2024-001. Equipment and Real Property Management
United States of Department of Education, Passed Through New York State, Department of Education:
Education Stabilization Fund
COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D
COVID-19: American Rescue Plan - Elementary and Secondary
School Emergency Relief ALN: 84.425U Criteria: Education Stabilization Fund (ESF) grant awards authorized under the federal Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and American Rescue Plan Act of 2021 (ARP) may be used for equipment purchases and capital expenditures, consistent with federal regulations 2 CFR §200.313 and 2 CFR §200.439. In accordance with 2 CFR §200.313, non-federal entities receiving federal awards are required to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires non-federal entities to track the acquisition date and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property acquired with federal awards must also be taken and the results reconciled with the property inventory records at least once every two years.
Condition: The District did not include COVID grants-funded capital improvements in its capital assets inventory records.
Cause: Insufficient internal controls over the tracking and reporting of federally-funded capital improvements. The District recorded expenditures for CRRSA and ARP grants-funded capital improvements and upgrades to its facilities and ventilation systems as contractual/purchased services in the special aid fund based on instructions from the pass-through entity instead of in the capital projects fund. As a result, District personnel compiling annual capital additions information did not identify the COVID grants-funded capital improvements as capital assets that should be added to the capital assets inventory listing.
Effect: Failure to include capital improvements acquired with Federal awards in the District’s capital assets inventory records affects its financial reporting in conformity with Generally Accepted Accounting Principles (GAAP) and could lead to improper or non-compliant procedures for assets inventory management, and the subsequent disposal of those capital assets.
Questioned Costs: None reported.
Context: The District uses specific expenditure codes in its special aid fund to identify and track various categories of expenditures incurred that are reimbursable under various Federal awards, including the ESSER grant awards under the CRRSA Act and ARP. Based on instructions from the pass-through entity, the New York State Education Department (NYSED), the District included eligible capital improvement costs in its CRRSA ESSER 2 and ARP ESSER 3 budget applications as purchased services, which were approved by the NYSED, and recorded the expenditures in its special aid fund’s contractual expenditures object code (.400 code). When District personnel compiled the listing of capital improvements additions for the fiscal year to perform the annual update of the capital assets inventory record, they reviewed and included capital costs from the District’s capital projects fund, but did not review or identify the costs of the various capital improvements that were recorded in the special aid fund’s .400 contractual expenditures code.
Identification of a Repeat Finding: This is not a repeat finding from the immediately prior audit.
Recommendation: The District should review and revise its existing procedures for compiling annual capital assets additions information to ensure capital expenditures purchased with Federal awards that meet the District’s capitalization threshold are considered and evaluated for inclusion in the District’s annual capital assets inventory records as appropriate. Views of Responsible Officials of Auditee: The District acknowledges but does not fully agree with this finding. federally-funded expenditures were recorded in the Special Aid Fund as purchased services, both on the FS-10 budgets and the purchase orders for portion of the capital improvement projects the PO’s were issued against. These payments are partially payments to contractors for wages, labor, materials, and other items, not necessarily equipment. The methods of financing for all these costs are reported on the State SA-139 Building Project Data Forms as partially funded by grants from ARPA & ESSER and annual district appropriation budget; hence, in the District’s annual capital asset inventory report, they will eventually be reconciled with the final building project cost report and will be added and tracked as part of the whole capital improvement projects.
2024-001. Equipment and Real Property Management
United States of Department of Education, Passed Through New York State, Department of Education:
Education Stabilization Fund
COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D
COVID-19: American Rescue Plan - Elementary and Secondary
School Emergency Relief ALN: 84.425U Criteria: Education Stabilization Fund (ESF) grant awards authorized under the federal Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and American Rescue Plan Act of 2021 (ARP) may be used for equipment purchases and capital expenditures, consistent with federal regulations 2 CFR §200.313 and 2 CFR §200.439. In accordance with 2 CFR §200.313, non-federal entities receiving federal awards are required to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires non-federal entities to track the acquisition date and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property acquired with federal awards must also be taken and the results reconciled with the property inventory records at least once every two years.
Condition: The District did not include COVID grants-funded capital improvements in its capital assets inventory records.
Cause: Insufficient internal controls over the tracking and reporting of federally-funded capital improvements. The District recorded expenditures for CRRSA and ARP grants-funded capital improvements and upgrades to its facilities and ventilation systems as contractual/purchased services in the special aid fund based on instructions from the pass-through entity instead of in the capital projects fund. As a result, District personnel compiling annual capital additions information did not identify the COVID grants-funded capital improvements as capital assets that should be added to the capital assets inventory listing.
Effect: Failure to include capital improvements acquired with Federal awards in the District’s capital assets inventory records affects its financial reporting in conformity with Generally Accepted Accounting Principles (GAAP) and could lead to improper or non-compliant procedures for assets inventory management, and the subsequent disposal of those capital assets.
Questioned Costs: None reported.
Context: The District uses specific expenditure codes in its special aid fund to identify and track various categories of expenditures incurred that are reimbursable under various Federal awards, including the ESSER grant awards under the CRRSA Act and ARP. Based on instructions from the pass-through entity, the New York State Education Department (NYSED), the District included eligible capital improvement costs in its CRRSA ESSER 2 and ARP ESSER 3 budget applications as purchased services, which were approved by the NYSED, and recorded the expenditures in its special aid fund’s contractual expenditures object code (.400 code). When District personnel compiled the listing of capital improvements additions for the fiscal year to perform the annual update of the capital assets inventory record, they reviewed and included capital costs from the District’s capital projects fund, but did not review or identify the costs of the various capital improvements that were recorded in the special aid fund’s .400 contractual expenditures code.
Identification of a Repeat Finding: This is not a repeat finding from the immediately prior audit.
Recommendation: The District should review and revise its existing procedures for compiling annual capital assets additions information to ensure capital expenditures purchased with Federal awards that meet the District’s capitalization threshold are considered and evaluated for inclusion in the District’s annual capital assets inventory records as appropriate. Views of Responsible Officials of Auditee: The District acknowledges but does not fully agree with this finding. federally-funded expenditures were recorded in the Special Aid Fund as purchased services, both on the FS-10 budgets and the purchase orders for portion of the capital improvement projects the PO’s were issued against. These payments are partially payments to contractors for wages, labor, materials, and other items, not necessarily equipment. The methods of financing for all these costs are reported on the State SA-139 Building Project Data Forms as partially funded by grants from ARPA & ESSER and annual district appropriation budget; hence, in the District’s annual capital asset inventory report, they will eventually be reconciled with the final building project cost report and will be added and tracked as part of the whole capital improvement projects.
Other Matter – Non-Major Federal Award Program
2024-002. Questioned Costs
United States of Department of Education, Passed Through New York State, Department of Education:
Special Education Cluster
Special Education Grants to States: IDEA Part B ALN: 84.027
Pass-through Entity Number: 0032-23-0415
Criteria: Pursuant to Federal regulations 2 CFR §200.344(e), a subrecipient of a Federal award must promptly refund any unobligated funds that the Federal agency or pass-through entity paid that are not authorized to be retained.
Condition: The District received total reimbursement for its 2022-2023 IDEA, Part B (Section 611) Federal grant award that exceeded the program’s final total expenditures, but did not notify the pass-through entity of the overpayment to refund the overpayment.
Cause: Some of the amounts reported in the District’s final expenditure report (Form FS-10F) submitted to the pass-through entity, the New York State Education Department (NYSED), for its 2022-2023 IDEA, Part B (Section 611) grant award were for accrued expenditures based on open encumbrances that did not materialize. The District’s Business Office adjusted the records in their accounting system but neglected to contact the pass-through entity for instructions to submit a corrected final expenditure report and refund the overpaid reimbursement.
Effect: The failure to notify the pass-through entity of unentitled Federal grant monies and promptly refund unentitled monies is noncompliant with Federal regulations and could affect amounts of future grant awards or their approval.
Questioned Costs: $60,184.
Context: On its revised Form FS-10F final expenditure report for the 2022-23 IDEA, Part B Section 611 grant award, which was submitted to the NYSED on March 6, 2024, the District reported amounts for three vendors totaling $62,199 that were recorded as accounts payable based on open encumbrances. Subsequently, in October 2024, the District determined that only $2,015 for one vendor was a valid expenditure and outstanding accounts payable, and adjusted its accounting records for the year ended June 30, 2024, while the external audit of its annual financial statements was under way. The District did not contact the NYSED about the invalid expenditures claimed on its Form FS-10F final expenditure report.
Identification of a Repeat Finding: This is not a repeat finding from the immediately prior audit.
Recommendation: The District should notify the NYSED of the overpayment and obtain instructions for how to refund the overpayment. The District should also implement procedures to ensure discrepancies between amounts reported in final expenditure reports and accounting records are reconciled and corrected final reports are submitted to the NYSED timely.
Views of Responsible Officials of Auditee: The District agrees with the finding. The District’s Assistant Business Administrator will contact the NYSED and submit a corrected final expenditure report, and begin the overpayment refund process.
2024-001. Equipment and Real Property Management
United States of Department of Education, Passed Through New York State, Department of Education:
Education Stabilization Fund
COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D
COVID-19: American Rescue Plan - Elementary and Secondary
School Emergency Relief ALN: 84.425U Criteria: Education Stabilization Fund (ESF) grant awards authorized under the federal Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and American Rescue Plan Act of 2021 (ARP) may be used for equipment purchases and capital expenditures, consistent with federal regulations 2 CFR §200.313 and 2 CFR §200.439. In accordance with 2 CFR §200.313, non-federal entities receiving federal awards are required to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires non-federal entities to track the acquisition date and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property acquired with federal awards must also be taken and the results reconciled with the property inventory records at least once every two years.
Condition: The District did not include COVID grants-funded capital improvements in its capital assets inventory records.
Cause: Insufficient internal controls over the tracking and reporting of federally-funded capital improvements. The District recorded expenditures for CRRSA and ARP grants-funded capital improvements and upgrades to its facilities and ventilation systems as contractual/purchased services in the special aid fund based on instructions from the pass-through entity instead of in the capital projects fund. As a result, District personnel compiling annual capital additions information did not identify the COVID grants-funded capital improvements as capital assets that should be added to the capital assets inventory listing.
Effect: Failure to include capital improvements acquired with Federal awards in the District’s capital assets inventory records affects its financial reporting in conformity with Generally Accepted Accounting Principles (GAAP) and could lead to improper or non-compliant procedures for assets inventory management, and the subsequent disposal of those capital assets.
Questioned Costs: None reported.
Context: The District uses specific expenditure codes in its special aid fund to identify and track various categories of expenditures incurred that are reimbursable under various Federal awards, including the ESSER grant awards under the CRRSA Act and ARP. Based on instructions from the pass-through entity, the New York State Education Department (NYSED), the District included eligible capital improvement costs in its CRRSA ESSER 2 and ARP ESSER 3 budget applications as purchased services, which were approved by the NYSED, and recorded the expenditures in its special aid fund’s contractual expenditures object code (.400 code). When District personnel compiled the listing of capital improvements additions for the fiscal year to perform the annual update of the capital assets inventory record, they reviewed and included capital costs from the District’s capital projects fund, but did not review or identify the costs of the various capital improvements that were recorded in the special aid fund’s .400 contractual expenditures code.
Identification of a Repeat Finding: This is not a repeat finding from the immediately prior audit.
Recommendation: The District should review and revise its existing procedures for compiling annual capital assets additions information to ensure capital expenditures purchased with Federal awards that meet the District’s capitalization threshold are considered and evaluated for inclusion in the District’s annual capital assets inventory records as appropriate. Views of Responsible Officials of Auditee: The District acknowledges but does not fully agree with this finding. federally-funded expenditures were recorded in the Special Aid Fund as purchased services, both on the FS-10 budgets and the purchase orders for portion of the capital improvement projects the PO’s were issued against. These payments are partially payments to contractors for wages, labor, materials, and other items, not necessarily equipment. The methods of financing for all these costs are reported on the State SA-139 Building Project Data Forms as partially funded by grants from ARPA & ESSER and annual district appropriation budget; hence, in the District’s annual capital asset inventory report, they will eventually be reconciled with the final building project cost report and will be added and tracked as part of the whole capital improvement projects.
2024-001. Equipment and Real Property Management
United States of Department of Education, Passed Through New York State, Department of Education:
Education Stabilization Fund
COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D
COVID-19: American Rescue Plan - Elementary and Secondary
School Emergency Relief ALN: 84.425U Criteria: Education Stabilization Fund (ESF) grant awards authorized under the federal Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and American Rescue Plan Act of 2021 (ARP) may be used for equipment purchases and capital expenditures, consistent with federal regulations 2 CFR §200.313 and 2 CFR §200.439. In accordance with 2 CFR §200.313, non-federal entities receiving federal awards are required to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires non-federal entities to track the acquisition date and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property acquired with federal awards must also be taken and the results reconciled with the property inventory records at least once every two years.
Condition: The District did not include COVID grants-funded capital improvements in its capital assets inventory records.
Cause: Insufficient internal controls over the tracking and reporting of federally-funded capital improvements. The District recorded expenditures for CRRSA and ARP grants-funded capital improvements and upgrades to its facilities and ventilation systems as contractual/purchased services in the special aid fund based on instructions from the pass-through entity instead of in the capital projects fund. As a result, District personnel compiling annual capital additions information did not identify the COVID grants-funded capital improvements as capital assets that should be added to the capital assets inventory listing.
Effect: Failure to include capital improvements acquired with Federal awards in the District’s capital assets inventory records affects its financial reporting in conformity with Generally Accepted Accounting Principles (GAAP) and could lead to improper or non-compliant procedures for assets inventory management, and the subsequent disposal of those capital assets.
Questioned Costs: None reported.
Context: The District uses specific expenditure codes in its special aid fund to identify and track various categories of expenditures incurred that are reimbursable under various Federal awards, including the ESSER grant awards under the CRRSA Act and ARP. Based on instructions from the pass-through entity, the New York State Education Department (NYSED), the District included eligible capital improvement costs in its CRRSA ESSER 2 and ARP ESSER 3 budget applications as purchased services, which were approved by the NYSED, and recorded the expenditures in its special aid fund’s contractual expenditures object code (.400 code). When District personnel compiled the listing of capital improvements additions for the fiscal year to perform the annual update of the capital assets inventory record, they reviewed and included capital costs from the District’s capital projects fund, but did not review or identify the costs of the various capital improvements that were recorded in the special aid fund’s .400 contractual expenditures code.
Identification of a Repeat Finding: This is not a repeat finding from the immediately prior audit.
Recommendation: The District should review and revise its existing procedures for compiling annual capital assets additions information to ensure capital expenditures purchased with Federal awards that meet the District’s capitalization threshold are considered and evaluated for inclusion in the District’s annual capital assets inventory records as appropriate. Views of Responsible Officials of Auditee: The District acknowledges but does not fully agree with this finding. federally-funded expenditures were recorded in the Special Aid Fund as purchased services, both on the FS-10 budgets and the purchase orders for portion of the capital improvement projects the PO’s were issued against. These payments are partially payments to contractors for wages, labor, materials, and other items, not necessarily equipment. The methods of financing for all these costs are reported on the State SA-139 Building Project Data Forms as partially funded by grants from ARPA & ESSER and annual district appropriation budget; hence, in the District’s annual capital asset inventory report, they will eventually be reconciled with the final building project cost report and will be added and tracked as part of the whole capital improvement projects.
Other Matter – Non-Major Federal Award Program
2024-002. Questioned Costs
United States of Department of Education, Passed Through New York State, Department of Education:
Special Education Cluster
Special Education Grants to States: IDEA Part B ALN: 84.027
Pass-through Entity Number: 0032-23-0415
Criteria: Pursuant to Federal regulations 2 CFR §200.344(e), a subrecipient of a Federal award must promptly refund any unobligated funds that the Federal agency or pass-through entity paid that are not authorized to be retained.
Condition: The District received total reimbursement for its 2022-2023 IDEA, Part B (Section 611) Federal grant award that exceeded the program’s final total expenditures, but did not notify the pass-through entity of the overpayment to refund the overpayment.
Cause: Some of the amounts reported in the District’s final expenditure report (Form FS-10F) submitted to the pass-through entity, the New York State Education Department (NYSED), for its 2022-2023 IDEA, Part B (Section 611) grant award were for accrued expenditures based on open encumbrances that did not materialize. The District’s Business Office adjusted the records in their accounting system but neglected to contact the pass-through entity for instructions to submit a corrected final expenditure report and refund the overpaid reimbursement.
Effect: The failure to notify the pass-through entity of unentitled Federal grant monies and promptly refund unentitled monies is noncompliant with Federal regulations and could affect amounts of future grant awards or their approval.
Questioned Costs: $60,184.
Context: On its revised Form FS-10F final expenditure report for the 2022-23 IDEA, Part B Section 611 grant award, which was submitted to the NYSED on March 6, 2024, the District reported amounts for three vendors totaling $62,199 that were recorded as accounts payable based on open encumbrances. Subsequently, in October 2024, the District determined that only $2,015 for one vendor was a valid expenditure and outstanding accounts payable, and adjusted its accounting records for the year ended June 30, 2024, while the external audit of its annual financial statements was under way. The District did not contact the NYSED about the invalid expenditures claimed on its Form FS-10F final expenditure report.
Identification of a Repeat Finding: This is not a repeat finding from the immediately prior audit.
Recommendation: The District should notify the NYSED of the overpayment and obtain instructions for how to refund the overpayment. The District should also implement procedures to ensure discrepancies between amounts reported in final expenditure reports and accounting records are reconciled and corrected final reports are submitted to the NYSED timely.
Views of Responsible Officials of Auditee: The District agrees with the finding. The District’s Assistant Business Administrator will contact the NYSED and submit a corrected final expenditure report, and begin the overpayment refund process.