Finding #2025-002; Education Stabilization Fund – CFDA No. 84.425; Year Ended June 30, 2025 CONDITION: Management failed to meet the Pennsylvania Department of Education (PDE) deadlines for submission of the quarterly reports (“Reconciliation of Cash on Hand”) for its grants, including the ECIA Title programs and the Education Stabilization (ESSER/ARP) funding during the 2024-25 fiscal year. In addition, as of June 30, 2025, several Final Expenditure Reports (FERs) also remain due. CRITERIA: According to PDE reporting instructions, a “Required Report” represents a required filing for projects that received payments in a previous quarter. The report must be filed no later than the 10th working day following the quarter just ended. A “Delinquent Report” represents a required report that has not been submitted by the 10th working day of the month. Consequently, delinquent reports are not available for importation by the Comptroller’s Office. As such, all scheduled payments to the respective project are suspended until the report is sent. Delinquent reports must be filed no later than the 10th working day of the following month. There are circumstances where the Final Expenditure Report will supersede the Quarterly Report. CAUSE: The cause of the non-filing is due to multiple issues. First, the addition of COVID-19 related funding added to the business manager’s workload. Second, due to the size of the District, the business manager not only performs duties associated with his own position, but also assists with other administrative duties. Third, there was a staff retirement in the business office, and the new employee hired in August 2023 has not yet been introduced to grant reporting. As mentioned in Finding #2025-001, the business manager is involved with nearly all transactions involving the business office. The business manager’s current workload, the additional COVID-19 funding, and the staff retirement caused other tasks to take priority over monitoring of grant expenditures and thus, led to the failure to file the required grant reports. EFFECT: The effect of the failure to file such reports caused the District to be out of compliance with PDE requirements. The noncompliance resulted in delayed funding from PDE under the ECIA Title and ESSER programs during the 2024-25 school year. PDE could further suspend funding on future grants, which would negatively impact the District’s cash flows. QUESTIONED COSTS: $0 PROPER PERSPECTIVE (SAMPLING): Because there were no quarterly reports filed in 2024-25 for the Education Stabilization funding, 0% of the reports were sampled. The audit sample was statistically valid. REPEAT FINDING: Yes. RECOMMENDATION: We recommend that the entire management team (superintendent, business manager, building principals, maintenance supervisor, etc.) identify and prioritize the duties each performs and determine those that can be reassigned to support staff, as well as whether the appropriate administrator is actually responsible for the duties they are performing. The business manager’s duties, as much as possible, should be limited to those directly involving the business office. With all administrative positions filled, duties that had shifted to the business manager should be able to revert to the appropriate individual. In addition, with the new business office employee hired in August 2023, we recommend the District involve the new staff person to assist in bringing all PDE filings current so that suspended grant payments resume. MANAGEMENT RESPONSE: Management agrees with the recommendations. The unique situation with the COVID-19 funding, coupled with shifts in the business manager’s duties over the last few years and the staff retirement has resulted in grant report filings becoming a lower priority. The management team will work together and will resume management team meetings to determine and monitor the duties for which each is responsible. Strides have been made in this regard, as the principals have become involved in Federal program training, budgeting, and scheduling. Although the aforementioned report submissions are delinquent and funding was suspended, some filings have been completed, and certain payments have been received and others are forthcoming. However, management will begin to gradually involve the new business office employee in grant reporting to improve on grant compliance with reporting requirements.
Finding #2025-003; Education Stabilization Fund – CFDA No. 84.425; Year Ended June 30, 2025 CONDITION: The annual report filed for the Elementary and Secondary School Emergency Relief (ESSER) Fund in fiscal year 2025 for fiscal year 2024 was filed with incorrect amounts for expenditures. CRITERIA: In accordance with the Uniform Grant Guidance, United States Department of Education, Education Stabilization Fund, Part III, Section L., “Reporting” regarding Special Reporting, grantees are required to submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds. CAUSE: The District personnel responsible for the report believes a working copy of the report was submitted, which resulted in discrepancies between the expenditures reported versus those reflected in their books and records. EFFECT: The error resulted in an inaccurate report submission to the Pennsylvania Department of Education. QUESTIONED COSTS: None PROPER PERSPECTIVE (SAMPLING): The District was only required to file one annual report during fiscal year 2024-25 for ESSER. 100% of these reports were tested for compliance. The audit sample was statistically valid. REPEAT FINDING: No. RECOMMENDATION: We recommend management contact the Pennsylvania Department of Education to inquire as to how to resubmit the annual report with correct amounts for 2023-24, agreeing the expenditures to the books and records. In addition, the personnel responsible for the completion of the annual report should ensure the amounts reported on the upcoming annual report for fiscal year 2024-25 contain the correct expenditures and agree with the District’s books and records. MANAGEMENT RESPONSE: Management agrees with the recommendations and will contact the Pennsylvania Department of Education to inquire as to how to resubmit the annual report with correct amounts for 2023-24, agreeing the expenditures to the books and records. In addition, the personnel responsible for the completion of the annual report will ensure the amounts reported for the upcoming annual report for fiscal year 2024-25 contain the correct expenditures and agree with the District’s books and records.
Finding #2025-004; Education Stabilization Fund – CFDA No. 84.425; Year Ended June 30, 2025 CONDITION: During our testing, it was noted that required grant reports were not filed during the 2024-25 fiscal year. This is an indication that internal controls are not in place to ensure compliance with timely and accurate grant filings. CRITERIA: Internal controls should be in place to ensure that grant reporting is performed accurately and in a timely manner. Delinquent reports subject the District to suspended grant payments. (See Finding #2025-002 in the Compliance section.) CAUSE: The cause of the lack of controls is due to multiple issues, as noted in Finding #2025-002 in the Compliance section. Ultimately, a lack of controls over grant approvals, spending timeframes, and workload prioritization contributed to the internal control deficiency and failure to submit required reports. EFFECT: The effect is that the internal controls over grant reporting are not functioning as designed. RECOMMENDATION: We recommend that procedures be modified, and internal controls followed to ensure accurate and timely filing of required grant reports. The management team involved with grants (superintendent, business manager, building principals, etc.) should be involved in modifying the procedures and implementing the controls. Controls should include an enhanced two-person monitoring of the grant process, from application through final reporting. In addition, with the new business office employee hired in August 2023, we recommend the District involve the new staff person to assist in bringing all PDE filings current. MANAGEMENT RESPONSE: Management agrees with the recommendations. The management team involved with grants will work to modify and improve the current procedures and will implement the controls surrounding grant compliance, from the application process through final reporting. The team will also continue to work to enhance our grant monitoring, including resuming management team meetings to keep everyone abreast of the status of grants. In addition, we will begin to gradually involve the new business office employee in grant reporting to improve on compliance with grant reporting requirements.
Finding #2025-005; Education Stabilization Fund – CFDA No. 84.425; Year Ended June 30, 2025 CONDITION: The District’s internal control over compliance failed to prevent errors in the ESSER annual report filed in fiscal year 2025 (for fiscal year 2024). CRITERIA: Internal controls over federal programs are to be sufficient to ensure compliance with the Education Stabilization Fund grant requirements, including properly submitted reports, as discussed in Compliance Finding 2025-003. CAUSE: The cause of the internal control deficiency over the annual reporting was a lack of oversight by management, which allowed a draft report to be submitted. EFFECT: The effect of this deficiency in internal controls over federal programs was the District’s failure to comply with the Reporting requirements of the Education Stabilization Fund (specifically ESSER reporting).