FAC Explorer

Audit 290234

FY End
2023-06-30
Total Expended
$2.36M
Findings
6
Programs
11
Organization: Kutztown Area School District (PA)
Year: 2023 Accepted: 2024-02-13
Auditor: Herbein + Company INC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
367060 2023-001 Significant Deficiency - F
367061 2023-001 Significant Deficiency - F
367062 2023-001 Significant Deficiency - F
943502 2023-001 Significant Deficiency - F
943503 2023-001 Significant Deficiency - F
943504 2023-001 Significant Deficiency - F

Programs

ALN Program Spent Major Findings
84.027 Special Education_grants to States $260,257 - 0
84.010 Title I Grants to Local Educational Agencies $259,764 - 0
84.425 Education Stabilization Fund $76,679 Yes 1
10.553 School Breakfast Program $59,714 - 0
10.555 National School Lunch Program $43,657 - 0
84.367 Supporting Effective Instruction State Grant $21,375 - 0
84.424 Student Support and Academic Enrichment Program $16,278 - 0
93.778 Medical Assistance Program $7,901 - 0
84.365 English Language Acquisition State Grants $5,860 - 0
84.173 Special Education_preschool Grants $2,240 - 0
10.649 Pandemic Ebt Administrative Costs $628 - 0

Contacts

Name Title Type
NJWTXE1CK8X5 Elizabeth Siteman Auditee
6106837361 Linda Himeback Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to the reimbursement. Negative amounts shown on the Schedule represent adjustment or credits made in the normal course of business amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The District did not elect to use the de minimis rate for indirect costs The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal awards activity of the Kutztown Area School District 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 the Kutztown Area School District, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Kutztown Area School District.
Title: ACCESS PROGRAM Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to the reimbursement. Negative amounts shown on the Schedule represent adjustment or credits made in the normal course of business amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The District did not elect to use the de minimis rate for indirect costs The District participates in the ACCESS Program which is a medical assistance program that reimburses local educational agencies for direct eligible health-related services provided to enrolled special needs students. Reimbursements are federal source revenues but are classified as fee-for-service and are not considered federal financial assistance. The amount of ACCESS funding classified as fee-for-service and recognized for the year ended June 30, 2023 was $100,000.
Title: FOOD COMMODITIES Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to the reimbursement. Negative amounts shown on the Schedule represent adjustment or credits made in the normal course of business amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The District did not elect to use the de minimis rate for indirect costs Nonmonetary assistance is reported in the Schedule at the fair market value of the commodities received and disbursed. At June 30, 2023, the District has $15,764 of food commodity inventory.

Finding Details

Finding 2023-001
Federal Program Education Stabilization Fund ALN 84.425D - COVID-19 - Elementary Secondary School Emergency Relief Fund (ESSER II), contract #200-210215 ALN 84.425U - COVID-19 - Elementary Secondary School Emergency Relief Fund (ESSER III), contract #223-210215 Criteria In accordance with Uniform Guidance Title 2 CFR 200.313, a non-Federal entity may not encumber equipment without prior approval of the Federal awarding agency. Condition The District charged costs for server and firewall purchases which met the definitions and thresholds requiring prior written approval, however, the District’s grant applications did not include these purchases as part of the budget submitted and they did not obtain prior approval through other means. Cause The District revised their original plan for spending of the ESSER funds and there was oversight in completing a revised budget to reflect the changes which included purchases that required pre-approval. Information regarding the pre-approval requirement for equipment purchases was not properly communicated between federal program leadership and the business office. Controls in place over equipment and real property management did not detect the pre-approval requirement prior to encumbering the cost using federal funds. Effect Costs encumbered without required prior approval are unallowable. The District subsequently communicated with the Pennsylvania Department of Education (PDE), the passthrough agency, and submitted budget revisions including these costs which were approved by PDE and deemed allowable. Questioned Costs None. Context We examined all equipment purchases charged to the Education Stabilization Fund during the year. Two of the three invoices examined had purchases totaling $110,986 which required pre-approval. Pre-approval was not obtained for either purchase; however, they were subsequently approved via interim budget revisions. Repeat Finding No. Recommendation We recommend the District revisit procedures for reviewing program guidelines and requirements prior to approving and incurring costs for equipment and real property from federal funding sources. Management Response See corrective action plan included in this report package.
Finding 2023-001
Federal Program Education Stabilization Fund ALN 84.425D - COVID-19 - Elementary Secondary School Emergency Relief Fund (ESSER II), contract #200-210215 ALN 84.425U - COVID-19 - Elementary Secondary School Emergency Relief Fund (ESSER III), contract #223-210215 Criteria In accordance with Uniform Guidance Title 2 CFR 200.313, a non-Federal entity may not encumber equipment without prior approval of the Federal awarding agency. Condition The District charged costs for server and firewall purchases which met the definitions and thresholds requiring prior written approval, however, the District’s grant applications did not include these purchases as part of the budget submitted and they did not obtain prior approval through other means. Cause The District revised their original plan for spending of the ESSER funds and there was oversight in completing a revised budget to reflect the changes which included purchases that required pre-approval. Information regarding the pre-approval requirement for equipment purchases was not properly communicated between federal program leadership and the business office. Controls in place over equipment and real property management did not detect the pre-approval requirement prior to encumbering the cost using federal funds. Effect Costs encumbered without required prior approval are unallowable. The District subsequently communicated with the Pennsylvania Department of Education (PDE), the passthrough agency, and submitted budget revisions including these costs which were approved by PDE and deemed allowable. Questioned Costs None. Context We examined all equipment purchases charged to the Education Stabilization Fund during the year. Two of the three invoices examined had purchases totaling $110,986 which required pre-approval. Pre-approval was not obtained for either purchase; however, they were subsequently approved via interim budget revisions. Repeat Finding No. Recommendation We recommend the District revisit procedures for reviewing program guidelines and requirements prior to approving and incurring costs for equipment and real property from federal funding sources. Management Response See corrective action plan included in this report package.
Finding 2023-001
Federal Program Education Stabilization Fund ALN 84.425D - COVID-19 - Elementary Secondary School Emergency Relief Fund (ESSER II), contract #200-210215 ALN 84.425U - COVID-19 - Elementary Secondary School Emergency Relief Fund (ESSER III), contract #223-210215 Criteria In accordance with Uniform Guidance Title 2 CFR 200.313, a non-Federal entity may not encumber equipment without prior approval of the Federal awarding agency. Condition The District charged costs for server and firewall purchases which met the definitions and thresholds requiring prior written approval, however, the District’s grant applications did not include these purchases as part of the budget submitted and they did not obtain prior approval through other means. Cause The District revised their original plan for spending of the ESSER funds and there was oversight in completing a revised budget to reflect the changes which included purchases that required pre-approval. Information regarding the pre-approval requirement for equipment purchases was not properly communicated between federal program leadership and the business office. Controls in place over equipment and real property management did not detect the pre-approval requirement prior to encumbering the cost using federal funds. Effect Costs encumbered without required prior approval are unallowable. The District subsequently communicated with the Pennsylvania Department of Education (PDE), the passthrough agency, and submitted budget revisions including these costs which were approved by PDE and deemed allowable. Questioned Costs None. Context We examined all equipment purchases charged to the Education Stabilization Fund during the year. Two of the three invoices examined had purchases totaling $110,986 which required pre-approval. Pre-approval was not obtained for either purchase; however, they were subsequently approved via interim budget revisions. Repeat Finding No. Recommendation We recommend the District revisit procedures for reviewing program guidelines and requirements prior to approving and incurring costs for equipment and real property from federal funding sources. Management Response See corrective action plan included in this report package.
Finding 2023-001
Federal Program Education Stabilization Fund ALN 84.425D - COVID-19 - Elementary Secondary School Emergency Relief Fund (ESSER II), contract #200-210215 ALN 84.425U - COVID-19 - Elementary Secondary School Emergency Relief Fund (ESSER III), contract #223-210215 Criteria In accordance with Uniform Guidance Title 2 CFR 200.313, a non-Federal entity may not encumber equipment without prior approval of the Federal awarding agency. Condition The District charged costs for server and firewall purchases which met the definitions and thresholds requiring prior written approval, however, the District’s grant applications did not include these purchases as part of the budget submitted and they did not obtain prior approval through other means. Cause The District revised their original plan for spending of the ESSER funds and there was oversight in completing a revised budget to reflect the changes which included purchases that required pre-approval. Information regarding the pre-approval requirement for equipment purchases was not properly communicated between federal program leadership and the business office. Controls in place over equipment and real property management did not detect the pre-approval requirement prior to encumbering the cost using federal funds. Effect Costs encumbered without required prior approval are unallowable. The District subsequently communicated with the Pennsylvania Department of Education (PDE), the passthrough agency, and submitted budget revisions including these costs which were approved by PDE and deemed allowable. Questioned Costs None. Context We examined all equipment purchases charged to the Education Stabilization Fund during the year. Two of the three invoices examined had purchases totaling $110,986 which required pre-approval. Pre-approval was not obtained for either purchase; however, they were subsequently approved via interim budget revisions. Repeat Finding No. Recommendation We recommend the District revisit procedures for reviewing program guidelines and requirements prior to approving and incurring costs for equipment and real property from federal funding sources. Management Response See corrective action plan included in this report package.
Finding 2023-001
Federal Program Education Stabilization Fund ALN 84.425D - COVID-19 - Elementary Secondary School Emergency Relief Fund (ESSER II), contract #200-210215 ALN 84.425U - COVID-19 - Elementary Secondary School Emergency Relief Fund (ESSER III), contract #223-210215 Criteria In accordance with Uniform Guidance Title 2 CFR 200.313, a non-Federal entity may not encumber equipment without prior approval of the Federal awarding agency. Condition The District charged costs for server and firewall purchases which met the definitions and thresholds requiring prior written approval, however, the District’s grant applications did not include these purchases as part of the budget submitted and they did not obtain prior approval through other means. Cause The District revised their original plan for spending of the ESSER funds and there was oversight in completing a revised budget to reflect the changes which included purchases that required pre-approval. Information regarding the pre-approval requirement for equipment purchases was not properly communicated between federal program leadership and the business office. Controls in place over equipment and real property management did not detect the pre-approval requirement prior to encumbering the cost using federal funds. Effect Costs encumbered without required prior approval are unallowable. The District subsequently communicated with the Pennsylvania Department of Education (PDE), the passthrough agency, and submitted budget revisions including these costs which were approved by PDE and deemed allowable. Questioned Costs None. Context We examined all equipment purchases charged to the Education Stabilization Fund during the year. Two of the three invoices examined had purchases totaling $110,986 which required pre-approval. Pre-approval was not obtained for either purchase; however, they were subsequently approved via interim budget revisions. Repeat Finding No. Recommendation We recommend the District revisit procedures for reviewing program guidelines and requirements prior to approving and incurring costs for equipment and real property from federal funding sources. Management Response See corrective action plan included in this report package.
Finding 2023-001
Federal Program Education Stabilization Fund ALN 84.425D - COVID-19 - Elementary Secondary School Emergency Relief Fund (ESSER II), contract #200-210215 ALN 84.425U - COVID-19 - Elementary Secondary School Emergency Relief Fund (ESSER III), contract #223-210215 Criteria In accordance with Uniform Guidance Title 2 CFR 200.313, a non-Federal entity may not encumber equipment without prior approval of the Federal awarding agency. Condition The District charged costs for server and firewall purchases which met the definitions and thresholds requiring prior written approval, however, the District’s grant applications did not include these purchases as part of the budget submitted and they did not obtain prior approval through other means. Cause The District revised their original plan for spending of the ESSER funds and there was oversight in completing a revised budget to reflect the changes which included purchases that required pre-approval. Information regarding the pre-approval requirement for equipment purchases was not properly communicated between federal program leadership and the business office. Controls in place over equipment and real property management did not detect the pre-approval requirement prior to encumbering the cost using federal funds. Effect Costs encumbered without required prior approval are unallowable. The District subsequently communicated with the Pennsylvania Department of Education (PDE), the passthrough agency, and submitted budget revisions including these costs which were approved by PDE and deemed allowable. Questioned Costs None. Context We examined all equipment purchases charged to the Education Stabilization Fund during the year. Two of the three invoices examined had purchases totaling $110,986 which required pre-approval. Pre-approval was not obtained for either purchase; however, they were subsequently approved via interim budget revisions. Repeat Finding No. Recommendation We recommend the District revisit procedures for reviewing program guidelines and requirements prior to approving and incurring costs for equipment and real property from federal funding sources. Management Response See corrective action plan included in this report package.