FAC Explorer

Audit 301756

FY End
2023-06-30
Total Expended
$3.48M
Findings
6
Programs
11
Organization: School District of the City of Jeannette (PA)
Year: 2023 Accepted: 2024-04-01
Auditor: Mark C Turnley CPA

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
391159 2023-001 Material Weakness Yes I
391160 2023-002 Material Weakness Yes I
391161 2023-003 Material Weakness - I
967601 2023-001 Material Weakness Yes I
967602 2023-002 Material Weakness Yes I
967603 2023-003 Material Weakness - I

Programs

ALN Program Spent Major Findings
10.553 School Breakfast Program $243,294 - 0
84.010 Title I Grants to Local Educational Agencies $90,002 - 0
10.555 National School Lunch Program $74,639 - 0
84.027 Special Education_grants to States $62,257 Yes 0
84.367 Improving Teacher Quality State Grants $40,328 - 0
10.558 Child and Adult Care Food Program $20,931 - 0
84.425 Education Stabilization Fund $3,445 Yes 0
84.173 Special Education_preschool Grants $1,953 Yes 0
93.778 Medical Assistance Program $1,593 - 0
10.649 Pandemic Ebt Administrative Costs $628 - 0
84.424 Student Support and Academic Enrichment Program $24 - 0

Contacts

Name Title Type
MGF7MQ85QHR7 Patricia Dellinger Auditee
7245235497 Mark Turnley Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 – BASIS OF PRESENTATION Accounting Policies: BASIS OF ACCOUNTING Expenditures reported on the Schedule are presented using the accrual method of accounting. Under this method, grant revenue is recognized to the extent expenditures are incurred. Expenditures are recognized when the liability for the expenditure is incurred rather than when the disbursement is actually made. The federal expenditures are recognized, as applicable, under 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, wherein certain types of expenditures are not allowable or limited to reimbursement. De Minimis Rate Used: N Rate Explanation: The School District of the City of Jeannette utilizes the indirect cost rate as prescribed under the terms of the grant agreement if applicable. The accompanying schedule of expenditures of federal awards (the ‘Schedule’) includes the federal grant activity administered by the School District of the City of Jeannette 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 Grant Guidance – UGG). Because the Schedule presents only a selected portion of the operations of the School District, it is not intended to and does not present the financial position or changes in net position of the School District of the City of Jeannette.
Title: NOTE 3 - RELATIONSHIP TO FINANCIAL STATEMENTS Accounting Policies: BASIS OF ACCOUNTING Expenditures reported on the Schedule are presented using the accrual method of accounting. Under this method, grant revenue is recognized to the extent expenditures are incurred. Expenditures are recognized when the liability for the expenditure is incurred rather than when the disbursement is actually made. The federal expenditures are recognized, as applicable, under 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, wherein certain types of expenditures are not allowable or limited to reimbursement. De Minimis Rate Used: N Rate Explanation: The School District of the City of Jeannette utilizes the indirect cost rate as prescribed under the terms of the grant agreement if applicable. Federal financial award revenues are included in the financial statements as ‘local source’ and 'federal source' revenues.
Title: NOTE 4 – RECEIVABLES AND UNEARNED REVENUE Accounting Policies: BASIS OF ACCOUNTING Expenditures reported on the Schedule are presented using the accrual method of accounting. Under this method, grant revenue is recognized to the extent expenditures are incurred. Expenditures are recognized when the liability for the expenditure is incurred rather than when the disbursement is actually made. The federal expenditures are recognized, as applicable, under 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, wherein certain types of expenditures are not allowable or limited to reimbursement. De Minimis Rate Used: N Rate Explanation: The School District of the City of Jeannette utilizes the indirect cost rate as prescribed under the terms of the grant agreement if applicable. Federal grants receivable are included as part of 'due from other governments' in Exhibit A and Exhibit C as referenced in Note 4 to the Financial Statements. Unearned federal grant revenue, if any, is included as part of 'unearned revenue' in Exhibit A and Exhibit C and is referenced in Note 6 to the Financial Statements.
Title: NOTE 5 - NON-CASH ASSISTANCE Accounting Policies: BASIS OF ACCOUNTING Expenditures reported on the Schedule are presented using the accrual method of accounting. Under this method, grant revenue is recognized to the extent expenditures are incurred. Expenditures are recognized when the liability for the expenditure is incurred rather than when the disbursement is actually made. The federal expenditures are recognized, as applicable, under 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, wherein certain types of expenditures are not allowable or limited to reimbursement. De Minimis Rate Used: N Rate Explanation: The School District of the City of Jeannette utilizes the indirect cost rate as prescribed under the terms of the grant agreement if applicable. The School District of the City of Jeannette received donated commodities from the Department of Agriculture in connection with its food service program. The amount of non-cash assistance expended in the accompanying schedule of expenditures of federal awards reflects the fair market value of the commodities used during the 2022-2023 fiscal year.

Finding Details

Finding 2023-001
CONDITION: The School District of the City of Jeannette contracted with a third-party vendor (ABM Building Solutions LLC) for the performance of an energy savings construction project at the District. The contract with the third-party vendor, which was procured through a cooperative purchasing group, exceeded the threshold for competitive procurement. The District was unable to provide documentation to verify that the third-party procurement contract was competitively procured, such as a bid evaluation and public solicitation. This is a continuing finding from the 2021-2022 fiscal year. CRITERIA: 24 Pa. Statutes 751 of the Public School Code and Section 2 CFR 200.318(i) of the Uniform Guidance prescribes the bidding requirements for equipment, supplies, and work of any nature made by a school district whereby the cost exceeds certain dollar thresholds as adjusted annually for an inflation index. The energy savings construction project exceeded the simplified acquisition threshold of $250,000. As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. CAUSE: School District personnel directly responsible for the oversight and execution of this contract, in an effort to prudently ensure that all compliance matters related to the Uniform Guidance procurement process were adhered to, received and reviewed a detail third-party opinion on the appropriate use of ESSER funding and the procurement process used by the selected contractor. District officials interpreted from this document, that the requirement specified by 2 CFR 200.318(i), based on documentation provided to them by the third-party vendor, would be met, however the District maintained no records internally to support this compliance. EFFECT: The School District of the City of Jeannette did not comply with the requirements of 2 CFR 200.318(i) of the Uniform Guidance with regard to maintaining records sufficient to detail the history of procurement for the energy savings construction project. QUESTIONED COST: $311,785 RECOMMENDATION: I am recommending that the management of the School District review and update as necessary its procurement policies to ensure retention of the appropriate procurement documentation, in all instances, including such instances whereby the District is using a contract vehicle from a cooperative purchase network so as to comply with all applicable sections of the Uniform Guidance, in specifically, Section 2 CFR 200.318(i) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
Finding 2023-002
CONDITION: The School District of the City of Jeannette contracted with a third-party vendor (Smart Solutions Technologies) for technology equipment for the District which exceeded the threshold for competitive procurement. The purchase was procured through a cooperative purchasing group. The District was unable to provide documentation to verify that the third-party procurement contract was competitively procured, such as a bid evaluation and public solicitation. This is a continuing finding from the 2021-2022 fiscal year. CRITERIA: 24 Pa. Statutes 751 of the Public School Code and Section 2 CFR 200.318(i) of the Uniform Guidance prescribes the bidding requirements for equipment, supplies, and work of any nature made by a school district whereby the cost exceeds certain dollar thresholds as adjusted annually for an inflation index. As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. CAUSE: School District personnel directly responsible for the oversight and execution of this contract, unintentionally assumed that this particular third-party contract did not require the specific bidding requirements as outlined in both 24 Pa. Statutes 751 of the Public School Code and Section 2 CFR 200.318(i) of the Uniform Guidance. EFFECT: The School District of the City of Jeannette did not comply with the requirements of 2 CFR 200.318(i) of the Uniform Guidance with regard to maintaining records sufficient to detail the history of procurement for the technology equipment. QUESTIONED COST: $74,231 RECOMMENDATION: I am recommending that the management of the School District review and update as necessary its procurement policies to ensure retention of the appropriate procurement documentation, in all instances, so as to comply with all applicable sections of the Uniform Guidance, in specifically, Section 2 CFR 200.318(i) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
Finding 2023-003
CONDITION: During my review of The School District of the City of Jeannette’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that either 1) three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 were obtained, or 2) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors – Grade Point Resources ($74,503.17) and VLN Partners, LLP ($52,750.00). CRITERIA: In accordance with 24 PA Statute 8.807.1, the District must obtain/document at least three (3) written or well documented price or rate quotations from a reasonable number of qualified sources for purchases of goods between $10,000 and $$22,500 (threshold established annually). In addition, Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance requires price or rate quotations to be received from an adequate number of qualified sources for purchases above the micro purchase threshold of $10,000 and the simplified acquisition threshold of $250,000. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs (#626), 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, or 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. QUESTIONED COST: $127,253 CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
Finding 2023-001
CONDITION: The School District of the City of Jeannette contracted with a third-party vendor (ABM Building Solutions LLC) for the performance of an energy savings construction project at the District. The contract with the third-party vendor, which was procured through a cooperative purchasing group, exceeded the threshold for competitive procurement. The District was unable to provide documentation to verify that the third-party procurement contract was competitively procured, such as a bid evaluation and public solicitation. This is a continuing finding from the 2021-2022 fiscal year. CRITERIA: 24 Pa. Statutes 751 of the Public School Code and Section 2 CFR 200.318(i) of the Uniform Guidance prescribes the bidding requirements for equipment, supplies, and work of any nature made by a school district whereby the cost exceeds certain dollar thresholds as adjusted annually for an inflation index. The energy savings construction project exceeded the simplified acquisition threshold of $250,000. As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. CAUSE: School District personnel directly responsible for the oversight and execution of this contract, in an effort to prudently ensure that all compliance matters related to the Uniform Guidance procurement process were adhered to, received and reviewed a detail third-party opinion on the appropriate use of ESSER funding and the procurement process used by the selected contractor. District officials interpreted from this document, that the requirement specified by 2 CFR 200.318(i), based on documentation provided to them by the third-party vendor, would be met, however the District maintained no records internally to support this compliance. EFFECT: The School District of the City of Jeannette did not comply with the requirements of 2 CFR 200.318(i) of the Uniform Guidance with regard to maintaining records sufficient to detail the history of procurement for the energy savings construction project. QUESTIONED COST: $311,785 RECOMMENDATION: I am recommending that the management of the School District review and update as necessary its procurement policies to ensure retention of the appropriate procurement documentation, in all instances, including such instances whereby the District is using a contract vehicle from a cooperative purchase network so as to comply with all applicable sections of the Uniform Guidance, in specifically, Section 2 CFR 200.318(i) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
Finding 2023-002
CONDITION: The School District of the City of Jeannette contracted with a third-party vendor (Smart Solutions Technologies) for technology equipment for the District which exceeded the threshold for competitive procurement. The purchase was procured through a cooperative purchasing group. The District was unable to provide documentation to verify that the third-party procurement contract was competitively procured, such as a bid evaluation and public solicitation. This is a continuing finding from the 2021-2022 fiscal year. CRITERIA: 24 Pa. Statutes 751 of the Public School Code and Section 2 CFR 200.318(i) of the Uniform Guidance prescribes the bidding requirements for equipment, supplies, and work of any nature made by a school district whereby the cost exceeds certain dollar thresholds as adjusted annually for an inflation index. As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. CAUSE: School District personnel directly responsible for the oversight and execution of this contract, unintentionally assumed that this particular third-party contract did not require the specific bidding requirements as outlined in both 24 Pa. Statutes 751 of the Public School Code and Section 2 CFR 200.318(i) of the Uniform Guidance. EFFECT: The School District of the City of Jeannette did not comply with the requirements of 2 CFR 200.318(i) of the Uniform Guidance with regard to maintaining records sufficient to detail the history of procurement for the technology equipment. QUESTIONED COST: $74,231 RECOMMENDATION: I am recommending that the management of the School District review and update as necessary its procurement policies to ensure retention of the appropriate procurement documentation, in all instances, so as to comply with all applicable sections of the Uniform Guidance, in specifically, Section 2 CFR 200.318(i) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
Finding 2023-003
CONDITION: During my review of The School District of the City of Jeannette’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that either 1) three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 were obtained, or 2) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors – Grade Point Resources ($74,503.17) and VLN Partners, LLP ($52,750.00). CRITERIA: In accordance with 24 PA Statute 8.807.1, the District must obtain/document at least three (3) written or well documented price or rate quotations from a reasonable number of qualified sources for purchases of goods between $10,000 and $$22,500 (threshold established annually). In addition, Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance requires price or rate quotations to be received from an adequate number of qualified sources for purchases above the micro purchase threshold of $10,000 and the simplified acquisition threshold of $250,000. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs (#626), 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, or 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. QUESTIONED COST: $127,253 CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.