FAC Explorer

Audit 356537

FY End
2024-06-30
Total Expended
$1.38M
Findings
12
Programs
11
Organization: Dermott Special School District (AR)
Year: 2024 Accepted: 2025-05-19
Auditor: Arkansas Legislative Audit

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
560659 2024-001 Material Weakness - P
560660 2024-001 Material Weakness - P
560661 2024-001 Material Weakness - P
560662 2024-001 Material Weakness - P
560663 2024-001 Material Weakness - P
560664 2024-001 Material Weakness - P
1137101 2024-001 Material Weakness - P
1137102 2024-001 Material Weakness - P
1137103 2024-001 Material Weakness - P
1137104 2024-001 Material Weakness - P
1137105 2024-001 Material Weakness - P
1137106 2024-001 Material Weakness - P

Programs

ALN Program Spent Major Findings
84.425 Covid-19 - Education Stabilization Fund $413,481 - 0
84.010 Title I Grants to Local Educational Agencies $410,430 Yes 1
84.027 Special Education_grants to States $149,584 - 0
10.553 School Breakfast Program $90,325 Yes 1
84.424 Student Support and Academic Enrichment Program $31,858 - 0
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) $29,502 - 0
84.371 Comprehensive Literacy Development $25,670 - 0
10.555 National School Lunch Program $11,587 Yes 1
10.582 Fresh Fruit and Vegetable Program $7,554 Yes 1
84.173 Special Education_preschool Grants $6,358 - 0
84.358 Rural Education $4,615 - 0

Contacts

Name Title Type
JMU5NJ19MFU5 April Cantrell Auditee
8705381000 Matt Fink, CPA Auditor
No contacts on file

Notes to SEFA

Title: Medicaid Funding (SEFA Note 4) Accounting Policies: Basis of Presentation (SEFA Note 1) - The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal award activity of Dermott Special School District (District) under programs of the federal government for the year ended June 30, 2024. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the District, it is not intended to and does not present the financial position or changes in financial position of the District. Summary of Significant Accounting Policies (SEFA Note 2) - Expenditures reported on the Schedule are reported on the regulatory basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance (SEFA Note 3) During the year ended June 30, 2024, the District received Medicaid funding of $50,211 from the Arkansas Department of Human Services. Such payments are not considered Federal awards expended, and therefore, are not included in the above Schedule.
Title: Nonmonetary Assistance (SEFA Notes 5 and 6) Accounting Policies: Basis of Presentation (SEFA Note 1) - The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal award activity of Dermott Special School District (District) under programs of the federal government for the year ended June 30, 2024. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the District, it is not intended to and does not present the financial position or changes in financial position of the District. Summary of Significant Accounting Policies (SEFA Note 2) - Expenditures reported on the Schedule are reported on the regulatory basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance (SEFA Note 3) Nonmonetary assistance is reported at the approximate value as provided by the U. S. Department of Defense through an agreement with the U. S. Department of Agriculture. Nonmonetary assistance is reported at the approximate value as provided by the Arkansas Department of Human Services.

Finding Details

Finding 2024-001
2024-001. Internal Control APPLICABLE MAJOR FEDERAL PROGRAMS: U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553, 10.555, and 10.582 PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 The internal control deficiencies identified in Finding 2024-001 noted in Section II Financial Statement Findings apply to these major federal programs. Financial statement finding 2024-001 detail below: Criteria: Internal control is a process consisting of five interrelated components - control environment, risk assessment, information and communication, control activities, and monitoring. Management is responsible for adopting sound accounting policies and for establishing and maintaining internal control that will, among other things, initiate, authorize, record, process, and report transactions (as well as events and conditions) consistent with management’s assertions embodied in the financial statements. Condition and Context: Deficiencies in the internal control component of control activities adversely affected the District’s ability to initiate, authorize, record, process, and report financial data in accordance with the regulatory basis of accounting such that there was a reasonable possibility that a material misstatement of the District’s financial statements would not be prevented, or detected and corrected on a timely basis. Financial accounting duties were not adequately segregated among employees. Specifically, certain key weaknesses included the following: non-payroll checks were prepared by the same employee responsible for the maintenance of accounting records and such employee had unrestricted access to the District’s electronic signature stamp. Payroll checks were prepared by the same employee responsible for changes to the payroll amounts, without compensating controls. The District Treasurer was responsible for receiving and depositing monies collected and preparation of bank reconciliations, without compensating controls. Repeat of finding 2023-001. Cause: District management, due to cost/benefit implications which hindered the District’s ability to adequately segregate financial accounting duties among employees, did not effectively address the deficiencies in internal control. Effect or potential effect: The District’s ability to initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements, as well as the ability to safeguard District assets, was adversely affected by the identified weaknesses in the above internal control component. Recommendation: District management should adopt sound accounting policies and establish and maintain internal control that will initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements and that will safeguard District assets. Views of responsible officials: We concur with the recommendation and will implement corrective procedures to the extent possible.
Finding 2024-001
2024-001. Internal Control APPLICABLE MAJOR FEDERAL PROGRAMS: U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553, 10.555, and 10.582 PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 The internal control deficiencies identified in Finding 2024-001 noted in Section II Financial Statement Findings apply to these major federal programs. Financial statement finding 2024-001 detail below: Criteria: Internal control is a process consisting of five interrelated components - control environment, risk assessment, information and communication, control activities, and monitoring. Management is responsible for adopting sound accounting policies and for establishing and maintaining internal control that will, among other things, initiate, authorize, record, process, and report transactions (as well as events and conditions) consistent with management’s assertions embodied in the financial statements. Condition and Context: Deficiencies in the internal control component of control activities adversely affected the District’s ability to initiate, authorize, record, process, and report financial data in accordance with the regulatory basis of accounting such that there was a reasonable possibility that a material misstatement of the District’s financial statements would not be prevented, or detected and corrected on a timely basis. Financial accounting duties were not adequately segregated among employees. Specifically, certain key weaknesses included the following: non-payroll checks were prepared by the same employee responsible for the maintenance of accounting records and such employee had unrestricted access to the District’s electronic signature stamp. Payroll checks were prepared by the same employee responsible for changes to the payroll amounts, without compensating controls. The District Treasurer was responsible for receiving and depositing monies collected and preparation of bank reconciliations, without compensating controls. Repeat of finding 2023-001. Cause: District management, due to cost/benefit implications which hindered the District’s ability to adequately segregate financial accounting duties among employees, did not effectively address the deficiencies in internal control. Effect or potential effect: The District’s ability to initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements, as well as the ability to safeguard District assets, was adversely affected by the identified weaknesses in the above internal control component. Recommendation: District management should adopt sound accounting policies and establish and maintain internal control that will initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements and that will safeguard District assets. Views of responsible officials: We concur with the recommendation and will implement corrective procedures to the extent possible.
Finding 2024-001
2024-001. Internal Control APPLICABLE MAJOR FEDERAL PROGRAMS: U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553, 10.555, and 10.582 PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 The internal control deficiencies identified in Finding 2024-001 noted in Section II Financial Statement Findings apply to these major federal programs. Financial statement finding 2024-001 detail below: Criteria: Internal control is a process consisting of five interrelated components - control environment, risk assessment, information and communication, control activities, and monitoring. Management is responsible for adopting sound accounting policies and for establishing and maintaining internal control that will, among other things, initiate, authorize, record, process, and report transactions (as well as events and conditions) consistent with management’s assertions embodied in the financial statements. Condition and Context: Deficiencies in the internal control component of control activities adversely affected the District’s ability to initiate, authorize, record, process, and report financial data in accordance with the regulatory basis of accounting such that there was a reasonable possibility that a material misstatement of the District’s financial statements would not be prevented, or detected and corrected on a timely basis. Financial accounting duties were not adequately segregated among employees. Specifically, certain key weaknesses included the following: non-payroll checks were prepared by the same employee responsible for the maintenance of accounting records and such employee had unrestricted access to the District’s electronic signature stamp. Payroll checks were prepared by the same employee responsible for changes to the payroll amounts, without compensating controls. The District Treasurer was responsible for receiving and depositing monies collected and preparation of bank reconciliations, without compensating controls. Repeat of finding 2023-001. Cause: District management, due to cost/benefit implications which hindered the District’s ability to adequately segregate financial accounting duties among employees, did not effectively address the deficiencies in internal control. Effect or potential effect: The District’s ability to initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements, as well as the ability to safeguard District assets, was adversely affected by the identified weaknesses in the above internal control component. Recommendation: District management should adopt sound accounting policies and establish and maintain internal control that will initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements and that will safeguard District assets. Views of responsible officials: We concur with the recommendation and will implement corrective procedures to the extent possible.
Finding 2024-001
2024-001. Internal Control APPLICABLE MAJOR FEDERAL PROGRAMS: U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553, 10.555, and 10.582 PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 The internal control deficiencies identified in Finding 2024-001 noted in Section II Financial Statement Findings apply to these major federal programs. Financial statement finding 2024-001 detail below: Criteria: Internal control is a process consisting of five interrelated components - control environment, risk assessment, information and communication, control activities, and monitoring. Management is responsible for adopting sound accounting policies and for establishing and maintaining internal control that will, among other things, initiate, authorize, record, process, and report transactions (as well as events and conditions) consistent with management’s assertions embodied in the financial statements. Condition and Context: Deficiencies in the internal control component of control activities adversely affected the District’s ability to initiate, authorize, record, process, and report financial data in accordance with the regulatory basis of accounting such that there was a reasonable possibility that a material misstatement of the District’s financial statements would not be prevented, or detected and corrected on a timely basis. Financial accounting duties were not adequately segregated among employees. Specifically, certain key weaknesses included the following: non-payroll checks were prepared by the same employee responsible for the maintenance of accounting records and such employee had unrestricted access to the District’s electronic signature stamp. Payroll checks were prepared by the same employee responsible for changes to the payroll amounts, without compensating controls. The District Treasurer was responsible for receiving and depositing monies collected and preparation of bank reconciliations, without compensating controls. Repeat of finding 2023-001. Cause: District management, due to cost/benefit implications which hindered the District’s ability to adequately segregate financial accounting duties among employees, did not effectively address the deficiencies in internal control. Effect or potential effect: The District’s ability to initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements, as well as the ability to safeguard District assets, was adversely affected by the identified weaknesses in the above internal control component. Recommendation: District management should adopt sound accounting policies and establish and maintain internal control that will initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements and that will safeguard District assets. Views of responsible officials: We concur with the recommendation and will implement corrective procedures to the extent possible.
Finding 2024-001
2024-001. Internal Control APPLICABLE MAJOR FEDERAL PROGRAMS: U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553, 10.555, and 10.582 PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 The internal control deficiencies identified in Finding 2024-001 noted in Section II Financial Statement Findings apply to these major federal programs. Financial statement finding 2024-001 detail below: Criteria: Internal control is a process consisting of five interrelated components - control environment, risk assessment, information and communication, control activities, and monitoring. Management is responsible for adopting sound accounting policies and for establishing and maintaining internal control that will, among other things, initiate, authorize, record, process, and report transactions (as well as events and conditions) consistent with management’s assertions embodied in the financial statements. Condition and Context: Deficiencies in the internal control component of control activities adversely affected the District’s ability to initiate, authorize, record, process, and report financial data in accordance with the regulatory basis of accounting such that there was a reasonable possibility that a material misstatement of the District’s financial statements would not be prevented, or detected and corrected on a timely basis. Financial accounting duties were not adequately segregated among employees. Specifically, certain key weaknesses included the following: non-payroll checks were prepared by the same employee responsible for the maintenance of accounting records and such employee had unrestricted access to the District’s electronic signature stamp. Payroll checks were prepared by the same employee responsible for changes to the payroll amounts, without compensating controls. The District Treasurer was responsible for receiving and depositing monies collected and preparation of bank reconciliations, without compensating controls. Repeat of finding 2023-001. Cause: District management, due to cost/benefit implications which hindered the District’s ability to adequately segregate financial accounting duties among employees, did not effectively address the deficiencies in internal control. Effect or potential effect: The District’s ability to initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements, as well as the ability to safeguard District assets, was adversely affected by the identified weaknesses in the above internal control component. Recommendation: District management should adopt sound accounting policies and establish and maintain internal control that will initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements and that will safeguard District assets. Views of responsible officials: We concur with the recommendation and will implement corrective procedures to the extent possible.
Finding 2024-001
2024-001. Internal Control APPLICABLE MAJOR FEDERAL PROGRAMS: U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553, 10.555, and 10.582 PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 The internal control deficiencies identified in Finding 2024-001 noted in Section II Financial Statement Findings apply to these major federal programs. Financial statement finding 2024-001 detail below: Criteria: Internal control is a process consisting of five interrelated components - control environment, risk assessment, information and communication, control activities, and monitoring. Management is responsible for adopting sound accounting policies and for establishing and maintaining internal control that will, among other things, initiate, authorize, record, process, and report transactions (as well as events and conditions) consistent with management’s assertions embodied in the financial statements. Condition and Context: Deficiencies in the internal control component of control activities adversely affected the District’s ability to initiate, authorize, record, process, and report financial data in accordance with the regulatory basis of accounting such that there was a reasonable possibility that a material misstatement of the District’s financial statements would not be prevented, or detected and corrected on a timely basis. Financial accounting duties were not adequately segregated among employees. Specifically, certain key weaknesses included the following: non-payroll checks were prepared by the same employee responsible for the maintenance of accounting records and such employee had unrestricted access to the District’s electronic signature stamp. Payroll checks were prepared by the same employee responsible for changes to the payroll amounts, without compensating controls. The District Treasurer was responsible for receiving and depositing monies collected and preparation of bank reconciliations, without compensating controls. Repeat of finding 2023-001. Cause: District management, due to cost/benefit implications which hindered the District’s ability to adequately segregate financial accounting duties among employees, did not effectively address the deficiencies in internal control. Effect or potential effect: The District’s ability to initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements, as well as the ability to safeguard District assets, was adversely affected by the identified weaknesses in the above internal control component. Recommendation: District management should adopt sound accounting policies and establish and maintain internal control that will initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements and that will safeguard District assets. Views of responsible officials: We concur with the recommendation and will implement corrective procedures to the extent possible.
Finding 2024-001
2024-001. Internal Control APPLICABLE MAJOR FEDERAL PROGRAMS: U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553, 10.555, and 10.582 PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 The internal control deficiencies identified in Finding 2024-001 noted in Section II Financial Statement Findings apply to these major federal programs. Financial statement finding 2024-001 detail below: Criteria: Internal control is a process consisting of five interrelated components - control environment, risk assessment, information and communication, control activities, and monitoring. Management is responsible for adopting sound accounting policies and for establishing and maintaining internal control that will, among other things, initiate, authorize, record, process, and report transactions (as well as events and conditions) consistent with management’s assertions embodied in the financial statements. Condition and Context: Deficiencies in the internal control component of control activities adversely affected the District’s ability to initiate, authorize, record, process, and report financial data in accordance with the regulatory basis of accounting such that there was a reasonable possibility that a material misstatement of the District’s financial statements would not be prevented, or detected and corrected on a timely basis. Financial accounting duties were not adequately segregated among employees. Specifically, certain key weaknesses included the following: non-payroll checks were prepared by the same employee responsible for the maintenance of accounting records and such employee had unrestricted access to the District’s electronic signature stamp. Payroll checks were prepared by the same employee responsible for changes to the payroll amounts, without compensating controls. The District Treasurer was responsible for receiving and depositing monies collected and preparation of bank reconciliations, without compensating controls. Repeat of finding 2023-001. Cause: District management, due to cost/benefit implications which hindered the District’s ability to adequately segregate financial accounting duties among employees, did not effectively address the deficiencies in internal control. Effect or potential effect: The District’s ability to initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements, as well as the ability to safeguard District assets, was adversely affected by the identified weaknesses in the above internal control component. Recommendation: District management should adopt sound accounting policies and establish and maintain internal control that will initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements and that will safeguard District assets. Views of responsible officials: We concur with the recommendation and will implement corrective procedures to the extent possible.
Finding 2024-001
2024-001. Internal Control APPLICABLE MAJOR FEDERAL PROGRAMS: U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553, 10.555, and 10.582 PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 The internal control deficiencies identified in Finding 2024-001 noted in Section II Financial Statement Findings apply to these major federal programs. Financial statement finding 2024-001 detail below: Criteria: Internal control is a process consisting of five interrelated components - control environment, risk assessment, information and communication, control activities, and monitoring. Management is responsible for adopting sound accounting policies and for establishing and maintaining internal control that will, among other things, initiate, authorize, record, process, and report transactions (as well as events and conditions) consistent with management’s assertions embodied in the financial statements. Condition and Context: Deficiencies in the internal control component of control activities adversely affected the District’s ability to initiate, authorize, record, process, and report financial data in accordance with the regulatory basis of accounting such that there was a reasonable possibility that a material misstatement of the District’s financial statements would not be prevented, or detected and corrected on a timely basis. Financial accounting duties were not adequately segregated among employees. Specifically, certain key weaknesses included the following: non-payroll checks were prepared by the same employee responsible for the maintenance of accounting records and such employee had unrestricted access to the District’s electronic signature stamp. Payroll checks were prepared by the same employee responsible for changes to the payroll amounts, without compensating controls. The District Treasurer was responsible for receiving and depositing monies collected and preparation of bank reconciliations, without compensating controls. Repeat of finding 2023-001. Cause: District management, due to cost/benefit implications which hindered the District’s ability to adequately segregate financial accounting duties among employees, did not effectively address the deficiencies in internal control. Effect or potential effect: The District’s ability to initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements, as well as the ability to safeguard District assets, was adversely affected by the identified weaknesses in the above internal control component. Recommendation: District management should adopt sound accounting policies and establish and maintain internal control that will initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements and that will safeguard District assets. Views of responsible officials: We concur with the recommendation and will implement corrective procedures to the extent possible.
Finding 2024-001
2024-001. Internal Control APPLICABLE MAJOR FEDERAL PROGRAMS: U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553, 10.555, and 10.582 PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 The internal control deficiencies identified in Finding 2024-001 noted in Section II Financial Statement Findings apply to these major federal programs. Financial statement finding 2024-001 detail below: Criteria: Internal control is a process consisting of five interrelated components - control environment, risk assessment, information and communication, control activities, and monitoring. Management is responsible for adopting sound accounting policies and for establishing and maintaining internal control that will, among other things, initiate, authorize, record, process, and report transactions (as well as events and conditions) consistent with management’s assertions embodied in the financial statements. Condition and Context: Deficiencies in the internal control component of control activities adversely affected the District’s ability to initiate, authorize, record, process, and report financial data in accordance with the regulatory basis of accounting such that there was a reasonable possibility that a material misstatement of the District’s financial statements would not be prevented, or detected and corrected on a timely basis. Financial accounting duties were not adequately segregated among employees. Specifically, certain key weaknesses included the following: non-payroll checks were prepared by the same employee responsible for the maintenance of accounting records and such employee had unrestricted access to the District’s electronic signature stamp. Payroll checks were prepared by the same employee responsible for changes to the payroll amounts, without compensating controls. The District Treasurer was responsible for receiving and depositing monies collected and preparation of bank reconciliations, without compensating controls. Repeat of finding 2023-001. Cause: District management, due to cost/benefit implications which hindered the District’s ability to adequately segregate financial accounting duties among employees, did not effectively address the deficiencies in internal control. Effect or potential effect: The District’s ability to initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements, as well as the ability to safeguard District assets, was adversely affected by the identified weaknesses in the above internal control component. Recommendation: District management should adopt sound accounting policies and establish and maintain internal control that will initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements and that will safeguard District assets. Views of responsible officials: We concur with the recommendation and will implement corrective procedures to the extent possible.
Finding 2024-001
2024-001. Internal Control APPLICABLE MAJOR FEDERAL PROGRAMS: U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553, 10.555, and 10.582 PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 The internal control deficiencies identified in Finding 2024-001 noted in Section II Financial Statement Findings apply to these major federal programs. Financial statement finding 2024-001 detail below: Criteria: Internal control is a process consisting of five interrelated components - control environment, risk assessment, information and communication, control activities, and monitoring. Management is responsible for adopting sound accounting policies and for establishing and maintaining internal control that will, among other things, initiate, authorize, record, process, and report transactions (as well as events and conditions) consistent with management’s assertions embodied in the financial statements. Condition and Context: Deficiencies in the internal control component of control activities adversely affected the District’s ability to initiate, authorize, record, process, and report financial data in accordance with the regulatory basis of accounting such that there was a reasonable possibility that a material misstatement of the District’s financial statements would not be prevented, or detected and corrected on a timely basis. Financial accounting duties were not adequately segregated among employees. Specifically, certain key weaknesses included the following: non-payroll checks were prepared by the same employee responsible for the maintenance of accounting records and such employee had unrestricted access to the District’s electronic signature stamp. Payroll checks were prepared by the same employee responsible for changes to the payroll amounts, without compensating controls. The District Treasurer was responsible for receiving and depositing monies collected and preparation of bank reconciliations, without compensating controls. Repeat of finding 2023-001. Cause: District management, due to cost/benefit implications which hindered the District’s ability to adequately segregate financial accounting duties among employees, did not effectively address the deficiencies in internal control. Effect or potential effect: The District’s ability to initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements, as well as the ability to safeguard District assets, was adversely affected by the identified weaknesses in the above internal control component. Recommendation: District management should adopt sound accounting policies and establish and maintain internal control that will initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements and that will safeguard District assets. Views of responsible officials: We concur with the recommendation and will implement corrective procedures to the extent possible.
Finding 2024-001
2024-001. Internal Control APPLICABLE MAJOR FEDERAL PROGRAMS: U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553, 10.555, and 10.582 PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 The internal control deficiencies identified in Finding 2024-001 noted in Section II Financial Statement Findings apply to these major federal programs. Financial statement finding 2024-001 detail below: Criteria: Internal control is a process consisting of five interrelated components - control environment, risk assessment, information and communication, control activities, and monitoring. Management is responsible for adopting sound accounting policies and for establishing and maintaining internal control that will, among other things, initiate, authorize, record, process, and report transactions (as well as events and conditions) consistent with management’s assertions embodied in the financial statements. Condition and Context: Deficiencies in the internal control component of control activities adversely affected the District’s ability to initiate, authorize, record, process, and report financial data in accordance with the regulatory basis of accounting such that there was a reasonable possibility that a material misstatement of the District’s financial statements would not be prevented, or detected and corrected on a timely basis. Financial accounting duties were not adequately segregated among employees. Specifically, certain key weaknesses included the following: non-payroll checks were prepared by the same employee responsible for the maintenance of accounting records and such employee had unrestricted access to the District’s electronic signature stamp. Payroll checks were prepared by the same employee responsible for changes to the payroll amounts, without compensating controls. The District Treasurer was responsible for receiving and depositing monies collected and preparation of bank reconciliations, without compensating controls. Repeat of finding 2023-001. Cause: District management, due to cost/benefit implications which hindered the District’s ability to adequately segregate financial accounting duties among employees, did not effectively address the deficiencies in internal control. Effect or potential effect: The District’s ability to initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements, as well as the ability to safeguard District assets, was adversely affected by the identified weaknesses in the above internal control component. Recommendation: District management should adopt sound accounting policies and establish and maintain internal control that will initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements and that will safeguard District assets. Views of responsible officials: We concur with the recommendation and will implement corrective procedures to the extent possible.
Finding 2024-001
2024-001. Internal Control APPLICABLE MAJOR FEDERAL PROGRAMS: U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553, 10.555, and 10.582 PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS-THROUGH NUMBER 0901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 The internal control deficiencies identified in Finding 2024-001 noted in Section II Financial Statement Findings apply to these major federal programs. Financial statement finding 2024-001 detail below: Criteria: Internal control is a process consisting of five interrelated components - control environment, risk assessment, information and communication, control activities, and monitoring. Management is responsible for adopting sound accounting policies and for establishing and maintaining internal control that will, among other things, initiate, authorize, record, process, and report transactions (as well as events and conditions) consistent with management’s assertions embodied in the financial statements. Condition and Context: Deficiencies in the internal control component of control activities adversely affected the District’s ability to initiate, authorize, record, process, and report financial data in accordance with the regulatory basis of accounting such that there was a reasonable possibility that a material misstatement of the District’s financial statements would not be prevented, or detected and corrected on a timely basis. Financial accounting duties were not adequately segregated among employees. Specifically, certain key weaknesses included the following: non-payroll checks were prepared by the same employee responsible for the maintenance of accounting records and such employee had unrestricted access to the District’s electronic signature stamp. Payroll checks were prepared by the same employee responsible for changes to the payroll amounts, without compensating controls. The District Treasurer was responsible for receiving and depositing monies collected and preparation of bank reconciliations, without compensating controls. Repeat of finding 2023-001. Cause: District management, due to cost/benefit implications which hindered the District’s ability to adequately segregate financial accounting duties among employees, did not effectively address the deficiencies in internal control. Effect or potential effect: The District’s ability to initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements, as well as the ability to safeguard District assets, was adversely affected by the identified weaknesses in the above internal control component. Recommendation: District management should adopt sound accounting policies and establish and maintain internal control that will initiate, authorize, record, process, and report transactions consistent with management’s assertions embodied in the financial statements and that will safeguard District assets. Views of responsible officials: We concur with the recommendation and will implement corrective procedures to the extent possible.