FAC Explorer

Audit 317473

FY End
2023-06-30
Total Expended
$6.24M
Findings
6
Programs
13
Organization: Mena School District (AR)
Year: 2023 Accepted: 2024-08-19
Auditor: Arkansas Legislative Audit

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
481440 2023-001 Material Weakness - AN
481441 2023-002 Material Weakness - F
481442 2023-002 Material Weakness - FN
1057882 2023-001 Material Weakness - AN
1057883 2023-002 Material Weakness - F
1057884 2023-002 Material Weakness - FN

Programs

ALN Program Spent Major Findings
84.010 Title I Grants to Local Educational Agencies $743,938 - 0
10.553 School Breakfast Program $311,530 - 0
32.009 Emergency Connectivity Fund Program $287,520 Yes 1
84.367 Supporting Effective Instruction State Grants $108,207 - 0
10.555 National School Lunch Program $80,702 - 0
84.027 Special Education_grants to States $58,808 - 0
84.424 Student Support and Academic Enrichment Program $55,355 - 0
10.582 Fresh Fruit and Vegetable Program $43,234 - 0
84.358 Rural Education $35,499 - 0
84.173 Special Education_preschool Grants $23,766 - 0
93.558 Temporary Assistance for Needy Families $5,236 - 0
84.425 Covid-19 - Education Stabilization Fund $2,294 Yes 0
93.079 Cooperative Agreements to Promote Adolescent Health Through School-Based Hiv/std Prevention and School-Based Surveillance $266 - 0

Contacts

Name Title Type
H9AFHK3QQRY5 Bridget Buckley Auditee
4793941710 Matt Fink, CPA Auditor
No contacts on file

Notes to SEFA

Title: Medicaid Funding (SEFA Note 4) Accounting Policies: Basis of Presentation (SEFA Note 1) - The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal award activity of Mena School District No. 23 (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 (CFR) 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 District, it is not intended to and does not present the financial position or changes in financial position of the District. Summary of Significant Accounting Policies (SEFA Note 2) - Expenditures reported on the Schedule are reported on the regulatory basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance (SEFA Note 3) During the year ended June 30, 2023, the District received Medicaid funding of $275,873 from the Arkansas Department of Human Services. Such payments are not considered Federal awards expended, and therefore, are not included in the above Schedule.
Title: Nonmonetary Assistance (SEFA Notes 5 and 6) Accounting Policies: Basis of Presentation (SEFA Note 1) - The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal award activity of Mena School District No. 23 (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 (CFR) 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 District, it is not intended to and does not present the financial position or changes in financial position of the District. Summary of Significant Accounting Policies (SEFA Note 2) - Expenditures reported on the Schedule are reported on the regulatory basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance (SEFA Note 3) Nonmonetary assistance is reported at the approximate value as provided by the U. S. Department of Defense through an agreement with the U. S. Department of Agriculture. Nonmonetary assistance is reported at the approximate value as provided by the Arkansas Department of Human Services.

Finding Details

Finding 2023-001
FEDERAL COMMUNICATIONS COMMISSION EMERGENCY CONNECTIVITY FUND PROGRAM - AL NUMBER 32.009 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-001.Activities Allowed or Unallowed / Special Tests and Provisions Criteria or specific requirement: Office of Management and Budget (OMB) 47 CFR § 54.1710 requires entities requesting funding to certify that they are only seeking support for eligible equipment provided to students and school staff who would otherwise lack connected devices sufficient to engage in remote learning. 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 652 devices, totaling $227,400, were reimbursed by the Emergency Connectivity Fund. Adequate supporting documentation was not retained to support the actual unmet need for the devices, as required by the grant. Additionally, the devices were purchased primarily for on-campus use. Cause: District's unfamiliarity with the new federal program. The service provider submitted the request for reimbursement without consulting the District to determine the actual amount of equipment provided to students and school staff with unmet needs. Effect or potential effect: The District received funding in excess of the documented actual unmet need for their students and school staff resulting in questionable costs of $227,400. Questioned costs: The questioned costs for 652 devices totaled $227,400. Context: Adequate documentation of actual unmet need could not be provided for 652 devices totaling $227,400. The District purchased and was reimbursed for a total of 830 devices for $286,140. Identification as a repeat finding: No Recommendation: The District should contact the Federal Communications Commission for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The district will contact the FCC and review the procedures used by the E-rate/Technology Coordinator to determine how this came about and develop further procedures to avoid this happening again.
Finding 2023-002
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425D AND 84.425U PASS-THROUGH NUMBER 5703 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-002.Equipment and Real Property Management / Special Tests and Provisions Criteria or specific requirement: 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 as determined 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. 2 CFR 200.311 requires property records be maintained for real property and improvements made to real property acquired with federal awards. 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 $1,322,196 for a capital improvement flooring project from the Education Stabilization Fund without obtaining a performance bond and 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 record in the capital assets subsidiary records capital improvements for a HVAC system or flooring project totaling $154,377 and $1,322,196, respectively, and for equipment totaling $12,138. Cause: Lack of internal controls and management oversight. Effect or potential effect: The District did not comply with Wage Rate Requirements or Bonding Requirements. The District's capital assets subsidiary records were not accurate. Questioned costs:Context: A population of 20 payments for capital improvements and equipment totaling $1,525,445. All 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 Department of Elementary and Secondary Education will be contacted regarding this matter. The district did not receive guidance from the Department about this issue other than stating that Davis-Bacon wage rules apply. Those materials will be recorded as capital assets and our new capital assets clerk will be trained on the definition and record keeping of such items. This likely occurred simply from the fact that yearly past practice for the district has been to enter the asset as one item in the asset system. Construction in progress has been used as a reconciliation item in fixed assets. There must have been some misunderstanding on this matter because the district does have a statement of coverage for the company that did this work and will provide it. However, if the format is wrong, the district will, in the future, insist that the proper format be used.
Finding 2023-002
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425D AND 84.425U PASS-THROUGH NUMBER 5703 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-002.Equipment and Real Property Management / Special Tests and Provisions Criteria or specific requirement: 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 as determined 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. 2 CFR 200.311 requires property records be maintained for real property and improvements made to real property acquired with federal awards. 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 $1,322,196 for a capital improvement flooring project from the Education Stabilization Fund without obtaining a performance bond and 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 record in the capital assets subsidiary records capital improvements for a HVAC system or flooring project totaling $154,377 and $1,322,196, respectively, and for equipment totaling $12,138. Cause: Lack of internal controls and management oversight. Effect or potential effect: The District did not comply with Wage Rate Requirements or Bonding Requirements. The District's capital assets subsidiary records were not accurate. Questioned costs:Context: A population of 20 payments for capital improvements and equipment totaling $1,525,445. All 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 Department of Elementary and Secondary Education will be contacted regarding this matter. The district did not receive guidance from the Department about this issue other than stating that Davis-Bacon wage rules apply. Those materials will be recorded as capital assets and our new capital assets clerk will be trained on the definition and record keeping of such items. This likely occurred simply from the fact that yearly past practice for the district has been to enter the asset as one item in the asset system. Construction in progress has been used as a reconciliation item in fixed assets. There must have been some misunderstanding on this matter because the district does have a statement of coverage for the company that did this work and will provide it. However, if the format is wrong, the district will, in the future, insist that the proper format be used.
Finding 2023-001
FEDERAL COMMUNICATIONS COMMISSION EMERGENCY CONNECTIVITY FUND PROGRAM - AL NUMBER 32.009 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-001.Activities Allowed or Unallowed / Special Tests and Provisions Criteria or specific requirement: Office of Management and Budget (OMB) 47 CFR § 54.1710 requires entities requesting funding to certify that they are only seeking support for eligible equipment provided to students and school staff who would otherwise lack connected devices sufficient to engage in remote learning. 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 652 devices, totaling $227,400, were reimbursed by the Emergency Connectivity Fund. Adequate supporting documentation was not retained to support the actual unmet need for the devices, as required by the grant. Additionally, the devices were purchased primarily for on-campus use. Cause: District's unfamiliarity with the new federal program. The service provider submitted the request for reimbursement without consulting the District to determine the actual amount of equipment provided to students and school staff with unmet needs. Effect or potential effect: The District received funding in excess of the documented actual unmet need for their students and school staff resulting in questionable costs of $227,400. Questioned costs: The questioned costs for 652 devices totaled $227,400. Context: Adequate documentation of actual unmet need could not be provided for 652 devices totaling $227,400. The District purchased and was reimbursed for a total of 830 devices for $286,140. Identification as a repeat finding: No Recommendation: The District should contact the Federal Communications Commission for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The district will contact the FCC and review the procedures used by the E-rate/Technology Coordinator to determine how this came about and develop further procedures to avoid this happening again.
Finding 2023-002
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425D AND 84.425U PASS-THROUGH NUMBER 5703 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-002.Equipment and Real Property Management / Special Tests and Provisions Criteria or specific requirement: 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 as determined 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. 2 CFR 200.311 requires property records be maintained for real property and improvements made to real property acquired with federal awards. 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 $1,322,196 for a capital improvement flooring project from the Education Stabilization Fund without obtaining a performance bond and 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 record in the capital assets subsidiary records capital improvements for a HVAC system or flooring project totaling $154,377 and $1,322,196, respectively, and for equipment totaling $12,138. Cause: Lack of internal controls and management oversight. Effect or potential effect: The District did not comply with Wage Rate Requirements or Bonding Requirements. The District's capital assets subsidiary records were not accurate. Questioned costs:Context: A population of 20 payments for capital improvements and equipment totaling $1,525,445. All 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 Department of Elementary and Secondary Education will be contacted regarding this matter. The district did not receive guidance from the Department about this issue other than stating that Davis-Bacon wage rules apply. Those materials will be recorded as capital assets and our new capital assets clerk will be trained on the definition and record keeping of such items. This likely occurred simply from the fact that yearly past practice for the district has been to enter the asset as one item in the asset system. Construction in progress has been used as a reconciliation item in fixed assets. There must have been some misunderstanding on this matter because the district does have a statement of coverage for the company that did this work and will provide it. However, if the format is wrong, the district will, in the future, insist that the proper format be used.
Finding 2023-002
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425D AND 84.425U PASS-THROUGH NUMBER 5703 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-002.Equipment and Real Property Management / Special Tests and Provisions Criteria or specific requirement: 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 as determined 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. 2 CFR 200.311 requires property records be maintained for real property and improvements made to real property acquired with federal awards. 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 $1,322,196 for a capital improvement flooring project from the Education Stabilization Fund without obtaining a performance bond and 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 record in the capital assets subsidiary records capital improvements for a HVAC system or flooring project totaling $154,377 and $1,322,196, respectively, and for equipment totaling $12,138. Cause: Lack of internal controls and management oversight. Effect or potential effect: The District did not comply with Wage Rate Requirements or Bonding Requirements. The District's capital assets subsidiary records were not accurate. Questioned costs:Context: A population of 20 payments for capital improvements and equipment totaling $1,525,445. All 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 Department of Elementary and Secondary Education will be contacted regarding this matter. The district did not receive guidance from the Department about this issue other than stating that Davis-Bacon wage rules apply. Those materials will be recorded as capital assets and our new capital assets clerk will be trained on the definition and record keeping of such items. This likely occurred simply from the fact that yearly past practice for the district has been to enter the asset as one item in the asset system. Construction in progress has been used as a reconciliation item in fixed assets. There must have been some misunderstanding on this matter because the district does have a statement of coverage for the company that did this work and will provide it. However, if the format is wrong, the district will, in the future, insist that the proper format be used.