Audit 24769

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND REPORTABLE INSTANCE OF NONCOMPLIANCE ? FEDERAL COMMUNICATIONS COMMISSION ? COVID-19 ? EMERGENCY CONNECTIVITY FUND PROGRAM ? ALN 32.009 2022-001 Internal Control and Compliance With Federal Equipment/Real Property Management and Special Tests and Provisions Requirements Criteria ? 47 CFR ? 54.1713 prohibits the resale of eligible equipment and services purchased with Emergency Connectivity Fund support, unless it is at least three years old and considered to be obsolete. 47 CFR ? 54.1710 requires that Independent School District No. 719, Prior Lake-Savage Area Schools (the District) to only seek support for eligible equipment provided to students and school staff who would otherwise lack connected devices sufficient to engage in remote learning. Condition ? During out audit, we noted that the District did not have sufficient controls in place within its Emergency Connectivity Fund Program to assure compliance with federal equipment/real property management and special tests and provisions requirements, which resulted in noncompliance. We also noted that 132 of the 1,650 pieces of eligible equipment were resold and are no longer in the District?s equipment inventory. We also noted that the District had requested reimbursement for all 1,650 devices, however, 127 of those devices were used for the sole purpose of avoiding disruption in learning due to anticipated loss or breakage, and thus did not meet the definition of eligible equipment for which the District could seek reimbursement. Questioned Costs ? $26,634. Context ? Of the 1,650 devices, 132 were resold and 127 were not eligible to be reimbursed. This was not a statistically valid sample. Repeat Finding ? This is a current year finding. Cause ? This was an oversight by district personnel due to unfamiliarity with this new federal program. Effect ? Noncompliance with the equipment/real property management and special tests and provisions requirements could be viewed as a violation of the award agreement. Recommendation ? We recommend that the District review its internal control procedures relating to equipment/real property management and special tests and provisions for the Emergency Connectivity Fund Program. The District should review the compliance guidance issued by the Federal Communications Commission to familiarize themselves with federal compliance requirements specific to the Emergency Connectivity Fund Program. View of Responsible Official and Planned Corrective Actions ? The District agrees with the finding. The District intends to review its procedures relating to equipment/real property management and special tests and provisions requirements to ensure compliance in the future with any additional federal awards. The District has separately issued a Corrective Action Plan related to this finding.

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND REPORTABLE INSTANCE OF NONCOMPLIANCE ? FEDERAL COMMUNICATIONS COMMISSION ? COVID-19 ? EMERGENCY CONNECTIVITY FUND PROGRAM ? ALN 32.009 2022-001 Internal Control and Compliance With Federal Equipment/Real Property Management and Special Tests and Provisions Requirements Criteria ? 47 CFR ? 54.1713 prohibits the resale of eligible equipment and services purchased with Emergency Connectivity Fund support, unless it is at least three years old and considered to be obsolete. 47 CFR ? 54.1710 requires that Independent School District No. 719, Prior Lake-Savage Area Schools (the District) to only seek support for eligible equipment provided to students and school staff who would otherwise lack connected devices sufficient to engage in remote learning. Condition ? During out audit, we noted that the District did not have sufficient controls in place within its Emergency Connectivity Fund Program to assure compliance with federal equipment/real property management and special tests and provisions requirements, which resulted in noncompliance. We also noted that 132 of the 1,650 pieces of eligible equipment were resold and are no longer in the District?s equipment inventory. We also noted that the District had requested reimbursement for all 1,650 devices, however, 127 of those devices were used for the sole purpose of avoiding disruption in learning due to anticipated loss or breakage, and thus did not meet the definition of eligible equipment for which the District could seek reimbursement. Questioned Costs ? $26,634. Context ? Of the 1,650 devices, 132 were resold and 127 were not eligible to be reimbursed. This was not a statistically valid sample. Repeat Finding ? This is a current year finding. Cause ? This was an oversight by district personnel due to unfamiliarity with this new federal program. Effect ? Noncompliance with the equipment/real property management and special tests and provisions requirements could be viewed as a violation of the award agreement. Recommendation ? We recommend that the District review its internal control procedures relating to equipment/real property management and special tests and provisions for the Emergency Connectivity Fund Program. The District should review the compliance guidance issued by the Federal Communications Commission to familiarize themselves with federal compliance requirements specific to the Emergency Connectivity Fund Program. View of Responsible Official and Planned Corrective Actions ? The District agrees with the finding. The District intends to review its procedures relating to equipment/real property management and special tests and provisions requirements to ensure compliance in the future with any additional federal awards. The District has separately issued a Corrective Action Plan related to this finding.