Audit 352599

1. Schedule of Expenditures of Federal Awards Finding Number: 2023-006 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 CFR 200.403(b) which requires, in part, except where otherwise authorized by statute, costs must conform to any limitations or exclusions set forth in 2 CFR Part 200 Subpart E or in the Federal award as to types or amount of cost items in order to be allowable under Federal awards. Further, Section 18003(d) of the Coronavirus Aid, Relief, and Economic Security Act provides a list of allowable ESSER I activities. Section 313(3) of the Coronavirus Response and Relief Supplemental Appropriations Act, 2021, includes additional allowable uses of funds under ESSER II. The District was awarded $405,474 of COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER I) grant funding (AL #84.425D) in 2021 and $1,448,106 in COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER II) grant funding (AL #84.425D) in 2022 and 2023 by the Ohio Department of Education and Workforce. The District maintained Education Stabilization Fund (AL# 84.425) activity in a separate fund to allow for accountability of federal expenditures. However, the District posted expenditures to this fund in excess of available Education Stabilization Fund funding of $238,050 pertaining to ESSER II and $847 pertaining to ESSER I. As such, the internal controls relating to monitoring the fund and transactions to ensure reasonable assurance that the charges were accurate were not operating effectively. The lack of effective controls resulted in overspending of the grant and overstatement of expenditures on the Schedule of Expenditures of Federal Awards. Noncompliance with grant requirements could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. District management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements. The District should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help ensure the District is in compliance with grant requirements and major federal programs are accurately identified for audit. The District spending more grant funding than was awarded also resulted in adjustments to the financial statements to move the expenditures in excess of the grant award to the General fund as reported in Finding 2023-005. See Finding 2023-005 in Section 2 above. The District spending more grant funding than was awarded also contributed to errors in the Final Expenditure reports submitted to the grantor. See Finding 2023-010 below.

2. Prevailing Wage Finding Number: 2023-007 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? Yes Prior Audit Finding Number: 2022-002 Material Weakness and Noncompliance 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 C.F.R. § 200 Paragraph D which states: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provision Applicable to Contract Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland "Anti-Kickback" Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, "Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States"). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 2 CFR § 176.190 Award term - Wage rate requirements under Section 1606 of the Recovery Act indicates when issuing announcements or requesting applications for Recovery Act programs or activities that may involve construction, alteration, maintenance, or repair the agency shall use the award term described in the following paragraphs: (a) Section 1606 of the Recovery Act requires that all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to the Recovery Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. The District expended $436,960 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL# 84.425U federal grant funds for a bathroom renovation. Due to a lack of proper internal controls over Federal Grants management, the District did not have a contract with this vendor that included a provision to ensure the contactor complied with Federal wage rate requirements. Additionally, the District could not provide support that weekly certified payroll was provided by the contractor. Failure to notify contractors of the wage rate requirements may result in noncompliance with the prevailing wage requirements as well as potentially reduced future federal funding. The District should ensure contracts for construction in excess of $2,000 contain a provision the contractor comply with the Wage Rate Requirements and ensure certified payroll reports are provided weekly by the contractor. The District should obtain the necessary information from the contractor to document compliance with the program requirements and if the contractor failed to comply then they have an obligation under 29 CFR Part 5 to report all suspected or reported violations to the Federal awarding agency.

3. Physical Inventories Finding Number: 2023-008 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2022/2023 Federal Agency: U.S. Department of Education Compliance Requirement: Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. §200.313(d)(2), which states, a physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 years. Due to a failure of internal controls, there was no indication that a physical inventory of the property acquired under the Elementary and Secondary School Emergency Relief (ESSER II, AL number 84.425D) and American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER), AL number 84.425U) had been performed within the preceding two years. Further, the District did not maintain a listing of capital assets purchased using this grant fund. Physical inventories should be performed, at a minimum, once every two years to verify that assets held per the capital asset listing actually exist. This will help detect errors, fraud, theft, or omissions.

4. Capital Expenditures Finding Number: 2023-009 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance, Material Weakness, and Questioned Cost 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. § 200.439 which states, in part, that capital expenditures for general purpose equipment, buildings and land and improvements to land, buildings, or equipment which materially increase their value or useful life are unallowable as a direct cost except with the prior written approval of the Federal awarding agency or pass-through entity. The District expended $412,699 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL number 84.425U federal grant funds for roof replacements and a bathroom renovation. The School District failed to have this capital expenditure pre-approved by the pass-through entity Ohio Department of Education and Workforce for the 2023 grant year due to a misunderstanding of requirements. Therefore, we consider the amount of $412,699 to be a questioned cost. Failure to obtain proper pre-approval for capital expenditures could lead to future questioned costs, reduced future federal funding, and the requirement to repay the Ohio Department of Education and Workforce.

5. Final Expenditure Reporting Finding Number: 2023-010 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.328 which provides the Federal awarding agency may solicit only the standard, OMB-approved government wide data elements for collection of financial information. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently 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, and preferably in coordination with performance reporting. The Ohio Department of Education Grants Manual requires, at the end of the grant period, that entities submit a final expenditure report (FER). A FER must be submitted to show how grant funds were expended during the grant period. The amounts by object code submitted by the District in the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER, AL # 84.425U), grant year 2023, varied from the underlying system data. The amounts by object code submitted by the District in the Final Expenditure Report for the Elementary and Secondary School Emergency Relief (ESSER II, AL # 84.425D), grant year 2023, varied from the underlying system data. This variance was due to improper monitoring. The failure to properly report expenditures to the grantor can result in corrective action taken by the grantor and obfuscates the true nature of the grants use. The Treasurer should review the annual Final Expenditure Reports and verify the correct information is provided to the grantor. This information should be reconciled to the underlying system reports. Material Weakness and Noncompliance documented in Federal Finding 2023-006 in Section 3 above pertaining to ESSER funding contributed to the reporting error.

1. Schedule of Expenditures of Federal Awards Finding Number: 2023-006 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 CFR 200.403(b) which requires, in part, except where otherwise authorized by statute, costs must conform to any limitations or exclusions set forth in 2 CFR Part 200 Subpart E or in the Federal award as to types or amount of cost items in order to be allowable under Federal awards. Further, Section 18003(d) of the Coronavirus Aid, Relief, and Economic Security Act provides a list of allowable ESSER I activities. Section 313(3) of the Coronavirus Response and Relief Supplemental Appropriations Act, 2021, includes additional allowable uses of funds under ESSER II. The District was awarded $405,474 of COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER I) grant funding (AL #84.425D) in 2021 and $1,448,106 in COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER II) grant funding (AL #84.425D) in 2022 and 2023 by the Ohio Department of Education and Workforce. The District maintained Education Stabilization Fund (AL# 84.425) activity in a separate fund to allow for accountability of federal expenditures. However, the District posted expenditures to this fund in excess of available Education Stabilization Fund funding of $238,050 pertaining to ESSER II and $847 pertaining to ESSER I. As such, the internal controls relating to monitoring the fund and transactions to ensure reasonable assurance that the charges were accurate were not operating effectively. The lack of effective controls resulted in overspending of the grant and overstatement of expenditures on the Schedule of Expenditures of Federal Awards. Noncompliance with grant requirements could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. District management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements. The District should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help ensure the District is in compliance with grant requirements and major federal programs are accurately identified for audit. The District spending more grant funding than was awarded also resulted in adjustments to the financial statements to move the expenditures in excess of the grant award to the General fund as reported in Finding 2023-005. See Finding 2023-005 in Section 2 above. The District spending more grant funding than was awarded also contributed to errors in the Final Expenditure reports submitted to the grantor. See Finding 2023-010 below.

2. Prevailing Wage Finding Number: 2023-007 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? Yes Prior Audit Finding Number: 2022-002 Material Weakness and Noncompliance 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 C.F.R. § 200 Paragraph D which states: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provision Applicable to Contract Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland "Anti-Kickback" Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, "Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States"). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 2 CFR § 176.190 Award term - Wage rate requirements under Section 1606 of the Recovery Act indicates when issuing announcements or requesting applications for Recovery Act programs or activities that may involve construction, alteration, maintenance, or repair the agency shall use the award term described in the following paragraphs: (a) Section 1606 of the Recovery Act requires that all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to the Recovery Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. The District expended $436,960 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL# 84.425U federal grant funds for a bathroom renovation. Due to a lack of proper internal controls over Federal Grants management, the District did not have a contract with this vendor that included a provision to ensure the contactor complied with Federal wage rate requirements. Additionally, the District could not provide support that weekly certified payroll was provided by the contractor. Failure to notify contractors of the wage rate requirements may result in noncompliance with the prevailing wage requirements as well as potentially reduced future federal funding. The District should ensure contracts for construction in excess of $2,000 contain a provision the contractor comply with the Wage Rate Requirements and ensure certified payroll reports are provided weekly by the contractor. The District should obtain the necessary information from the contractor to document compliance with the program requirements and if the contractor failed to comply then they have an obligation under 29 CFR Part 5 to report all suspected or reported violations to the Federal awarding agency.

3. Physical Inventories Finding Number: 2023-008 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2022/2023 Federal Agency: U.S. Department of Education Compliance Requirement: Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. §200.313(d)(2), which states, a physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 years. Due to a failure of internal controls, there was no indication that a physical inventory of the property acquired under the Elementary and Secondary School Emergency Relief (ESSER II, AL number 84.425D) and American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER), AL number 84.425U) had been performed within the preceding two years. Further, the District did not maintain a listing of capital assets purchased using this grant fund. Physical inventories should be performed, at a minimum, once every two years to verify that assets held per the capital asset listing actually exist. This will help detect errors, fraud, theft, or omissions.

4. Capital Expenditures Finding Number: 2023-009 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance, Material Weakness, and Questioned Cost 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. § 200.439 which states, in part, that capital expenditures for general purpose equipment, buildings and land and improvements to land, buildings, or equipment which materially increase their value or useful life are unallowable as a direct cost except with the prior written approval of the Federal awarding agency or pass-through entity. The District expended $412,699 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL number 84.425U federal grant funds for roof replacements and a bathroom renovation. The School District failed to have this capital expenditure pre-approved by the pass-through entity Ohio Department of Education and Workforce for the 2023 grant year due to a misunderstanding of requirements. Therefore, we consider the amount of $412,699 to be a questioned cost. Failure to obtain proper pre-approval for capital expenditures could lead to future questioned costs, reduced future federal funding, and the requirement to repay the Ohio Department of Education and Workforce.

5. Final Expenditure Reporting Finding Number: 2023-010 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.328 which provides the Federal awarding agency may solicit only the standard, OMB-approved government wide data elements for collection of financial information. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently 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, and preferably in coordination with performance reporting. The Ohio Department of Education Grants Manual requires, at the end of the grant period, that entities submit a final expenditure report (FER). A FER must be submitted to show how grant funds were expended during the grant period. The amounts by object code submitted by the District in the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER, AL # 84.425U), grant year 2023, varied from the underlying system data. The amounts by object code submitted by the District in the Final Expenditure Report for the Elementary and Secondary School Emergency Relief (ESSER II, AL # 84.425D), grant year 2023, varied from the underlying system data. This variance was due to improper monitoring. The failure to properly report expenditures to the grantor can result in corrective action taken by the grantor and obfuscates the true nature of the grants use. The Treasurer should review the annual Final Expenditure Reports and verify the correct information is provided to the grantor. This information should be reconciled to the underlying system reports. Material Weakness and Noncompliance documented in Federal Finding 2023-006 in Section 3 above pertaining to ESSER funding contributed to the reporting error.

1. Schedule of Expenditures of Federal Awards Finding Number: 2023-006 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 CFR 200.403(b) which requires, in part, except where otherwise authorized by statute, costs must conform to any limitations or exclusions set forth in 2 CFR Part 200 Subpart E or in the Federal award as to types or amount of cost items in order to be allowable under Federal awards. Further, Section 18003(d) of the Coronavirus Aid, Relief, and Economic Security Act provides a list of allowable ESSER I activities. Section 313(3) of the Coronavirus Response and Relief Supplemental Appropriations Act, 2021, includes additional allowable uses of funds under ESSER II. The District was awarded $405,474 of COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER I) grant funding (AL #84.425D) in 2021 and $1,448,106 in COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER II) grant funding (AL #84.425D) in 2022 and 2023 by the Ohio Department of Education and Workforce. The District maintained Education Stabilization Fund (AL# 84.425) activity in a separate fund to allow for accountability of federal expenditures. However, the District posted expenditures to this fund in excess of available Education Stabilization Fund funding of $238,050 pertaining to ESSER II and $847 pertaining to ESSER I. As such, the internal controls relating to monitoring the fund and transactions to ensure reasonable assurance that the charges were accurate were not operating effectively. The lack of effective controls resulted in overspending of the grant and overstatement of expenditures on the Schedule of Expenditures of Federal Awards. Noncompliance with grant requirements could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. District management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements. The District should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help ensure the District is in compliance with grant requirements and major federal programs are accurately identified for audit. The District spending more grant funding than was awarded also resulted in adjustments to the financial statements to move the expenditures in excess of the grant award to the General fund as reported in Finding 2023-005. See Finding 2023-005 in Section 2 above. The District spending more grant funding than was awarded also contributed to errors in the Final Expenditure reports submitted to the grantor. See Finding 2023-010 below.

2. Prevailing Wage Finding Number: 2023-007 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? Yes Prior Audit Finding Number: 2022-002 Material Weakness and Noncompliance 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 C.F.R. § 200 Paragraph D which states: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provision Applicable to Contract Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland "Anti-Kickback" Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, "Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States"). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 2 CFR § 176.190 Award term - Wage rate requirements under Section 1606 of the Recovery Act indicates when issuing announcements or requesting applications for Recovery Act programs or activities that may involve construction, alteration, maintenance, or repair the agency shall use the award term described in the following paragraphs: (a) Section 1606 of the Recovery Act requires that all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to the Recovery Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. The District expended $436,960 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL# 84.425U federal grant funds for a bathroom renovation. Due to a lack of proper internal controls over Federal Grants management, the District did not have a contract with this vendor that included a provision to ensure the contactor complied with Federal wage rate requirements. Additionally, the District could not provide support that weekly certified payroll was provided by the contractor. Failure to notify contractors of the wage rate requirements may result in noncompliance with the prevailing wage requirements as well as potentially reduced future federal funding. The District should ensure contracts for construction in excess of $2,000 contain a provision the contractor comply with the Wage Rate Requirements and ensure certified payroll reports are provided weekly by the contractor. The District should obtain the necessary information from the contractor to document compliance with the program requirements and if the contractor failed to comply then they have an obligation under 29 CFR Part 5 to report all suspected or reported violations to the Federal awarding agency.

3. Physical Inventories Finding Number: 2023-008 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2022/2023 Federal Agency: U.S. Department of Education Compliance Requirement: Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. §200.313(d)(2), which states, a physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 years. Due to a failure of internal controls, there was no indication that a physical inventory of the property acquired under the Elementary and Secondary School Emergency Relief (ESSER II, AL number 84.425D) and American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER), AL number 84.425U) had been performed within the preceding two years. Further, the District did not maintain a listing of capital assets purchased using this grant fund. Physical inventories should be performed, at a minimum, once every two years to verify that assets held per the capital asset listing actually exist. This will help detect errors, fraud, theft, or omissions.

4. Capital Expenditures Finding Number: 2023-009 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance, Material Weakness, and Questioned Cost 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. § 200.439 which states, in part, that capital expenditures for general purpose equipment, buildings and land and improvements to land, buildings, or equipment which materially increase their value or useful life are unallowable as a direct cost except with the prior written approval of the Federal awarding agency or pass-through entity. The District expended $412,699 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL number 84.425U federal grant funds for roof replacements and a bathroom renovation. The School District failed to have this capital expenditure pre-approved by the pass-through entity Ohio Department of Education and Workforce for the 2023 grant year due to a misunderstanding of requirements. Therefore, we consider the amount of $412,699 to be a questioned cost. Failure to obtain proper pre-approval for capital expenditures could lead to future questioned costs, reduced future federal funding, and the requirement to repay the Ohio Department of Education and Workforce.

5. Final Expenditure Reporting Finding Number: 2023-010 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.328 which provides the Federal awarding agency may solicit only the standard, OMB-approved government wide data elements for collection of financial information. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently 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, and preferably in coordination with performance reporting. The Ohio Department of Education Grants Manual requires, at the end of the grant period, that entities submit a final expenditure report (FER). A FER must be submitted to show how grant funds were expended during the grant period. The amounts by object code submitted by the District in the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER, AL # 84.425U), grant year 2023, varied from the underlying system data. The amounts by object code submitted by the District in the Final Expenditure Report for the Elementary and Secondary School Emergency Relief (ESSER II, AL # 84.425D), grant year 2023, varied from the underlying system data. This variance was due to improper monitoring. The failure to properly report expenditures to the grantor can result in corrective action taken by the grantor and obfuscates the true nature of the grants use. The Treasurer should review the annual Final Expenditure Reports and verify the correct information is provided to the grantor. This information should be reconciled to the underlying system reports. Material Weakness and Noncompliance documented in Federal Finding 2023-006 in Section 3 above pertaining to ESSER funding contributed to the reporting error.

1. Schedule of Expenditures of Federal Awards Finding Number: 2023-006 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 CFR 200.403(b) which requires, in part, except where otherwise authorized by statute, costs must conform to any limitations or exclusions set forth in 2 CFR Part 200 Subpart E or in the Federal award as to types or amount of cost items in order to be allowable under Federal awards. Further, Section 18003(d) of the Coronavirus Aid, Relief, and Economic Security Act provides a list of allowable ESSER I activities. Section 313(3) of the Coronavirus Response and Relief Supplemental Appropriations Act, 2021, includes additional allowable uses of funds under ESSER II. The District was awarded $405,474 of COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER I) grant funding (AL #84.425D) in 2021 and $1,448,106 in COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER II) grant funding (AL #84.425D) in 2022 and 2023 by the Ohio Department of Education and Workforce. The District maintained Education Stabilization Fund (AL# 84.425) activity in a separate fund to allow for accountability of federal expenditures. However, the District posted expenditures to this fund in excess of available Education Stabilization Fund funding of $238,050 pertaining to ESSER II and $847 pertaining to ESSER I. As such, the internal controls relating to monitoring the fund and transactions to ensure reasonable assurance that the charges were accurate were not operating effectively. The lack of effective controls resulted in overspending of the grant and overstatement of expenditures on the Schedule of Expenditures of Federal Awards. Noncompliance with grant requirements could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. District management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements. The District should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help ensure the District is in compliance with grant requirements and major federal programs are accurately identified for audit. The District spending more grant funding than was awarded also resulted in adjustments to the financial statements to move the expenditures in excess of the grant award to the General fund as reported in Finding 2023-005. See Finding 2023-005 in Section 2 above. The District spending more grant funding than was awarded also contributed to errors in the Final Expenditure reports submitted to the grantor. See Finding 2023-010 below.

2. Prevailing Wage Finding Number: 2023-007 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? Yes Prior Audit Finding Number: 2022-002 Material Weakness and Noncompliance 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 C.F.R. § 200 Paragraph D which states: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provision Applicable to Contract Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland "Anti-Kickback" Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, "Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States"). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 2 CFR § 176.190 Award term - Wage rate requirements under Section 1606 of the Recovery Act indicates when issuing announcements or requesting applications for Recovery Act programs or activities that may involve construction, alteration, maintenance, or repair the agency shall use the award term described in the following paragraphs: (a) Section 1606 of the Recovery Act requires that all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to the Recovery Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. The District expended $436,960 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL# 84.425U federal grant funds for a bathroom renovation. Due to a lack of proper internal controls over Federal Grants management, the District did not have a contract with this vendor that included a provision to ensure the contactor complied with Federal wage rate requirements. Additionally, the District could not provide support that weekly certified payroll was provided by the contractor. Failure to notify contractors of the wage rate requirements may result in noncompliance with the prevailing wage requirements as well as potentially reduced future federal funding. The District should ensure contracts for construction in excess of $2,000 contain a provision the contractor comply with the Wage Rate Requirements and ensure certified payroll reports are provided weekly by the contractor. The District should obtain the necessary information from the contractor to document compliance with the program requirements and if the contractor failed to comply then they have an obligation under 29 CFR Part 5 to report all suspected or reported violations to the Federal awarding agency.

3. Physical Inventories Finding Number: 2023-008 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2022/2023 Federal Agency: U.S. Department of Education Compliance Requirement: Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. §200.313(d)(2), which states, a physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 years. Due to a failure of internal controls, there was no indication that a physical inventory of the property acquired under the Elementary and Secondary School Emergency Relief (ESSER II, AL number 84.425D) and American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER), AL number 84.425U) had been performed within the preceding two years. Further, the District did not maintain a listing of capital assets purchased using this grant fund. Physical inventories should be performed, at a minimum, once every two years to verify that assets held per the capital asset listing actually exist. This will help detect errors, fraud, theft, or omissions.

4. Capital Expenditures Finding Number: 2023-009 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance, Material Weakness, and Questioned Cost 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. § 200.439 which states, in part, that capital expenditures for general purpose equipment, buildings and land and improvements to land, buildings, or equipment which materially increase their value or useful life are unallowable as a direct cost except with the prior written approval of the Federal awarding agency or pass-through entity. The District expended $412,699 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL number 84.425U federal grant funds for roof replacements and a bathroom renovation. The School District failed to have this capital expenditure pre-approved by the pass-through entity Ohio Department of Education and Workforce for the 2023 grant year due to a misunderstanding of requirements. Therefore, we consider the amount of $412,699 to be a questioned cost. Failure to obtain proper pre-approval for capital expenditures could lead to future questioned costs, reduced future federal funding, and the requirement to repay the Ohio Department of Education and Workforce.

5. Final Expenditure Reporting Finding Number: 2023-010 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.328 which provides the Federal awarding agency may solicit only the standard, OMB-approved government wide data elements for collection of financial information. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently 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, and preferably in coordination with performance reporting. The Ohio Department of Education Grants Manual requires, at the end of the grant period, that entities submit a final expenditure report (FER). A FER must be submitted to show how grant funds were expended during the grant period. The amounts by object code submitted by the District in the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER, AL # 84.425U), grant year 2023, varied from the underlying system data. The amounts by object code submitted by the District in the Final Expenditure Report for the Elementary and Secondary School Emergency Relief (ESSER II, AL # 84.425D), grant year 2023, varied from the underlying system data. This variance was due to improper monitoring. The failure to properly report expenditures to the grantor can result in corrective action taken by the grantor and obfuscates the true nature of the grants use. The Treasurer should review the annual Final Expenditure Reports and verify the correct information is provided to the grantor. This information should be reconciled to the underlying system reports. Material Weakness and Noncompliance documented in Federal Finding 2023-006 in Section 3 above pertaining to ESSER funding contributed to the reporting error.

1. Schedule of Expenditures of Federal Awards Finding Number: 2023-006 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 CFR 200.403(b) which requires, in part, except where otherwise authorized by statute, costs must conform to any limitations or exclusions set forth in 2 CFR Part 200 Subpart E or in the Federal award as to types or amount of cost items in order to be allowable under Federal awards. Further, Section 18003(d) of the Coronavirus Aid, Relief, and Economic Security Act provides a list of allowable ESSER I activities. Section 313(3) of the Coronavirus Response and Relief Supplemental Appropriations Act, 2021, includes additional allowable uses of funds under ESSER II. The District was awarded $405,474 of COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER I) grant funding (AL #84.425D) in 2021 and $1,448,106 in COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER II) grant funding (AL #84.425D) in 2022 and 2023 by the Ohio Department of Education and Workforce. The District maintained Education Stabilization Fund (AL# 84.425) activity in a separate fund to allow for accountability of federal expenditures. However, the District posted expenditures to this fund in excess of available Education Stabilization Fund funding of $238,050 pertaining to ESSER II and $847 pertaining to ESSER I. As such, the internal controls relating to monitoring the fund and transactions to ensure reasonable assurance that the charges were accurate were not operating effectively. The lack of effective controls resulted in overspending of the grant and overstatement of expenditures on the Schedule of Expenditures of Federal Awards. Noncompliance with grant requirements could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. District management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements. The District should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help ensure the District is in compliance with grant requirements and major federal programs are accurately identified for audit. The District spending more grant funding than was awarded also resulted in adjustments to the financial statements to move the expenditures in excess of the grant award to the General fund as reported in Finding 2023-005. See Finding 2023-005 in Section 2 above. The District spending more grant funding than was awarded also contributed to errors in the Final Expenditure reports submitted to the grantor. See Finding 2023-010 below.

2. Prevailing Wage Finding Number: 2023-007 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? Yes Prior Audit Finding Number: 2022-002 Material Weakness and Noncompliance 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 C.F.R. § 200 Paragraph D which states: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provision Applicable to Contract Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland "Anti-Kickback" Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, "Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States"). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 2 CFR § 176.190 Award term - Wage rate requirements under Section 1606 of the Recovery Act indicates when issuing announcements or requesting applications for Recovery Act programs or activities that may involve construction, alteration, maintenance, or repair the agency shall use the award term described in the following paragraphs: (a) Section 1606 of the Recovery Act requires that all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to the Recovery Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. The District expended $436,960 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL# 84.425U federal grant funds for a bathroom renovation. Due to a lack of proper internal controls over Federal Grants management, the District did not have a contract with this vendor that included a provision to ensure the contactor complied with Federal wage rate requirements. Additionally, the District could not provide support that weekly certified payroll was provided by the contractor. Failure to notify contractors of the wage rate requirements may result in noncompliance with the prevailing wage requirements as well as potentially reduced future federal funding. The District should ensure contracts for construction in excess of $2,000 contain a provision the contractor comply with the Wage Rate Requirements and ensure certified payroll reports are provided weekly by the contractor. The District should obtain the necessary information from the contractor to document compliance with the program requirements and if the contractor failed to comply then they have an obligation under 29 CFR Part 5 to report all suspected or reported violations to the Federal awarding agency.

3. Physical Inventories Finding Number: 2023-008 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2022/2023 Federal Agency: U.S. Department of Education Compliance Requirement: Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. §200.313(d)(2), which states, a physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 years. Due to a failure of internal controls, there was no indication that a physical inventory of the property acquired under the Elementary and Secondary School Emergency Relief (ESSER II, AL number 84.425D) and American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER), AL number 84.425U) had been performed within the preceding two years. Further, the District did not maintain a listing of capital assets purchased using this grant fund. Physical inventories should be performed, at a minimum, once every two years to verify that assets held per the capital asset listing actually exist. This will help detect errors, fraud, theft, or omissions.

4. Capital Expenditures Finding Number: 2023-009 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance, Material Weakness, and Questioned Cost 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. § 200.439 which states, in part, that capital expenditures for general purpose equipment, buildings and land and improvements to land, buildings, or equipment which materially increase their value or useful life are unallowable as a direct cost except with the prior written approval of the Federal awarding agency or pass-through entity. The District expended $412,699 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL number 84.425U federal grant funds for roof replacements and a bathroom renovation. The School District failed to have this capital expenditure pre-approved by the pass-through entity Ohio Department of Education and Workforce for the 2023 grant year due to a misunderstanding of requirements. Therefore, we consider the amount of $412,699 to be a questioned cost. Failure to obtain proper pre-approval for capital expenditures could lead to future questioned costs, reduced future federal funding, and the requirement to repay the Ohio Department of Education and Workforce.

5. Final Expenditure Reporting Finding Number: 2023-010 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.328 which provides the Federal awarding agency may solicit only the standard, OMB-approved government wide data elements for collection of financial information. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently 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, and preferably in coordination with performance reporting. The Ohio Department of Education Grants Manual requires, at the end of the grant period, that entities submit a final expenditure report (FER). A FER must be submitted to show how grant funds were expended during the grant period. The amounts by object code submitted by the District in the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER, AL # 84.425U), grant year 2023, varied from the underlying system data. The amounts by object code submitted by the District in the Final Expenditure Report for the Elementary and Secondary School Emergency Relief (ESSER II, AL # 84.425D), grant year 2023, varied from the underlying system data. This variance was due to improper monitoring. The failure to properly report expenditures to the grantor can result in corrective action taken by the grantor and obfuscates the true nature of the grants use. The Treasurer should review the annual Final Expenditure Reports and verify the correct information is provided to the grantor. This information should be reconciled to the underlying system reports. Material Weakness and Noncompliance documented in Federal Finding 2023-006 in Section 3 above pertaining to ESSER funding contributed to the reporting error.

1. Schedule of Expenditures of Federal Awards Finding Number: 2023-006 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 CFR 200.403(b) which requires, in part, except where otherwise authorized by statute, costs must conform to any limitations or exclusions set forth in 2 CFR Part 200 Subpart E or in the Federal award as to types or amount of cost items in order to be allowable under Federal awards. Further, Section 18003(d) of the Coronavirus Aid, Relief, and Economic Security Act provides a list of allowable ESSER I activities. Section 313(3) of the Coronavirus Response and Relief Supplemental Appropriations Act, 2021, includes additional allowable uses of funds under ESSER II. The District was awarded $405,474 of COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER I) grant funding (AL #84.425D) in 2021 and $1,448,106 in COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER II) grant funding (AL #84.425D) in 2022 and 2023 by the Ohio Department of Education and Workforce. The District maintained Education Stabilization Fund (AL# 84.425) activity in a separate fund to allow for accountability of federal expenditures. However, the District posted expenditures to this fund in excess of available Education Stabilization Fund funding of $238,050 pertaining to ESSER II and $847 pertaining to ESSER I. As such, the internal controls relating to monitoring the fund and transactions to ensure reasonable assurance that the charges were accurate were not operating effectively. The lack of effective controls resulted in overspending of the grant and overstatement of expenditures on the Schedule of Expenditures of Federal Awards. Noncompliance with grant requirements could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. District management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements. The District should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help ensure the District is in compliance with grant requirements and major federal programs are accurately identified for audit. The District spending more grant funding than was awarded also resulted in adjustments to the financial statements to move the expenditures in excess of the grant award to the General fund as reported in Finding 2023-005. See Finding 2023-005 in Section 2 above. The District spending more grant funding than was awarded also contributed to errors in the Final Expenditure reports submitted to the grantor. See Finding 2023-010 below.

2. Prevailing Wage Finding Number: 2023-007 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? Yes Prior Audit Finding Number: 2022-002 Material Weakness and Noncompliance 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 C.F.R. § 200 Paragraph D which states: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provision Applicable to Contract Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland "Anti-Kickback" Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, "Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States"). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 2 CFR § 176.190 Award term - Wage rate requirements under Section 1606 of the Recovery Act indicates when issuing announcements or requesting applications for Recovery Act programs or activities that may involve construction, alteration, maintenance, or repair the agency shall use the award term described in the following paragraphs: (a) Section 1606 of the Recovery Act requires that all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to the Recovery Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. The District expended $436,960 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL# 84.425U federal grant funds for a bathroom renovation. Due to a lack of proper internal controls over Federal Grants management, the District did not have a contract with this vendor that included a provision to ensure the contactor complied with Federal wage rate requirements. Additionally, the District could not provide support that weekly certified payroll was provided by the contractor. Failure to notify contractors of the wage rate requirements may result in noncompliance with the prevailing wage requirements as well as potentially reduced future federal funding. The District should ensure contracts for construction in excess of $2,000 contain a provision the contractor comply with the Wage Rate Requirements and ensure certified payroll reports are provided weekly by the contractor. The District should obtain the necessary information from the contractor to document compliance with the program requirements and if the contractor failed to comply then they have an obligation under 29 CFR Part 5 to report all suspected or reported violations to the Federal awarding agency.

3. Physical Inventories Finding Number: 2023-008 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2022/2023 Federal Agency: U.S. Department of Education Compliance Requirement: Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. §200.313(d)(2), which states, a physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 years. Due to a failure of internal controls, there was no indication that a physical inventory of the property acquired under the Elementary and Secondary School Emergency Relief (ESSER II, AL number 84.425D) and American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER), AL number 84.425U) had been performed within the preceding two years. Further, the District did not maintain a listing of capital assets purchased using this grant fund. Physical inventories should be performed, at a minimum, once every two years to verify that assets held per the capital asset listing actually exist. This will help detect errors, fraud, theft, or omissions.

4. Capital Expenditures Finding Number: 2023-009 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance, Material Weakness, and Questioned Cost 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. § 200.439 which states, in part, that capital expenditures for general purpose equipment, buildings and land and improvements to land, buildings, or equipment which materially increase their value or useful life are unallowable as a direct cost except with the prior written approval of the Federal awarding agency or pass-through entity. The District expended $412,699 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL number 84.425U federal grant funds for roof replacements and a bathroom renovation. The School District failed to have this capital expenditure pre-approved by the pass-through entity Ohio Department of Education and Workforce for the 2023 grant year due to a misunderstanding of requirements. Therefore, we consider the amount of $412,699 to be a questioned cost. Failure to obtain proper pre-approval for capital expenditures could lead to future questioned costs, reduced future federal funding, and the requirement to repay the Ohio Department of Education and Workforce.

5. Final Expenditure Reporting Finding Number: 2023-010 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.328 which provides the Federal awarding agency may solicit only the standard, OMB-approved government wide data elements for collection of financial information. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently 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, and preferably in coordination with performance reporting. The Ohio Department of Education Grants Manual requires, at the end of the grant period, that entities submit a final expenditure report (FER). A FER must be submitted to show how grant funds were expended during the grant period. The amounts by object code submitted by the District in the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER, AL # 84.425U), grant year 2023, varied from the underlying system data. The amounts by object code submitted by the District in the Final Expenditure Report for the Elementary and Secondary School Emergency Relief (ESSER II, AL # 84.425D), grant year 2023, varied from the underlying system data. This variance was due to improper monitoring. The failure to properly report expenditures to the grantor can result in corrective action taken by the grantor and obfuscates the true nature of the grants use. The Treasurer should review the annual Final Expenditure Reports and verify the correct information is provided to the grantor. This information should be reconciled to the underlying system reports. Material Weakness and Noncompliance documented in Federal Finding 2023-006 in Section 3 above pertaining to ESSER funding contributed to the reporting error.

1. Schedule of Expenditures of Federal Awards Finding Number: 2023-006 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 CFR 200.403(b) which requires, in part, except where otherwise authorized by statute, costs must conform to any limitations or exclusions set forth in 2 CFR Part 200 Subpart E or in the Federal award as to types or amount of cost items in order to be allowable under Federal awards. Further, Section 18003(d) of the Coronavirus Aid, Relief, and Economic Security Act provides a list of allowable ESSER I activities. Section 313(3) of the Coronavirus Response and Relief Supplemental Appropriations Act, 2021, includes additional allowable uses of funds under ESSER II. The District was awarded $405,474 of COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER I) grant funding (AL #84.425D) in 2021 and $1,448,106 in COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER II) grant funding (AL #84.425D) in 2022 and 2023 by the Ohio Department of Education and Workforce. The District maintained Education Stabilization Fund (AL# 84.425) activity in a separate fund to allow for accountability of federal expenditures. However, the District posted expenditures to this fund in excess of available Education Stabilization Fund funding of $238,050 pertaining to ESSER II and $847 pertaining to ESSER I. As such, the internal controls relating to monitoring the fund and transactions to ensure reasonable assurance that the charges were accurate were not operating effectively. The lack of effective controls resulted in overspending of the grant and overstatement of expenditures on the Schedule of Expenditures of Federal Awards. Noncompliance with grant requirements could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. District management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements. The District should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help ensure the District is in compliance with grant requirements and major federal programs are accurately identified for audit. The District spending more grant funding than was awarded also resulted in adjustments to the financial statements to move the expenditures in excess of the grant award to the General fund as reported in Finding 2023-005. See Finding 2023-005 in Section 2 above. The District spending more grant funding than was awarded also contributed to errors in the Final Expenditure reports submitted to the grantor. See Finding 2023-010 below.

2. Prevailing Wage Finding Number: 2023-007 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? Yes Prior Audit Finding Number: 2022-002 Material Weakness and Noncompliance 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 C.F.R. § 200 Paragraph D which states: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provision Applicable to Contract Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland "Anti-Kickback" Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, "Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States"). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 2 CFR § 176.190 Award term - Wage rate requirements under Section 1606 of the Recovery Act indicates when issuing announcements or requesting applications for Recovery Act programs or activities that may involve construction, alteration, maintenance, or repair the agency shall use the award term described in the following paragraphs: (a) Section 1606 of the Recovery Act requires that all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to the Recovery Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. The District expended $436,960 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL# 84.425U federal grant funds for a bathroom renovation. Due to a lack of proper internal controls over Federal Grants management, the District did not have a contract with this vendor that included a provision to ensure the contactor complied with Federal wage rate requirements. Additionally, the District could not provide support that weekly certified payroll was provided by the contractor. Failure to notify contractors of the wage rate requirements may result in noncompliance with the prevailing wage requirements as well as potentially reduced future federal funding. The District should ensure contracts for construction in excess of $2,000 contain a provision the contractor comply with the Wage Rate Requirements and ensure certified payroll reports are provided weekly by the contractor. The District should obtain the necessary information from the contractor to document compliance with the program requirements and if the contractor failed to comply then they have an obligation under 29 CFR Part 5 to report all suspected or reported violations to the Federal awarding agency.

3. Physical Inventories Finding Number: 2023-008 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2022/2023 Federal Agency: U.S. Department of Education Compliance Requirement: Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. §200.313(d)(2), which states, a physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 years. Due to a failure of internal controls, there was no indication that a physical inventory of the property acquired under the Elementary and Secondary School Emergency Relief (ESSER II, AL number 84.425D) and American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER), AL number 84.425U) had been performed within the preceding two years. Further, the District did not maintain a listing of capital assets purchased using this grant fund. Physical inventories should be performed, at a minimum, once every two years to verify that assets held per the capital asset listing actually exist. This will help detect errors, fraud, theft, or omissions.

4. Capital Expenditures Finding Number: 2023-009 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance, Material Weakness, and Questioned Cost 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. § 200.439 which states, in part, that capital expenditures for general purpose equipment, buildings and land and improvements to land, buildings, or equipment which materially increase their value or useful life are unallowable as a direct cost except with the prior written approval of the Federal awarding agency or pass-through entity. The District expended $412,699 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL number 84.425U federal grant funds for roof replacements and a bathroom renovation. The School District failed to have this capital expenditure pre-approved by the pass-through entity Ohio Department of Education and Workforce for the 2023 grant year due to a misunderstanding of requirements. Therefore, we consider the amount of $412,699 to be a questioned cost. Failure to obtain proper pre-approval for capital expenditures could lead to future questioned costs, reduced future federal funding, and the requirement to repay the Ohio Department of Education and Workforce.

5. Final Expenditure Reporting Finding Number: 2023-010 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.328 which provides the Federal awarding agency may solicit only the standard, OMB-approved government wide data elements for collection of financial information. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently 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, and preferably in coordination with performance reporting. The Ohio Department of Education Grants Manual requires, at the end of the grant period, that entities submit a final expenditure report (FER). A FER must be submitted to show how grant funds were expended during the grant period. The amounts by object code submitted by the District in the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER, AL # 84.425U), grant year 2023, varied from the underlying system data. The amounts by object code submitted by the District in the Final Expenditure Report for the Elementary and Secondary School Emergency Relief (ESSER II, AL # 84.425D), grant year 2023, varied from the underlying system data. This variance was due to improper monitoring. The failure to properly report expenditures to the grantor can result in corrective action taken by the grantor and obfuscates the true nature of the grants use. The Treasurer should review the annual Final Expenditure Reports and verify the correct information is provided to the grantor. This information should be reconciled to the underlying system reports. Material Weakness and Noncompliance documented in Federal Finding 2023-006 in Section 3 above pertaining to ESSER funding contributed to the reporting error.

1. Schedule of Expenditures of Federal Awards Finding Number: 2023-006 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 CFR 200.403(b) which requires, in part, except where otherwise authorized by statute, costs must conform to any limitations or exclusions set forth in 2 CFR Part 200 Subpart E or in the Federal award as to types or amount of cost items in order to be allowable under Federal awards. Further, Section 18003(d) of the Coronavirus Aid, Relief, and Economic Security Act provides a list of allowable ESSER I activities. Section 313(3) of the Coronavirus Response and Relief Supplemental Appropriations Act, 2021, includes additional allowable uses of funds under ESSER II. The District was awarded $405,474 of COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER I) grant funding (AL #84.425D) in 2021 and $1,448,106 in COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER II) grant funding (AL #84.425D) in 2022 and 2023 by the Ohio Department of Education and Workforce. The District maintained Education Stabilization Fund (AL# 84.425) activity in a separate fund to allow for accountability of federal expenditures. However, the District posted expenditures to this fund in excess of available Education Stabilization Fund funding of $238,050 pertaining to ESSER II and $847 pertaining to ESSER I. As such, the internal controls relating to monitoring the fund and transactions to ensure reasonable assurance that the charges were accurate were not operating effectively. The lack of effective controls resulted in overspending of the grant and overstatement of expenditures on the Schedule of Expenditures of Federal Awards. Noncompliance with grant requirements could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. District management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements. The District should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help ensure the District is in compliance with grant requirements and major federal programs are accurately identified for audit. The District spending more grant funding than was awarded also resulted in adjustments to the financial statements to move the expenditures in excess of the grant award to the General fund as reported in Finding 2023-005. See Finding 2023-005 in Section 2 above. The District spending more grant funding than was awarded also contributed to errors in the Final Expenditure reports submitted to the grantor. See Finding 2023-010 below.

2. Prevailing Wage Finding Number: 2023-007 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? Yes Prior Audit Finding Number: 2022-002 Material Weakness and Noncompliance 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 C.F.R. § 200 Paragraph D which states: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provision Applicable to Contract Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland "Anti-Kickback" Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, "Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States"). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 2 CFR § 176.190 Award term - Wage rate requirements under Section 1606 of the Recovery Act indicates when issuing announcements or requesting applications for Recovery Act programs or activities that may involve construction, alteration, maintenance, or repair the agency shall use the award term described in the following paragraphs: (a) Section 1606 of the Recovery Act requires that all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to the Recovery Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. The District expended $436,960 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL# 84.425U federal grant funds for a bathroom renovation. Due to a lack of proper internal controls over Federal Grants management, the District did not have a contract with this vendor that included a provision to ensure the contactor complied with Federal wage rate requirements. Additionally, the District could not provide support that weekly certified payroll was provided by the contractor. Failure to notify contractors of the wage rate requirements may result in noncompliance with the prevailing wage requirements as well as potentially reduced future federal funding. The District should ensure contracts for construction in excess of $2,000 contain a provision the contractor comply with the Wage Rate Requirements and ensure certified payroll reports are provided weekly by the contractor. The District should obtain the necessary information from the contractor to document compliance with the program requirements and if the contractor failed to comply then they have an obligation under 29 CFR Part 5 to report all suspected or reported violations to the Federal awarding agency.

3. Physical Inventories Finding Number: 2023-008 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2022/2023 Federal Agency: U.S. Department of Education Compliance Requirement: Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. §200.313(d)(2), which states, a physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 years. Due to a failure of internal controls, there was no indication that a physical inventory of the property acquired under the Elementary and Secondary School Emergency Relief (ESSER II, AL number 84.425D) and American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER), AL number 84.425U) had been performed within the preceding two years. Further, the District did not maintain a listing of capital assets purchased using this grant fund. Physical inventories should be performed, at a minimum, once every two years to verify that assets held per the capital asset listing actually exist. This will help detect errors, fraud, theft, or omissions.

4. Capital Expenditures Finding Number: 2023-009 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance, Material Weakness, and Questioned Cost 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. § 200.439 which states, in part, that capital expenditures for general purpose equipment, buildings and land and improvements to land, buildings, or equipment which materially increase their value or useful life are unallowable as a direct cost except with the prior written approval of the Federal awarding agency or pass-through entity. The District expended $412,699 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL number 84.425U federal grant funds for roof replacements and a bathroom renovation. The School District failed to have this capital expenditure pre-approved by the pass-through entity Ohio Department of Education and Workforce for the 2023 grant year due to a misunderstanding of requirements. Therefore, we consider the amount of $412,699 to be a questioned cost. Failure to obtain proper pre-approval for capital expenditures could lead to future questioned costs, reduced future federal funding, and the requirement to repay the Ohio Department of Education and Workforce.

5. Final Expenditure Reporting Finding Number: 2023-010 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.328 which provides the Federal awarding agency may solicit only the standard, OMB-approved government wide data elements for collection of financial information. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently 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, and preferably in coordination with performance reporting. The Ohio Department of Education Grants Manual requires, at the end of the grant period, that entities submit a final expenditure report (FER). A FER must be submitted to show how grant funds were expended during the grant period. The amounts by object code submitted by the District in the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER, AL # 84.425U), grant year 2023, varied from the underlying system data. The amounts by object code submitted by the District in the Final Expenditure Report for the Elementary and Secondary School Emergency Relief (ESSER II, AL # 84.425D), grant year 2023, varied from the underlying system data. This variance was due to improper monitoring. The failure to properly report expenditures to the grantor can result in corrective action taken by the grantor and obfuscates the true nature of the grants use. The Treasurer should review the annual Final Expenditure Reports and verify the correct information is provided to the grantor. This information should be reconciled to the underlying system reports. Material Weakness and Noncompliance documented in Federal Finding 2023-006 in Section 3 above pertaining to ESSER funding contributed to the reporting error.

1. Schedule of Expenditures of Federal Awards Finding Number: 2023-006 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 CFR 200.403(b) which requires, in part, except where otherwise authorized by statute, costs must conform to any limitations or exclusions set forth in 2 CFR Part 200 Subpart E or in the Federal award as to types or amount of cost items in order to be allowable under Federal awards. Further, Section 18003(d) of the Coronavirus Aid, Relief, and Economic Security Act provides a list of allowable ESSER I activities. Section 313(3) of the Coronavirus Response and Relief Supplemental Appropriations Act, 2021, includes additional allowable uses of funds under ESSER II. The District was awarded $405,474 of COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER I) grant funding (AL #84.425D) in 2021 and $1,448,106 in COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER II) grant funding (AL #84.425D) in 2022 and 2023 by the Ohio Department of Education and Workforce. The District maintained Education Stabilization Fund (AL# 84.425) activity in a separate fund to allow for accountability of federal expenditures. However, the District posted expenditures to this fund in excess of available Education Stabilization Fund funding of $238,050 pertaining to ESSER II and $847 pertaining to ESSER I. As such, the internal controls relating to monitoring the fund and transactions to ensure reasonable assurance that the charges were accurate were not operating effectively. The lack of effective controls resulted in overspending of the grant and overstatement of expenditures on the Schedule of Expenditures of Federal Awards. Noncompliance with grant requirements could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. District management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements. The District should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help ensure the District is in compliance with grant requirements and major federal programs are accurately identified for audit. The District spending more grant funding than was awarded also resulted in adjustments to the financial statements to move the expenditures in excess of the grant award to the General fund as reported in Finding 2023-005. See Finding 2023-005 in Section 2 above. The District spending more grant funding than was awarded also contributed to errors in the Final Expenditure reports submitted to the grantor. See Finding 2023-010 below.

2. Prevailing Wage Finding Number: 2023-007 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? Yes Prior Audit Finding Number: 2022-002 Material Weakness and Noncompliance 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 C.F.R. § 200 Paragraph D which states: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provision Applicable to Contract Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland "Anti-Kickback" Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, "Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States"). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 2 CFR § 176.190 Award term - Wage rate requirements under Section 1606 of the Recovery Act indicates when issuing announcements or requesting applications for Recovery Act programs or activities that may involve construction, alteration, maintenance, or repair the agency shall use the award term described in the following paragraphs: (a) Section 1606 of the Recovery Act requires that all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to the Recovery Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. The District expended $436,960 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL# 84.425U federal grant funds for a bathroom renovation. Due to a lack of proper internal controls over Federal Grants management, the District did not have a contract with this vendor that included a provision to ensure the contactor complied with Federal wage rate requirements. Additionally, the District could not provide support that weekly certified payroll was provided by the contractor. Failure to notify contractors of the wage rate requirements may result in noncompliance with the prevailing wage requirements as well as potentially reduced future federal funding. The District should ensure contracts for construction in excess of $2,000 contain a provision the contractor comply with the Wage Rate Requirements and ensure certified payroll reports are provided weekly by the contractor. The District should obtain the necessary information from the contractor to document compliance with the program requirements and if the contractor failed to comply then they have an obligation under 29 CFR Part 5 to report all suspected or reported violations to the Federal awarding agency.

3. Physical Inventories Finding Number: 2023-008 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2022/2023 Federal Agency: U.S. Department of Education Compliance Requirement: Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. §200.313(d)(2), which states, a physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 years. Due to a failure of internal controls, there was no indication that a physical inventory of the property acquired under the Elementary and Secondary School Emergency Relief (ESSER II, AL number 84.425D) and American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER), AL number 84.425U) had been performed within the preceding two years. Further, the District did not maintain a listing of capital assets purchased using this grant fund. Physical inventories should be performed, at a minimum, once every two years to verify that assets held per the capital asset listing actually exist. This will help detect errors, fraud, theft, or omissions.

4. Capital Expenditures Finding Number: 2023-009 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance, Material Weakness, and Questioned Cost 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. § 200.439 which states, in part, that capital expenditures for general purpose equipment, buildings and land and improvements to land, buildings, or equipment which materially increase their value or useful life are unallowable as a direct cost except with the prior written approval of the Federal awarding agency or pass-through entity. The District expended $412,699 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL number 84.425U federal grant funds for roof replacements and a bathroom renovation. The School District failed to have this capital expenditure pre-approved by the pass-through entity Ohio Department of Education and Workforce for the 2023 grant year due to a misunderstanding of requirements. Therefore, we consider the amount of $412,699 to be a questioned cost. Failure to obtain proper pre-approval for capital expenditures could lead to future questioned costs, reduced future federal funding, and the requirement to repay the Ohio Department of Education and Workforce.

5. Final Expenditure Reporting Finding Number: 2023-010 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.328 which provides the Federal awarding agency may solicit only the standard, OMB-approved government wide data elements for collection of financial information. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently 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, and preferably in coordination with performance reporting. The Ohio Department of Education Grants Manual requires, at the end of the grant period, that entities submit a final expenditure report (FER). A FER must be submitted to show how grant funds were expended during the grant period. The amounts by object code submitted by the District in the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER, AL # 84.425U), grant year 2023, varied from the underlying system data. The amounts by object code submitted by the District in the Final Expenditure Report for the Elementary and Secondary School Emergency Relief (ESSER II, AL # 84.425D), grant year 2023, varied from the underlying system data. This variance was due to improper monitoring. The failure to properly report expenditures to the grantor can result in corrective action taken by the grantor and obfuscates the true nature of the grants use. The Treasurer should review the annual Final Expenditure Reports and verify the correct information is provided to the grantor. This information should be reconciled to the underlying system reports. Material Weakness and Noncompliance documented in Federal Finding 2023-006 in Section 3 above pertaining to ESSER funding contributed to the reporting error.

1. Schedule of Expenditures of Federal Awards Finding Number: 2023-006 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 CFR 200.403(b) which requires, in part, except where otherwise authorized by statute, costs must conform to any limitations or exclusions set forth in 2 CFR Part 200 Subpart E or in the Federal award as to types or amount of cost items in order to be allowable under Federal awards. Further, Section 18003(d) of the Coronavirus Aid, Relief, and Economic Security Act provides a list of allowable ESSER I activities. Section 313(3) of the Coronavirus Response and Relief Supplemental Appropriations Act, 2021, includes additional allowable uses of funds under ESSER II. The District was awarded $405,474 of COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER I) grant funding (AL #84.425D) in 2021 and $1,448,106 in COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER II) grant funding (AL #84.425D) in 2022 and 2023 by the Ohio Department of Education and Workforce. The District maintained Education Stabilization Fund (AL# 84.425) activity in a separate fund to allow for accountability of federal expenditures. However, the District posted expenditures to this fund in excess of available Education Stabilization Fund funding of $238,050 pertaining to ESSER II and $847 pertaining to ESSER I. As such, the internal controls relating to monitoring the fund and transactions to ensure reasonable assurance that the charges were accurate were not operating effectively. The lack of effective controls resulted in overspending of the grant and overstatement of expenditures on the Schedule of Expenditures of Federal Awards. Noncompliance with grant requirements could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. District management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements. The District should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help ensure the District is in compliance with grant requirements and major federal programs are accurately identified for audit. The District spending more grant funding than was awarded also resulted in adjustments to the financial statements to move the expenditures in excess of the grant award to the General fund as reported in Finding 2023-005. See Finding 2023-005 in Section 2 above. The District spending more grant funding than was awarded also contributed to errors in the Final Expenditure reports submitted to the grantor. See Finding 2023-010 below.

2. Prevailing Wage Finding Number: 2023-007 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? Yes Prior Audit Finding Number: 2022-002 Material Weakness and Noncompliance 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 C.F.R. § 200 Paragraph D which states: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provision Applicable to Contract Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland "Anti-Kickback" Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, "Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States"). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 2 CFR § 176.190 Award term - Wage rate requirements under Section 1606 of the Recovery Act indicates when issuing announcements or requesting applications for Recovery Act programs or activities that may involve construction, alteration, maintenance, or repair the agency shall use the award term described in the following paragraphs: (a) Section 1606 of the Recovery Act requires that all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to the Recovery Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. The District expended $436,960 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL# 84.425U federal grant funds for a bathroom renovation. Due to a lack of proper internal controls over Federal Grants management, the District did not have a contract with this vendor that included a provision to ensure the contactor complied with Federal wage rate requirements. Additionally, the District could not provide support that weekly certified payroll was provided by the contractor. Failure to notify contractors of the wage rate requirements may result in noncompliance with the prevailing wage requirements as well as potentially reduced future federal funding. The District should ensure contracts for construction in excess of $2,000 contain a provision the contractor comply with the Wage Rate Requirements and ensure certified payroll reports are provided weekly by the contractor. The District should obtain the necessary information from the contractor to document compliance with the program requirements and if the contractor failed to comply then they have an obligation under 29 CFR Part 5 to report all suspected or reported violations to the Federal awarding agency.

3. Physical Inventories Finding Number: 2023-008 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2022/2023 Federal Agency: U.S. Department of Education Compliance Requirement: Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. §200.313(d)(2), which states, a physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 years. Due to a failure of internal controls, there was no indication that a physical inventory of the property acquired under the Elementary and Secondary School Emergency Relief (ESSER II, AL number 84.425D) and American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER), AL number 84.425U) had been performed within the preceding two years. Further, the District did not maintain a listing of capital assets purchased using this grant fund. Physical inventories should be performed, at a minimum, once every two years to verify that assets held per the capital asset listing actually exist. This will help detect errors, fraud, theft, or omissions.

4. Capital Expenditures Finding Number: 2023-009 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Equipment And Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance, Material Weakness, and Questioned Cost 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. § 200.439 which states, in part, that capital expenditures for general purpose equipment, buildings and land and improvements to land, buildings, or equipment which materially increase their value or useful life are unallowable as a direct cost except with the prior written approval of the Federal awarding agency or pass-through entity. The District expended $412,699 of its American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL number 84.425U federal grant funds for roof replacements and a bathroom renovation. The School District failed to have this capital expenditure pre-approved by the pass-through entity Ohio Department of Education and Workforce for the 2023 grant year due to a misunderstanding of requirements. Therefore, we consider the amount of $412,699 to be a questioned cost. Failure to obtain proper pre-approval for capital expenditures could lead to future questioned costs, reduced future federal funding, and the requirement to repay the Ohio Department of Education and Workforce.

5. Final Expenditure Reporting Finding Number: 2023-010 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.328 which provides the Federal awarding agency may solicit only the standard, OMB-approved government wide data elements for collection of financial information. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently 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, and preferably in coordination with performance reporting. The Ohio Department of Education Grants Manual requires, at the end of the grant period, that entities submit a final expenditure report (FER). A FER must be submitted to show how grant funds were expended during the grant period. The amounts by object code submitted by the District in the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER, AL # 84.425U), grant year 2023, varied from the underlying system data. The amounts by object code submitted by the District in the Final Expenditure Report for the Elementary and Secondary School Emergency Relief (ESSER II, AL # 84.425D), grant year 2023, varied from the underlying system data. This variance was due to improper monitoring. The failure to properly report expenditures to the grantor can result in corrective action taken by the grantor and obfuscates the true nature of the grants use. The Treasurer should review the annual Final Expenditure Reports and verify the correct information is provided to the grantor. This information should be reconciled to the underlying system reports. Material Weakness and Noncompliance documented in Federal Finding 2023-006 in Section 3 above pertaining to ESSER funding contributed to the reporting error.