FAC Explorer

Audit 330250

FY End
2024-06-30
Total Expended
$5.08M
Findings
6
Programs
10
Organization: Chippewa Hills School District (MI)
Year: 2024 Accepted: 2024-12-01
Auditor: Roslund Prestage & Company PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
512474 2024-004 Material Weakness - A
512475 2024-005 Material Weakness Yes A
512476 2024-006 Significant Deficiency - N
1088916 2024-004 Material Weakness - A
1088917 2024-005 Material Weakness Yes A
1088918 2024-006 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
84.010 Title I Grants to Local Educational Agencies $614,414 Yes 1
10.553 School Breakfast Program $259,040 - 0
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) $86,666 - 0
10.559 Summer Food Service Program for Children $57,811 - 0
84.424 Student Support and Academic Enrichment Program $51,049 - 0
10.555 National School Lunch Program $26,680 - 0
84.060 Indian Education Grants to Local Educational Agencies $24,481 - 0
93.778 Medical Assistance Program $11,876 - 0
10.582 Fresh Fruit and Vegetable Program $1,402 - 0
84.425 Education Stabilization Fund $1,013 Yes 0

Contacts

Name Title Type
XD6NWHLC63N8 Michelle Newman Auditee
9899672000 Christina Schaub Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: The District has elected to not use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of Chippewa Hills School District (the District) 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 (CFR) 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 the District, it is not intended to and does not present its financial position or changes in net position of the District. Management has utilized the Nexsys cash management system and the Grant Auditor Report in preparing the Schedule of Expenditures of Federal Awards.
Title: ADJUSTMENTS Accounting Policies: Expenditures reported on the schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: The District has elected to not use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The adjustment listed in the schedule of expenditures of federal awards represent the following: • $2,576 – revenue received in the current year for prior year expenditures that were not included on the prior year schedule of expenditures of federal awards.
Title: RECONCILIATION WITH AUDITED FINANCIAL STATEMENTS Accounting Policies: Expenditures reported on the schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: The District has elected to not use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Federal expenditures are reported as revenues in the following funds in the financial statements of the District: Description Amount General Fund 5,874,487 Food Service Fund 1,567,960 Little Warriors Fund 30,930 Total federal revenues per financial statements 7,473,377Less: Federal revenue adjustments (2,576) Less: Federal revenues not subject to single audit act (30,930) Less: Prior year unavailable federal revenue (2,362,697) Federal revenues subject to single audit act 5,077,174

Finding Details

Finding 2024-004
Finding 2024-004 – ACTIVITIES ALLOWED OR UNALLOWED and ALLOWABLE COSTS/COST PRINCIPLES Type: Material weakness in internal control over compliance / Noncompliance Program: Title I (ALN 84.010) Condition: Expenditures charged to the grant were not authorized in the grant budget. Criteria: As detailed by 2 CFR 200.402, “the total cost of a Federal award is the sum of the allowable direct and allocable indirect costs less any applicable credits”. Cause: Management’s misunderstanding of costs allowed under this grant. Effect: Unallowed costs were charged to the grant based on comparison to MDE approved budgets. Consequently, reimbursements (funding sources) may be overstated. Context: Amounts expended for this grant by function code and/or object code were over the amounts allowed in the MDE approved budget by $74,502. Recommendation: We recommend that the District review all grant agreements to gain a thorough understanding of allowable costs and then establish internal controls to assure that charges to the grant do not exceed budget. Management’s Resp: Management is in agreement with this recommendation.
Finding 2024-005
Finding 2024-005 – ACTIVITIES ALLOWED OR UNALLOWED and ALLOWABLE COSTS/COST PRINCIPLES (repeat comment) Type: Material weakness in internal control over compliance / Noncompliance Program: COVID 19 Education Stabilization Fund (ALN 84.425U – ESSER III Formula) Condition: Expenditures charged to the grant were not authorized in the grant budget. Criteria: As detailed by 2 CFR 200.402, “the total cost of a Federal award is the sum of the allowable direct and allocable indirect costs less any applicable credits”. Cause: Management’s misunderstanding of costs allowed under this grant. Effect: Unallowed costs were charged to the grant based on comparison to MDE approved budgets. Consequently, reimbursements (funding sources) may be overstated. Context: Amounts expended in the current year for this grant by function code and/or object code were over the amounts allowed in the MDE approved budget by $377,467. Also, supplies and equipment charged to the grant were not approved in the grant. Recommendation: We recommend that the District review all grant agreements to gain a thorough understanding of allowable costs and then establish internal controls to assure that 1) charges to the grant do not exceed budget, and 2) only allowable costs are charged to the grant. Management’s Resp: Management is in agreement with this recommendation.
Finding 2024-006
Finding 2024-006 – SPECIAL TESTS Type: Significant Deficiency in internal control over compliance / Noncompliance – Prevailing Wage Program: COVID 19 - Education Stabilization Fund (ALN 84.425U – ESSER III Formula) Condition: The District was unable to provide evidence that prevailing wages were paid for the two construction projects charged to the grant. Criteria: Per 2 CFR 200, Appendix II(D), contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. Cause: Management oversight. Effect: Wages paid for construction projects may have been paid below the prevailing wage requirements. Recommendation: We recommend that the District review their process over awarding contracts paid with federal funds to ensure that prevailing wage requirements are included in the contract language and obtain documentation that prevailing wages were paid. Management’s Resp: We are in agreement with this finding.
Finding 2024-004
Finding 2024-004 – ACTIVITIES ALLOWED OR UNALLOWED and ALLOWABLE COSTS/COST PRINCIPLES Type: Material weakness in internal control over compliance / Noncompliance Program: Title I (ALN 84.010) Condition: Expenditures charged to the grant were not authorized in the grant budget. Criteria: As detailed by 2 CFR 200.402, “the total cost of a Federal award is the sum of the allowable direct and allocable indirect costs less any applicable credits”. Cause: Management’s misunderstanding of costs allowed under this grant. Effect: Unallowed costs were charged to the grant based on comparison to MDE approved budgets. Consequently, reimbursements (funding sources) may be overstated. Context: Amounts expended for this grant by function code and/or object code were over the amounts allowed in the MDE approved budget by $74,502. Recommendation: We recommend that the District review all grant agreements to gain a thorough understanding of allowable costs and then establish internal controls to assure that charges to the grant do not exceed budget. Management’s Resp: Management is in agreement with this recommendation.
Finding 2024-005
Finding 2024-005 – ACTIVITIES ALLOWED OR UNALLOWED and ALLOWABLE COSTS/COST PRINCIPLES (repeat comment) Type: Material weakness in internal control over compliance / Noncompliance Program: COVID 19 Education Stabilization Fund (ALN 84.425U – ESSER III Formula) Condition: Expenditures charged to the grant were not authorized in the grant budget. Criteria: As detailed by 2 CFR 200.402, “the total cost of a Federal award is the sum of the allowable direct and allocable indirect costs less any applicable credits”. Cause: Management’s misunderstanding of costs allowed under this grant. Effect: Unallowed costs were charged to the grant based on comparison to MDE approved budgets. Consequently, reimbursements (funding sources) may be overstated. Context: Amounts expended in the current year for this grant by function code and/or object code were over the amounts allowed in the MDE approved budget by $377,467. Also, supplies and equipment charged to the grant were not approved in the grant. Recommendation: We recommend that the District review all grant agreements to gain a thorough understanding of allowable costs and then establish internal controls to assure that 1) charges to the grant do not exceed budget, and 2) only allowable costs are charged to the grant. Management’s Resp: Management is in agreement with this recommendation.
Finding 2024-006
Finding 2024-006 – SPECIAL TESTS Type: Significant Deficiency in internal control over compliance / Noncompliance – Prevailing Wage Program: COVID 19 - Education Stabilization Fund (ALN 84.425U – ESSER III Formula) Condition: The District was unable to provide evidence that prevailing wages were paid for the two construction projects charged to the grant. Criteria: Per 2 CFR 200, Appendix II(D), contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. Cause: Management oversight. Effect: Wages paid for construction projects may have been paid below the prevailing wage requirements. Recommendation: We recommend that the District review their process over awarding contracts paid with federal funds to ensure that prevailing wage requirements are included in the contract language and obtain documentation that prevailing wages were paid. Management’s Resp: We are in agreement with this finding.