Audit 319431

Findings number: 2023 003 Federal agency: U.S. Department of Agriculture Pass through agency: Commonwealth Department of Elementary and Second Education Program: Child Nutrition Cluster – National School Lunch Program ALN #: 10.555 Award number: Various Award year: Various Finding: Internal Control and Compliance over Allowability and Reporting Prior Year Finding: No Type of Finding: Material Weakness Criteria Allowability: Reimbursement for meals served is not based on costs; it is determined solely by applying the applicable meals times rates formula. Financial Reporting: a. Claims for Reimbursement SFAs and sponsors must submit monthly claims for reimbursement for meals and snacks served to eligible students within 60 days following the last day of the month covered by the claim (7 CFR sections 210.8, 220.11, 215.10, and 225.15(c)). The state agency has an additional 30 days to submit a consolidated report to FNS (7 CFR 210.5(d), 220.13(b)(2), 215.11(c)(2), and 225.8). b. Recordkeeping Each month’s claim for reimbursement and all data used in the claims review process must be maintained on file. Accurate records must be maintained justifying all meals claimed and documenting that all Program funds were spent only on allowable Child Nutrition Program costs. Failure to maintain such records may be grounds for denial of reimbursement for meals served and/or administrative costs claimed during the period covered by the records in question. Records are required to be retained for a period of three years after submission of the final Claim for Reimbursement for the fiscal year. Or, if audit findings have not been resolved, the records must be retained beyond the three year period as long as required for the resolution of the issues raised by the audit. School food authorities are required to make the information available to the Department and the state agency upon request. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our completeness and accuracy testing of the City of Boston Public Schools Food and Nutrition Services (FNS) monthly claims for reimbursement and recordkeeping, which included the allowability of meals reimbursed, we noted that edit checks were performed and documented monthly at the school site level confirming meal count reports. However, out of a sample of 60 days across 12 schools, there were 11 days across 4 schools that did not agree to the underlying manual tally sheets. Additionally, there was one school site that did not retain their tally sheets, and as such, we were unable to confirm the meals were accurate or allowable. Additionally, although a control was identified by the FNS documented policies, we were unable to verify meal counts were being reviewed at the individual school level by the site manager. Cause This appears to be due to insufficient policies and procedures surrounding the claims for reimbursement and recordkeeping. Effect Meal count reports utilized for the monthly claims for reimbursement are not complete and accuracy, nor do they have complete and accurate underlying records to substantiate the meals requested for reimbursement. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs $5,287 Recommendation We recommend that FNS enhance their policies and procedures to include a more thorough review and approval of meal counts at the school level to ensure allowability as well as completeness and accuracy of the meal counts submitted for reimbursement. Additionally, we recommend FNS re enforce their policy to ensure underlying records are maintained in accordance with program requirements. View of Responsible Officials from the Auditee FNS understands that this is a serious issue in schools that use paper tally sheets and has already begun to implement steps to improve the accuracy of meal counting and claiming in response to similar findings from a March 2023 on site DESE review of SY2022 23 meal claims. • Site managers were retrained on June 7, 2023, on procedures for proper counting and claiming of reimbursable meals, and reminded of the document retention policy. • Follow up training was provided during the 2023 24 school year, and more is planned for 2024 25. • In addition, FNS has been reducing the usage of paper tally sheets in favor of electronic records created in the POS system when students scan their ID card or enter their ID number as they are served a reimbursable meal. This greatly improves accuracy by eliminating the possibility of arithmetic or data entry errors that can occur when transferring information from paper sheets into the computer. • FNS has hired a financial analyst, whose duties include working with field coordinators (regional supervisors who oversee groups of schools) to ensure that claims entered into the Titan POS system are accurate, complete and backed up by appropriate documentation.

Finding number: 2023 004 Federal agency: U.S. Department of Agriculture Pass through agency: Commonwealth Department of Elementary and Second Education Program: Child Nutrition Cluster – National School Lunch Program Child Nutrition Cluster – Fresh Fruits and Vegetables ALN #: 10.555, 10.582 Award number: Various Award year: Various Finding: Internal Control over School Food Accounts Prior Year Finding: No Type of Finding: Significant Deficiency Criteria 7 CFR 210.14(a), 210.14(c), 210.19(a)(2), 215.7(d), 220.2 and 220.7(e)(1)(i) indicate that a School Food Authority (SFA) is required to account for all revenues and expenditures of its nonprofit school food service in accordance with State and Federal requirements. A SFA must operate its food services on a non profit basis; all revenue generated by the school food service must be used to operate and improve its food services. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of school food accounts, it was disclosed that the recording of food service federal reimbursement payments is reviewed and approved by the City of Boston Public Schools Food and Nutrition Services (FNS) Director of Finance. This monthly Cash Receipt Form is prepared and sent from the FNS Director of Finance to the City of Boston Treasury Department (Treasury) outlining the grant’s upcoming wire funds from their monthly claims submission request. However, during our testing of a sample size of three months, we noted the September 2022 cash receipt form was not submitted to Treasury for both the National School Lunch program and Fresh Fruits and Vegetables program. Additionally, we noted a variance of $8,676 between the March 2023 Cash Receipt Form, and the reimbursement request and revenue received for the Fresh Fruits and Vegetable program. Cause This appears to be due to insufficient policies and procedures to ensure the Cash Receipt Form is complete and accurate. Additionally, the policies lack an alternative control in cases where key management is unable to perform the control. Effect The FNS does not have effective internal controls over the SFA. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that the FNS enhance its policies to ensure completeness and accuracy of the Cash Receipt Forms and include alternative procedures should the control operator be unavailable. View of Responsible Officials from the Auditee FNS would note that the cash receipt form is not the only control to ensure that school nutrition program revenues are correctly deposited in the school nutrition program account. The FNS Director of Finance also reviews the revenue deposited into the account on at least a monthly basis, compares this with a printed copy of the expected reimbursement amount that was submitted to DESE, writes and initials a confirmation of the deposit amount on the printed reimbursement report, and maintains this paperwork in a file. In the event of a discrepancy between the expected and received amounts, the FNS Director of Finance contacts DESE and/or the city treasury as needed to reconcile. So if a cash receipt form is not submitted or contains an error, any missing or incorrect deposits would be discovered and corrected. However, to reduce the possibility of errors or delays in depositing the funds, the FNS Director of Finance will ensure that the FNS Financial Analyst is able to complete the cash receipt form as a backup when necessary.

Finding number: 2023 004 Federal agency: U.S. Department of Agriculture Pass through agency: Commonwealth Department of Elementary and Second Education Program: Child Nutrition Cluster – National School Lunch Program Child Nutrition Cluster – Fresh Fruits and Vegetables ALN #: 10.555, 10.582 Award number: Various Award year: Various Finding: Internal Control over School Food Accounts Prior Year Finding: No Type of Finding: Significant Deficiency Criteria 7 CFR 210.14(a), 210.14(c), 210.19(a)(2), 215.7(d), 220.2 and 220.7(e)(1)(i) indicate that a School Food Authority (SFA) is required to account for all revenues and expenditures of its nonprofit school food service in accordance with State and Federal requirements. A SFA must operate its food services on a non profit basis; all revenue generated by the school food service must be used to operate and improve its food services. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of school food accounts, it was disclosed that the recording of food service federal reimbursement payments is reviewed and approved by the City of Boston Public Schools Food and Nutrition Services (FNS) Director of Finance. This monthly Cash Receipt Form is prepared and sent from the FNS Director of Finance to the City of Boston Treasury Department (Treasury) outlining the grant’s upcoming wire funds from their monthly claims submission request. However, during our testing of a sample size of three months, we noted the September 2022 cash receipt form was not submitted to Treasury for both the National School Lunch program and Fresh Fruits and Vegetables program. Additionally, we noted a variance of $8,676 between the March 2023 Cash Receipt Form, and the reimbursement request and revenue received for the Fresh Fruits and Vegetable program. Cause This appears to be due to insufficient policies and procedures to ensure the Cash Receipt Form is complete and accurate. Additionally, the policies lack an alternative control in cases where key management is unable to perform the control. Effect The FNS does not have effective internal controls over the SFA. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that the FNS enhance its policies to ensure completeness and accuracy of the Cash Receipt Forms and include alternative procedures should the control operator be unavailable. View of Responsible Officials from the Auditee FNS would note that the cash receipt form is not the only control to ensure that school nutrition program revenues are correctly deposited in the school nutrition program account. The FNS Director of Finance also reviews the revenue deposited into the account on at least a monthly basis, compares this with a printed copy of the expected reimbursement amount that was submitted to DESE, writes and initials a confirmation of the deposit amount on the printed reimbursement report, and maintains this paperwork in a file. In the event of a discrepancy between the expected and received amounts, the FNS Director of Finance contacts DESE and/or the city treasury as needed to reconcile. So if a cash receipt form is not submitted or contains an error, any missing or incorrect deposits would be discovered and corrected. However, to reduce the possibility of errors or delays in depositing the funds, the FNS Director of Finance will ensure that the FNS Financial Analyst is able to complete the cash receipt form as a backup when necessary.

Finding number: 2023 005 Federal agency: U.S. Department of Treasury Pass through agency: N/A - Direct Program: COVID-19 Emergency Rental Assistance Program ALN #: 21.023 Award number: N/A Award year: January 1, 2021 to September 30, 2025 Finding: Internal Control and Compliance over Subrecipient Monitoring Prior Year Finding: No Type of Finding: Material Weakness Criteria According to 2 CFR 200.331 (b), a pass through entity must evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring, which may include consideration of such factors as: • The subrecipient’s prior experience with the same or similar subawards; • The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; • Whether the subrecipient has new personnel or new or substantially changed systems; and • The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Also, according to 2 CFR 200.331 (d), a pass through entity must: • Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. • Follow up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass through entity detected through audits, on site reviews, and other means. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of subrecipient monitoring for a sample of 2 out of the population of 5 subrecipients, the Mayor's Office of Housing (MOH) was unable to provide documentation for either of the subrecipients showing that a formal risk evaluation had been performed. Cause This appears to be due to inadequate policies and procedures surrounding the initial risk assessment of the subrecipients. Effect The MOH does not have adequate controls over evaluating each subrecipient’s risk of noncompliance for purposes of determining appropriate subrecipient monitoring. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that the MOH implement control procedures to ensure that each subrecipient is evaluated for risk of noncompliance to ensure appropriate subrecipient monitoring. View of Responsible Officials from the Auditee The City and the Mayor’s Office of Housing has reinforced all documented policies and procedures with staff to ensure all areas of compliance have appropriate backup documentation to demonstrate that pre-award risk has been assessed.

Finding number: 2023 006 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Title I, Grants to Local Education Agencies ALN #: 84.010 Award number: 305 532937 2022 0035; 305 719222 2023 0035 Award year: September 1, 2021 to June 30, 2023 Finding: Internal Control and Compliance over Payroll Costs Prior Year Finding: Yes; 2022 001 Type of Finding: Material Weakness Criteria In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both Federally assisted and all other activities compensated by the non Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, and that these timesheets are approved by the Department Head/Supervisor on a Department Time Summary Report (DTSR). However, for our sample of 40 payroll transactions charged to the program, 23 transactions were not supported by a completed timesheet. Additionally, we noted that the DTSR was either not located or not approved by the Department Head/Supervisor for 5 payroll transactions. Cause This appears to be due to an insufficient system for collecting, filing and maintaining supporting documentation for payroll transactions charged to Federal programs. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Additionally, BPS is not in compliance with 2 CFR 200.430(i)(1) regarding documentation in support of salaries and wages charge to the federal program. The number of transactions that were not supported by a time sheet represent 57% of the selected population and indicate a systemic problem. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: Questioned costs of $65,817, for unsupported payroll charges, were charged to ALN # 84.010, Award No. 305 532937 2022 0035 and Award No. 305 719222 2023 0035. Recommendation We recommend that BPS re enforce its policies and procedures to ensure their review of payroll changes via signoff on the Department Time Summary is appropriately documented and records are retained to ensure that all payroll costs charged to the federal program are supported by documentation as required by 2 CFR 200.430(i)(1). View of Responsible Officials from the Auditee BPS has updated DTSR training and guidance for timekeepers to ensure that any similar technical issues are addressed quickly and manually adjusted if needed. Training was given in August 2024.

Finding number: 2023 007 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Title I, Grants to Local Education Agencies ALN #: 84.010 Award number: Various Award year: Various Finding: Internal Control and Compliance over Reporting Prior Year Finding: Yes; 2022-002 Type of Finding: Material Weakness Criteria The City of Boston Public Schools (BPS) receives funding from the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education (DESE). DESE sets policy for the grants and required reports. DESE issues guidance in Grants for Schools: Getting Them and Using them, A Procedural Manual. According to the DESE’s procedure manual, “At the conclusion of grant activities, recipients must submit a final financial report to the Department, accounting for the expenditure of funds received. Grants Management has developed an online process and standard form (FR1) for collecting this information. The FR1 form should be submitted to Grants Management within sixty (60) days of the end date of the grant. Grant recipients should file their reports after carefully reconciling all figures with their city auditor, town accountant, or agency business manager.” Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our review of compliance with subrecipient reporting requirements for the Title I program, we noted that, for our sample of 6 of the population of 6 FR1 reports required to be filed in fiscal year 2023, all 6 reports were not filed. Cause This appears to be due to inadequate policies and procedures surrounding the filing of financial reports under the program. Effect BPS does not have effective internal controls over the Federal award in regard to the primary recipient’s Title I program reporting requirements. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS implement control procedures to ensure that the FR1 form be submitted to DESE Grants Management within sixty (60) days of the end date of the grant in accordance with the reporting requirements of the primary Federal recipient of the Title I program. View of Responsible Officials from the Auditee BPS is working with DESE to revise our control procedures with the switch to their new GEM$ grant management system to ensure we are meeting compliance with FR1 deadlines.

Finding number: 2023 008 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Title I, Grants to Local Education Agencies ALN #: 84.010 Award number: Various Award year: Various Finding: Internal Control and Compliance over Participation of Private School Children Prior Year Finding: No Type of Finding: Material Weakness Criteria For programs funded under Title I, Part A (Assistance Listing 84.010), an LEA, after timely and meaningful consultation with private school officials, must provide equitable services to eligible private school children, their teachers, and their families. Eligible private school children are those who reside in a participating public school attendance area and have educational needs under Section 1115(c) of the ESEA (20 USC 6315(c)). The amount of funds an LEA makes available for equitable services under Title I, Part A must be equal to the proportion of funds generated by private school children from low income families who reside in participating public school attendance areas. An LEA must determine the proportional share available for services for eligible private school children based on the total amount of Title I funds received prior to any expenditures or transfers of funds within the program, such as reservations for administration, parental involvement, and district wide activities (20 USC 6320(a)(4)(A)). LEAs determine the proportional share by multiplying the proportion of children from low income families who attend private schools and live in participating Title I attendance areas by the LEA’s total Title I allocation (including any funds transferred into Title I). For more information, see Title I, Part A of the ESEA: Providing Equitable Services to Eligible Private School Children, Teachers, and Families (October 7, 2019) (https://oese.ed.gov/files/2020/07/equitable services guidance100419.pdf). The control of funds used to provide equitable services to eligible private school students, teachers and other educational personnel, and families, and title to materials, equipment, and property purchased with those funds must be in a public agency and the public agency must administer the funds, materials, equipment, and property. The provision of equitable services must be by employees of a public agency or through a contract by the public agency with an individual, association, agency, or organization that is independent of the private school. The contract must be under the control of the public agency (Sections 1117(d), and 8501(d) of ESEA (20 USC 6320(d), and 7881(d); section 18005(b) of the CARES Act; 34 CFR sections 76.661, 200.64(b)(3), 200.67, and 299.9). Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition As part of the City of Boston Public School’s (BPS) policy over compliance with private school funding, private school officials are required to fill out the Boston Public Schools: Non Public Grant Assurance and Participation Form attesting BPS provided timely and meaningful consultation with the school officials in making its determination. However, during our testing of 10 private schools in which BPS provides funding to eligible private school children, BPS was unable to locate the submitted form for one school. Additionally, for the 9 private schools where the form was provided, the authorized private school official certified that BPS did not provide timely and meaningful consultation before having made any decision that affected the participation of eligible private school children. Additionally, we were able to verify that the amount of funds available for equitable services for BPS was determined by multiplying the proportion of private school children from low income families residing in participating public school attendance areas by the LEA’s total Title I, Part A allocation. We noted the data on children from low income families who reside in the participating Title I public school attendance area and attend the private school is provided by the private school officials, which is then inputted and calculated by BPS on their Title I application. However, we were unable to confirm completeness and accuracy of the eligible private school children counts used in the calculation as BPS did not retain the correspondence from the schools to support the data ultimately included in their calculation. Cause This appears to be due to an insufficient system in place to ensure consultations are performed timely and all supporting documentation related to compliance with providing equitable services for eligible private school children. Effect BPS is not conducting timely consultations with private school officials in making its determination for private school funding and as such, private school programs are getting delayed. BPS is potentially using inaccurate or incomplete data when calculating the amount of funds available for equitable services for eligible private school children. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation BPS management should enhance their policy to include tracking of when consultations with private school officials are held to ensure timely and meaning consultation. Additionally, when utilizing data provided by private school officials to determine the eligible private school child count, we recommend BPS retain copies of their correspondence to ensure completeness and accuracy of the calculation. View of Responsible Officials from the Auditee BPS has implemented a revised consultation process for the FY24 FY25 cycle to ensure that the consultation process happens with fidelity and that records are properly stored.

Finding number: 2023 009 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Title I, Grants to Local Education Agencies ALN #: 84.010 Award number: Various Award year: Various Finding: Internal Control over Annual Report Card, High School Graduation Rate Prior Year Finding: Yes; 2022-003 Type of Finding: Material Weakness Criteria An SEA and its LEAs must report graduation rate data for all public high schools at the school, LEA, and state levels using the four year adjusted cohort rate and, at an SEA’s or LEA’s discretion, one or more extended year adjusted cohort rates. Graduation rate data must be reported both in the aggregate and disaggregated by the subgroups in Section 1111(c)(2) of the ESEA, homeless status, status as a child in foster care using a four year adjusted cohort graduation rate (and any extended year adjusted cohort rates) (ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(23), (25)(20 USC 6311(h)(1)(C)(iii)(II) and 7801(23), (25))). Except as noted below, only students who earn a regular high school diploma may be counted as a graduate for purposes of calculating graduation rates. The term “regular high school diploma” means the standard high school diploma that is awarded to the preponderance of students in the state and that is fully aligned with the state standards (but not to alternate academic achievement standards for students with the most significant cognitive disabilities) or a higher diploma. A regular high school diploma does not include a recognized equivalent of a diploma, such as a general equivalency diploma (GED), certificate of completion, certificate of attendance, or similar lesser credential (ESEA, Section 8101(43) (20 USC 7801(43))). An SEA may, but is not required to, award a state defined alternate diploma for students with the most significant cognitive disabilities who take an alternate assessment aligned with alternate academic achievement standards. That diploma must be standards based, aligned with the state’s requirements for a regular high school diploma, and obtained within the time period for which the state ensures the availability of a free appropriate public education. If an SEA awards an alternate diploma, the SEA may count those students in its four year and any extended year adjusted cohort graduation rate, even if the student takes more than four years to receive the alternate diploma (ESEA, Section 8101(23)(A)(ii)(I)(bb), (25)(A)(ii)(I)(bb) (20 USC 7801(23)(A)(ii)(I)(bb), (25)(A)(ii)(I)(bb))). To remove a student from the cohort, a school or LEA must confirm, in writing, that the student transferred out, emigrated to another country, transferred to a prison or juvenile facility, or is deceased. To confirm that a student transferred out, the school or LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. A student who is retained in grade, enrolls in a GED program, or leaves school for any other reason may not be counted as having transferred out for the purpose of calculating graduation rate and must remain in the adjusted cohort (ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(23), (25) (20 USC 6311(h)(1)(C)(iii)(II) and 7801(23), (25))). Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Per the City of Boston Public School’s (BPS) Student Withdrawal Procedures policy, school leaders are required to sign off, via a Google Form, prior to state data submissions in October, March and June that there is sufficient documentation to support all students who have withdrawn from their school. During our testing of 24 public high schools in which BPS is responsible for reporting graduation data, 13 school leaders did not submit their school’s certification for the data submission timeframe selected. Additionally, we noted 5 schools where the school leader provided a certification; however their certification was not submitted prior to the state’s data submission. Cause This appears to be due to an insufficient system for collecting school leader’s certifications prior to state submission. Effect BPS is potentially misstating the number of students in the adjusted cohorts used by the Commonwealth of Massachusetts to determine the 4 year adjusted cohort graduation rate. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation BPS management should re enforce their policy and the requirements with staff related to the removal of students from the adjusted cohorts used to determine the 4 year adjusted cohort graduation rate. In addition, BPS management should re enforce their policies and procedures to obtain and monitor official written documentation of student transfers that is required to remove students from their respective cohort. View of Responsible Officials from the Auditee The sign off form is only one part of the controls BPS has implemented. The student withdrawal team also reviews individual documentation for every student who has been withdrawn prior to the data certification, and they update the withdrawal code to be a dropout if there is not sufficient documentation. While, we did not have full sign off from school leaders, we did adjust individual withdrawal codes prior to submitting the data to the state. This is a new process that was put in place starting in the fall of 2022. We will continue to update training for school leaders around certification.

Finding number: 2023 010 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Title I, Grants to Local Education Agencies ALN #: 84.010 Award number: Various Award year: Various Finding: Internal Control and Compliance over Assessment System Security Prior Year Finding: No Type of Finding: Material Weakness Criteria SEAs, in consultation with LEAs, are required to establish and maintain an assessment system that is valid, reliable, and consistent with relevant professional and technical standards. Within their assessment system, SEAs must have policies and procedures to maintain test security and ensure that LEAs implement those policies and procedures (Title I, Section 1111(b)(2)(B)(iii) of the ESEA (20 USC 6311(b)(2)(B)(iii))). Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Each year schools who administer the Massachusetts Comprehensive Assessment System (MCAS) test are required to review and sign the Superintendent’s Assurance of Proper MCAS Test Administration form (Assurance Form), attesting their school will meet all the requirements and test administration protocols as outlined by the City of Boston Public Schools (BPS) and the Massachusetts Department of Secondary Education. During our testing of 26 schools in which BPS is responsible for administering the MCAS test, forms for 3 schools were not obtained. Cause This appears to be due to an insufficient system for collecting and retaining school leader’s certifications ensuring they will meet all requirements and test administration protocols. Effect Schools are potentially not following all requirements and protocols related to the administration of the MCAS test and therefore not maintaining an assessment system that is valid, reliable and consistent with professional technical standards. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation BPS management should re enforce their policy and the requirements to obtain and monitor official written documentation of school’s compliance with the administration of the MCAS test. View of Responsible Officials from the Auditee BPS takes testing security very seriously. We have a cross functional team that works with our schools to ensure that protocols are being followed. We will reinforce with our school leaders the need for them to promptly complete the certifications to that effect.

Finding number: 2023 011 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Special Education (IDEA) Cluster ALN #: 84.027; 84.173 Award number: 240 532934 2022 0035; 240 714716 2023 0035 Award year: August 23, 2021 to September 30, 2024 Finding: Internal Control over Payroll Costs and Period of Performance Prior Year Finding: No Type of Finding: Material Weakness Criteria Allowable Costs – Payroll In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both Federally assisted and all other activities compensated by the non Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Period of Performance A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308, 200.309, and 200.403(h)). A period of performance may contain one or more budget periods. LEAs and SEAs must obligate funds during the 27 months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15 month period of initial availability plus a 12 month period for carryover. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs and period of performance associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, and that these timesheets are approved by the Department Head/Supervisor on a Department Time Summary Report (DTSR). However, for 39 of our sample of 40 payroll transactions charged to the program, we noted that the DTSR was either not located or not approved by the Department Head/Supervisor. Cause This appears to be due to the insufficient retention and documentation over the review and approval of payroll charges. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS re enforce its policies and procedures to ensure their review of payroll changes via signoff on the Department Time Summary is appropriately documented and records are retained. View of Responsible Officials from the Auditee BPS has updated DTSR training and guidance for timekeepers to ensure that any similar technical issues are addressed quickly and manually adjusted if needed. Training was given in August 2024.

Finding number: 2023 012 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Special Education (IDEA) Cluster ALN #: 84.027; 84.173 Award number: Various Award year: Various Finding: Internal Control over Maintenance of Effort Prior Year Finding: No Type of Finding: Significant Deficiency Criteria LEAs – Local Maintenance of Effort (1) Eligibility Standard a. To meet the eligibility standard for an award for a fiscal year, the LEA must budget for the education of children with disabilities at least the same amount, from at least one of the following sources ,as the LEA spent for that purpose from the same source for the most recent fiscal year for which information is available: i. Local funds only; ii. The combination of state and local funds; iii. Local funds only on a per capita basis; or iv. The combination of state and local funds on a per capita basis. b. When determining the amount of funds that the LEA must budget to meet the requirement, the LEA may take into consideration, to the extent the information is available, the exceptions and adjustment provided in 34 CFR sections 300.204 and 300.205 that the LEA: i. Took in the intervening year or years between the most recent fiscal year for which information is available and the fiscal year for which the LEA is budgeting; and ii. Reasonably expects to take in the fiscal year for which the LEA is budgeting. c. Expenditures made from funds provided by the federal government for which the SEA is required to account to the federal government or for which the LEA is required to account to the federal government directly or through the SEA may not be considered in determining whether an LEA meets the eligibility standard (34 CFR section 300.203(a)). (2) Compliance Standard a. Except as provided in 34 CFR sections 300.204 and 300.205, funds provided to an LEA under IDEA, Part B must not be used to reduce the level of expenditures for the education of children with disabilities made by the LEA from local funds below the level of those expenditures for the preceding fiscal year. An LEA meets this standard if it does not reduce the level of expenditures for the education of children with disabilities made by the LEA from at least one of the following sources below the level of those expenditures from the same source for the preceding fiscal year, except as provided in 34 CFR sections 300.204 and 300.205: i. Local funds only; ii. The combination of state and local funds; iii. Local funds only on a per capita basis; or iv. The combination of state and local funds on a per capita basis. Expenditures made from funds provided by the federal government for which the SEA is required to account to the federal government or for which the LEA is required to account to the federal government directly or through the SEA may not be considered in determining whether an LEA meets the compliance standard (34 CFR section 300.203(b)). (3) § 300.204 Exception to maintenance of effort Notwithstanding the restriction in § 300.203(b), an LEA may reduce the level of expenditures by the LEA under Part B of the Act below the level of those expenditures for the preceding fiscal year if the reduction is attributable to any of the following: a. The voluntary departure, by retirement or otherwise, or departure for just cause, of special education or related services personnel. b. A decrease in the enrollment of children with disabilities. c. The termination of the obligation of the agency, consistent with this part, to provide a program of special education to a particular child with a disability that is an exceptionally costly program, as determined by the SEA, because the child— i. Has left the jurisdiction of the agency; ii. Has reached the age at which the obligation of the agency to provide FAPE to the child has terminated; or iii. No longer needs the program of special education. d. The termination of costly expenditures for long term purchases, such as the acquisition of equipment or the construction of school facilities. e. The assumption of cost by the high cost fund operated by the SEA under § 300.704(c). Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing to confirm the City of Boston Public Schools (BPS) met Special Education (IDEA) Cluster’s maintenance of effort (MOE) Compliance Standard test, we noted there was four school closures during fiscal year 2023. This resulted in a decrease in the enrollment of children with disabilities, an allowable exception to the MOE calculation as noted above. However, BPS was unable to provide sufficient documentation calculating the actual decrease in the enrollment of children with disabilities and the associated dollar value impact on the MOE calculation. Cause This appears to be due to insufficient policy in place for tracking the MOE compliance and retention of documentation supporting allowable exceptions. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS re enforce its policies and procedures to ensure sufficient tracking and documentation is retained supporting all allowable exceptions for the maintenance of effort Compliance Standard requirement. View of Responsible Officials from the Auditee This is the first year BPS met maintenance of effort through the per pupil standard. We are revising our tracking and documentation for special education expenses to ensure that when we meet MOE through this standard we have kept appropriate records to meet MOE compliance requirements.

Finding number: 2023 011 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Special Education (IDEA) Cluster ALN #: 84.027; 84.173 Award number: 240 532934 2022 0035; 240 714716 2023 0035 Award year: August 23, 2021 to September 30, 2024 Finding: Internal Control over Payroll Costs and Period of Performance Prior Year Finding: No Type of Finding: Material Weakness Criteria Allowable Costs – Payroll In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both Federally assisted and all other activities compensated by the non Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Period of Performance A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308, 200.309, and 200.403(h)). A period of performance may contain one or more budget periods. LEAs and SEAs must obligate funds during the 27 months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15 month period of initial availability plus a 12 month period for carryover. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs and period of performance associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, and that these timesheets are approved by the Department Head/Supervisor on a Department Time Summary Report (DTSR). However, for 39 of our sample of 40 payroll transactions charged to the program, we noted that the DTSR was either not located or not approved by the Department Head/Supervisor. Cause This appears to be due to the insufficient retention and documentation over the review and approval of payroll charges. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS re enforce its policies and procedures to ensure their review of payroll changes via signoff on the Department Time Summary is appropriately documented and records are retained. View of Responsible Officials from the Auditee BPS has updated DTSR training and guidance for timekeepers to ensure that any similar technical issues are addressed quickly and manually adjusted if needed. Training was given in August 2024.

Finding number: 2023 012 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Special Education (IDEA) Cluster ALN #: 84.027; 84.173 Award number: Various Award year: Various Finding: Internal Control over Maintenance of Effort Prior Year Finding: No Type of Finding: Significant Deficiency Criteria LEAs – Local Maintenance of Effort (1) Eligibility Standard a. To meet the eligibility standard for an award for a fiscal year, the LEA must budget for the education of children with disabilities at least the same amount, from at least one of the following sources ,as the LEA spent for that purpose from the same source for the most recent fiscal year for which information is available: i. Local funds only; ii. The combination of state and local funds; iii. Local funds only on a per capita basis; or iv. The combination of state and local funds on a per capita basis. b. When determining the amount of funds that the LEA must budget to meet the requirement, the LEA may take into consideration, to the extent the information is available, the exceptions and adjustment provided in 34 CFR sections 300.204 and 300.205 that the LEA: i. Took in the intervening year or years between the most recent fiscal year for which information is available and the fiscal year for which the LEA is budgeting; and ii. Reasonably expects to take in the fiscal year for which the LEA is budgeting. c. Expenditures made from funds provided by the federal government for which the SEA is required to account to the federal government or for which the LEA is required to account to the federal government directly or through the SEA may not be considered in determining whether an LEA meets the eligibility standard (34 CFR section 300.203(a)). (2) Compliance Standard a. Except as provided in 34 CFR sections 300.204 and 300.205, funds provided to an LEA under IDEA, Part B must not be used to reduce the level of expenditures for the education of children with disabilities made by the LEA from local funds below the level of those expenditures for the preceding fiscal year. An LEA meets this standard if it does not reduce the level of expenditures for the education of children with disabilities made by the LEA from at least one of the following sources below the level of those expenditures from the same source for the preceding fiscal year, except as provided in 34 CFR sections 300.204 and 300.205: i. Local funds only; ii. The combination of state and local funds; iii. Local funds only on a per capita basis; or iv. The combination of state and local funds on a per capita basis. Expenditures made from funds provided by the federal government for which the SEA is required to account to the federal government or for which the LEA is required to account to the federal government directly or through the SEA may not be considered in determining whether an LEA meets the compliance standard (34 CFR section 300.203(b)). (3) § 300.204 Exception to maintenance of effort Notwithstanding the restriction in § 300.203(b), an LEA may reduce the level of expenditures by the LEA under Part B of the Act below the level of those expenditures for the preceding fiscal year if the reduction is attributable to any of the following: a. The voluntary departure, by retirement or otherwise, or departure for just cause, of special education or related services personnel. b. A decrease in the enrollment of children with disabilities. c. The termination of the obligation of the agency, consistent with this part, to provide a program of special education to a particular child with a disability that is an exceptionally costly program, as determined by the SEA, because the child— i. Has left the jurisdiction of the agency; ii. Has reached the age at which the obligation of the agency to provide FAPE to the child has terminated; or iii. No longer needs the program of special education. d. The termination of costly expenditures for long term purchases, such as the acquisition of equipment or the construction of school facilities. e. The assumption of cost by the high cost fund operated by the SEA under § 300.704(c). Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing to confirm the City of Boston Public Schools (BPS) met Special Education (IDEA) Cluster’s maintenance of effort (MOE) Compliance Standard test, we noted there was four school closures during fiscal year 2023. This resulted in a decrease in the enrollment of children with disabilities, an allowable exception to the MOE calculation as noted above. However, BPS was unable to provide sufficient documentation calculating the actual decrease in the enrollment of children with disabilities and the associated dollar value impact on the MOE calculation. Cause This appears to be due to insufficient policy in place for tracking the MOE compliance and retention of documentation supporting allowable exceptions. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS re enforce its policies and procedures to ensure sufficient tracking and documentation is retained supporting all allowable exceptions for the maintenance of effort Compliance Standard requirement. View of Responsible Officials from the Auditee This is the first year BPS met maintenance of effort through the per pupil standard. We are revising our tracking and documentation for special education expenses to ensure that when we meet MOE through this standard we have kept appropriate records to meet MOE compliance requirements.

Finding number: 2023 013 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: COVID 19 Education Stabilization Fund ALN #: 84.425D Award number: 119 532940 2022 0035 Award year: September 1, 2022 to June 30, 2024 Finding: Internal Control over Payroll Costs Prior Year Finding: No Type of Finding: Significant Deficiency Criteria In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both Federally assisted and all other activities compensated by the non Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, as well as weekly time and effort reporting worksheets. The timesheets are then reviewed alongside the bi weekly Department Time Summary Reports (DTSRs) and approved by the Department Head, ensuring appropriate salary and wage distribution. However, for one of our sample of 40 payroll transactions charged to the program, we noted that although the respective DTSR was approved by the Department Head and the employee signed their timesheet, the employee selected was missing from the DTSR. Cause This appears to be due to the review of the DTSR not being precise enough to ensure all employees are included and appropriately charged to the program. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS enhance its policies and procedures to include a more detailed review of the Department Time Summary to ensure that all payroll costs charged to the federal program are reviewed and approved. View of Responsible Officials from the Auditee We had a system error for the employee when they changed from temporary to permanent status that led to their time not correctly showing up in the DTSR document. This problem should have been flagged earlier by their department timekeeper for correction. BPS has updated DTSR training and guidance for timekeepers to ensure that any similar technical issues are addressed quickly and manually adjusted if needed.

Finding number: 2023 014 Federal agency: U.S. Department of Homeland Security Pass through agency: N/A – Direct Funding Program: Staffing for Adequate Fire and Emergency Response ALN #: 97.083 Award number: EMW 2020 FF 00996 Award year: February 27, 2022 to February 26, 2025 Finding: Internal Control over Payroll Prior Year Finding: No Type of Finding: Material Weakness Criteria In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both Federally assisted and all other activities compensated by the non Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs associated with payroll charges, we noted the Boston Fire Department (BFD) provides a pay rate text file to the City of Boston Central Payroll Division to process stipend payments. The pay rate file is then uploaded into the City’s payroll system (HCM), which is used to process the fire fighter’s payroll. However, we noted there is no review process over the pay rate file to ensure accuracy of the rates. Cause This appears to be due to a lack of a formal control over the stipend pay rate process. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend BFD implement a formal process to ensure accuracy of stipend rates prior to upload into the City’s payroll system. View of Responsible Officials from the Auditee The City of Boston and The Boston Fire Department will implement additional internal controls over the review of pay rates. These additional internal controls will ensure that all pay rates are accurate and will include evidence of review and approval.

Finding number: 2023 015 Federal agency: U.S. Department of Homeland Security Pass through agency: N/A – Direct Funding Program: Staffing for Adequate Fire and Emergency Response ALN #: 97.083 Award number: EMW 2020 FF 00996 Award year: February 27, 2022 to February 26, 2025 Finding: Internal Control and Compliance over Financial Reporting Prior Year Finding: No Type of Finding: Material Weakness Criteria Per the Department of Homeland Security (DHS) Notice of Funding Opportunity (NOFO) for Fiscal Year 2020 Staffing for Adequate Fire and Emergency Response (SAFER) Grant Program, recipients of the SAFER Program grants are required to submit an FFR (SF 425) on a semi annual basis. The FFR is to be submitted using the online FEMA GO based on the calendar year beginning with the period after the start of the period of performance. Grant recipients are required to submit an FFR throughout the entire period of performance of the grant. Reports are due: 1. No later than July 30 (for the period January 1 – June 30) 2. No later than January 30 (for the period July 1 – December 31) 3. Within 120 days after the end of the period of performance Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our review of controls in place with the semi annual SF 425 Financial Reporting requirement, we noted that for both our samples of the financial reports required to be filed in fiscal year 2023, there was a lack of an internal control over the filing of the reports in place during the fiscal year. During our review of compliance with the semi annual SF 425 Financial Reporting requirement, we noted that certain financial information within the semi annual report covering July 1, 2022 to December 31, 2022 could not be verified against the general ledger including Line 10e Federal Share of expenditures and Line 10g Total Federal Funds, both reporting $6,125,484. Additionally, we noted the semi annual report covering January 1, 2023 to June 30, 2023 was filed 87 days late on October 25, 2023. Cause This appears to be due to inadequate policies and procedures surrounding the filing of financial reports under the program. Effect The Boston Fire Department (BFD) does not have a process in place to ensure the completeness and accuracy, or the timely filing, of the semi annual SF 425 Financial Report. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs None Recommendation We recommend that the BFD implement control procedures to ensure that the SF 425 Financial Reports are filed timely and reviewed against supporting general ledger schedules to ensure completeness and accuracy of each report prior to submission. View of Responsible Officials from the Auditee BFD has taken considerable steps to incorporate and implement proper control procedures surrounding all grant related matters, i.e. financial reporting and oversight. In August 2023, BFD hired a Financial Grants Manager with more than ten years of experience working in municipal government with grants to ensure proper financial oversight is established and enforced. Additionally, BFD has acquired licenses for Airtable, an online platform for creating and sharing relational databases. It combines the features of a database and a spreadsheet, allowing users to store, organize, and collaborate on information about anything. This platform allows the department to track upcoming reporting deadlines, maintain information regarding grant related purchases, etc. The Financial Grants Manager has been reviewing all currently funded grants, to include SAFER, to ensure that the general ledger postings accurately reflect allowable costs so that when reports are filed the information reported in FEMA GO is accurate and complete. BFD projects that timely and accurate filing will be in effect no later than in January 2025 in order to complete the semi annual reports due for the period ending December 31, 2024.

Finding number: 2023 016 Federal agency: U.S. Department of Homeland Security Pass through agency: N/A – Direct Funding Program: Staffing for Adequate Fire and Emergency Response ALN #: 97.083 Award number: EMW 2020 FF 00996 Award year: February 27, 2022 to February 26, 2025 Finding: Internal Control and Compliance over Performance Reporting Prior Year Finding: No Type of Finding: Material Weakness Criteria Per the Department of Homeland Security (DHS) Notice of Funding Opportunity (NOFO) for Fiscal Year 2020 Staffing for Adequate Fire and Emergency Response (SAFER) Grant Program and the Federal Emergency Management Agency (FEMA) Grant Programs Directorate Information Bulletin No. 471, the recipient is responsible for completing and submitting a Programmatic Performance Report (PPR) using FEMA GO. For those awards which began in prior year, the PPR is due every six months based on the calendar year until the period of performance ends, and no later than 30 days after the six month period end. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing over both required semi annual performance progress reports (PPRs) for fiscal year 2023, we noted the semi annual PPR covering July 1, 2022 to December 31, 2022 was filed six days late on February 6, 2023. Additionally, we noted the semi annual PPR covering January 1, 2023 to June 30, 2023 was never filed. Cause This appears to be due to inadequate policies and procedures surrounding the filing of PPRs under the program. Effect The Boston Fire Department (BFD) does not have a process in place to ensure the completeness and accuracy, or the timely filing, of the semi annual PPR. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that the BPD implement control procedures to ensure that the PPRs are filed timely and reviewed against supporting schedules to ensure completeness and accuracy of each report prior to submission. View of Responsible Officials from the Auditee BFD has taken considerable steps to incorporate and implement proper control procedures surrounding all grant related matters, i.e. programmatic reporting and oversight. In February 2024, BFD hired a Programmatic Grants Manager to ensure and implement proper policies and procedures regarding programmatic aspects of the department’s external funds. Additionally, BFD has acquired licenses for Airtable, an online platform for creating and sharing relational databases. It combines the features of a database and a spreadsheet, allowing users to store, organize, and collaborate on information about anything. This platform allows the department to track upcoming reporting deadlines, maintain information regarding grant related purchases, etc. The Programmatic Grants Manager has been reviewing all currently funded grants, to include SAFER, to ensure that the general ledger postings accurately reflect allowable costs so that when reports are filed the information reported in FEMA GO is accurate and complete. BFD projects that timely and accurate filing will be in effect no later than in January 2025 in order to complete the semi annual reports due for the period ending December 31, 2024.

Findings number: 2023 003 Federal agency: U.S. Department of Agriculture Pass through agency: Commonwealth Department of Elementary and Second Education Program: Child Nutrition Cluster – National School Lunch Program ALN #: 10.555 Award number: Various Award year: Various Finding: Internal Control and Compliance over Allowability and Reporting Prior Year Finding: No Type of Finding: Material Weakness Criteria Allowability: Reimbursement for meals served is not based on costs; it is determined solely by applying the applicable meals times rates formula. Financial Reporting: a. Claims for Reimbursement SFAs and sponsors must submit monthly claims for reimbursement for meals and snacks served to eligible students within 60 days following the last day of the month covered by the claim (7 CFR sections 210.8, 220.11, 215.10, and 225.15(c)). The state agency has an additional 30 days to submit a consolidated report to FNS (7 CFR 210.5(d), 220.13(b)(2), 215.11(c)(2), and 225.8). b. Recordkeeping Each month’s claim for reimbursement and all data used in the claims review process must be maintained on file. Accurate records must be maintained justifying all meals claimed and documenting that all Program funds were spent only on allowable Child Nutrition Program costs. Failure to maintain such records may be grounds for denial of reimbursement for meals served and/or administrative costs claimed during the period covered by the records in question. Records are required to be retained for a period of three years after submission of the final Claim for Reimbursement for the fiscal year. Or, if audit findings have not been resolved, the records must be retained beyond the three year period as long as required for the resolution of the issues raised by the audit. School food authorities are required to make the information available to the Department and the state agency upon request. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our completeness and accuracy testing of the City of Boston Public Schools Food and Nutrition Services (FNS) monthly claims for reimbursement and recordkeeping, which included the allowability of meals reimbursed, we noted that edit checks were performed and documented monthly at the school site level confirming meal count reports. However, out of a sample of 60 days across 12 schools, there were 11 days across 4 schools that did not agree to the underlying manual tally sheets. Additionally, there was one school site that did not retain their tally sheets, and as such, we were unable to confirm the meals were accurate or allowable. Additionally, although a control was identified by the FNS documented policies, we were unable to verify meal counts were being reviewed at the individual school level by the site manager. Cause This appears to be due to insufficient policies and procedures surrounding the claims for reimbursement and recordkeeping. Effect Meal count reports utilized for the monthly claims for reimbursement are not complete and accuracy, nor do they have complete and accurate underlying records to substantiate the meals requested for reimbursement. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs $5,287 Recommendation We recommend that FNS enhance their policies and procedures to include a more thorough review and approval of meal counts at the school level to ensure allowability as well as completeness and accuracy of the meal counts submitted for reimbursement. Additionally, we recommend FNS re enforce their policy to ensure underlying records are maintained in accordance with program requirements. View of Responsible Officials from the Auditee FNS understands that this is a serious issue in schools that use paper tally sheets and has already begun to implement steps to improve the accuracy of meal counting and claiming in response to similar findings from a March 2023 on site DESE review of SY2022 23 meal claims. • Site managers were retrained on June 7, 2023, on procedures for proper counting and claiming of reimbursable meals, and reminded of the document retention policy. • Follow up training was provided during the 2023 24 school year, and more is planned for 2024 25. • In addition, FNS has been reducing the usage of paper tally sheets in favor of electronic records created in the POS system when students scan their ID card or enter their ID number as they are served a reimbursable meal. This greatly improves accuracy by eliminating the possibility of arithmetic or data entry errors that can occur when transferring information from paper sheets into the computer. • FNS has hired a financial analyst, whose duties include working with field coordinators (regional supervisors who oversee groups of schools) to ensure that claims entered into the Titan POS system are accurate, complete and backed up by appropriate documentation.

Finding number: 2023 004 Federal agency: U.S. Department of Agriculture Pass through agency: Commonwealth Department of Elementary and Second Education Program: Child Nutrition Cluster – National School Lunch Program Child Nutrition Cluster – Fresh Fruits and Vegetables ALN #: 10.555, 10.582 Award number: Various Award year: Various Finding: Internal Control over School Food Accounts Prior Year Finding: No Type of Finding: Significant Deficiency Criteria 7 CFR 210.14(a), 210.14(c), 210.19(a)(2), 215.7(d), 220.2 and 220.7(e)(1)(i) indicate that a School Food Authority (SFA) is required to account for all revenues and expenditures of its nonprofit school food service in accordance with State and Federal requirements. A SFA must operate its food services on a non profit basis; all revenue generated by the school food service must be used to operate and improve its food services. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of school food accounts, it was disclosed that the recording of food service federal reimbursement payments is reviewed and approved by the City of Boston Public Schools Food and Nutrition Services (FNS) Director of Finance. This monthly Cash Receipt Form is prepared and sent from the FNS Director of Finance to the City of Boston Treasury Department (Treasury) outlining the grant’s upcoming wire funds from their monthly claims submission request. However, during our testing of a sample size of three months, we noted the September 2022 cash receipt form was not submitted to Treasury for both the National School Lunch program and Fresh Fruits and Vegetables program. Additionally, we noted a variance of $8,676 between the March 2023 Cash Receipt Form, and the reimbursement request and revenue received for the Fresh Fruits and Vegetable program. Cause This appears to be due to insufficient policies and procedures to ensure the Cash Receipt Form is complete and accurate. Additionally, the policies lack an alternative control in cases where key management is unable to perform the control. Effect The FNS does not have effective internal controls over the SFA. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that the FNS enhance its policies to ensure completeness and accuracy of the Cash Receipt Forms and include alternative procedures should the control operator be unavailable. View of Responsible Officials from the Auditee FNS would note that the cash receipt form is not the only control to ensure that school nutrition program revenues are correctly deposited in the school nutrition program account. The FNS Director of Finance also reviews the revenue deposited into the account on at least a monthly basis, compares this with a printed copy of the expected reimbursement amount that was submitted to DESE, writes and initials a confirmation of the deposit amount on the printed reimbursement report, and maintains this paperwork in a file. In the event of a discrepancy between the expected and received amounts, the FNS Director of Finance contacts DESE and/or the city treasury as needed to reconcile. So if a cash receipt form is not submitted or contains an error, any missing or incorrect deposits would be discovered and corrected. However, to reduce the possibility of errors or delays in depositing the funds, the FNS Director of Finance will ensure that the FNS Financial Analyst is able to complete the cash receipt form as a backup when necessary.

Finding number: 2023 004 Federal agency: U.S. Department of Agriculture Pass through agency: Commonwealth Department of Elementary and Second Education Program: Child Nutrition Cluster – National School Lunch Program Child Nutrition Cluster – Fresh Fruits and Vegetables ALN #: 10.555, 10.582 Award number: Various Award year: Various Finding: Internal Control over School Food Accounts Prior Year Finding: No Type of Finding: Significant Deficiency Criteria 7 CFR 210.14(a), 210.14(c), 210.19(a)(2), 215.7(d), 220.2 and 220.7(e)(1)(i) indicate that a School Food Authority (SFA) is required to account for all revenues and expenditures of its nonprofit school food service in accordance with State and Federal requirements. A SFA must operate its food services on a non profit basis; all revenue generated by the school food service must be used to operate and improve its food services. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of school food accounts, it was disclosed that the recording of food service federal reimbursement payments is reviewed and approved by the City of Boston Public Schools Food and Nutrition Services (FNS) Director of Finance. This monthly Cash Receipt Form is prepared and sent from the FNS Director of Finance to the City of Boston Treasury Department (Treasury) outlining the grant’s upcoming wire funds from their monthly claims submission request. However, during our testing of a sample size of three months, we noted the September 2022 cash receipt form was not submitted to Treasury for both the National School Lunch program and Fresh Fruits and Vegetables program. Additionally, we noted a variance of $8,676 between the March 2023 Cash Receipt Form, and the reimbursement request and revenue received for the Fresh Fruits and Vegetable program. Cause This appears to be due to insufficient policies and procedures to ensure the Cash Receipt Form is complete and accurate. Additionally, the policies lack an alternative control in cases where key management is unable to perform the control. Effect The FNS does not have effective internal controls over the SFA. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that the FNS enhance its policies to ensure completeness and accuracy of the Cash Receipt Forms and include alternative procedures should the control operator be unavailable. View of Responsible Officials from the Auditee FNS would note that the cash receipt form is not the only control to ensure that school nutrition program revenues are correctly deposited in the school nutrition program account. The FNS Director of Finance also reviews the revenue deposited into the account on at least a monthly basis, compares this with a printed copy of the expected reimbursement amount that was submitted to DESE, writes and initials a confirmation of the deposit amount on the printed reimbursement report, and maintains this paperwork in a file. In the event of a discrepancy between the expected and received amounts, the FNS Director of Finance contacts DESE and/or the city treasury as needed to reconcile. So if a cash receipt form is not submitted or contains an error, any missing or incorrect deposits would be discovered and corrected. However, to reduce the possibility of errors or delays in depositing the funds, the FNS Director of Finance will ensure that the FNS Financial Analyst is able to complete the cash receipt form as a backup when necessary.

Finding number: 2023 005 Federal agency: U.S. Department of Treasury Pass through agency: N/A - Direct Program: COVID-19 Emergency Rental Assistance Program ALN #: 21.023 Award number: N/A Award year: January 1, 2021 to September 30, 2025 Finding: Internal Control and Compliance over Subrecipient Monitoring Prior Year Finding: No Type of Finding: Material Weakness Criteria According to 2 CFR 200.331 (b), a pass through entity must evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring, which may include consideration of such factors as: • The subrecipient’s prior experience with the same or similar subawards; • The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; • Whether the subrecipient has new personnel or new or substantially changed systems; and • The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Also, according to 2 CFR 200.331 (d), a pass through entity must: • Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. • Follow up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass through entity detected through audits, on site reviews, and other means. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of subrecipient monitoring for a sample of 2 out of the population of 5 subrecipients, the Mayor's Office of Housing (MOH) was unable to provide documentation for either of the subrecipients showing that a formal risk evaluation had been performed. Cause This appears to be due to inadequate policies and procedures surrounding the initial risk assessment of the subrecipients. Effect The MOH does not have adequate controls over evaluating each subrecipient’s risk of noncompliance for purposes of determining appropriate subrecipient monitoring. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that the MOH implement control procedures to ensure that each subrecipient is evaluated for risk of noncompliance to ensure appropriate subrecipient monitoring. View of Responsible Officials from the Auditee The City and the Mayor’s Office of Housing has reinforced all documented policies and procedures with staff to ensure all areas of compliance have appropriate backup documentation to demonstrate that pre-award risk has been assessed.

Finding number: 2023 006 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Title I, Grants to Local Education Agencies ALN #: 84.010 Award number: 305 532937 2022 0035; 305 719222 2023 0035 Award year: September 1, 2021 to June 30, 2023 Finding: Internal Control and Compliance over Payroll Costs Prior Year Finding: Yes; 2022 001 Type of Finding: Material Weakness Criteria In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both Federally assisted and all other activities compensated by the non Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, and that these timesheets are approved by the Department Head/Supervisor on a Department Time Summary Report (DTSR). However, for our sample of 40 payroll transactions charged to the program, 23 transactions were not supported by a completed timesheet. Additionally, we noted that the DTSR was either not located or not approved by the Department Head/Supervisor for 5 payroll transactions. Cause This appears to be due to an insufficient system for collecting, filing and maintaining supporting documentation for payroll transactions charged to Federal programs. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Additionally, BPS is not in compliance with 2 CFR 200.430(i)(1) regarding documentation in support of salaries and wages charge to the federal program. The number of transactions that were not supported by a time sheet represent 57% of the selected population and indicate a systemic problem. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: Questioned costs of $65,817, for unsupported payroll charges, were charged to ALN # 84.010, Award No. 305 532937 2022 0035 and Award No. 305 719222 2023 0035. Recommendation We recommend that BPS re enforce its policies and procedures to ensure their review of payroll changes via signoff on the Department Time Summary is appropriately documented and records are retained to ensure that all payroll costs charged to the federal program are supported by documentation as required by 2 CFR 200.430(i)(1). View of Responsible Officials from the Auditee BPS has updated DTSR training and guidance for timekeepers to ensure that any similar technical issues are addressed quickly and manually adjusted if needed. Training was given in August 2024.

Finding number: 2023 007 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Title I, Grants to Local Education Agencies ALN #: 84.010 Award number: Various Award year: Various Finding: Internal Control and Compliance over Reporting Prior Year Finding: Yes; 2022-002 Type of Finding: Material Weakness Criteria The City of Boston Public Schools (BPS) receives funding from the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education (DESE). DESE sets policy for the grants and required reports. DESE issues guidance in Grants for Schools: Getting Them and Using them, A Procedural Manual. According to the DESE’s procedure manual, “At the conclusion of grant activities, recipients must submit a final financial report to the Department, accounting for the expenditure of funds received. Grants Management has developed an online process and standard form (FR1) for collecting this information. The FR1 form should be submitted to Grants Management within sixty (60) days of the end date of the grant. Grant recipients should file their reports after carefully reconciling all figures with their city auditor, town accountant, or agency business manager.” Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our review of compliance with subrecipient reporting requirements for the Title I program, we noted that, for our sample of 6 of the population of 6 FR1 reports required to be filed in fiscal year 2023, all 6 reports were not filed. Cause This appears to be due to inadequate policies and procedures surrounding the filing of financial reports under the program. Effect BPS does not have effective internal controls over the Federal award in regard to the primary recipient’s Title I program reporting requirements. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS implement control procedures to ensure that the FR1 form be submitted to DESE Grants Management within sixty (60) days of the end date of the grant in accordance with the reporting requirements of the primary Federal recipient of the Title I program. View of Responsible Officials from the Auditee BPS is working with DESE to revise our control procedures with the switch to their new GEM$ grant management system to ensure we are meeting compliance with FR1 deadlines.

Finding number: 2023 008 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Title I, Grants to Local Education Agencies ALN #: 84.010 Award number: Various Award year: Various Finding: Internal Control and Compliance over Participation of Private School Children Prior Year Finding: No Type of Finding: Material Weakness Criteria For programs funded under Title I, Part A (Assistance Listing 84.010), an LEA, after timely and meaningful consultation with private school officials, must provide equitable services to eligible private school children, their teachers, and their families. Eligible private school children are those who reside in a participating public school attendance area and have educational needs under Section 1115(c) of the ESEA (20 USC 6315(c)). The amount of funds an LEA makes available for equitable services under Title I, Part A must be equal to the proportion of funds generated by private school children from low income families who reside in participating public school attendance areas. An LEA must determine the proportional share available for services for eligible private school children based on the total amount of Title I funds received prior to any expenditures or transfers of funds within the program, such as reservations for administration, parental involvement, and district wide activities (20 USC 6320(a)(4)(A)). LEAs determine the proportional share by multiplying the proportion of children from low income families who attend private schools and live in participating Title I attendance areas by the LEA’s total Title I allocation (including any funds transferred into Title I). For more information, see Title I, Part A of the ESEA: Providing Equitable Services to Eligible Private School Children, Teachers, and Families (October 7, 2019) (https://oese.ed.gov/files/2020/07/equitable services guidance100419.pdf). The control of funds used to provide equitable services to eligible private school students, teachers and other educational personnel, and families, and title to materials, equipment, and property purchased with those funds must be in a public agency and the public agency must administer the funds, materials, equipment, and property. The provision of equitable services must be by employees of a public agency or through a contract by the public agency with an individual, association, agency, or organization that is independent of the private school. The contract must be under the control of the public agency (Sections 1117(d), and 8501(d) of ESEA (20 USC 6320(d), and 7881(d); section 18005(b) of the CARES Act; 34 CFR sections 76.661, 200.64(b)(3), 200.67, and 299.9). Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition As part of the City of Boston Public School’s (BPS) policy over compliance with private school funding, private school officials are required to fill out the Boston Public Schools: Non Public Grant Assurance and Participation Form attesting BPS provided timely and meaningful consultation with the school officials in making its determination. However, during our testing of 10 private schools in which BPS provides funding to eligible private school children, BPS was unable to locate the submitted form for one school. Additionally, for the 9 private schools where the form was provided, the authorized private school official certified that BPS did not provide timely and meaningful consultation before having made any decision that affected the participation of eligible private school children. Additionally, we were able to verify that the amount of funds available for equitable services for BPS was determined by multiplying the proportion of private school children from low income families residing in participating public school attendance areas by the LEA’s total Title I, Part A allocation. We noted the data on children from low income families who reside in the participating Title I public school attendance area and attend the private school is provided by the private school officials, which is then inputted and calculated by BPS on their Title I application. However, we were unable to confirm completeness and accuracy of the eligible private school children counts used in the calculation as BPS did not retain the correspondence from the schools to support the data ultimately included in their calculation. Cause This appears to be due to an insufficient system in place to ensure consultations are performed timely and all supporting documentation related to compliance with providing equitable services for eligible private school children. Effect BPS is not conducting timely consultations with private school officials in making its determination for private school funding and as such, private school programs are getting delayed. BPS is potentially using inaccurate or incomplete data when calculating the amount of funds available for equitable services for eligible private school children. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation BPS management should enhance their policy to include tracking of when consultations with private school officials are held to ensure timely and meaning consultation. Additionally, when utilizing data provided by private school officials to determine the eligible private school child count, we recommend BPS retain copies of their correspondence to ensure completeness and accuracy of the calculation. View of Responsible Officials from the Auditee BPS has implemented a revised consultation process for the FY24 FY25 cycle to ensure that the consultation process happens with fidelity and that records are properly stored.

Finding number: 2023 009 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Title I, Grants to Local Education Agencies ALN #: 84.010 Award number: Various Award year: Various Finding: Internal Control over Annual Report Card, High School Graduation Rate Prior Year Finding: Yes; 2022-003 Type of Finding: Material Weakness Criteria An SEA and its LEAs must report graduation rate data for all public high schools at the school, LEA, and state levels using the four year adjusted cohort rate and, at an SEA’s or LEA’s discretion, one or more extended year adjusted cohort rates. Graduation rate data must be reported both in the aggregate and disaggregated by the subgroups in Section 1111(c)(2) of the ESEA, homeless status, status as a child in foster care using a four year adjusted cohort graduation rate (and any extended year adjusted cohort rates) (ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(23), (25)(20 USC 6311(h)(1)(C)(iii)(II) and 7801(23), (25))). Except as noted below, only students who earn a regular high school diploma may be counted as a graduate for purposes of calculating graduation rates. The term “regular high school diploma” means the standard high school diploma that is awarded to the preponderance of students in the state and that is fully aligned with the state standards (but not to alternate academic achievement standards for students with the most significant cognitive disabilities) or a higher diploma. A regular high school diploma does not include a recognized equivalent of a diploma, such as a general equivalency diploma (GED), certificate of completion, certificate of attendance, or similar lesser credential (ESEA, Section 8101(43) (20 USC 7801(43))). An SEA may, but is not required to, award a state defined alternate diploma for students with the most significant cognitive disabilities who take an alternate assessment aligned with alternate academic achievement standards. That diploma must be standards based, aligned with the state’s requirements for a regular high school diploma, and obtained within the time period for which the state ensures the availability of a free appropriate public education. If an SEA awards an alternate diploma, the SEA may count those students in its four year and any extended year adjusted cohort graduation rate, even if the student takes more than four years to receive the alternate diploma (ESEA, Section 8101(23)(A)(ii)(I)(bb), (25)(A)(ii)(I)(bb) (20 USC 7801(23)(A)(ii)(I)(bb), (25)(A)(ii)(I)(bb))). To remove a student from the cohort, a school or LEA must confirm, in writing, that the student transferred out, emigrated to another country, transferred to a prison or juvenile facility, or is deceased. To confirm that a student transferred out, the school or LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. A student who is retained in grade, enrolls in a GED program, or leaves school for any other reason may not be counted as having transferred out for the purpose of calculating graduation rate and must remain in the adjusted cohort (ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(23), (25) (20 USC 6311(h)(1)(C)(iii)(II) and 7801(23), (25))). Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Per the City of Boston Public School’s (BPS) Student Withdrawal Procedures policy, school leaders are required to sign off, via a Google Form, prior to state data submissions in October, March and June that there is sufficient documentation to support all students who have withdrawn from their school. During our testing of 24 public high schools in which BPS is responsible for reporting graduation data, 13 school leaders did not submit their school’s certification for the data submission timeframe selected. Additionally, we noted 5 schools where the school leader provided a certification; however their certification was not submitted prior to the state’s data submission. Cause This appears to be due to an insufficient system for collecting school leader’s certifications prior to state submission. Effect BPS is potentially misstating the number of students in the adjusted cohorts used by the Commonwealth of Massachusetts to determine the 4 year adjusted cohort graduation rate. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation BPS management should re enforce their policy and the requirements with staff related to the removal of students from the adjusted cohorts used to determine the 4 year adjusted cohort graduation rate. In addition, BPS management should re enforce their policies and procedures to obtain and monitor official written documentation of student transfers that is required to remove students from their respective cohort. View of Responsible Officials from the Auditee The sign off form is only one part of the controls BPS has implemented. The student withdrawal team also reviews individual documentation for every student who has been withdrawn prior to the data certification, and they update the withdrawal code to be a dropout if there is not sufficient documentation. While, we did not have full sign off from school leaders, we did adjust individual withdrawal codes prior to submitting the data to the state. This is a new process that was put in place starting in the fall of 2022. We will continue to update training for school leaders around certification.

Finding number: 2023 010 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Title I, Grants to Local Education Agencies ALN #: 84.010 Award number: Various Award year: Various Finding: Internal Control and Compliance over Assessment System Security Prior Year Finding: No Type of Finding: Material Weakness Criteria SEAs, in consultation with LEAs, are required to establish and maintain an assessment system that is valid, reliable, and consistent with relevant professional and technical standards. Within their assessment system, SEAs must have policies and procedures to maintain test security and ensure that LEAs implement those policies and procedures (Title I, Section 1111(b)(2)(B)(iii) of the ESEA (20 USC 6311(b)(2)(B)(iii))). Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Each year schools who administer the Massachusetts Comprehensive Assessment System (MCAS) test are required to review and sign the Superintendent’s Assurance of Proper MCAS Test Administration form (Assurance Form), attesting their school will meet all the requirements and test administration protocols as outlined by the City of Boston Public Schools (BPS) and the Massachusetts Department of Secondary Education. During our testing of 26 schools in which BPS is responsible for administering the MCAS test, forms for 3 schools were not obtained. Cause This appears to be due to an insufficient system for collecting and retaining school leader’s certifications ensuring they will meet all requirements and test administration protocols. Effect Schools are potentially not following all requirements and protocols related to the administration of the MCAS test and therefore not maintaining an assessment system that is valid, reliable and consistent with professional technical standards. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation BPS management should re enforce their policy and the requirements to obtain and monitor official written documentation of school’s compliance with the administration of the MCAS test. View of Responsible Officials from the Auditee BPS takes testing security very seriously. We have a cross functional team that works with our schools to ensure that protocols are being followed. We will reinforce with our school leaders the need for them to promptly complete the certifications to that effect.

Finding number: 2023 011 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Special Education (IDEA) Cluster ALN #: 84.027; 84.173 Award number: 240 532934 2022 0035; 240 714716 2023 0035 Award year: August 23, 2021 to September 30, 2024 Finding: Internal Control over Payroll Costs and Period of Performance Prior Year Finding: No Type of Finding: Material Weakness Criteria Allowable Costs – Payroll In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both Federally assisted and all other activities compensated by the non Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Period of Performance A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308, 200.309, and 200.403(h)). A period of performance may contain one or more budget periods. LEAs and SEAs must obligate funds during the 27 months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15 month period of initial availability plus a 12 month period for carryover. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs and period of performance associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, and that these timesheets are approved by the Department Head/Supervisor on a Department Time Summary Report (DTSR). However, for 39 of our sample of 40 payroll transactions charged to the program, we noted that the DTSR was either not located or not approved by the Department Head/Supervisor. Cause This appears to be due to the insufficient retention and documentation over the review and approval of payroll charges. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS re enforce its policies and procedures to ensure their review of payroll changes via signoff on the Department Time Summary is appropriately documented and records are retained. View of Responsible Officials from the Auditee BPS has updated DTSR training and guidance for timekeepers to ensure that any similar technical issues are addressed quickly and manually adjusted if needed. Training was given in August 2024.

Finding number: 2023 012 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Special Education (IDEA) Cluster ALN #: 84.027; 84.173 Award number: Various Award year: Various Finding: Internal Control over Maintenance of Effort Prior Year Finding: No Type of Finding: Significant Deficiency Criteria LEAs – Local Maintenance of Effort (1) Eligibility Standard a. To meet the eligibility standard for an award for a fiscal year, the LEA must budget for the education of children with disabilities at least the same amount, from at least one of the following sources ,as the LEA spent for that purpose from the same source for the most recent fiscal year for which information is available: i. Local funds only; ii. The combination of state and local funds; iii. Local funds only on a per capita basis; or iv. The combination of state and local funds on a per capita basis. b. When determining the amount of funds that the LEA must budget to meet the requirement, the LEA may take into consideration, to the extent the information is available, the exceptions and adjustment provided in 34 CFR sections 300.204 and 300.205 that the LEA: i. Took in the intervening year or years between the most recent fiscal year for which information is available and the fiscal year for which the LEA is budgeting; and ii. Reasonably expects to take in the fiscal year for which the LEA is budgeting. c. Expenditures made from funds provided by the federal government for which the SEA is required to account to the federal government or for which the LEA is required to account to the federal government directly or through the SEA may not be considered in determining whether an LEA meets the eligibility standard (34 CFR section 300.203(a)). (2) Compliance Standard a. Except as provided in 34 CFR sections 300.204 and 300.205, funds provided to an LEA under IDEA, Part B must not be used to reduce the level of expenditures for the education of children with disabilities made by the LEA from local funds below the level of those expenditures for the preceding fiscal year. An LEA meets this standard if it does not reduce the level of expenditures for the education of children with disabilities made by the LEA from at least one of the following sources below the level of those expenditures from the same source for the preceding fiscal year, except as provided in 34 CFR sections 300.204 and 300.205: i. Local funds only; ii. The combination of state and local funds; iii. Local funds only on a per capita basis; or iv. The combination of state and local funds on a per capita basis. Expenditures made from funds provided by the federal government for which the SEA is required to account to the federal government or for which the LEA is required to account to the federal government directly or through the SEA may not be considered in determining whether an LEA meets the compliance standard (34 CFR section 300.203(b)). (3) § 300.204 Exception to maintenance of effort Notwithstanding the restriction in § 300.203(b), an LEA may reduce the level of expenditures by the LEA under Part B of the Act below the level of those expenditures for the preceding fiscal year if the reduction is attributable to any of the following: a. The voluntary departure, by retirement or otherwise, or departure for just cause, of special education or related services personnel. b. A decrease in the enrollment of children with disabilities. c. The termination of the obligation of the agency, consistent with this part, to provide a program of special education to a particular child with a disability that is an exceptionally costly program, as determined by the SEA, because the child— i. Has left the jurisdiction of the agency; ii. Has reached the age at which the obligation of the agency to provide FAPE to the child has terminated; or iii. No longer needs the program of special education. d. The termination of costly expenditures for long term purchases, such as the acquisition of equipment or the construction of school facilities. e. The assumption of cost by the high cost fund operated by the SEA under § 300.704(c). Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing to confirm the City of Boston Public Schools (BPS) met Special Education (IDEA) Cluster’s maintenance of effort (MOE) Compliance Standard test, we noted there was four school closures during fiscal year 2023. This resulted in a decrease in the enrollment of children with disabilities, an allowable exception to the MOE calculation as noted above. However, BPS was unable to provide sufficient documentation calculating the actual decrease in the enrollment of children with disabilities and the associated dollar value impact on the MOE calculation. Cause This appears to be due to insufficient policy in place for tracking the MOE compliance and retention of documentation supporting allowable exceptions. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS re enforce its policies and procedures to ensure sufficient tracking and documentation is retained supporting all allowable exceptions for the maintenance of effort Compliance Standard requirement. View of Responsible Officials from the Auditee This is the first year BPS met maintenance of effort through the per pupil standard. We are revising our tracking and documentation for special education expenses to ensure that when we meet MOE through this standard we have kept appropriate records to meet MOE compliance requirements.

Finding number: 2023 011 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Special Education (IDEA) Cluster ALN #: 84.027; 84.173 Award number: 240 532934 2022 0035; 240 714716 2023 0035 Award year: August 23, 2021 to September 30, 2024 Finding: Internal Control over Payroll Costs and Period of Performance Prior Year Finding: No Type of Finding: Material Weakness Criteria Allowable Costs – Payroll In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both Federally assisted and all other activities compensated by the non Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Period of Performance A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308, 200.309, and 200.403(h)). A period of performance may contain one or more budget periods. LEAs and SEAs must obligate funds during the 27 months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15 month period of initial availability plus a 12 month period for carryover. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs and period of performance associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, and that these timesheets are approved by the Department Head/Supervisor on a Department Time Summary Report (DTSR). However, for 39 of our sample of 40 payroll transactions charged to the program, we noted that the DTSR was either not located or not approved by the Department Head/Supervisor. Cause This appears to be due to the insufficient retention and documentation over the review and approval of payroll charges. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS re enforce its policies and procedures to ensure their review of payroll changes via signoff on the Department Time Summary is appropriately documented and records are retained. View of Responsible Officials from the Auditee BPS has updated DTSR training and guidance for timekeepers to ensure that any similar technical issues are addressed quickly and manually adjusted if needed. Training was given in August 2024.

Finding number: 2023 012 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Special Education (IDEA) Cluster ALN #: 84.027; 84.173 Award number: Various Award year: Various Finding: Internal Control over Maintenance of Effort Prior Year Finding: No Type of Finding: Significant Deficiency Criteria LEAs – Local Maintenance of Effort (1) Eligibility Standard a. To meet the eligibility standard for an award for a fiscal year, the LEA must budget for the education of children with disabilities at least the same amount, from at least one of the following sources ,as the LEA spent for that purpose from the same source for the most recent fiscal year for which information is available: i. Local funds only; ii. The combination of state and local funds; iii. Local funds only on a per capita basis; or iv. The combination of state and local funds on a per capita basis. b. When determining the amount of funds that the LEA must budget to meet the requirement, the LEA may take into consideration, to the extent the information is available, the exceptions and adjustment provided in 34 CFR sections 300.204 and 300.205 that the LEA: i. Took in the intervening year or years between the most recent fiscal year for which information is available and the fiscal year for which the LEA is budgeting; and ii. Reasonably expects to take in the fiscal year for which the LEA is budgeting. c. Expenditures made from funds provided by the federal government for which the SEA is required to account to the federal government or for which the LEA is required to account to the federal government directly or through the SEA may not be considered in determining whether an LEA meets the eligibility standard (34 CFR section 300.203(a)). (2) Compliance Standard a. Except as provided in 34 CFR sections 300.204 and 300.205, funds provided to an LEA under IDEA, Part B must not be used to reduce the level of expenditures for the education of children with disabilities made by the LEA from local funds below the level of those expenditures for the preceding fiscal year. An LEA meets this standard if it does not reduce the level of expenditures for the education of children with disabilities made by the LEA from at least one of the following sources below the level of those expenditures from the same source for the preceding fiscal year, except as provided in 34 CFR sections 300.204 and 300.205: i. Local funds only; ii. The combination of state and local funds; iii. Local funds only on a per capita basis; or iv. The combination of state and local funds on a per capita basis. Expenditures made from funds provided by the federal government for which the SEA is required to account to the federal government or for which the LEA is required to account to the federal government directly or through the SEA may not be considered in determining whether an LEA meets the compliance standard (34 CFR section 300.203(b)). (3) § 300.204 Exception to maintenance of effort Notwithstanding the restriction in § 300.203(b), an LEA may reduce the level of expenditures by the LEA under Part B of the Act below the level of those expenditures for the preceding fiscal year if the reduction is attributable to any of the following: a. The voluntary departure, by retirement or otherwise, or departure for just cause, of special education or related services personnel. b. A decrease in the enrollment of children with disabilities. c. The termination of the obligation of the agency, consistent with this part, to provide a program of special education to a particular child with a disability that is an exceptionally costly program, as determined by the SEA, because the child— i. Has left the jurisdiction of the agency; ii. Has reached the age at which the obligation of the agency to provide FAPE to the child has terminated; or iii. No longer needs the program of special education. d. The termination of costly expenditures for long term purchases, such as the acquisition of equipment or the construction of school facilities. e. The assumption of cost by the high cost fund operated by the SEA under § 300.704(c). Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing to confirm the City of Boston Public Schools (BPS) met Special Education (IDEA) Cluster’s maintenance of effort (MOE) Compliance Standard test, we noted there was four school closures during fiscal year 2023. This resulted in a decrease in the enrollment of children with disabilities, an allowable exception to the MOE calculation as noted above. However, BPS was unable to provide sufficient documentation calculating the actual decrease in the enrollment of children with disabilities and the associated dollar value impact on the MOE calculation. Cause This appears to be due to insufficient policy in place for tracking the MOE compliance and retention of documentation supporting allowable exceptions. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS re enforce its policies and procedures to ensure sufficient tracking and documentation is retained supporting all allowable exceptions for the maintenance of effort Compliance Standard requirement. View of Responsible Officials from the Auditee This is the first year BPS met maintenance of effort through the per pupil standard. We are revising our tracking and documentation for special education expenses to ensure that when we meet MOE through this standard we have kept appropriate records to meet MOE compliance requirements.

Finding number: 2023 013 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: COVID 19 Education Stabilization Fund ALN #: 84.425D Award number: 119 532940 2022 0035 Award year: September 1, 2022 to June 30, 2024 Finding: Internal Control over Payroll Costs Prior Year Finding: No Type of Finding: Significant Deficiency Criteria In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both Federally assisted and all other activities compensated by the non Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, as well as weekly time and effort reporting worksheets. The timesheets are then reviewed alongside the bi weekly Department Time Summary Reports (DTSRs) and approved by the Department Head, ensuring appropriate salary and wage distribution. However, for one of our sample of 40 payroll transactions charged to the program, we noted that although the respective DTSR was approved by the Department Head and the employee signed their timesheet, the employee selected was missing from the DTSR. Cause This appears to be due to the review of the DTSR not being precise enough to ensure all employees are included and appropriately charged to the program. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS enhance its policies and procedures to include a more detailed review of the Department Time Summary to ensure that all payroll costs charged to the federal program are reviewed and approved. View of Responsible Officials from the Auditee We had a system error for the employee when they changed from temporary to permanent status that led to their time not correctly showing up in the DTSR document. This problem should have been flagged earlier by their department timekeeper for correction. BPS has updated DTSR training and guidance for timekeepers to ensure that any similar technical issues are addressed quickly and manually adjusted if needed.

Finding number: 2023 014 Federal agency: U.S. Department of Homeland Security Pass through agency: N/A – Direct Funding Program: Staffing for Adequate Fire and Emergency Response ALN #: 97.083 Award number: EMW 2020 FF 00996 Award year: February 27, 2022 to February 26, 2025 Finding: Internal Control over Payroll Prior Year Finding: No Type of Finding: Material Weakness Criteria In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both Federally assisted and all other activities compensated by the non Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs associated with payroll charges, we noted the Boston Fire Department (BFD) provides a pay rate text file to the City of Boston Central Payroll Division to process stipend payments. The pay rate file is then uploaded into the City’s payroll system (HCM), which is used to process the fire fighter’s payroll. However, we noted there is no review process over the pay rate file to ensure accuracy of the rates. Cause This appears to be due to a lack of a formal control over the stipend pay rate process. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend BFD implement a formal process to ensure accuracy of stipend rates prior to upload into the City’s payroll system. View of Responsible Officials from the Auditee The City of Boston and The Boston Fire Department will implement additional internal controls over the review of pay rates. These additional internal controls will ensure that all pay rates are accurate and will include evidence of review and approval.

Finding number: 2023 015 Federal agency: U.S. Department of Homeland Security Pass through agency: N/A – Direct Funding Program: Staffing for Adequate Fire and Emergency Response ALN #: 97.083 Award number: EMW 2020 FF 00996 Award year: February 27, 2022 to February 26, 2025 Finding: Internal Control and Compliance over Financial Reporting Prior Year Finding: No Type of Finding: Material Weakness Criteria Per the Department of Homeland Security (DHS) Notice of Funding Opportunity (NOFO) for Fiscal Year 2020 Staffing for Adequate Fire and Emergency Response (SAFER) Grant Program, recipients of the SAFER Program grants are required to submit an FFR (SF 425) on a semi annual basis. The FFR is to be submitted using the online FEMA GO based on the calendar year beginning with the period after the start of the period of performance. Grant recipients are required to submit an FFR throughout the entire period of performance of the grant. Reports are due: 1. No later than July 30 (for the period January 1 – June 30) 2. No later than January 30 (for the period July 1 – December 31) 3. Within 120 days after the end of the period of performance Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our review of controls in place with the semi annual SF 425 Financial Reporting requirement, we noted that for both our samples of the financial reports required to be filed in fiscal year 2023, there was a lack of an internal control over the filing of the reports in place during the fiscal year. During our review of compliance with the semi annual SF 425 Financial Reporting requirement, we noted that certain financial information within the semi annual report covering July 1, 2022 to December 31, 2022 could not be verified against the general ledger including Line 10e Federal Share of expenditures and Line 10g Total Federal Funds, both reporting $6,125,484. Additionally, we noted the semi annual report covering January 1, 2023 to June 30, 2023 was filed 87 days late on October 25, 2023. Cause This appears to be due to inadequate policies and procedures surrounding the filing of financial reports under the program. Effect The Boston Fire Department (BFD) does not have a process in place to ensure the completeness and accuracy, or the timely filing, of the semi annual SF 425 Financial Report. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs None Recommendation We recommend that the BFD implement control procedures to ensure that the SF 425 Financial Reports are filed timely and reviewed against supporting general ledger schedules to ensure completeness and accuracy of each report prior to submission. View of Responsible Officials from the Auditee BFD has taken considerable steps to incorporate and implement proper control procedures surrounding all grant related matters, i.e. financial reporting and oversight. In August 2023, BFD hired a Financial Grants Manager with more than ten years of experience working in municipal government with grants to ensure proper financial oversight is established and enforced. Additionally, BFD has acquired licenses for Airtable, an online platform for creating and sharing relational databases. It combines the features of a database and a spreadsheet, allowing users to store, organize, and collaborate on information about anything. This platform allows the department to track upcoming reporting deadlines, maintain information regarding grant related purchases, etc. The Financial Grants Manager has been reviewing all currently funded grants, to include SAFER, to ensure that the general ledger postings accurately reflect allowable costs so that when reports are filed the information reported in FEMA GO is accurate and complete. BFD projects that timely and accurate filing will be in effect no later than in January 2025 in order to complete the semi annual reports due for the period ending December 31, 2024.

Finding number: 2023 016 Federal agency: U.S. Department of Homeland Security Pass through agency: N/A – Direct Funding Program: Staffing for Adequate Fire and Emergency Response ALN #: 97.083 Award number: EMW 2020 FF 00996 Award year: February 27, 2022 to February 26, 2025 Finding: Internal Control and Compliance over Performance Reporting Prior Year Finding: No Type of Finding: Material Weakness Criteria Per the Department of Homeland Security (DHS) Notice of Funding Opportunity (NOFO) for Fiscal Year 2020 Staffing for Adequate Fire and Emergency Response (SAFER) Grant Program and the Federal Emergency Management Agency (FEMA) Grant Programs Directorate Information Bulletin No. 471, the recipient is responsible for completing and submitting a Programmatic Performance Report (PPR) using FEMA GO. For those awards which began in prior year, the PPR is due every six months based on the calendar year until the period of performance ends, and no later than 30 days after the six month period end. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing over both required semi annual performance progress reports (PPRs) for fiscal year 2023, we noted the semi annual PPR covering July 1, 2022 to December 31, 2022 was filed six days late on February 6, 2023. Additionally, we noted the semi annual PPR covering January 1, 2023 to June 30, 2023 was never filed. Cause This appears to be due to inadequate policies and procedures surrounding the filing of PPRs under the program. Effect The Boston Fire Department (BFD) does not have a process in place to ensure the completeness and accuracy, or the timely filing, of the semi annual PPR. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that the BPD implement control procedures to ensure that the PPRs are filed timely and reviewed against supporting schedules to ensure completeness and accuracy of each report prior to submission. View of Responsible Officials from the Auditee BFD has taken considerable steps to incorporate and implement proper control procedures surrounding all grant related matters, i.e. programmatic reporting and oversight. In February 2024, BFD hired a Programmatic Grants Manager to ensure and implement proper policies and procedures regarding programmatic aspects of the department’s external funds. Additionally, BFD has acquired licenses for Airtable, an online platform for creating and sharing relational databases. It combines the features of a database and a spreadsheet, allowing users to store, organize, and collaborate on information about anything. This platform allows the department to track upcoming reporting deadlines, maintain information regarding grant related purchases, etc. The Programmatic Grants Manager has been reviewing all currently funded grants, to include SAFER, to ensure that the general ledger postings accurately reflect allowable costs so that when reports are filed the information reported in FEMA GO is accurate and complete. BFD projects that timely and accurate filing will be in effect no later than in January 2025 in order to complete the semi annual reports due for the period ending December 31, 2024.