FAC Explorer

Audit 317639

FY End
2023-06-30
Total Expended
$1.40M
Findings
4
Programs
11
Organization: Strong-Huttig School District (AR)
Year: 2023 Accepted: 2024-08-21
Auditor: Arkansas Legislative Audit

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
484743 2023-001 Material Weakness Yes FN
484744 2023-002 Significant Deficiency - B
1061185 2023-001 Material Weakness Yes FN
1061186 2023-002 Significant Deficiency - B

Programs

ALN Program Spent Major Findings
84.425 Covid-19 - Education Stabilization Fund $638,358 Yes 2
84.010 Title I Grants to Local Educational Agencies $258,140 - 0
84.027 Special Education_grants to States $89,729 - 0
10.553 School Breakfast Program $81,471 - 0
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $33,658 - 0
84.358 Rural Education $22,778 - 0
10.555 National School Lunch Program $13,764 - 0
84.371 Comprehensive Literacy Development $12,277 - 0
84.424 Student Support and Academic Enrichment Program $10,755 - 0
84.173 Special Education_preschool Grants $6,780 - 0
84.367 Supporting Effective Instruction State Grants $500 - 0

Contacts

Name Title Type
UXQTB13V4KD5 Crystal Osgood Auditee
8707973040 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 Strong-Huttig School District No. 83 (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 $116,129 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 Strong-Huttig School District No. 83 (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
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH THE ARKANSAS DEPARTMENT OF EDUCATION COVID-19 - AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425U PASS-THROUGH NUMBER 7009 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-001.Equipment and Real Property Management and Special Tests and Provisions Criteria or specific requirement: Property records should be maintained for equipment acquired with federal awards as specified in 2 CFR Section 200.313. In addition, 29 CFR 5.5 (Wage Rate Requirements) requires all contractors and subcontractors performing construction contracts in excess of $2,000, financed by federal assistance funds, to pay laborers and mechanics employed by the contractor or subcontractor not less than the prevailing wage rates established by the Department of Labor for the locality of the project. Non-federal entities shall include in the applicable construction contracts a provision that the contractor or subcontractor comply with those requirements. Such requirements include the submission of weekly certified payrolls for each week in which any contract work is performed, to the non-federal entities. Additionally, 2 CFR 200.326 and Ark. Code Ann. § 18-44-503 require a non-federal entity to obtain a performance bond for the public construction contract. Condition: The District paid $54,427 for installation of a security camera system from the Education Stabilization Fund without obtaining a written contract that included the prevailing wage rate provision, and weekly certified payrolls were not submitted to the District. Additionally, the District did not obtain a performance bond from the contractor, as required by Ark. Code Ann. § 18-44-503, and the system was not recorded in the District's equipment subsidiary ledger. Cause: Lack of Internal controls and management oversight. Effect or potential effect: The District did not comply with Wage Rate Requirements or Bonding Requirements. Additionally, the District's equipment subsidiary records were not accurate. Context: Examined all payments/contracts for facility repairs and improvements, four in total. Identification as a repeat finding: Yes Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The District will conduct a training for all supervisors indicating and sharing what forms are required for each item purchased or purchased service prior to releasing any funds. Links to required Work Force forms(Davis Bacon Forms; Bond Contractor Form, etc. ) will be shared with all supervisors to use during collaboration with contractors and subcontractors. We are currently working with the company to determine how best to obtain these records from past services.
Finding 2023-002
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH THE ARKANSAS DEPARTMENT OF EDUCATION COVID-19 - AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425U PASS-THROUGH NUMBER 7009 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-002 Allowable Costs/Cost Principles Criteria or specific requirement: Purchase of equipment and other capital expenditures require the prior written approval of the Federal awarding agency or pass-through entity, as specified in Office of Management and Budget (OMB) 2 CFR Section 200.439. Condition: In our test of expenditures from the COVID-19 Education Stabilization Fund, we identified two equipment purchases with unit costs greater than the $5,000 threshold for which the District did not obtain prior written approval from the Arkansas Division of Elementary and Secondary Education (DESE). These purchases had a total cost of $10,400. Cause: Lack of Internal controls and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $10,400 were paid from the COVID-19 - Education Stabilization Fund. Questioned costs: The amount of questioned costs were $10,400. Context: We examined all capital expenditures of the COVID-19 - Education Stabilization Fund totaling $68,927. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The District will communicate with the team at DESE to determine what is needed to bring all files current. The District understands fully that all state and federal spending must follow guidelines set forth in the grant or amount allocated. Accounts payable will not release funds until all guidelines and documents are secured and attached to the Purchase Card of Purchase Order form. The District will conduct a training to inform supervisors what forms and guidelines are required prior to the release of any monies.
Finding 2023-001
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH THE ARKANSAS DEPARTMENT OF EDUCATION COVID-19 - AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425U PASS-THROUGH NUMBER 7009 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-001.Equipment and Real Property Management and Special Tests and Provisions Criteria or specific requirement: Property records should be maintained for equipment acquired with federal awards as specified in 2 CFR Section 200.313. In addition, 29 CFR 5.5 (Wage Rate Requirements) requires all contractors and subcontractors performing construction contracts in excess of $2,000, financed by federal assistance funds, to pay laborers and mechanics employed by the contractor or subcontractor not less than the prevailing wage rates established by the Department of Labor for the locality of the project. Non-federal entities shall include in the applicable construction contracts a provision that the contractor or subcontractor comply with those requirements. Such requirements include the submission of weekly certified payrolls for each week in which any contract work is performed, to the non-federal entities. Additionally, 2 CFR 200.326 and Ark. Code Ann. § 18-44-503 require a non-federal entity to obtain a performance bond for the public construction contract. Condition: The District paid $54,427 for installation of a security camera system from the Education Stabilization Fund without obtaining a written contract that included the prevailing wage rate provision, and weekly certified payrolls were not submitted to the District. Additionally, the District did not obtain a performance bond from the contractor, as required by Ark. Code Ann. § 18-44-503, and the system was not recorded in the District's equipment subsidiary ledger. Cause: Lack of Internal controls and management oversight. Effect or potential effect: The District did not comply with Wage Rate Requirements or Bonding Requirements. Additionally, the District's equipment subsidiary records were not accurate. Context: Examined all payments/contracts for facility repairs and improvements, four in total. Identification as a repeat finding: Yes Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The District will conduct a training for all supervisors indicating and sharing what forms are required for each item purchased or purchased service prior to releasing any funds. Links to required Work Force forms(Davis Bacon Forms; Bond Contractor Form, etc. ) will be shared with all supervisors to use during collaboration with contractors and subcontractors. We are currently working with the company to determine how best to obtain these records from past services.
Finding 2023-002
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH THE ARKANSAS DEPARTMENT OF EDUCATION COVID-19 - AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425U PASS-THROUGH NUMBER 7009 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-002 Allowable Costs/Cost Principles Criteria or specific requirement: Purchase of equipment and other capital expenditures require the prior written approval of the Federal awarding agency or pass-through entity, as specified in Office of Management and Budget (OMB) 2 CFR Section 200.439. Condition: In our test of expenditures from the COVID-19 Education Stabilization Fund, we identified two equipment purchases with unit costs greater than the $5,000 threshold for which the District did not obtain prior written approval from the Arkansas Division of Elementary and Secondary Education (DESE). These purchases had a total cost of $10,400. Cause: Lack of Internal controls and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $10,400 were paid from the COVID-19 - Education Stabilization Fund. Questioned costs: The amount of questioned costs were $10,400. Context: We examined all capital expenditures of the COVID-19 - Education Stabilization Fund totaling $68,927. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The District will communicate with the team at DESE to determine what is needed to bring all files current. The District understands fully that all state and federal spending must follow guidelines set forth in the grant or amount allocated. Accounts payable will not release funds until all guidelines and documents are secured and attached to the Purchase Card of Purchase Order form. The District will conduct a training to inform supervisors what forms and guidelines are required prior to the release of any monies.