Audit 32134

FY End
2022-06-30
Total Expended
$95.10M
Findings
2
Programs
28
Year: 2022 Accepted: 2023-01-30
Auditor: Cohnreznick LLP

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
32196 2022-001 Material Weakness - P
608638 2022-001 Material Weakness - P

Programs

ALN Program Spent Major Findings
84.425 Education Stabilization Fund $23.72M Yes 1
10.555 National School Lunch Program $23.27M - 0
84.027 Special Education_grants to States $10.88M - 0
32.009 Emergency Connectivity Fund Program $8.41M Yes 0
84.010 Title I Grants to Local Educational Agencies $5.39M - 0
10.553 School Breakfast Program $5.09M - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $1.55M Yes 0
84.367 Improving Teacher Quality State Grants $1.42M - 0
84.287 Twenty-First Century Community Learning Centers $969,080 - 0
10.559 Summer Food Service Program for Children $757,730 - 0
84.424 Student Support and Academic Enrichment Program $632,727 - 0
21.019 Coronavirus Relief Fund $500,293 - 0
84.048 Career and Technical Education -- Basic Grants to States $418,404 - 0
84.173 Special Education_preschool Grants $411,476 - 0
84.181 Special Education-Grants for Infants and Families $346,965 - 0
84.365 English Language Acquisition State Grants $251,590 - 0
93.575 Child Care and Development Block Grant $192,692 - 0
84.371 Striving Readers $184,914 - 0
84.041 Impact Aid $145,107 - 0
10.558 Child and Adult Care Food Program $109,309 - 0
12.900 Language Grant Program $103,897 - 0
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $100,424 - 0
84.196 Education for Homeless Children and Youth $89,379 - 0
16.034 Coronavirus Emergency Supplemental Funding Program $63,892 - 0
93.498 Provider Relief Fund $53,296 - 0
16.839 Stop School Violence $31,344 - 0
93.434 Every Student Succeeds Act/preschool Development Grants $9,208 - 0
12.903 Gencyber Grants Program $5,356 - 0

Contacts

Name Title Type
LBUJLL83NF95 Sundeep Patel Auditee
4103131277 Dan Kenney Auditor
No contacts on file

Notes to SEFA

Title: Relation to the financial statements and federal financial reports Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the Howard County Public School System (HCPSS), a component unit of Howard County, Maryland, under programs of the federal government for the year ended June 30, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S.Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, andAudit Requirements for Federal Awards ("Uniform Guidance").Expenditures reported on theSchedule are reported on the modified accrual basis of accounting. This basis of accounting is fullydescribed in the Summary of Significant Accounting Policies to HCPSS's financial statements. Suchexpenditures are recognized following the cost principles contained in the Uniform Guidance,wherein certain types of expenditures are not allowable or are limited as to reimbursement.Because the Schedule presents only a selected portion of operations of HCPSS, it is not intendedto and does not present the financial position, changes in net position, or cash flows of HCPSS. The value of food commodities donated by the United States Department of Agriculture (the"Department") is determined by the Department and is included in revenues and expenditures in theyear received. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Amounts reported in the Schedule agree with amounts reported in HCPSS's basic financialstatements and the related federal financial reports submitted by HCPSS, except as indicatedbelow.Federal revenues per the financial statements are reconciled to the Schedule as follows:Total federal revenues per financial statements $ 95,251,991Federal revenues reported as local intergovernmental revenue onfinancial statements 692,984Provider Relief Funds reported in the Schedule but recorded asprior year revenue 20,775Federal revenues not included in the ScheduleMedical assistance revenue (640,826)U.S. ROTC revenue (226,893)Total federal revenues per Schedule of Expenditures ofFederal Awards $ 95,098,031
Title: COVID-19 Provider Relief Fund and American Rescue Plan ("ARP") Rural Distri Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the Howard County Public School System (HCPSS), a component unit of Howard County, Maryland, under programs of the federal government for the year ended June 30, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S.Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, andAudit Requirements for Federal Awards ("Uniform Guidance").Expenditures reported on theSchedule are reported on the modified accrual basis of accounting. This basis of accounting is fullydescribed in the Summary of Significant Accounting Policies to HCPSS's financial statements. Suchexpenditures are recognized following the cost principles contained in the Uniform Guidance,wherein certain types of expenditures are not allowable or are limited as to reimbursement.Because the Schedule presents only a selected portion of operations of HCPSS, it is not intendedto and does not present the financial position, changes in net position, or cash flows of HCPSS. The value of food commodities donated by the United States Department of Agriculture (the"Department") is determined by the Department and is included in revenues and expenditures in theyear received. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. For the U.S. Department of Health and Human Services ("HHS") awards related to the ProviderRelief Fund ("PRF") and American Rescue Plan ("ARP") Rural Distribution program, HHS hasindicated that the amounts on the schedule be reported corresponding to reporting requirements ofthe HRSA PRF Reporting Portal. Payments from HHS for PRF are assigned to 'Payment ReceivedPeriods' (each, a Period) based upon the date each payment from the PRF was received. EachPeriod has a specified Period of Availability and timing of reporting requirements. Entities report intothe HRSA PRF Reporting Portal after each Period's deadline to use the funds (i.e., after the end ofthe Period of Availability).The Schedule includes $20,775 received from HHS between July 1, 2020 through December 31,2020. In accordance with guidance from HHS, this amount is considered Period 2 funding. Suchamounts were recognized in the fiscal year ended June 30, 2021 as grant revenue in the yearexpensed in the financial statements.The Schedule includes $32,521 received from HHS between January 1, 2021 through June 30,2021. In accordance with guidance from HHS, this amount is considered Period 3 funding. Suchamounts were recognized in the fiscal year ended June 30, 2022 as grant revenue in the yearexpensed in the financial statements.Provider Relief Funds of $20,775 related to Period 2 were included on the 2021 Schedule ofExpenditures of Federal Awards ("SEFA"). Per guidance released by HHS in July 2021, recipientsof Provider Relief Funds for Period 2 with a June year-end should have included those amounts inthe 2022 SEFA only.

Finding Details

B. Findings - Financial Statement Audit 2022-001 - Revenue Recognition Statement of Condition: During the year end closing process, HCPSS recorded inaccurate adjustments to revenue in the Restricted Programs Fund. Criteria: Internal controls over financial reporting should exist to ensure that material misstatements are prevented or detected and corrected by management in a timely manner. Cause: Management did not have a sufficient review process in place over the adjustments related to revenue in the Restricted Programs Fund. Effect: Management may produce interim or annual financial statements that are materially misstated. Recommendation: We have the following recommendation related to the internal control processes that impact revenue recognition in the Restricted Programs Fund: ? We recommend that HCPSS provide proper oversight and review of the recording and approval processes related to revenue recognition. HCPSS needs to ensure that they have multiple levels of resources that have a sufficient understanding of the laws, agreements, and accounting principles pertinent to the grants and similar programs associated with the fund. View of Responsible Officials Pertaining to 2022-001 HCPSS is in the process of reengineering its internal processes for the accounting of its Restricted Programs Fund. This includes two additional hires - a grant budget analyst and grant accountant - who will support the Restricted Programs Fund in providing enhanced oversight and compliance with generally accepted accounting principles throughout the year.
B. Findings - Financial Statement Audit 2022-001 - Revenue Recognition Statement of Condition: During the year end closing process, HCPSS recorded inaccurate adjustments to revenue in the Restricted Programs Fund. Criteria: Internal controls over financial reporting should exist to ensure that material misstatements are prevented or detected and corrected by management in a timely manner. Cause: Management did not have a sufficient review process in place over the adjustments related to revenue in the Restricted Programs Fund. Effect: Management may produce interim or annual financial statements that are materially misstated. Recommendation: We have the following recommendation related to the internal control processes that impact revenue recognition in the Restricted Programs Fund: ? We recommend that HCPSS provide proper oversight and review of the recording and approval processes related to revenue recognition. HCPSS needs to ensure that they have multiple levels of resources that have a sufficient understanding of the laws, agreements, and accounting principles pertinent to the grants and similar programs associated with the fund. View of Responsible Officials Pertaining to 2022-001 HCPSS is in the process of reengineering its internal processes for the accounting of its Restricted Programs Fund. This includes two additional hires - a grant budget analyst and grant accountant - who will support the Restricted Programs Fund in providing enhanced oversight and compliance with generally accepted accounting principles throughout the year.