Audit 295432

FEDERAL COMMUNICATIONS COMMISSION EMERGENCY CONNECTIVITY FUND PROGRAM - AL NUMBER 32.009 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-001 Activities Allowed or Unallowed Criteria or specific requirement: Office of Management and Budget (OMB) 47 CFR § 54.1706 (b) states that eligible schools cannot request and receive support for the purchase of eligible equipment and services for use solely at the school; however, some on-campus use is permitted for eligible equipment that was purchased primarily to provide off-campus access. Condition: During testing, we identified unallowable costs totaling $228,436 were paid from the Emergency Connectivity Fund for 722 connected devices that were purchased primarily for on-campus access and were not distributed to students for off-campus remote learning. Cause: Lack of internal controls and management oversight of program expenditures. Effect: Unallowable costs of $228,436 were paid from the Emergency Connectivity Fund. Questioned costs: The amount of questioned costs was $228,436. Context: 722 out of 1,522 devices purchased were not primarily for off-campus use and resulted in unallowable costs. Identification as a repeat finding: No Recommendation: The District should contact the Federal Communications Commission for guidance regarding this matter and implement controls over program expenditures. Views of responsible officials: Based on the information that we had available at the time and based on guidance provided by our E-rate consultant and from conferring with other schools that were also applying for ECF funding, we were within compliance as we understood the requirements to be. The deadline to apply for this wave of funding was before they had finished writing and released the guidelines for this additional one-time funding. We performed the required survey and ordered precisely the number of devices as indicated in the forms that answered that they did not have a reliable internet device at home. The District will contact the Federal Communications Commission for guidance on the matter. If necessary, the computers in question will be distributed in the appropriate manner in accordance with the regulation.

U.S DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425U PASS THROUGH NUMBER 4401 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-002 Equipment and Real Property Management / Special Tests and Provisions Criteria or specific requirement (including statutory, regulatory, or other citation): 29 CFR 5.5 (Wage Rate Requirements) requires all contractors and subcontractors performing construction contracts in excess of $2,000, financed by federal assistance funds, to pay laborers and mechanics employed by the contractor or subcontractor not less than the prevailing wage rates established by the Department of Labor for the locality of the project. Non-federal entities shall include in the applicable construction contracts a provision that the contractor or subcontractor comply with those requirements. Such requirements include the submission of weekly certified payrolls for each week in which any contract work is performed, to the non-federal entities. Additionally, 2 CFR 200.326 and Ark. Code Ann. § 18-44-503 require a non-federal entity to obtain a performance bond for the public construction contract. Condition: The District paid $1,064,887 for installation of an HVAC system from the Education Stabilization Fund without obtaining a written contract that included the prevailing wage rate provision, and weekly certified payrolls were not submitted to the District. Additionally, the District did not obtain a performance bond from the contractor, as required by Ark. Code Ann. § 18-44-503. Cause: Lack of internal controls and management oversight. Effect: The District did not comply with Wage Rate Requirements or Bonding Requirements. Context: A total of two payments/contracts for facility repairs and improvements were paid from the Education Stabilization Fund. Both were examined. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The District supplied the bidding groups with all the federal guidelines and requirements. However, we did not request or receive documentation regarding the adherence to those requirements. The District will contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding the matter and implement proper controls over program expenditures.

FEDERAL COMMUNICATIONS COMMISSION EMERGENCY CONNECTIVITY FUND PROGRAM - AL NUMBER 32.009 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-001 Activities Allowed or Unallowed Criteria or specific requirement: Office of Management and Budget (OMB) 47 CFR § 54.1706 (b) states that eligible schools cannot request and receive support for the purchase of eligible equipment and services for use solely at the school; however, some on-campus use is permitted for eligible equipment that was purchased primarily to provide off-campus access. Condition: During testing, we identified unallowable costs totaling $228,436 were paid from the Emergency Connectivity Fund for 722 connected devices that were purchased primarily for on-campus access and were not distributed to students for off-campus remote learning. Cause: Lack of internal controls and management oversight of program expenditures. Effect: Unallowable costs of $228,436 were paid from the Emergency Connectivity Fund. Questioned costs: The amount of questioned costs was $228,436. Context: 722 out of 1,522 devices purchased were not primarily for off-campus use and resulted in unallowable costs. Identification as a repeat finding: No Recommendation: The District should contact the Federal Communications Commission for guidance regarding this matter and implement controls over program expenditures. Views of responsible officials: Based on the information that we had available at the time and based on guidance provided by our E-rate consultant and from conferring with other schools that were also applying for ECF funding, we were within compliance as we understood the requirements to be. The deadline to apply for this wave of funding was before they had finished writing and released the guidelines for this additional one-time funding. We performed the required survey and ordered precisely the number of devices as indicated in the forms that answered that they did not have a reliable internet device at home. The District will contact the Federal Communications Commission for guidance on the matter. If necessary, the computers in question will be distributed in the appropriate manner in accordance with the regulation.

U.S DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425U PASS THROUGH NUMBER 4401 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-002 Equipment and Real Property Management / Special Tests and Provisions Criteria or specific requirement (including statutory, regulatory, or other citation): 29 CFR 5.5 (Wage Rate Requirements) requires all contractors and subcontractors performing construction contracts in excess of $2,000, financed by federal assistance funds, to pay laborers and mechanics employed by the contractor or subcontractor not less than the prevailing wage rates established by the Department of Labor for the locality of the project. Non-federal entities shall include in the applicable construction contracts a provision that the contractor or subcontractor comply with those requirements. Such requirements include the submission of weekly certified payrolls for each week in which any contract work is performed, to the non-federal entities. Additionally, 2 CFR 200.326 and Ark. Code Ann. § 18-44-503 require a non-federal entity to obtain a performance bond for the public construction contract. Condition: The District paid $1,064,887 for installation of an HVAC system from the Education Stabilization Fund without obtaining a written contract that included the prevailing wage rate provision, and weekly certified payrolls were not submitted to the District. Additionally, the District did not obtain a performance bond from the contractor, as required by Ark. Code Ann. § 18-44-503. Cause: Lack of internal controls and management oversight. Effect: The District did not comply with Wage Rate Requirements or Bonding Requirements. Context: A total of two payments/contracts for facility repairs and improvements were paid from the Education Stabilization Fund. Both were examined. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The District supplied the bidding groups with all the federal guidelines and requirements. However, we did not request or receive documentation regarding the adherence to those requirements. The District will contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding the matter and implement proper controls over program expenditures.