Audit 385625

2025-001 – U.S. Department of Education, For the Period July 1, 2024, through June 30, 2025, Assistance Listing #84.027-84.173 – Internal Controls and Compliance over Special Education Cluster Criteria: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended, debarred, or otherwise excluded from participating in the transaction. In addition, under the requirements of fiscal management, grant recipients are required to design and implement internal controls to ensure compliance with grant requirements and their own policies and procedures. Condition: The School Unit contracted with schools to provide out-of-district tuition and did not document that the schools were not suspended or debarred as service providers. Cause: Although the School Unit verified the schools were not suspended or debarred through the site Sam.gov, no documentation was maintained to show such verification was performed. Effect: The School Unit is not in compliance with documentation requirements under the Uniform Guidance. Questioned Costs: None Recommendation: Management should ensure that documentation of suspension and debarment checks are maintained annually for all vendors for which suspension and debarment requirements apply. Documentation should be in accordance with the School Unit’s procurement policy and procedures.

2025-002 – U.S. Department of Education, For the Period July 1, 2024, through June 30, 2025, Assistance Listing #84.027-84.173 – Internal Controls and Compliance over Special Education Cluster Criteria: Grants through the Department of Education are on a reimbursement basis. In order for a grant expenditure to be eligible for reimbursement, it must be for an allowable expenditure that has been incurred. Condition: The School Unit paid for a 5-year software agreement in 2024 and included the software costs in grant reimbursements in 2025. Cause: The payment for the software agreement was recognized as a prepaid expenditure in 2024. However, the entire amount was recognized as an expenditure in 2025 and was included in the calculation of grant reimbursements. Effect: The School Unit was reimbursed for expenditures that had not yet been incurred as the costs were for future services. Known Questioned Costs: $44,800. Recommendation: When reversing prior year prepaid expenditures, management should review the period for which the payment was to ensure the correct amount is recognized in current year expenditures.