Audit 362175

FY End
2024-08-31
Total Expended
$1.06M
Findings
6
Programs
9
Organization: La Center School District (WA)
Year: 2024 Accepted: 2025-07-14

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
571250 2024-001 Material Weakness - B
571251 2024-001 Material Weakness - B
571252 2024-001 Material Weakness - B
1147692 2024-001 Material Weakness - B
1147693 2024-001 Material Weakness - B
1147694 2024-001 Material Weakness - B

Contacts

Name Title Type
E5TEMAEZBKK4 Gary McGarvie Auditee
3602632131 Lindsay Osborne Auditor
No contacts on file

Notes to SEFA

Title: NOTE 3—PROGRAM COSTS/MATCHING CONTRIBUTIONS Accounting Policies: This Schedule is prepared on the same basis of accounting as the La Center School District’s financial statements. The La Center School District uses the modified accrual basis of accounting. Expenditures represent only the federally funded portions of the program. District records should be consulted to determine amounts expended or matched from non-federal sources. De Minimis Rate Used: N Rate Explanation: The La Center School District has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The La Center School District used the federal restricted rate of 2.59%. The amounts shown as current year expenses represent only the federal award portion of the program costs. Entire program costs, including the La Center School District’s local matching share, may be more than shown. Such expenditures are recognized following, the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Title: NOTE 4—NONCASH AWARDS Accounting Policies: This Schedule is prepared on the same basis of accounting as the La Center School District’s financial statements. The La Center School District uses the modified accrual basis of accounting. Expenditures represent only the federally funded portions of the program. District records should be consulted to determine amounts expended or matched from non-federal sources. De Minimis Rate Used: N Rate Explanation: The La Center School District has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The La Center School District used the federal restricted rate of 2.59%. The amount of commodities reported on the schedule is the value of commodities distributed by the La Center School District during the current year and priced as prescribed by $57,025.62.
Title: NOTE 5—SCHOOLWIDE PROGRAMS Accounting Policies: This Schedule is prepared on the same basis of accounting as the La Center School District’s financial statements. The La Center School District uses the modified accrual basis of accounting. Expenditures represent only the federally funded portions of the program. District records should be consulted to determine amounts expended or matched from non-federal sources. De Minimis Rate Used: N Rate Explanation: The La Center School District has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The La Center School District used the federal restricted rate of 2.59%. The La Center School District operates a “schoolwide program” in one elementary building. Using federal funding, schoolwide programs are designed to upgrade an entire educational program within a school for all students, rather than limit services to certain targeted students. The following federal program amounts were expended by the La Center School District in its schoolwide program: Title I (84.010) $241,448; Title III (84.011) $6,109.59.

Finding Details

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS La Center School District No. 101 September 1, 2023 through August 31, 2024 2024-001 The District did not have adequate internal controls and did not comply with time-and-effort requirements. Assistance Listing Number and Title: 84.027 Special Education Grants to States Federal Grantor Name: Department of Education, Office of Special Education and Rehabilitation Services Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: 307698, 338473, AD-2988 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2024, the District spent $362,064 in federal funds from the Special Education program cluster. This program ensures students with disabilities receive free and appropriate public education with specially designed instruction that addresses their unique needs. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. The District is responsible for ensuring it supports all payroll costs charged to the program with adequate time-and-effort documentation, as required by federal regulations and the awarding agency. Depending on the number and types of activities employees perform, time-and-effort documentation can be a semiannual certification or a monthly personnel activity report, such as a detailed timesheet. Time-and-effort documentation must also be signed and dated after the work is completed. Description of Condition The District’s internal controls were ineffective for ensuring it supported all salaries and benefits it charged to the program with appropriate time-and-effort documentation, as federal regulations and OSPI require. Specifically, District staff tracked allowable payroll costs and completed time-and effort documentation. However, for the second half of the school year, the semi-annual certifications indicated time worked was for another federal program. Additionally, the District completed a semiannual certification for one staff member who required a monthly personnel activity report because they worked on more than one cost objective. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The District relied on one staff member to complete all semiannual certifications without an independent review to ensure forms were accurately completed. Additionally, the District misunderstood when a semiannual certification could be used. Effect of Condition The District did not obtain time-and-effort documentation for five employees whose payroll and benefits costs totaling $135,194 were charged to the program. Without adequate time-and-effort documentation, the District cannot demonstrate compliance with the awarding agency’s documentation requirements to support costs charged to federal programs. Further, the District cannot assure federal grantors that payroll costs it charged to the program were accurate and valid. During the audit, the District supported these payroll costs by providing alternative documentation to show the employees worked on the program; therefore, we are not questioning these costs. Recommendation We recommend the District establish and follow internal controls to ensure it complies with federal and OSPI requirements for obtaining signed time-and-effort documentation timely. District’s Response This letter is in response to the SAO Audit concern regarding the Special Education Time & Effort Attestation Finding. As discussed with the State Auditor, the issue stemmed from a clerical error in the activity box selection. We have since corrected the forms, with the original signer’s initials added for verification. This error did not affect student services or funding. A review of prior year signatures supports the intent to check the correct box on the forms. To prevent similar issues in the future, we will pre-fill the forms and print them with the appropriate box selections for the necessary attestation. Moving forward, LCSD will continue to adhere to the guidelines provided by OSPI for attestation signatures and the correct use of fund codes. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, Subpart E, Cost Principles, establishes requirements for determining allowable costs and supporting costs allocated to federal programs. Office of Superintendent of Public Instruction Addendum to Bulletin 048-17, Guidelines for Charging Employee Compensation to Federal Grants establishes requirements for documenting time-and-effort, including fixed schedule systems.
SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS La Center School District No. 101 September 1, 2023 through August 31, 2024 2024-001 The District did not have adequate internal controls and did not comply with time-and-effort requirements. Assistance Listing Number and Title: 84.027 Special Education Grants to States Federal Grantor Name: Department of Education, Office of Special Education and Rehabilitation Services Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: 307698, 338473, AD-2988 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2024, the District spent $362,064 in federal funds from the Special Education program cluster. This program ensures students with disabilities receive free and appropriate public education with specially designed instruction that addresses their unique needs. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. The District is responsible for ensuring it supports all payroll costs charged to the program with adequate time-and-effort documentation, as required by federal regulations and the awarding agency. Depending on the number and types of activities employees perform, time-and-effort documentation can be a semiannual certification or a monthly personnel activity report, such as a detailed timesheet. Time-and-effort documentation must also be signed and dated after the work is completed. Description of Condition The District’s internal controls were ineffective for ensuring it supported all salaries and benefits it charged to the program with appropriate time-and-effort documentation, as federal regulations and OSPI require. Specifically, District staff tracked allowable payroll costs and completed time-and effort documentation. However, for the second half of the school year, the semi-annual certifications indicated time worked was for another federal program. Additionally, the District completed a semiannual certification for one staff member who required a monthly personnel activity report because they worked on more than one cost objective. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The District relied on one staff member to complete all semiannual certifications without an independent review to ensure forms were accurately completed. Additionally, the District misunderstood when a semiannual certification could be used. Effect of Condition The District did not obtain time-and-effort documentation for five employees whose payroll and benefits costs totaling $135,194 were charged to the program. Without adequate time-and-effort documentation, the District cannot demonstrate compliance with the awarding agency’s documentation requirements to support costs charged to federal programs. Further, the District cannot assure federal grantors that payroll costs it charged to the program were accurate and valid. During the audit, the District supported these payroll costs by providing alternative documentation to show the employees worked on the program; therefore, we are not questioning these costs. Recommendation We recommend the District establish and follow internal controls to ensure it complies with federal and OSPI requirements for obtaining signed time-and-effort documentation timely. District’s Response This letter is in response to the SAO Audit concern regarding the Special Education Time & Effort Attestation Finding. As discussed with the State Auditor, the issue stemmed from a clerical error in the activity box selection. We have since corrected the forms, with the original signer’s initials added for verification. This error did not affect student services or funding. A review of prior year signatures supports the intent to check the correct box on the forms. To prevent similar issues in the future, we will pre-fill the forms and print them with the appropriate box selections for the necessary attestation. Moving forward, LCSD will continue to adhere to the guidelines provided by OSPI for attestation signatures and the correct use of fund codes. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, Subpart E, Cost Principles, establishes requirements for determining allowable costs and supporting costs allocated to federal programs. Office of Superintendent of Public Instruction Addendum to Bulletin 048-17, Guidelines for Charging Employee Compensation to Federal Grants establishes requirements for documenting time-and-effort, including fixed schedule systems.
SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS La Center School District No. 101 September 1, 2023 through August 31, 2024 2024-001 The District did not have adequate internal controls and did not comply with time-and-effort requirements. Assistance Listing Number and Title: 84.027 Special Education Grants to States Federal Grantor Name: Department of Education, Office of Special Education and Rehabilitation Services Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: 307698, 338473, AD-2988 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2024, the District spent $362,064 in federal funds from the Special Education program cluster. This program ensures students with disabilities receive free and appropriate public education with specially designed instruction that addresses their unique needs. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. The District is responsible for ensuring it supports all payroll costs charged to the program with adequate time-and-effort documentation, as required by federal regulations and the awarding agency. Depending on the number and types of activities employees perform, time-and-effort documentation can be a semiannual certification or a monthly personnel activity report, such as a detailed timesheet. Time-and-effort documentation must also be signed and dated after the work is completed. Description of Condition The District’s internal controls were ineffective for ensuring it supported all salaries and benefits it charged to the program with appropriate time-and-effort documentation, as federal regulations and OSPI require. Specifically, District staff tracked allowable payroll costs and completed time-and effort documentation. However, for the second half of the school year, the semi-annual certifications indicated time worked was for another federal program. Additionally, the District completed a semiannual certification for one staff member who required a monthly personnel activity report because they worked on more than one cost objective. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The District relied on one staff member to complete all semiannual certifications without an independent review to ensure forms were accurately completed. Additionally, the District misunderstood when a semiannual certification could be used. Effect of Condition The District did not obtain time-and-effort documentation for five employees whose payroll and benefits costs totaling $135,194 were charged to the program. Without adequate time-and-effort documentation, the District cannot demonstrate compliance with the awarding agency’s documentation requirements to support costs charged to federal programs. Further, the District cannot assure federal grantors that payroll costs it charged to the program were accurate and valid. During the audit, the District supported these payroll costs by providing alternative documentation to show the employees worked on the program; therefore, we are not questioning these costs. Recommendation We recommend the District establish and follow internal controls to ensure it complies with federal and OSPI requirements for obtaining signed time-and-effort documentation timely. District’s Response This letter is in response to the SAO Audit concern regarding the Special Education Time & Effort Attestation Finding. As discussed with the State Auditor, the issue stemmed from a clerical error in the activity box selection. We have since corrected the forms, with the original signer’s initials added for verification. This error did not affect student services or funding. A review of prior year signatures supports the intent to check the correct box on the forms. To prevent similar issues in the future, we will pre-fill the forms and print them with the appropriate box selections for the necessary attestation. Moving forward, LCSD will continue to adhere to the guidelines provided by OSPI for attestation signatures and the correct use of fund codes. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, Subpart E, Cost Principles, establishes requirements for determining allowable costs and supporting costs allocated to federal programs. Office of Superintendent of Public Instruction Addendum to Bulletin 048-17, Guidelines for Charging Employee Compensation to Federal Grants establishes requirements for documenting time-and-effort, including fixed schedule systems.
SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS La Center School District No. 101 September 1, 2023 through August 31, 2024 2024-001 The District did not have adequate internal controls and did not comply with time-and-effort requirements. Assistance Listing Number and Title: 84.027 Special Education Grants to States Federal Grantor Name: Department of Education, Office of Special Education and Rehabilitation Services Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: 307698, 338473, AD-2988 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2024, the District spent $362,064 in federal funds from the Special Education program cluster. This program ensures students with disabilities receive free and appropriate public education with specially designed instruction that addresses their unique needs. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. The District is responsible for ensuring it supports all payroll costs charged to the program with adequate time-and-effort documentation, as required by federal regulations and the awarding agency. Depending on the number and types of activities employees perform, time-and-effort documentation can be a semiannual certification or a monthly personnel activity report, such as a detailed timesheet. Time-and-effort documentation must also be signed and dated after the work is completed. Description of Condition The District’s internal controls were ineffective for ensuring it supported all salaries and benefits it charged to the program with appropriate time-and-effort documentation, as federal regulations and OSPI require. Specifically, District staff tracked allowable payroll costs and completed time-and effort documentation. However, for the second half of the school year, the semi-annual certifications indicated time worked was for another federal program. Additionally, the District completed a semiannual certification for one staff member who required a monthly personnel activity report because they worked on more than one cost objective. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The District relied on one staff member to complete all semiannual certifications without an independent review to ensure forms were accurately completed. Additionally, the District misunderstood when a semiannual certification could be used. Effect of Condition The District did not obtain time-and-effort documentation for five employees whose payroll and benefits costs totaling $135,194 were charged to the program. Without adequate time-and-effort documentation, the District cannot demonstrate compliance with the awarding agency’s documentation requirements to support costs charged to federal programs. Further, the District cannot assure federal grantors that payroll costs it charged to the program were accurate and valid. During the audit, the District supported these payroll costs by providing alternative documentation to show the employees worked on the program; therefore, we are not questioning these costs. Recommendation We recommend the District establish and follow internal controls to ensure it complies with federal and OSPI requirements for obtaining signed time-and-effort documentation timely. District’s Response This letter is in response to the SAO Audit concern regarding the Special Education Time & Effort Attestation Finding. As discussed with the State Auditor, the issue stemmed from a clerical error in the activity box selection. We have since corrected the forms, with the original signer’s initials added for verification. This error did not affect student services or funding. A review of prior year signatures supports the intent to check the correct box on the forms. To prevent similar issues in the future, we will pre-fill the forms and print them with the appropriate box selections for the necessary attestation. Moving forward, LCSD will continue to adhere to the guidelines provided by OSPI for attestation signatures and the correct use of fund codes. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, Subpart E, Cost Principles, establishes requirements for determining allowable costs and supporting costs allocated to federal programs. Office of Superintendent of Public Instruction Addendum to Bulletin 048-17, Guidelines for Charging Employee Compensation to Federal Grants establishes requirements for documenting time-and-effort, including fixed schedule systems.
SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS La Center School District No. 101 September 1, 2023 through August 31, 2024 2024-001 The District did not have adequate internal controls and did not comply with time-and-effort requirements. Assistance Listing Number and Title: 84.027 Special Education Grants to States Federal Grantor Name: Department of Education, Office of Special Education and Rehabilitation Services Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: 307698, 338473, AD-2988 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2024, the District spent $362,064 in federal funds from the Special Education program cluster. This program ensures students with disabilities receive free and appropriate public education with specially designed instruction that addresses their unique needs. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. The District is responsible for ensuring it supports all payroll costs charged to the program with adequate time-and-effort documentation, as required by federal regulations and the awarding agency. Depending on the number and types of activities employees perform, time-and-effort documentation can be a semiannual certification or a monthly personnel activity report, such as a detailed timesheet. Time-and-effort documentation must also be signed and dated after the work is completed. Description of Condition The District’s internal controls were ineffective for ensuring it supported all salaries and benefits it charged to the program with appropriate time-and-effort documentation, as federal regulations and OSPI require. Specifically, District staff tracked allowable payroll costs and completed time-and effort documentation. However, for the second half of the school year, the semi-annual certifications indicated time worked was for another federal program. Additionally, the District completed a semiannual certification for one staff member who required a monthly personnel activity report because they worked on more than one cost objective. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The District relied on one staff member to complete all semiannual certifications without an independent review to ensure forms were accurately completed. Additionally, the District misunderstood when a semiannual certification could be used. Effect of Condition The District did not obtain time-and-effort documentation for five employees whose payroll and benefits costs totaling $135,194 were charged to the program. Without adequate time-and-effort documentation, the District cannot demonstrate compliance with the awarding agency’s documentation requirements to support costs charged to federal programs. Further, the District cannot assure federal grantors that payroll costs it charged to the program were accurate and valid. During the audit, the District supported these payroll costs by providing alternative documentation to show the employees worked on the program; therefore, we are not questioning these costs. Recommendation We recommend the District establish and follow internal controls to ensure it complies with federal and OSPI requirements for obtaining signed time-and-effort documentation timely. District’s Response This letter is in response to the SAO Audit concern regarding the Special Education Time & Effort Attestation Finding. As discussed with the State Auditor, the issue stemmed from a clerical error in the activity box selection. We have since corrected the forms, with the original signer’s initials added for verification. This error did not affect student services or funding. A review of prior year signatures supports the intent to check the correct box on the forms. To prevent similar issues in the future, we will pre-fill the forms and print them with the appropriate box selections for the necessary attestation. Moving forward, LCSD will continue to adhere to the guidelines provided by OSPI for attestation signatures and the correct use of fund codes. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, Subpart E, Cost Principles, establishes requirements for determining allowable costs and supporting costs allocated to federal programs. Office of Superintendent of Public Instruction Addendum to Bulletin 048-17, Guidelines for Charging Employee Compensation to Federal Grants establishes requirements for documenting time-and-effort, including fixed schedule systems.
SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS La Center School District No. 101 September 1, 2023 through August 31, 2024 2024-001 The District did not have adequate internal controls and did not comply with time-and-effort requirements. Assistance Listing Number and Title: 84.027 Special Education Grants to States Federal Grantor Name: Department of Education, Office of Special Education and Rehabilitation Services Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: 307698, 338473, AD-2988 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2024, the District spent $362,064 in federal funds from the Special Education program cluster. This program ensures students with disabilities receive free and appropriate public education with specially designed instruction that addresses their unique needs. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. The District is responsible for ensuring it supports all payroll costs charged to the program with adequate time-and-effort documentation, as required by federal regulations and the awarding agency. Depending on the number and types of activities employees perform, time-and-effort documentation can be a semiannual certification or a monthly personnel activity report, such as a detailed timesheet. Time-and-effort documentation must also be signed and dated after the work is completed. Description of Condition The District’s internal controls were ineffective for ensuring it supported all salaries and benefits it charged to the program with appropriate time-and-effort documentation, as federal regulations and OSPI require. Specifically, District staff tracked allowable payroll costs and completed time-and effort documentation. However, for the second half of the school year, the semi-annual certifications indicated time worked was for another federal program. Additionally, the District completed a semiannual certification for one staff member who required a monthly personnel activity report because they worked on more than one cost objective. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The District relied on one staff member to complete all semiannual certifications without an independent review to ensure forms were accurately completed. Additionally, the District misunderstood when a semiannual certification could be used. Effect of Condition The District did not obtain time-and-effort documentation for five employees whose payroll and benefits costs totaling $135,194 were charged to the program. Without adequate time-and-effort documentation, the District cannot demonstrate compliance with the awarding agency’s documentation requirements to support costs charged to federal programs. Further, the District cannot assure federal grantors that payroll costs it charged to the program were accurate and valid. During the audit, the District supported these payroll costs by providing alternative documentation to show the employees worked on the program; therefore, we are not questioning these costs. Recommendation We recommend the District establish and follow internal controls to ensure it complies with federal and OSPI requirements for obtaining signed time-and-effort documentation timely. District’s Response This letter is in response to the SAO Audit concern regarding the Special Education Time & Effort Attestation Finding. As discussed with the State Auditor, the issue stemmed from a clerical error in the activity box selection. We have since corrected the forms, with the original signer’s initials added for verification. This error did not affect student services or funding. A review of prior year signatures supports the intent to check the correct box on the forms. To prevent similar issues in the future, we will pre-fill the forms and print them with the appropriate box selections for the necessary attestation. Moving forward, LCSD will continue to adhere to the guidelines provided by OSPI for attestation signatures and the correct use of fund codes. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303 Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, Subpart E, Cost Principles, establishes requirements for determining allowable costs and supporting costs allocated to federal programs. Office of Superintendent of Public Instruction Addendum to Bulletin 048-17, Guidelines for Charging Employee Compensation to Federal Grants establishes requirements for documenting time-and-effort, including fixed schedule systems.