Criteria – The OMB Compliance Supplement identifies Matching, Level of Effort, Earmarking as a type of compliance requirement subject to audit for applicable major programs and identifies level of effort as a compliance category within that requirement. Maintenance of effort is specifically described as the requirement that specified service or expenditure levels be maintained. As part of maintaining compliance with this requirement, the District should maintain documentation sufficient to support the MOE calculation used in its grant funding request and to demonstrate that required expenditure levels we met. Under 2 CFR § 200.516, deficiencies in internal control over compliance for major programs are reportable when they rise to the level of a material weakness or significant deficiency. Condition – Scituate School District was required to prepare a MOE calculation to support its special education grant funding request, however it did not retain sufficient supporting documentation for the calculation. Specifically, detailed budget and actual expenditure reports, reconciliations to the general ledger or other underlying accounting records, and/or retained workpapers supporting the underlying inputs were not maintained in a manner that permitted full verification of the calculation. As a result, we were unable to fully verify the completeness and accuracy of the underlying inputs used in the District’s MOE calculation. Although other audit procedures \did not identify actual noncompliance with MOE requirements for the period under audit, the District did not maintain adequate documentation of evidence to be in compliance with this requirement. Cause – The District’s controls over budgetary inputs, specifically regarding MOE documentation and retention were not designed or operating effectively. Contributing factors appear to include one or more of the following: • Lack of formal written procedures addressing preparation, review and retention of MOE calculation support; • Insufficient monitoring or supervisory review to ensure the calculation was fully supported and reconciled to underlying records; and/or • Staff turnover or limited training regarding budgetary input and documentation expectations for federal compliance requirements. Effect – The absence of adequate supporting documentation creates a reasonable possibility that material noncompliance with the MOE requirement could occur and not be prevented, or detected and corrected, on a timely basis. In addition, the District’s ability to demonstrate compliance with maintenance of effort to the pass-through entity (RIDE), federal agency, or other reviewers is impaired when the calculation cannot be fully supported. If this condition is not corrected, future periods could result in undetected MOE errors, questioned costs, repayment obligations, delays in funding, or other administrative sanctions. Questioned Costs – None Recommendation – We recommend that management establish and implement formal written procedures to ensure complete supporting documentation is prepared and maintained for all MOE calculations. At a minimum, those procedures should require: • Clearly identified sources of data used in calculation; • Documentation of methodology used in the MOE calculation provided annually to the pass-through entity; • Retention of detailed budget vs actual expenditure reports in accordance with the Uniform Chart of Accounts and other underlying support; • Reconciliations of calculation inputs to the general ledger or other accounting records; • Independent review and approval of the completed MOE calculation and supporting workpapers prior to submission Management’s Response – Management acknowledges the lapse in internal controls and the lack of documented procedures regarding MOE preparation, review, and retention of MOE calculation support in FY 2025. Corrective Action: This issue was addressed and corrected during FY2026. Specifically, we have implemented the following: 1. A formal written procedure on the MOE calculation describing the methodology, data sources, document retention, review and approvals. 2. UCOA training has been provided to secretarial staff and school administrators involved in related processes to ensure proper coding of expenses. 3. Implementation of new approval chains to review and approve the UCOA coding to ensure proper coding of expenses. 4. Monthly transaction reconciliations. Expected Completion: The corrective actions have been substantially competed as of this writing. Final completion expected by June 30, 2026
Criteria – When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR § 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. “Covered transactions” include those procurement contracts for goods and services awarded under non-procurement transactions (e.g. grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR § 180.220. This requirement applies to contracts entered into to procure goods and services with Individuals with Disabilities Education Act funds. Condition – Scituate School Department does not appear to have any specific procedures in place for verifying that an entity with which is plans to enter into a covered transaction is not suspended, debarred or otherwise excluded. Cause – The District’s controls over contracting with entities does not have an instituted procedure directing staff to ensure and confirm that the vendor is not suspended or debarred. Effect – It appears that contracts for goods or services that were “covered transactions” were entered into without verification that the vendor was not suspended, debarred or otherwise excluded. Questioned Costs – None Recommendation – We recommend that the District update its policies to incorporate verification procedures to ensure that an entity with which it plans to enter into a covered transaction is not suspended, debarred or otherwise excluded. Management’s Response – Management acknowledges the lack of suspension and debarment language in its procurement procedures in effect during FY25. Corrective Action: This issue was addressed and corrected in FY26. Specifically, the school department has implemented an updated procurement policy and procedure to meet the suspension and debarment requirement. We have provided training to staff and updated automated procurement approval chains to ensure compliance. Expected Completion: The corrective actions have been substantially completed as of this writing. Final completion expected by June 30, 2026.