FAC Explorer

Audit 319381

FY End
2023-06-30
Total Expended
$1.23M
Findings
10
Programs
10
Organization: Washington Parks Academy (MI)
Year: 2023 Accepted: 2024-09-11
Auditor: The Clairmount Group Plc

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
496459 2023-001 Material Weakness Yes P
496460 2023-002 Material Weakness Yes P
496461 2023-003 Material Weakness Yes P
496462 2023-004 Material Weakness Yes P
496463 2023-005 Material Weakness Yes A
1072901 2023-001 Material Weakness Yes P
1072902 2023-002 Material Weakness Yes P
1072903 2023-003 Material Weakness Yes P
1072904 2023-004 Material Weakness Yes P
1072905 2023-005 Material Weakness Yes A

Programs

ALN Program Spent Major Findings
84.425 Education Stabilization Fund $446,951 Yes 5
84.010 Title I Grants to Local Educational Agencies $329,968 - 0
10.555 National School Lunch Program $235,374 - 0
84.027 Special Education_grants to States $87,248 - 0
10.553 School Breakfast Program $36,181 - 0
84.424 Student Support and Academic Enrichment Program $25,538 - 0
10.565 Commodity Supplemental Food Program $19,506 - 0
84.367 Improving Teacher Quality State Grants $16,782 - 0
10.185 Local Food for School $2,153 - 0
10.649 Pandemic Ebt Administrative Costs $628 - 0

Contacts

Name Title Type
HEHLGKT5KQP8 Mary Anne Johnson Auditee
2483302557 Lashanda Thomas Auditor
No contacts on file

Notes to SEFA

Title: NOTE 2 – GRANT AUDITOR’S REPORT Accounting Policies: The accompanying schedule of federal awards (the “Schedule”) includes the federal grant activity of Washington - Parks Academy under programs of the federal government for the year ended June 30, 2023. Expenditures reported on the Schedule are reported on the same basis of accounting as the general-purpose financial statements. The information in the 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 Guidance). Therefore, some amounts presented in the schedule may differ from amounts presented in or used in the preparation of the general-purpose financial statements. Because the Schedule presents only a selected portion of Washington-Parks Academy's operations, it is not intended to and does not present the financial position, changes in net assets, or cash flows, if applicable, of Washington-Parks Academy. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: Management has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Management has utilized the Cash Management System (CMS) Grant Auditor’s Report to prepare the expenditure schedule for federal awards. There were no exceptions for Entitlement and IDEA Part B cash receipts, which are not included in CMS.
Title: NOTE 3 – FEDERAL REVENUE RECONCILIATION Accounting Policies: The accompanying schedule of federal awards (the “Schedule”) includes the federal grant activity of Washington - Parks Academy under programs of the federal government for the year ended June 30, 2023. Expenditures reported on the Schedule are reported on the same basis of accounting as the general-purpose financial statements. The information in the 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 Guidance). Therefore, some amounts presented in the schedule may differ from amounts presented in or used in the preparation of the general-purpose financial statements. Because the Schedule presents only a selected portion of Washington-Parks Academy's operations, it is not intended to and does not present the financial position, changes in net assets, or cash flows, if applicable, of Washington-Parks Academy. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: Management has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Federal Revenue - Statement of Revenue, Expenditures and Changes in Fund Balance
Title: NOTE 4 – NONCASH ASSISTANCE Accounting Policies: The accompanying schedule of federal awards (the “Schedule”) includes the federal grant activity of Washington - Parks Academy under programs of the federal government for the year ended June 30, 2023. Expenditures reported on the Schedule are reported on the same basis of accounting as the general-purpose financial statements. The information in the 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 Guidance). Therefore, some amounts presented in the schedule may differ from amounts presented in or used in the preparation of the general-purpose financial statements. Because the Schedule presents only a selected portion of Washington-Parks Academy's operations, it is not intended to and does not present the financial position, changes in net assets, or cash flows, if applicable, of Washington-Parks Academy. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: Management has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The value of the noncash assistance received in the form of food commodities was determined in accordance with the value provided by the State of Michigan.

Finding Details

Finding 2023-001
Finding Type: Material Weakness Criteria The Academy’s internal control structure should ensure that the accounting data is appropriately calculated, reconciled, and reported in accordance with generally accepted accounting principles. Condition The Academy’s accounts required significant adjustments to the general ledger to properly reflect the appropriate balance after the books and records were presented for audit. Cause/Effect While the accounts were reconciled throughout the year, the reconciliations completed had certain instances where the year-end reconciliation process didn’t match to the general ledger. Recommendation The Academy should institute monthly and yearly closing procedures to ensure that all accounts are reconciled and match the general ledger.
Finding 2023-002
Finding Type: Material Weakness Criteria The Academy should monitor the general ledger appropriately to ensure timely and accurate financial statements. Condition The Academy lacked appropriate overall monitoring of account balances during the year to compile complete and accurate financial reports, which resulted in many auditor-proposed journal entries. Context We noted that the Academy didn’t have a process in place to ensure that financial statements were accurate and complete. Cause/Effect The Academy did not identify the resources necessary to ensure general ledger accounts were monitored and analyzed by appropriate individuals, including taking an overview of fund activity to finalize the accounting records. As a result of the lack of appropriate overall monitoring procedures, there were many auditor-proposed journal entries. Recommendation The Academy should develop an overall monitoring procedure to ensure that all fund activity is complete, accurate, and logical. This includes assigning an appropriate individual to each general ledger account, and several individuals are responsible for the entire general ledger and financial statements to perform monitoring, analytical analysis, and adjustment as needed.
Finding 2023-003
Finding Type: Material Weakness and Material Noncompliance Criteria There should be a process in place to ensure that the Academy complies with laws and regulations. Condition There was an instance identified where the Academy was not in compliance with laws and regulations. State School Aid Act MCL 388.1718 requires that annual audits are submitted by November 1 to the Michigan Department of Education. Cause/Effect There was a change in staff and staff shortages, which led to noncompliance with MCL 388.1718. Recommendation We recommend that the Academy implement a process that identifies specific individuals to identify and monitor applicable compliance requirements throughout the year.
Finding 2023-004
Finding Type: Material Weakness Criteria There should be a process to ensure grant revenue is accurately and timely recorded. Condition The Academy didn’t have a process in place to ensure that grant revenue was reported accurately and timely. Context During our testing, we noted errors in recording various revenue, accounts receivable, and unearned revenue accounts. This included instances where revenues were not properly recorded, and drawdowns for grants were processed beyond the sixty-day requirement, which reduced revenue. Cause/Effect There is no process to ensure that grant revenues are timely and accurately accounted for. Recommendation We recommend that the Academy implement a process that would allow for the accurate recording of grant revenue and timely request of cash drawdowns.
Finding 2023-005
Finding Type: Material Weakness – Noncompliance – Educational Stabilization Fund Under the Coronavirus Aid, Relief, and Economic Security Act Criteria Michigan Department of Education awarded the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) program to public school academies operating before fiscal year 2022. Under the program, Academies cannot allow the transfer of ESSER funding to academies open after fiscal year 2021. Condition The Academy transferred ESSER funds based on the State of Michigan's approved consolidated application that identified Lincoln-King Adams-Young Academy as a second tier subrecipient. Subsequent to year-end, the State of Michigan deemed the transfer as unallowable incurred expenditures ineligible. The Academy firmly disputes that the transfers were unallowable because of the pre-approvals received by the Academy to be a sub-recipient of a federal award but supports trying to resolve the relevant issues. Questioned Cost Questioned costs included amounts transferred to Lincoln-King Adams-Young Academy, which totaled $3,345,325 in Fiscal Year 23. Context Subsequent to year-end, we were made aware that the transfers were unallowable. Cause and Effect The Academy relied on the approved consolidated application noting the use of funds for Lincoln-King Adams-Young Academy.
Finding 2023-001
Finding Type: Material Weakness Criteria The Academy’s internal control structure should ensure that the accounting data is appropriately calculated, reconciled, and reported in accordance with generally accepted accounting principles. Condition The Academy’s accounts required significant adjustments to the general ledger to properly reflect the appropriate balance after the books and records were presented for audit. Cause/Effect While the accounts were reconciled throughout the year, the reconciliations completed had certain instances where the year-end reconciliation process didn’t match to the general ledger. Recommendation The Academy should institute monthly and yearly closing procedures to ensure that all accounts are reconciled and match the general ledger.
Finding 2023-002
Finding Type: Material Weakness Criteria The Academy should monitor the general ledger appropriately to ensure timely and accurate financial statements. Condition The Academy lacked appropriate overall monitoring of account balances during the year to compile complete and accurate financial reports, which resulted in many auditor-proposed journal entries. Context We noted that the Academy didn’t have a process in place to ensure that financial statements were accurate and complete. Cause/Effect The Academy did not identify the resources necessary to ensure general ledger accounts were monitored and analyzed by appropriate individuals, including taking an overview of fund activity to finalize the accounting records. As a result of the lack of appropriate overall monitoring procedures, there were many auditor-proposed journal entries. Recommendation The Academy should develop an overall monitoring procedure to ensure that all fund activity is complete, accurate, and logical. This includes assigning an appropriate individual to each general ledger account, and several individuals are responsible for the entire general ledger and financial statements to perform monitoring, analytical analysis, and adjustment as needed.
Finding 2023-003
Finding Type: Material Weakness and Material Noncompliance Criteria There should be a process in place to ensure that the Academy complies with laws and regulations. Condition There was an instance identified where the Academy was not in compliance with laws and regulations. State School Aid Act MCL 388.1718 requires that annual audits are submitted by November 1 to the Michigan Department of Education. Cause/Effect There was a change in staff and staff shortages, which led to noncompliance with MCL 388.1718. Recommendation We recommend that the Academy implement a process that identifies specific individuals to identify and monitor applicable compliance requirements throughout the year.
Finding 2023-004
Finding Type: Material Weakness Criteria There should be a process to ensure grant revenue is accurately and timely recorded. Condition The Academy didn’t have a process in place to ensure that grant revenue was reported accurately and timely. Context During our testing, we noted errors in recording various revenue, accounts receivable, and unearned revenue accounts. This included instances where revenues were not properly recorded, and drawdowns for grants were processed beyond the sixty-day requirement, which reduced revenue. Cause/Effect There is no process to ensure that grant revenues are timely and accurately accounted for. Recommendation We recommend that the Academy implement a process that would allow for the accurate recording of grant revenue and timely request of cash drawdowns.
Finding 2023-005
Finding Type: Material Weakness – Noncompliance – Educational Stabilization Fund Under the Coronavirus Aid, Relief, and Economic Security Act Criteria Michigan Department of Education awarded the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) program to public school academies operating before fiscal year 2022. Under the program, Academies cannot allow the transfer of ESSER funding to academies open after fiscal year 2021. Condition The Academy transferred ESSER funds based on the State of Michigan's approved consolidated application that identified Lincoln-King Adams-Young Academy as a second tier subrecipient. Subsequent to year-end, the State of Michigan deemed the transfer as unallowable incurred expenditures ineligible. The Academy firmly disputes that the transfers were unallowable because of the pre-approvals received by the Academy to be a sub-recipient of a federal award but supports trying to resolve the relevant issues. Questioned Cost Questioned costs included amounts transferred to Lincoln-King Adams-Young Academy, which totaled $3,345,325 in Fiscal Year 23. Context Subsequent to year-end, we were made aware that the transfers were unallowable. Cause and Effect The Academy relied on the approved consolidated application noting the use of funds for Lincoln-King Adams-Young Academy.