Audit 395758

Finding Reference Number: 2025-001 Procurement Finding. Title and CFDA Number of Federal Program: 84.351A – Assistance for Arts Education - R&D Cluster. Type of Finding: Federal Award Finding. Finding Resolution Status: In Process. Criteria: Under the Uniform Guidance (2 CFR 200.318–200.326), non Federal entities must maintain written procurement procedures that comply with federal requirements. Additionally, federal procurement rules apply regardless of whether a vendor is pre-identified by the pass through entity, unless a specific exemption applies. Statement of Condition: The Organization did not perform vendor selection procedures, competitive bidding, or document the rationale for vendor selection in accordance with its procurement policy, as the two vendors were pre-established and written into the grant agreement by the University of South Florida (USF) and the original grant agent prior to Distinctive Schools’ involvement in administering the grant. Cause: The Organization concluded that its procurement policy did not apply and therefore did not perform the required procurement procedures. Effect or Potential Effect: Failure to comply with Uniform Guidance procurement requirements may result in noncompliance with federal standards, insufficient documentation supporting vendor selection, potential questioned costs if expenditures are deemed improperly procured, and an increased risk of favoritism, unreasonable costs, or lack of competition. Questioned costs - None identified. Reportable Views of Responsible Officials: See Corrective Action Plan. Identification of Repeat Findings - This is not a repeat finding. Recommendation: Management should document a formal justification for the use of pre-selected vendors, update internal procedures to address grant-specified or inherited vendors, train program and grants personnel on Uniform Guidance procurement requirements, and maintain complete supporting documentation in the grant file, including written confirmation from the pass-through entity.

Finding Reference Number: 2025-002 FFATA Reporting Finding. Title and CFDA Number of Federal Program: 84.351A – Assistance for Arts Education - R&D Cluster. Type of Finding: Federal Award Finding. Finding Resolution Status: In Process. Criteria: Recipients of Federal awards are required to report first tier subawards of $30,000 or more into FSRS, including key data elements, in accordance with 2 CFR Part 170 and the reporting requirements incorporated into 2 CFR 200.516(a). Statement of Condition: The Organization did not submit the required Federal Funding Accountability and Transparency Act (FFATA) subaward report in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS.gov) for applicable first tier subawards. This reporting is required no later than the last day of the month following the month in which the subaward obligation was made, per the Transparency Act requirements referenced in 2 CFR Part 200 the Compliance Supplement. Cause: The Organization did not complete or submit the required FFATA report in FSRS.gov for the applicable subaward(s). Effect or Potential Effect: Failure to report subawards in FSRS.gov results in noncompliance with FFATA reporting requirements. As a result, the Federal awarding agency and pass through entities may lack necessary transparency regarding the entity’s subaward activity. Questioned costs - None identified. Reportable Views of Responsible Officials: See Corrective Action Plan. Identification of Repeat Findings - This is not a repeat finding. Recommendation: Management should establish and implement procedures to ensure that all first tier subawards subject to FFATA are reported timely and accurately into FSRS.gov, consistent with Federal requirements.