Audit 394802

Material Weakness: 2025-002 Federal Agency: Department of Homeland Security Pass Thru Entity: Oklahoma Department of Emergency Management Program: FEMA Disaster Grants - Public Assistance Assistance Listing: 97.036 Grant Period: Year Ending June 30, 2025 Condition: Construction projects paid with federal monies did not meet the compliance requirements of the Davis-Bacon Act. Criteria: The Davis-Bacon Act requires that nonfederal entities shall meet certain requirements for the construction, alteration or repair of public buildings or public works in excess of $2,000.00. Any contract entered into must include the locally prevailing wage to be paid to workers including fringe benefits. The contractor is obliged to pay at least the prevailing wage listed in the contract. Contractors are required to pay covered workers weekly and submit weekly certified payrolls to the contracting entity. They are also required to post the applicable Davis-Bacon wage determination along with the Davis-Bacon poster at the job site. Cause: The District did not follow the requirements of the Davis-Bacon Act when expending federal monies. Effect: The District could be liable for paying any additional wages if the contractor did not pay prevailing wage rates to laborers working on the project, or the expenditures could be disallowed for the expenditures that were subject to the Davis-Bacon Act. Recommendation: We recommend the District develop internal controls to meet the requirements of the Davis-Bacon Act that ensure any time federal awards are used on construction that compliance with contracts, including inserting the prevailing wage clauses and ensuring that federal wage rates and fringes are met by an effective monitoring process which includes collecting and reviewing weekly certified payroll reports from the contractor or subcontractor. Also, ensuring that all items are posted at the work site to ensure compliance. District’s Response: The District has developed internal controls to ensure that in the future if federal awards are expended on construction that all requirements of the Davis-Bacon Act will be met. Questioned Costs: $ 0

Material Weakness: 2025-003 Federal Agency: Department of Homeland Security Pass Thru Entity: Oklahoma Department of Emergency Management Program: FEMA Disaster Grants - Public Assistance Assistance Listing: 97.036 Grant Period: Year Ending June 30, 2025 Condition: Federal expenditures were not properly accounted for in the Oklahoma Cost Accounting System for a federal project. Due to the error, the District’s accounting records submitted to the Oklahoma Cost Accounting System for expenses in federal projects were understated. Expenditures for the Federal Emergency Management Agency in the amount of $60,214.43 were not coded to the federal project and were not reported to the Oklahoma State Department of Education as federal expenditures. Criteria: Oklahoma public schools must follow the Oklahoma Cost Accounting System which ensures legal compliance by recording and summarizing financial transactions. Part of the coding ensures that federal expenditures are coded as such and reported to the Oklahoma State Department of Education which allows for tracking of federal expenditures. Cause: The District’s internal control procedure of reviewing the accounting records for completeness and accuracy by accounting personnel and management that were to provide effective oversight of the District’s financial reporting failed to detect the proper placement and reporting of federal expenditures to match the federal revenues received in the accounting records. Effect: The issue resulted in incorrect project reporting of federal expenditures submitted to the Oklahoma State Department of Education. Due to the error in the District’s accounting records, the Districts expenses for federal projects in the Oklahoma Cost Accounting System were understated by $60,214.43. Therefore, the expenditures reported on the Schedule of Expenditures of Federal Awards will not match the numbers submitted to the Oklahoma State Department of Education. The difference is as follows. Project 594, Federal Emergency Management Agency, had expenditures in the amount of $60,214.43 that were not reported as federal expenditures. Recommendation: The District’s accounting personnel and management must continually monitor and review all expenses to verify coding. Controls should be put in place to compare federal program records with what is reported in the Oklahoma Cost Accounting System. Federal revenues and expenditures should be compared to make sure that both the revenues and expenditures are coded properly. Internal controls should be in place to provide effective oversight of the District’s financial reporting by accounting personnel and those charged with governance. District’s Response: The District will review all federal program coding for accuracy prior to the end of the fiscal year. Questioned Costs: $ 0