Aleutian Pribilof Islands Association, Inc.

2025-001 – Significant Deficiency in Internal Control over Financial Reporting – Application of Indirect Cost Rates Criteria: Uniform Guidance requires non‑federal entities to apply the approved indirect cost rate in effect for the period in which the costs are incurred. Under 45 CFR § 75.414(c), negotiated indirect cost rates must be accepted by all HHS awarding agencies unless a deviation is required by statute or approved by the agency head. Predetermined rates, as defined in Appendix IV, Section C.1.b, are not subject to adjustment and must be applied for the entire specified period. Condition: During our testing of indirect costs charged to federal awards, we noted that the Association applied the provisional indirect cost rates that were approved rates under its negotiated indirect cost rate agreement (NICRA) dated February 12, 2024. The Association applied for an extension of those rates in March of 2024. A new agreement was approved in May of 2024 with new predetermined rates that were effective for FY24, FY25, and FY26. The Association continued to apply provisional rates after the predetermined rates had been issued by the cognizant agency. As a result, indirect costs were charged to some federal programs using a higher rate. Cause: The Association's intent was to extend the provisional rates. This was the first time the Association received a predetermined rate. It was also the first time an agreement was received with an effective date for the current fiscal year. The Association did not update its accounting system or internal controls to reflect the issuance of the predetermined indirect cost rate. Staff continued to apply the provisional rates. Effect or potential effect: Indirect costs were overcharged to some federal awards. After identification of the difference in rates and the effective dates, the Association reduced indirect costs amounts charged by approximately $86,000 ($39,912 for 93.224 and $13,151 for 64.055) for the fiscal year under audit. Recommendations: We recommend that the Association implement internal controls to ensure indirect rates are applied in accordance with the negotiated indirect cost rate agreement. Views of Responsible Officials: Management agrees with the finding and has set up a corrective action plan. Refer to Corrective Action Plan. 2025-002 – Significant Deficiency in Internal Control over Compliance and Other Matters – Application of Indirect Cost Rates Name of Federal agency: U.S. Department of Health & Human Services U.S. Department of Veterans Affairs Identification of Assistance Listing number and title: 93.224 and 93.527 Health Centers Program Cluster 64.055 Staff Sergeant Parker Gordon Fox Suicide Prevention Grant Program Federal award identification number and year: H80CS01129-22, H80CS01129-23, H80CS01129-24 AK-SSG-1461-22 Refer to Finding 2025-001 Questioned Costs: None

2025-003 Material Weakness in Internal Control over Compliance and Noncompliance – Eligibility Name of Federal agency U.S. Department of Veterans Affairs Identification of Assistance Listing number and title: 64.055 Staff Sergeant Parker Gordon Fox Suicide Prevention Grant Program Federal award identification number and year: AK-SSG-1461-22 Criteria or specific requirement: Per §201(q)(4) of Hannon Act, an eligible individual is a person at risk of suicide who is one of the following: (1) A Veteran as defined in 38 U.S.C. 101, (2) an individual described in 38 U.S.C. 1720I(b), or (3) an individual described in 38 U.S.C. 1712A(a)(1)(C)(i) through (iv). See Section III. Participant Eligibility for details on how Staff Sergeant Parker Gordon Fox Suicide Prevention Grant Program grantees determine participant eligibility. Condition: To ensure services are provided only to eligible individuals, the Association uses a review checklist outlining the program’s eligibility requirements. We noted that the Association did not retain documentation of this completed checklist. Cause: The controls in place were not operating effectively to ensure eligibility requirements were met or that documentation of eligibility was retained. Effect or potential effect: The Association is out of compliance with the program eligibility requirements. Questioned Costs: None Context: For this program, a sample of eight individuals who participated was tested for compliance with eligibility requirements. Of the eight individuals tested, six did not have documentation retained to support that eligibility requirements were met. Additionally, six did not have documentation demonstrating the use of the eligibility checklist implemented by the Association. The Association was unable to provide any eligibility documentation for two of the sampled individuals. Identification of Repeat Finding: Not applicable. Recommendations: We recommend that, as part of the Association’s internal control structure over compliance with Uniform Guidance, the eligibility checklist be reviewed by more than one individual to verify that all eligibility requirements are met before an individual is approved to participate in the program. Views of Responsible Officials: Management agrees with the finding and has set up a corrective action plan. Refer to Corrective Action Plan.

2023-001 Significant Deficiency in Internal Control over Compliance and non-compliance – Eligibility Identification of federal program: 93.210 Tribal Self-Governance Program: IHS Compact/Funding Agreement Criteria or specific requirement: Uniform Guidance 42 C.F.R section 136.12(a)(1)(2) 136.12(a)(1)(2) Subject to the requirements of this subpart, the Indian Health Service will provide direct services at its facilities, and contract health services, as medically indicated, and to the extent that funds and resources allocated to the particular Health Service Delivery Area Permit, to persons of Indian or Alaska Native decent who: (1) Are members of a federally recognized Indian tribe; and (2) Reside within a Health Service Delivery Area designated under section 36a.15 Condition: It was noted during the audit that four of the forty samples tested did not have proof that individuals that received IHS benefits were eligible for these benefits based on Uniform Guidance 42 C.F.R section 136.12(a)(1)(2) Cause: The controls in place were not operating effectively to ensure eligibility requirements were met. Effect or potential effect: The Association is out of compliance with Uniform Guidance eligibility requirements. Questioned Costs: None Context: For this program, a sample of forty individuals that received IHS benefits were tested for eligibility requirements. Of the forty individuals tested, four did not have documentation supporting the eligibility requirements were met. Identification of Repeat Finding: Not applicable. Recommendations: We recommend that as a part of the Association’s internal control structure over compliance with Uniform Guidance, additional criteria be added to the patient’s intake form and reviewed to ensure eligibility requirements are met prior to the patient receiving benefits. Views of Responsible Officials: Management agrees with the finding and has set up a corrective action plan. Refer to Corrective Action Plan.

Finding 2021-001 Reporting ? Material Weakness in Internal Control Over Compliance and Noncompliance Identification of the federal program Tribal Self Governance, Assistance Listing No. 15.022 Agency U.S. Department of the Interior Award No. OSGT811 Year 2021 Criteria or specific requirement In accordance 2 CFR Part 170, the Association was required to report firsttier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition The required reports were not submitted during the year. A control was not in place to evaluate the applicability of the reporting requirement and ensure the reports were submitted timely. Cause There is some degree of uncertainty regarding the applicability of this requirement for Compact Agreements negotiated with the Bureau of Indian Affairs under the Indian Self-Determination and Education Assistance Act (ISDEAA), also known as Public Law 93-638. In prior years, subawards related to this source were determined to not be subject to this reporting requirement. However, in 2021, the Association received funding related to the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 that was awarded through their existing compact agreement. The Association was not aware that this requirement appears to be applicable for funds received under CARES through the Compact Agreement. Effect or potential effect The Association did not submit the reports before the last day of the month following the month in which the subaward/subaward amendment obligation was made, resulting in the late submission related to five applicable subrecipients and initial noncompliance with program reporting requirements. Questioned costs None identified. Context The auditor performed inquiries with staff and management surrounding controls and procedures related to compliance requirements outlined in the OMB Compliance Supplement. This requirement was noted in the Supplement and was determined not to have been done. Identification as a repeat finding Not applicable, not a repeat finding. Recommendation We recommend the Association implement internal control procedures to evaluate applicability of grant reporting requirements, especially when funding sources or nature of grant awards change. Views of Responsible Official and Planned Corrective Action Management concurs with the finding. The Association has taken corrective action for the audit finding. New controls are in place to ensure that all subawards over $30,000 are properly and timely reported.