Audit 406418

Condition The Education Alliance did not submit the Single Audit Reporting Package to the Federal Audit Clearinghouse prior to the March 31, 2026, deadline. Criteria Based on requirements set forth by 2 CFR section 200.512(a), the Education Alliance is required to submit the Single Audit Reporting Package to the Federal Audit Clearinghouse (FAC) by the earlier of thirty calendar days after receipt of the auditor's reports or nine months after the end of the audit period. Cause The delay in submission was due to the audited financial statements not being prepared in a timely manner. As described in Finding 2025-001, the auditee has a material weakness in internal control over financial reporting related to federal grant accounting, including inadequate controls over grant accounting and revenue recognition to ensure timely completion of the audited financial statements. Effect Because the audited financial statements were not completed timely, the auditee was unable to meet the FAC submission requirements under 2 CFR section 200.512(a). This resulted in noncompliance with federal regulations. Questioned Costs No questioned costs were identified. Recommendation We recommend the Education Alliance complete and submit all future annual Single Audits to the Federal Audit Clearinghouse prior to the required deadline to ensure all compliance requirements are met. Management Response Management will coordinate with external auditors to ensure timely completion of the audit and to ensure compliance with 2 CFR 200.512 requirements.

Condition During our testing of cash draws, we noted the Education Alliance requested and received federal funds for certain expenditures from subrecipients prior to the related costs being incurred. Specifically, funds were requested based on subrecipient annual agreements rather than actual expenditures incurred as of the date of the draw request. Criteria In accordance with requirements set forth by 2 CFR section 200.305(b), non-federal entities are required to minimize the time elapsed between the transfer of federal funds from the awarding agency and the disbursement of those funds for programmatic purposes. Cause The Education Alliance did not have adequate controls in place to ensure that cash drawdowns for subrecipient activity aligned with the timing of actual expenditures incurred by subrecipients. Effect Federal funds were drawn in advance of allowable programmatic expenditures, resulting in noncompliance with federal cash management requirements and the accumulation of significant refundable advances at year-end. Questioned Costs No questioned costs were identified. Recommendation We recommend the Education Alliance implement procedures to ensure that cash drawdowns related to subrecipient agreements are supported by expected disbursement needs, including monitoring subrecipient expenditure activity and reimbursement status, to minimize the time between receipt and disbursement of federal funds. Management Response Management will review its cash management procedures to ensure that federal drawdowns are supported by actual or immediate cash needs based on expenditures incurred. Management will also closely monitor subrecipient expenditure activity and reimbursement timing to ensure compliance with 2 CFR 200.305(b) and minimize the time between receipt and disbursement of federal funds.

Condition The Education Alliance did not timely report seven first-tier subawards subject to the Federal Funding Accountability and Transparency Act (FFATA) to the System for Award Management (SAM.gov). Criteria FFATA, as implemented at 2 CFR Part 170, requires recipients to report each first-tier subaward of $30,000 or more in federal funds to SAM.gov no later than the end of the month following the month in which the subaward was made. FFATA also requires reporting of the total compensation of the recipient’s five most highly compensated executives in certain circumstances. Cause Management did not have effective internal controls in place to identify all subawards subject to FFATA and to ensure required data was submitted to SAM.gov within the prescribed timeframe. Effect Required FFATA information was not available in the federal transparency reporting system in a complete and timely manner, which may limit public access to accurate information regarding the use of federal funds and represents noncompliance with federal award requirements. Questioned Costs No questioned costs were identified. Recommendation We recommend the Education Alliance strengthen internal controls over FFATA compliance by establishing written procedures to identify all first-tier subawards subject to FFATA reporting, assigning responsibility for preparing and reviewing FFATA submissions, maintaining a tracking log of reportable subawards and applicable due dates, and performing periodic supervisory review to confirm all required reports are submitted completely and timely to SAM.gov. Management Response Management will implement corrective actions to ensure compliance going forward, including revising written procedures to identify reportable subawards, assigning responsibility for preparation and review of FFATA submissions, maintaining a tracking log of subawards and reporting deadlines, and performing supervisory reviews to ensure reports are submitted completely and timely. Management will also provide training for relevant personnel and evaluate prior subawards to determine whether any required reports were omitted and will complete any necessary submissions to the extent permitted.