Audit 326468

FY End
2024-06-30
Total Expended
$74.73M
Findings
2
Programs
16
Organization: School District, City of Flint (MI)
Year: 2024 Accepted: 2024-10-29

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
504039 2024-003 - - N
1080481 2024-003 - - N

Contacts

Name Title Type
MNNJZH49BK96 Chanda Cleaves Auditee
8107676380 Cynthia Scott Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the schedule of federal expenditures are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, where in certain types of expenditures are not allowable or are limited as a reimbursement. Cash received is recorded on the cash basis. Revenues are recognized when qualifying expenditures have been incurred and all grant requirements have been met. Expenditures on this schedule reconcile with amounts reported in the financial statements and the financial reports submitted to the Michigan Department of Education. Management has utilized the MDE NexSys Grant Auditor Report (GAR) in preparing the Schedule of Expenditures of Federal Awards. The amounts reported on the Recipient Entitlement Balance Report, or PAL Report, agree with this schedule for USDA donated food commodities and are reported in the Cash Receipts column. Expenditures include spoilage or pilferage. De Minimis Rate Used: N Rate Explanation: Flint Community Schools did not elect to use a flat de minimis rate of 10% of modified total direct costs for their indirect cost rate. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of Flint Community Schools under programs of the federal government for the year ended June 30, 2024. 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, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Flint Community Schools, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Flint Community Schools.
Title: Reconciliation to the Michigan Department of Education (MDE) NexSys Grant Section Auditors Report (GAR): Accounting Policies: Expenditures reported on the schedule of federal expenditures are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, where in certain types of expenditures are not allowable or are limited as a reimbursement. Cash received is recorded on the cash basis. Revenues are recognized when qualifying expenditures have been incurred and all grant requirements have been met. Expenditures on this schedule reconcile with amounts reported in the financial statements and the financial reports submitted to the Michigan Department of Education. Management has utilized the MDE NexSys Grant Auditor Report (GAR) in preparing the Schedule of Expenditures of Federal Awards. The amounts reported on the Recipient Entitlement Balance Report, or PAL Report, agree with this schedule for USDA donated food commodities and are reported in the Cash Receipts column. Expenditures include spoilage or pilferage. De Minimis Rate Used: N Rate Explanation: Flint Community Schools did not elect to use a flat de minimis rate of 10% of modified total direct costs for their indirect cost rate. District total current payments per MDE NexSys GAR $68,528,355 Addition of receipts not passed through the Michigan Department of Education and not included in the NexSys System: 55030 Entitlement Commodities 162,802 55030 Bonus Commodities 725 Special Education Cluster 1,774,588 Title I Technical Assistance Grant 54,181 Title I Regional Assistance Grant 16,615 Title III Part A Immigrant Students 8,964 Medicaid Outreach AOP 2023-2024 26,516 Medicaid Outreach AOP 2022-2023 Plus payments out of NexSys in the prior year, but not received by the District until after June 30, 2023: School Breakfast Expansion 10,000 Less payments out of NexSys prior to year end, but not received by the District until after June 30, 2024: Fresh Fruits and Vegetables Program (22,425) Plus a Recapture in NexSys in the current year related to a prior year grant: Title II Part A 210520 2020-2021 79,041 Plus Immaterial Rouding 1 Total Current Year Receipts per the Schedule of Expenditures of Federal Awards $70,639,363
Title: Reconciliation to Financial Statements: Accounting Policies: Expenditures reported on the schedule of federal expenditures are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, where in certain types of expenditures are not allowable or are limited as a reimbursement. Cash received is recorded on the cash basis. Revenues are recognized when qualifying expenditures have been incurred and all grant requirements have been met. Expenditures on this schedule reconcile with amounts reported in the financial statements and the financial reports submitted to the Michigan Department of Education. Management has utilized the MDE NexSys Grant Auditor Report (GAR) in preparing the Schedule of Expenditures of Federal Awards. The amounts reported on the Recipient Entitlement Balance Report, or PAL Report, agree with this schedule for USDA donated food commodities and are reported in the Cash Receipts column. Expenditures include spoilage or pilferage. De Minimis Rate Used: N Rate Explanation: Flint Community Schools did not elect to use a flat de minimis rate of 10% of modified total direct costs for their indirect cost rate. General Fund $71,840,348 Special Revenue Fund: Lunch Fund 2,857,523 Federal Revenue Presented in the Financial Statements 74,697,871 Federal revenue for which the School District is considered a vendor or beneficiary rather than a subrecipient: NJROTC Program Grant JROTC221S (43,697) Less a Recapture in NexSys in the current year related to a prior year grant: Title II Part A 210520 2020-2021 79,041 Federal Revenue on the Schedule of Expenditures of Federal Awards $74,733,215

Finding Details

EFS Section 1 - Elementary and Secondary Education - Davis-Bacon Prevailing Wage Requirements ALN 84.425U - ESSER III - Grant # 213713 2122 - Grant Ending September 30, 2024 Condition and Criteria: The Federal Compliance Supplement requires that recipients and subrecipients that use ESF funds for minor remodeling, renovation or construction contracts, that are over $2,000, and use laborers and mechanics, must meet Davis-Bacon prevailing wage requirements. To ensure this, the District is required to review the weekly certified payrolls, ensuring that the proper prevailing wages were paid. During the audit, it was noted that certified payrolls were not consistently being reviewed, which allowed for one contractor to not pay the correct rate to their employees. We would like to note that once this situation was uncovered, the contractor did in fact correct the prior pays so that all employees were paid the appropriate prevailing wages. Effect: The District was out of compliance in regards to the Davis-Bacon rules until the wages were subsequently corrected by the contractor.Cause: The Construction Manager was not consistently reviewing weekly certified payrolls, as required, throughout the course of the construction to ensure that proper prevailing wages were consistently paid. Context: While the District was out of compliance initially for not ensuring that the correct prevailing wages were paid, this situation was fully corrected prior to the audit by the contractor. Questioned Costs: $0. While the District was out of compliance initially for not ensuring that the correct prevailing wages were paid, this situation was fully corrected prior to the audit by the contractor. Auditors' Recommendation: We recommend the Contract Manager begin reviewing certified payrolls weekly for all on-going projects for which ESF funds are being utilized. Views of Responsible Officials and Planned Corrective Actions: The District understands the issue and will work with their Construction Manager to ensure that certified payrolls are reviewed weekly moving forward. Please see the attached Corrective Action Plan prepared by the District.
EFS Section 1 - Elementary and Secondary Education - Davis-Bacon Prevailing Wage Requirements ALN 84.425U - ESSER III - Grant # 213713 2122 - Grant Ending September 30, 2024 Condition and Criteria: The Federal Compliance Supplement requires that recipients and subrecipients that use ESF funds for minor remodeling, renovation or construction contracts, that are over $2,000, and use laborers and mechanics, must meet Davis-Bacon prevailing wage requirements. To ensure this, the District is required to review the weekly certified payrolls, ensuring that the proper prevailing wages were paid. During the audit, it was noted that certified payrolls were not consistently being reviewed, which allowed for one contractor to not pay the correct rate to their employees. We would like to note that once this situation was uncovered, the contractor did in fact correct the prior pays so that all employees were paid the appropriate prevailing wages. Effect: The District was out of compliance in regards to the Davis-Bacon rules until the wages were subsequently corrected by the contractor.Cause: The Construction Manager was not consistently reviewing weekly certified payrolls, as required, throughout the course of the construction to ensure that proper prevailing wages were consistently paid. Context: While the District was out of compliance initially for not ensuring that the correct prevailing wages were paid, this situation was fully corrected prior to the audit by the contractor. Questioned Costs: $0. While the District was out of compliance initially for not ensuring that the correct prevailing wages were paid, this situation was fully corrected prior to the audit by the contractor. Auditors' Recommendation: We recommend the Contract Manager begin reviewing certified payrolls weekly for all on-going projects for which ESF funds are being utilized. Views of Responsible Officials and Planned Corrective Actions: The District understands the issue and will work with their Construction Manager to ensure that certified payrolls are reviewed weekly moving forward. Please see the attached Corrective Action Plan prepared by the District.