FAC Explorer

Audit 295868

FY End
2023-06-30
Total Expended
$1.49M
Findings
8
Programs
7
Organization: Helix Network of Educational Choices (LA)
Year: 2023 Accepted: 2024-03-19
Auditor: Faulk & Winkler LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
381132 2023-003 Material Weakness - AB
381133 2023-004 Material Weakness - AB
381134 2023-003 Material Weakness - AB
381135 2023-004 Material Weakness - AB
957574 2023-003 Material Weakness - AB
957575 2023-004 Material Weakness - AB
957576 2023-003 Material Weakness - AB
957577 2023-004 Material Weakness - AB

Programs

ALN Program Spent Major Findings
84.425 Education Stabilization Fund $690,022 Yes 2
10.555 National School Lunch Program $317,959 - 0
84.010 Title I Grants to Local Educational Agencies $154,212 - 0
10.553 School Breakfast Program $96,042 - 0
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $40,233 - 0
84.367 Improving Teacher Quality State Grants $16,557 - 0
84.424 Student Support and Academic Enrichment Program $12,060 - 0

Contacts

Name Title Type
L7JTTDNGUA64 Ne'shira Millender Auditee
2257734925 Lloyd Johnson Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 - 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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: N/A - did not use the de minimis cost rate. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the Federal award activity of Helix Network of Educational Choices (the Academies) under programs of the federal government for the year ended June 30, 2023. 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). The Schedule presents only a selected portion of the operations of the Academies; accordingly, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Academies.
Title: NOTE 2 - SUMMARY OF SIGNFICANT ACCOUNTING POLICIES 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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: N/A - did not use the de minimis cost rate. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Title: NOTE 3 - INDIRECT COST RATE 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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: N/A - did not use the de minimis cost rate. The Academies have elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: NOTE 4 - NONCASH ASSISTANCE 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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: N/A - did not use the de minimis cost rate. The Academies did not receive any federal noncash assistance for the year ended June 30, 2023.

Finding Details

Finding 2023-003
2023-003 Internal Control Over Financial Reporting Title and Assistance Listing Number of the Federal Program: 84.425D COVID-19 - Elementary and Secondary School Emergency Relief Fund; 84.425U COVID-19 - American Rescue plan - Elementary and Secondary School Emergency Relief Fiscal Year Finding Originated: 2023 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Name of Federal Agency: Department of Education Pass-through Agency: Louisiana Department of Education / East Baton Rouge Parish School Board Questioned Costs: No questioned costs reported. Condition: Significant audit adjustments were required to fairly present the consolidated financial statements and related Schedule of Expenditures of Federal Awards (SEFA). Criteria: According to 2 CFR 200.508 “Auditee Responsibilities” the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200.510 “Financial statements” requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 “Financial management”, the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. When federal expenditures are incurred over $750,000, a Single Audit is required to be performed under Uniform Guidance. Failure to properly record federal expenditures could cause the Academies to not have a Single Audit performed, or have it performed improperly, which would be considered noncompliant with Uniform Guidance. Cause: The impacts of the financial statement audit adjustments are as follows: • Accounts receivable and revenue related to Employee Retention Tax Credits were overstated by $600,000. • Revenues and expenditures related to reimbursement-based federal grants included in testing as a major program were understated $426,863. The Academies did not record certain grant revenues and expenditures for expenditures paid directly by the granting agency on behalf of the Academies. This adjustment impacted the SEFA and financial statements. • Revenue related to Child Nutrition Program funds were overstated $19,150. This adjustment impacted the SEFA and financial statements. • Adjustments to property and equipment resulting in a net increase to net assets of $29,583. • Adjustments to accumulated depreciation resulting in a net decrease in net assets of $54,906. • Adjustments to inter-school payable amounts resulting in a net increase in net assets of $23,015. • Adjustments to accounts payable resulting in a net increase in net assets of $60,179. • Adjustments to due to management company resulting in a net increase in net assets of $45,903. • Adjustments to compensated absences resulting in a net decrease in net assets of $24,391. Effect: The consolidated financial statements and related SEFA required material adjustments in order to be presented fairly. A lack of accounting practices can cause potential misstatements to remain unidentified and cause the financial statements and related schedules to be misleading. Noncompliance with Uniform Guidance may result in a temporary suspension of federal awards. Recommendation: We recommend the Academies implement monthly financial statement closing procedures which capture all relevant information necessary to reconcile accounts to supporting documentation on a timely basis. These procedures should include implementing internal controls over recording and monitoring revenues related to federal awards to ensure accuracy of funds recorded. Views of responsible officials: See views of responsible officials on page 36.
Finding 2023-004
2023-004 Documentation of Review and Approval of Disbursements Title and Assistance Listing Number of the Federal Program: 84.425D COVID-19 - Elementary and Secondary School Emergency Relief Fund; 84.425U COVID-19 - American Rescue plan – Elementary and Secondary School Emergency Relief Fiscal Year Finding Originated: 2023 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Name of Federal Agency: Department of Education Pass-through Agency: Louisiana Department of Education / East Baton Rouge Parish School Board Questioned Costs: No questioned costs reported. Condition: The Academies were not consistently able to provide documentation of review and approval of transactions tested. Criteria: As noted in 2 CFR 200.303 “Internal controls”, non-Federal entities must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-Federal entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of Federal awards. Cause: For non-payroll items, 9 out of 21 transactions tested did not have sufficient documentation notating review and approval of the non-payroll disbursements. As a result, internal controls over non-payroll disbursements were not operating effectively. For payroll items, 8 out of 26 payroll transactions tested did not have sufficient documentation notating review and approval of the payroll costs. The Academies changed their payroll service provider during the fiscal year and did not retain pertinent information regarding approval of payroll from the previous payroll provider, to which the exceptions are derived from. Effect: Disbursements that lack supervisory review and approval are at greater risk of being improper due to fraud or error. Recommendation: The Academies should ensure internal controls are operating effectively and that documentation of internal controls is maintained to demonstrate the effectiveness of the control. Views of responsible officials: See views of responsible officials on page 36.
Finding 2023-003
2023-003 Internal Control Over Financial Reporting Title and Assistance Listing Number of the Federal Program: 84.425D COVID-19 - Elementary and Secondary School Emergency Relief Fund; 84.425U COVID-19 - American Rescue plan - Elementary and Secondary School Emergency Relief Fiscal Year Finding Originated: 2023 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Name of Federal Agency: Department of Education Pass-through Agency: Louisiana Department of Education / East Baton Rouge Parish School Board Questioned Costs: No questioned costs reported. Condition: Significant audit adjustments were required to fairly present the consolidated financial statements and related Schedule of Expenditures of Federal Awards (SEFA). Criteria: According to 2 CFR 200.508 “Auditee Responsibilities” the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200.510 “Financial statements” requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 “Financial management”, the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. When federal expenditures are incurred over $750,000, a Single Audit is required to be performed under Uniform Guidance. Failure to properly record federal expenditures could cause the Academies to not have a Single Audit performed, or have it performed improperly, which would be considered noncompliant with Uniform Guidance. Cause: The impacts of the financial statement audit adjustments are as follows: • Accounts receivable and revenue related to Employee Retention Tax Credits were overstated by $600,000. • Revenues and expenditures related to reimbursement-based federal grants included in testing as a major program were understated $426,863. The Academies did not record certain grant revenues and expenditures for expenditures paid directly by the granting agency on behalf of the Academies. This adjustment impacted the SEFA and financial statements. • Revenue related to Child Nutrition Program funds were overstated $19,150. This adjustment impacted the SEFA and financial statements. • Adjustments to property and equipment resulting in a net increase to net assets of $29,583. • Adjustments to accumulated depreciation resulting in a net decrease in net assets of $54,906. • Adjustments to inter-school payable amounts resulting in a net increase in net assets of $23,015. • Adjustments to accounts payable resulting in a net increase in net assets of $60,179. • Adjustments to due to management company resulting in a net increase in net assets of $45,903. • Adjustments to compensated absences resulting in a net decrease in net assets of $24,391. Effect: The consolidated financial statements and related SEFA required material adjustments in order to be presented fairly. A lack of accounting practices can cause potential misstatements to remain unidentified and cause the financial statements and related schedules to be misleading. Noncompliance with Uniform Guidance may result in a temporary suspension of federal awards. Recommendation: We recommend the Academies implement monthly financial statement closing procedures which capture all relevant information necessary to reconcile accounts to supporting documentation on a timely basis. These procedures should include implementing internal controls over recording and monitoring revenues related to federal awards to ensure accuracy of funds recorded. Views of responsible officials: See views of responsible officials on page 36.
Finding 2023-004
2023-004 Documentation of Review and Approval of Disbursements Title and Assistance Listing Number of the Federal Program: 84.425D COVID-19 - Elementary and Secondary School Emergency Relief Fund; 84.425U COVID-19 - American Rescue plan – Elementary and Secondary School Emergency Relief Fiscal Year Finding Originated: 2023 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Name of Federal Agency: Department of Education Pass-through Agency: Louisiana Department of Education / East Baton Rouge Parish School Board Questioned Costs: No questioned costs reported. Condition: The Academies were not consistently able to provide documentation of review and approval of transactions tested. Criteria: As noted in 2 CFR 200.303 “Internal controls”, non-Federal entities must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-Federal entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of Federal awards. Cause: For non-payroll items, 9 out of 21 transactions tested did not have sufficient documentation notating review and approval of the non-payroll disbursements. As a result, internal controls over non-payroll disbursements were not operating effectively. For payroll items, 8 out of 26 payroll transactions tested did not have sufficient documentation notating review and approval of the payroll costs. The Academies changed their payroll service provider during the fiscal year and did not retain pertinent information regarding approval of payroll from the previous payroll provider, to which the exceptions are derived from. Effect: Disbursements that lack supervisory review and approval are at greater risk of being improper due to fraud or error. Recommendation: The Academies should ensure internal controls are operating effectively and that documentation of internal controls is maintained to demonstrate the effectiveness of the control. Views of responsible officials: See views of responsible officials on page 36.
Finding 2023-003
2023-003 Internal Control Over Financial Reporting Title and Assistance Listing Number of the Federal Program: 84.425D COVID-19 - Elementary and Secondary School Emergency Relief Fund; 84.425U COVID-19 - American Rescue plan - Elementary and Secondary School Emergency Relief Fiscal Year Finding Originated: 2023 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Name of Federal Agency: Department of Education Pass-through Agency: Louisiana Department of Education / East Baton Rouge Parish School Board Questioned Costs: No questioned costs reported. Condition: Significant audit adjustments were required to fairly present the consolidated financial statements and related Schedule of Expenditures of Federal Awards (SEFA). Criteria: According to 2 CFR 200.508 “Auditee Responsibilities” the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200.510 “Financial statements” requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 “Financial management”, the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. When federal expenditures are incurred over $750,000, a Single Audit is required to be performed under Uniform Guidance. Failure to properly record federal expenditures could cause the Academies to not have a Single Audit performed, or have it performed improperly, which would be considered noncompliant with Uniform Guidance. Cause: The impacts of the financial statement audit adjustments are as follows: • Accounts receivable and revenue related to Employee Retention Tax Credits were overstated by $600,000. • Revenues and expenditures related to reimbursement-based federal grants included in testing as a major program were understated $426,863. The Academies did not record certain grant revenues and expenditures for expenditures paid directly by the granting agency on behalf of the Academies. This adjustment impacted the SEFA and financial statements. • Revenue related to Child Nutrition Program funds were overstated $19,150. This adjustment impacted the SEFA and financial statements. • Adjustments to property and equipment resulting in a net increase to net assets of $29,583. • Adjustments to accumulated depreciation resulting in a net decrease in net assets of $54,906. • Adjustments to inter-school payable amounts resulting in a net increase in net assets of $23,015. • Adjustments to accounts payable resulting in a net increase in net assets of $60,179. • Adjustments to due to management company resulting in a net increase in net assets of $45,903. • Adjustments to compensated absences resulting in a net decrease in net assets of $24,391. Effect: The consolidated financial statements and related SEFA required material adjustments in order to be presented fairly. A lack of accounting practices can cause potential misstatements to remain unidentified and cause the financial statements and related schedules to be misleading. Noncompliance with Uniform Guidance may result in a temporary suspension of federal awards. Recommendation: We recommend the Academies implement monthly financial statement closing procedures which capture all relevant information necessary to reconcile accounts to supporting documentation on a timely basis. These procedures should include implementing internal controls over recording and monitoring revenues related to federal awards to ensure accuracy of funds recorded. Views of responsible officials: See views of responsible officials on page 36.
Finding 2023-004
2023-004 Documentation of Review and Approval of Disbursements Title and Assistance Listing Number of the Federal Program: 84.425D COVID-19 - Elementary and Secondary School Emergency Relief Fund; 84.425U COVID-19 - American Rescue plan – Elementary and Secondary School Emergency Relief Fiscal Year Finding Originated: 2023 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Name of Federal Agency: Department of Education Pass-through Agency: Louisiana Department of Education / East Baton Rouge Parish School Board Questioned Costs: No questioned costs reported. Condition: The Academies were not consistently able to provide documentation of review and approval of transactions tested. Criteria: As noted in 2 CFR 200.303 “Internal controls”, non-Federal entities must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-Federal entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of Federal awards. Cause: For non-payroll items, 9 out of 21 transactions tested did not have sufficient documentation notating review and approval of the non-payroll disbursements. As a result, internal controls over non-payroll disbursements were not operating effectively. For payroll items, 8 out of 26 payroll transactions tested did not have sufficient documentation notating review and approval of the payroll costs. The Academies changed their payroll service provider during the fiscal year and did not retain pertinent information regarding approval of payroll from the previous payroll provider, to which the exceptions are derived from. Effect: Disbursements that lack supervisory review and approval are at greater risk of being improper due to fraud or error. Recommendation: The Academies should ensure internal controls are operating effectively and that documentation of internal controls is maintained to demonstrate the effectiveness of the control. Views of responsible officials: See views of responsible officials on page 36.
Finding 2023-003
2023-003 Internal Control Over Financial Reporting Title and Assistance Listing Number of the Federal Program: 84.425D COVID-19 - Elementary and Secondary School Emergency Relief Fund; 84.425U COVID-19 - American Rescue plan - Elementary and Secondary School Emergency Relief Fiscal Year Finding Originated: 2023 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Name of Federal Agency: Department of Education Pass-through Agency: Louisiana Department of Education / East Baton Rouge Parish School Board Questioned Costs: No questioned costs reported. Condition: Significant audit adjustments were required to fairly present the consolidated financial statements and related Schedule of Expenditures of Federal Awards (SEFA). Criteria: According to 2 CFR 200.508 “Auditee Responsibilities” the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200.510 “Financial statements” requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 “Financial management”, the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. When federal expenditures are incurred over $750,000, a Single Audit is required to be performed under Uniform Guidance. Failure to properly record federal expenditures could cause the Academies to not have a Single Audit performed, or have it performed improperly, which would be considered noncompliant with Uniform Guidance. Cause: The impacts of the financial statement audit adjustments are as follows: • Accounts receivable and revenue related to Employee Retention Tax Credits were overstated by $600,000. • Revenues and expenditures related to reimbursement-based federal grants included in testing as a major program were understated $426,863. The Academies did not record certain grant revenues and expenditures for expenditures paid directly by the granting agency on behalf of the Academies. This adjustment impacted the SEFA and financial statements. • Revenue related to Child Nutrition Program funds were overstated $19,150. This adjustment impacted the SEFA and financial statements. • Adjustments to property and equipment resulting in a net increase to net assets of $29,583. • Adjustments to accumulated depreciation resulting in a net decrease in net assets of $54,906. • Adjustments to inter-school payable amounts resulting in a net increase in net assets of $23,015. • Adjustments to accounts payable resulting in a net increase in net assets of $60,179. • Adjustments to due to management company resulting in a net increase in net assets of $45,903. • Adjustments to compensated absences resulting in a net decrease in net assets of $24,391. Effect: The consolidated financial statements and related SEFA required material adjustments in order to be presented fairly. A lack of accounting practices can cause potential misstatements to remain unidentified and cause the financial statements and related schedules to be misleading. Noncompliance with Uniform Guidance may result in a temporary suspension of federal awards. Recommendation: We recommend the Academies implement monthly financial statement closing procedures which capture all relevant information necessary to reconcile accounts to supporting documentation on a timely basis. These procedures should include implementing internal controls over recording and monitoring revenues related to federal awards to ensure accuracy of funds recorded. Views of responsible officials: See views of responsible officials on page 36.
Finding 2023-004
2023-004 Documentation of Review and Approval of Disbursements Title and Assistance Listing Number of the Federal Program: 84.425D COVID-19 - Elementary and Secondary School Emergency Relief Fund; 84.425U COVID-19 - American Rescue plan – Elementary and Secondary School Emergency Relief Fiscal Year Finding Originated: 2023 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Name of Federal Agency: Department of Education Pass-through Agency: Louisiana Department of Education / East Baton Rouge Parish School Board Questioned Costs: No questioned costs reported. Condition: The Academies were not consistently able to provide documentation of review and approval of transactions tested. Criteria: As noted in 2 CFR 200.303 “Internal controls”, non-Federal entities must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-Federal entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of Federal awards. Cause: For non-payroll items, 9 out of 21 transactions tested did not have sufficient documentation notating review and approval of the non-payroll disbursements. As a result, internal controls over non-payroll disbursements were not operating effectively. For payroll items, 8 out of 26 payroll transactions tested did not have sufficient documentation notating review and approval of the payroll costs. The Academies changed their payroll service provider during the fiscal year and did not retain pertinent information regarding approval of payroll from the previous payroll provider, to which the exceptions are derived from. Effect: Disbursements that lack supervisory review and approval are at greater risk of being improper due to fraud or error. Recommendation: The Academies should ensure internal controls are operating effectively and that documentation of internal controls is maintained to demonstrate the effectiveness of the control. Views of responsible officials: See views of responsible officials on page 36.