Want to know if I handled this correctly.

Failed to award a merited free-throw. Player missed what I thought was the front end of a 1 and 1. Defender rebounds the miss and gets fouled on the rebound. Coach brings to our attention that it was supposed to be a two shot foul immediately. I never report the foul and bring everyone back to the line to shoot the second free-throw and go on from there. What I am asking is, was I right to not report the foul or should that have been reported anyway?

The foul should have been reported.

Give A1 his second FT, with no one on the lane.

Give the ball to B at the spot nearest to where B1 was fouled.

If you told the players it was a 1 and 1, then you need to report the foul. As far as I know, this the only POI in NFHS rules. Report the foul, give the free throw with the lane clear, and move on to the penalty of the foul.

Anytime the ball changes possession before the correctable error is discovered, play resumes from POI.