2025-005 U.S. Department of Education, Assistance Listing #84.010, Title 1A Disadvantage for the period of July 1, 2024, through June 30, 2025 Criteria: In accordance with grant agreement terms and applicable federal and state regulations (e.g., Uniform Guidance 2 CFR Part 200), grant reimbursement requests must accurately reflect allowable costs incurred. Condition: The School incorrectly calculated allowable costs when preparing Title 1 grant reimbursement requests. The majority of the error was attributed to the 1/1/2023-3/31/2023 reimbursement request. The request was overstated, and the Maine Department of Education (MDOE) paid the full amount requested. The noncompliance was reported in the 2024 Single Audit, but was not rectified. A payable to MDOE for $123,810 has been recorded on the financial statements as of June 30, 2025. Cause: The above mentioned requests improperly excluded accounting credits when reporting grant expenditures. Most notably, an accounting credit for a MainePERS reimbursement of $95,077 was not netted against grant expenditures. Effect: Grant expenditures totaling $123,810 were over-reported and represent questioned costs that should be reimbursed to MDOE. Failure to comply with grant requirements may result in financial penalties, reputational risk, and potential restrictions on future funding. Questioned Costs: $123,810 Recommendation: Management should: • Reimburse MDOE for the questioned costs of $123,810. • Implement procedures to ensure all credits and adjustments are considered when preparing reimbursement requests. • Strengthen review controls over grant accounting to prevent similar errors in the future. • Provide staff training on proper grant accounting and compliance requirements.
2025-006 U.S. Department of Treasury, Assistance Listing #21.027, Coronavirus State and Local Fiscal Recovery Funds (SLRF) Program for the period of July 1, 2024, through June 30, 2025 Criteria: In accordance with 2 CFR part 180 and 2 CFR §200.214, non-federal entities are prohibited from entering into contracts or making subawards to parties that are suspended or debarred from participation in federal programs. Entities must verify vendor eligibility through the System of Awards Management (SAM.gov), obtain a vendor certification documenting compliance, or add a clause or condition in the contract for that vendor. Condition: Of the five vendors tested, three did not have documented evidence the City performed the required suspension and debarment verification. Cause: The City uses SLRF funds to fill budget gaps caused by the pandemic’s economic fallout. The City did not procure all contracts with the expectation they would be paid for with federal funds. Therefore, suspension and debarment procedures were not verified in all cases. Effect: Without proper verification, there is an increased risk that federal funds could be expended on vendors who are suspended or debarred, which may result in noncompliance with federal regulations and potential repayment of funds. Recommendation: We recommend the City review their existing contracts to ensure documentation of suspension and debarment compliance has been obtained for all vendors paid with SLRF grants. Questioned Costs: None.