Audit 382747

Significant Deficiency and Material Instance of Non-Compliance Finding 2025-004 Information on the federal program: This finding pertains to Assistance Listing Number 84.425U COVID-19 Education Stabilization Fund from the U.S. Department of Education passed through the Massachusetts Department of Elementary and Secondary Education. This finding is related to the allowable costs/cost principles compliance requirement. Criteria: The United States Federal government in accordance with Section 274A(b) of the Immigration and Nationality Act (INA), codified at 8 U.S.C. § 1324a(b) requires Form I-9’s be maintained for all eligible employees. Condition: Out of the twenty-five selections tested, we noted one I-9 form which was not properly completed by the School. We also noted four additional selections where the I-9 form was unable to be located. We also noted that there were no supporting documents for W-4 form for two selections. Cause: During fiscal year 2025, the School operated under a management agreement with the Fund. The Fund changed accounting systems twice during fiscal year 2025 which led to delays in processing financial statements and transactions. Review of the required documents and supporting backup was not performed on a timely basis. Effect: Because of the failure to maintain required forms, ineligible employees may be added to payroll. Questioned costs: None Was the sampling a statistically valid sample? Yes Was the finding a repeat of a finding in the immediately prior year? No Recommendation: Procedures should be implemented requiring the completion of required forms and the formal review and approval should be performed prior to adding employees to payroll. Management Response: The School will conduct an audit of all active employees’ personnel files to verify that each file contains completed I-9 and W-4 forms. Additionally, the School will implement a policy requiring all personnel files to be complete and reviewed before new employees begin work.