Audit 30731

FY End
2022-06-30
Total Expended
$8.22M
Findings
6
Programs
14
Organization: Benton Harbor Area Schools (MI)
Year: 2022 Accepted: 2023-01-10

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
31234 2022-001 Material Weakness - B
31235 2022-002 Material Weakness - P
31236 2022-001 Material Weakness - B
607676 2022-001 Material Weakness - B
607677 2022-002 Material Weakness - P
607678 2022-001 Material Weakness - B

Programs

ALN Program Spent Major Findings
10.555 National School Lunch Program $775,779 Yes 0
84.371 Striving Readers $608,000 - 0
84.367 Improving Teacher Quality State Grants $549,866 - 1
84.010 Title I Grants to Local Educational Agencies $429,310 Yes 1
84.424 Student Support and Academic Enrichment Program $394,773 - 0
10.553 School Breakfast Program $350,459 Yes 0
10.559 Summer Food Service Program for Children $242,312 Yes 0
21.019 Coronavirus Relief Fund $133,845 - 0
84.425 Education Stabilization Fund $43,750 Yes 0
10.558 Child and Adult Care Food Program $27,540 - 0
84.048 Career and Technical Education -- Basic Grants to States $22,965 - 0
93.778 Medical Assistance Program $8,822 - 0
10.582 Fresh Fruit and Vegetable Program $5,225 Yes 0
84.365 English Language Acquisition State Grants $1,808 - 0

Contacts

Name Title Type
ZEP1F7J2CGC7 Kelvin Butts Auditee
2696051011 Marc Sawyers Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the same basis of accounting as the basic financial statements. 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: The auditee did not use the de minimis cost rate. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of Benton Harbor Area Schools under programs of the federal government for the year ended June 30, 2022. The information in this Schedule is presented in accordance with 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 Benton Harbor Area Schools, it is not intended to and does not present the financial position, changes in net position, or cash flows, as applicable, of Benton Harbor Area Schools.
Title: Grant Section Auditor Report Accounting Policies: Expenditures reported on the Schedule are reported on the same basis of accounting as the basic financial statements. 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: The auditee did not use the de minimis cost rate. Management has utilized the MDE NexSys Grant, Application and Cash Management System Grant Auditor Report (GAR) in preparing the Schedule of Expenditures of Federal Awards.
Title: Non-Cash Assistance Accounting Policies: Expenditures reported on the Schedule are reported on the same basis of accounting as the basic financial statements. 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: The auditee did not use the de minimis cost rate. The amounts reported on the Recipient Entitlement Balance Report, or PAL Report, agree with the SEFA for USDA donated food commodities.
Title: Federal Income Reconciliation Accounting Policies: Expenditures reported on the Schedule are reported on the same basis of accounting as the basic financial statements. 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: The auditee did not use the de minimis cost rate. Grant ExpendituresPer ScheduleFederalof FederalRevenue PerFinancialFinancialAssistanceStatementsDifferenceTitle I, Part A $4,355,385 $4,355,385 $- Title II, Part A 549,866 811,463 (261,597)Title IV, Part A 394,773 394,773 - Title III, Part A 1,808 1,808 - MICLSD - Subgrantees 608,000 608,000 - Education Stabilization Fund 696,563 696,563 - Coronavirus Relief Funds 133,845 133,845 - Medicaid Cluster 8,822 8,822 - Vocational and Technical Education 22,965 22,965 - Child Nutrition Cluster 1,417,683 1,417,683 - Child and Adult Care Food Program 27,540 27,540 - $8,217,250 $8,478,847 $(261,597)

Finding Details

Unallowed/Allowable Cost Principles ? Time and Effort Reporting Finding Type: Material weakness in internal control over compliance and noncompliance with laws and regulations. Program(s) Impacted: 84.010 Title I, Part A Condition: The District did not maintain adequate support documentation to substantiate salaries and wages charged to the Title I, Part A grant. Criteria: 2 CFR 200.430(i) requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among other requirements identified in this section, these records must (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and (v) comply with the established accounting policies and practices of the District. Cause: The District?s oversight of payroll charges on the Title I, Part A grant was insufficient. Effect: The District is unable to support the accuracy of all expenditures charged to the grant. Questioned Costs: $2,234 Unallowed/Allowable Cost Principles ? Time and Effort Reporting Finding Type: Material weakness in internal control over compliance and noncompliance with laws and regulations. Program(s) Impacted: 84.010 Title I, Part A Condition: The District did not maintain adequate support documentation to substantiate salaries and wages charged to the Title I, Part A grant. Criteria: 2 CFR 200.430(i) requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among other requirements identified in this section, these records must (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and (v) comply with the established accounting policies and practices of the District. Cause: The District?s oversight of payroll charges on the Title I, Part A grant was insufficient. Effect: The District is unable to support the accuracy of all expenditures charged to the grant. Questioned Costs: $2,234
Inaccurate SEFA and Internal Control over Compliance Finding Type: Material weakness in internal control over compliance and noncompliance with laws and regulations. Program(s) Impacted: 84.367 Title II, Part A Condition: The District did not record expenditures to the 2020-21 or 2021-22 grants in a timely manner, and internal controls over expenditures charged were not in place throughout the period during which such charges were incurred. Expenditures reported for the Title II, Part A grant in their submission to the Michigan Department of Education?s Financial Information Database (FID) did not agree with expenditures reported in the schedule of expenditures of Federal awards (SEFA) for the same period, as the District did not provide accurate information to the auditors nor did they prepare an accurate SEFA. Criteria: 2 CFR 200.510(b) requires that an auditee prepare a SEFA for the period covered by the financial statements which must include the total Federal awards expended for each program. In addition, 2 CFR 200.303 requires that an auditee establish and maintain effective internal control over the Federal award that provides reasonable assurance of compliance with Federal statutes, regulations, and the terms and conditions of the award. Cause: The District incurred expenditures throughout the fiscal year, however, did not determine Title II, Part A charges until prior to submission of the Final Expenditure Report for the grant, and did not inform their auditors of differences between federal revenue recognized and expenditure recorded during the same period. Effect: The District?s SEFA was not accurate for the fiscal year ending June 30, 2021, and adjustments were needed in the current year to correct Title II, Part A expenditures previously recorded. In addition, the FID submission to MDE reflected revenue recorded to Title II, Part A that did not agree with expenditures recorded to the associated grant code. Questioned Costs: $0 Recommendation: We recommend that the District record expenditures to federal grants throughout the fiscal year, as such expenditures are incurred, and prepare an accurate SEFA for auditor review. View of Responsible Officials: The District agrees with the recommendation and will implement internal controls to address the stated condition.
Unallowed/Allowable Cost Principles ? Time and Effort Reporting Finding Type: Material weakness in internal control over compliance and noncompliance with laws and regulations. Program(s) Impacted: 84.010 Title I, Part A Condition: The District did not maintain adequate support documentation to substantiate salaries and wages charged to the Title I, Part A grant. Criteria: 2 CFR 200.430(i) requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among other requirements identified in this section, these records must (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and (v) comply with the established accounting policies and practices of the District. Cause: The District?s oversight of payroll charges on the Title I, Part A grant was insufficient. Effect: The District is unable to support the accuracy of all expenditures charged to the grant. Questioned Costs: $2,234 Unallowed/Allowable Cost Principles ? Time and Effort Reporting Finding Type: Material weakness in internal control over compliance and noncompliance with laws and regulations. Program(s) Impacted: 84.010 Title I, Part A Condition: The District did not maintain adequate support documentation to substantiate salaries and wages charged to the Title I, Part A grant. Criteria: 2 CFR 200.430(i) requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among other requirements identified in this section, these records must (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and (v) comply with the established accounting policies and practices of the District. Cause: The District?s oversight of payroll charges on the Title I, Part A grant was insufficient. Effect: The District is unable to support the accuracy of all expenditures charged to the grant. Questioned Costs: $2,234
Unallowed/Allowable Cost Principles ? Time and Effort Reporting Finding Type: Material weakness in internal control over compliance and noncompliance with laws and regulations. Program(s) Impacted: 84.010 Title I, Part A Condition: The District did not maintain adequate support documentation to substantiate salaries and wages charged to the Title I, Part A grant. Criteria: 2 CFR 200.430(i) requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among other requirements identified in this section, these records must (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and (v) comply with the established accounting policies and practices of the District. Cause: The District?s oversight of payroll charges on the Title I, Part A grant was insufficient. Effect: The District is unable to support the accuracy of all expenditures charged to the grant. Questioned Costs: $2,234 Unallowed/Allowable Cost Principles ? Time and Effort Reporting Finding Type: Material weakness in internal control over compliance and noncompliance with laws and regulations. Program(s) Impacted: 84.010 Title I, Part A Condition: The District did not maintain adequate support documentation to substantiate salaries and wages charged to the Title I, Part A grant. Criteria: 2 CFR 200.430(i) requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among other requirements identified in this section, these records must (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and (v) comply with the established accounting policies and practices of the District. Cause: The District?s oversight of payroll charges on the Title I, Part A grant was insufficient. Effect: The District is unable to support the accuracy of all expenditures charged to the grant. Questioned Costs: $2,234
Inaccurate SEFA and Internal Control over Compliance Finding Type: Material weakness in internal control over compliance and noncompliance with laws and regulations. Program(s) Impacted: 84.367 Title II, Part A Condition: The District did not record expenditures to the 2020-21 or 2021-22 grants in a timely manner, and internal controls over expenditures charged were not in place throughout the period during which such charges were incurred. Expenditures reported for the Title II, Part A grant in their submission to the Michigan Department of Education?s Financial Information Database (FID) did not agree with expenditures reported in the schedule of expenditures of Federal awards (SEFA) for the same period, as the District did not provide accurate information to the auditors nor did they prepare an accurate SEFA. Criteria: 2 CFR 200.510(b) requires that an auditee prepare a SEFA for the period covered by the financial statements which must include the total Federal awards expended for each program. In addition, 2 CFR 200.303 requires that an auditee establish and maintain effective internal control over the Federal award that provides reasonable assurance of compliance with Federal statutes, regulations, and the terms and conditions of the award. Cause: The District incurred expenditures throughout the fiscal year, however, did not determine Title II, Part A charges until prior to submission of the Final Expenditure Report for the grant, and did not inform their auditors of differences between federal revenue recognized and expenditure recorded during the same period. Effect: The District?s SEFA was not accurate for the fiscal year ending June 30, 2021, and adjustments were needed in the current year to correct Title II, Part A expenditures previously recorded. In addition, the FID submission to MDE reflected revenue recorded to Title II, Part A that did not agree with expenditures recorded to the associated grant code. Questioned Costs: $0 Recommendation: We recommend that the District record expenditures to federal grants throughout the fiscal year, as such expenditures are incurred, and prepare an accurate SEFA for auditor review. View of Responsible Officials: The District agrees with the recommendation and will implement internal controls to address the stated condition.
Unallowed/Allowable Cost Principles ? Time and Effort Reporting Finding Type: Material weakness in internal control over compliance and noncompliance with laws and regulations. Program(s) Impacted: 84.010 Title I, Part A Condition: The District did not maintain adequate support documentation to substantiate salaries and wages charged to the Title I, Part A grant. Criteria: 2 CFR 200.430(i) requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among other requirements identified in this section, these records must (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and (v) comply with the established accounting policies and practices of the District. Cause: The District?s oversight of payroll charges on the Title I, Part A grant was insufficient. Effect: The District is unable to support the accuracy of all expenditures charged to the grant. Questioned Costs: $2,234 Unallowed/Allowable Cost Principles ? Time and Effort Reporting Finding Type: Material weakness in internal control over compliance and noncompliance with laws and regulations. Program(s) Impacted: 84.010 Title I, Part A Condition: The District did not maintain adequate support documentation to substantiate salaries and wages charged to the Title I, Part A grant. Criteria: 2 CFR 200.430(i) requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among other requirements identified in this section, these records must (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and (v) comply with the established accounting policies and practices of the District. Cause: The District?s oversight of payroll charges on the Title I, Part A grant was insufficient. Effect: The District is unable to support the accuracy of all expenditures charged to the grant. Questioned Costs: $2,234