VIRGIN ISLANDS PORT AUTHORITY

Finding Number: 2022-006 Prior Year Finding Number: 2021-006 Compliance Requirement: Reporting Program: U.S. Department of Commerce Economic Development Cluster ALN: 11.307 Award #: 01-01-14843, 01-01-14844 Award Year: 03/06/19 – 06/30/25 03/06/19 – 05/21/22 Criteria – Each non-Federal entity must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed 8 (3 financial, 5 performance) out of the 14 reports (6 financial, 8 performance) required to be submitted during the fiscal year and noted the following: • 3 performance reports tested did not contain evidence of proper segregation of duties. The same individual prepared and reviewed each report. • 2 performance reports tested did not contain evidence of review prior to submission. Cause – It appears that policies and procedures, including review over reporting procedures, were not functioning as intended. Effect or Potential Effect – The lack of effective internal controls over compliance can potentially lead to the reporting of inaccurate or incomplete information to the Federal Government. Questioned Costs – None. Context – We tested a sample of 8 reports and found 5 exceptions, as noted in the condition. This is a condition identified per review of the Authority’s compliance with the specified requirements not using a statistically valid sample. Recommendation – We recommend that management implement procedures to ensure proper segregation of duties in the preparation and review of reports. Specifically, the individual responsible for preparing the report should not be the same person reviewing and approving it. Management should assign separate personnel for the preparation and independent review of all required reports and maintain documentation evidencing both roles. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure proper monitoring and review of the required reports by an appropriate official. The planned corrective actions are presented in the Authority’s Corrective Action Plan, which is attached as Appendix B.

Finding Number: 2022-007 Prior Year Finding Number: 2021-008 Compliance Requirement: Equipment and Real Property Management Program: U.S. Department of Transportation Airport Improvement Program ALN: 20.106 Award #: Various Award Year: Various Criteria – Per 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 FAIN), 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 conditions of the property, and any ultimate disposition data including the date of disposal and sale price of the property. Further, a physical inventory of equipment should be taken at least once every 2 years and reconciled to the equipment records along with the usage of an appropriate control system to safeguard and maintain equipment. Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We noted that the Authority maintains an equipment listing for fixed assets purchased with federal funding. However, the Authority was unable to provide complete property records which met the stated requirements. Additionally, the Authority did not conduct a physical inventory count of equipment in the last two years. The most recent physical inventory count was performed during fiscal year 2017. Further, it does not appear that internal controls over compliance are operating at a level of precision to ensure compliance with the equipment management compliance requirements. Cause – The internal controls established for the records maintenance and physical inventory count did not fully operate as designed causing the Authority to fall out of compliance with the required timing of such physical inventory count. Effect or Potential Effect – There is a risk that inadequate monitoring of equipment could lead to misappropriation of assets and noncompliance with Federal regulations resulting in a return of Federal awards received. Questioned Costs – None. Context – This is a condition identified per review of the Authority’s compliance with the specified requirements. Recommendation – We recommend that the Authority improve internal controls to ensure adherence to Federal regulations related to equipment record maintenance and physical inventory counts. There should be timely coordination and communication among all departments responsible for handling and managing such assets. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority recognizes the importance of maintaining accurate and complete property records for fixed assets purchased with federal funding. A complete fixed asset inventory was conducted in 2023 and is now performed annually. The planned corrective actions are presented in the Authority’s Corrective Action Plan, which is attached as Appendix B.

Finding Number: 2022-008 Prior Year Finding Number: 2021-009 Compliance Requirement: Reporting Program: U.S. Department of Transportation Airport Improvement Program ALN: 20.106 Award #: Various Award Year: Various Criteria – Each non-Federal entity must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed 15 (10 financial and 5 performance) out of the 38 (23 financial and 15 performance) reports required to be submitted during the fiscal year and noted the following: • 4 performance reports and 1 financial report did not contain evidence of review and approval. • 1 performance report was not available for review. • 5 performance reports did not contain evidence of submission. • 1 financial report was not submitted in a timely manner (1,248 days late). Cause – It appears that policies and procedures, including review over reporting procedures, were not functioning as intended. Effect or Potential Effect – The Authority is not in compliance with the stated provisions and inaccurate information may have been reported to the Federal government. Failure to submit required reports could result in reduction or disallowance of Federal funding. Questioned Costs – None. Context – We tested a sample of 15 reports and found 12 exceptions as noted in the condition. This is a condition identified per review of the Authority’s compliance with the specified requirements not using a statistically valid sample. Recommendation – We recommend that the Authority reevaluate its policies and procedures to ensure proper monitoring and review of the required reports by an appropriate official who would ensure the information submitted is complete, accurate, consistent, and submitted within the required timeframe. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure proper monitoring and review of the required reports by an appropriate official. The planned corrective actions are presented in the Authority’s Corrective Action Plan, which is attached as Appendix B.

Finding Number: 2022-009 Prior Year Finding Number: 2021-011 Compliance Requirement: Reporting Program: U.S. Department of Transportation National Infrastructure Investments ALN: 20.933 Award #: DTMA91G1600010 Award Year: 02/01/2017 - 09/30/2024 Criteria – Each non-Federal entity must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed 5 (2 financial and 3 special reports) out of the 9 (4 financial and 5 special) reports required to be submitted during the fiscal year and noted the following: • 1 special report was not submitted. • 2 special reports did not contain evidence of approval prior to submission. • 1 special report was not submitted in a timely manner (33 days late). Cause – It appears that policies and procedures, including review over reporting procedures, were not functioning as intended. Effect or Potential Effect – The Authority is not in compliance with the stated provisions and inaccurate information may have been reported to the Federal government. Failure to submit required reports could result in reduction or disallowance of Federal funding. Questioned Costs – None. Context – We tested a sample of 5 reports and found 4 exceptions as noted in the condition. This is a condition identified per review of the Authority’s compliance with the specified requirements not using a statistically valid sample. Recommendation – We recommend that the Authority reevaluate its policies and procedures to ensure proper monitoring and review of the required reports by an appropriate official who would ensure the information submitted is complete, accurate, consistent, and submitted within the required timeframe. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure proper monitoring and review of the required reports by an appropriate official. The planned corrective actions are presented in the Authority’s Corrective Action Plan, which is attached as Appendix B.

Finding Number: 2022-010 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 #: PID000002 Award Year: 10/01/2021- 11/25/2022 Criteria – Each non-Federal entity must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed the 1 report required to be submitted during the fiscal year and noted that there was no evidence of approval prior to submission. Cause – It appears that policies and procedures, including review over reporting procedures were not functioning as intended. Effect or Potential Effect – The Authority is not in compliance with the stated provisions and inaccurate information may have been reported to the Federal government. Questioned Costs – None. Context – We tested one report and found one exception as noted in the condition. This is a condition identified per review of the Authority’s compliance with the specified requirements not using a statistically valid sample. Recommendation – We recommend that the Authority reevaluate its policies and procedures to ensure proper monitoring and review of the required reports by an appropriate official who would ensure the information submitted is complete, accurate, consistent, and submitted within the required timeframe. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure proper monitoring and review of the required reports by an appropriate official. The planned corrective actions are presented in the Authority’s Corrective Action Plan, which is attached as Appendix B.

Finding Number: 2021-006 Prior Year Finding Number: 2020-007 Compliance Requirement: Reporting Program: U.S. Department of Commerce Economic Development Cluster ALN: 11.307 Award #: 01-01-14843, 01-01-14844 Award Year: 03/06/19 – 06/06/22 03/06/19 – 05/21/22 Criteria – Each non-Federal entity must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed 5 (2 financial, 3 performance) out of the 12 reports (4 financial, 8 performance) required to be submitted during the fiscal year and noted that 2 performance reports tested did not contain evidence of proper segregation of duties. The same individual prepared and reviewed each report. Cause – It appears that policies and procedures, including review over reporting procedures, were not functioning as intended. Effect or Potential Effect – The lack of effective internal controls over compliance can potentially lead to the reporting of inaccurate or incomplete information to the Federal Government. Questioned Costs – None. Context – We tested a sample of 5 reports and found 2 exceptions, as noted in the condition. This is a condition identified per review of the Authority’s compliance with the specified requirements not using a statistically valid sample. Recommendation – We recommend that management implement procedures to ensure proper segregation of duties in the preparation and review of reports. Specifically, the individual responsible for preparing the report should not be the same person reviewing and approving it. Management should assign separate personnel for the preparation and independent review of all required reports, and maintain documentation evidencing both roles. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure proper monitoring and review of the required reports by an appropriate official. The planned corrective actions are presented in the Authority’s Corrective Action Plan, which is attached as Appendix B.

Finding Number: 2021-007 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed/Allowable Costs/Cost Principles Program: U.S. Department of Transportation COVID-19 Airport Improvement Program ALN: 20.106 Award #: 3-78-0001-043-2020 Award Period: 5/12/2020 – 5/12/2024 Criteria – Per the grant award, funds may be used to reimburse operational and maintenance expenses directly related to the Sponsor-owned and operated Airports, incurred no earlier than January 20, 2020. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires the non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonable ensure compliance with Federal statutes, regulations, and other terms and conditions of the Federal award. Condition – During our testing of payroll expenditures incurred throughout the year, we noted for one pay period, the Authority sought and received reimbursement for payroll activities unrelated to Sponsor-owned and operated Airports. The total reimbursement amount of $632,113 exceeded the actual payroll expenditures for Sponsor-owned and operated airports, which totaled $553,075. The difference of $79,038 was related to the operations of the Authority’s Marine division. Cause – The Authority does not appear to have adequate policies and procedures to ensure compliance with applicable cost principles or to ensure that an appropriate level of review and approval is completed prior to charging costs to a federal program. Effect or Potential Effect – An ineffective control system for reviewing transactions to ensure that only allowable costs and allowable activities are allocated to federal programs can result in noncompliance with federal statutes, regulations, and the provisions of grant agreements, which could ultimately lead to disallowed costs for major programs. Questioned Costs – $79,038. Context – This is a condition identified per review of the Authority’s compliance with the specified requirements. The exception noted was not part of a statistically valid sample. Recommendation – We recommend that the Authority reevaluate and improve internal controls to ensure adherence to federal regulations related to the fiscal administrative requirements for expending and accounting for payroll, and to ensure proper and accurate allocation of payroll costs.   Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure proper monitoring and review are completed prior to charging costs to a federal program. The planned corrective actions are presented in the Authority’s Corrective Action Plan, which is attached as Appendix B.

Finding Number: 2021-008 Prior Year Finding Number: 2020-008 Compliance Requirement: Equipment and Real Property Management Program: U.S. Department of Transportation Airport Improvement Program ALN: 20.106 Award #: Various Award Year: Various Criteria – Per 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 FAIN), 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 conditions of the property, and any ultimate disposition data including the date of disposal and sale price of the property. Further, a physical inventory of equipment should be taken at least once every 2 years and reconciled to the equipment records along with the usage of an appropriate control system to safeguard and maintain equipment. Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We noted that the Authority maintains an equipment listing for fixed assets purchased with federal funding. However, the Authority was unable to provide complete property records which met the stated requirements. Additionally, the Authority did not conduct a physical inventory count of equipment in the last two years. The most recent physical inventory count was performed during fiscal year 2017. Further, it does not appear that internal controls over compliance are operating at a level of precision to ensure compliance with the equipment management compliance requirements. Cause – The internal controls established for the records maintenance and physical inventory count did not fully operate as designed causing the Authority to fall out of compliance with the required timing of such physical inventory count. Effect or Potential Effect – There is a risk that inadequate monitoring of equipment could lead to misappropriation of assets and noncompliance with Federal regulations resulting in a return of Federal awards received. Questioned Costs – None. Context – This is a condition identified per review of the Authority’s compliance with the specified requirements. Recommendation – We recommend that the Authority improve internal controls to ensure adherence to Federal regulations related to equipment record maintenance and physical inventory counts. There should be timely coordination and communication among all departments responsible for handling and managing such assets. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority recognize the importance of maintaining accurate and complete property records for fixed assets purchased with federal funding. A complete fixed asset inventory was conducted in 2023 and is now performed annually. The planned corrective actions are presented in the Authority’s Corrective Action Plan, which is attached as Appendix B.

Finding Number: 2021-009 Prior Year Finding Number: 2020-009 Compliance Requirement: Reporting Program: U.S. Department of Transportation Airport Improvement Program ALN: 20.106 Award #: Various Award Year: Various Criteria – Each non-Federal entity must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed 18 (10 financial and 8 performance) out of the 53 (31 financial and 22 performance) reports required to be submitted during the fiscal year and noted the following: • 8 performance reports did not contain evidence of review and approval. • 1 financial report and 8 performance reports did not contain evidence of submission. • 1 financial report was not submitted in a timely manner (206 days late). Cause – It appears that policies and procedures, including review over reporting procedures, were not functioning as intended. Effect or Potential Effect – The Authority is not in compliance with the stated provisions and inaccurate information may have been reported to the Federal government. Failure to submit required reports could result in reduction or disallowance of Federal funding. Questioned Costs – None. Context – We tested a sample of 18 reports and found 10 exceptions as noted in the condition. This is a condition identified per review of the Authority’s compliance with the specified requirements not using a statistically valid sample. Recommendation – We recommend that the Authority reevaluate its policies and procedures to ensure proper monitoring and review of the required reports by an appropriate official who would ensure the information submitted is complete, accurate, consistent, and submitted within the required timeframe. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure proper monitoring and review of the required reports by an appropriate official. The planned corrective actions are presented in the Authority’s Corrective Action Plan, which is attached as Appendix B.

Finding Number: 2021-010 Prior Year Finding Number: N/A Compliance Requirement: Procurement and Suspension and Debarment Program: U.S. Department of Transportation National Infrastructure Investments ALN: 20.933 Award #: DTMA91G1600010 Award Year: 02/01/2017 - 03/31/2022 Criteria – Certain prescribed requirements dictate that recipients of Federal awards have adequate procedures and controls in place to ensure that practices are properly documented in the entity’s files, provide a vendor debarment or suspension certification, provide for retention of files, and that supporting documentation corroborate compliance with these requirements. Condition – In our review of the one (1) procurement transaction taking place during the year, we noted that the transaction did not contain evidence that the contractor was not suspended or debarred. Cause – The Authority did not strictly adhere to its policies and procedures. Effect or Potential Effect – The Authority could inadvertently contract with parties that are suspended or debarred from doing business with the Federal government. Questioned Costs – None. Context – This is a condition identified per review of the Authority’s compliance with the specified requirements. No sampling was performed. Recommendation – We recommend that the Authority follow its internal controls to ensure adherence to Federal regulations relating to vendor suspension and debarment. There should be timely coordination and communication amongst all departments that are responsible for handling and managing vendors. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure compliance with procurement policies and procedures. The planned corrective actions are presented in the Authority’s Corrective Action Plan, which is attached as Appendix B.

Finding Number: 2021-011 Prior Year Finding Number: 2020-010 Compliance Requirement: Reporting Program: U.S. Department of Transportation National Infrastructure Investments ALN: 20.933 Award #: DTMA91G1600010 Award Year: 02/01/2017 - 03/31/2022 Criteria – Each non-Federal entity must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed 7 (2 financial and 5 special reports) out of the 13 (4 financial and 9 special) reports required to be submitted during the fiscal year and noted the following: • 3 special reports were not submitted. • 2 special reports did not contain evidence of review and approval. • 2 special reports were not submitted in a timely manner (22 and 40 days late). Cause – It appears that policies and procedures, including review over reporting procedures were not functioning as intended. Effect or Potential Effect – The Authority is not in compliance with the stated provisions and inaccurate information may have been reported to the Federal government. Failure to submit required reports could result in reduction or disallowance of Federal funding. Questioned Costs – None. Context – We tested a sample of 7 reports and found 5 exceptions as noted in the condition. This is a condition identified per review of the Authority’s compliance with the specified requirements not using a statistically valid sample. Recommendation – We recommend that the Authority reevaluate its policies and procedures to ensure proper monitoring and review of the required reports by an appropriate official who would ensure the information submitted is complete, accurate, consistent, and submitted within the required timeframe. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure proper monitoring and review of the required reports by an appropriate official. The planned corrective actions are presented in the Authority’s Corrective Action Plan, which is attached as Appendix B.

Finding Number: 2020-007 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Commerce Economic Development Cluster CFDA: 11.307 Award #: 01-01-14843, 01-01-14844 Award Year: 03/06/19 – 06/06/22 03/06/19 – 05/21/22 Criteria – Each State or Territory must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed 7 out of the 20 reports (12 financial, 8 performance) required to be submitted during the fiscal year and noted the following: • 1 of the 4 financial reports tested was not submitted to the Federal agency. • All 3 performance reports tested did not contain evidence of review and approval. Cause – It appears that policies and procedures, including review over reporting procedures were not functioning as intended. Effect or Potential Effect – The Authority is not in compliance with the stated provisions and inaccurate information may have been reported to the Federal government. Failure to submit required reports could result in reduction or disallowance of Federal funding. Questioned Costs – None. Context – This is a condition identified per review of the Authority’s compliance with the specified requirements. Recommendation – We recommend that the Authority reevaluate its policies and procedures to ensure proper monitoring and review of the required reports by an appropriate official who would ensure the information submitted is complete, accurate, consistent, and submitted within the required timeframe. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure proper monitoring and review of the required reports by an appropriate official. The planned corrective actions are presented in the Authority’s Corrective Action Plan which is attached as Appendix B.

Finding Number: 2020-008 Prior Year Finding Number: 2019-007 Compliance Requirement: Equipment and Real Property Management Program: U.S. Department of Transportation Airport Improvement Program CFDA: 20.106 Award #: Various Award Year: Various Criteria – Per 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 FAIN), 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 conditions of the property, and any ultimate disposition data including the date of disposal and sale price of the property. Further, a physical inventory of equipment should be taken at least once every 2 years and reconciled to the equipment records along with the usage of an appropriate control system to safeguard and maintain equipment. Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We noted that the Authority maintains an equipment listing for fixed assets purchased with federal funding. However, the Authority was unable to provide complete property records which met the stated requirements. Additionally, the Authority did not conduct a physical inventory count of equipment in the last two years. The most recent physical inventory count was performed during fiscal year 2017. Further, it does not appear that internal controls over compliance are operating at a level of precision to ensure compliance with the equipment management compliance requirements. Cause – The internal controls established for the records maintenance and physical inventory count did not fully operate as designed causing the Authority to fall out of compliance with the required timing of such physical inventory count. Effect or Potential Effect – There is a risk that inadequate monitoring of equipment could lead to misappropriation of assets and noncompliance with Federal regulations resulting in a return of Federal awards received. Questioned Costs – None. Context – This is a condition identified per review of the Authority’s compliance with the specified requirements. Recommendation – We recommend that the Authority improve internal controls to ensure adherence to Federal regulations related to equipment record maintenance and physical inventory counts. There should be timely coordination and communication among all departments responsible for handling and managing such assets. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority recognize the importance of maintaining accurate and complete property records for fixed assets purchased with federal funding. A complete fixed asset inventory was conducted in 2023 and is now performed annually. The planned corrective actions are presented in the Authority’s Corrective Action Plan which is attached as Appendix B.

Finding Number: 2020-009 Prior Year Finding Number: 2019-008 Compliance Requirement: Reporting Program: U.S. Department of Transportation Airport Improvement Program CFDA: 20.106 Award #: Various Award Year: Various Criteria – Each State or Territory must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed 18 (9 financial and 9 performance) out of the 78 (49 financial and 29 performance) reports required to be submitted during the fiscal year and noted the following: • 1 financial report did not contain evidence of review and approval by one of the two designated reviewers. • 1 financial report was not submitted. • 9 performance reports did not contain evidence of review and approval. • 2 performance reports did not contain evidence of submission. • 2 financial and 1 performance reports had not been submitted in a timely manner. Cause – It appears that policies and procedures, including review over reporting procedures, were not functioning as intended. Effect or Potential Effect – The Authority is not in compliance with the stated provisions and inaccurate information may have been reported to the Federal government. Failure to submit required reports could result in reduction or disallowance of Federal funding. Questioned Costs – None. Context – This is a condition identified per review of the Authority’s compliance with the specified requirements. Recommendation – We recommend that the Authority reevaluate its policies and procedures to ensure proper monitoring and review of the required reports by an appropriate official who would ensure the information submitted is complete, accurate, consistent, and submitted within the required timeframe. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure proper monitoring and review of the required reports by an appropriate official. The planned corrective actions are presented in the Authority’s Corrective Action Plan which is attached as Appendix B.

Finding Number: 2020-010 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Transportation National Infrastructure Investments CFDA: 20.933 Award #: DTMA91G1600010 Award Year: 02/01/2017 - 03/31/2022 Criteria – Each State or Territory must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed 4 out of the 9 special reports required to be submitted during the fiscal year and noted the following: • 2 reports were submitted to the Federal Agency; however, they did not contain evidence of review, approval, and submission. • 2 reports were not submitted to the Federal Agency. Cause – It appears that policies and procedures, including review over reporting procedures were not functioning as intended. Effect or Potential Effect – The Authority is not in compliance with the stated provisions and inaccurate information may have been reported to the Federal government. Failure to submit required reports could result in reduction or disallowance of Federal funding. Questioned Costs – None. Context – This is a condition identified per review of the Authority’s compliance with the specified requirements. Recommendation – We recommend that the Authority reevaluate its policies and procedures to ensure proper monitoring and review of the required reports by an appropriate official who would ensure the information submitted is complete, accurate, consistent, and submitted within the required timeframe. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure proper monitoring and review of the required reports by an appropriate official. The planned corrective actions are presented in the Authority’s Corrective Action Plan which is attached as Appendix B.

Finding Number: 2019-007 Prior Year Finding Number: N/A Compliance Requirement: Equipment and Real Property Management Information on Federal Program(s) - U.S. Department of Transportation: Direct Program: Federal Aviation Administration Airport Improvement Program CFDA Number: 20.106 Criteria or Specific Requirement – Per 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 property, who holds title, the acquisition date, cost of the property, percentage of Federal participation in the cost of the property, the location, use and conditions of the property, and any ultimate disposition data including the date of disposal and sale price of the property. Further, a physical inventory of equipment should be taken at least once every 2 years and reconciled to the equipment records along with the usage of an appropriate control system to safeguard and maintain equipment. Additionally, 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 – The Authority did not conduct a physical inventory count of equipment in the last two years. The most recent physical inventory count was performed during fiscal year 2017. Further, it does not appear that internal controls over compliance are operating at a level of precision to ensure compliance with the physical inventory count requirement. Questioned Costs – Not determinable. Context – This is a condition identified per review of the Authority’s compliance with the specified requirements. Effect – There is a risk that inadequate monitoring of equipment could lead to misappropriation of assets and noncompliance with Federal regulations resulting in a return of Federal awards received. Cause – The internal controls established for the physical inventory count did not fully operate as designed causing the Authority to fall out of compliance with the required timing of such physical inventory count. Recommendation – We recommend that the Authority improve internal controls to ensure adherence to Federal regulations related to performing physical inventory counts of equipment. There should be timely coordination and communication amongst all departments that are responsible for handling and managing such assets. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The planned corrective actions are presented in the Authority’s Corrective Action Plan which is attached as Appendix B.

Finding Number: 2019-008 Prior Year Finding Number: 2018-009 Compliance Requirement: Reporting Information on Federal Program(s) - U.S. Department of Transportation: Direct Program: Federal Aviation Administration Airport Improvement Program CFDA Number: 20.106 Criteria or Specific Requirement – In accordance with the OMB Compliance Supplement for this program, each State or Territory must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Condition: During our review of the annual SF-425 annual financial report expected to be filed with the grantor agency, we noted that financial information reported did not agree with the underlying records and the report had not been submitted in a timely manner. Further, it does not appear that the controls in place are operating at a level of precision to ensure compliance with the reporting compliance requirement. Questioned Costs – Not determinable. Context – This is a condition identified per review of the Authority’s compliance with specified requirements. Effect – The Authority is not in compliance with the stated provisions and inaccurate information may have been reported to the Federal government. Cause – It appears that policies and procedures, including review over reporting procedures were not functioning as intended. Recommendation – We recommend that the Authority reevaluate its policies and procedures to ensure proper monitoring and review of the required reports by an appropriate official who would ensure the information submitted is complete, accurate, consistent, and submitted within the required timeframe. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The planned corrective actions are presented in the Authority’s Corrective Action Plan which is attached as Appendix B.

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GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION