Audit 408416

Lack of Internal Controls over the Preparation of the Schedule of Expenditures and Federal Awards (Significant Deficiency) Federal Program: COVID-19 Education Stabilization Fund (ARP ESSER) – 84.425U Criteria: The School is required to prepare a schedule of expenditures of federal awards in accordance with the Uniform Grant Guidance. Internal controls must be in place to ensure the School properly reports all federal expenditures and related information on this schedule. Condition: The School failed to properly identify all federal grant expenditures and related information required by Uniform Grant Guidance to be reported in the June 30, 2024 schedule of expenditures of federal awards. Context: The School failed to provide a Schedule of Expenditures of Federal Awards in accordance with the Uniform Grant Guidance. Cause: The School lacks a system of proper internal controls over the completeness of the information reported on the schedule of expenditures of federal awards. Effect or Potential Effect: The schedule of expenditures of federal awards did not include all federal program expenditures during the fiscal year ended June 30, 2024. Recommendation: We recommend the School institute procedures to ensure that an accurate and complete schedule of expenditures of federal awards is maintained. The School should prepare and update the schedule on an ongoing basis throughout the year. View of Responsible Officials and Planned Corrective Action: The School will institute procedures to ensure that all federal expenditures are identified and accurately reported on the schedule of expenditures of federal awards.

Equipment and Real Property Management and Allowable Cost (Significant Deficiency) Federal Program: COVID-19 Education Stabilization Fund (ARP ESSER) – 84.425U Criteria: Pursuant to 2 CFR part 200 section 439, capital expenditures for equipment and other capital expenditures are allowable as direct cost, provided that items with a unit cost of $5,000 or the entity’s capitalization threshold have the prior written approval of the Federal awarding agency or pass-through entity. Furthermore, section 313(d)(1) specifies that property records must be maintained that include a description of the property, a serial or identification number, the source of funding for the property, who holds the title, the acquisition date, and cost of the property. An inventory of the property is required to be taken every two years. Condition: During testing it was noted the School purchased fixed assets over the capitalization threshold using ARP ESSER funds for assets which differed from the ones previously approved. No revised budgets were submitted to receive approval for these fixed assets. Additionally, an inventory of the fixed assets was not taken. Cause: There was confusion on the School’s part on needing to submit revised budgets and new pre-approvals for purchasing specific fixed assets that differed from what they were originally approved for. Also, the School was unaware of the inventory requirements. Effect or Potential Effect: Internal controls are not functioning as designed and the School is not in compliance with the equipment and real property management and allowable cost requirements of the program. Questioned Cost: $0 Context: The School was originally approved for specific fixed assets for ARP ESSER capital expenditures. The School then expended the funds on different capital assets which were not previously approved by the Pennsylvania Department of Education. This amounted to ARP ESSER capital expenditures of $89,359.72. An inventory of the fixed assets was not performed. Repeat Finding: This is not a repeat finding. Recommendation: The School should establish procedures to ensure all capital expenditures with grant funding is appropriately approved prior to purchase and property records are maintained in sufficient detail to allow for the adequate tracking of all equipment purchased with grant funds. The School should establish an inventory schedule in compliance with the Equipment and Real Property Management compliance requirements. View of Responsible Officials and Planned Corrective Action: There was confusion on the School’s part of needing revised budgets and new approvals for the change in planned capital expenditures. Often times grant filings were due prior to all instructions being received. Now that the School is fully aware of the capital expenditures requirements this should not occur again. The School was unaware of the required inventory tracking. This should not occur again.

Reporting (Significant Deficiency) Federal Program: COVID-19 Education Stabilization Fund (ESSER II and ARP ESSER) – 84.425D/U Criteria: The Education Stabilization Fund (ESSER) award requires grantees to submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. LEAs/subrecipients submit data to the SEA/Governor for the SEA’s/Governor’s report. Report Title: ESF – ESSER Recipient Data Collection Form OMB PRA Number: OMB No. 1810-0749. Condition: ESSER funds were expended during the fiscal year ended June 30, 2024, however the ESF – ESSER Recipient Data Collection Form OMB PRA Number: OMB No. 1810-0749 was not filed. Cause: The School did not identify the reporting requirement and thus the report was not completed. Effect or Potential Effect: The School was not in compliance with the reporting requirements established by the Department of Education. Questioned Cost: $0 Context: For the testing of the ESSER program, there was only one annual report that was due to be filed for the 2023/2024 fiscal year. Repeat Finding: This is not a repeat finding. Recommendation: As new grants are awarded; the grant agreements and OMB compliance supplement should be reviewed in detail to determine applicable compliance requirements. View of Responsible Officials and Planned Corrective Action: As of March 2026, the annual performance report is being completed by the Business Manager.

Federal Program: COVID-19 Education Stabilization Fund (ESSER II and ARP ESSER) – 84.425D/U Criteria: Based on requirements set forth by 2 CFR §200.512(a), the School is required to submit the Single Audit Reporting Package to the Federal Audit Clearinghouse (FAC) and the Pennsylvania Department of Education (PDE) no later than the earlier of thirty calendar days after the receipt of the auditor's report or nine months after the end to the audit period. Condition: The School did not submit the Single Audit Reporting Package to the FAC or the PDE prior to the March 31, 2025, deadline. Cause: The submission was delayed because the audited financial statements were not completed in a timely manner. Also, ss noted in Finding 2024-002, the School has a significant deficiency in internal control over financial reporting related to the preparation of the Schedule of Expenditures of Federal Awards. Effect or Potential Effect: As a result of the delayed completion of the audited financial statements, the School was unable to meet the FAC and PDE filing deadlines required under 2 CFR §200.512(a), resulting in noncompliance with federal reporting requirements. Questioned Cost: $0 Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School implement procedures to ensure that future Single Audit Reporting Packages are completed and submitted to the FAC and PDE within the required timeframes to maintain compliance with federal reporting requirements. View of Responsible Officials and Planned Corrective Action: Management will coordinate with external auditors to ensure timely completion of the audit and to ensure compliance with 2 CFR §200.512(a) requirements.