Audit 328698

Finding 2024-001 Identification of the Federal Program U.S. Department of Education: AL 84.425U ARP ESSER – American Rescue Plan - Elementary and Secondary School Emergency Relief Fund Passed through New York State Education Department – applicable to all above grant funds passed through as shown on the Schedule of Federal Expenditures Compliance Requirement: Reporting Criteria The Charter School is required to submit an annual report to New York State Education Department - the Education Stabilization Fund Annual Reporting - to provide required information which is then utilized by NYSED to complete the U.S. Department of Education ESF – ESSER Recipient Data Collection Form. A critical component of this report is the accurate reporting of the Charter School’s number of positions supported with ESSER funds and expenditures by ESSER subgrant and accounting object for the period from July 1, 2022, to June 30, 2023, and was required to be filed by February 15, 2024. In accordance with the instructions for completing the form, expenditures are defined as the reimbursement payments received by the Charter School during the reporting period. Statement of condition and cause During our audit, we noted the Charter School inaccurately reported expenditures and number of positions supported on the Education Stabilization Fund Annual Reporting for period from July 1, 2022 to June 30, 2023 as a result of utilizing the accrual basis of accounting to determine expenditures, rather than the amount of reimbursement payments received. Management’s internal controls over compliance with respect to this report did not allow management to detect and correct the error on a timely basis. Effect As a result of utilizing the incorrect reporting basis, the information reported to the pass-through entity (NYSED) on the Education Stabilization Fund Annual Reporting was incorrect. This could lead to errors in the amounts ultimately reported to the U.S. Department of Education by NYSED. Questioned Costs N/A Repeat Finding No Recommendation We recommend the Charter School review the NYSED Grants Finance reports via the NYSED website to determine the reimbursement payments received during the applicable reporting period and agree the amounts per the website to the total amounts shown in the Education Stabilization Fund Annual Reporting. This will ensure that the information is shown in accordance with the instructions for the NYSED report and the related U.S. Department of Education requirements. Management response Management acknowledges that the reporting method utilized for the Annual Education Stabilization ESSER Fund report should have been completed on a cash basis which is based on the reimbursement of expenses received during the fiscal year. Discovery Charter School will take the necessary steps to comply with the cash basis reporting method on all future Annual Education Stabilization ESSER Funds reports.

Finding 2024-001 Identification of the Federal Program U.S. Department of Education: AL 84.425U ARP ESSER – American Rescue Plan - Elementary and Secondary School Emergency Relief Fund Passed through New York State Education Department – applicable to all above grant funds passed through as shown on the Schedule of Federal Expenditures Compliance Requirement: Reporting Criteria The Charter School is required to submit an annual report to New York State Education Department - the Education Stabilization Fund Annual Reporting - to provide required information which is then utilized by NYSED to complete the U.S. Department of Education ESF – ESSER Recipient Data Collection Form. A critical component of this report is the accurate reporting of the Charter School’s number of positions supported with ESSER funds and expenditures by ESSER subgrant and accounting object for the period from July 1, 2022, to June 30, 2023, and was required to be filed by February 15, 2024. In accordance with the instructions for completing the form, expenditures are defined as the reimbursement payments received by the Charter School during the reporting period. Statement of condition and cause During our audit, we noted the Charter School inaccurately reported expenditures and number of positions supported on the Education Stabilization Fund Annual Reporting for period from July 1, 2022 to June 30, 2023 as a result of utilizing the accrual basis of accounting to determine expenditures, rather than the amount of reimbursement payments received. Management’s internal controls over compliance with respect to this report did not allow management to detect and correct the error on a timely basis. Effect As a result of utilizing the incorrect reporting basis, the information reported to the pass-through entity (NYSED) on the Education Stabilization Fund Annual Reporting was incorrect. This could lead to errors in the amounts ultimately reported to the U.S. Department of Education by NYSED. Questioned Costs N/A Repeat Finding No Recommendation We recommend the Charter School review the NYSED Grants Finance reports via the NYSED website to determine the reimbursement payments received during the applicable reporting period and agree the amounts per the website to the total amounts shown in the Education Stabilization Fund Annual Reporting. This will ensure that the information is shown in accordance with the instructions for the NYSED report and the related U.S. Department of Education requirements. Management response Management acknowledges that the reporting method utilized for the Annual Education Stabilization ESSER Fund report should have been completed on a cash basis which is based on the reimbursement of expenses received during the fiscal year. Discovery Charter School will take the necessary steps to comply with the cash basis reporting method on all future Annual Education Stabilization ESSER Funds reports.