Audit 380500

2023-3 – Equipment and Real Property Management Education Stabilization Fund - AL #84.425 U.S. Department of Education Pass-Through Entity - Pennsylvania Department of Education Criteria: In accordance with 2 CFR part 200.439, capital expenditures for equipment with a per-unit cost of $5,000 are allowable as direct costs, but only with the prior written approval of the Federal agency or pass-through entity. Additionally, 2 CFR section 200.313(d)(1) requires that property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property, who holds title, the acquisition date, cost of the property. Condition: During our testing, we noted that the District acquired four individual pieces of equipment over the $5,000 threshold to be used in the STEAM/CNC Lab without receiving prior approval from the Pennsylvania Department of Education. Additionally, we noted one instance of the District not including all required information on their property records. Cause: The prior approval process of ARP ESSER Funds occurred during the grant application process; however, the specific equipment needs for the STEAM/CNC Lab were not identified at that time. Due to an oversight by the District, at the time of purchase, they did not consider the need to request prior approval from the Pennsylvania Department of Education. Effect: Internal controls are not functioning as designed, and the District is not in compliance with the equipment and real property management requirements of the program. Questioned Costs: None Recommendation: We recommend that the District implement procedures to ensure prior written approval is obtained for applicable equipment purchases funded by federal grants and that fixed asset records include all required information in accordance with Uniform Guidance. The District should also provide appropriate training to personnel involved in grant purchasing and asset management to ensure ongoing compliance. Views of Responsible Officials: Management is in agreement with the finding.

2023-4 – Activities Allowed Education Stabilization Fund - AL #84.425 U.S. Department of Education Pass-Through Entity - Pennsylvania Department of Education Criteria: In accordance with 2 CFR part 200.303, the District is required to establish and maintain effective internal control over the Federal award that provides reasonable assurance that they are in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing, we noted that 3 of the 60 payroll transactions selected for testing did not have sufficient audit evidence to demonstrate the District was following their internal control processes. Cause: Due to an oversight by the staff, there was one instance of a supervisor not providing appropriate approval on a timecard. Additionally, there was one instance of a clerical error made by the Business Office that resulted in a variance in the hours paid compared to the hours worked. The third exception was due to the District not being able to provide sufficient documentation/timecard to support the wages charged to the grant. Effect: The internal controls implemented by the District were not operating effectively. Questioned Costs: None Recommendation: We recommend that the District strengthen internal controls over payroll charged to Federal awards by ensuring required approvals are obtained and review processes occur. Additionally, the District should review their record retention policy to ensure sufficient supporting documentation is retained to demonstrate compliance with Federal requirements. Views of Responsible Officials: Management is in agreement with the finding.

2023-2 – Reporting Education Stabilization Fund - AL #84.425 U.S. Department of Education Pass-Through Entity - Pennsylvania Department of Education Criteria: The Pennsylvania Department of Revenue requires Reconciliation of Cash on Hand Quarterly Reports to be filed by the 10th working days of after each quarter. Additionally, a final expenditure report is required to be filed within 30 days after funds are expended, but no later than 30 days after the ending date of the project. Districts are required to have appropriate controls over the accuracy of preparation and timely filing of these reports. Condition: The District filed the Reconciliation of Cash on Hand Quarterly Report for Grant # 223-21-0229 after the 10-day requirement for the quarters ending September 30, March 31, and June 30 of fiscal year 2023. Additionally, The District was unable to provide support to tie the reported expenditures back to their general ledger. The District did not file any of the required Reconciliation of Cash on Hand Quarterly Reports for Grant #225-21-0229 and Grant #181-21-2228 during fiscal year 2023. Also, the District did not file the required final expenditure report for Grant #181-21-2228 even though all funds were expended during fiscal year 2023. Cause: The District’s internal controls and review process were not operating as designed. As a result of a lack of effective review, expenditures were not reported on a cumulative basis on the Reconciliation of Cash on Hand Quarterly Reports. Effect: The District is not in compliance with the reporting requirements of the program, which could potentially lead to withholding of grant funds by the granting agency. Questioned Costs: None Recommendation: We recommend that the District strengthen internal controls over grant reporting to ensure all required Reconciliation of Cash on Hand Quarterly Reports and final expenditure reports are prepared accurately and submitted timely in accordance with grant requirements. The District should implement a formal review and monitoring process and provide training to staff responsible for grant reporting to ensure ongoing compliance. Views of Responsible Officials: Management is in agreement with the finding.