U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION SPECIAL EDUCATION CLUSTER - AL NUMBERS 84.027A AND 84.173A PASS-THROUGH NUMBER 5440 AUDIT PERIOD - YEAR ENDED JUNE 30, 2025 2025-004. Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR part 200, subpart E – Cost Principles, establishes principles for determining the allowable costs incurred by the School under federal awards. Such costs are to be necessary and reasonable for the performance of the federal award. Condition: During our test of Special Education non-payroll expenditures, we identified unallowable costs totaling $19,750. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $19,750 were paid from Special Education funds. Questioned costs: $19,750. Context: Tested all non-payroll checks (2) totaling $25,240. Identification as a repeat finding: No Recommendation: The Charter School should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The School has made personnel and policy changes and has also been in contact with DESE for guidance. The School has since made coding corrections and implemented proper controls over program expenditures.
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I - GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS-THROUGH NUMBER 5440 AUDIT PERIOD - YEAR ENDED JUNE 30, 2025 Allowable Costs/Cost Principles Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR part 200, subpart E – Cost Principles, establishes principles and standards for determining allowable costs incurred by the School under federal awards. Such costs are to be necessary and reasonable for the performance of the federal award and adequately documented. Condition: During our examination of Title I payroll expenditures, we identified $68,662 in salary and fringe benefits paid to Non-Title I employees. A similar finding was issued in the prior year audit. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $68,662 were paid from Title I. Questioned costs: $68,662. Context: An examination of Title I payroll expenditures for 6 employees totaling $173,575 from a population of 44 employees totaling $1,378,919. Our sample was not a statistically valid sample. Identification as a repeat finding: Yes Recommendation: The Charter School should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The School has contacted DESE for guidance regarding this matter and has implemented proper controls over Title I program expenditures.
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBERS 84.425D AND 84.425U PASS-THROUGH NUMBER 5440 AUDIT PERIOD - YEAR ENDED JUNE 30, 2025 2025-002. Equipment and Real Property Management Criteria or specific requirement: Proper records should be maintained for equipment acquired with federal awards as specified in Office of Management and Budget (OMB) 2 CFR part 200.313(d)(1). Specifically, the property records must include a serial number or another identification number and the source of the funding for the property (including the federal award identification number). Condition: During our examination of property records for equipment acquired under the Education Stabilization Fund program, we noted the capital asset listing did not include items purchased during the 2025 fiscal year nor serial numbers and/or identification tag numbers. A similar finding was issued in the prior year audit. Cause: Lack of internal controls and management oversight over property records. Effect or potential effect: Items purchased with Education Stabilization funds could not be identified for sighting and the asset listing was incomplete. Context: A test of three assets from the capital asset listing and one capital outlay purchase during the fiscal year. Identification as a repeat finding: Yes Recommendation: Internal controls should be implemented to ensure property records include all required information. Views of responsible officials: The School has since implemented an improved inventory control system that conducts inventory and records all information into APSCN as required.
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425U PASS-THROUGH NUMBER 5440 AUDIT PERIOD - YEAR ENDED JUNE 30, 2025 2025-003. Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR part 200, subpart E – Cost Principles, establishes principles for determining the allowable costs incurred by the School under federal awards. Such costs are to be necessary and reasonable for the performance of the federal award. Office of Management and Budget (OMB) 2 CFR part 200 subpart D - Establish, document and maintain effective internal controls over the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Such Controls are necessary and reasonable for the performance of the Federal Award. Condition: In our test of Education Stabilization Fund non-payroll expenditures, documentation was not provided for three expenditures totaling $47,412. Additionally, $61,332 of the non-payroll expenditures tested lacked documented approval prior to payment. A similar finding was issued in the prior year audit. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: Documentation was not retained for audit resulting in questioned costs. Questioned costs: $47,412. Context: A sample of 6 non-payroll expenditures totaling $306,142 from a population of 56 totaling $3,559,186. Our sample was not a statistically valid sample. Identification as a repeat finding: Yes Recommendation: To ensure expenditures charged to federal award programs are accurate, all expenditures should be reviewed and approved by appropriate Charter School personnel. Documentation of this review and approval should be maintained. Furthermore, documentation for all expenditures should be maintained. Views of responsible officials: The School has made personnel and policy changes, and has put in place a purchase order process of approval that documents expenditures in compliance with audit regulations. The School has also made coding corrections and implemented proper controls over program expenditures.
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBERS 84.425D AND 84.425U PASS-THROUGH NUMBER 5440 AUDIT PERIOD - YEAR ENDED JUNE 30, 2025 2025-005. Allowable Costs/Cost Principles Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR 200.430(g)(1) requires that salaries and wages charged to federal awards must be based on records that accurately reflect the work performed. Condition: Time distribution certifications that support salaries and wages charged to the Education Stabilization Fund were not maintained. A similar finding was noted in the prior year. Cause: Procedures are in place for personnel to review the accuracy of the time distribution certifications. However, these procedures were not followed in the current year. Effect or potential effect: Without proper documentation, it cannot be verified that salaries and wages charged to program were based on actual time spent on allowable program-related activities. Questioned costs: $19,396. Context: A sample of 4 employees from a population of 31 employees. Our sample was not a statistically valid sample. Identification as a repeat finding: Yes Recommendation: The Charter School should follow procedures established to ensure charges are accurate, allowable, and properly allocated. Views of responsible officials: The School has now made personnel and policy changes, and established procedures regarding time certifications that provide assurance that charges are accurate, allowable, and properly allocated.