FAC Explorer

Audit 1068

FY End
2023-06-30
Total Expended
$2.27M
Findings
2
Programs
9
Organization: Tawas Area Schools (MI)
Year: 2023 Accepted: 2023-10-24
Auditor: Stephenson & Company PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
544 2023-001 - - B
576986 2023-001 - - B

Programs

ALN Program Spent Major Findings
84.425 Education Stabilization Fund $943,400 Yes 1
84.010 Title I Grants to Local Educational Agencies $332,725 - 0
10.553 School Breakfast Program $103,776 - 0
10.555 National School Lunch Program $65,148 - 0
84.367 Improving Teacher Quality State Grants $21,551 - 0
84.424 Student Support and Academic Enrichment Program $18,756 - 0
10.665 Schools and Roads - Grants to States $7,711 - 0
93.778 Medical Assistance Program $1,073 - 0
10.649 Pandemic Ebt Administrative Costs $628 - 0

Contacts

Name Title Type
K6LELMJ9GX33 Beverly McCoy Auditee
9899482255 Cynthia R. Scott Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule of Federal Expenditures are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance. Where in certain types of expenditures are not allowable or are limited as a reimbursement. Cash received is recorded on a cash basis. Revenues are recognized when qualifying expenditures have been incurred and all grant requirements have been met. Expenditures on this schedule reconcile with amounts reported in the financial statements and the financial reports submitted to the Michigan Department of Education. Management has utilized the MDE NexSys Grant Auditors Report (GAR) in preparing the Schedule of Expenditures of Federal Awards. The amounts reported on the Recipient Entitlement Balance Report, or PAL Report, agree with this schedule for USDA donated food commodities and are reported in the Cash Receipts column. Expenditures include spoilage or pilferage. De Minimis Rate Used: N Rate Explanation: Tawas Area Schools did not elect to use a flat de minimis rate of 10% of modified total direct costs for their indirect cost rate. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Tawas Area Schools under programs of the federal government for the year ended June 30, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Tawas Area Schools, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Tawas Area Schools.
Title: Reconciliation to the Michigan Department of Education (MDE) NexSys Grant Section Auditors Report (GAR): Accounting Policies: Expenditures reported on the Schedule of Federal Expenditures are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance. Where in certain types of expenditures are not allowable or are limited as a reimbursement. Cash received is recorded on a cash basis. Revenues are recognized when qualifying expenditures have been incurred and all grant requirements have been met. Expenditures on this schedule reconcile with amounts reported in the financial statements and the financial reports submitted to the Michigan Department of Education. Management has utilized the MDE NexSys Grant Auditors Report (GAR) in preparing the Schedule of Expenditures of Federal Awards. The amounts reported on the Recipient Entitlement Balance Report, or PAL Report, agree with this schedule for USDA donated food commodities and are reported in the Cash Receipts column. Expenditures include spoilage or pilferage. De Minimis Rate Used: N Rate Explanation: Tawas Area Schools did not elect to use a flat de minimis rate of 10% of modified total direct costs for their indirect cost rate. Total Current Year Receipts per the MDE NexSys Grant Section Auditors Report $2,249,641 Addition of receipts not passed through the Michigan Department of Education and not included in the NexSys System: Food Distribution for National Lunch Program: 55030 Entitlement Commodities 52,317 55030 Bonus Commodities 1,533 Schools and Roads Grant Funds – 2023 7,711 Medicaid Outreach Claims 2022-2023 1,073 Plus receipts included in the NexSys System at June 30, 2022 that were not received by the District until the current fiscal year-end: Title I Part A Imp Basic Pro 221530 2122 104,184 Title IIA Improving Teacher Quality 220520 2022 33,645 Title IV Part A Student Support & Academic Enrichment 210750 2021 16,934 COVID-19 - ESSER Funding 213712 2021 ESSER II 161,529 Total Current Year Receipts on the Schedule of Expenditures of Federal Awards $2,628,567.
Title: Reconciliation to financial statements: Accounting Policies: Expenditures reported on the Schedule of Federal Expenditures are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance. Where in certain types of expenditures are not allowable or are limited as a reimbursement. Cash received is recorded on a cash basis. Revenues are recognized when qualifying expenditures have been incurred and all grant requirements have been met. Expenditures on this schedule reconcile with amounts reported in the financial statements and the financial reports submitted to the Michigan Department of Education. Management has utilized the MDE NexSys Grant Auditors Report (GAR) in preparing the Schedule of Expenditures of Federal Awards. The amounts reported on the Recipient Entitlement Balance Report, or PAL Report, agree with this schedule for USDA donated food commodities and are reported in the Cash Receipts column. Expenditures include spoilage or pilferage. De Minimis Rate Used: N Rate Explanation: Tawas Area Schools did not elect to use a flat de minimis rate of 10% of modified total direct costs for their indirect cost rate. General Fund $1,625,568 Special Revenue Funds: Lunch Fund 648,442 Federal Revenue on the Schedule of Expenditures of Federal Awards $2,274,010

Finding Details

Finding 2023-001
Condition and Criteria: According to the United States Department of Education's (USDE) Elementary and Secondary School Emergency Relief Programs and Governor's Emergency Education Relief Programs Frequently Asked Questions document, updated on December 7, 2022, "under limited circumstances, it may be allowable for ESSER, GEER, or EANS-funded activities to continue after the obligation and liquidation period". However, "under no circumstances may the services extend beyond the date on which the funds revert to the U.S. Department of Treasury (31 USC § 1552), which occurs four years after the obligation deadlines", which for the above-named grant, would be September 30, 2028. In the current year, the District paid in advance for six years of a new Subscription-Based Information Technology Arrangement (SBITA) out of the ESSER grant funds, that will run through June 30, 2029, nine months past the four year cutoff. In addition, the District has not yet obtained an approval from the Michigan Department of Education (MDE) for the four-year extension. Effect: The District drew the entire cost of the six-year SBITA agreement, including the portion that falls outside of the allowable grant period under the above mentioned exception. Cause: The District did not realize that the SBITA agreement extending past the four-year window would be considered unallowable, nor did they realize that they needed to obtain MDE approval prior to drawing the additional four years. Context: In the current year, the District paid in advance for six years of a new Subscription-Based Information Technology Arrangement (SBITA) out of the ESSER grant funds, that will run through June 30, 2029. This includes nine months of SBITA services past the four year cutoff allowed with those ESSER funds. In addition, the District has not yet obtained an approval from MDE for the four-year extension. Context: In the current year, the District paid in advance for six years of a new Subscription-Based Information Technology Arrangement (SBITA) out of the ESSER grant funds, that will run through June 30, 2029. This includes nine months of SBITA services past the four year cutoff allowed with those ESSER funds. In addition, the District has not yet obtained an approval from MDE for the four-year extension.
Finding 2023-001
Condition and Criteria: According to the United States Department of Education's (USDE) Elementary and Secondary School Emergency Relief Programs and Governor's Emergency Education Relief Programs Frequently Asked Questions document, updated on December 7, 2022, "under limited circumstances, it may be allowable for ESSER, GEER, or EANS-funded activities to continue after the obligation and liquidation period". However, "under no circumstances may the services extend beyond the date on which the funds revert to the U.S. Department of Treasury (31 USC § 1552), which occurs four years after the obligation deadlines", which for the above-named grant, would be September 30, 2028. In the current year, the District paid in advance for six years of a new Subscription-Based Information Technology Arrangement (SBITA) out of the ESSER grant funds, that will run through June 30, 2029, nine months past the four year cutoff. In addition, the District has not yet obtained an approval from the Michigan Department of Education (MDE) for the four-year extension. Effect: The District drew the entire cost of the six-year SBITA agreement, including the portion that falls outside of the allowable grant period under the above mentioned exception. Cause: The District did not realize that the SBITA agreement extending past the four-year window would be considered unallowable, nor did they realize that they needed to obtain MDE approval prior to drawing the additional four years. Context: In the current year, the District paid in advance for six years of a new Subscription-Based Information Technology Arrangement (SBITA) out of the ESSER grant funds, that will run through June 30, 2029. This includes nine months of SBITA services past the four year cutoff allowed with those ESSER funds. In addition, the District has not yet obtained an approval from MDE for the four-year extension. Context: In the current year, the District paid in advance for six years of a new Subscription-Based Information Technology Arrangement (SBITA) out of the ESSER grant funds, that will run through June 30, 2029. This includes nine months of SBITA services past the four year cutoff allowed with those ESSER funds. In addition, the District has not yet obtained an approval from MDE for the four-year extension.