Audit 50426

FY End
2022-06-30
Total Expended
$4.66M
Findings
4
Programs
11
Organization: Horizon Science Academy Lorain (OH)
Year: 2022 Accepted: 2023-05-10

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
59966 2022-002 Material Weakness - N
59967 2022-002 Material Weakness - N
636408 2022-002 Material Weakness - N
636409 2022-002 Material Weakness - N

Programs

Contacts

Name Title Type
QKVXDN9FSDP3 Ramazan Celep Auditee
8478243380 Lindsey Young Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: CFR 200.414 allows a non-federal entity that has never received a negotiated indirect cost rate to charge a de minimis rate of 10% of modified total direct costs to indirect costs. The Academy has not elected to use the 10% de minimis indirect cost rate. The schedule includes the federal award activity of the Horizon Science Academy Lorain under programs of the federal government for the fiscal year ended June 30, 2022 and is prepared in accordance with the accrual basis of accounting. The information on this schedule is prepared in accordance with the requirements of Title 2 US Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Horizon Science Academy Lorain, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Horizon Science Academy Lorain.
Title: PASS-THROUGH ENTITY NUMBERS Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: CFR 200.414 allows a non-federal entity that has never received a negotiated indirect cost rate to charge a de minimis rate of 10% of modified total direct costs to indirect costs. The Academy has not elected to use the 10% de minimis indirect cost rate. OAKS did not assign pass-through entity numbers for fiscal year 2022.
Title: CHILD NUTRITION CLUSTER Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: CFR 200.414 allows a non-federal entity that has never received a negotiated indirect cost rate to charge a de minimis rate of 10% of modified total direct costs to indirect costs. The Academy has not elected to use the 10% de minimis indirect cost rate. Commingled with state and local revenue from sales of breakfasts and lunches; assumed expenditures were made on a first-in, first-out basis.
Title: TRANSFERS TO SCHOOLWIDE BUILDING PROGRAM Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: CFR 200.414 allows a non-federal entity that has never received a negotiated indirect cost rate to charge a de minimis rate of 10% of modified total direct costs to indirect costs. The Academy has not elected to use the 10% de minimis indirect cost rate. The following amounts were transferred to the Schoolwide Building Program Fund based on ODE administrative action and transferability guidelines during fiscal year 2022: See the Notes to the SEFA for chart/table.
Title: FEDERAL AWARDS ADMINISTERED FOR OTHER GOVERNMENTS Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: CFR 200.414 allows a non-federal entity that has never received a negotiated indirect cost rate to charge a de minimis rate of 10% of modified total direct costs to indirect costs. The Academy has not elected to use the 10% de minimis indirect cost rate. During fiscal year 2022, the Horizon Science Academy Lorain was appointed as lead local educational agency (LEA) and administrative fiscal agent for the Title III Consortium. In this capacity, the Horizon Science Academy Lorain received Title III monies from the U.S. Department of Education and reports these grants on their Schedule of Expenditures of Federal Awards and they are subject to audit during the Horizon Science Academy Lorains annual audit in accordance with Uniform Guidance. Awards that are reported by the Horizon Science Academy Lorain which benefit member community schools are as follows: See the Notes to the SEFA for chart/table.

Finding Details

2 CFR ? 3474.1 provides that the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. Appendix II to 2 CFR part 200, Paragraph D states that all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, ?Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction?). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland ?Anti-Kickback? Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, ?Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States?). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. Lack of proper internal controls over Federal Grants management let to the Academy expending $36,178 of its Education Stabilization Fund - Elementary and Secondary School Emergency Relief (ESSER II) Fund, AL #84.425D, and $380,024 of its Education Stabilization Fund - American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Fund, AL #84.425U, federal grant funds for parking lot, locker room, and paving projects. The Academy?s agreement with the vendor for these updates did not include a provision to ensure the contractor complied with Federal wage rate requirements. Additionally, the Academy did not obtain weekly certified payroll reports from the vendor to verify prevailing wages were paid. Without proper controls over wage rate requirements, there is an increased risk that the Academy and its contractors and subcontractors are not in compliance with applicable federal regulations. Noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. The Academy should ensure contracts for construction in excess of $2,000 paid with federal grant monies contains provision the contractor comply with the wage rate requirements and ensure certified payroll reports are provided weekly by the contractor. The Academy should review the certified payroll reports and report all suspected or reported violations to the Federal awarding agency.
2 CFR ? 3474.1 provides that the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. Appendix II to 2 CFR part 200, Paragraph D states that all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, ?Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction?). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland ?Anti-Kickback? Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, ?Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States?). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. Lack of proper internal controls over Federal Grants management let to the Academy expending $36,178 of its Education Stabilization Fund - Elementary and Secondary School Emergency Relief (ESSER II) Fund, AL #84.425D, and $380,024 of its Education Stabilization Fund - American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Fund, AL #84.425U, federal grant funds for parking lot, locker room, and paving projects. The Academy?s agreement with the vendor for these updates did not include a provision to ensure the contractor complied with Federal wage rate requirements. Additionally, the Academy did not obtain weekly certified payroll reports from the vendor to verify prevailing wages were paid. Without proper controls over wage rate requirements, there is an increased risk that the Academy and its contractors and subcontractors are not in compliance with applicable federal regulations. Noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. The Academy should ensure contracts for construction in excess of $2,000 paid with federal grant monies contains provision the contractor comply with the wage rate requirements and ensure certified payroll reports are provided weekly by the contractor. The Academy should review the certified payroll reports and report all suspected or reported violations to the Federal awarding agency.
2 CFR ? 3474.1 provides that the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. Appendix II to 2 CFR part 200, Paragraph D states that all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, ?Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction?). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland ?Anti-Kickback? Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, ?Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States?). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. Lack of proper internal controls over Federal Grants management let to the Academy expending $36,178 of its Education Stabilization Fund - Elementary and Secondary School Emergency Relief (ESSER II) Fund, AL #84.425D, and $380,024 of its Education Stabilization Fund - American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Fund, AL #84.425U, federal grant funds for parking lot, locker room, and paving projects. The Academy?s agreement with the vendor for these updates did not include a provision to ensure the contractor complied with Federal wage rate requirements. Additionally, the Academy did not obtain weekly certified payroll reports from the vendor to verify prevailing wages were paid. Without proper controls over wage rate requirements, there is an increased risk that the Academy and its contractors and subcontractors are not in compliance with applicable federal regulations. Noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. The Academy should ensure contracts for construction in excess of $2,000 paid with federal grant monies contains provision the contractor comply with the wage rate requirements and ensure certified payroll reports are provided weekly by the contractor. The Academy should review the certified payroll reports and report all suspected or reported violations to the Federal awarding agency.
2 CFR ? 3474.1 provides that the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. Appendix II to 2 CFR part 200, Paragraph D states that all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, ?Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction?). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland ?Anti-Kickback? Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, ?Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States?). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. Lack of proper internal controls over Federal Grants management let to the Academy expending $36,178 of its Education Stabilization Fund - Elementary and Secondary School Emergency Relief (ESSER II) Fund, AL #84.425D, and $380,024 of its Education Stabilization Fund - American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Fund, AL #84.425U, federal grant funds for parking lot, locker room, and paving projects. The Academy?s agreement with the vendor for these updates did not include a provision to ensure the contractor complied with Federal wage rate requirements. Additionally, the Academy did not obtain weekly certified payroll reports from the vendor to verify prevailing wages were paid. Without proper controls over wage rate requirements, there is an increased risk that the Academy and its contractors and subcontractors are not in compliance with applicable federal regulations. Noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. The Academy should ensure contracts for construction in excess of $2,000 paid with federal grant monies contains provision the contractor comply with the wage rate requirements and ensure certified payroll reports are provided weekly by the contractor. The Academy should review the certified payroll reports and report all suspected or reported violations to the Federal awarding agency.