FAC Explorer

Audit 329556

FY End
2024-06-30
Total Expended
$425.37M
Findings
2
Programs
25
Organization: Detroit Public Schools Community District (MI)
Year: 2024 Accepted: 2024-11-22
Auditor: Plante & Moran PLLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
509796 2024-002 Material Weakness - B
1086238 2024-002 Material Weakness - B

Programs

ALN Program Spent Major Findings
10.555 National School Lunch Program - Cash Assistance $22.15M - 0
84.027 Special Education Grants to States $15.16M Yes 0
10.553 School Breakfast Program $10.20M - 0
84.424 Student Support and Academic Enrichment Program $8.25M - 0
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) $7.54M Yes 0
84.048 Career and Technical Education -- Basic Grants to States $4.02M - 0
93.323 Covid-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $3.05M Yes 1
84.425 Covid-19 - Education Stabilization Fund $2.53M Yes 0
10.555 National School Lunch Program - Commodities $2.41M - 0
10.582 Fresh Fruit and Vegetable Program $1.56M - 0
10.555 National School Lunch Program $1.28M - 0
10.185 Local Food for Schools Cooperative Agreement Program $806,682 - 0
93.778 Medical Assistance Program $793,608 - 0
84.371 Comprehensive Literacy Development $579,977 - 0
97.036 Covid-19 - Disaster Grants - Public Assistance (presidentially Declared Disasters) $369,793 - 0
84.002 Adult Education - Basic Grants to States $366,180 - 0
84.173 Special Education Preschool Grants $343,203 Yes 0
10.559 Summer Food Service Program for Children $323,145 - 0
10.558 Child and Adult Care Food Program $80,451 - 0
10.579 Child Nutrition Discretionary Grants Limited Availability $65,756 - 0
16.710 Public Safety Partnership and Community Policing Grants $51,118 - 0
84.010 Title I Grants to Local Educational Agencies $39,756 - 0
10.575 Farm to School Grant Program $28,467 - 0
84.181 Special Education-Grants for Infants and Families $8,777 - 0
84.365 English Language Acquisition State Grants $2,116 - 0

Contacts

Name Title Type
G5RDP1CNJMW4 Hisan Richardson Auditee
3138737352 Amanda Ward Auditor
No contacts on file

Notes to SEFA

Title: Grant Auditor Report Accounting Policies: The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal grant activity of Detroit Public Schools Community District (the “School District”) under programs of the federal government for the year ended June 30, 2024. The information in the 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 (the “Uniform Guidance”). Because the Schedule presents only a selected portion of the operations of the School District, it is not intended to and does not present the financial position, changes in net position, or cash flows of the School District. Expenditures reported in the Schedule are reported on the same basis of accounting as the basic financial statements. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The pass through entity identifying numbers are presented where available. The School District has elected not to use the 10 percent de minimis indirect cost rate to recover indirect costs, as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The School District has elected not to use the 10 percent de minimis indirect cost rate to recover indirect costs, as allowed under the Uniform Guidance. Management has utilized the Michigan Department of Education NexSys Grant Auditor Report (GAR) in preparing the schedule of expenditures of federal awards. Differences, if any, between the GAR and the schedule of expenditures of federal awards relate to the timing of payments and the fiscal year to which the payments relate.
Title: Noncash Assistance Accounting Policies: The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal grant activity of Detroit Public Schools Community District (the “School District”) under programs of the federal government for the year ended June 30, 2024. The information in the 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 (the “Uniform Guidance”). Because the Schedule presents only a selected portion of the operations of the School District, it is not intended to and does not present the financial position, changes in net position, or cash flows of the School District. Expenditures reported in the Schedule are reported on the same basis of accounting as the basic financial statements. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The pass through entity identifying numbers are presented where available. The School District has elected not to use the 10 percent de minimis indirect cost rate to recover indirect costs, as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The School District has elected not to use the 10 percent de minimis indirect cost rate to recover indirect costs, as allowed under the Uniform Guidance. The value of the noncash assistance received was determined in accordance with the provisions of the Uniform Guidance.
Title: Adjustments and Transfers Accounting Policies: The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal grant activity of Detroit Public Schools Community District (the “School District”) under programs of the federal government for the year ended June 30, 2024. The information in the 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 (the “Uniform Guidance”). Because the Schedule presents only a selected portion of the operations of the School District, it is not intended to and does not present the financial position, changes in net position, or cash flows of the School District. Expenditures reported in the Schedule are reported on the same basis of accounting as the basic financial statements. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The pass through entity identifying numbers are presented where available. The School District has elected not to use the 10 percent de minimis indirect cost rate to recover indirect costs, as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The School District has elected not to use the 10 percent de minimis indirect cost rate to recover indirect costs, as allowed under the Uniform Guidance. During the year ended June 30, 2024, the School District transferred $37,409 of awarded Title II, Part A (ALN 84.367) to Title IV, Part A (ALN 84.424). The 23 24 Title IV, Part A payments received and expenditures presented on the Schedule include $37,409 of amounts related to the transfer from Title II, Part A funds awarded. The transferred award allocations are presented within the adjustments and transfers column of the Schedule. The transfers were approved by the Michigan Department of Education (MDE). During the year ended June 30, 2024, there were adjustments of the following: • $23,374,924 to account for federal revenue in fiscal year 2024 that relates to federal expenditures incurred in a previous fiscal year, not previously reported on the SEFA • $4,425,245 to account for federal expenditures incurred in the prior fiscal year that were not previously reported on the SEFA. These adjustments relate to the following ALNs: 84.010, Title I Grants to Local Educational Agencies; 21.027, Coronavirus State and Local Fiscal Recovery Funds; and 93.323, Epidemiology and Laboratory Capacity for Infectious Diseases • $361,185 to close out grants

Finding Details

Finding 2024-002
Assistance Listing Number, Federal Agency, and Program Name - 93.323, U.S. Department of Health and Human Services, COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 2024 Pass through Entity - Wayne County Regional Educational Service Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.300(a), nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align with the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.403(g), costs must be adequately documented. Condition - The School District's controls did not prevent, or detect and correct in a timely manner, costs charged to the grant in excess of the related invoices. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A - Refer to context below. Context - In a sample of 13 non payroll related transactions, we identified 3 transactions where the costs charged to the grant exceeded the related invoices. The School District used a manual allocation process through a manual journal entry to charge expenses to the grant that resulted in the grant being charged $48,447 in excess of the supporting invoices. As of June 30, 2024, the School District had not yet requested reimbursement for the excess costs charged; the request was made and payment was received subsequent to year end. Upon identification of the error, the School District posted a manual journal entry to remove the duplicate costs of $48,447 from the grant fund and reduced the SEFA by this amount for the year ended June 30, 2024. The School District followed the guidance of the pass through entity provided subsequent to year end. Cause and Effect - Controls in place did not prevent, or detect and correct in a timely manner, an instance of noncompliance. The controls in place to verify that the manual adjusting journal entry was complete and accurate were not effective. As a result, the initial SEFA provided to the auditors was overstated by $48,447. The SEFA for the year ended June 30, 2024 was corrected. Recommendation - We recommend that the School District review its processes and controls to ensure the preparation and review of journal entries to charge costs to grant funds include a review for duplicate expenses. Views of Responsible Officials and Corrective Action Plan - The Grant Accounting team will develop a standard operating procedure on review and approval of journal entries. The Grant Account Team will provide training to Grant Compliance staff members on the defined process. Grant Compliance Senior Director and Assistant Director will be responsible for ensuring journal requests are submitted following the outlined operating procedure. Grant Accounting staff members will review submitted materials to ensure no invoice is overcharged and then process journal request.
Finding 2024-002
Assistance Listing Number, Federal Agency, and Program Name - 93.323, U.S. Department of Health and Human Services, COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 2024 Pass through Entity - Wayne County Regional Educational Service Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.300(a), nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align with the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.403(g), costs must be adequately documented. Condition - The School District's controls did not prevent, or detect and correct in a timely manner, costs charged to the grant in excess of the related invoices. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A - Refer to context below. Context - In a sample of 13 non payroll related transactions, we identified 3 transactions where the costs charged to the grant exceeded the related invoices. The School District used a manual allocation process through a manual journal entry to charge expenses to the grant that resulted in the grant being charged $48,447 in excess of the supporting invoices. As of June 30, 2024, the School District had not yet requested reimbursement for the excess costs charged; the request was made and payment was received subsequent to year end. Upon identification of the error, the School District posted a manual journal entry to remove the duplicate costs of $48,447 from the grant fund and reduced the SEFA by this amount for the year ended June 30, 2024. The School District followed the guidance of the pass through entity provided subsequent to year end. Cause and Effect - Controls in place did not prevent, or detect and correct in a timely manner, an instance of noncompliance. The controls in place to verify that the manual adjusting journal entry was complete and accurate were not effective. As a result, the initial SEFA provided to the auditors was overstated by $48,447. The SEFA for the year ended June 30, 2024 was corrected. Recommendation - We recommend that the School District review its processes and controls to ensure the preparation and review of journal entries to charge costs to grant funds include a review for duplicate expenses. Views of Responsible Officials and Corrective Action Plan - The Grant Accounting team will develop a standard operating procedure on review and approval of journal entries. The Grant Account Team will provide training to Grant Compliance staff members on the defined process. Grant Compliance Senior Director and Assistant Director will be responsible for ensuring journal requests are submitted following the outlined operating procedure. Grant Accounting staff members will review submitted materials to ensure no invoice is overcharged and then process journal request.