Audit 359058

Reportable Finding Considered a Material Weakness – Lack of Supporting Documentation for Cash Draws Program Name: Innovative Approaches to Literacy; Full-Service Community Schools; and Promise Neighborhood Assistance listing #: 84.215K Program year: 2024 Federal Awarding Agency: Department of Education Compliance requirement: Cash Management Criteria: According to 2 CFR 200.305(b)(4) – If the recipient or subrecipient cannot meet the criteria for advance payments, an advance payment for an initial period may be made, however, after that, the Federal agency or pass-through entity must reimburse the recipient or subrecipient for its actual cash disbursements. In addition, per 2 CFR 200.305(b)(9), the recipient or subrecipient must be able to account for all Federal funds received, obligated, and expended. Condition: During our testing of cash draws, it was noted that the reimbursement requests submitted for this award were not based on actual cash disbursements, lacked adequate documentation with no internal support retained that showed internal review and approval for the cash draws. Cause: Policies and internal controls over draw requests were not in place during the year, due in part to turnover in the positions that were in charge of approvals. Effect: The requests for reimbursement were not in line with actual expenses incurred during the draw period. Questioned costs: There are no questioned costs related to this finding. Repeat finding: This is not a repeat finding. Recommendation: We recommend that the Organization update their policies and procedures surrounding cash management to ensure that funds are drawn on a reimbursement basis, supported by actual expenditures incurred. Views of Responsible Officials and Corrective Action Plan (unaudited): See corrective action plan.

Reportable Finding Considered a Significant Deficiency – Lack of Supporting Documentation for Search for Suspension and Debarment in Procurement Program Name: Innovative Approaches to Literacy; Full-Service Community Schools; and Promise Neighborhood Assistance listing #: 84.215K Program year: 2024 Federal Awarding Agency: Department of Education Compliance requirement: Procurement Criteria: According to 2 CFR §200.214, non-federal entities are prohibited from contracting with or making subawards to parties that are suspended or debarred. The primary method for ensuring compliance with this requirement is to perform a vendor search on SAM.gov. Other methods include having vendors self-certify or including a clause in the vendor contract. Condition: During our testing of procurement, it was noted that the Organization lacked support documenting a search for suspension or debarment of its vendors or use of the other methods for ensuring compliance. Cause: Policies and internal controls over procurement were not fully functioning during the year, due in part to turnover in the positions that were in charge of procurement. Effect: The risk of engaging a vendor who is suspended or barred from receiving federal funding or participating in federal award activities is increased. Questioned costs: There are no questioned costs related to this finding. Repeat finding: This is not a repeat finding. Recommendation: We recommend that the Organization update their policies and procedures surrounding procurement to require that one of the methods described above is utilized to ensure that no federal funding is passed to individuals or corporations that are barred from receiving it. Views of Responsible Officials and Corrective Action Plan (unaudited): See corrective action plan.

Reportable Finding Considered a Material Weakness – Lack of Supporting Documentation for Cash Draws Program Name: Innovative Approaches to Literacy; Full-Service Community Schools; and Promise Neighborhood Assistance listing #: 84.215K Program year: 2024 Federal Awarding Agency: Department of Education Compliance requirement: Cash Management Criteria: According to 2 CFR 200.305(b)(4) – If the recipient or subrecipient cannot meet the criteria for advance payments, an advance payment for an initial period may be made, however, after that, the Federal agency or pass-through entity must reimburse the recipient or subrecipient for its actual cash disbursements. In addition, per 2 CFR 200.305(b)(9), the recipient or subrecipient must be able to account for all Federal funds received, obligated, and expended. Condition: During our testing of cash draws, it was noted that the reimbursement requests submitted for this award were not based on actual cash disbursements, lacked adequate documentation with no internal support retained that showed internal review and approval for the cash draws. Cause: Policies and internal controls over draw requests were not in place during the year, due in part to turnover in the positions that were in charge of approvals. Effect: The requests for reimbursement were not in line with actual expenses incurred during the draw period. Questioned costs: There are no questioned costs related to this finding. Repeat finding: This is not a repeat finding. Recommendation: We recommend that the Organization update their policies and procedures surrounding cash management to ensure that funds are drawn on a reimbursement basis, supported by actual expenditures incurred. Views of Responsible Officials and Corrective Action Plan (unaudited): See corrective action plan.

Reportable Finding Considered a Significant Deficiency – Lack of Supporting Documentation for Search for Suspension and Debarment in Procurement Program Name: Innovative Approaches to Literacy; Full-Service Community Schools; and Promise Neighborhood Assistance listing #: 84.215K Program year: 2024 Federal Awarding Agency: Department of Education Compliance requirement: Procurement Criteria: According to 2 CFR §200.214, non-federal entities are prohibited from contracting with or making subawards to parties that are suspended or debarred. The primary method for ensuring compliance with this requirement is to perform a vendor search on SAM.gov. Other methods include having vendors self-certify or including a clause in the vendor contract. Condition: During our testing of procurement, it was noted that the Organization lacked support documenting a search for suspension or debarment of its vendors or use of the other methods for ensuring compliance. Cause: Policies and internal controls over procurement were not fully functioning during the year, due in part to turnover in the positions that were in charge of procurement. Effect: The risk of engaging a vendor who is suspended or barred from receiving federal funding or participating in federal award activities is increased. Questioned costs: There are no questioned costs related to this finding. Repeat finding: This is not a repeat finding. Recommendation: We recommend that the Organization update their policies and procedures surrounding procurement to require that one of the methods described above is utilized to ensure that no federal funding is passed to individuals or corporations that are barred from receiving it. Views of Responsible Officials and Corrective Action Plan (unaudited): See corrective action plan.