Audit 10150

FY End
2023-06-30
Total Expended
$3.94M
Findings
10
Programs
10
Organization: Higher Ground Academy (MN)
Year: 2023 Accepted: 2024-01-08

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
7819 2023-002 Significant Deficiency - L
7820 2023-002 Significant Deficiency - L
7821 2023-002 Significant Deficiency - L
7822 2023-001 Significant Deficiency - B
7823 2023-001 Significant Deficiency - B
584261 2023-002 Significant Deficiency - L
584262 2023-002 Significant Deficiency - L
584263 2023-002 Significant Deficiency - L
584264 2023-001 Significant Deficiency - B
584265 2023-001 Significant Deficiency - B

Contacts

Name Title Type
HKL7SXMDFJE4 Dustin Reeves Auditee
9525636834 Ryan Schmidt Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Academy did not use an indirect cost rate when calculating federal expenditures. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of Higher Ground Academy (the Academy) under programs of the federal government for the year ended June 30, 2023. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a select portion of the operations of Higher Ground Academy, it is not intended to and does not present the financial position or changes in financial position of Higher Ground Academy.
Title: INVENTORY Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Academy did not use an indirect cost rate when calculating federal expenditures. Nonmonetary assistance is reported in this schedule at the fair market value of commodities received and disbursed for the USDA National School Lunch Program Commodities (ALN 10.555). Revenue and expenditures are recorded when commodities are received.
Title: SUBRECIPIENTS Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Academy did not use an indirect cost rate when calculating federal expenditures. The Academy did not pass any federal funds to subrecipients during the year ended June 30, 2023.
Title: PASS-THROUGH IDENTIFIER Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Academy did not use an indirect cost rate when calculating federal expenditures. The Academy's pass-through identifying numbers assigned by each pass-through entity above are unknown.

Finding Details

Federal Program: ALN 10.553/10.555/10.559 Child Nutrition Cluster Condition: The Academy failed to prepare and retain documentation to fully support the number of meals that were served and reported to the State, for which federal funding was received. Meal submissions were reviewed for four months during the audit, noting that two of these months contained discrepancies between the number of meals claimed in comparison to the number of meals served per internal records. The discrepancies, when netted together, indicated that more meals had been served than claims and reported to the State. Criteria: The Academy is required to accurately monitor, record, and report the numbers of meals that were served and how many of these were free or reduced. Cause: The Academy does not have sufficient procedures in place to verify that the number of meals claimed can be fully reconciled to the number of meals served per the internal point-of-sale records. Effect: The failure to retain sufficient records for meals served resulted in a lack of documentation to support the number and types of meals served that were reported to the State. Questioned Costs: None identified. Recommendation: We recommend that the Academy evaluate current procedures for accurately monitoring, recording, and reporting the number of meals served, including how many of these were free or reduced, and ensure proper documentation is retained supporting all reports submitted to the State. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.
Federal Program: ALN 10.553/10.555/10.559 Child Nutrition Cluster Condition: The Academy failed to prepare and retain documentation to fully support the number of meals that were served and reported to the State, for which federal funding was received. Meal submissions were reviewed for four months during the audit, noting that two of these months contained discrepancies between the number of meals claimed in comparison to the number of meals served per internal records. The discrepancies, when netted together, indicated that more meals had been served than claims and reported to the State. Criteria: The Academy is required to accurately monitor, record, and report the numbers of meals that were served and how many of these were free or reduced. Cause: The Academy does not have sufficient procedures in place to verify that the number of meals claimed can be fully reconciled to the number of meals served per the internal point-of-sale records. Effect: The failure to retain sufficient records for meals served resulted in a lack of documentation to support the number and types of meals served that were reported to the State. Questioned Costs: None identified. Recommendation: We recommend that the Academy evaluate current procedures for accurately monitoring, recording, and reporting the number of meals served, including how many of these were free or reduced, and ensure proper documentation is retained supporting all reports submitted to the State. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.
Federal Program: ALN 10.553/10.555/10.559 Child Nutrition Cluster Condition: The Academy failed to prepare and retain documentation to fully support the number of meals that were served and reported to the State, for which federal funding was received. Meal submissions were reviewed for four months during the audit, noting that two of these months contained discrepancies between the number of meals claimed in comparison to the number of meals served per internal records. The discrepancies, when netted together, indicated that more meals had been served than claims and reported to the State. Criteria: The Academy is required to accurately monitor, record, and report the numbers of meals that were served and how many of these were free or reduced. Cause: The Academy does not have sufficient procedures in place to verify that the number of meals claimed can be fully reconciled to the number of meals served per the internal point-of-sale records. Effect: The failure to retain sufficient records for meals served resulted in a lack of documentation to support the number and types of meals served that were reported to the State. Questioned Costs: None identified. Recommendation: We recommend that the Academy evaluate current procedures for accurately monitoring, recording, and reporting the number of meals served, including how many of these were free or reduced, and ensure proper documentation is retained supporting all reports submitted to the State. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.
Federal Program: ALN 84.425 Education Stabilization Fund (ESF) Condition: The Academy does not have formally documented written controls to ensure compliance with the U.S. Office of Management and Budget’s (OMB) Uniform Administrative Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), in regard to determining allowable costs, procurement procedures, and cash management. Criteria: 2 CFR § 200.302(b) requires the Academy to have written procedures related to managing cash from federal award, including determining the allowability of costs in accordance with 2 CFR 200 Subpart E – Cost Principles. Additionally, 2 CFR § 318(a) and (c), requires the Academy to formally document procedures used for procurements made within federal programs, to demonstrate compliance with Uniform Guidance, which includes written standards of conduct that cover conflicts of interest and govern the performance of individuals engaged in procurement. Cause: The Academy’s policies and procedures have not been formally drafted and updated in written form to the extent sufficient to meet the requirements above. Effect: The failure to have written policies and procedures resulted in the Academy’s noncompliance with the requirements of the Uniform Guidance. Context: This is a general requirement that pertains to most federal grants. This was not identified via sampling procedures. Questioned Costs: None identified. Recommendation: We recommend the Academy review the Electronic Code of Federal Regulations, particularly the sections referenced above, to obtain a better understanding of the related requirements under Uniform Guidance. Based on this understanding, we recommend the Academy adopt written policies and procedures pertaining to cash management, determining the allowability of costs, and procurement procedures for all federal programs. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.
Federal Program: ALN 84.425 Education Stabilization Fund (ESF) Condition: The Academy does not have formally documented written controls to ensure compliance with the U.S. Office of Management and Budget’s (OMB) Uniform Administrative Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), in regard to determining allowable costs, procurement procedures, and cash management. Criteria: 2 CFR § 200.302(b) requires the Academy to have written procedures related to managing cash from federal award, including determining the allowability of costs in accordance with 2 CFR 200 Subpart E – Cost Principles. Additionally, 2 CFR § 318(a) and (c), requires the Academy to formally document procedures used for procurements made within federal programs, to demonstrate compliance with Uniform Guidance, which includes written standards of conduct that cover conflicts of interest and govern the performance of individuals engaged in procurement. Cause: The Academy’s policies and procedures have not been formally drafted and updated in written form to the extent sufficient to meet the requirements above. Effect: The failure to have written policies and procedures resulted in the Academy’s noncompliance with the requirements of the Uniform Guidance. Context: This is a general requirement that pertains to most federal grants. This was not identified via sampling procedures. Questioned Costs: None identified. Recommendation: We recommend the Academy review the Electronic Code of Federal Regulations, particularly the sections referenced above, to obtain a better understanding of the related requirements under Uniform Guidance. Based on this understanding, we recommend the Academy adopt written policies and procedures pertaining to cash management, determining the allowability of costs, and procurement procedures for all federal programs. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.
Federal Program: ALN 10.553/10.555/10.559 Child Nutrition Cluster Condition: The Academy failed to prepare and retain documentation to fully support the number of meals that were served and reported to the State, for which federal funding was received. Meal submissions were reviewed for four months during the audit, noting that two of these months contained discrepancies between the number of meals claimed in comparison to the number of meals served per internal records. The discrepancies, when netted together, indicated that more meals had been served than claims and reported to the State. Criteria: The Academy is required to accurately monitor, record, and report the numbers of meals that were served and how many of these were free or reduced. Cause: The Academy does not have sufficient procedures in place to verify that the number of meals claimed can be fully reconciled to the number of meals served per the internal point-of-sale records. Effect: The failure to retain sufficient records for meals served resulted in a lack of documentation to support the number and types of meals served that were reported to the State. Questioned Costs: None identified. Recommendation: We recommend that the Academy evaluate current procedures for accurately monitoring, recording, and reporting the number of meals served, including how many of these were free or reduced, and ensure proper documentation is retained supporting all reports submitted to the State. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.
Federal Program: ALN 10.553/10.555/10.559 Child Nutrition Cluster Condition: The Academy failed to prepare and retain documentation to fully support the number of meals that were served and reported to the State, for which federal funding was received. Meal submissions were reviewed for four months during the audit, noting that two of these months contained discrepancies between the number of meals claimed in comparison to the number of meals served per internal records. The discrepancies, when netted together, indicated that more meals had been served than claims and reported to the State. Criteria: The Academy is required to accurately monitor, record, and report the numbers of meals that were served and how many of these were free or reduced. Cause: The Academy does not have sufficient procedures in place to verify that the number of meals claimed can be fully reconciled to the number of meals served per the internal point-of-sale records. Effect: The failure to retain sufficient records for meals served resulted in a lack of documentation to support the number and types of meals served that were reported to the State. Questioned Costs: None identified. Recommendation: We recommend that the Academy evaluate current procedures for accurately monitoring, recording, and reporting the number of meals served, including how many of these were free or reduced, and ensure proper documentation is retained supporting all reports submitted to the State. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.
Federal Program: ALN 10.553/10.555/10.559 Child Nutrition Cluster Condition: The Academy failed to prepare and retain documentation to fully support the number of meals that were served and reported to the State, for which federal funding was received. Meal submissions were reviewed for four months during the audit, noting that two of these months contained discrepancies between the number of meals claimed in comparison to the number of meals served per internal records. The discrepancies, when netted together, indicated that more meals had been served than claims and reported to the State. Criteria: The Academy is required to accurately monitor, record, and report the numbers of meals that were served and how many of these were free or reduced. Cause: The Academy does not have sufficient procedures in place to verify that the number of meals claimed can be fully reconciled to the number of meals served per the internal point-of-sale records. Effect: The failure to retain sufficient records for meals served resulted in a lack of documentation to support the number and types of meals served that were reported to the State. Questioned Costs: None identified. Recommendation: We recommend that the Academy evaluate current procedures for accurately monitoring, recording, and reporting the number of meals served, including how many of these were free or reduced, and ensure proper documentation is retained supporting all reports submitted to the State. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.
Federal Program: ALN 84.425 Education Stabilization Fund (ESF) Condition: The Academy does not have formally documented written controls to ensure compliance with the U.S. Office of Management and Budget’s (OMB) Uniform Administrative Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), in regard to determining allowable costs, procurement procedures, and cash management. Criteria: 2 CFR § 200.302(b) requires the Academy to have written procedures related to managing cash from federal award, including determining the allowability of costs in accordance with 2 CFR 200 Subpart E – Cost Principles. Additionally, 2 CFR § 318(a) and (c), requires the Academy to formally document procedures used for procurements made within federal programs, to demonstrate compliance with Uniform Guidance, which includes written standards of conduct that cover conflicts of interest and govern the performance of individuals engaged in procurement. Cause: The Academy’s policies and procedures have not been formally drafted and updated in written form to the extent sufficient to meet the requirements above. Effect: The failure to have written policies and procedures resulted in the Academy’s noncompliance with the requirements of the Uniform Guidance. Context: This is a general requirement that pertains to most federal grants. This was not identified via sampling procedures. Questioned Costs: None identified. Recommendation: We recommend the Academy review the Electronic Code of Federal Regulations, particularly the sections referenced above, to obtain a better understanding of the related requirements under Uniform Guidance. Based on this understanding, we recommend the Academy adopt written policies and procedures pertaining to cash management, determining the allowability of costs, and procurement procedures for all federal programs. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.
Federal Program: ALN 84.425 Education Stabilization Fund (ESF) Condition: The Academy does not have formally documented written controls to ensure compliance with the U.S. Office of Management and Budget’s (OMB) Uniform Administrative Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), in regard to determining allowable costs, procurement procedures, and cash management. Criteria: 2 CFR § 200.302(b) requires the Academy to have written procedures related to managing cash from federal award, including determining the allowability of costs in accordance with 2 CFR 200 Subpart E – Cost Principles. Additionally, 2 CFR § 318(a) and (c), requires the Academy to formally document procedures used for procurements made within federal programs, to demonstrate compliance with Uniform Guidance, which includes written standards of conduct that cover conflicts of interest and govern the performance of individuals engaged in procurement. Cause: The Academy’s policies and procedures have not been formally drafted and updated in written form to the extent sufficient to meet the requirements above. Effect: The failure to have written policies and procedures resulted in the Academy’s noncompliance with the requirements of the Uniform Guidance. Context: This is a general requirement that pertains to most federal grants. This was not identified via sampling procedures. Questioned Costs: None identified. Recommendation: We recommend the Academy review the Electronic Code of Federal Regulations, particularly the sections referenced above, to obtain a better understanding of the related requirements under Uniform Guidance. Based on this understanding, we recommend the Academy adopt written policies and procedures pertaining to cash management, determining the allowability of costs, and procurement procedures for all federal programs. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.