the District?s Temporary Assistance for Needy Families (TANF) program operated to meet 7 CFR 273.2(j)(2)(i)(C). As a result, SNAP applications are being improperly denied for failing the net or gross income test. The cost of this underpayment is currently unknown. 2. The SNAP gross income test is applied to applicants that contain an elderly or disabled member. As a result, SNAP applications are being improperly denied for failing the gross income test. The cost of this underpayment is currently unknown. 3. SNAP benefits are issued for the initial month of the certification period if the prorated amount is less than $10. As a result, SNAP benefits are being improperly overissued to some households. The cost of this overpayment is currently unknown. 4. The Federal minimum SNAP benefit is not issued to eligible one or two person households unless those households are categorically eligible. As a result, one or two person households that are not categorically eligible will not receive benefits they are entitled to. The cost of this underpayment is currently unknown. 5. Certain allowable medical expenses are not configured in DCAS to allow a medical expense deduction. As a result, certain households with elderly or disabled members are not receiving a medical expense deduction. The cost of this underpayment is currently unknown. 6. DCAS is excluding retirement benefits from ?Civil Service Retirement and Disability? as unearned income when determining eligibility and benefits levels. As a result, some households may be determined eligible even if these retirement benefits would make them ineligible and some households will receive overpayments for failing to include these retirement benefits in the SNAP benefit calculation. The cost of this overpayment is $126,574. 7. Certain SNAP applicants/household members verified as students but not meeting a student exemption are included as household members. As a result, ineligible students are included in SNAP households resulting in overpayments. The cost of this overpayment is currently unknown. 8. ESA is not providing the mandatory homeless shelter deduction for SNAP households experiencing homelessness with allowable shelter costs that do not opt to claim an excess shelter deduction. The cost of this underpayment is currently unknown. These amounts represent 0.03% of the total amounts paid by DHS in claims for beneficiary payments. DHS paid a total of $457,027,534 in beneficiary payments to all SNAP beneficiaries in fiscal year 2021. Questioned Costs ? Known amount is $126,574. Context ? This is a condition identified per review of DHS? compliance with specified requirements resulting from a system implementation. Effect ? Without an effectively designed and operated system in place, ineligible beneficiaries may receive benefits under the SNAP grant and DHS may make payments on behalf of those beneficiaries resulting in noncompliance with the eligibility requirements. Inaccurate beneficiary allotment payments could result in participants receiving benefits that they are not entitled to receive under the program. Cause ? DHS did not effectively design and operate the ADP system for SNAP which resulted to inaccurate benefit payments. Recommendation ? We recommend that DHS continue to evaluate and improve the new ADP system for SNAP to ensure that it addresses all the administration requirements of the SNAP program. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The DHS and DHCF DCAS team agree with the findings noted in this report. DHS self-reported these findings as part of the Agencies ongoing effort to maintain integrity with all eligibility determinations. The root cause for each of the eight (8) issues with the ADP system for SNAP varied. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-002 Prior Year Finding Number: 2020-003 Compliance Requirement: Special Tests and Provisions ? EBT Card Security Program: U.S. Department of Agriculture Supplemental Nutrition Assistance Program Cluster (SNAP) ALN: 10.551, 10.561 Award #: Various Award Year: 10/01/2020 ? 09/30/2021 Government Department/Agency: Department of Human Services (DHS)/ Office of the Chief Financial Officer/Office of Finance and Treasury (OCFO/OFT) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 7 CFR Section 274.8(b)(3), As an addition to or component of the Security Program required of Automated Data Processing (ADP) systems, the State agency shall ensure that the following electronic benefits transfer (EBT) security requirements are established: (i) Storage and control measures to control blank unissued EBT cards and PINs, and unused or spare POS devices; (ii) Measures to ensure communication access control. Communication controls shall include the transmission of transaction data and issuance information from POS terminals to work-stations and terminals at the data processing center; (iii) Message validation; (iv) Administrative and operational procedures; (v) A separate EBT security component shall be incorporated into the State agency Security Program for ADP systems. The periodic risk analyses required by the Security Program shall address the following items specific to an EBT system ? (B) Completeness and timeliness of the reconciliation system; and (vi) The State agency shall incorporate the contingency plan approved by FNS into the Security Program. Condition ? OCFO/OFT for DHS are 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. OCFO/OFT have contracted with Fidelity National Information Service (FIS) for the issuance and security of the EBT cards; however, it is OCFO/OFT?s ultimate responsibility to ensure the contractor has controls in place to maintain adequate security over, and documentation/records of EBT cards. During our tests of the design and implementation of internal controls, we noted the following issues: ? For one (1) out of the 60 samples, BDO noted that the number of cards issued and the number of cards returned to stock were incorrect on the EBT Balance Sheet, and the manager signed off on the incorrect amounts. ? For one (1) out of the 60 samples, one of the packages was not complete, as page 1 of the EBT Card Issuance Log for Workstation 2 was missing from the package. We were therefore unable to complete the testing for Workstation 2 for that sample. ? For one (1) out of the 60 samples, the Supervisor incorrectly signed as Manager/Supervisor on both Workstation 1 and Workstation 2 EBT Balance Sheets at the same time she acted as staff during lunch hour at Workstation 2, when the only employee (working at Workstation 1) needed to go to lunch. The Workstation 2 EBT Balance Sheet should have been reviewed and signed by the Manager and not by the acting staff. ? For eight (8) out of the 60 samples, although both EBT Balance Sheets reconciled with the EBT Card Issuance Logs included in the package, we noted the following deficiencies: o For one (1) of the samples, for at least one (1) customer the form of identification noted was a referral, but the form was not complete, as the customer did not sign ?Part A. issue photo ID?. o For three (3) of the samples, for at least one (1) customer, the staff portion of the Photo-ID Referral Authorization is missing information, as the staff did not identify the form of identification used, although a referral form was attached. o For two (2) of the samples, for at least one (1) customer, the Photo-ID Referral Authorization was missing a supervisor signature on the referral page. o For one (1) of the sample, for at least one (1) customer the Photo-ID Program Referral Form was missing a supervisor signature on the referral page. In addition, for at least one (1) customer the referral form was incomplete, as the customer did not sign or date on Part A of the form. o For one (1) of the samples, for at least one customer the name on the intake form was missing from the EBT Card Issuance Log. Questioned Costs ? None. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? Without adequate internal controls to ensure compliance with EBT Card Security requirements, there is an increased risk that the inventory of EBT cards will not be properly maintained and accounted for. Cause ? OCFO/OFT for DHS does not have adequate policies and procedures in place to ensure adequate safeguarding, documentation and monitoring of EBT cards. Recommendation - We recommend that OCFO/OFT for DHS strengthen formal policies and procedures to maintain adequate security over, and documentation/records for EBT Cards. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The OCFO/OFT for DHS concurs with this finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-003 Prior Year Finding Number: 2020-004 Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of the Treasury COVID-19 - Coronavirus Relief Fund ALN: 21.019 Award #: N/A Award Year: 03/01/2020 ? 12/31/2021 Government Department/Agency: Office of the Mayor Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331(a) Requirements for Pass-Through Entities requires that pass-through entities must: Ensure that every sub-award is clearly identified to the subrecipient as a sub-award and includes certain information outlined in the section noted above, pre-award assessment, indirect cost rated for the award, assistance listing number, finding and award follow-up and other pertinent actions. In accordance with the requirements of 2 CFR Section 1402.300, the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR part 170 Reporting Subaward and Executive Compensation Information. Condition ? Our examination of the program?s subrecipient monitoring requirements includes submission and review of monthly financial and performance reports. We examined twelve (12) subrecipients and noted that there is no evidence that a review of the monthly financial and performance reports submitted was made by the Office of the Mayor (OM) for eight (8) subrecipients. We also noted that two (2) subrecipients failed to submit their monthly financial and performance reports and no documentation was available for the debarred/prohibited entity for these two subrecipients. Questioned Costs ? None. Context ? This is a condition identified per review of OM?s compliance with specified monitoring requirements on the program?s subrecipients using a statistically valid sample. Effect ? The District is not in compliance with the subrecipient monitoring requirements as it failed to document its review of the reports and was not able to obtain reports on some of the subrecipient. Cause ? Management did not have proper internal controls and policies and procedures in place to ensure that a review is performed on the financial and program reports. Management did not have working procedures in place to follow up on financial and program reports not submitted. Further, management did not maintain evidence that the subrecipient is not suspended or debarred. Recommendation ? We recommend that OM implement policies, procedures and controls that will ensure that financial and program reports are reviewed, and evidence of review are documented. Further, OM should implement policies to follow up on financial and program reports not submitted in order to ensure compliance with all the required laws, guidelines and requirement under the award. OM should implement procedure to maintain evidence that the subrecipient is not suspended or debarred. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The Office of the Mayor agrees with the conditions and recommendations of this finding as it relates to the inability to provide the specified compliance documents referenced in this finding under the existing subrecipient protocol within the Agency. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-004 Prior Year Finding Number: N/A Compliance Requirement: Eligibility Program: U.S. Department of the Treasury/ COVID-19 ? Emergency Rental Assistance (ERA) Program ALN: 21.023 Award #: N/A Award Year: 12/27/2020 ? 09/30/2025 Government Department/Agency: Office of the Mayor/ Department of Human Services Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Treasury Department ERA FAQ 8-25-21, question 1, states that grantees must require all applications for assistance to include an attestation from the applicant that all information included is correct and complete. The Treasury Department ERA FAQ 8-25-21, question 4, states that the statutes establishing ERA1 and ERA2 limit eligibility to households based on certain income criteria. For purposes of ERA1, the area median income for a household is the same as the income limits for families published by the Department of Housing and Urban Development (HUD) in accordance with 42 U.S.C. 1437a(b)(2), available under the heading for ?Access Individual Income Limits Areas? at https://www.huduser.gov/portal/datasets/il.html. If a grantee in ERA1 uses a household?s monthly income to determine eligibility, the grantee should review the monthly income information provided at the time of application and extrapolate over a 12-month period to determine whether household income exceeds 80 percent of area median income. For example, if the applicant provides income information for two months, the grantee should multiply it by six to determine the annual amount. If a household qualifies based on monthly income, the grantee must redetermine the household income eligibility every three months for the duration of assistance. Grantees in ERA1 and ERA2 must have a reasonable basis under the circumstances for determining income. A grantee may support its determination with both a written attestation from the applicant as to household income and also documentation available to the applicant, such as paystubs, W-2s or other wage statements, tax filings, bank statements demonstrating regular income, or an attestation from an employer. In appropriate cases, grantees may rely on an attestation from a caseworker or other professional with knowledge of a household?s circumstances to certify that an applicant?s household income qualifies for assistance. Under categorical eligibility, if an applicant?s household income has been verified to be at or below 80 percent of the area median income (for ERA1) or if an applicant?s household has been verified as a low-income family as defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)) (for ERA2) in connection with another local, state, or federal government assistance program, grantees are permitted to rely on a determination letter from the government agency that verified the applicant?s household income or status as a low-income family, provided that the determination for such program was made on or after January 1, 2020. The Treasury Department ERA FAQ 8-25-21, question 5, states grantees must obtain, if available, a current lease, signed by the applicant and the landlord or sublessor, that identifies the unit where the applicant resides and establishes the rental payment amount. If a household does not have a signed lease, documentation of residence may include evidence of paying utilities for the residential unit, an attestation by a landlord who can be identified as the verified owner or management agent of the unit, or other reasonable documentation as determined by the grantee. In the absence of a signed lease, evidence of the amount of a rental payment may include bank statements, check stubs, or other documentation that reasonably establishes a pattern of paying rent, a written attestation by a landlord who can be verified as the legitimate owner or management agent of the unit, or other reasonable documentation as defined by the grantee in its policies and procedures. Condition ? During testing over rental and utility beneficiary eligibility for the Emergency Rental Assistance Program, we noted that the District Department of Human Services, Family Services Agency (FSA) (?the Agency?) was unable to provide sufficient documentation to support the beneficiary?s eligibility determination during the fiscal year 2021 audit. Specifically, out of a sample of 60 transactions tested, we noted the following exceptions: ? For six (6) participants, the Agency relied on a categorical eligibility determination from another low-income program run by the Agency. However, the determination for such program was not made on or after January 1, 2020, as stated in the FAQ. Because management did not adhere to the ERA program requirements, the amounts provided to these participants represent known questioned costs totaling $6,964. ? For one (1) participant, the income eligibility requirement was not met, resulting in an improper rental assistance payment totaling $15,900. ? For one (1) participant, the documentation of income determination was not properly supported by paystubs, W-2s or other wage statements, tax filings, or bank statements demonstrating regular income. Therefore, the participant should not have been deemed eligible, resulting in an improper rental assistance payment totaling $3,872. In addition, the Agency did not obtain a signed attestation from the participant indicating that the information provided was correct and complete. This participant was a recipient of a low-income program run by the Agency. In lieu of an attestation form, BDO noted the agency maintained a participant rent calculation that was signed by the participant. ? For ten (10) participants, the Agency did not follow their documented policies and procedures such that the rental calculation worksheets were not signed by the participants. ? For three (3) participants, we examined the rental calculation worksheets to determine the accuracy of the amount of ERA funds provided to those participants. The Agency was unable to provide a rental calculation worksheet for one (1) participant. For two (2) participants, the rental calculation worksheet did not align to the amount of ERA funds paid to the participants. The participants received $828 more than the amounts approved on the rent calculation worksheets, representing known questioned costs. The DC Department of Human Services, Family Services Agency, lacks a quality control oversight system to ensure that eligibility documentation is maintained to support eligibility decisions. Questioned Costs ? $27,564. Context ? This is a condition identified per review of the Agency?s compliance with specified requirements using a statistically valid sample. Effect ? Lack of supporting documentation for program services and noncompliance with program requirements could result in disallowances of costs and participants could be receiving benefits that they are not entitled to receive under the program. Cause ? The Agency did not appear to adhere to internal control procedures to ensure that applications are properly completed and retained. Recommendation ? We recommend that the Agency strictly implement internal control procedures to ensure that documentation is maintained to support the beneficiary determinations. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The Department of Human Services (DHS) agrees with the finding that six (6) participants deemed categorically eligible for ERA assistance based on participation in FRSP had eligibility determinations made prior to January 1, 2020. DHS has reviewed these participants? situations. Based on notes made by FRSP Case Managers within the Homeless Management Information System (HMIS), it is evident that there were no major changes to household income while receiving ERA rental assistance and that without the continued assistance the households would be at imminent risk of homelessness. Additionally, four of the six participants enrolled in Temporary Assistance for Needy Families (TANF) and/or Supplemental Nutrition Assistance Program (SNAP) since receiving rental assistance. This leads DHS to conclude that the participants were well within the 80% AMI and eligible for ERA assistance. DHS agrees with the finding that for one (1) participant, the income eligibility requirement was not met, resulting in an improper rental assistance payment totaling $15,900. Upon secondary review, it appears that case managers mistakenly attributed the wrong income amount to the applicant which put them above the 80% Area Median Income (AMI) threshold. Since learning of the incorrect payment, DHS reached out to the landlord who received the funds to formally request their return to the District. The landlord has responded that funds will be returned, and this will be tracked to ensure the return is recorded against ERA within the District?s financial system (SOAR). DHS agrees with the finding that one (1) participant did not have properly documented income. Income documentation provided was not sufficient to identify that it was for the specific participant receiving ERA rental assistance. This participant was enrolled in the Family Rehousing and Stabilization Program (FRSP), also known as Rapid Re-housing (RRH). FRSP is a key program within the District?s continuum of care to support families who are experiencing homelessness or are at imminent risk of experiencing homelessness. DHS has reviewed this participant?s situation and confirmed that the participant entered FRSP from an emergency shelter for families experiencing homelessness and was enrolled in Supplemental Nutrition Assistance Program (SNAP) within three months of receiving rental assistance. This leads DHS to conclude that the participant was well within the 80% AMI and was eligible for ERA assistance. DHS agrees with the finding that ten (10) FRSP rent calculation worksheets were not signed by participants, that two (2) rent calculation worksheets did not align to the amount of the subsidy that was paid out of ERA, and that one (1) rental calculation worksheet was not on file. In the cases where more subsidy was paid on behalf of households than was documented in the FRSP rent calculation worksheet, ERA regulations permitted payment up to full rent and therefore the amounts paid out were eligible under ERA. These gaps in documentation are due to rapidly expanding caseloads during the pandemic and new safety protocols that required certain changes to case management protocols. DHS believes that sufficient documentation was provided to show that all FRSP households paid out of ERA funds were below 80% AMI, had a lease on file, and would have been at imminent risk of homelessness without assistance. To address the gaps in income and subsidy calculation documentation, DHS is conducting monitoring of the FRSP enrollment and documentation processes. DHS is also enhancing contractual language and requirements for the FRSP management contract to ensure sufficient oversight and accountability. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-005 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of the Treasury COVID-19 ? Emergency Rental Assistance (ERA) Program ALN: 21.023 Award #: N/A Award Year: 12/27/2020 ? 09/30/2025 Government Department/Agency: Office of the Mayor/ Department of Human Services Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.328 Financial Reporting: ?Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future, OMB-approved, governmentwide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting. The Federal awarding agency must use OMB-approved common information collections, as applicable, when providing financial and performance reporting information.? The U.S. Department of the Treasury Reporting Guidance for the COVID-19 Emergency Rental Assistance (ERA) Program outlines the Special Reports required under this program, and the key data elements, and the submission requirements. The Reporting Guidance is located on the Treasury?s website for the ERA program. Monthly Special Reports were required to be submitted on a monthly basis, beginning in April 2021 for ERA1 and June 2021 for ERA2, generally by the 15th of the following month unless otherwise specified within the Reporting Guidance. As outlined in the Reporting Guidance provided by Treasury, the key data elements for the monthly reports included (1) the total number of participant households in the reporting period and (2) the total amount of ERA funds expended in the reporting period. The program also requires ERA recipients to certify the reports submitted. For ERA1, Treasury required recipients to submit an interim report for the period from the Award Date through March 31, 2021, and a partial report for the period from April 1, 2021 ? June 30, 2021. For ERA2, Treasury required recipients to submit a partial report for the period from April 1, 2021 ? June 30, 2021. Condition ? The U.S. Department of Treasury (Treasury) provided Reporting Guidance for the Emergency Rental Assistance Program on their website in order to assist recipients with understanding and reporting the required information to Treasury. For the reports tested, BDO noted the following: ? For one of four monthly reports tested (the ERA1 May 2021 Monthly Report), BDO was unable to validate the amounts reported for (1) the total number of participant households in the reporting period and (2) the total amount of ERA funds expended in the reporting period as management did not provide supporting documentation for the origin of the amounts ? For one of four monthly reports tested (the ERA1 May 2021 Monthly Report), there was no documented evidence that the report was certified by management. ? For one of four monthly reports tested (the ERA1 May 2021 Monthly Report), we were not able to verify the submission date of the report. ? For one of four monthly reports tested (the ERA2 July 2021 Monthly Report), management did not submit the report to Treasury. ? For two of two special reports selected for testing (the ERA1 interim report and the ERA2 partial report), management was unable to provide the reports as there is no evidence of submission of the reports to Treasury and no evidence the reports were certified by management. Questioned Costs ? None. Context ? This is a condition identified per review of the Office of the Mayor?s/Department of Human Services? compliance with specified requirements using a statistically valid sample. Effect ? Without proper internal controls and policies and procedures in place, the required financial and special reports are either not submitted or not submitted with accurate information. Cause ? This program required rapid implementation with incomplete and changing guidance at the onset of the program in order to provide eligible households with financial assistance and housing stability services in response to the COVID-19 pandemic. The focus of the management team was getting the financial assistance to eligible families as quickly as possible; and the completion of the reporting requirements was not prioritized. Management did not establish effective controls related to the accumulation and maintenance of data used for the financial and special reports, and did not have adequate reviews and approvals in place to ensure the reports were completed accurately and completely. Recommendation ? We recommend that the Office of the Mayor/Department of Human Services fully implement its current corrective action plan to deploy policies and procedures and controls to ensure reports are submitted with accurate information, that management maintain documentation of the determination of the amounts used to report to Treasury, and that reports are submitted on a timely basis. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The Department of Human Services (DHS) concurs with the finding that the May 2021 Monthly Report supporting data was not properly documented. Beginning with the June 2021 Monthly Report, the District maintained documentation of data sources for all Monthly and Quarterly reports and will continue to maintain for the duration of the ERA program. DHS concurs with the finding that the July 2021 ERA2 Monthly Report was not submitted. At the time of reporting, there were no participating households funded from ERA2 and the team was not aware that the report was required to document where no households were funded. DHS discussed this with U.S. Department of the Treasury ERA Reporting staff and based on their guidance, the July 2021 ERA2 report was submitted on June 10, 2022 as a corrective action. The Department of Human Services (DHS) certified the May 2021 ERA1 Monthly Report at the time of submission, however, auditors could not substantiate that the certification of the report was performed because the U.S. Department of the Treasury?s COVID-19 Relief Hub reporting portal did not have the functionality to show certification when submitting reports. DHS has received confirmation from U.S. Treasury that the report was properly submitted. DHS also submitted the Interim and Partial reports, however, auditors could not substantiate that certification of the reports were performed at the time of submission, as U.S. Treasury?s reporting portal functionality did not have the functionality to show certification when submitting reports. DHS provided Q2 Partial Reports, however, data fields were added within the portal that were not included when the reports were submitted. U.S. Treasury Reporting staff has confirmed that when new fields are added or changed to reports within the reporting portal, these changes override prior submitted reports. DHS has received confirmation from U.S. Treasury that the Interim and Quarterly reports were properly submitted. Beginning with the May 2022 Monthly report due June 15, 2022, DHS will document management certification via internal emails that include screen shots of the submission within Treasury?s reporting portal. This will ensure that even if Treasury reporting portal functionality changes in the future, there is clear supporting documentation of management certification. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-006 Prior Year Finding Number: N/A Compliance Requirement: Period of Performance Program: U.S. Department of the Treasury COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award #: N/A Award Year: 10/01/2020 ? 09/20/2021 Government Department/Agency: Office of the Mayor/Deputy Mayor for Planning and Economic Development (DMPED) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. As per Compliance Supplement, recipients may only use funds to cover costs incurred during the period beginning on March 3, 2021 and ending on December 31, 2024 per section 602(g)(1) of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2 and Treasury?s Interim Final Rule at 31 C.F.R. Section 35.5(a). Condition ? Based on the testing of direct costs charged to the major federal program during the beginning of the period of performance, we sampled and selected 70 transactions totaling $109,948,108. We noted one (1) transaction consisting of three invoices totaling $79.5 million were expended in accordance with the state and local fiscal recovery funds? programmatic objectives. However, this transaction was incurred prior to the mandated period of performance stipulated in the Compliance Supplement and program requirement. Questioned Costs ? $79,500,000. Context ? This is a condition identified per review of Deputy Mayor for Planning and Economic Development (DMPED)?s compliance with specified requirements using a statistically valid sample. Effect ? DMPED is not in compliance with the stated provisions. Expenses incurred and charged to the program prior to period of performance could result in disallowances of costs. Cause ? DMPED did not appear to have adequate policies and procedures in place to ensure compliance with the required period of performance stipulations. Recommendation ? We recommend that DMPED strengthen its processes with respect to initiating and charging expenditures particularly to new federal programs. We also recommend that DMPED enhance its review process to properly determine the activities of each grant relative to the appropriate period of performance. In instances where verbal approval is needed for urgent activity, we recommend DMPED request appropriate contemporaneous documentation to substantiate such verbal approvals. Correspondingly, such information should also be monitored, approved and retained by a responsible official of DMPED in a timely manner. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DMPED concurs with the conditions and recommendations of this finding. In the process of deploying pandemic relief emergency funds, DMPED received District government contingency cash in order to accelerate implementation of the Bridge Fund to provide relief to businesses that had been forced to close and lay off staff to protect public health. Contingency funds were ultimately replaced by Coronavirus State and Local Fiscal Recovery Fund (CSLFRF). DMPED notes that the use of these funds was in accordance with federal eligibility requirements and the District received verbal approval from US Treasury to use CSLFRF funds prior to the period of performance. DMPED has received written communication from the U.S. Department of the Treasury (Treasury) noting that they would not recommend that the Secretary of the Treasury take action to recoup such amounts. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-007 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Education DC School Choice Incentive Program ALN: 84.370 Award #: U370C190001-20 Award Year: 04/15/2019 ? 04/15/2024 Government Department/Agency: Office of the State Superintendent of Education Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Under the requirements of the Federal Funding Accountability and Transparency Act (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). In accordance with OMB Memorandum M-20-21, Implementation Guidance for Supplementing Funding Provided in Response to the Coronavirus Disease 2019 (COVID-19), existing Transparency Act subaward reporting requirements may be leveraged to meet the transparency requirements outlined in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). 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. As provided in 2 CFR Part 170 and FAR Subpart 4.14, respectively, federal agencies are required to include the award term specified in Appendix A to 2 CFR Part 170 or the contract clause in FAR 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards, as applicable, in awards subject to the Transparency Act. Consistent with the OMB guidance, ? The 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. ? FAR 52.204-10(a) defines ?first-tier subcontract? to mean a subcontract awarded directly by a contractor to acquire supplies or services (including construction) for performance of a prime contract, but excludes the contractor?s supplier agreements with vendors, such as long-term arrangements for materials or supplies that benefit multiple contracts or the costs of which would normally be applied to a contractor's general and administrative expenses or indirect cost. Additionally, if the subaward/subcontract was subject to reporting under the Transparency Act, the action was reported in FSRS no later than the last day of the month following the month in which the subaward/subcontract amendment obligation was made or in the subcontract award/subcontract modification was made. Condition ? We performed testing over the Transparency Act reporting requirements outlined in the criteria section above. We tested five (5) subrecipients with a total dollar amount of $1,468,619. The result of the testing is outlined below. ? One (1) report was submitted late in FSRS with a dollar amount of $127,281. Questioned Costs ? None. Context ? This is a condition identified per review of Office of the State Superintendent of Education (OSSE)?s compliance with specified reporting requirements related to the program?s subrecipients using a statistically valid sample. Effect ? OSSE is not in compliance with reporting requirements under the Transparency Act related to the program?s subrecipients. Cause ? Lack of monitoring and internal control in place to ensure that reports required under the Transparency Act are submitted timely in FSRS result in OSSE?s noncompliance with the reporting requirements. Recommendation ? We recommend OSSE to enhance its controls over the timely submission of reports required under the Transparency Act to ensure compliance with reporting requirements and established policies and procedures. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The Office of State Superintendent of Education (OSSE) concurs with the conditions and recommendations of this finding since these recommendations were already incorporated, upon OSSE?s detection of the reporting delay, to prevent the recurrences of untimely Federal Funding Accountability and Transparency Act (FFATA) submission, which occur in 2020-2021. The adverse effect of COVID-19 resulted in extenuating circumstances that caused the FFATA reporting delayed submission. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-008 Prior Year Finding Number: N/A Compliance Requirement: Equipment and Real Property Management Program: U.S. Department of Education COVID-19 ? Education Stabilization Fund Elementary and Secondary School Emergency Relief (ESSER) Fund ALN: 84.425D Award #: A3SERF, B3SERF Award Year: 10/01/2020 ? 09/30/2021, 03/13/2020 ? 09/30/2023 COVID-19 ? Education Stabilization Fund American Rescue Plan - Elementary and Secondary Schools Emergency Relief Fund (ARP-ESSER) ALN: 84.425U Award #: U3SERF Award Year: 03/24/2021 ? 09/30/2023 Government Department/Agency: District of Columbia Public School Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Additionally, per the Uniform Guidance in 2 CFR Section 200.313, Equipment, property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Further, a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Condition ? We noted that DCPS has a policy to track and maintain a list of equipment purchased using federal funds with a single unit cost of $200 or more; and to conduct periodic equipment inventory count twice a year. Of the 43 out of 60 samples tested for equipment real property management requirements, we noted that: 1. Equipment purchased using federal funds with a single unit cost of $200 or more is tracked in the TIPWeb-IT system; however, there is no linkage between assets tracked in TIPWeb-IT and the funding source or Purchase Order. As a result, we were not able to verify that the equipment purchased using federal funds was being tracked in the TIPWeb-IT system. 2. There is no separate listing of equipment purchased using federal funds being maintained. 3. No physical inventory count was performed for equipment purchased using federal funds in 2021. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of District of Columbia Public School (DCPS)?s compliance with the specified requirements using a statistically valid sample. Effect ? There is a risk that inadequate recordkeeping of equipment could lead to misappropriation of assets and noncompliance with Federal regulations resulting in a return of Federal awards received. Cause ? Due to a lack of linkage between procurement systems and asset management systems and COVID related concerns, DCPS was unable to adequately support compliance with its policies and procedures regarding monitoring of equipment acquired with Federal funds. Recommendation ? We recommend that DCPS implement policies, procedures and controls that will ensure that equipment purchased using federal funds are tracked and maintained, in order to adhere to Federal regulations related to equipment and its related maintenance. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The District of Columbia Public School (DCPS) agrees with the conditions and recommendations of this finding. While DCPS has implemented and follows stringent asset procurement and management policies, we have adopted separate systems to track the purchasing, receiving, and the lifecycle of assets. The Procurement and ERP systems, PASS/SOAR are used to track purchases of assets, while the Warehouse receiving system captures a record of assets received by DCPS. The DCPS?s Asset Management System, TIPWeb tracks a device throughout its lifecycle (deployment/assignment, condition, location, disposal, etc.). This split system functionality contributes to the conditions noted in the audit findings. In addition, the COVID-19 pandemic, and the need to minimize in-person, close contact among staff members, necessitated temporary departures from established asset receiving and physical audit procedures in calendar year 2021. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-009 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Education COVID-19 ? Education Stabilization Fund Governors Emergency Education Relief (GEER) Fund ALN: 84.425C Award #: S425C200023 Award Year: 05/26/2020 ? 09/30/2021 COVID-19 ? Education Stabilization Fund Elementary and Secondary School Emergency Relief (ESSER) Fund ALN: 84.425D Award #: S425D200034 Award Year: 05/07/2020 ? 09/30/2021 Government Department/Agency: Office of the State Superintendent of Education Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Under the requirements of the Federal Funding Accountability and Transparency Act (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). In accordance with OMB Memorandum M-20-21, Implementation Guidance for Supplementing Funding Provided in Response to the Coronavirus Disease 2019 (COVID-19), existing Transparency Act subaward reporting requirements may be leveraged to meet the transparency requirements outlined in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). 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. As provided in 2 CFR Part 170 and FAR Subpart 4.14, respectively, federal agencies are required to include the award term specified in Appendix A to 2 CFR Part 170 or the contract clause in FAR 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards, as applicable, in awards subject to the Transparency Act. Consistent with the OMB guidance, ? The 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. ? FAR 52.204-10(a) defines ?first-tier subcontract? to mean a subcontract awarded directly by a contractor to acquire supplies or services (including construction) for performance of a prime contract, but excludes the contractor?s supplier agreements with vendors, such as long-term arrangements for materials or supplies that benefit multiple contracts or the costs of which would normally be applied to a contractor's general and administrative expenses or indirect cost. Additionally, if the subaward/subcontract was subject to reporting under the Transparency Act, the action was reported in FSRS no later than the last day of the month following the month in which the subaward/subcontract amendment obligation was made or in the subcontract award/subcontract modification was made. Condition ? We performed testing over the Transparency Act reporting requirements outlined in the criteria section above. We tested six (6) subrecipients with a total dollar amount of $7,002,618. The results of the testing are outlined below. ? One (1) report was submitted late in FSRS with a dollar amount of $560,327. ? One (1) report was not reported in FSRS with a dollar amount of $158,372. Questioned Costs ? None. Context ? This is a condition identified per review of Office of the State Superintendent of Education (OSSE)?s compliance with specified reporting requirements related to the program?s subrecipients using a statistically valid sample. Effect ? OSSE is not in compliance with reporting requirements under the Transparency Act related to the program?s subrecipients. Cause ? Lack of monitoring and internal control in place to ensure that reports required under the Transparency Act are prepared and submitted timely in FSRS result in OSSE?s noncompliance with the reporting requirements. Recommendation ? We recommend OSSE to enhance its controls over the preparation and timely submission of reports required under the Transparency Act to ensure compliance with reporting requirements and established policies and procedures. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The Office of State Superintendent of Education (OSSE) concurs with the conditions and recommendations of this finding since these recommendations were already incorporated, upon OSSE?s detection of the reporting delay, to prevent the recurrences of untimely Federal Funding Accountability and Transparency Act (FFATA) submission, which occur in 2020-2021. The adverse effect of COVID-19 resulted in extenuating circumstances that caused the FFATA reporting delayed submission. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-010 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Education COVID-19 ? Education Stabilization Fund Higher Education Emergency Relief Fund (HEERF) Student Aid Portion ALN #: 84.425E Award #: P425E201913 - 20B Award Year: 04/24/2020 ? 04/23/2022 COVID-19 ? Education Stabilization Fund HEERF Institutional Aid Portion ALN: 84.425F Award #: P425F202580 - 20B Award Year: 05/07/2020 ? 05/06/2022 COVID-19 ? Education Stabilization Fund HEERF Historically Black Colleges and Universities (HBCUs) ALN: 84.425J Award #: P425J200098 - 20C Award Year: 05/01/2020 ? 02/26/2022 Government Department/Agency: University of the District of Columbia Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. There are three components to reporting for HEERF: 1) public reporting on the (a)(1) Student Aid Portion; 2) public reporting on the (a)(1) Institutional Portion (a)(2) and (a)(3) subprograms (Quarterly Reporting Form), as applicable; and 3) the annual report. The CARES Act 18004(e) and the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) 314(e) requires an institution receiving funds under HEERF I and HEERF II to submit a report to the secretary, at such time in such a manner as the secretary may require. While ARP does not explicitly identify procedures by which institutions must report on their uses of HEERF grant funds, Education Department exercises this reporting authority under 2 CFR section 200.328 and 2 CFR section 200.329. Condition ? During our testing of the quarterly public reporting requirements for HEERF Student Aid Portion and HEERF Institutional Portion, we noted the following: ? For four (4) out of six (6) reports, University of the District of Columbia (UDC) was not able to provide evidence of the timely posting of the quarterly public reports to the UDC website because the webmaster?s web posting audit log, which expires after 60 days, had not been retained by UDC. ? For four (4) out of six (6) reports, UDC was not able to provide evidence that the quarterly public reports were reviewed prior to posting to the UDC website because the evidence had not been retained by UDC. Questioned Costs ? None. Context ? This is a condition identified per review of UDC?s compliance with specified reporting requirements related to the program using a statistically valid sample. Effect ? Without adequate controls in place to ensure that reports are posted timely and proof that the reports were reviewed leads to noncompliance of the reporting requirements under the program. Cause ? UDC does not have adequate controls in place to ensure that documents are maintained related to the review and the timely posting of reports to the UDC website. Recommendation ? We recommend UDC to enhance its controls over the maintenance of documentation for the timely submission of reports and proof of review of reports as required to ensure compliance with reporting requirements. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? UDC OCFO agrees with the conditions and recommendations of this finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-011 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Immunization Cooperative Agreements ALN: 93.268 Award #: 1 NH23IP922596-02-02 to NH23IP922596-02-11 Award Year: 08/01/2019 ? 06/30/2024 Government Department/Agency: Department of Health (DC Health) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? We noted that the District Department of Health (DC Health) allocated payroll expenditures to the Immunization Cooperative Agreements (ICA) program during fiscal year 2021 based on budgeted percentages. These percentages were entered into the PeopleSoft Human Resources/Payroll System (PeopleSoft) at the beginning of the fiscal year and were based on management?s estimate of the respective employee?s level of effort for each program. PeopleSoft calculated the payroll costs every payroll cycle for each employee and program based on the predetermined percentage, and reported it through the Labor Distribution Report (485 Report). However, management did not perform a periodic comparison of actual costs to the budgeted costs and make any necessary adjustment as required by 2 CFR Section 200.430. Specifically, 19 out of 60 sampled payroll items tested for the ICA grant were recorded based on estimated hours and not actual hours. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DC Health?s compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits, for the ICA program in fiscal year 2021 were $1,085,464. Effect ? DC Health was unable to demonstrate that the payroll expenditures charged to the ICA grant accurately reflected the time incurred on the program and were properly supported in accordance with 2 CFR Part 200.430 time and effort reporting requirements. Cause ? DC Health did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the ICA program to the actual expenditures incurred. Per corrective action plans and status updates submitted by DC Health to BDO in fiscal year 2021, significant milestones have been achieved however due to several change management tasks, the corrective action plan is still progressing into fiscal year 2022 and is expected to fully implement by September 30, 2022. Recommendation ? We recommend that DC Health fully implement its current corrective action plan to deploy policies and procedures to periodically compare employees? estimated hours per the 485 Report to the actual hours incurred, and make any necessary adjustments as required by 2 CFR 200.430. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The District Department of Health (DC Health) concurs with the finding, causes and recommendations cited for the fiscal year 2021 single audit for the Immunization Cooperative Agreements (ICA) program. The current corrective action plan is progressing and will be fully implemented in fiscal year 2022. The actions that were already underway in fiscal year 2021 and those still being implemented in fiscal year 2022 will support the required periodic comparison of actual costs to the budgeted costs of personnel and make any necessary adjustment as required by 2 CFR 200.430. There were delays in implementation of the corrective action plan in fiscal year 2021 due to disruptions and changes in government operations, but also because tools to manage compliance were being revised and further developed. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-012 Prior Year Finding Number: 2020-005 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases ALN: 93.323 Award #: 1 NU50CK000502-02-00, 6 NU50CK000502-03-00 Award Year: 08/01/2019 ? 07/31/2024, 08/01/2021 ? 07/31/2022 Government Department/Agency: Department of Health (DC Health) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? We noted that the District Department of Health (DC Health) allocated payroll expenditures to the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program during fiscal year 2021 based on budgeted percentages. These percentages were entered into the PeopleSoft Human Resources/Payroll System (PeopleSoft) at the beginning of the fiscal year and were based on management?s estimate of the respective employee?s level of effort for each program. PeopleSoft calculated the payroll costs every payroll cycle for each employee and program based on the predetermined percentage, and reported it through the Labor Distribution Report (485 Report). However, management did not perform a periodic comparison of actual costs to the budgeted costs and make any necessary adjustment as required by 2 CFR Section 200.430. Specifically, 5 out of 60 sampled payroll items tested for the ELC grant were recorded based on estimated hours and not actual hours. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DC Health?s compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits, for the ELC program in fiscal year 2021 were $19,632,181. Effect ? DC Health was unable to demonstrate that the payroll expenditures charged to the ELC grant accurately reflected the time incurred on the program and were properly supported in accordance with 2 CFR Part 200.430 time and effort reporting requirements. Cause ? DC Health did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the ELC program to the actual expenditures incurred. Per corrective action plans and status updates submitted by DC Health to BDO in fiscal year 2021, significant milestones have been achieved however due to several change management tasks, the corrective action plan is still progressing into fiscal year 2022 and is expected to fully implement by September 30, 2022. Recommendation ? We recommend that DC Health fully implement its current corrective action plan to deploy policies and procedures to periodically compare employees? estimated hours per the 485 Report to the actual hours incurred, and make any necessary adjustments as required by 2 CFR 200.430. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The District Department of Health (DC Health) concurs with the finding, causes and recommendations cited for the fiscal year 2021 single audit for the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program. The current corrective action plan is progressing and will be fully implemented in fiscal year 2022. The actions that were already underway in fiscal year 2021 and those still being implemented in fiscal year 2022 will support the required periodic comparison of actual costs to the budgeted costs of personnel and make any necessary adjustment as required by 2 CFR 200.430. There were delays in implementation of the corrective action plan in fiscal year 2021 due to disruptions and changes in government operations, but also because tools to manage compliance were being revised and further developed. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-013 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services COVID-19 - Provider Relief Fund ALN: 93.498 Award #: HHS-18706482840 Award Year: 03/27/2020 ? 09/30/2021 Government Department/Agency: Health Resources and Services Administration/Not-for-Profit Hospital Corporation (d/b/a United Medical Center) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. CFR Section 200.510 (b) states in part: The auditee must also prepare a Schedule of Expenditures of Federal awards (SEFA) for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR section 200.502, Basis for determining Federal awards expended. In June 2021, the U.S. Department of Health and Human Services (HHS) through the Health Resources and Services Administration (HRSA) issued revised reporting requirements for recipients of CARES Act Provider Relief Fund (PRF) payments. The reporting requirement stated that as part of the post-payment reporting process, HRSA PRF recipients who received one or more payments exceeding $10,000 in the aggregate during a payment received period were required to report in each applicable reporting time period as indicated below. The Single Audit Compliance Supplement issued by the Office of Management and Budget (OMB) also states that the SEFA reporting amounts for this program (including both expenditures and lost revenues) are based upon the PRF report that is required to be submitted to the HRSA reporting portal as detailed below. ? Period 1: PRF Portal Reporting Time Period - July 1, 2021 to September 30, 2021. SEFA Reporting - Fiscal Year End (FYEs) of June 30, 2021 through June 29, 2022 ? Period 2: PRF Portal Reporting Time Period - January 1, 2022 to March 31, 2022. SEFA Reporting - FYEs of December 31, 2021 through FYEs June 29, 2022 ? Period 3: PRF Portal Reporting Time Period - July 1, 2022 to September 30, 2022. SEFA Reporting - Guidance will be included in 2022 Compliance Supplement ? Period 4:PRF Portal Reporting Time Period - January 1, 2023 to March 31, 2023. SEFA Reporting - Guidance will be included in 2022 Compliance Supplement Condition ? The Not-for-Profit Hospital Corporation, doing business as United Medical Center (UMC) received $18,622,284 of PRF funds in Period 1 (April ? June 2020) and $8,534,000 of PRF funds in Period 2 (July - August 2020). UMC?s FYE and SEFA is as of September 30, 2021 and as such based on the requirement detailed above, only Period 1 funds are to be reported on the SEFA. However, our review of UMC?s SEFA as of September 30, 2021 revealed that both Periods 1 and 2 funds totaling $27,156,284 were reported on the SEFA and as such, were not reported in accordance with the guidelines outlined above. Consequently, an adjustment was recorded to correct the SEFA. Questioned Costs ? None. Context ? This is a condition identified per review of UMC?s compliance with specified requirements using the prescribed SEFA reporting requirements for recipients of PRF payments. Effect ? UMC did not accurately prepare and report on the SEFA the PRF funds received in accordance with the specified reporting requirements outlined in the 2021 Compliance Supplement. Cause ? UMC erroneously reported both Periods 1 and 2 funds on its SEFA as of September 30, 2021 instead of just Period 1 as required by the 2021 Compliance Supplement. Recommendation ? We recommend that UMC establishes internal control policies and procedures to confirm the most recent Compliance Supplement is reviewed to ensure the funds received are reported on SEFA is in accordance with the reporting requirements. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? UMC agrees with the conditions and recommendations of this finding. There was no intentional noncompliance reporting of the SEFA. The difference of the amount reported was due to the misinterpretation of the dates in the Compliance Supplement. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-014 Prior Year Finding Number: 2020-007 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2020 ? 09/30/2021 Government Department/Agency: Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 205.60 (a), ?The State agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of financial assistance, and the use of any information obtained under Section 205.55, with respect to individual applications denied, recipients whose benefits have been terminated, recipients whose benefits have been modified, and the dollar value of these denials, terminations and modifications. Under this requirement, the agency will keep individual records which contain pertinent facts about each applicant and recipient. The records will include information concerning the date of application and the date and basis of its disposition; facts essential to the determination of initial and continuing eligibility (including the individual's social security number, need for, and provision of financial assistance); and the basis for discontinuing assistance.? Condition ? During our testing over beneficiary eligibility compliance requirements of the Temporary Assistance for Needy Families (TANF) program, we selected a sample of 60 beneficiaries in fiscal year 2021 to test DHS? compliance with eligibility requirements. We noted the following: ? For one (1) out of 60, we noted that the application submitted by the customer included three (3) children. The youngest child was not properly included in the Product Delivery Case (PDC) in the DC Access System (DCAS) through 5/5/2022. Therefore, the case was only paid for two children instead of three, as such we noted there was an underpayment, which totaled $1,716 for fiscal year 2021. ? For one (1) out of 60, the application submitted associated with the sample tested could not be located. Therefore, DHS was unable to provide sufficient documentation to verify that assistance was not provided to any individual who was fleeing to avoid prosecution, or custody or confinement after conviction, for a felony or attempt to commit a felony, or who is violating a condition of probation or parole imposed under Federal or State law. In addition, DHS was unable to provide support that would allow us to test that cash assistance was not provided to an individual during the 10-year period that began on the date the individual was convicted in Federal or State court of having made a fraudulent statement or representation with respect to place of residence in order to simultaneously receive assistance from two or more States under TANF, Title XIX, or the Food Stamp Act of 1977, or benefits in two or more States under the Supplemental Security Income program under Title XVI of the Social Security Act. ? For ten (10) out of 60, DHS was unable to provide support that would allow us to test that cash assistance was not provided to an individual during the 10-year period that began on the date the individual was convicted in Federal or State court of having made a fraudulent statement or representation with respect to place of residence in order to simultaneously receive assistance from two or more States under TANF, Title XIX, or the Food Stamp Act of 1977, or benefits in two or more States under the Supplemental Security Income program under Title XVI of the Social Security Act. In addition, for one (1) of these samples, due to the Public Health Emergency, as of April 2020, all applications received an extended recertification and the recertification that was submitted by the customer on September 8, 2020 should not have been processed as the recertification did not factor into determining the customer's eligibility. A further review of this case shows that the previous application was completed on July 1, 2019. We reviewed the November 2019 application noting that the page with the customer's signature was missing, so the application was not complete. ? For one (1) out of 60, we noted that the supplemental form included in the application package was not signed or dated, as such DHS was unable to provide support that would allow us to test that cash assistance was not provided to an individual during the 10-year period that began on the date the individual was convicted in Federal or State court of having made a fraudulent statement or representation with respect to place of residence in order to simultaneously receive assistance from two or more States under TANF, Title XIX, or the Food Stamp Act of 1977, or benefits in two or more States under the Supplemental Security Income program under Title XVI of the Social Security Act. ? For one (1) out of 60, we noted that the supplemental form that included the 10-year fraud question implemented on 10/1/2019, was not filled out by participant at the time of the application date, as the application date was dated 5/7/2019. Due to certifications not being required during Fiscal Year 2021, due to waivers from FNS, the applicant did not certify until 10/5/2021. BDO noted that the customer submitted a recertification on 4/11/2021 and completed the supplemental form at that time. Therefore, DHS was unable to provide support for the period October 1, 2020 to April 10, 2021, that would allow us to test that cash assistance was not provided to an individual during the 10-year period that began on the date the individual was convicted in Federal or State court of having made a fraudulent statement or representation with respect to place of residence in order to simultaneously receive Income assistance from two or more States under TANF, Title XIX, or the Food Stamp Act of 1977, or benefits in two or more States under the Supplemental Security program under Title XVI of the Social Security Act. These amounts represent 23% of the total eligibility amounts tested related to the 60 sampled items of $347,766. BDO also noted that for one (1) out of 60, the Social Service Representative (SSR) that approved the application was not listed on the FY2021 Authority to Act List, or as a person authorized to approve the application. The SSR who approved this application did not have the authority to approve it. Questioned Costs ? Known amount is $78,927. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? Without properly maintaining documentation to support eligibility determinations, ineligible beneficiaries may receive benefits under the TANF grant and DHS may make payments on behalf of those beneficiaries resulting in noncompliance with the eligibility requirements. Cause ? DHS did not consistently adhere to its established policies and procedures requiring it to maintain documentation supporting participant eligibility. Recommendation - We recommend that DHS strengthen its existing policies and procedures over the review and maintenance of appropriate documentation to ensure compliance with eligibility requirements. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS/ESA concur with the findings. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-015 Prior Year Finding Number: 2020-008 Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2020 ? 09/30/2021 Government Department/Agency: Department of Human Services (DHS) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. According to Title IV-A, Section 411 of the Social Security Act (the Act), 45 CFR 265.3, and the American Recovery and Reinvestment Act (ARRA) of 2009, (Public Law 111-5), each State must file an annual report containing information on the TANF program and the State?s maintenance-of-effort (MOE) program(s) for that year, including strategies to implement the Family Violence Option, State diversion programs, and other program characteristics. States are required to submit the ACF-196R report quarterly, beginning in FFY 2015, in lieu of the SF-425, Federal Financial Report (financial status). Each State files quarterly expenditure data on the State?s use of Federal TANF funds, State TANF MOE expenditures, and State expenditures of MOE funds in separate State programs. If a State is expending Federal TANF funds received in prior fiscal years, it must file a separate quarterly TANF Financial Report for each fiscal year that provides information on the expenditures of that year?s TANF funds. This form must be used for reporting regular TANF grant funds, Contingency Funds, and ARRA-Emergency Fund for TANF State Programs funds. See TANF-ACF-PI-2014-02, available at http://www.acf.hhs.gov/programs/ofa/resource/tanf-acf-pi-2014-02, for more information. Condition ? We noted the following: ? During our test work over the quarterly ACF-196R Report, we noted that for Grant Identifying number - G-1802DCTANF, in the 3rd quarter there was a variance of ($286,950) between the amount included in the SEFA detail ($286,950) and the amount reported on the ACF-196R ($0) for the fiscal year 2018 grant. The amount of $286,950 related to a fraud penalty assessed by ACF with regards to fraud perpetrated by a former DHS employee resulting in the misuse of federal TANF funds. Based on ACF instructions, agencies are required to make adjustments for errors and fraud to the amounts reported in the fiscal year that the grant was awarded. As such, it required DHS to reopen the ACF-196R report for the 2018 grant, and the agency to make the correction to the final report for that year. BDO obtained the original 4th quarter (month 13) report for the 2018 grant submitted on February 13, 2019 noting the grant expenditures were $49,547,259. In addition, BDO obtained the revised final report that was submitted for the 2018 grant on July 7, 2021 noting that that the grant expenditures was reduced to $49,451,685, which was a decrease of $95,574. The $95,574 decrease is a combination of the (286,950) penalty and an increase in expenditure of $191,376, which netted to $95,574. The $191,376 difference relates to an initial adjustment made for fiscal year 2018 in a report dated March 5, 2021. The ($286,950) decrease was properly supported, however, DHS was unable to provide support for the increase of $191,376. ? During our test work over the Matching, Level of Effort, Earmarking compliance requirement, we compared the Total Cumulative Administrative Cost per ACF 196R for G-2101DCTANF to the Detailed Analysis of Program expenditures from the CFO Solve reports by Department and subject to the Random Moment Time Study. We noted that there was a difference between the Total Cumulative Administrative Cost reported on Line 22a of the fiscal year 2021 ACF 196R ($12,873,104) and the amount recalculated by the Auditor ($13,003,592), resulting in a variance of ($130,488). The amount reported was understated by $130,488. ? During our reconciliation of the TANF Eligibility population, we noted that the Federally Eligible TANF Benefit Payments for fiscal year 2021 totaled $37,493,407. An incorrect amount of $13,969,482 was identified as being moved to Maintenance of Effort Benefit Payments on the Funding Status Repot, resulting in the remaining cash assistance total of $23,523,925. However, the amount charged to the federal grant by OCFO (identified as ?Cash Assistance? in the SEFA detail) was $23,270,584. There was therefore a variance of $253,341 between the SEFA and the Funding Status Report. The cash assistance included on the internal funding status report was incorrect, and the HSSC OCFO was unable to provide support for the variance. Questioned Costs ? None. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? Without proper internal controls and policies and procedures in place over the review and approval of the quarterly ACF-196R report, the TANF program incorrectly reported amounts on the ACF-196R reports for two of the four grants open in fiscal year 2021. Cause ? Management did not have proper internal controls and policies and procedures in place over the review and approval of the ACF-196R report to ensure that the amounts are properly reported. Recommendation - We recommend that DHS strengthen their policies, procedures and controls over the review and approval of the quarterly ACF-196R report to ensure the amounts reported for each open grant are accurate for the ACF-196R report prior to approval. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS concurs with this finding. The agency will submit the revised ACF-196R report correcting the amount in question and additional controls will be put in place to minimize recurrence. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-016 Prior Year Finding Number: 2020-009 Compliance Requirement: Special Tests and Provisions ? Income Eligibility and Verification System Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2020 ? 09/30/2021 Government Department/Agency: Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 205.56(a)(1)(i), ?The State agency shall review and compare the information obtained from each data exchange against information contained in the case record to determine whether it affects the applicant?s or the recipient?s eligibility or the amount of assistance.? Per 45 CFR Section 205.60 (a), ?The State agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of financial assistance, and the use of any information obtained under Section 205.55, with respect to individual applications denied, recipients whose benefits have been terminated, recipients whose benefits have been modified, and the dollar value of these denials, terminations and modifications. Under this requirement, the agency will keep individual records which contain pertinent facts about each applicant and recipient. The records will include information concerning the date of application and the date and basis of its disposition; facts essential to the determination of initial and continuing eligibility (including the individual's social security number, need for, and provision of financial assistance); and the basis for discontinuing assistance.? Condition ? During our test work of 60 cases selected to test the Special Tests and Provisions ? Income Eligibility and Verification Systems (IEVS), we noted that DHS was unable to provide sufficient documentation to support all eligibility determinations tested during the fiscal year 2021 audit. Specifically, out of the 60 beneficiary disbursements tested, we noted the following exception: ? For one (1) out of 60, the Social Service Representative (SSR) that approved the application did not have the Authority to approve the application. ? For three (3) out of 60, DHS was unable to provide evidence of use of IEVS to determine eligibility. ? For three (3) out of 60, DHS was unable to provide evidence of use of IEVS to determine eligibility for a child only case to ensure that children did not have benefits from Social Security Administration. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? The District is not in full compliance with its policies and with Federal program compliance requirements surrounding records maintenance. Further, ineligible TANF beneficiaries may receive benefits under the TANF grant and the District may make payments on behalf of those beneficiaries. Cause ? Controls are not adequate to ensure that the District adheres to its established policies and procedures requiring it to maintain documentation supporting participant eligibility. Recommendation - We recommend that DHS enforce existing policies and procedures and implement additional policies and procedures for maintaining and monitoring case record documentation to ensure that Income Eligibility and Verification System requirements are complied with. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS agrees with the finding in this report. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-017 Prior Year Finding Number: 2020-010 Compliance Requirement: Reporting; Special Tests and Provisions ? Penalty for Failure to Comply With Work Verification Plan Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2020 ? 09/30/2021 Government Department/Agency: Department of Human Services (DHS)/ Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 261.60 (a), ?A State must report the actual hours that an individual participates in an activity, subject to the qualifications in paragraphs (b) and (c) of this section and Section 261.61(c). It is not sufficient to report the hours an individual is scheduled to participate in an activity. (b) For the purposes of calculating the work participation rates for a month, actual hours may include the hours for which an individual was paid, including paid holidays and sick leave. For participation in unpaid work activities, it may include excused absences for hours missed due to a maximum of 10 holidays in the preceding 12-month period and up to 80 hours of additional excused absences in the preceding 12-month period, no more than 16 of which may occur in a month, for each work-eligible individual. Each State must designate the days that it wishes to count as holidays for those in unpaid activities in its Work Verification Plan. It may designate no more than 10 such days. In order to count an excused absence as actual hours of participation, the individual must have been scheduled to participate in a countable work activity for the period of the absence that the State reports as participation. A State must describe its excused absence policies and definitions as part of its Work Verification Plan, specified at Section 261.62. (c) For unsubsidized employment, subsidized employment, and OJT, a State may report projected actual hours of employment participation for up to six months based on current, documented actual hours of work. Any time a State receives information that the client's actual hours of work have changed, or no later than the end of any six-month period, the State must re-verify the client's current actual average hours of work, and may report these projected actual hours of participation for another six-month period. (d) A State may not count more hours toward the participation rate for a self-employed individual than the number derived by dividing the individual's self-employment income (gross income less business expenses) by the Federal minimum wage. A State may propose an alternative method of determining self-employment hours as part of its Work Verification Plan. (e) A State may count supervised homework time and up to one hour of unsupervised homework time for each hour of class time. Total homework time counted for participation cannot exceed the hours required or advised by a particular educational program.? Per 45 CFR Section 261.61 (a), ?A State must support each individual?s hours of participation with documentation in the case file. In accordance with Section 261.62, a State must describe in its Work Verification Plan the documentation it uses to verify hours of participation in each activity.? According to the DC State Verification Plan, the D.C. Department of Human Services (DHS), Department of Human Services Monitoring Unit reviews and audits all documentation submitted by vendors reflecting the activities of recipients in TANF Employment program. This documentation includes time sheets, activity logs, school records, pay stubs, and verification of employment, work experience and on-the-job training. The Monitoring Unit completes this audit process to determine if sufficient documentation exists to substantiate reported time and attendance data, to warrant a payment to TANF Employment program vendors, and submission of countable hours for federal reporting purposes. The District projects hours of participation in unsubsidized, self-employment for six months or until the recipient's next scheduled recertification, whichever is sooner. Per 45 CFR Section 265.7 (a)-(c), ?Each State?s quarterly reports (the TANF Data Report, the TANF Financial Report (or Territorial Financial Report), and the SSP-MOE Data Report) must be complete and accurate and filed by the due date.? For disaggregated data report, `a complete and accurate report? means that: (1) The reported data accurately reflect information available to the State in case records, financial records, and automated data systems, and include correction of the quarterly data by the end of the fiscal year reporting period; (2) The data are free from computational errors and are internally consistent (e.g., items that should add to totals do so); (3) The State reports data for all required elements (i.e., no data are missing); (4)(i) The State provides data on all families; or (ii) if the State opts to use sampling, the State reports data on all families selected in a sample that meets the specification and procedures in the TANF Sampling Manual (except for families listed in error); and (5) Where estimates are necessary (e.g., some types of assistance may require cost estimates), the State uses reasonable methods to develop these estimates. For an aggregated data report, ?a complete and accurate report? means that: (1) The reported data accurately reflect information available to the State in case records, financial records, and automated data systems; (2) The data are free from computational errors and are internally consistent (e.g., items that should add to totals do so); (3) The State reports data on all applicable elements; and (4) Monthly totals are unduplicated counts for all families (e.g., the number of families and the number of out-of-wedlock births are unduplicated counts).? 45 CFR Section 265.7 (f) states that ?States must maintain records to adequately support any report, in accordance with Section 75.361 through 75.370 of this title.? Condition ? During our test work over a sample of 60 participants for Special Tests and Provisions - Penalty for Failure to Comply with Work Verification Plan and Reporting, we noted: ? For nineteen (19) instances, we noted that although the hours reported met or exceeded the required work participation hours, DHS/ESA was unable to provide documentation to support the hours reported. Therefore, we were unable to confirm that approved hours were properly supported. ? For nine (9) instances, we noted that although the hours reported met or exceeded the required work participation hours, and the customer met the requirement, the hours reported did not agree with the recalculated hours. The information tested in our sample represents the underlying data used in Reporting for the 1st and 4th quarters of fiscal year 2021. Consequently, DHS incorrectly reported data in the ACF-199 report for the 1st and 4th quarters of fiscal year 2021. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? Data within the ACF-199 report may not be complete and accurate. Specifically, if the work participation data is not substantiated, or inconsistencies are noted, it may result in inaccurate data being reported and may lead to an incorrect ACF-199 report and could result in an incorrect allocation of Federal Funds to the state. Cause ? Controls are not operating effectively over the documentation of work participation data to ensure that adequate evidence of the work participation is maintained. Recommendation - We recommend that DHS enforce existing policies and procedures and implement additional controls to ensure that adequate documentation is maintained to substantiate the work participation data reported in the ACF-199 report in accordance with the District of Columbia Work Verification Plan. We also recommend that DHS implement policies, procedures and controls that will enable an accurate reconciliation between the data sources used in the preparation of the ACF-199 report to ensure proper reporting of data elements. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS agrees with the findings. ESA agrees with the documentation issue on the nineteen (19) cases. This is a residual issue with the tables in DCAS and updating those tables to reflect updated hours. This was compounded by the fact that there were no recertifications for TANF over the last two years because of COVID-19. For the nine (9) cases where there are more reported (and documented hours), this is intentional, as it ?preserves? caped federal hours. DHS is updating the work verification plan to document this. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-018 Prior Year Finding Number: 2020-012 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Foster Care ? Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2020 ? 09/30/2021 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. 45 CFR Section 92.20(b)(2), ?Accounting records, "Grantees and sub grantees must maintain records which adequately identify the source and application of funds provided for financially assisted activities. These records must contain information pertaining to grant or subgrant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays or expenditures, and income.? 45 CFR Section 1356.30(f), ?In order for a child care institution to be eligible for title IV-E funding, the licensing file for the institution must contain documentation which verifies that safety considerations with respect to the staff of the institution have been addressed.? 45 CFR Section 1356.30(a) states, ?The Title IV-E agency must provide documentation that criminal records checks have been conducted with respect to prospective foster and adoptive parents.? 42 U.S. Code Section 671(a)(20)(A), ?In order for a State to be eligible for payments under this part, it shall have a plan approved by the Secretary which provides procedures for criminal records checks of national crime information databases for any prospective foster or adoptive parent before the foster or adoptive parent may be finally approved for placement of a child regardless of whether foster care maintenance payments or adoption assistance payments are to be made on behalf of the child under the State plan.? Furthermore, per 45 CFR Section 1356.21(a), ?Statutory and regulatory requirements of the Federal foster care program, To implement the foster care maintenance payments program provisions of the title IV-E plan and to be eligible to receive Federal financial participation (FFP) for foster care maintenance payments under this part, a Title IV-E agency must meet the requirements of this section, 45 CFR 1356.22, 45 CFR 1356.30, and Parts 472, 475(1), 475(4), 475(5), 475(6).? Condition ? During our audit we noted that in fiscal year 2021, the Foster Care program had total disbursements of $3,368,296 for 4,590 maintenance payments. We selected a sample of 60 participants representing disbursed federal funds totaling $42,923, we noted the following deficiencies: ? For two (2) of 60 samples, the redetermination forms provided showed that periods billed and included in the population and samples selected included amounts with eligibility status of ?Eligible Not Reimbursable?. ? For two (2) of 60 samples CFSA failed to provide evidence that a judicial determination of reasonable efforts toward permanency was not obtained at least once every 12 months after the child was in foster care. ? For four (4) of 60 samples, CSFA did not provide valid licenses for the child day care centers. ? For six (6) of 60 samples, CFSA did not always provide complete evidence of background checks such as criminal record checks and fingerprint-based checks from the national crime information databases. ? For one (1) of 60 samples, the paid rate billed did not agree to CFSA?s approved Rate Schedule. These deficiencies represent 22% of the total disbursements tested. Questioned Costs ? Known amount is $9,383. Context ? This is a condition identified per review of CFSA?s compliance with specified requirements using a statistically valid sample. Effect ? CFSA was not in compliance with the eligibility requirements of the Foster Care program. Cause ? CFSA does not have adequate controls in place to ensure that eligibility files are being properly reviewed and the required documentation is being maintained to evidence compliance with eligibility requirements. Recommendation - We recommend CFSA reevaluate and strengthen its existing policies and procedures over the review and maintenance of appropriate documentation to ensure compliance with eligibility requirements in accordance with the program. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? CFSA concurs with the findings as stated. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-019 Prior Year Finding Number: 2020-014 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Medicaid Cluster ALN 93.775, 93.777, 93.778 Award #: Various Award Year: 10/01/2020 ? 09/30/2021 Government Department/Agency: Department of Health Care Finance (DHCF) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per Section 1927 of the Social Security Act (42 USC 1396r-8): Drug manufacturers are required to provide a listing to CMS of all covered outpatient drugs and; and on a quarterly basis, are required to provide their average manufacturer?s price and their best prices for each covered outpatient drug. Based on these data, CMS calculates a unit rebate amount for each drug, which it then provides to States. Each State agency under this subchapter shall report to each manufacturer not later than 60 days after the end of each rebate period and in a form consistent with a standard reporting format established by the Secretary, information on the total number of units of each dosage form and strength and package size of each covered outpatient drug dispensed after December 31, 1990, for which payment was made under the plan during the period, and shall promptly transmit a copy of such report to the Secretary. The CMS Medicaid Drug Rebate Data Guide requires that upon receipt of a quarterly invoice, labelers have 37 calendar days from the invoice postmark date to pay rebates before interest begins to accrue. In those instances where states have used a meter to postmark the envelope and the United States Postal Service (USPS) or common mail carrier has also postmarked the envelope, the postmark date of the USPS or common mail carrier should be used to track the interest start date. For invoices that are submitted electronically, states should be able to identify the date on which the electronic invoice was received in order to properly track the interest start date. Interest stops accruing on the postmark date of the labeler?s mailed check, the date the state applies a credit to the labeler, or the date on which a state provides written acknowledgment to the labeler of the resolution. On the 38th day from the date interest originally began accruing, any unpaid interest becomes principal and interest accrues on the new principal amount beginning on the 38th day after that. Condition ? During our review of 60 samples of drug rebates, we noted that for two (2) rebates, the manufacturer did not pay the rebate within 37 days after receiving the invoice from the DHCF, however, no interest was calculated and charged to the drug manufacturer. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DHCF?s compliance with the drug rebates requirements using a statistically valid sample. Effect ? Without complete adherence to policies and procedures, there is no assurance that drug rebates are paid, or interest is assessed when rebates are not paid timely. Cause ? The contractor?s system for processing rebates implemented a new process to effectively calculate interest on outstanding balances weekly rather than quarterly effective June 2020, however, the change was not completely implemented. Recommendation - We recommend that DHCF strictly adhere to its policies and procedures to ensure that rebates are paid timely and interest is calculated and assessed when drug rebates are not paid timely. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHCF agrees with the facts described in the condition above. The drug rebate vendor changed their process to calculate interest on outstanding balances weekly rather than quarterly effective June 30, 2020. That proved to be an incomplete solution because invoices can become late and escape interest calculation if they are paid before the following week?s interest calculation. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-020 Prior Year Finding Number: 2020-015 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Medicaid Cluster ALN: 93.775, 93.777, 93.778 Award #: Various Award Year: 10/01/2020 ? 09/30/2021 Government Department/Agency: Department of Health Care Finance (DHCF)/Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Medicaid State Plan: Citation 42 CFR Section 431.17AT-79-29. Section 4.7 (Maintenance of Records) states, ?The Medicaid agency maintains or supervises the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of medical assistance, and administrative costs and statistical, fiscal and other records necessary for reporting and accountability, and retains these records in accordance with Federal requirements. All requirements of 42 CFR 431.17 are met.? Economic Security Administration (ESA) Policy Manual, Section 1.3, ?All eligibility criteria and clarifying information are documented on the Record of Case Action, form 1052. The case record should speak for itself. An outside reviewer shall be able to follow the chronology of events in the case be reading the narrative. All application documents including verification and correspondence must be date-stamped. For working recipients, the record should include the dates pay is received and how often the recipient is paid. When the recipient?s statement is the best available source, the record should include the application/recipient and agency efforts to verify the information. All address changes should be documented.? Condition ? During testing over beneficiary eligibility for the Medicaid benefits, we noted that the District?s Economic Security Administration (ESA) was unable to provide sufficient documentation to support the beneficiary?s eligibility determination during the fiscal year 2021 audit. Specifically, out of a sample of 132 participant files tested, we noted the following exceptions: ? One (1) participant file where ESA did not provide the application. ? Six (6) participants files where ESA did not process the application within the required timeframe or did not provide approval notices. Without an approval notice being timely issued, there is no assurance the application was processed within the required timeframe. The Department of Health Care Finance, as the State Medicaid Agency, lacks a quality control oversight system to ensure that eligibility documentation is maintained to support the eligibility decision. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of ESA?s compliance with specified requirements using a statistically valid sample. Effect ? Lack of supporting documentation for program services and noncompliance with program requirements could result in disallowances of costs and participants could be receiving benefits that they are not entitled to receive under the program. Cause ? DHCF and ESA did not appear to adhere to internal control procedures to ensure that applications are properly completed and retained. Recommendation - We recommend that ESA strictly implement internal control procedures to ensure that documentation is maintained to support the beneficiary determinations. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHCF and DHS concur with these findings. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-021 Prior Year Finding Number: 2020-017 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services HIV Emergency Relief Project Grants ALN: 93.914 Award #: 2 H89HA00012-31-00, 2 H89HA00012-30-00 Award Year: 03/01/2021 ? 02/28/2022, 03/01/2020 ? 02/28/2021 Government Department/Agency: Department of Health (DC Health) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? We noted that the District Department of Health (DC Health) continued to allocate payroll expenditures to the HIV Emergency Relief Project Grants (HIVER) program during fiscal year 2021 based on budgeted percentages. These percentages were entered into the PeopleSoft Human Resources/Payroll System (PeopleSoft) at the beginning of the fiscal year and were based on management?s estimate of the respective employee?s level of effort for each program. PeopleSoft calculated the payroll costs every payroll cycle for each employee and program based on the predetermined percentage, and reported it through the Labor Distribution Report (485 Report). However, management did not perform a periodic comparison of actual costs to the budgeted costs and make any necessary adjustment as required by 2 CFR Section 200.430. Specifically, 32 out of 60 sampled payroll items tested for the HIVER grant were recorded based on estimated hours and not actual hours. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DC Health?s compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits, for the HIVER program in fiscal year 2021 were $4,183,988. Effect ? DC Health was unable to demonstrate that the payroll expenditures charged to the HIVER grant accurately reflected the time incurred on the program and were properly supported in accordance with 2 CFR Part 200.430 time and effort reporting requirements. Cause ? DC Health did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the HIVER program to the actual expenditures incurred. Per corrective action plans and status updates submitted by DC Health to BDO in fiscal year 2021, significant milestones have been achieved however due to several change management tasks, the corrective action plan is still progressing into fiscal year 2022 and is expected to fully implement by September 30, 2022. Recommendation ? We recommend that DC Health fully implement its current corrective action plan to deploy policies and procedures to periodically compare employees? estimated hours per the 485 Report to the actual hours incurred, and make any necessary adjustments as required by 2 CFR 200.430. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The District Department of Health (DC Health) concurs with the finding, causes and recommendations cited for the fiscal year 2021 single audit for the HIV Emergency Relief Project Grants (HIVER) program. The current corrective action plan is progressing and will be fully implemented in fiscal year 2022. The actions that were already underway in fiscal year 2021 and those still being implemented in fiscal year 2022 will support the required periodic comparison of actual costs to the budgeted costs of personnel and make any necessary adjustment as required by 2 CFR 200.430. There were delays in implementation of the corrective action plan in fiscal year 2021 due to disruptions and changes in government operations, but also because tools to manage compliance were being revised and further developed. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-022 Prior Year Finding Number: 2020-018 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles; Reporting Program: U.S. Department of Homeland Security Federal Emergency Management Agency (FEMA) COVID-19 - Public Assistance - Presidentially Declared Disaster ALN: 97.036 Award #: FEMA-4502-DR-DC Award Year: 10/01/2020 ? 09/30/2021 Government Department/Agency: Homeland Security and Emergency Management Agency (HSEMA) Criteria - The Uniform Guidance in 2 CFR Section 200.510 (b) indicates: Schedule of expenditures of Federal awards (SEFA). 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 2 CFR section 200.502, Basis for determining Federal awards expended. 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. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. For a cluster of programs also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in 2 CFR section 200.502 Basis for determining Federal awards expended paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total Federal awards expended for loan or loan guarantee programs in the schedule. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee elected to use the 10% de minimis cost rate as covered in 2 CFR section 200.414 Indirect (F&A) costs. As indicated in the Part 4 of the July 2021 OMB Compliance Supplement relating to the Disaster Grants ? Public Assistance, we noted: Non-Federal entities must record expenditures on the SEFA when: (1) FEMA has approved the non-Federal entity?s project worksheet (PW), and (2) the non-Federal entity has incurred the eligible expenditures. Federal awards expended in years subsequent to the fiscal year in which the PW is approved are to be recorded on the non-Federal entity?s SEFA in those subsequent years. For example, 1. If FEMA approves the PW in the non-Federal entity?s fiscal year 2014 and eligible expenditures are incurred in the non-Federal entity?s fiscal year 2015, the non-Federal entity records the eligible expenditures in its fiscal year 2015 SEFA. 2. If the non-Federal entity incurs eligible expenditures in its fiscal year 2014 and FEMA approves the non-Federal entity?s PW in the non-Federal entity?s fiscal year 2015, the non-Federal entity records the eligible expenditures in its fiscal year 2015 SEFA with a footnote that discloses the amount included on the SEFA that was incurred in a prior year. Additionally, Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Compliance Supplement also requires that amounts reported in the SF-425 financial reports can be traced to accounting records that support the audited financial statements and the SEFA and amounts reported agree with the accounting records. Condition ? Certain grant expenditures related to the Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (PDD) program, amounting to approximately $15.7 million had been inaccurately recorded and initially reported in fiscal year 2021. In reconciling the PW detail and the general ledger, it was discovered that the PW?s of these expenses should not have been included in the fiscal year 2021 SEFA. Consequently, an adjustment was recorded to correct the SEFA. In addition, our review of financial reports revealed that the same expenditures of $15.7 million were not reported in accordance with the guidelines outlined above and thus the federal financial reports were not completed accurately as prescribed. Questioned Costs ? None. Context ? This is a condition identified per review of Part 4 of the OMB Compliance Supplement. Effect ? The SEFA may not be fairly presented, in all material respects, in relation to the basic financial statements taken as a whole. In addition, the lack of adherence to the established internal controls policies and procedures can lead to noncompliance with federal statutes, regulations, and provisions of grant agreements. Cause ? HSEMA did not adhere to their instituted policies and procedures as indicated in the District of Columbia Public Assistance Administrative Plan to ensure the accuracy of the SEFA and recorded amounts in the correct accounting period. Recommendation ? We recommend that HSEMA adhere to instituted policies and procedures to ensure the accuracy of the SEFA and recorded amounts in the correct accounting period. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? HSEMA concur with these findings and will strengthen policies and procedures to remediate these findings. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-023 Prior Year Finding Number: N/A Compliance Requirement: Reporting; Subrecipient Monitoring Program: U.S. Department of Homeland Security Federal Emergency Management Agency (FEMA) COVID-19 - Public Assistance - Presidentially Declared Disaster ALN: 97.036 Award #: FEMA-4502-DR-DC Award Year: 10/01/2020 ? 09/30/2021 Government Department/Agency: Homeland Security and Emergency Management Agency (HSEMA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331(a) Requirements for Pass-Through Entities requires that pass-through entities must: Ensure that every sub-award is clearly identified to the subrecipient as a sub-award and includes certain information outlined in the section noted above, including FFATA; pre-award assessment, indirect cost rated for the award, assistance listing number, finding and award follow-up and other pertinent actions. In accordance with the requirements of 2 CFR Section 1402.300, the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR part 170 Reporting Subaward and Executive Compensation Information. In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System. Condition ? Our examination of the program?s subrecipient monitoring requirements includes follow-ups by the recipient to ensure the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient detected through audits, on-site reviews, and other means. We selected four (4) subrecipients for testing and noted that for all the samples selected HSEMA failed to provide evidence that it monitored the subrecipients through review of audits, on-site reviews, and other means. In addition Homeland Security and Emergency Management Agency failed to collect and report information on subawards or amendments of $30,000 or more in federal funds in the FFATA Subaward Reporting System to fulfil the FFATA requirements. Questioned Costs ? None. Context ? This is a condition identified per review of HSEMA?s compliance with specified requirements using a statistically valid sample. Effect ? HSEMA is not in compliance with the subrecipient monitoring requirements as it failed to provide evidence of monitoring the subrecipients. Cause ? HSEMA did not have proper internal controls and policies and procedures in place to ensure that the subrecipient takes timely and appropriate action on deficiencies detected though audits. Recommendation ? We recommend that HSEMA should implement policies, procedures and controls that will ensure compliance with all the required laws, guidelines and requirement under the award. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? HSEMA performed several forms of monitoring of subrecipient projects and costs but recognizes there is room to do more. The PDD projects submitted to FEMA for reimbursement were all completed work projects, which avoided the risk of advance funding being used improperly and eliminated the need for project progress monitoring. Financial monitoring was performed by requiring subrecipients to provide 100% complete financial and procurement documentation to support their claimed costs. Furthermore, in-person site visits were highly discouraged during the COVID-19 pandemic. HSEMA and FEMA staff provided regular advice, guidance, training, and technical assistance to subrecipients throughout the grant project development and approval process. Between the HSEMA and FEMA reviews of project documentation multiple times during the submission process, HSEMA is confident that no unallowable activities or improperly documented and justified costs were billed to the federal award. Based on the feedback and recommendation from the auditors, HSEMA will work with FEMA PDD staff to add appropriate additional subrecipient monitoring activities that will ensure compliance with all required laws, guidelines, and requirements under the federal award. We concur with the audit team?s finding that the FFATA report for the PDD grant was not submitted. Due to the constantly changing amount of the grant and subawards, it was initially planned to submit FFATA information at closeout once final totals were known. Based on the feedback from the audit team, HSEMA will submit information on subawards already issued and will begin submitting monthly updates on PDD subawards going forward on a monthly basis. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-024 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Homeland Security Homeland Security Grant Program ALN: 97.067 Award #: EMW-2018-SS-00051-S01, EMW-2019-SS-00069-S01, EMW-2020-SS-00057-S01 Award Year: 10/01/2020 ? 09/30/2021 Government Department/Agency: Homeland Security and Emergency Management Agency (HSEMA) Criteria - The Uniform Guidance in 2 CFR Section 200.510 (b) indicates: Schedule of expenditures of Federal awards (SEFA). 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 2 CFR section 200.502, Basis for determining Federal awards expended. 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. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. For a cluster of programs also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in 2 CFR section 200.502 Basis for determining Federal awards expended paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total Federal awards expended for loan or loan guarantee programs in the schedule. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee elected to use the 10% de minimis cost rate as covered in 2 CFR section 200.414 Indirect (F&A) costs. Additionally, Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Condition ? During our test work of 40 samples selected to test the activities allowed or unallowed and allowable costs/cost principles, we noted expenditure for one (1) sample selected was miscoded and posted to Homeland Security Program (HSG) instead of Pre-Disaster Mitigation Grant (PDM) program. HSEMA discovered the error and made a correcting entry in March 2022. However, the agency did not make the necessary adjustment to properly reflect the amount in fiscal year 2021 SEFA. Consequently, an adjustment was recorded to correct the SEFA. Questioned Costs ? None. Context ? This is a condition identified per review of HSEMA?s compliance with specified requirements using a statistically valid sample. Effect ? The SEFA may not be fairly presented, in all material respects, in relation to the basic financial statements taken as a whole. In addition, the lack of adherence to the established internal controls policies and procedures can lead to noncompliance with federal statutes, regulations, and provisions of grant agreements. Cause ? Management is not adhering to their internal policies and procedures to ensure that transactions are properly charged to the correct grant. Recommendation ? We recommend that HSEMA adhere to instituted policies and procedures to ensure the accuracy of the SEFA and recorded amounts in the correct project codes. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? HSEMA concur with the finding. The fiscal year 2021 SEFA has been adjusted accordingly on June 27, 2022, to reflect the reduction of the $50,000 in costs that belonged to a pre-disaster grant in the same year. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2021-025 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of Homeland Security Homeland Security Grant Program ALN: 97.067 Award #: EMW-2018-SS-00051-S01, EMW-2019-SS-00069-S01, EMW-2020-SS-00057-S01 Award Year: 10/01/2020 ? 09/30/2021 Government Department/Agency: Homeland Security and Emergency Management Agency (HSEMA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331(a) Requirements for Pass-Through Entities requires that pass-through entities must: Ensure that every sub-award is clearly identified to the subrecipient as a sub-award and includes certain information outlined in the section noted above, including FFATA; pre-award assessment, indirect cost rated for the award, assistance listing number, finding and award follow-up and other pertinent actions. In accordance with the requirements of 2 CFR Section 1402.300, the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR part 170 Reporting Subaward and Executive Compensation Information. In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System. Condition ? Our examination of the program?s subrecipient monitoring requirements includes submission and review of Quarterly Status Reports (QSR). We selected 25 quarterly reports for testing and noted that one (1) subrecipient failed to provide the QSR for the first quarter of fiscal year 2021. Questioned Costs ? None. Context ? This is a condition identified per review of HSEMA?s compliance with specified requirements using a statistically valid sample. Effect ? Without adequate internal controls in place to ensure all required quarterly report are submitted and properly reviewed for monitoring, HSEMA could be noncompliant with the subrecipient monitoring requirements. Cause ? Management is not adhering to their internal policies and procedures to ensure that all required quarterly reports are submitted and properly reviewed. Recommendation ? We recommend that HSEMA should implement policies, procedures and controls that will ensure that quarterly reports are submitted and properly reviewed, and evidence of review are documented. Further, HSEMA should implement policies to follow up on the missing reports in order to ensure compliance with all the required laws, guidelines and requirement under the award. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? HSEMA concur that the one (1) quarterly report noted by the audit team was not submitted by the subrecipient. HSEMA?s quarterly review of subaward reports identified this missing report at the time. HSEMA will improve its processes to ensure a clear and consistent corrective action notice is sent to subrecipients when a quarterly report is not submitted. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-001 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Agriculture Supplemental Nutrition Assistance Program Cluster (SNAP) CFDA #: 10.551, 10.561 Award #: Various Award Year: 10/01/2019 ? 09/30/2020 Government Department/Agency: Department of Health (DOH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In addition, per 2 CFR Section 200.403, ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented.? Condition ? For one (1) of the 40 nonpayroll expenses selected for testing (from DHS, DOH and OFT), the OCFO team at DOH accrued three direct voucher numbers as part of a journal voucher as of 09/30/2020 for amounts owed to the University of the District of Columbia (UDC). These accruals were paid in October 2020 (fiscal year 2021). However, the three journal vouchers were recorded individually a second time in the DOH records as of 09/30/2020. DOH inadvertently recorded the direct vouchers twice in the accounting system. This amount represents 1.1% of the total sampled items related to the 40 sampled items of $12,498,460. Questioned Costs ? Known amount is $136,913. Context ? This is a condition identified per review of DOH?s compliance with specified requirements using a statistically valid sample. Effect ? Without adequate internal controls in place to ensure costs are properly reviewed for allowability, DOH could be noncompliant with the allowability requirement and could request funds for costs that are unallowed. Cause ? Management is not adhering to their internal policies and procedures to ensure that transactions are allowable. Recommendation - We recommend that DOH strengthen their policies and procedures over the recording of expenditures to ensure compliance with activities allowed or unallowed and allowable costs/cost principles requirements. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DOH concurs with this finding. OCFO has reviewed the finding which was caused by a T-Code error while entering journal entries to accrue the ?Due To Due From? component units at the end of the fiscal year, which lead to duplication of expenditure?s in SOAR and on the SEFA. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-002 Prior Year Finding Number: 2019-001 Compliance Requirement: Special Tests and Provisions ? ADP System for SNAP Program: Government Department/Agency: U.S. Department of Agriculture Supplemental Nutrition Assistance Program Cluster (SNAP) CFDA #: 10.551, 10.561 Award #: Various Award Year: 10/01/2019 ? 09/30/2020 Government Department/Agency: Department of Human Services (DHS)/DC Access System (DCAS) Program Management Administration Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 272.10(a), ?All State agencies are required to sufficiently automate their SNAP operations and computerize their systems for obtaining, maintaining, utilizing, and transmitting information concerning SNAP.? Per 2 CFR Section 272.10(b), ?In order to meet the requirements of the Act and ensure the efficient and effective administration of the program, a SNAP system, at a minimum, shall be automated in each of the following program areas (1) Certification and (2) Issuance Reconciliation and Reporting. Under Certification ? States agencies must determine eligibility and calculate benefits or validate the eligibility worker's calculations by processing and storing all casefile information necessary for the eligibility determination and benefit computation (including but not limited to all household members' names, addresses, dates of birth, social security numbers, individual household members' earned and unearned income by source, deductions, resources and household size). Also, State agencies must redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.? Condition ? The District is self-reporting findings it noted from its ongoing efforts to resolve issues with the ADP system for SNAP. The issues identified and the estimated impact follows: ? 211 cases reassessed during a change reported before or during recertification, were found categorically eligible despite being over the income limits for the program. The eligibility is based on a system searching and finding a past TANF determination on which the household is not currently received a TANF payment as supposed to considering only current active TANF cases. These households are not currently meeting any of the criteria of eligibility for SNAP. The cost of this overpayment between September 2019 and October 2020 is $5,594. ? 12 cases of overpayments were identified in instances where the TANF certification period expires before the SNAP certification period; at which time the SNAP monthly benefit does not reflect the change in unearned income. The system reassesses the eligibility for the case to the eligibility system counting TANF income for the full SNAP certification period. The correct outcome should be that a reassessment of the NSAP eligibility excludes the TANF unearned income. The cost of this overpayment between September 2019 and October 2020 is $557. ? 1,400 were potentially impacted since the launch of DCAS in 2016, for which SNAP medical expenses deductions have not been properly handled in two scenarios where a customer received the deduction improperly resulting in overpayments. The system incorrectly teats Medicare premiums paid by the District as an allowable SNAP medical expense, and SNAP medical expenses are not being flagged in the system for re-verification at recertification and if the caseworker does not manually end-date the expense in the system, the unverified expenses are continuing to count as deductions in the next certification period. The total cost is still being researched, however on average, claiming $50 - $200 in medical expenses can result in an additional $7 - $69 in SNAP benefits a month. Assuming each of the active *? 1,400 case were overpaid by $30/month for the last 2 years ($720 each) the total amount overpayment for just these cases is estimated at $1,008,000. Additional analysis is needed to determine the total overpayment going back to 2016. These amounts represent 0.4% of the total amounts paid by DHS in claims for beneficiary payments. DHS paid a total of $242,324,311 in beneficiary payments to all SNAP beneficiaries in fiscal year 2020. Questioned Costs ? Known amount is $1,014,151. Context ? This is a condition identified per review of DHS? compliance with specified requirements resulting from a system implementation. Effect ? Without an effectively designed and operated system in place, ineligible beneficiaries may receive benefits under the SNAP grant and DHS may make payments on behalf of those beneficiaries resulting in noncompliance with the eligibility requirements. Inaccurate beneficiary allotment payments could result in participants receiving benefits that they are not entitled to receive under the program. Cause ? DHS did not effectively design and operate the ADP system for SNAP which resulted to inaccurate benefit payments. Recommendation ? We recommend that DHS continue to evaluate and improve the new ADP system for SNAP to ensure that it addresses all the administration requirements of the SNAP program. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The Department of Human Services (DHS) and the Department of Health Care Finance (DHCF) DCAS team agree with the findings noted in this report. DHS self-reported these findings as part of the Agencies ongoing effort to maintain integrity with all eligibility determinations. The root cause for each of the three (3) issues with the ADP system for SNAP varied. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-003 Prior Year Finding Number: 2019-002 Compliance Requirement: Special Tests and Provisions ? EBT Card Security Program: U.S. Department of Agriculture Supplemental Nutrition Assistance Program Cluster (SNAP) CFDA #: 10.551, 10.561 Award #: Various Award Year: 10/01/2019 ? 09/30/2020 Government Department/Agency: Department of Human Services (DHS)/Office of Finance and Treasury (OFT) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 7 CFR Section 274.8(b)(3), As an addition to or component of the Security Program required of Automated Data Processing (ADP) systems, the State agency shall ensure that the following electronic benefits transfer (EBT) security requirements are established: (i) Storage and control measures to control blank unissued EBT cards and PINs, and unused or spare POS devices; (ii) Measures to ensure communication access control. Communication controls shall include the transmission of transaction data and issuance information from POS terminals to work-stations and terminals at the data processing center; (iii) Message validation; (iv) Administrative and operational procedures; (v) A separate EBT security component shall be incorporated into the State agency Security Program for ADP systems. The periodic risk analyses required by the Security Program shall address the following items specific to an EBT system ? (B) Completeness and timeliness of the reconciliation system; and (vi) The State agency shall incorporate the contingency plan approved by FNS into the Security Program. Condition ? OCFO/OFT for DHS are 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. OCFO/OFT have contracted with Fidelity National Information Service (FIS) for the issuance and security of the EBT cards; however, it is OCFO/OFT?s ultimate responsibility to ensure the contractor has controls in place to maintain adequate security over, and documentation/records of EBT cards. During our tests of the design and implementation of internal controls, we noted the following issues: ? For one (1) out of the 60 samples, although the EBT balance sheets for both workstations agreed with the received and returned amounts on the EBT Issuance Logs, we noted that the destruction detail for one card was not included on the Destruction Log. ? For 22 out of the 60 samples, although both EBT balance sheets reconciled with the EBT card issuance logs included in the package, we noted the following deficiencies: o For two (2) of the samples, for at least one customer, the form of identification noted was a referral; however, no Photo ID Referral form was attached. In addition, for one (1) of these samples, for at least one customer the Photo-ID Program Referral form was missing a supervisor signature on the referral page. o For two (2) of the samples, for at least one customer, the staff portion of the Intake Form is missing information. The staff did not identify the form of identification used, although a referral form was attached. o For eight (8) of the samples, for at least one customer, the Photo-ID Referral Authorization was missing a supervisor signature on the Referral page. In addition, for one (1) of these samples, for at least one customer the Photo-ID Program Referral Form has an approval signature that is either electronic or photocopied under C. Authorization, which we determined was not allowable. We further noted that for at least one (1) customer in this sample, the form of identification noted a referral, but no Photo ID Referral form was attached. We also noted for one (1) of these samples, for at least one customer, the Photo-ID Referral Authorization was missing a supervisor signature on the Referral page. In addition, we noted that for at least one customer, the Photo-ID Program Referral Form was missing an eligibility worker's signature on the referral page. o For nine (9) of the samples, BDO noted that for at least one customer, the Photo-ID Program Referral Form has an approval signature that is either electronic or photocopied under Section C. Authorization. Authorization which we determined to be not allowable. In addition, for one (1) of these samples, for at least one customer, the supervisor's signature was missing from the Photo-ID Referral Form. o For one (1) of the samples, for at least one customer, the Case number on Intake form was different from the Case number on the Referral form. Questioned Costs ? None. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? Without adequate internal controls to ensure compliance with EBT Card Security requirements, there is an increased risk that the inventory of EBT cards will not be properly maintained and accounted for. Cause ? OCFO/OFT for DHS does not have adequate policies and procedures in place to ensure adequate safeguarding, documentation and monitoring of EBT cards. Recommendation - We recommend that OCFO/OFT for DHS strengthen formal policies and procedures to maintain adequate security over, and documentation/records for EBT Cards. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The OCFO/OFT for DHS concurs with this finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-004 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of Treasury COVID-19 - Coronavirus Relief Fund (CRF) CFDA #: 21.019 Award #: N/A Award Year: 03/01/2020 ? 12/31/2021 Government Department/Agency:: Office of the Mayor (OM) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331(a) Requirements for Pass-Through Entities requires that pass-through entities must: Ensure that every sub-award is clearly identified to the subrecipient as a sub-award and includes certain information outlined in the section noted above, including FFATA; pre-award assessment, indirect cost rated for the award, CFDA number, finding and award follow-up and other pertinent actions. In accordance with the requirements of 2 CFR Section 1402.300, the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR part 170 Reporting Subaward and Executive Compensation Information. In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $25,000 or more in federal funds in the FFATA Subaward Reporting System. Condition ? Our examination of the program?s subrecipient monitoring requirements includes submission and review of monthly financial and performance reports. We examined 11 subrecipients and noted that there is no evidence that a review of the monthly financial and performance reports submitted was made by the Office of the Mayor for six (6) subrecipients. We also noted that two (2) subrecipients failed to submit their monthly financial and performance reports. Questioned Costs ? None. Context ? This is a condition identified per review of OM?s compliance with specified monitoring requirements on the program?s subrecipient. Effect ? The District is not in compliance with the subrecipient monitoring requirements as it failed to document its review of the reports and was not able to obtain reports on some of the subrecipient. Cause ? Management did not have proper internal controls and policies and procedures in place to ensure that a review is performed on the financial and program reports. Further, management did not have working procedures in place to follow up on financial and program reports not submitted. Recommendation ? We recommend that OM implement policies, procedures and controls that will ensure that financial and program reports are reviewed, and evidence of review are documented. Further, OM should implement policies to follow up on financial and program reports not submitted in order to ensure compliance with all the required laws, guidelines and requirement under the award. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The OM agrees with the conditions and recommendations of this finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-005 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases CFDA #: 93.323 Award #: 1 NU50CK000502-01-00, 6 NU50CK000502-01-04 Award Year: 08/01/2019 ? 07/31/2024, 04/23/2020 ? 04/23/2022 Government Department/Agency:: Department of Health (DOH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? We noted that DOH allocated payroll expenditures to the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program during fiscal year 2020 based on budgeted percentages. These percentages were entered into the PeopleSoft Human Resources/Payroll System (PeopleSoft) at the beginning of the fiscal year and were based on management?s estimate of the respective employee?s level of effort for each program. PeopleSoft calculated the payroll costs every payroll cycle for each employee and program based on the predetermined percentage, and reported it through the Labor Distribution Report (485 Report). However, management did not perform a periodic comparison of actual costs to the budgeted costs and make any necessary adjustment as required by 2 CFR Section 200.430. Specifically, 3 out of 60 sampled payroll items tested for the ELC grant were recorded based on estimated hours and not actual hours. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DOH?s compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits, for the ELC program in fiscal year 2020 were $6,573,246. Effect ? DOH was unable to demonstrate that the payroll expenditures charged to the ELC grant accurately reflected the time incurred on the program and were properly supported in accordance with 2 CFR Part 200.430 time and effort reporting requirements. Cause ? DOH did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the ELC program to the actual expenditures incurred. Per corrective action plans and status updates submitted by DOH to BDO in fiscal year 2020, DOH has a plan still in progress to develop a program manager-level certification of employee time and effort reflected in bi-weekly payroll records (485 Reports). It has not been completed by the end of fiscal year 2020. Recommendation ? We recommend that DOH fully implement its current corrective action plan to deploy policies and procedures to periodically compare employees? estimated hours per the 485 Report to the actual hours incurred, and make any necessary adjustments as required by 2 CFR 200.430. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The Department of Health (DOH) concurs with the finding. This was not a prior year?s finding for the ELC grant, but DOH is already engaged in a corrective action plan (CAP) that is progressing and will be fully implemented in fiscal year 2021. The remedy for this finding will be the result of full agency-wide implementation of a the agency?s existing standard operating procedure for ?Time and Effort Certification? with the objective of ensuring the DOH is routinely requiring periodic comparison of actual costs to the budgeted costs of personnel and making any necessary adjustment as required by 2 CFR 200.430. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-006 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Diseases CFDA #: 93.323 Award #: 6 NU50CK000502-01-04 Award Year: 04/23/2020 ? 04/23/2022 Government Department/Agency: Department of Health (DOH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.328 Financial Reporting: ?Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future, OMB-approved, governmentwide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting. The Federal awarding agency must use OMB-approved common information collections, as applicable, when providing financial and performance reporting information.? Condition ? DOH received COVID funding under the ELC program in fiscal year 2020. The first trench of COVID funding was awarded to DOH on 04/23/2020. The grant agreement imposes additional reporting requirements on DOH, which is to submit monthly fiscal reports beginning 60 days after Notice of Award is issued. During fiscal year 2020, DOH should submit monthly fiscal report for July ? September. We noted that DOH only submitted ELC COVID-19 financial progress report for the month of July. August and September reports were not submitted. Questioned Costs ? None. Context ? This is a condition identified per review of DOH?s compliance with specified requirements. Effect ? Without proper internal controls and policies and procedures in place, the required financial reports are not submitted. Cause ? This is a complex program, with several components, expanded scope and a remarkable and fast budget increase. In the context of the pandemic, the focus and priority by program leads was on getting program data (i.e., the COVID-19 disease surveillance, testing and contact-tracing data) to DOH?s federal partners. Recommendation ? We recommend that DOH fully implement its current corrective action plan to deploy policies and procedures to ensure monthly financial reports are submitted on time as required by 2CFR 200.328. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The Department of Health (DOH) concurs with the finding. Programmatic, fiscal and administrative requirements arrived rapidly with the supplemental COVID-19 funding, creating a need for operational resources to catch up to pandemic emergency response needs related to the ELC grant. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-007 Prior Year Finding Number: 2019-009 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) CFDA #: 93.558 Award #: Various Award Year: 10/01/2019 ? 09/30/2020 Government Department/Agency:: Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 205.60 (a), ?The State agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of financial assistance, and the use of any information obtained under Section 205.55, with respect to individual applications denied, recipients whose benefits have been terminated, recipients whose benefits have been modified, and the dollar value of these denials, terminations and modifications. Under this requirement, the agency will keep individual records which contain pertinent facts about each applicant and recipient. The records will include information concerning the date of application and the date and basis of its disposition; facts essential to the determination of initial and continuing eligibility (including the individual's social security number, need for, and provision of financial assistance); and the basis for discontinuing assistance.? Condition ? During our testing over beneficiary eligibility compliance requirements of the Temporary Assistance for Needy Families (TANF) program, we selected a sample of 60 beneficiaries in fiscal year 2020 to test DHS? compliance with eligibility requirements. We noted the following: ? For two (2) out of 60, the most recent application prior to the fiscal year 2020 payment selected for testing was not completed properly. We noted that the applicant's household composition was missing. ? For two (2) out of 60, DHS was unable to provide sufficient documentation to support that assistance was not provided to any individual who was fleeing to avoid prosecution, or custody or confinement after conviction, for a felony or attempt to commit a felony, or who is violating a condition of probation or parole imposed under Federal or State law as the question was not addressed on the application. ? For six (6) out of 60, DHS was unable to provide support that would allow us to test that cash assistance was not provided to an individual during the 10-year period that began on the date the individual was convicted in Federal or State court of having made a fraudulent statement or representation with respect to place of residence in order to simultaneously receive assistance from two or more States under TANF, Title XIX, or the Food Stamp Act of 1977, or benefits in two or more States under the Supplemental Security Income program under Title XVI of the Social Security Act. ? For sixteen (16) out of 60, the participant's application date covered the sampled month and was prior to the date of the implementation of supplemental form to correct the prior year finding (10/01/2019). Therefore DHS was unable to provide support that would allow us to test that cash assistance was not provided to an individual during the 10-year period that began on the date the individual was convicted in Federal or State court of having made a fraudulent statement or representation with respect to place of residence in order to simultaneously receive assistance from two or more States under TANF, Title XIX, or the Food Stamp Act of 1977, or benefits in two or more States under the Supplemental Security Income program under Title XVI of the Social Security Act. ? For eight (8) out of 60, the participant's application date covered the sampled month and was prior to the date of the implementation of supplemental form to correct the prior year finding (10/01/2019). However, later in the fiscal year, the customer completed the supplemental form which included the 10-year question. Therefore for part of the year, DHS was unable to provide support that would allow us to test that cash assistance was not provided to an individual during the 10-year period that began on the date the individual was convicted in Federal or State court of having made a fraudulent statement or representation with respect to place of residence in order to simultaneously receive assistance from two or more States under TANF, Title XIX, or the Food Stamp Act of 1977, or benefits in two or more States under the Supplemental Security Income program under Title XVI of the Social Security Act. ? For three (3) out of 60, the supplemental form to correct the prior year finding was not filled out by the participant for fiscal year 2020 because of the Global Coronavirus Pandemic, as allowed by the waivers provided. The last available application was dated during fiscal year 2019, for which DHS was unable to provide support that would allow us to test that cash assistance was not provided to an individual during the 10-year period that began on the date the individual was convicted in Federal or State court of having made a fraudulent statement or representation with respect to place of residence in order to simultaneously receive assistance from two or more States under TANF, Title XIX, or the Food Stamp Act of 1977, or benefits in two or more States under the Supplemental Security Income program under Title XVI of the Social Security Act. These amounts represent 53% of the total eligibility amounts tested related to the 60 sampled items of $352,777. Questioned Costs ? Known amount is $186,579. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? Without properly maintaining documentation to support eligibility determinations, ineligible beneficiaries may receive benefits under the TANF grant and DHS may make payments on behalf of those beneficiaries resulting in noncompliance with the eligibility requirements. Cause ? DHS did not consistently adhere to its established policies and procedures requiring it to maintain documentation supporting participant eligibility. Recommendation - We recommend that DHS strengthen its existing policies and procedures over the review and maintenance of appropriate documentation to ensure compliance with eligibility requirements. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The District does not dispute the findings provided by BDO for the noted eligibility. ESA will follow through on the outlined internal control procedures to ensure that documentation is maintained to support eligibility decisions and that customer files are properly retained. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-008 Prior Year Finding Number: 2019-010 Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) CFDA #: 93.558 Award #: Various Award Year: 10/01/2019 ? 09/30/2020 Government Department/Agency: Department of Human Services (DHS) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. According to Title IV-A, Section 411 of the Social Security Act (the Act), 45 CFR 265.3, and the American Recovery and Reinvestment Act (ARRA) of 2009, (Public Law 111-5), each State must file an annual report containing information on the TANF program and the State?s maintenance-of-effort (MOE) program(s) for that year, including strategies to implement the Family Violence Option, State diversion programs, and other program characteristics. States are required to submit the ACF-196R report quarterly, beginning in FFY 2015, in lieu of the SF-425, Federal Financial Report (financial status). Each State files quarterly expenditure data on the State?s use of Federal TANF funds, State TANF MOE expenditures, and State expenditures of MOE funds in separate State programs. If a State is expending Federal TANF funds received in prior fiscal years, it must file a separate quarterly TANF Financial Report for each fiscal year that provides information on the expenditures of that year?s TANF funds. This form must be used for reporting regular TANF grant funds, Contingency Funds, and ARRA-Emergency Fund for TANF State Programs funds. See TANF-ACF-PI-2014-02, available at http://www.acf.hhs.gov/programs/ofa/resource/tanf-acf-pi-2014-02, for more information. Condition ? During our test work over the quarterly ACF-196R, we noted the following: ? For Grant Identifying number - G-2001DCTANF, there was a variance of $67,903 between the amount reported on the revised 4th quarter ACF-196R for the fiscal year 2020 grant and the recalculated amount of IDCR earned in fiscal year 2020. The amount reported as IDCR earned for fiscal year 2020 was $2,433,562 while the recalculated amount was $2,501,465, resulting a variance of $67,903. Questioned Costs ? None. Context ? This is a condition identified per review of DHS? compliance with specified requirements. Effect ? Without proper internal controls and policies and procedures in place over the review and approval of the quarterly ACF-196R report, the TANF program incorrectly reported Indirect Cost Rate (IDCR) earned on expenditures on the final ACF-196R report for one of the four grants open in fiscal year 2020. Cause ? Management did not have proper internal controls and policies and procedures in place over the review and approval of the ACF-196R report to ensure that the amounts are properly reported. Recommendation - We recommend that DHS strengthen their policies, procedures and controls over the review and approval of the quarterly ACF-196R report to ensure the amounts reported for each open grant are accurate for the ACF-196R report prior to approval. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS concurs with this finding. The agency has subsequently submitted the report correcting the amount in question and has put controls in place to minimize a recurrence. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-009 Prior Year Finding Number: 2019-012 Compliance Requirement: Special Tests and Provisions ? Income Eligibility and Verification System Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) CFDA #: 93.558 Award #: Various Award Year: 10/01/2019 ? 09/30/2020 Government Department/Agency: Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 205.56(a)(1)(i), ?The State agency shall review and compare the information obtained from each data exchange against information contained in the case record to determine whether it affects the applicant?s or the recipient?s eligibility or the amount of assistance.? Per 45 CFR Section 205.60 (a), ?The State agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of financial assistance, and the use of any information obtained under Section 205.55, with respect to individual applications denied, recipients whose benefits have been terminated, recipients whose benefits have been modified, and the dollar value of these denials, terminations and modifications. Under this requirement, the agency will keep individual records which contain pertinent facts about each applicant and recipient. The records will include information concerning the date of application and the date and basis of its disposition; facts essential to the determination of initial and continuing eligibility (including the individual's social security number, need for, and provision of financial assistance); and the basis for discontinuing assistance.? Condition ? During our test work of 60 cases selected to test the Special Tests and Provisions ? Income Eligibility and Verification Systems (IEVS), we noted that DHS was unable to provide sufficient documentation to support all eligibility determinations tested during the fiscal year 2020 audit. Specifically, out of the 60 beneficiary disbursements tested, we noted the following exception: ? For three (3) instances, we noted that DHS was unable to provide evidence of use of IEVS to determine eligibility. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? The District is not in full compliance with its policies and with Federal program compliance requirements surrounding records maintenance. Further, ineligible TANF beneficiaries may receive benefits under the TANF grant and the District may make payments on behalf of those beneficiaries. Cause ? Controls are not adequate to ensure that the District adheres to its established policies and procedures requiring it to maintain documentation supporting participant eligibility. Recommendation - We recommend that DHS enforce existing policies and procedures and implement additional policies and procedures for maintaining and monitoring case record documentation to ensure that Income Eligibility and Verification System requirements are complied with. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS agrees with the finding in this report. The root cause for the three (3) instances in which the required income verification was not obtained or documented through the IEVS was due to either a special character apostrophe in the beneficiary?s first name or in scenarios where the system did not create a case note on the integrated case stating a data check and comparison was performed and that no change is required. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-010 Prior Year Finding Number: 2019-014 Compliance Requirement: Reporting; Special Tests and Provisions ? Penalty for Failure to Comply With Work Verification Plan Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) CFDA #: 93.558 Award #: Various Award Year: 10/01/2019 ? 09/30/2020 Government Department/Agency: Department of Human Services (DHS) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 261.60 (a), ?A State must report the actual hours that an individual participates in an activity, subject to the qualifications in paragraphs (b) and (c) of this section and Section 261.61(c). It is not sufficient to report the hours an individual is scheduled to participate in an activity. (b) For the purposes of calculating the work participation rates for a month, actual hours may include the hours for which an individual was paid, including paid holidays and sick leave. For participation in unpaid work activities, it may include excused absences for hours missed due to a maximum of 10 holidays in the preceding 12-month period and up to 80 hours of additional excused absences in the preceding 12-month period, no more than 16 of which may occur in a month, for each work-eligible individual. Each State must designate the days that it wishes to count as holidays for those in unpaid activities in its Work Verification Plan. It may designate no more than 10 such days. In order to count an excused absence as actual hours of participation, the individual must have been scheduled to participate in a countable work activity for the period of the absence that the State reports as participation. A State must describe its excused absence policies and definitions as part of its Work Verification Plan, specified at Section 261.62. (c) For unsubsidized employment, subsidized employment, and OJT, a State may report projected actual hours of employment participation for up to six months based on current, documented actual hours of work. Any time a State receives information that the client's actual hours of work have changed, or no later than the end of any six-month period, the State must re-verify the client's current actual average hours of work, and may report these projected actual hours of participation for another six-month period. (d) A State may not count more hours toward the participation rate for a self-employed individual than the number derived by dividing the individual's self-employment income (gross income less business expenses) by the Federal minimum wage. A State may propose an alternative method of determining self-employment hours as part of its Work Verification Plan. (e) A State may count supervised homework time and up to one hour of unsupervised homework time for each hour of class time. Total homework time counted for participation cannot exceed the hours required or advised by a particular educational program.? Per 45 CFR Section 261.61 (a), ?A State must support each individual?s hours of participation with documentation in the case file. In accordance with Section 261.62, a State must describe in its Work Verification Plan the documentation it uses to verify hours of participation in each activity.? According to the DC State Verification Plan, the D.C. Department of Human Services (DHS), Department of Human Services Monitoring Unit reviews and audits all documentation submitted by vendors reflecting the activities of recipients in TANF Employment program. This documentation includes time sheets, activity logs, school records, pay stubs, and verification of employment, work experience and on-the-job training. The Monitoring Unit completes this audit process to determine if sufficient documentation exists to substantiate reported time and attendance data, to warrant a payment to TANF Employment program vendors, and submission of countable hours for federal reporting purposes. The District projects hours of participation in unsubsidized, self-employment for six months or until the recipient's next scheduled recertification, whichever is sooner. Per 45 CFR Section 265.7 (a)-(c), ?Each State?s quarterly reports (the TANF Data Report, the TANF Financial Report (or Territorial Financial Report), and the SSP-MOE Data Report) must be complete and accurate and filed by the due date.? For disaggregated data report, `a complete and accurate report? means that: (1) The reported data accurately reflect information available to the State in case records, financial records, and automated data systems, and include correction of the quarterly data by the end of the fiscal year reporting period; (2) The data are free from computational errors and are internally consistent (e.g., items that should add to totals do so); (3) The State reports data for all required elements (i.e., no data are missing); (4)(i) The State provides data on all families; or (ii) if the State opts to use sampling, the State reports data on all families selected in a sample that meets the specification and procedures in the TANF Sampling Manual (except for families listed in error); and (5) Where estimates are necessary (e.g., some types of assistance may require cost estimates), the State uses reasonable methods to develop these estimates. For an aggregated data report, ?a complete and accurate report? means that: (1) The reported data accurately reflect information available to the State in case records, financial records, and automated data systems; (2) The data are free from computational errors and are internally consistent (e.g., items that should add to totals do so); (3) The State reports data on all applicable elements; and (4) Monthly totals are unduplicated counts for all families (e.g., the number of families and the number of out-of-wedlock births are unduplicated counts).? 45 CFR Section 265.7 (f) states that ?States must maintain records to adequately support any report, in accordance with Section 75.361 through 75.370 of this title.? Condition ? During our test work over a sample of 60 participants for Special Tests and Provisions - Penalty for Failure to Comply with Work Verification Plan and Reporting, we noted: ? For thirty-six (36) instances, we noted that although the hours reported met or exceeded the required work participation hours, DHS/ESA was unable to provide documentation to support the hours reported. Therefore, we were unable to confirm that approved hours were properly supported. ? For eight (8) instances, we noted that although the hours reported met or exceeded the required work participation hours, and the customer met the requirement, the hours reported did not agree with the recalculated hours. ? For one (1) instance, we noted that these participants did not meet the work participation requirement, as the average of approved hours was less than the hours required per week. No sanction was noted. ? For one (1) instance, DHS/OPM was unable to find customer in CATCH. No further explanation as to whether participant was exempt was provided. ? For one (1) instance, the participant case number is the incorrect case number. However, BDO noted that the case number included for the sample was the same case number included in the Eligibility population. BDO also observed in DCAS, that the participant's income support number was different. The information tested in our sample represents the underlying data used in Reporting for the 2nd and 4th quarters of fiscal year 2020. Consequently, DHS incorrectly reported data in the ACF-199 report for the 2nd and 4th quarters of fiscal year 2020. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? Data within the ACF-199 report may not be complete and accurate. Specifically, if the work participation data is not substantiated, or inconsistencies are noted, it may result in inaccurate data being reported and may lead to an incorrect ACF-199 report and could result in an incorrect allocation of Federal Funds to the state. Cause ? Controls are not operating effectively over the documentation of work participation data to ensure that adequate evidence of the work participation is maintained. Recommendation - We recommend that DHS enforce existing policies and procedures and implement additional controls to ensure that adequate documentation is maintained to substantiate the work participation data reported in the ACF-199 report in accordance with the District of Columbia Work Verification Plan. We also recommend that DHS implement policies, procedures and controls that will enable an accurate reconciliation between the data sources used in the preparation of the ACF-199 report to ensure proper reporting of data elements. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS agrees with the findings in the report. This is an iterative issue which was born out of correcting a past finding, where employment hours were associated with, but not tied to specific employment fields, thus creating inflated DHS is aware of the issues and is working to implement fixes in DCAS which align hours with employment activity, thus creating inflated ?DCAS Hours.? In this case, the employment activity appears to continue to remain active, for a prolonged period of time, with ?DCAS Hours.? The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-011 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles; Special Tests and Provisions ? Operation of a Foster Care Demonstration Project Program: U.S. Department of Health and Human Services Foster Care ? Title IV-E CFDA #: 93.658 Award #: Various Award Year: 10/01/2019 ? 09/30/2020 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In addition, per 2 CFR Section 200.403, ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented.? Condition ? During our test work of 40 samples selected to test the Activities Allowed or Unallowed and Allowable Costs/Cost Principles, and 40 samples selected to test Special Test and Provisions - Operation of a Foster Care Demonstration Project, we noted the following: ? For four (4) Special Test and Provision samples, we noted that CFSA paid these transactions but did not document the amounts and the rates paid in their respective contracts. Total questioned costs for these instances is $2,618. ? BDO also observed that for another four (4) transactions totaling to $33,688, which were self-reported and not included in the 40 nonpayroll samples, plus one (1) transaction that was included in the sample amounting to $9,031, where CFSA improperly requested reimbursement from the federal program, before payment was made to the provider. Total questioned costs for these instances is $42,719. Both conditions represent 1.9% of the total sampled items of $611,704 and 0.8% of the population not tested in the sample of $3,969,887. Questioned Costs ? Known amount is $45,337. Context ? This is a condition identified per review of CFSA?s compliance with specified requirements using a statistically valid sample. Effect ? Without adequate controls in place to ensure costs are allowable and reimbursable, CFSA could incorrectly charge expenditures to the federal program. Cause ? Management is not adhering to their internal policies and procedures to ensure that transactions are paid prior to requesting reimbursement from the grantor. Recommendation ? We recommend that CFSA strengthen their policies and procedures over the recording of expenditures to ensure compliance with activities allowed or unallowed and allowable costs/cost principles requirements. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? CFSA concurs with the facts of the finding. A prior period adjustment will be made with the fiscal year 2021 third quarter Title IV-E Foster Care claim for the questioned costs. The questioned costs are associated with the federal-approved Title IV-E waiver program the agency operated until 2019. No further claims will be made against this waiver program. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-012 Prior Year Finding Number: 2019-018 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Foster Care ? Title IV-E CFDA #: 93.658 Award #: Various Award Year: 10/01/2019 ? 09/30/2020 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. 45 CFR Section 92.20(b)(2), ?Accounting records, "Grantees and sub grantees must maintain records which adequately identify the source and application of funds provided for financially assisted activities. These records must contain information pertaining to grant or subgrant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays or expenditures, and income.? 45 CFR Section 233.90(b)(3), states ?a Title IV-E agency may provide foster care maintenance payments on behalf of youth who have attained age 18, but are under the age of 19, and who are full-time students expected to complete their secondary schooling or equivalent vocational or technical training before reaching 19.? 45 CFR Section 1356.30(f), ?In order for a child care institution to be eligible for title IV-E funding, the licensing file for the institution must contain documentation which verifies that safety considerations with respect to the staff of the institution have been addressed.? 45 CFR Section 1356.30(a) states, ?The Title IV-E agency must provide documentation that criminal records checks have been conducted with respect to prospective foster and adoptive parents.? 42 U.S. Code Section 671(a)(20)(A), ?In order for a State to be eligible for payments under this part, it shall have a plan approved by the Secretary which provides procedures for criminal records checks of national crime information databases for any prospective foster or adoptive parent before the foster or adoptive parent may be finally approved for placement of a child regardless of whether foster care maintenance payments or adoption assistance payments are to be made on behalf of the child under the State plan.? 42 U.S. Code Section 671(a)(20)(B), ?In order for a State to be eligible for payments under this part, it shall have a plan approved by the Secretary which provides that the State shall check any child abuse and neglect registry maintained by the State for information on any prospective foster or adoptive parent and on any other adult living in the home of such a prospective parent, and request any other State in which any such prospective parent or other adult has resided in the preceding 5 years, to enable the State to check any child abuse and neglect registry maintained by such other State for such information, before the prospective foster or adoptive parent may be finally approved for placement of a child.? Furthermore, per 45 CFR Section 1356.21(a), ?Statutory and regulatory requirements of the Federal foster care program, To implement the foster care maintenance payments program provisions of the title IV-E plan and to be eligible to receive Federal financial participation (FFP) for foster care maintenance payments under this part, a Title IV-E agency must meet the requirements of this section, 45 CFR 1356.22, 45 CFR 1356.30, and Parts 472, 475(1), 475(4), 475(5), 475(6).? Condition ? During our audit we noted that in fiscal year 2020, the Foster Care program had total disbursements of $3,780,751 for 5,461 maintenance payments. We selected a sample of 60 participants representing disbursed federal funds totaling $43,773, we noted the following deficiencies: ? For one (1) of 60 samples, CFSA paid the Child Care Provider for two days which comprised of a holiday and an absence. ? For one (1) of 60 samples, the judicial order provided was unsigned. ? For two (2) of 60 samples, CFSA did not provide evidence of criminal record checks, including fingerprint-based checks from the national crime information databases. ? For six (6) of 60 samples, CSFA did not provide valid licenses for the child day care centers. ? For five (5) of 60 samples CFSA failed to provide evidence that a judicial determination of reasonable efforts toward permanency was not obtained at least once every 12 months after the child was in foster care. ? For eight (8) of 60 samples, the redetermination forms provided showed that periods billed and included in the population and samples selected included amounts with eligibility status of ?Eligible Not Reimbursable?. These deficiencies represent 52% of the total disbursements tested. Questioned Costs ? Known amount is $22,584. Context ? This is a condition identified per review of CFSA?s compliance with specified requirements using a statistically valid sample. Effect ? CFSA was not in compliance with the eligibility requirements of the Foster Care program. Cause ? CFSA does not have adequate controls in place to ensure that eligibility files are being properly reviewed and the required documentation is being maintained to evidence compliance with eligibility requirements. Recommendation - We recommend CFSA reevaluate and strengthen its existing policies and procedures over the review and maintenance of appropriate documentation to ensure compliance with eligibility requirements in accordance with the program. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? CFSA concurs with the findings as stated. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-013 Prior Year Finding Number: 2019-019 Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Foster Care ? Title IV-E CFDA #: 93.658 Award #: Various Award Year: 10/01/2019 ? 09/30/2020 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per OMB No. 0970-0205, Form CB-496, Title IV-E Programs Quarterly Financial Report, ?is required to be submitted at the end of each fiscal quarter by each State or Tribe with an approved plan under title IV-E of the Social Security Act to administer the Foster Care, Adoption Assistance, and Guardianship Assistance programs. In submitting this form, each State or Tribal grantee meets its statutory and regulatory requirements to report actual program expenditures made in the preceding fiscal quarter and to provide an estimate of program expenditures anticipated in the upcoming fiscal quarter.? Condition ? During our review and reconciliation of the allowable costs used in the preparation of the CB-496 quarterly reports, we observed the following exceptions: ? For the first quarter, the Agency duplicated the number of days used to compute the administrative rate for one of the providers by 536 days, and thereby, overclaimed costs by $39,480. ? In the 3rd and 4th quarters, the Agency over-claimed maintenance costs by $10,267 and $49,582 respectively. Questioned Costs ? Known amount is $99,329. Context ? This is a condition identified per review of CFSA?s compliance with specified requirements using a statistically valid sample. Effect ? Without proper internal controls and policies and procedures in place to ensure that costs were properly reported in the CB-496, the Foster Care program expenditures included errors and overstated expenditures in three out of the four quarters submitted to the federal agency. Lack of proper internal controls over the review of the CB-496 may lead to incorrect reporting of financial data. Cause ? CFSA overstated expenditures reported as a result of the inclusion of duplicated transactions and certain congregate care costs that should not have been claimed. Thus, Management did not have proper procedures and internal controls in place to ensure that the CB-496 was correct prior to approval. Recommendation - We recommend that CFSA update its policies, procedures and controls to ensure amounts reported in the CB-496 quarterly reports are properly reviewed prior to approval and submission to the federal agency. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? CFSA concurs with the facts of the finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-014 Prior Year Finding Number: 2019-022 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Medicaid Cluster CFDA #: 93.775, 93.777, 93.778 Award #: Various Award Year: 10/01/2019 ? 09/30/2020 Government Department/Agency: Department of Health Care Finance (DHCF) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per Section 1927 of the Social Security Act (42 USC 1396r-8): Drug manufacturers are required to provide a listing to CMS of all covered outpatient drugs and; and on a quarterly basis, are required to provide their average manufacturer?s price and their best prices for each covered outpatient drug. Based on these data, CMS calculates a unit rebate amount for each drug, which it then provides to States. Each State agency under this subchapter shall report to each manufacturer not later than 60 days after the end of each rebate period and in a form consistent with a standard reporting format established by the Secretary, information on the total number of units of each dosage form and strength and package size of each covered outpatient drug dispensed after December 31, 1990, for which payment was made under the plan during the period, and shall promptly transmit a copy of such report to the Secretary. The CMS Medicaid Drug Rebate Data Guide requires that upon receipt of a quarterly invoice, labelers have 37 calendar days from the invoice postmark date to pay rebates before interest begins to accrue. In those instances where states have used a meter to postmark the envelope and the United States Postal Service (USPS) or common mail carrier has also postmarked the envelope, the postmark date of the USPS or common mail carrier should be used to track the interest start date. For invoices that are submitted electronically, states should be able to identify the date on which the electronic invoice was received in order to properly track the interest start date. Interest stops accruing on the postmark date of the labeler?s mailed check, the date the state applies a credit to the labeler, or the date on which a state provides written acknowledgment to the labeler of the resolution. On the 38th day from the date interest originally began accruing, any unpaid interest becomes principal and interest accrues on the new principal amount beginning on the 38th day after that. Condition ? During our review of 60 samples of drug rebates, we noted that for three (3) rebates, the manufacturer did not pay the rebate within 37 days after receiving the invoice from the DHCF, however, no interest was calculated and charged to the drug manufacturer. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DHCF?s compliance with the drug rebates requirements using a statistically valid sample. Effect ? Without adequate policies and procedures in place, there is no assurance that drug rebates are paid, or interest is assessed when rebates are not paid timely. Cause ? The contractor?s system for processing rebates does not have the capability to calculate interest once an account is paid in full. The system will only calculate interest if the account has an open balance. Recommendation - We recommend that DHCF establish policies and procedures to ensure that rebates are paid timely and interest is calculated and assessed when drug rebates are not paid timely. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHCF agrees with the facts described in the Condition above. This is a repeat finding. The fiscal year 2019 Single Audit finding 2019-022 alerted DHCF that the drug rebate system was not applying interest to amounts paid late, but prior to the production of the next quarterly invoice. In response, the drug rebate vendor addressed the problem prospectively by calculating interest on outstanding balances weekly rather than quarterly effective June 30, 2020. The three instances cited in the Condition above occurred in fiscal year 2020, but prior to June 30, 2020 correction. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-015 Prior Year Finding Number: 2019-023 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Medicaid Cluster CFDA #: 93.775, 93.777, 93.778 Award #: Various Award Year: 10/01/2019 ? 09/30/2020 Government Department/Agency: Department of Health Care Finance (DHCF)/Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Medicaid State Plan: Citation 42 CFR Section 431.17AT-79-29. Section 4.7 (Maintenance of Records) states, ?The Medicaid agency maintains or supervises the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of medical assistance, and administrative costs and statistical, fiscal and other records necessary for reporting and accountability, and retains these records in accordance with Federal requirements. All requirements of 42 CFR 431.17 are met.? Economic Security Administration (ESA) Policy Manual, Section 1.3, ?All eligibility criteria and clarifying information are documented on the Record of Case Action, form 1052. The case record should speak for itself. An outside reviewer shall be able to follow the chronology of events in the case be reading the narrative. All application documents including verification and correspondence must be date-stamped. For working recipients, the record should include the dates pay is received and how often the recipient is paid. When the recipient?s statement is the best available source, the record should include the application/recipient and agency efforts to verify the information. All address changes should be documented.? Condition ? During testing over beneficiary eligibility for the Medicaid benefits, we noted that the District?s Economic Security Administration (ESA) was unable to provide sufficient documentation to support the beneficiary?s eligibility determination during the fiscal year 2020 audit. Specifically, out of a sample of 132 participant files tested, we noted the following exceptions: ? Two (2) participant files where ESA did not provide the application. ? One (1) participant file where ESA did not perform the recertification within the required timeframe. No recertification date was entered in the ACEDS system since April 2017, therefore, the participant?s benefits continued without a recertification being performed. Without a recertification being performed, there is no assurance the participant qualifies for Medicaid benefits. The Department of Health Care Finance, as the State Medicaid Agency, lacks a quality control oversight system to ensure that eligibility documentation is maintained to support the eligibility decision. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of ESA?s compliance with specified requirements using a statistically valid sample. Effect ? Lack of supporting documentation for program services and noncompliance with program requirements could result in disallowances of costs and participants could be receiving benefits that they are not entitled to receive under the program. Cause ? DHCF and ESA did not appear to adhere to internal control procedures to ensure that applications are properly completed and retained, and that recertification of benefits were performed as required. Recommendation - We recommend that ESA strictly implement internal control procedures to ensure that documentation is maintained to support the beneficiary determination and that recertifications are performed within established timeframes. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHCF and DHS concur with this finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-016 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions ? Medicaid National Correct Coding Initiative Program: U.S. Department of Health and Human Services Medicaid Cluster CFDA #: 93.775, 93.777, 93.778 Award #: Various Award Year: 10/01/2019 ? 09/30/2020 Government Department/Agency: Department of Health Care Finance (DHCF) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Medicaid National Correct Coding Initiative (NCCI) Technical Guidance Manual, section 7.1.1, Sharing of State Medicaid NCCI Edit Files by States with Other Entities, requires that access to the complete quarterly Medicaid NCCI edit files that are posted on the Medicaid Integrity Institute (MII) on the RISSNET portal is limited to a State?s Medicaid Agency (SMA). A MSA may share these quarterly state Medicaid NCCI edit files which are posted on the MII on the RISSNET portal with the contracted fiscal agent that processes its fee-for service claims or with any of its contracted Medicaid managed-care entities that is using the Medicaid NCCI methodologies in its processing of claims or encounter data, if appropriate confidentiality agreements are in place. The Medicaid National Correct Coding Initiative Technical Guidance Manual, section 7.1.2 requires Confidentiality Agreements for contracted parties. At a minimum, the following elements must be included in the confidentiality agreements for any contracted party using the Medicaid NCCI files posted on the MII: ? Disclosure shall be limited to only those responsible for the implementation of the quarterly state Medicaid NCCI edit files. Disclosure shall not be made prior to the start of the new calendar quarter. ? After the start of the new calendar quarter, a Contracted Party may disclose only non-confidential information contained in the Medicaid NCCI edit files that is also available to the general public found on the Medicaid NCCI webpage. ? The Contracted Party agrees to use any non-public information from the quarterly state Medicaid NCCI edit files only for any business purposes directly related to the implementation of the Medicaid NCCI methodologies in the particular state. ? New, revised, or deleted Medicaid NCCI edits shall not be published or otherwise shared with individuals, medical societies, or any other entities unless it is a Contracted Party prior to the posting of the Medicaid NCCI edits on the Medicaid webpage. ? Implementation of New, revised, or deleted Medicaid NCCI edits shall not occur prior to the first day of the calendar quarter. ? Only a state Medicaid agency has the discretion to release additional information for selected individual edits or limited ranges of edits from the files posted on the MII. ? State Medicaid agencies must impose penalties, up to and including loss of contract, for violations of any confidentiality agreements relating to use of the MII edit files. Condition ? We noted that DHCF did not have any Confidentiality Agreements in place during fiscal year 2020 as required by the Medicaid National Correct Coding Initiative Technical Guidance Manual. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DHCF?s compliance with specified requirements of the Medicaid National Correct Coding Initiative Technical Guidance Manual. Effect ? Without the required confidentiality agreements in place, critical Medicaid information contained on the Medicaid NCCI edit files may be shared with non-authorized entities. Cause ? DHCF did not have adequate internal control procedures to ensure that confidentiality agreements were in place for contracted parties or fiscal agents. Recommendation ? We recommend that DHCF comply with the requirements of the Medicaid National Correct Coding Initiative Technical Guidance Manual to ensure that confidentiality agreements are in place with contracted parties and fiscal agents. In addition, we recommend that DHCF establish internal control procedures to ensure that Confidentiality agreements are in place prior to granting access to the information on the Medicaid NCCI edit files. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHCF agrees with the facts described in the Condition above. DHCF executed a confidentiality agreement with its third-party contractor, Conduent, on April 20, 2021, in compliance with Section 7.1.2 of the above-referenced technical guidance manual. Notwithstanding the recent execution of this agreement, DHCF has at all times maintained control over compliance with applicable confidentiality requirements through a comprehensive confidentiality clause in its contract with Conduent. The reason for non-compliance is that DHCF interpreted the contract clause to sufficiently cover the bases specified in the technical guidance. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-017 Prior Year Finding Number: 2019-024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services HIV Emergency Relief Project Grants CFDA #: 93.914 Award #: 2 H89HA00012-30-00, 2 H89HA00012-29-00 Award Year: 03/01/2020 ? 02/28/2021, 03/01/2019 ? 02/29/2020 Government Department/Agency: Department of Health (DOH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? We noted that DOH continued to allocate payroll expenditures to the HIV Emergency Relief Project Grant (HIVER) program during fiscal year 2020 based on budgeted percentages. These percentages were entered into the PeopleSoft Human Resources/Payroll System (PeopleSoft) at the beginning of the fiscal year and were based on management?s estimate of the respective employee?s level of effort for each program. PeopleSoft calculated the payroll costs every payroll cycle for each employee and program based on the predetermined percentage, and reported it through the Labor Distribution Report (485 Report). However, management did not perform a periodic comparison of actual costs to the budgeted costs and make any necessary adjustment as required by 2 CFR Section 200.430. Specifically, 44 out of 60 sampled payroll items tested for the HIVER grant were recorded based on estimated hours and not actual hours. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DOH?s compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits, for the HIVER program in fiscal year 2020 were $3,941,203. Effect ? DOH was unable to demonstrate that the payroll expenditures charged to the HIVER grant accurately reflected the time incurred on the program and were properly supported in accordance with 2 CFR Part 200.430 time and effort reporting requirements. Cause ? DOH did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the HIVER program to the actual expenditures incurred. Per corrective action plans and status updates submitted by DOH to BDO in fiscal year 2020, DOH has a plan still in progress to develop a program manager-level certification of employee time and effort reflected in bi-weekly payroll records (485 Reports). It has not been completed by the end of fiscal year 2020. Recommendation ? We recommend that DOH fully implement its current corrective action plan to deploy policies and procedures to periodically compare employees? estimated hours per the 485 Report to the actual hours incurred, and make any necessary adjustments as required by 2 CFR 200.430. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The Department of Health (DOH) concurs with the finding. The current corrective action plan (CAP) is progressing and will be fully implemented in fiscal year 2021. The actions that were already underway in fiscal year 2020 and those still being implemented will support the required periodic comparison of actual costs to the budgeted costs of personnel and making any necessary adjustment as required by 2 CFR 200.430. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-018 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Homeland Security Federal Emergency Management Agency (FEMA) COVID-19 - Public Assistance - Presidentially Declared Disaster CFDA #: 97.036 Award #: FEMA-4502-DR-DC Award Year: 10/01/2019 ? 09/30/2020 Government Department/Agency: Homeland Security and Emergency Management Agency (HSEMA) Criteria ? The Uniform Guidance in 2 CFR Section 200.510 (b) indicates: Schedule of expenditures of Federal awards (SEFA). 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 2 CFR section 200.502, Basis for determining Federal awards expended. 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. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. For a cluster of programs also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in 2 CFR section 200.502 Basis for determining Federal awards expended paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total Federal awards expended for loan or loan guarantee programs in the schedule. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee elected to use the 10% de minimis cost rate as covered in 2 CFR section 200.414 Indirect (F&A) costs. As indicated in the Part 4 of the August 2020 OMB Compliance Supplement relating to the Disaster Grants ? Public Assistance, we noted: Non-Federal entities must record expenditures on the SEFA when: (1) FEMA has approved the non-Federal entity?s project worksheet (PW), and (2) the non-Federal entity has incurred the eligible expenditures. Federal awards expended in years subsequent to the fiscal year in which the PW is approved are to be recorded on the non-Federal entity?s SEFA in those subsequent years. For example, 1. If FEMA approves the PW in the non-Federal entity?s fiscal year 2014 and eligible expenditures are incurred in the non-Federal entity?s fiscal year 2015, the non-Federal entity records the eligible expenditures in its fiscal year 2015 SEFA. 2. If the non-Federal entity incurs eligible expenditures in its fiscal year 2014 and FEMA approves the non-Federal entity?s PW in the non-Federal entity?s fiscal year 2015, the non-Federal entity records the eligible expenditures in its fiscal year 2015 SEFA with a footnote that discloses the amount included on the SEFA that was incurred in a prior year. Additionally, Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Condition ? Certain grant expenditures related to the Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (PDD) program, amounting to approximately $131 million had been inaccurately recorded and initially reported in fiscal year 2020. In reconciling the PW detail and the general ledger, it was discovered that the PW of these eligible expenses were approved by FEMA in fiscal year 2021. Therefore, these expenses should not have been included in the fiscal year 2020 SEFA. Consequently, an adjustment was recorded to correct the SEFA. Additionally, during our testing of the allowable cost compliance requirement, we identified two samples from Office of Contract and Procurement (OCP) out of 402 samples, where a portion of the expenses were reported in the incorrect period resulting in an overstatement of fiscal year 2020 expenses of $138,136. Questioned Costs ? None. Context ? This is a condition identified per review of Part 4 of the OMB Compliance Supplement. Effect ? The SEFA may not be fairly presented, in all material respects, in relation to the basic financial statements taken as a whole. In addition, the lack of adherence to the established internal controls policies and procedures can lead to noncompliance with federal statutes, regulations, and provisions of grant agreements. Cause ? HSEMA did not adhere to their instituted policies and procedures as indicated in the District of Columbia Public Assistance Administrative Plan to ensure the accuracy of the SEFA and recorded amounts in the correct accounting period. Recommendation ? We recommend that HSEMA adhere to instituted policies and procedures to ensure the accuracy of the SEFA and recorded amounts in the correct accounting period. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? OCFO agrees with the conditions and recommendations of this finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2020-019 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Homeland Security Federal Emergency Management Agency (FEMA) COVID-19 - Public Assistance - Presidentially Declared Disaster CFDA #: 97.036 Award #: FEMA-4502-DR-DC Award Year: 10/01/2019 ? 09/30/2020 Government Department/Agency: Homeland Security and Emergency Management Agency (HSEMA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per Office of Management and Budget (OMB) Compliance Supplement, the instructions for recording expenditures on the Schedule of Expenditures of Federal Awards (SEFA) for the Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (PDD) program, ?Non-Federal entities must record expenditures on the SEFA when: (1) Federal Emergency Management Agency (FEMA) has approved the non-Federal entity?s project worksheet (PW), and (2) the non-Federal entity has incurred the eligible expenditures. Federal awards expended in years subsequent to the fiscal year in which the PW is approved are to be recorded on the non-Federal entity?s SEFA in those subsequent years.? The Compliance Supplement also requires that amounts reported in the SF-425 can be traced to accounting records that support the audited financial statements and the SEFA and amounts reported agree with the accounting records. Condition ? HSEMA is required to submit the SF-425 financial reports quarterly to the federal government for the PDD grant. Our review of financial reports revealed that the expenditures in the amount of approximately $131 million were not reported in the proper year in accordance with the guidelines outlined above and thus the federal financial reports were not completed accurately as prescribed. These expenditures should have been reflected in the fiscal year 2021 SEFA. Questioned Costs ? None. Context ? This is a condition identified per review of HSEMA?s compliance with specified requirements. Effect ? HSEMA did not accurately reflect the amounts for the reporting periods. As such HSEMA is noncompliance with the reporting requirements. Cause ? HSEMA recorded expenditures of approximately $131 million in fiscal year 2020 when the related PW of these expenses were approved by FEMA in fiscal year 2021. Recommendation ? We recommend HSEMA to enhance its controls over the review of financial reports to ensure compliance with reporting requirements and established policies and procedures. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? OCFO agrees with the conditions and recommendations of this finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-001 Prior Year Finding Number: 2018-001 Compliance Requirement: Special Tests and Provisions ? ADP System for SNAP Program: Government Department/Agency: U.S. Department of Agriculture Supplemental Nutrition Assistance Program Cluster (SNAP) CFDA #: 10.551, 10.561 Award #: Various Award Year: 10/01/2018 ? 09/30/2019 Department of Human Services (DHS)/DC Access System (DCAS) Program Management Administration Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 272.10(a), ?All State agencies are required to sufficiently automate their SNAP operations and computerize their systems for obtaining, maintaining, utilizing, and transmitting information concerning SNAP.? Per 2 CFR Section 272.10(b), ?In order to meet the requirements of the Act and ensure the efficient and effective administration of the program, a SNAP system, at a minimum, shall be automated in each of the following program areas (1) Certification and (2) Issuance Reconciliation and Reporting. Under Certification ? States agencies must determine eligibility and calculate benefits or validate the eligibility worker's calculations by processing and storing all casefile information necessary for the eligibility determination and benefit computation (including but not limited to all household members' names, addresses, dates of birth, social security numbers, individual household members' earned and unearned income by source, deductions, resources and household size). Also, State agencies must redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.? Condition ? The District is self-reporting findings it noted from its ongoing efforts to resolve issues with the ADP system for SNAP. The issues identified and the estimated impact follows: ? 3,655 cases of overpayments were identified which resulted from a batch sequence being misaligned in the release of DCAS 2.17 as part of an overhaul of the SNAP certification process. The error in the batch sequence meant that payments were issued to individuals prior to their case being reassessed to ensure the individual was still eligible for recertification. As a result, there were SNAP overpayments erroneously issued for the months of October and November 2018. The root cause of the issue was technical and was identified on December 7, 2018. A fix went into production shortly after on December 12, 2018, which resolved the issue and prevented it from happening in future months. DCAS also updated the technical QA process. Total impact of the error amounted to $796,690. ? 5,410 cases of overpayments were identified which resulted from late recertifications defaulting to the first day of the month of what would be the customers new certification period rather than the actual date the SNAP beneficiary returned the application or all verifications. The DCAS system flags all customers due to recertification by selecting cases scheduled to have their certification period expire in 60 days. With each case selected for recertification, a DCAS ?recertification Record? or ?evidence is created that must be closed prior to the last day of the customers certification period; if not closed, the recertification will be denied. Once the recertification record has been denied, the DCAS system enables caseworkers to complete a late recertification by extending the time (30 days) in which the recertification evidence can still be edited. While the date of the certification was defaulted to the first day of the new certification period, the date could still be edited by caseworkers and should have been manually reviewed. However, workers were not accustomed to changing this value (date) because of the belief in the DCAS system calculating the correct certification period start date. In May 2019, enhancements were done to update the new certification period start date to the date when the last verification is cleared on the case during the case period. These will pro-rate customer?s benefits from that date. Total impact of the error amounted to $761,488. ? 1,001 cases of underpayments were identified which resulted from the DCAS system double counting income which leads to some SNAP customers exceeding the income limit eligibility rules and others to have reduced benefit. After the release of a system enhancement in May 2019, it created an error for customers aged 65 and more, who received multiple incomes from the Social Security Administration. The information received from the Social Security Administration file known as Bendex, began to treat retirement income separately, rather than in combination with any disability income received. This error was discovered in July 2019. The impact of the error amounted to $93,781. Approximately 100 cases are expected to be reviewed by the program each month. ? 1,982 of SNAP cases actively receiving a benefit for which SNAP customers did not have a social security number at the time of the application or recertification. As previously reported in the prior year, DHS was in the process of analyzing the number of SNAP customers affected by this issue. The updated results of that analysis show from the time period between October 2016 and October 2019, there are 1,982 SNAP cases actively receiving a benefit. Per SNAP policy, each of these individuals made their best effort to apply for an SSN at time of application and the District did not deny them the opportunity to participate. DHS submitted a plan under legal review, to issue a one-time mass ?request for information? notice to all 1,982 SNAP beneficiaries, providing 60 days to provide an SSN or verify the status of their SSA Application. DHS is targeting the start of the project in December 2019/January 2020. Until a permanent system fix is developed and delivered, program staff will work a monthly report that will feed into an ongoing notice mail merge process. Until clients have provided an update, the true number of the overpayment is unknown. These amounts represent 1% of the total amounts paid by DHS in claims for beneficiary payments. DHS paid a total of $173,109,637 in beneficiary payments to all SNAP beneficiaries in fiscal year 2019. Questioned Costs ? Known amount is $1,464,397. Context ? This is a condition identified per review of DHS? compliance with specified requirements resulting from a system implementation. Effect ? Without an effectively designed and operated system in place, ineligible beneficiaries may receive benefits under the SNAP grant and DHS may make payments on behalf of those beneficiaries resulting in noncompliance with the eligibility requirements. Inaccurate beneficiary allotment payments could result in participants receiving benefits that they are not entitled to receive under the program. Cause ? DHS did not effectively design and operate the new ADP system for SNAP which resulted to inaccurate benefit payments. Recommendation ? We recommend that DHS continue to evaluate and improve the new ADP system for SNAP to ensure that it addresses all the administration requirements of the SNAP program. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The Department of Human Services (DHS) and the Department of Health Care Finance (DHCF) DCAS team agree with the findings noted in this report. All of the findings are known issues that have been addressed through prior system fix/enhancement or separate mitigation plans. The overpayments impacting 3,655 cases as part of an overhaul of the SNAP certification process and the 5,410 cases impacted by recertification dates defaulting to the first day of the month have been addressed through prior system fix/enhancement or separate mitigation plans. The corrective actions and enhanced quality assurance monitoring have prevented similar issues from occurring in fiscal year 2020. To date, the nature of overpayments as reported have not occurred in fiscal year 2020. DHS and DCAS technical teams will continue to monitor the system and report issues as they occur. The DCAS system enhancement to resolve the 1,001 cases impacted by the BENDEX Interface and double counting income has completed the requirements and design stage. The new design will apply to SNAP, TANF and non-MAGI Medical applicant and beneficiaries. The key issues experienced with the BENDEX interface were: (1) Double counting Social Security Title II benefit; (2) Gross vs. Net Social Security Title II benefit; and, (3) Benefit Identification Code (BIC) mapping to Benefit Type mapping. The DCAS technical team is in the process of finalizing the rest of the development schedule. The fix is expected to be delivered in Spring 2021. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-002 Prior Year Finding Number: 2018-002 Compliance Requirement: Special Tests and Provisions ? EBT Card Security Program: Government Department/Agency: U.S. Department of Agriculture Supplemental Nutrition Assistance Program Cluster (SNAP) CFDA #: 10.551, 10.561 Award #: Various Award Year: 10/01/2018 ? 09/30/2019 Department of Human Services (DHS)/Office of Finance and Treasury (OFT) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 7 CFR Section 274.8(b)(3), As an addition to or component of the Security Program required of Automated Data Processing (ADP) systems, the State agency shall ensure that the following electronic benefits transfer (EBT) security requirements are established: (i) Storage and control measures to control blank unissued EBT cards and PINs, and unused or spare POS devices; (ii) Measures to ensure communication access control. Communication controls shall include the transmission of transaction data and issuance information from POS terminals to work-stations and terminals at the data processing center; (iii) Message validation; (iv) Administrative and operational procedures; (v) A separate EBT security component shall be incorporated into the State agency Security Program for ADP systems. The periodic risk analyses required by the Security Program shall address the following items specific to an EBT system ? (B) Completeness and timeliness of the reconciliation system; and (vi) The State agency shall incorporate the contingency plan approved by FNS into the Security Program. Condition ? OCFO/OFT for DHS are 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. OCFO/OFT have contracted with Fidelity National Information Service (FIS) for the issuance and security of the EBT cards; however, it is OCFO/OFT?s ultimate responsibility to ensure the contractor has controls in place to maintain adequate security over, and documentation/records of EBT cards. During our tests of the design and implementation of internal controls, we noted the following issues: ? For three (3) out of the 60 samples, although the EBT balance sheets for both workstations agreed with the received and returned amounts on the EBT Issuance Logs, we noted that the Destruction Logs were not provided. We were therefore unable to confirm the amounts destroyed on these dates. ? For one (1) out of the 60 samples, although the EBT balance sheets for both workstations agreed with the received and returned amounts on the EBT Issuance Logs, we noted that the destruction detail for one card was not included on the Destruction Log. ? For 30 out of the 60 samples, although both EBT balance sheets reconciled with the EBT card issuance logs included in the package, we noted the following deficiencies: o For eight (8) of the samples, for at least one customer, the form of identification noted was a referral; however, but no Photo ID Referral form was attached. In addition, for three (3) of these samples, for at least one customer the Photo-ID Program Referral form was missing a supervisor signature on the referral page. Further, we noted that for one (1) of these samples, for at least one customer, the staff portion of the Intake Form was missing information. The staff did not identify the form of identification used, although a referral form was attached. o For eight (8) of the samples, for at least one customer, the Photo-ID Referral Authorization was missing a supervisor signature on the referral page. In addition, for one (1) of these samples, for at least one customer, the staff portion of the Intake Form was missing information. The staff did not identify the form of identification used, although a referral form was attached. o For seven (7) of the samples, for at least one customer, the approval signature on the Photo-ID Referral form appeared to be a photocopy or an electronic signature, which we determined was not allowable. In addition, for one (1) of these samples, we noted that for at least for one customer, the Photo-ID Referral form was missing a signature. We also noted that for one (1) of these samples, for at least one customer, the staff portion of the Intake Form was missing information. The staff did not identify the form of identification used, although a referral form was attached. We further noted that for one (1) of these samples, for at least one customer on the Photo-ID Referral form under section B. the recipient information did not correlate to the information on the intake form. o For four (4) of the samples, we noted that for at least one customer, Photo-ID Referral Form Authorization Approval appeared to be pre-signed and dated. For one (1) of these samples, for at least one customer, the approval signature on the Photo-ID Referral form appeared to be a photocopy or an electronic signature, which we determined was not allowable. For one (1) of these samples, for at least one customer no identification form was selected on the intake form. o For one (1) of the samples, we noted that for at least one customer, the form of identification referenced on the intake form was DC, but a Photo-ID Program Referral form was provided that was missing the eligibility worker?s information. In addition, we noted that for at least one customer, Section C on the Photo-ID Program Referral form was missing the eligibility worker?s signature and the approval signature date was not completed. We also noted that for at least one customer, Section C on the Photo-ID Program Referral form is missing the eligibility worker's information. We further noted that for at least one customer, the Photo-ID Program Referral form had an approval signature that is either electronic or photocopied under C. Authorization, which we determined was not allowable. Questioned Costs ? None. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? Without adequate internal controls to ensure compliance with EBT Card Security requirements, there is an increased risk that the inventory of EBT cards will not be properly maintained and accounted for. Cause ? OCFO/OFT for DHS does not have adequate policies and procedures in place to ensure adequate safeguarding, documentation and monitoring of EBT cards. Recommendation - We recommend that OCFO/OFT for DHS implement formal policies and procedures to maintain adequate security over, and documentation/records for EBT Cards. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The OCFO/OFT for DHS concurs with this finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-003 Prior Year Finding Number: 2018-003 Compliance Requirement: Eligibility Program: Government Department/Agency: U.S. Department of Agriculture Child Nutrition Cluster CFDA #: 10.553, 10.555, 10.556, 10.559 Award #: 1DC300302 Award Year: 10/01/2018 ? 09/30/2019 District of Columbia Public Schools (DCPS) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. 7 CFR Section 210.8 states: ?Claims for reimbursement: The school food authority shall establish internal controls which ensure the accuracy of lunch counts prior to the submission of the monthly Claim for Reimbursement. At a minimum, these internal controls shall include: an on-site review of the lunch counting and claiming system employed by each school within the jurisdiction of the school food authority; comparisons of daily free, reduced price and paid lunch counts against data which will assist in the identification of lunch counts in excess of the number of free, reduced price and paid lunches served each day to children eligible for such lunches; and a system for following up on those lunch counts which suggest the likelihood of lunch counting problems.? Condition ? We selected a sample of 120 students and 40 Community Eligibility Program (CEP) schools in fiscal year 2019 to test DCPS? compliance with eligibility requirements. The sample of 120 consisted of 60 students who were determined to be eligible through the application process, and 60 students who were directly certified through participation in other federal assistance programs. During our test work over the eligibility requirement for the Child Nutrition Cluster, we noted deficiencies in DCPS? eligibility determination process. These deficiencies also affected DCPS? ability to report complete and accurate meal count claims for reimbursement to the Office of the State Superintendent of Education (OSSE). Specifically, we noted the following: ? For direct applications and schools not participating in CEP, claim reimbursement is based on the individual student level. There are four (4) students and ten (10) students per student account history in WebSMARTT or Mosaic, respectively, where the student was served a meal on a day the student was recorded as absent based on the absence record in Aspen. Starting January 2019, DCPS started a new process wherein they reconcile the number of meals served and student attendance for the day and subsequently adjust the claims based on the result of such reconciliation. Using the same student samples with noted exception above, we tested transactions after January 2019 and noted that there was no exception for lunch claims after the January 2019 reconciliation process. We noted however, one (1) student directly certified and one (1) student not participating in CEP, per student account history in WebSMARTT or Mosaic, respectively, were served breakfast on a day the student was recorded as absent based on the absence record in Aspen. We also noted that the new process does not reconcile breakfast served. ? For schools participating in CEP, claim reimbursement is based on total meals served on a daily basis. For three (3) instances in forty (40) schools tested, wherein the production records and edit check summary showed that the school claimed more meals than what was actually served for the month. We also noted one (1) meal production report not reviewed and approved by an appropriate reviewer. Questioned Costs ? Known amount is $11,601. Context ? This is a condition identified per review of DCPS? compliance with specified requirements using a statistically valid sample. Effect ? DCPS did not comply with the eligibility and reporting requirements of the Child Nutrition Cluster. Cause ? DCPS does not have fully effective internal controls over the eligibility determination process to ensure participants are accurately being assessed for free and reduced price lunch, and that meal count claims submitted for reimbursement include only claims for students who are eligible. Additionally, DCPS must reassess existing controls to ensure that the student receiving the meal is properly identified to avoid having a served meal associated with a child marked as absent. Recommendation ? We recommend DCPS to continue to enhance its controls over eligibility and reporting to ensure compliance with the requirements of the Child Nutrition Cluster. This includes (1) Data corrections are properly recorded in WebSMARTT or Mosaic; and (2) Enhance controls at the point of sale to improve the accuracy of identifying the student as they are served the meal. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DCPS agrees with the conditions and recommendations of this finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-004 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions - Verification of Free and Reduced-Price Applications (NSLP) Program: Government Department/Agency: U.S. Department of Agriculture Child Nutrition Cluster CFDA #: 10.553, 10.555, 10.556, 10.559 Award #: 1DC300302 Award Year: 10/01/2018 ? 09/30/2019 District of Columbia Public Schools (DCPS) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The compliance supplement requires that by November 15th of each school year, DCPS must verify the current free and reduced-price eligibility of households selected from a sample of applications that it has approved for free and reduced-price meals. The verification sample size is based on the total number of approved applications on file on October 1st. Condition ? We selected three (3) of the twenty (20) verifications performed by DCPS during the year and noted that one (1) of the three (3) verifications, DCPS did not properly review the application. Specifically, the applicant should have not been approved for reduced price meal as the participant did not have the income eligibility. As such, DCPS was not able to make changes to the participant?s eligibility status based on the participant?s documentation. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DCPS? compliance with specified requirements using a statistically valid sample. Effect ? DCPS did not comply with the special test and provisions requirement of the Child Nutrition Cluster. Cause ? DCPS does not have fully effective internal controls over the verification process to ensure that it correctly identifies any error made in the eligibility determination. Recommendation ? We recommend DCPS to continue to enhance its controls over verification of free and reduced-priced application requirements of the Child Nutrition Cluster. Additionally, DCPS must reassess existing internal controls to possibly include another layer of review control to validate the verifications made. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DCPS agrees with the conditions and recommendations of this finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-005 Prior Year Finding Number: N/A Compliance Requirement: Eligibility Program: Government Department/Agency: U.S. Department of Housing and Urban Development Home Investment Partnerships Program CFDA #: 14.239 Award #: M18-SG110100 Award Year: 08/22/2018 ? 09/01/2026 Department of Housing and Community Development (DHCD) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The maximum of HOME rents, which include utilities or the utility allowance, are the lesser of: fair market rent for comparable units in the area, as established by HUD under 24 CFR section 888.111, or a rent that does not exceed 30 percent of the adjusted income of a family whose annual income equals 65 percent of the median income for the area as determined by HUD with adjustments for the number of bedrooms. Twenty percent of the HOME-assisted units must be occupied by very low-income families and meet one of the following rent requirements: (1) the rent does not exceed 30 percent of the annual income of a family whose income equals 50 percent of the median income for the area as determined by HUD, with adjustments for larger or smaller families; or (2) the rent does not exceed 30 percent of the families adjusted income (24 CFR sections 92.216 and 92.252). Condition ? During our testing over Eligibility, we noted that the rent charged and paid by some of the eligible family exceeded 30 percent of their household income. Specifically, out of the seven (7) households we sampled and tested, the rent (including utilities or utility allowances) paid by four (4) households exceeded 30% of their household income. Questioned Costs ? Not determinable. Context ? This is a condition determined per review of DHCD?s compliance with specified eligibility requirements using a statistically valid sample. The Program financed the construction of a 64-unit affordable housing development that was completed in the fiscal year. Effect ? DHCD was unable to demonstrate that the rent charged and paid by families residing at the property did not exceed the amount determined by HUD. Cause ? DCHD did not have policies and procedures in place to review rent charged to tenants at the beginning of their residence to ensure it did not exceed the amount specified by the regulations. Per discussions with DHCD, the property used the Low-Income Housing Tax Credit program (LIHTC) calculation to determine eligibility for the households instead because they believed it was the most restrictive program. Recommendation ? We recommend that DHCD utilize the guidelines provided by the U.S. Housing and Urban Development in determining eligibility and to ensure that they meet the limits on the rents that can be charged. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The Portfolio and Asset Management Division (PAMD) initiated its work on the project known as the ?Maycroft? located at 1474 Columbia Road, NW, in the late summer of 2018. At this time, PAMD was provided governing documents including the funds provided by the Department for acquisition, critical repairs, and substantial rehabilitation of the premises. The funding sources were as follows: ? Housing Production Trust Funds (HPTF) of $7,536,648; and ? Low Income Housing Tax Credits (LIHTC) of $1,093,562. When the Initial Income Certification was conducted by the property staff and confirmed with DHCD, (between late summer 2018 and early spring 2019), all applicants? eligibility was confirmed as aligned with the LIHTC restrictions. The LIHTC restrictions are outlined in the Indenture of Restrictive Covenants and HPTF program requirements described in the Affordable Housing Covenant. At that time, the HOME loan had not yet been transferred to PAMD, and tenant eligibility was not confirmed for the HOME Investment Partnerships Program. Typically, PAMD would not incorporate this project for routine HOME compliance until one year after is received into the PAMD portfolio. DHCD agrees with the conditions and recommendations of this finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-006 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions - Housing Quality Standards Program: Government Department/Agency: U.S. Department of Housing and Urban Development Home Investment Partnerships Program CFDA #: 14.239 Award #: M18-SG110100 Award Year: 08/22/2018 ? 09/01/2026 Department of Housing and Community Development (DHCD) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. During the period of affordability (i.e. the period for which the non-Federal entity must maintain subsidized housing) for HOME assisted rental housing, the participating jurisdiction must perform on-site inspections to determine compliance with property standards and verify the information submitted by the owners no less than (a) every 3 years for projects containing 1 to 4 units, (b) every 2 years for projects containing 5 to 25 units, and (c) every year for projects containing 26 or more units. Condition ? During our testing over Special Tests and Provisions ? Housing Quality Standards, we noted that no inspection was performed for some units that had been identified as due for inspection. Specifically, we noted that although DHCD identifies those units on which housing quality inspections are due, of the four (4) units examined, one (1) unit was not inspected. In addition, we noted that for one other property, deficiencies noted in the inspection report were not completed timely or by the compliance due date. Questioned Costs ? Not determinable. Context ? This is a condition determined through the review of DHCD?s property inspection compliance tracker. Effect ? DHCD was unable to demonstrate that housing units were inspected as required to ensure they met the required housing quality standards. In addition, DHCD was unable to demonstrate that needed repairs are completed timely as required. Cause ? DCHD did not have policies and procedures in place to ensure that inspections were performed for all housing units identified as due for inspection, and that needed repairs were completed timely. Per discussion with DHCD, the property was miscategorized in their records and was not inspected as it should have. Recommendation ? We recommend that DHCD put policies and procedures in place to ensure that inspections are performed for those units on which housing quality inspections are due, and to ensure that any needed repairs are completed timely. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? As it pertains to the unit that was not inspected, this was due to miscommunication between separate divisions within the agency and highlighted the need for more efficient communication within the agency. A more robust data management system with a newly-contracted loan servicer will improve data integrity efforts and prevent such data errors. Regarding the property lacking confirmation of completed repairs, DHCD made repeated attempts to contact the property to verify completion but was unsuccessful. The inspections team was repeatedly denied access to the property and correspondence remained unanswered. Due to the COVID-19 health emergency, previously planned follow-up visits were unable to be completed. DHCD agrees with the conditions and recommendations of this finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-007 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: Government Department/Agency: U.S. Department of Housing and Urban Development Housing Opportunities For Persons With Aids CFDA #: 14.241 Award #: DCH18-F001 Award Year: 10/01/2018 ? 09/30/2019 Department of Health (DOH) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? We noted that DOH continued to allocate payroll expenditures to the Housing Opportunities For Persons With Aids (HOPWA) program during fiscal year 2019 based on budgeted percentages. These percentages were entered into the PeopleSoft Human Resources/Payroll System (PeopleSoft) at the beginning of the fiscal year and were based on management?s estimate of the respective employee?s level of effort for each program. PeopleSoft calculated the payroll costs every payroll cycle for each employee and program based on the predetermined percentage, and reported it through the Labor Distribution Report (485 Report). However, management did not perform a periodic comparison of actual costs to the budgeted costs and make any necessary adjustment as required by 2 CFR Section 200.430. Specifically, 14 out of 19 sampled payroll items tested for the HOPWA grant were recorded based on estimated hours and not actual hours. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DOH?s compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits, for the HOPWA program in fiscal year 2019 were $281,737. Effect ? DOH was unable to demonstrate that the payroll expenditures charged to the HOPWA grant accurately reflected the time incurred on the program and were properly supported in accordance with 2 CFR Part 200.430 time and effort reporting requirements. Cause ? DOH did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the HOPWA program to the actual expenditures incurred. Per corrective action plans and status updates submitted by DOH to BDO in fiscal year 2019, DOH has a plan still in progress to develop a program manager-level certification of employee time and effort reflected in bi-weekly payroll records (485 Reports). It has not been completed by the end of fiscal year 2019. Recommendation ? We recommend that DOH fully implement its current corrective action plan to deploy policies and procedures to periodically compare employees? estimated hours per the 485 Report to the actual hours incurred and make any necessary adjustments as required by 2 CFR 200.430. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The Department of Health (DOH) concurs with the finding. While 14.241 (HOPWA) was not reviewed for the prior year?s single audit, consistent with the prior year?s CAP for this same finding, DOH reached several milestones to address this deficiency. At the start of fiscal year 2020, the agency?s Time and Effort Certification standard operating procedure (SOP) was issued and distributed to DOH personnel, and a uniform time and effort certification tool and attestation for supervisors was developed. These actions will support the required periodic comparison of actual costs to the budgeted costs and make any necessary adjustment as required by 2 CFR 200.430. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-008 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: Government Department/Agency: U.S. Department of Education Student Financial Assistance Cluster CFDA #: 84.007, 84.033, 84.063, 84.268, 93.925 Award #: Various Award Year: Various University of the District of Columbia (UDC) Criteria ? 2 CFR 200.502(a), Determining Federal Awards Expended. 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 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 awards including grants, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, cooperative agreements, and direct appropriations; the disbursement of funds to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property; the receipt of surplus property; the receipt or use of program income; the distribution or use of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest subsidy; and the period when insurance is in force. Condition ? Certain grant expenditures for CFDA 93.925, Scholarships for Health Professions Students from Disadvantaged Backgrounds and CFDA 84.268, Federal Direct Student Loans programs approximately $578,000 were inaccurately included in the SEFA. As a result, UDC subsequently adjusted the SEFA to remove these transactions from being reported as federal expenditures. Questioned Costs ? None. Context ? This is a condition identified per review of UDC?s compliance with specified requirements. Effect ? The SEFA may not be fairly presented, in all material respects, in relation to the basic financial statements taken as a whole. Cause ? UDC did not have the means to show adjustments to amounts being reported under the original format of the schedule to ensure adequate preparation and review of the SEFA. Recommendation ? We recommend that UDC implement format changes to the forms used to collect the SEFA information to allow for the inclusion of adjustments to the ledger balances to ensure federal funds are reported at the appropriate amounts. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? UDC concurs with the condition and recommendation of the finding. The recommended format change to the form will allow for the presentation of the reconciliation between the ledger and the final reported federal expenditures. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-009 Prior Year Finding Number: 2018-006 Compliance Requirement: Eligibility Program: Government Department/Agency: U.S. Department of Health and Human Services Temporary Assistance for Needy Families Cluster (TANF) CFDA #: 93.558 Award #: Various Award Year: 10/01/2018 ? 09/30/2019 Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 205.60 (a), ?The State agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of financial assistance, and the use of any information obtained under Section 205.55, with respect to individual applications denied, recipients whose benefits have been terminated, recipients whose benefits have been modified, and the dollar value of these denials, terminations and modifications. Under this requirement, the agency will keep individual records which contain pertinent facts about each applicant and recipient. The records will include information concerning the date of application and the date and basis of its disposition; facts essential to the determination of initial and continuing eligibility (including the individual's social security number, need for, and provision of financial assistance); and the basis for discontinuing assistance.? Condition ? During our testing over beneficiary eligibility compliance requirements of the Temporary Assistance for Needy Families (TANF) program, we selected a sample of 60 beneficiaries in fiscal year 2019 to test DHS? compliance with eligibility requirements. We noted the following: ? For two (2) out of 60, the applications that were completed prior to the fiscal year payment selected for testing were not found in the Document Imaging Management System (DIMS). Therefore, we were unable to verify the household composition, the Income reported, the Social Security Numbers for all individuals included in the application, or whether a fleeing felon is included on the application. ? For one (1) out of 60, the most recent application prior to the fiscal year 2019 payment selected for testing was not completed properly. We obtained the application two years prior to the fiscal year 2019 payment to confirm certain information. However, we noted that this application was missing even numbered pages. Therefore, we were unable to verify the Social Security numbers for all individuals on the application, and whether the applicant was a US citizen. ? For one (1) out of 60, DHS was unable to provide sufficient documentation to support that assistance was not provided to any individual who was fleeing to avoid prosecution, or custody or confinement after conviction, for a felony or attempt to commit a felony, or who is violating a condition of probation or parole imposed under Federal or State law as the question was not addressed on the application. ? For 60 out of 60, DHS was unable to provide support that would allow us to test that cash assistance was not provided to an individual during the 10-year period that began on the date the individual was convicted in Federal or State court of having made a fraudulent statement or representation with respect to place of residence in order to simultaneously receive assistance from two or more States under TANF, Title XIX, or the Food Stamp Act of 1977, or benefits in two or more States under the Supplemental Security Income program under Title XVI of the Social Security Act. These amounts represent 100% of the total eligibility amounts tested related to the 60 sampled items of $318,499. In addition, while testing a sample of 60 sample items for TANF Special Tests and Provisions - Penalty for refusal to Work, for one (1) out of the 60 samples, we noted that the beneficiary payment determined from DCAS for the month of August 2019 was incorrect as the benefit paid was $503 instead of $472. The beneficiary was overpaid $31. Questioned Costs ? Known amount is $318,530. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? Without properly maintaining documentation to support eligibility determinations, ineligible beneficiaries may receive benefits under the TANF grant and DHS may make payments on behalf of those beneficiaries resulting in noncompliance with the eligibility requirements. Cause ? DHS did not consistently adhere to its established policies and procedures requiring it to maintain documentation supporting participant eligibility. Recommendation - We recommend that DHS strengthen its existing policies and procedures over the review and maintenance of appropriate documentation to ensure compliance with eligibility requirements. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The District does not dispute the findings provided by BDO for the noted eligibility. ESA will follow through on the outlined internal control procedures to ensure that documentation is maintained to support eligibility decisions and that customer files are properly retained. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-010 Prior Year Finding Number: 2018-007 Compliance Requirement: Reporting Program: Government Department/Agency: U.S. Department of Health and Human Services Temporary Assistance for Needy Families Cluster (TANF) CFDA #: 93.558 Award #: Various Award Year: 10/01/2018 ? 09/30/2019 Department of Human Services (DHS) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. According to Title IV-A, Section 411 of the Social Security Act (the Act), 45 CFR 265.3, and the American Recovery and Reinvestment Act (ARRA) of 2009, (Public Law 111-5), each State must file an annual report containing information on the TANF program and the State?s maintenance-of-effort (MOE) program(s) for that year, including strategies to implement the Family Violence Option, State diversion programs, and other program characteristics. States are required to submit the ACF-196R report quarterly, beginning in FFY 2015, in lieu of the SF-425, Federal Financial Report (financial status). Each State files quarterly expenditure data on the State?s use of Federal TANF funds, State TANF MOE expenditures, and State expenditures of MOE funds in separate State programs. If a State is expending Federal TANF funds received in prior fiscal years, it must file a separate quarterly TANF Financial Report for each fiscal year that provides information on the expenditures of that year?s TANF funds. This form must be used for reporting regular TANF grant funds, Contingency Funds, and ARRA-Emergency Fund for TANF State Programs funds. See TANF-ACF-PI-2014-02, available at http://www.acf.hhs.gov/programs/ofa/resource/tanf-acf-pi-2014-02, for more information. Condition ? During our test work over the quarterly ACF-196R, we noted the following: ? For Grant Identifying number - G-1702DCTANF there was a variance between the amount reported on the ACF-196R and the amount included in SOAR for the original report for the 4th quarter. We noted that less expenditures were included on the SEFA/CFOSolve Report ($8,956,660) than included on the ACF-196R ($9,000,119), resulting in a variance of ($43,459). ? For Grant Identifying number - G-1802DCTANF there was a variance between the amount reported on the ACF-196R and the amount included in SOAR for the original report for the 4th quarter. We noted that less expenditures were included on the SEFA/CFOSolve Report ($25,413,526) than included on the ACF-196R ($25,452,546), resulting in a variance of ($39,020). ? For Grant Identifying number - G-1901DCTANF there was a variance between the amount reported on the ACF-196R and the amount included in SOAR for the final adjusted report for the 4th quarter. We noted that less expenditures were included on the SEFA/CFOSolve Report ($82,100,371) than included on the ACF-196R ($82,242,278), resulting in a variance of ($141,907). Questioned Costs ? None. Context ? This is a condition identified per review of DHS? compliance with specified requirements. Effect ? Without proper internal controls and policies and procedures in place to ensure that ACF-196R balances were properly reported, the TANF program incorrectly reported expenditures on the final ACF-196R report for each of the three grants open in fiscal year 2019. In addition, inadequate internal controls may lead to incorrect reporting of performance data. Cause ? Management did not have proper internal controls and policies and procedures in place to ensure that the ACF-196R properly reviewed prior to approval. Recommendation - We recommend that DHS implement policies, procedures and controls that will ensure the amounts reported for each open grant are accurate for ACF-196R prior to approval. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS concurs with this finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-011 Prior Year Finding Number: 2018-008 Compliance Requirement: Special Tests and Provisions ? Child Support Non-Cooperation Program: Government Department/Agency: U.S. Department of Health and Human Services Temporary Assistance for Needy Families Cluster (TANF) CFDA #: 93.558 Award #: Various Award Year: 10/01/2018 ? 09/30/2019 Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 264.30 (a) (1) The State agency must refer all appropriate individuals in the family of a child, for whom paternity has not been established or for whom a child support order needs to be established, modified or enforced, to the child support enforcement agency (i.e., the IV-D agency). (2) Referred individuals must cooperate in establishing paternity and in establishing, modifying, or enforcing a support order with respect to the child. Per 45 CFR Section 264.30 (c) The IV-A agency must then take appropriate action by: (1) Deducting from the assistance that would otherwise be provided to the family of the individual an amount equal to not less than 25 percent of the amount of such assistance; or (2) Denying the family any assistance under the program. Per the Code of the District of Columbia - Section 4?205.55. (a) The Mayor shall give timely and adequate notice in cases of intended action to discontinue, withhold, terminate, suspend, reduce assistance, or make assistance subject to additional conditions, or to change the manner or form of payment to a protective, vendor, or 2-party payment. (1) ?Timely? means that the notice is postmarked at least 15 days before the date upon which the action would become effective, except as provided in Section 4-205.54(d). (2) ?Adequate? means that the written notice includes a statement of what action the Mayor intends to take, the reasons for the intended action, the specific law and regulations supporting the action, an explanation of the individual?s right to request a hearing, and the circumstances under which assistance will be continued if a hearing is requested. Condition ? During our compliance test work for the Special Tests and Provisions ? Child Support Non-Cooperation compliance requirement, we tested 60 cases out of 2,097 cases referred by Child Support Enforcement (CSE) to the TANF program as having not cooperated with Child Support. Of the 60 cases selected for control testing, we noted the following exceptions: ? For one (1) instance, the sanction letter that was sent to the customer was contradicting, although the sanction was imposed in a timely manner and for the correct amount, the heading and part of the body of the letter indicated that a sanction was being lifted but the amount included in the letter indicated that a sanction was being imposed on July 1, 2019. In addition, in the sanction letter there was no reference to specific laws and regulations supporting the decision to sanction the customer and reduce the benefit amount. ? For five (5) instances, we were unable to review the sanction letters as DHS/ESA was unable to retrieve the letters due to data validation errors. ? For ten (10) instances, we noted that although the amounts or percentages reflected in the sanction letters were correct, there were no references to specific laws and regulations supporting the decisions to sanction and reduce the benefit amounts. ? For one (1) instance, we noted that both a work sanction and a child support sanction were listed in DCAS from the conversion from ACEDS effective May 1, 2016. However, the higher child support noncooperation sanction is actually being imposed and there is no evidence that a child support sanction letter was sent out through ACEDS (or subsequently DCAS). Questioned Costs ? Unknown. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? Without adequate internal controls to ensure compliance with TANF Child Support Non-Cooperation requirements, there is an increased risk that TANF beneficiaries will receive incorrect TANF benefits. Cause ? Management is not adhering to their policies and procedures to ensure that DHS is in compliance with TANF Child Support Non-Cooperation compliance requirements. Recommendation - We recommend that DHS enforce existing policies and procedures and implement internal controls to ensure that Child Support Non-Cooperation sanctions are consistently applied and adequate documentation is maintained to support DHS? compliance with the TANF Child Support Non-Cooperation compliance requirements. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS concurs with this finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-012 Prior Year Finding Number: 2018-009 Compliance Requirement: Special Tests and Provisions ? Income Eligibility and Verification System Program: Government Department/Agency: U.S. Department of Health and Human Services Temporary Assistance for Needy Families Cluster (TANF) CFDA #: 93.558 Award #: Various Award Year: 10/01/2018 ? 09/30/2019 Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 205.56(a)(1)(i), ?The State agency shall review and compare the information obtained from each data exchange against information contained in the case record to determine whether it affects the applicant?s or the recipient?s eligibility or the amount of assistance.? Per 45 CFR Section 205.60 (a), ?The State agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of financial assistance, and the use of any information obtained under Section 205.55, with respect to individual applications denied, recipients whose benefits have been terminated, recipients whose benefits have been modified, and the dollar value of these denials, terminations and modifications. Under this requirement, the agency will keep individual records which contain pertinent facts about each applicant and recipient. The records will include information concerning the date of application and the date and basis of its disposition; facts essential to the determination of initial and continuing eligibility (including the individual's social security number, need for, and provision of financial assistance); and the basis for discontinuing assistance.? Condition ? During our test work of 60 cases selected to test the Special Tests and Provisions ? Income Eligibility and Verification Systems (IEVS), we noted that DHS was unable to provide sufficient documentation to support all eligibility determinations tested during the fiscal year 2019 audit. Specifically, out of the 60 beneficiary disbursements tested, we noted the following exception: ? For one (1) instance, we noted that although information was obtained through the IEVS as reported in DC Access System (DCAS) around the date of application or recertification, there was no information received from the Social Security Administration due to a special character apostrophe in the first name of this beneficiary. Therefore, the required income verification was not obtained or documented. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? The District is not in full compliance with its policies and with Federal program compliance requirements surrounding records maintenance. Further, ineligible TANF beneficiaries may receive benefits under the TANF grant and the District may make payments on behalf of those beneficiaries. Cause ? Controls are not adequate to ensure that the District adheres to its established policies and procedures requiring it to maintain documentation supporting participant eligibility. Recommendation - We recommend that DHS enforce existing policies and procedures and implement additional policies and procedures for maintaining and monitoring case record documentation to ensure that Income Eligibility and Verification System requirements are complied with. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS agrees with the finding in this report. The root cause for the one (1) instance, in which the required income verification was not obtained or documented through the IEVS due to a special character apostrophe in the beneficiary?s first name has been identified. The special character in the beneficiary?s name prevented the DCAS IEVS interface from storing the returned, person-level details on the case file because of the way the data is stored in backend tables. In this scenario, an automated batch job selected all active records-person level details of the beneficiary and sent through the IEVS; however, due to the special character in the beneficiary?s first name, the automated batch job could not insert return data into the necessary data tables. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-013 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions ? Penalty for Refusal to Work Program: Government Department/Agency: U.S. Department of Health and Human Services Temporary Assistance for Needy Families Cluster (TANF) CFDA #: 93.558 Award #: Various Award Year: 10/01/2018 ? 09/30/2019 Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 261.14 (a) and (b), ?If an individual refuses to engage in work required under Section 407 of the Act, the State must reduce or terminate the amount of assistance payable to the family, subject to any good cause or other exceptions the State may establish. Such reduction is governed by the provisions of 45 CFR Section 261.16. The State must, at a minimum, reduce the amount of assistance otherwise payable to the family pro rata with respect to any period during the month in which the individual refuses to work. The State may impose a greater reduction, including terminating assistance.? Condition ? During our test work of 60 samples selected to test the Special Tests and Provisions - Penalty for Refusal to Work, we noted the following: ? For one (1) instance the customer had no participation hours in CATCH for fiscal year 2019 but had a POWER exemption through April 30, 2019. BDO noted that the customer was not sanctioned for the month of May or June 2019 although DIMS indicates that the customer did not begin working until mid-June. Therefore, we determined that this customer was not sanctioned as required, and the benefits were not properly reduced. ? For one (1) instance the customer had no work participation, was not sanctioned and was assigned to the Office of Work Opportunity (OWO) Closed Cases during the entire time. Per DHS/ESA it was due to an erroneous assessment and assignment decision. Therefore, we determined that this customer was not sanctioned as required, and the benefits were not properly reduced. ? For one (1) instance the customer was not assigned to a service provider until July 13, 2019 and was not sanctioned for months with no hours reported. Therefore, we determined that this customer was not sanctioned as required, and the benefits were not properly reduced. ? For one (1) instance the benefits were approved on May 23, 2019. The customer was assigned to OWO from May 2019 and was not assigned to a vendor. There is no evidence that customer was sanctioned for lack of participation between June and September 2019. Therefore, we determined that this customer was not sanctioned as required, and the benefits were not properly reduced. Total payments made to these four (4) beneficiaries for the months that they did not have reported hours subsequent to when they should have been sanctioned were $8,882. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? Participants may erroneously receive full federal benefits, when they should have sanctions to reduce their federal benefits under the TANF program. Cause ? Controls are not operating effectively to ensure that the TANF program applies appropriate sanctions on participants who refuse to fulfill the minimum working requirements to receive or maintain benefits. Recommendation ? We recommend that DHS enforce existing policies and procedures and implement additional policies and procedures to ensure that Penalty for Refusal to Work requirements are complied with. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS agrees with the finding in the report and this recommendation. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-014 Prior Year Finding Number: 2018-010 Compliance Requirement: Reporting; Special Tests and Provisions ? Penalty for Failure to Comply With Work Verification Plan Program: Government Department/Agency: U.S. Department of Health and Human Services Temporary Assistance for Needy Families Cluster (TANF) CFDA #: 93.558 Award #: Various Award Year: 10/01/2018 ? 09/30/2019 Department of Human Services (DHS) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 261.60 (a), ?A State must report the actual hours that an individual participates in an activity, subject to the qualifications in paragraphs (b) and (c) of this section and Section 261.61(c). It is not sufficient to report the hours an individual is scheduled to participate in an activity. (b) For the purposes of calculating the work participation rates for a month, actual hours may include the hours for which an individual was paid, including paid holidays and sick leave. For participation in unpaid work activities, it may include excused absences for hours missed due to a maximum of 10 holidays in the preceding 12-month period and up to 80 hours of additional excused absences in the preceding 12-month period, no more than 16 of which may occur in a month, for each work-eligible individual. Each State must designate the days that it wishes to count as holidays for those in unpaid activities in its Work Verification Plan. It may designate no more than 10 such days. In order to count an excused absence as actual hours of participation, the individual must have been scheduled to participate in a countable work activity for the period of the absence that the State reports as participation. A State must describe its excused absence policies and definitions as part of its Work Verification Plan, specified at Section 261.62. (c) For unsubsidized employment, subsidized employment, and OJT, a State may report projected actual hours of employment participation for up to six months based on current, documented actual hours of work. Any time a State receives information that the client's actual hours of work have changed, or no later than the end of any six-month period, the State must re-verify the client's current actual average hours of work, and may report these projected actual hours of participation for another six-month period. (d) A State may not count more hours toward the participation rate for a self-employed individual than the number derived by dividing the individual's self-employment income (gross income less business expenses) by the Federal minimum wage. A State may propose an alternative method of determining self-employment hours as part of its Work Verification Plan. (e) A State may count supervised homework time and up to one hour of unsupervised homework time for each hour of class time. Total homework time counted for participation cannot exceed the hours required or advised by a particular educational program.? Per 45 CFR Section 261.61 (a), ?A State must support each individual?s hours of participation with documentation in the case file. In accordance with Section 261.62, a State must describe in its Work Verification Plan the documentation it uses to verify hours of participation in each activity.? According to the DC State Verification Plan, the D.C. Department of Human Services (DHS), Department of Human Services Monitoring Unit reviews and audits all documentation submitted by vendors reflecting the activities of recipients in TANF Employment program. This documentation includes time sheets, activity logs, school records, pay stubs, and verification of employment, work experience and on-the-job training. The Monitoring Unit completes this audit process to determine if sufficient documentation exists to substantiate reported time and attendance data, to warrant a payment to TANF Employment program vendors, and submission of countable hours for federal reporting purposes. The District projects hours of participation in unsubsidized, self-employment for six months or until the recipient's next scheduled recertification, whichever is sooner. Per 45 CFR Section 265.7 (a)-(c), ?Each State?s quarterly reports (the TANF Data Report, the TANF Financial Report (or Territorial Financial Report), and the SSP-MOE Data Report) must be complete and accurate and filed by the due date.? For disaggregated data report, `a complete and accurate report? means that: (1) The reported data accurately reflect information available to the State in case records, financial records, and automated data systems, and include correction of the quarterly data by the end of the fiscal year reporting period; (2) The data are free from computational errors and are internally consistent (e.g., items that should add to totals do so); (3) The State reports data for all required elements (i.e., no data are missing); (4)(i) The State provides data on all families; or (ii) if the State opts to use sampling, the State reports data on all families selected in a sample that meets the specification and procedures in the TANF Sampling Manual (except for families listed in error); and (5) Where estimates are necessary (e.g., some types of assistance may require cost estimates), the State uses reasonable methods to develop these estimates. For an aggregated data report, ?a complete and accurate report? means that: (1) The reported data accurately reflect information available to the State in case records, financial records, and automated data systems; (2) The data are free from computational errors and are internally consistent (e.g., items that should add to totals do so); (3) The State reports data on all applicable elements; and (4) Monthly totals are unduplicated counts for all families (e.g., the number of families and the number of out-of-wedlock births are unduplicated counts).? 45 CFR Section 265.7 (f) states that ?States must maintain records to adequately support any report, in accordance with Section 75.361 through 75.370 of this title.? Condition ? During our test work over a sample of 60 participants for Special Tests and Provisions - Penalty for Failure to Comply with Work Verification Plan and Reporting, we noted: ? For nineteen (19) instances, we noted that although the hours reported met or exceeded the required work participation hours, DHS/ESA was unable to provide documentation to support the hours reported. ? For eight (8) instances, the agency could not provide documentation to support the projected hours included in DCAS as required in the Work Verification Plan. For six (6) of these instances, the participants did not meet the work participation requirements and was properly sanctioned; for one (1) instance, the participant did not meet the work participation requirements and there was no sanction until months after it should have been imposed; while in one (1) other instance, the participant did not meet the work participation requirement and no sanction was noted as the participant was assigned to the DHS CATCH 2.7. ? For five (5) instances, we noted that these participants did not meet the work participation requirement, as the average of approved hours was less than the hours required per week. No sanction was noted. In addition, for four (4) of these instances no support was provided for the hours recorded in DCAS. ? For three (3) instances, we noted that the actual or projected hours reported for the participant were less than the hours included on the support. ? For two (2) instances, we noted that the support used to project hours for the participant was dated more than six months before the month tested and therefore should not have been used. In addition, one (1) of these participants did not meet the work participation requirement and no sanction was noted. ? For one (1) instance, we noted that the agency was unable to provide documentation to support the 4 hours included under the code (T63) ? ?Deeming?, which is used for reporting ?Deemed Core Hours? or hours of participation in work experience or community service programs for work-eligible individuals under specific circumstances. ? For two (2) instances, we noted that the agency was unable to locate timesheets. Therefore, we were unable to confirm that approved hours were properly supported. In addition, the agency reported that the participants worked less hours than the approved hours in CATCH. ? For one (1) instance, we noted that for this sample item the hours for two timesheets could not be identified as the dates on the timesheets for the last two weeks of the month of October 2018 were cut off. DHS/ESA was unable to provide the hard copies for these timesheets. ? For one (1) instance, we noted that although CATCH identified 0 hours of work participation requirement, the Eligibility population identified 20 hours of work participation requirement. Although the hours reported met the work participation requirement, the agency could not provide documentation to support the projected hours included in DCAS as required in the Work Verification Plan. ? For one (1) instance, we noted that that although this participant was exempt through March 2019 from compliance with this requirement due to having a child under 1, the hours reported on the ACF-199 (30 hours) did not agree with the "required" hours (20 hours). In addition, we noted that although the hours reported met or exceeded the required work participation hours, DHS/ESA was unable to provide documentation to support the hours reported. ? For one (1) instance, we noted that the actual or projected hours reported for the participant were more than the recalculated average hours based on the support provided. The information tested in our sample represents the underlying data used in Reporting for the 1st and 2nd quarters of fiscal year 2019. Consequently, DHS incorrectly reported data in the ACF-199 report for the 1st and 2nd quarters of fiscal year 2019. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DHS? compliance with specified requirements using a statistically valid sample. Effect ? Data within the ACF-199 report may not be complete and accurate. Specifically, if the work participation data is not substantiated, or inconsistencies are noted, it may result in inaccurate data being reported and may lead to an incorrect ACF-199 report, and could result in an incorrect allocation of Federal Funds to the state. Cause ? Controls are not operating effectively over the documentation of work participation data to ensure that adequate evidence of the work participation is maintained. Recommendation - We recommend that DHS enforce existing policies and procedures and implement additional controls to ensure that adequate documentation is maintained to substantiate the work participation data reported in the ACF-199 report in accordance with the District of Columbia Work Verification Plan. We also recommend that DHS implement policies, procedures and controls that will enable an accurate reconciliation between the data sources used in the preparation of the ACF-199 report to ensure proper reporting of data elements, such as child care subsidies. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS agrees with the finding in the report. DHS is aware of the issues and is working to implement fixes in DCAS which align hours with employment activity. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-015 Prior Year Finding Number: N/A Compliance Requirement: Subrecipient Monitoring Program: Government Department/Agency: U.S. Department of Health and Human Services Community Services Block Grant (CSBG) CFDA #: 93.569 Award #: Various Award Year: 10/01/2018 ? 09/30/2019 Department of Human Services (DHS) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with the Uniform Guidance in 2 CFR Section 200.331(a) Requirements for Pass-Through Entities requires that pass-through entities must: Ensure that every sub-award is clearly identified to the subrecipient as a sub-award and includes certain information outlined in the section noted above, including FFATA; pre-award assessment, indirect cost rated for the award, CFDA number, finding and award follow-up and other pertinent actions. In accordance with the requirements of 2 CFR Section 1402.300, the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR part 170 Reporting Subaward and Executive Compensation Information. In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $25,000 or more in federal funds in the FFATA Subaward Reporting System. Condition ? Our examination of the program?s subrecipient monitoring requirements included a review of the Federal Funding Accountability and Transparency Act (FFATA) requirements for the Community Services Block Grant. The Department of Human Services failed to submit subaward data to fulfill the FFATA requirements. Questioned Costs ? None. Context ? This is a condition identified per review of DHS? compliance with specified monitoring requirements on the program?s subrecipient. Effect ? The District is not in compliance with the FFATA requirements as it failed to submit subaward data for the Community Services Block Grant Program. Cause ? Management did not have proper internal controls and policies and procedures in place to ensure that the FFATA requirements were performed. Recommendation ? We recommend that DHS implement policies, procedures and controls that will ensure the CSBG personnel comply with all the required laws, guidelines and requirement under the award. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHS agrees with the finding in the report and this recommendation. FFATA initiated but lapsed and inactive during fiscal year 2019. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-016 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions ? Monitoring of Income Eligibility Requirement Program: Government Department/Agency: U.S. Department of Health and Human Services Head Start CFDA #: 93.600 Award #: 03CH010214-04-00; 03CH010214-05-00 03CD4015-04-00; 03CH3445-06-00 Award Year: 09/01/2018?08/31/2020; 02/1/2019?06/30/2020 District of Columbia Public Schools (DCPS) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Chapter XIII 1302.12(b), Determining, verifying, and documenting eligibility, DCPS is required to ensure federally funded children meet the income and age eligibility requirements. DCPS uses the Head Start School-wide Model (HSSWM). This model verifies that children enrolled in Pre-K and Preschool in DCPS Title 1 classrooms meet categorical eligibility requirements based on DCPS? funded enrollment. DCPS vetted their eligibility model with the Department of Health and Human Services (HHS) Administration for Children and Families (ACF), who came up with a unique set of specifications for DCPS to minimize the risk of non-compliance with the income and age eligibility requirements. DCPS has three partner agencies: the DC Department of Human Services (DHS), Children and Family Services Agency (CFSA) and the Office of the State Superintendent of Education (OSSE), who collect eligibility data on children who meet categorical eligibility, defined as children who are homeless, those in foster care, children in a family receiving Temporary Assistance for Needy Families (TANF), or who were admitted into the program in the prior year. These partner agencies provide data to DCPS on children in these categories. DCPS performs a match of the eligibility data provided by the partner agencies against the initial enrollment audit data and subsequent monthly enrollment data (the ?data match?) to determine DCPS? categorically eligible children. Condition ? We noted that the automated system used by DCPS to compile the Head Start?s monthly data match was not operating during the majority of the months in fiscal year 2019. DCPS was not able to provide the two (2) monthly data match sampled, as such, we were unable to determine DCPS? compliance with the program?s categorical eligibility requirement. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DCPS? compliance with specified requirements using a statistically valid sample. Effect ? DCPS did not comply with the specific program requirement in managing the program. Cause ? It appears that policies and procedures, including a review over monitoring, preparation and review of the program?s categorical eligibility requirement is not functioning as intended. Recommendation ? We recommend that DCPS re-evaluate its policies and procedures to ensure that policies and alternative procedures are instituted to enable DCPS monitor its program eligibility requirement. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DCPS agrees with the conditions and recommendations of this finding. In the Spring of 2020, the Early Childhood Education Division (ECED) piloted a process to obtain income verification on all Head Start families that were not categorically eligible via TANF or SSI. Forms and processes were developed to begin usage during enrollment for school year 2020-2021. Because DCPS does not have Head Start funding for school year 2020-2021, ECED will not be implementing this Head Start eligibility verification process during this school year. However, the process that was piloted in school year 2019-2020 will be implemented should DCPS receive Head Start funding in the future. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-017 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions ? Program Governance Program: Government Department/Agency: U.S. Department of Health and Human Services Head Start CFDA #: 93.600 Award #: 03CH010214-04-00; 03CH010214-05-00 03CD4015-04-00; 03CH3445-06-00 Award Year: 09/01/2018?08/31/2020; 02/1/2019?06/30/2020 District of Columbia Public Schools (DCPS) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. U.S. Code 42 USC 9839(a)(2)(A), (B), and (D) states that each Head Start agency shall make available to the public a report published at least once in each fiscal year that discloses the following information from the most recently concluded fiscal year: (a) the total amount of public and private funds received and the amount from each source; (b) an explanation of budgetary expenditures and proposed budget for the fiscal year; and (c) the results of the most recent review by the Secretary and the financial audit. Condition ? We noted that the required annual report for school year 2018-2019 was not prepared and published as of audit date. Questioned Costs ? None. Context ? This is a condition identified per review of DCPS? compliance with specified requirements. Effect ? DCPS did not comply with the specific program governance requirement. Cause ? It appears that policies and procedures, including a review over monitoring, preparation and review of this program governance requirement is not functioning as intended. Recommendation ? We recommend that DCPS re-evaluate its policies and procedures to ensure that preparation and review of this requirement is monitored by an appropriate official who would ensure that information submitted is complete, accurate, consistent, submitted and published within the required timeframe. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DCPS agrees with the conditions and recommendations of this finding. The Early Childhood Education Division of DCPS was going through significant staffing turnover at the end of school year 2018-2019 which led to missing the deadline for creating and submitting an annual report. DCPS is preparing a school year 2018-2019 annual report (in retrospect) and will publish the report to the DCPS website by October 31, 2020. An annual report for the school year 2019-2020 school year was prepared and posted on the DCPS web site and was distributed to internal staff and external stakeholders. The Early Childhood Education Division has trained three levels of staff (Chief, Deputy Chief, Directors and Administrative Coordinators) on the Head Start requirement for an annual report. When/if DCPS applies and receives Head Start funding in the future, individuals in all these positions will ensure a report is prepared. The Division will also put in place an annual program calendar to identify due dates for all Head Start required reports in order to anticipate and track progress. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-018 Prior Year Finding Number: 2018-011 Compliance Requirement: Eligibility Program: Government Department/Agency: U.S. Department of Health and Human Services Foster Care ? Title IV-E CFDA #: 93.658 Award #: Various Award Year: 10/01/2018 ? 09/30/2019 Child and Family Services Agency (CFSA) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. 45 CFR Section 92.20(b)(2), ?Accounting records, "Grantees and sub grantees must maintain records which adequately identify the source and application of funds provided for financially assisted activities. These records must contain information pertaining to grant or subgrant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays or expenditures, and income.? 45 CFR Section 233.90(b)(3), states ?a Title IV-E agency may provide foster care maintenance payments on behalf of youth who have attained age 18, but are under the age of 19, and who are full-time students expected to complete their secondary schooling or equivalent vocational or technical training before reaching 19.? 45 CFR Section 1356.30(f), ?In order for a child care institution to be eligible for title IV-E funding, the licensing file for the institution must contain documentation which verifies that safety considerations with respect to the staff of the institution have been addressed.? 45 CFR Section 1356.30(a) states, ?The Title IV-E agency must provide documentation that criminal records checks have been conducted with respect to prospective foster and adoptive parents.? 42 U.S. Code Section 671(a)(20)(A), ?In order for a State to be eligible for payments under this part, it shall have a plan approved by the Secretary which provides procedures for criminal records checks of national crime information databases for any prospective foster or adoptive parent before the foster or adoptive parent may be finally approved for placement of a child regardless of whether foster care maintenance payments or adoption assistance payments are to be made on behalf of the child under the State plan.? 42 U.S. Code Section 671(a)(20)(B), ?In order for a State to be eligible for payments under this part, it shall have a plan approved by the Secretary which provides that the State shall check any child abuse and neglect registry maintained by the State for information on any prospective foster or adoptive parent and on any other adult living in the home of such a prospective parent, and request any other State in which any such prospective parent or other adult has resided in the preceding 5 years, to enable the State to check any child abuse and neglect registry maintained by such other State for such information, before the prospective foster or adoptive parent may be finally approved for placement of a child.? Furthermore, per 45 CFR Section 1356.21(a), ?Statutory and regulatory requirements of the Federal foster care program, ?To implement the foster care maintenance payments program provisions of the title IV-E plan and to be eligible to receive Federal financial participation (FFP) for foster care maintenance payments under this part, a Title IV-E agency must meet the requirements of this section, 45 CFR 1356.22, 45 CFR 1356.30, and Parts 472, 475(1), 475(4), 475(5), 475(6).? Condition ? During our audit we noted that in fiscal year 2019, the Foster Care program had total disbursements of $5,043,554 for 7,371 Maintenance payments. We selected a sample of 60 participants representing disbursed federal funds totaling $40,389, we noted the following deficiencies: ? For three (3) of 60 samples, CFSA was unable to provide documentation supporting that a youth over 18 was a full-time student expected to complete their secondary schooling or equivalent vocational or technical training. ? For seventeen (17) of 60 samples, CFSA was not able to provide the licensing documentation or documentation provided was outside of the audit period for the selected individuals. ? For one (1) of 60 samples, the licensing documentation provided was unsigned. ? For twelve (12) of 60 samples, CFSA did not provide evidence that criminal record checks, including fingerprint-based checks from the national crime information databases and check registry were performed. ? For one (1) of 60 samples, the background check provided for review by CFSA did not pertain to the period under audit. There was no evidence that a background check was performed every two (2) years. ? For one (1) of 60 samples, CSFA did not provide a neglect registry check for the prospective foster parent. ? For one (1) of 60 samples, documentation provided for a group home does not allow us to determine that CFSA performed the required review of background checks and check registries that the group home was required to perform. These deficiencies represent 39% of the total disbursements tested. Questioned Costs ? Known amount is $15,853. Context ? This is a condition identified per review of CFSA?s compliance with specified requirements using a statistically valid sample. Effect ? CFSA was not in compliance with the eligibility requirements of the Foster Care program. Cause ? CFSA does not have adequate controls in place to ensure that eligibility files are being properly reviewed and the required documentation is being maintained to evidence compliance with eligibility requirements. Recommendation - We recommend CFSA reevaluate and strengthen its existing policies and procedures over the review and maintenance of appropriate documentation to ensure compliance with eligibility requirements in accordance with the program. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The CFSA appreciates the level of detail and clarity in the detail-level catalogue of findings that was provided to us in support of this Schedule of Findings and Questioned Costs. CFSA concurs with the findings. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-019 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: Government Department/Agency: U.S. Department of Health and Human Services Foster Care ? Title IV-E CFDA #: 93.658 Award #: Various Award Year: 10/01/2018 ? 09/30/2019 Child and Family Services Agency (CFSA) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per OMB No. 0970-0205, Form CB-496, Title IV-E Programs Quarterly Financial Report, ?is required to be submitted at the end of each fiscal quarter by each State or Tribe with an approved plan under title IV-E of the Social Security Act to administer the Foster Care, Adoption Assistance, and Guardianship Assistance programs. In submitting this form, each State or Tribal grantee meets its statutory and regulatory requirements to report actual program expenditures made in the preceding fiscal quarter and to provide an estimate of program expenditures anticipated in the upcoming fiscal quarter.? Condition ? During our review and reconciliation of the CB-496 quarterly reports, we observed that the Agency did not report project evaluation costs. In the 3rd and 4th quarters, CFSA duplicated and misclassified costs resulting in overclaimed evaluation costs. These errors were identified under 6a FMAP Rate-Project Intervention and Other Waiver Based Expenditures and in 6b 50% FFP Rate - Project Intervention and Other Waiver Based Expenditures. Questioned Costs ? Known amount is $48,649. Context ? This is a condition identified per review of CFSA?s compliance with specified requirements using a statistically valid sample. Effect ? Without proper internal controls and policies and procedures in place to ensure that CB- 496 balances were properly reported, the Foster Care program incorrectly reported project evaluation expenditures on the CB-496 reports for two of the four quarters in fiscal year 2019. Lack of proper internal controls over review of CB-496 may lead to incorrect reporting of performance data. Cause ? CFSA overstated amounts reported and misclassified evaluation costs because of duplicated transactions. Thus, Management did not have proper internal controls and policies and procedures in place to ensure that the CB-496 was properly reviewed prior to approval. Recommendation - We recommend that CFSA implement additional procedures that will ensure the amounts reported are accurate in the CB-496 quarterly reports prior to approval. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? CFSA concurs with the facts of the finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-020 Prior Year Finding Number: 2018-012 Compliance Requirement: Eligibility Program: Government Department/Agency: U.S. Department of Health and Human Services Adoption Assistance ? Title IV-E CFDA #: 93.659 Award #: Various Award Year: 10/01/2018 ? 09/30/2019 Child and Family Services Agency (CFSA) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. According to 45 CFR Section 92.20(b)(2), Accounting records, ?Grantees and sub grantees must maintain records which adequately identify the source and application of funds provided for financially assisted activities. These records must contain information pertaining to grant or subgrant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays or expenditures, and income.? 42 U.S. Code Section 671(a)(20)(A), ?in order for a State to be eligible for payments under this part, it shall have a plan approved by the Secretary which provides procedures for criminal records checks of national crime information databases for any prospective foster or adoptive parent before the foster or adoptive parent may be finally approved for placement of a child regardless of whether foster care maintenance payments or adoption assistance payments are to be made on behalf of the child under the State plan.? 42 U.S. Code Section 671(a)(20)(B), ?In order for a State to be eligible for payments under this part, it shall have a plan approved by the Secretary which provides that the State shall check any child abuse and neglect registry maintained by the State for information on any prospective foster or adoptive parent and on any other adult living in the home of such a prospective parent, and request any other State in which any such prospective parent or other adult has resided in the preceding 5 years, to enable the State to check any child abuse and neglect registry maintained by such other State for such information, before the prospective foster or adoptive parent may be finally approved for placement of a child.? 42 U.S. Code Section 673(a)(4)(A), ?Notwithstanding any other provision of this section, a payment may not be made pursuant to this section to parents or relative guardians with respect to a child (i) who has attained (I) 18 years of age, or such greater age as the State may elect under section 675(8)(B)(iii) of this title; or (II) 21 years of age, if the State determines that the child has a mental or physical handicap which warrants the continuation of assistance; (ii) who has not attained 18 years of age, if the State determines that the parents or relative guardians, as the case may be, are no longer legally responsible for the support of the child; or (iii) if the State determines that the child is no longer receiving any support from the parents or relative guardians, as the case may be. (B) Parents or relative guardians who have been receiving adoption assistance payments or kinship guardianship assistance payments under this section shall keep the State or local agency administering the program under this section informed of circumstances which would, pursuant to this subsection, make them ineligible for the payments, or eligible for the payments in a different amount.? Condition ? In fiscal year 2019, CFSA had total disbursements of $9,202,854 for 11,721 subsidy payments. We selected a sample of 60 participants representing disbursed funds totaling $47,915 to test compliance with eligibility requirements. Based on our review, we noted that management?s internal control over compliance with the program?s eligibility requirements were not operating effectively to prevent or detect noncompliance with the program requirements. Our audit revealed the following deficiencies: ? For six (6) out of 60 samples, the date that the determination was performed was not included on the Title IV-E FACES Eligibility Determination screen as there was no event included on these pages labeled as "Determination". ? For one (1) out of 60 samples, CFSA was unable to provide a Title IV-E FACES Eligibility Determination screen. ? For one (1) out of 60 samples, the adoption referrals provided by CFSA were not dated by referring worker and it was not dated and/or signed by the supervisor. ? For sixty (60) out of 60 samples, CFSA was unable to provide evidence that the annual subsidy application was reviewed and that the reviews were properly documented. Additionally, for one (1) out of 60 samples we noted that CFSA mailed the letter on November 11, 2019, which is after the fiscal year under audit. ? For fifteen (15) out of 60 samples, CFSA was unable to provide documentation evidencing that prospective adoptive parent(s) were issued a license, had received a criminal history record check, including a fingerprint-based check, and received a child abuse and registry check. Additionally, for ten (10) of these samples, no documentation was provided that allowed us to verify the number of members in the household and that all adults over 18 received a background check and child abuse and neglect registry. ? For three (3) out of 60 samples, CFSA was unable to provide documentation evidencing that prospective adoptive parent(s) had received a child abuse and neglect registry check. ? For five (5) out of 60 samples, CFSA provided documentation that was outside the period to demonstrate whether the license and check register and criminal history record check, including a fingerprint-based check were done at the time of the adoption. Additionally, for one (1) of these samples, we noted no documentation to support that background check and child abuse and neglect registry check were performed for at least one adult over 18 in the house. ? For seven (7) out of 60 samples, we noted no documentation to support that background checks and child abuse and neglect registry checks were performed for at least one adult over 18 years of age in the house. ? For one (1) out of 60 samples, CFSA provided a subsidy agreement that was signed more than one (1) year prior to the final decree and was therefore null and void. ? For one (1) out of 60 samples, the recalculated subsidy rate did not agree with the rate included in the signed subsidy agreement nor the approved rate for years 2017 or 2018. ? For one (1) out of 60 samples, CFSA provided a subsidy agreement that was missing pages 2 and 3, we were therefore unable to determine what was the agreed upon subsidy rate for this sample. ? For one (1) out of 60 samples, Report and Recommendation Part I (Child?s Asset Statement) that is usually completed by CFSA personnel was not included in the subsidy record. These deficiencies represent 100% of the total disbursements tested. Questioned Costs ? Known amount is $47,915. Context ? This is a condition identified per review of CFSA?s compliance with specified requirements using a statistically valid sample. Effect ? Without proper controls in place to ensure case files are properly reviewed and documentation maintained, CFSA was not in compliance with the eligibility requirements of the Adoption Assistance program. In addition, we were unable to determine whether each child remains eligible and whether the subsidy should have continued. Cause ? CFSA does not have adequate controls in place to ensure that eligibility files are being properly reviewed and required documentation is being maintained to ensure compliance with eligibility requirements as required by the program. Recommendation - We recommend CFSA evaluate and strengthen its existing policies and procedures over the review and maintenance of appropriate documentation to ensure compliance with eligibility requirements of the program. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The CFSA appreciates the level of detail and clarity in the detail-level catalogue of findings that was provided to us in support of this Schedule of Findings and Questioned Costs. CFSA concurs with the findings. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-021 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: Government Department/Agency: U.S. Department of Health and Human Services Adoption Assistance ? Title IV-E CFDA #: 93.659 Award #: Various Award Year: 10/01/2018 ? 09/30/2019 Child and Family Services Agency (CFSA) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per OMB No. 0970-0205, Form CB-496, Title IV-E Programs Quarterly Financial Report, ?is required to be submitted at the end of each fiscal quarter by each State or Tribe with an approved plan under title IV-E of the Social Security Act to administer the Foster Care, Adoption Assistance, and Guardianship Assistance programs. In submitting this form, each State or Tribal grantee meets its statutory and regulatory requirements to report actual program expenditures made in the preceding fiscal quarter and to provide an estimate of program expenditures anticipated in the upcoming fiscal quarter.? Condition ? During our review and reconciliation of the CB-496 quarterly report, we noted that there was a net variance of $9,033 between the amounts reported on the CB-496 and the Stamping Report in the 2nd quarter ended March 31, 2019. Questioned Costs ? Known amount is $9,033. Context ? This is a condition identified per review of CFSA?s compliance with specified requirements using a statistically valid sample. Effect ? Without proper internal controls and policies and procedures in place to ensure that CB- 496 balances were properly reported, the Adoption Assistance Program incorrectly reported expenditures on the CB-496 report for the 2nd quarter in fiscal year 2019. Lack of proper internal controls over review of CB-496 may lead to incorrect reporting of performance data. Cause ? CFSA erroneously included some non-allowable costs such as respite care and nursing care (for eligible children). Thus, CFSA?s Management did not have proper internal controls and policies and procedures in place to ensure that the CB-496 was properly reviewed prior to approval. Recommendation - We recommend that CFSA implement additional procedures that will ensure the amounts reported are accurate in the CB-496 quarterly reports prior to approval. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? CFSA concurs with the facts of the finding. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-022 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: Government Department/Agency: U.S. Department of Health and Human Services Medicaid Cluster CFDA #: 93.775, 93.777, 93.778 Award #: 1905DC5MAP Award Year: 10/01/2018 ? 09/30/2019 Department of Health Care Finance (DHCF)/Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per Section 1927 of the Social Security Act (42 USC 1396r-8): Drug manufacturers are required to provide a listing to CMS of all covered outpatient drugs and; and on a quarterly basis, are required to provide their average manufacturer?s price and their best prices for each covered outpatient drug. Based on these data, CMS calculates a unit rebate amount for each drug, which it then provides to States. Each State agency under this subchapter shall report to each manufacturer not later than 60 days after the end of each rebate period and in a form consistent with a standard reporting format established by the Secretary, information on the total number of units of each dosage form and strength and package size of each covered outpatient drug dispensed after December 31, 1990, for which payment was made under the plan during the period, and shall promptly transmit a copy of such report to the Secretary. The CMS Medicaid Drug Rebate Data Guide requires that upon receipt of a quarterly invoice, labelers have 37 calendar days from the invoice postmark date to pay rebates before interest begins to accrue. In those instances where states have used a meter to postmark the envelope and the United States Postal Service (USPS) or common mail carrier has also postmarked the envelope, the postmark date of the USPS or common mail carrier should be used to track the interest start date. For invoices that are submitted electronically, states should be able to identify the date on which the electronic invoice was received in order to properly track the interest start date. Interest stops accruing on the postmark date of the labeler?s mailed check, the date the state applies a credit to the labeler, or the date on which a state provides written acknowledgment to the labeler of the resolution. On the 38th day from the date interest originally began accruing, any unpaid interest becomes principal and interest accrues on the new principal amount beginning on the 38th day after that. Condition ? During our review of 60 samples of drug rebates, we noted that two rebates totaling $25,612 were paid over a year late. One invoice totaling $14,228 for the quarter ended 6/30/2017 was 552 days late and another invoice totaling $11,384 for the quarter ended March 31, 2017 was 438 days late. In addition, we noted that for one (1) of the 60 drug rebates tested, the manufacturer did not pay the rebate within 37 days after receiving the invoice from the DHCF, however, no interest was calculated and charged to the drug manufacturer. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DHCF?s compliance with the drug rebates requirements using a statistically valid sample. Effect ? Without adequate policies and procedures in place, there is no assurance that drug rebates are paid, or interest is assessed when rebates are not paid timely. Cause ? The contractor?s system for processing rebates does not have the capability to calculate interest once an account is paid in full. The system will only calculate interest if the account has an open balance. Recommendation - We recommend that DHCF establish policies and procedures to ensure that rebates are paid timely and interest is calculated and assessed when drug rebates are not paid timely. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHCF agrees with the facts described in the Condition above. Please note, however, that DHCF?s drug rebate vendor made efforts to collect both of the outstanding balances noted in the Condition including sending dunning notices and including the details of outstanding receivables in section 3 of each subsequent invoice. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-023 Prior Year Finding Number: 2018-013 Compliance Requirement: Eligibility Program: Government Department/Agency: U.S. Department of Health and Human Services Medicaid Cluster CFDA #: 93.775, 93.777, 93.778 Award #: 1905DC5MAP Award Year: 10/01/2018 ? 09/30/2019 Department of Health Care Finance (DHCF)/Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria ? The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Medicaid State Plan: Citation 42 CFR Section 431.17AT-79-29. Section 4.7 (Maintenance of Records) states, ?The Medicaid agency maintains or supervises the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of medical assistance, and administrative costs and statistical, fiscal and other records necessary for reporting and accountability, and retains these records in accordance with Federal requirements. All requirements of 42 CFR 431.17 are met.? Economic Security Administration (ESA) Policy Manual, Section 1.3, ?All eligibility criteria and clarifying information are documented on the Record of Case Action, form 1052. The case record should speak for itself. An outside reviewer shall be able to follow the chronology of events in the case be reading the narrative. All application documents including verification and correspondence must be date-stamped. For working recipients, the record should include the dates pay is received and how often the recipient is paid. When the recipient?s statement is the best available source, the record should include the application/recipient and agency efforts to verify the information. All address changes should be documented.? Condition ? During testing over beneficiary eligibility for the Medicaid benefits, we noted that the District?s Economic Security Administration (ESA) was unable to provide sufficient documentation to support the beneficiary?s eligibility determination during the fiscal year 2019 audit. Specifically, out of a sample of 132 participant files tested, we noted the following exceptions: ? One (1) participant file where ESA did not include the applicant?s resources in the ACEDS system when determining eligibility. ? Two (2) participant files where ESA did not perform the recertification within the required timeframe. For one of those two cases, the Level of Care assessment was not completed timely, therefore, the participant?s benefits were extended for another year. The Department of Health Care Finance, as the State Medicaid Agency, lacks a quality control oversight system to ensure that eligibility documentation is maintained to support the eligibility decision. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of ESA?s compliance with specified requirements using a statistically valid sample. Effect ? Lack of supporting documentation for program services and noncompliance with program requirements could result in disallowances of costs and participants could be receiving benefits that they are not entitled to receive under the program. Cause ? DHCF and ESA did not appear to adhere to internal control procedures to ensure that resources disclosed on an application were properly entered into the ACEDS system, and that recertification of benefits were performed as required. In addition, DHCF did not complete the Level of Care Assessments in a timely manner to facilitate the recertifications of beneficiaries. Recommendation - We recommend that ESA improve internal control procedures to ensure that information disclosed in the applicant?s application is properly entered in the ACEDS system and that recertifications are performed within established timeframes. In addition, we recommend that DHCF establish a quality control system to ensure that Level of Care assessments are completed timely to support the eligibility determination decision. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? DHCF concurs that in 1/132 instance, it was unable to produce a level of care (LOC) assessment document corresponding to an eligibility approval made during fiscal year 2019. The subject assessment was completed in April 2018 by DHCF?s former contractor, Delmarva, and the resulting document was stored in the contractor-owned database, ?Blue Crab.? In July 2018, DHCF implemented D.C. Care Connect (DCCC) as the sole case management system of record for all long-term services and supports (LTSS). The subject LOC document is outstanding due to data migration errors that occurred during the transmission of LTSS documents from Blue Crab system to DCCC. DHCF does not propose any corrective action at this time because the data migration between systems has been complete since July 2018 with implementation of the DCCC as the single LTSS case management system owned and operated by DHCF. Accordingly, DHCF does not anticipate this issue to arise in the FY 2020 Single Audit, as the eligibility universe will be comprised only of determinations made during FY 2020, which is subsequent to the July 2018 implementation of DCCC. For all other matters with which DHS and DHCF concur, the District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-024 Prior Year Finding Number: 2018-015 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: Government Department/Agency: U.S. Department of Health and Human Services HIV Emergency Relief Project Grants CFDA #: 93.914 Award #: 2 H89HA00012-29-00, H89HA00012-28-00 Award Year: 03/01/2019 ? 02/29/2020, 03/01/2018 ? 02/28/2019 Department of Health (DOH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? We noted that DOH continued to allocate payroll expenditures to the HIV Emergency Relief Project Grant (HIVER) program during fiscal year 2019 based on budgeted percentages. These percentages were entered into the PeopleSoft Human Resources/Payroll System (PeopleSoft) at the beginning of the fiscal year and were based on management?s estimate of the respective employee?s level of effort for each program. PeopleSoft calculated the payroll costs every payroll cycle for each employee and program based on the predetermined percentage, and reported it through the Labor Distribution Report (485 Report). However, management did not perform a periodic comparison of actual costs to the budgeted costs and make any necessary adjustment as required by 2 CFR Section 200.430. Specifically, 37 out of 60 sampled payroll items tested for the HIVER grant were recorded based on estimated hours and not actual hours. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DOH?s compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits, for the HIVER program in fiscal year 2019 were $3,034,788. Effect ? DOH was unable to demonstrate that the payroll expenditures charged to the HIVER grant accurately reflected the time incurred on the program and were properly supported in accordance with 2 CFR Part 200.430 time and effort reporting requirements. Cause ? DOH did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the HIVER program to the actual expenditures incurred. Per corrective action plans and status updates submitted by DOH to BDO in fiscal year 2019, DOH has a plan still in progress to develop a program manager-level certification of employee time and effort reflected in bi-weekly payroll records (485 Reports). It has not been completed by the end of fiscal year 2019. Recommendation ? We recommend that DOH fully implement its current corrective action plan to deploy policies and procedures to periodically compare employees? estimated hours per the 485 Report to the actual hours incurred, and make any necessary adjustments as required by 2 CFR 200.430. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The Department of Health (DOH) concurs with the finding. Consistent with the prior year?s CAP for this finding, DOH reached several milestones to address this deficiency. At the start of fiscal year 2020, the agency?s Time and Effort Certification standard operating procedure (SOP) was issued and distributed to DOH personnel, and a uniform time and effort certification tool and attestation for supervisors was developed. These actions will support the required periodic comparison of actual costs to the budgeted costs and make any necessary adjustment as required by 2 CFR 200.430. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

Finding Number: 2019-025 Prior Year Finding Number: 2018-016 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: Government Department/Agency: U.S. Department of Health and Human Services HIV Care Formula Grants CFDA #: 93.917 Award #: 2 X07HA00045-29-00, 2 X07HA00045-28-00 Award Year: 04/01/2019 ? 03/31/2020, 04/01/2018 ? 03/31/2019 Department of Health (DOH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation ? Personal Services: ?Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.? 2 CFR Section 200.430(i): ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Condition ? We noted that DOH continued to allocate payroll expenditures to the HIV Care Formula Grant (HIV Care) program during fiscal year 2019 based on budgeted percentages. These percentages were entered into the PeopleSoft Human Resources/Payroll System (PeopleSoft) at the beginning of the fiscal year and were based on management?s estimate of the respective employee?s level of effort for each program. PeopleSoft calculated the payroll costs every payroll cycle for each employee and program based on the predetermined percentage, and reported it through the Labor Distribution Report (485 Report). However, management did not perform a periodic comparison of actual costs to the budgeted costs and make any necessary adjustment as required by 2 CFR 200.430. Specifically, 32 out of 60 sampled payroll items tested for the HIV Care grant were recorded based on estimated hours and not actual hours. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of DOH?s compliance with specified requirements using a statistically valid sample. Payroll costs including fringe benefits, for the HIV Care program in fiscal year 2019 were $1,503,757. Effect ? DOH was unable to demonstrate that the payroll expenditures charged to the HIV Care grant accurately reflected the time incurred on the program and were properly supported in accordance with 2 CFR Part 200.430 time and effort reporting requirements. Cause ? DOH did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the HIV Care program to the actual expenditures incurred. Per corrective action plans and status updates submitted by DOH to BDO in fiscal year 2019, DOH has a plan still in progress to develop a program manager-level certification of employee time and effort reflected in bi-weekly payroll records (485 Reports). It has not been completed by the end of fiscal year 2019. Recommendation ? We recommend that DOH fully implement its current corrective action plan to deploy policies and procedures to periodically compare employees? estimated hours per the 485 Report to the actual hours incurred, and make any necessary adjustments as required by 2 CFR 200.430. Related Noncompliance ? Material noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The Department of Health (DOH) concurs with the finding. Consistent with the prior year?s CAP for this finding, DOH reached several milestones to address this deficiency. At the start of fiscal year 2020, the agency?s Time and Effort Certification standard operating procedure (SOP) was issued and distributed to DOH personnel, and a uniform time and effort certification tool and attestation for supervisors was developed. These actions will support the required periodic comparison of actual costs to the budgeted costs and make any necessary adjustment as required by 2 CFR 200.430. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.

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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

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION