Audit 32166

2022-001 Internal Control over Compliance and Compliance with Reporting Information on the Major Federal Program: U.S. Department of Education Name of Program: Credit Enhancement for Charter School Facilities Assistance Listing Number: 84.354 Grant Award Number: U354A170013 Grant Award Period: September 27, 2017 until the Federal funds and earnings on those funds have been expended for the grant purposes or until financing facilitated by the grant has been retired, whichever is later. Criteria or Specific Requirement: In accordance with ?200.303(a), Internal Controls, a non-federal entity 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. ?200.328, Monitoring and Reporting Program Performance, documents that the non-federal entity is required to submit performance reports at the interval required by the federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Intervals must be not less frequent than annually, nor more frequent than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the federal award or could significantly affect program outcomes. The reports submitted to the federal awarding agency should be accurate. The grant agreement section 5 requires the grantee to submit an annual performance report (with such information and at such time as the Secretary may require) and audited financial statements to the Department of Education (ED) for each fiscal year that the grantee?s obligation to the Federal Government remains in effect. (The grantee?s commitment continues for the duration of time that reserve funds and earnings are used to achieve the specified grant purposes.). Condition: During our testing over reporting requirements, we noted that the required annual performance report (APR) as prepared and submitted in accordance with the terms of the award did not reconcile to underlying accumulated records. Cause: The Organization has documented monitoring policies and procedures; however, as identified above, the implementation of these policies and procedures did not detect or prevent the instance of noncompliance with the reporting criteria contained within the Uniform Guidance. Effect: While there are no known questioned costs that resulted from the condition identified above, the improper implementation of established internal control policies and procedures can lead to noncompliance with federal statutes, regulations, and the provisions of grant agreements which could ultimately lead to disallowed costs or reserve funds being required to be returned for the major federal program. Questioned Costs: There are no questioned costs as the item outlined above is an internal control related matter related to compliance requirements not met in accordance with the grant agreement. Context: This is a condition identified during our testing over the reporting requirements. Any samples selected as part of the overall SEFA review and testing of reporting were performed using a non-statistical method. Repeat Finding: This is a repeat finding of 2021-002. Recommendation: In order to facilitate accurate and timely reporting and compliance with the terms and conditions of federal awards, we recommend management ensure all reporting requirements are documented, maintained and updated as necessary. Views of Responsible Officials: Management agrees with the finding. Management has identified the underlying calculation causing the reporting error and will use the proper calculation going forward as well as implementing a second review to ensure that the summarized data agrees to the underlying data.

2022-001 Internal Control over Compliance and Compliance with Reporting Information on the Major Federal Program: U.S. Department of Education Name of Program: Credit Enhancement for Charter School Facilities Assistance Listing Number: 84.354 Grant Award Number: U354A170013 Grant Award Period: September 27, 2017 until the Federal funds and earnings on those funds have been expended for the grant purposes or until financing facilitated by the grant has been retired, whichever is later. Criteria or Specific Requirement: In accordance with ?200.303(a), Internal Controls, a non-federal entity 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. ?200.328, Monitoring and Reporting Program Performance, documents that the non-federal entity is required to submit performance reports at the interval required by the federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Intervals must be not less frequent than annually, nor more frequent than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the federal award or could significantly affect program outcomes. The reports submitted to the federal awarding agency should be accurate. The grant agreement section 5 requires the grantee to submit an annual performance report (with such information and at such time as the Secretary may require) and audited financial statements to the Department of Education (ED) for each fiscal year that the grantee?s obligation to the Federal Government remains in effect. (The grantee?s commitment continues for the duration of time that reserve funds and earnings are used to achieve the specified grant purposes.). Condition: During our testing over reporting requirements, we noted that the required annual performance report (APR) as prepared and submitted in accordance with the terms of the award did not reconcile to underlying accumulated records. Cause: The Organization has documented monitoring policies and procedures; however, as identified above, the implementation of these policies and procedures did not detect or prevent the instance of noncompliance with the reporting criteria contained within the Uniform Guidance. Effect: While there are no known questioned costs that resulted from the condition identified above, the improper implementation of established internal control policies and procedures can lead to noncompliance with federal statutes, regulations, and the provisions of grant agreements which could ultimately lead to disallowed costs or reserve funds being required to be returned for the major federal program. Questioned Costs: There are no questioned costs as the item outlined above is an internal control related matter related to compliance requirements not met in accordance with the grant agreement. Context: This is a condition identified during our testing over the reporting requirements. Any samples selected as part of the overall SEFA review and testing of reporting were performed using a non-statistical method. Repeat Finding: This is a repeat finding of 2021-002. Recommendation: In order to facilitate accurate and timely reporting and compliance with the terms and conditions of federal awards, we recommend management ensure all reporting requirements are documented, maintained and updated as necessary. Views of Responsible Officials: Management agrees with the finding. Management has identified the underlying calculation causing the reporting error and will use the proper calculation going forward as well as implementing a second review to ensure that the summarized data agrees to the underlying data.