Audit 358306

FY End
2024-06-30
Total Expended
$3.08M
Findings
6
Programs
9
Organization: Shelby City School District (OH)
Year: 2024 Accepted: 2025-06-09

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
564143 2024-001 Material Weakness - N
564144 2024-001 Material Weakness - N
564145 2024-001 Material Weakness - N
1140585 2024-001 Material Weakness - N
1140586 2024-001 Material Weakness - N
1140587 2024-001 Material Weakness - N

Contacts

Name Title Type
KLVXU6366JX5 Beth Lykins Auditee
4193423520 Teresa Jessee Auditor
No contacts on file

Notes to SEFA

Title: NOTE A - BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of Shelby City School District, Richland County, Ohio (the District) under programs of the federal government for the year ended June 30, 2024. The information on this Schedule is prepared in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (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 net position of the District.
Title: NOTE D - CHILD NUTRITION CLUSTER Accounting Policies: Expenditures reported on the Schedule are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The District commingles cash receipts from the U.S. Department of Agriculture with similar State grants. When reporting expenditures on this Schedule, the District assumes it expends federal monies first.
Title: NOTE E - FOOD DONATION PROGRAM Accounting Policies: Expenditures reported on the Schedule are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The District reports commodities consumed on the Schedule at entitlement value. The District allocated donated food commodities to the respective program that benefitted from the use of those donated food commodities.
Title: NOTE F – TRANSFERS BETWEEN PROGRAM YEARS Accounting Policies: Expenditures reported on the Schedule are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. Federal regulations require schools to obligate certain federal awards by June 30. However, with DEW’s consent, schools can transfer unobligated amounts to the subsequent fiscal year’s program. The District transferred the following amounts from 2024 to 2025 programs:

Finding Details

2 CFR § 3474.1 gives regulatory effect to the Department of Education (DOE) for Appendix II to 2 CFR Part 200 which states, in part, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following: (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 Provisions Applicable to Contracts 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 wages specified in a 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. Lack of effective controls led to the District expending AL# 84.425 COVID-19 Education Stabilization Fund federal grant funds on the following projects which did not meet the requirements of the Davis Bacon Act: • $34,500 for an asphalt parking lot at the health clinic. The District did not enter into a written agreement with the contractor which contained a provision to ensure the contractor complied with Federal wage rate requirements. Further, the District did not obtain weekly certified payroll reports from the contractor to verify prevailing wages were paid on a weekly basis. • $2,975 for a new sidewalk at the health clinic. The District did not enter into a written agreement with the contractor which contained a provision to ensure the contractor complied with Federal wage rate requirements. Further, the District did not obtain weekly certified payroll reports from the contractor to verify prevailing wages were paid on a weekly basis. The above-listed noncompliance also resulted in a qualified opinion over the AL# 84.425 COVID-19 Education Stabilization Fund program. Failure to have effective controls in place over wage-rate requirements may result in the District and its contractors or subcontractors failing to pay prevailing wages when required by Federal law and could result in reduction of future Federal funding or other sanctions imposed by Federal grantors. When required by Federal grant legislation, the District should ensure prime construction contracts in excess of $2,000 paid with Federal grant monies contain provisions that require the contractor to comply with wage rate requirements. Further, the District should ensure certified payroll reports are provided weekly by the contractor.
2 CFR § 3474.1 gives regulatory effect to the Department of Education (DOE) for Appendix II to 2 CFR Part 200 which states, in part, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following: (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 Provisions Applicable to Contracts 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 wages specified in a 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. Lack of effective controls led to the District expending AL# 84.425 COVID-19 Education Stabilization Fund federal grant funds on the following projects which did not meet the requirements of the Davis Bacon Act: • $34,500 for an asphalt parking lot at the health clinic. The District did not enter into a written agreement with the contractor which contained a provision to ensure the contractor complied with Federal wage rate requirements. Further, the District did not obtain weekly certified payroll reports from the contractor to verify prevailing wages were paid on a weekly basis. • $2,975 for a new sidewalk at the health clinic. The District did not enter into a written agreement with the contractor which contained a provision to ensure the contractor complied with Federal wage rate requirements. Further, the District did not obtain weekly certified payroll reports from the contractor to verify prevailing wages were paid on a weekly basis. The above-listed noncompliance also resulted in a qualified opinion over the AL# 84.425 COVID-19 Education Stabilization Fund program. Failure to have effective controls in place over wage-rate requirements may result in the District and its contractors or subcontractors failing to pay prevailing wages when required by Federal law and could result in reduction of future Federal funding or other sanctions imposed by Federal grantors. When required by Federal grant legislation, the District should ensure prime construction contracts in excess of $2,000 paid with Federal grant monies contain provisions that require the contractor to comply with wage rate requirements. Further, the District should ensure certified payroll reports are provided weekly by the contractor.
2 CFR § 3474.1 gives regulatory effect to the Department of Education (DOE) for Appendix II to 2 CFR Part 200 which states, in part, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following: (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 Provisions Applicable to Contracts 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 wages specified in a 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. Lack of effective controls led to the District expending AL# 84.425 COVID-19 Education Stabilization Fund federal grant funds on the following projects which did not meet the requirements of the Davis Bacon Act: • $34,500 for an asphalt parking lot at the health clinic. The District did not enter into a written agreement with the contractor which contained a provision to ensure the contractor complied with Federal wage rate requirements. Further, the District did not obtain weekly certified payroll reports from the contractor to verify prevailing wages were paid on a weekly basis. • $2,975 for a new sidewalk at the health clinic. The District did not enter into a written agreement with the contractor which contained a provision to ensure the contractor complied with Federal wage rate requirements. Further, the District did not obtain weekly certified payroll reports from the contractor to verify prevailing wages were paid on a weekly basis. The above-listed noncompliance also resulted in a qualified opinion over the AL# 84.425 COVID-19 Education Stabilization Fund program. Failure to have effective controls in place over wage-rate requirements may result in the District and its contractors or subcontractors failing to pay prevailing wages when required by Federal law and could result in reduction of future Federal funding or other sanctions imposed by Federal grantors. When required by Federal grant legislation, the District should ensure prime construction contracts in excess of $2,000 paid with Federal grant monies contain provisions that require the contractor to comply with wage rate requirements. Further, the District should ensure certified payroll reports are provided weekly by the contractor.
2 CFR § 3474.1 gives regulatory effect to the Department of Education (DOE) for Appendix II to 2 CFR Part 200 which states, in part, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following: (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 Provisions Applicable to Contracts 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 wages specified in a 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. Lack of effective controls led to the District expending AL# 84.425 COVID-19 Education Stabilization Fund federal grant funds on the following projects which did not meet the requirements of the Davis Bacon Act: • $34,500 for an asphalt parking lot at the health clinic. The District did not enter into a written agreement with the contractor which contained a provision to ensure the contractor complied with Federal wage rate requirements. Further, the District did not obtain weekly certified payroll reports from the contractor to verify prevailing wages were paid on a weekly basis. • $2,975 for a new sidewalk at the health clinic. The District did not enter into a written agreement with the contractor which contained a provision to ensure the contractor complied with Federal wage rate requirements. Further, the District did not obtain weekly certified payroll reports from the contractor to verify prevailing wages were paid on a weekly basis. The above-listed noncompliance also resulted in a qualified opinion over the AL# 84.425 COVID-19 Education Stabilization Fund program. Failure to have effective controls in place over wage-rate requirements may result in the District and its contractors or subcontractors failing to pay prevailing wages when required by Federal law and could result in reduction of future Federal funding or other sanctions imposed by Federal grantors. When required by Federal grant legislation, the District should ensure prime construction contracts in excess of $2,000 paid with Federal grant monies contain provisions that require the contractor to comply with wage rate requirements. Further, the District should ensure certified payroll reports are provided weekly by the contractor.
2 CFR § 3474.1 gives regulatory effect to the Department of Education (DOE) for Appendix II to 2 CFR Part 200 which states, in part, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following: (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 Provisions Applicable to Contracts 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 wages specified in a 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. Lack of effective controls led to the District expending AL# 84.425 COVID-19 Education Stabilization Fund federal grant funds on the following projects which did not meet the requirements of the Davis Bacon Act: • $34,500 for an asphalt parking lot at the health clinic. The District did not enter into a written agreement with the contractor which contained a provision to ensure the contractor complied with Federal wage rate requirements. Further, the District did not obtain weekly certified payroll reports from the contractor to verify prevailing wages were paid on a weekly basis. • $2,975 for a new sidewalk at the health clinic. The District did not enter into a written agreement with the contractor which contained a provision to ensure the contractor complied with Federal wage rate requirements. Further, the District did not obtain weekly certified payroll reports from the contractor to verify prevailing wages were paid on a weekly basis. The above-listed noncompliance also resulted in a qualified opinion over the AL# 84.425 COVID-19 Education Stabilization Fund program. Failure to have effective controls in place over wage-rate requirements may result in the District and its contractors or subcontractors failing to pay prevailing wages when required by Federal law and could result in reduction of future Federal funding or other sanctions imposed by Federal grantors. When required by Federal grant legislation, the District should ensure prime construction contracts in excess of $2,000 paid with Federal grant monies contain provisions that require the contractor to comply with wage rate requirements. Further, the District should ensure certified payroll reports are provided weekly by the contractor.
2 CFR § 3474.1 gives regulatory effect to the Department of Education (DOE) for Appendix II to 2 CFR Part 200 which states, in part, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following: (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 Provisions Applicable to Contracts 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 wages specified in a 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. Lack of effective controls led to the District expending AL# 84.425 COVID-19 Education Stabilization Fund federal grant funds on the following projects which did not meet the requirements of the Davis Bacon Act: • $34,500 for an asphalt parking lot at the health clinic. The District did not enter into a written agreement with the contractor which contained a provision to ensure the contractor complied with Federal wage rate requirements. Further, the District did not obtain weekly certified payroll reports from the contractor to verify prevailing wages were paid on a weekly basis. • $2,975 for a new sidewalk at the health clinic. The District did not enter into a written agreement with the contractor which contained a provision to ensure the contractor complied with Federal wage rate requirements. Further, the District did not obtain weekly certified payroll reports from the contractor to verify prevailing wages were paid on a weekly basis. The above-listed noncompliance also resulted in a qualified opinion over the AL# 84.425 COVID-19 Education Stabilization Fund program. Failure to have effective controls in place over wage-rate requirements may result in the District and its contractors or subcontractors failing to pay prevailing wages when required by Federal law and could result in reduction of future Federal funding or other sanctions imposed by Federal grantors. When required by Federal grant legislation, the District should ensure prime construction contracts in excess of $2,000 paid with Federal grant monies contain provisions that require the contractor to comply with wage rate requirements. Further, the District should ensure certified payroll reports are provided weekly by the contractor.