Federal Assistance Listing Number: 84.425U Federal Award Year(s): June 30, 2024 Program Title(s): Education Stabilization Fund Name of Federal Agency(ies): U.S. Department of Education Services Name of Pass-Through Entity(ies): Colorado Department of Education COVID-19 Program(s): Yes Criteria: As stated in 2 CFR 200.303, the District must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The District had a material weakness in internal controls over multiple processes. The District’s lacked segregation of duties and/or a review process over payroll. The District’s process for managing personnel information and payroll was performed by one employee during the fiscal year ended June 30, 2024. In addition, the District did not properly maintain reimbursement request information that would reconcile the ESSER request for reimbursement with the allowable expenditures. However, the District was in compliance with the allowable activities, allowable costs, and cash management requirements, because the allowable activities and allowable costs exceeded the amount requested for reimbursement. Cause: The District’s payroll and human resources processes were performed by one employee without a secondary review. In addition, the reimbursement request process was performed by one employee without segregation of duties or secondary review and did not reconcile the ESSER grants on a regular basis to verify that revenues matched expenditures. Effect: The District hired a third-party accounting firm in order to reconcile the grants for fiscal year ended June 30, 2024. The District required material audit adjustments and incurred significant delays in the audit process for the fiscal year ended June 30, 2024. In addition, the District’s reimbursement documentation was unavailable for review. However, the allowable costs exceeded the reimbursement received from the Colorado Department of Education. Repeat Finding: No. Questioned Costs: None noted. Recommendation: We recommend that the District implement a month-end and year-end closing processes for the ESSER and potentially other federal grants that includes reconciling grant on a monthly basis, submitting requests for funds on a monthly basis, maintaining proper accounting records, and properly recording all the transactions in the District’s accounting system. In addition, we recommend that the District implement a process to perform a secondary review of completed grant reconciliations and requests for funds monthly. The District has already taken some steps to address this issue by hiring new staff and a third-party accounting firm to assist with this situation. Corrective Action Plan for Financial Reporting Findings: Reported on page 59.
2025-005: Noncompliance related to FAC Reports for fiscal years ended June 30, 2023, and June 30, 2024 Federal Assistance Listing Number: 10.553, 10.555, 10.559, 10.649, 84.010, 84.367, 84.424A, 84.358, 84.425U, 84.048, 93.354, and 93.981. Federal Award Year(s): June 30, 2024, and June 30, 2023 Program Title(s): Multiple Name of Federal Agency(ies): U.S. Department of Agriculture, U.S. Department of Education, and U.S. Department of Health and Human Services Name of Pass-Through Entity(ies): Various, including the Colorado Department of Education, Colorado Community Colleges System, and Colorado Department of Human Services COVID-19 Program(s): Yes Criteria: In accordance with Section 200.512 of the 2CFR200 Subpart F, a non-Federal entity that received a Single Audit must submit the reporting package to the Federal government through the Federal Audit Clearinghouse (FAC), also known as the data collection form. The FAC report is required to be submitted the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Condition: Based on our search through the FAC website (www.FAC.gov), the District did not submit the data collection report to the Federal Audit Clearinghouse for the audit for the fiscal year ended June 30, 2023, Single Audit conducted. In addition, the District was not able to provide accurate accounting records to the auditors in a timely manner to conduct the Single Audit for the fiscal year ended June 30, 2024, which delayed the submission of the data collection report to the FAC in a timely manner. Cause: The District lacked internal controls and awareness of the requirements noted above to certify and submit the annual data collection form to the Federal Audit Clearinghouse report in a timely manner, or at all. In addition, the District’s internal controls over grants management and accounting records was inadequate, which caused material audit adjustments and additional time for the District to reconcile grants. This caused the District’s Single Audit for the fiscal year ended June 30, 2024, to be significantly delayed. Effect: The District was noncompliant with 2 CFR 200.512 for fiscal years ended June 30, 2023, and June 30, 2024. Repeat Finding: No. Questioned Costs: None noted. Recommendation: In the future, we highly recommend that the District maintain proper internal controls and accurate grant records to prepare an accurate SEFA that will allow auditors to perform the Single Audits on major Federal programs, and submit the FAC report in a timely manner. Corrective Action Plan: Reported on page 59.