CORRECTIVE ACTION PLAN
Oversight Agency for Audit: U.S. Department of Treasury
The City of Peabody, Massachusetts respectfully submits the following corrective action plan for the year ended June 30, 2023.
Name and address of independent public accounting firm:
Powers & Sullivan, LLC
100 Qu...
CORRECTIVE ACTION PLAN
Oversight Agency for Audit: U.S. Department of Treasury
The City of Peabody, Massachusetts respectfully submits the following corrective action plan for the year ended June 30, 2023.
Name and address of independent public accounting firm:
Powers & Sullivan, LLC
100 Quannapowitt Parkway, Suite 101
Wakefield, MA 01880
Audit period: July 1, 2022 through June 30, 2023
The finding from the June 30, 2023, schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule.
FINDINGS—FEDERAL AWARD PROGRAMS AUDITS
U.S. DEPARTMENT OF EDUCATION
Passed through Massachusetts Department of Elementary and Secondary Education
Education Stabilization Fund
Education Stabilization Fund Federal Assistance Listing No. 84.425D, 84.425U and 84.425W
2023-007: Controls for the Purchase of Capital Equipment
Compliance Requirement: Equipment/Real Property Management
Type of Finding: Compliance and Material Weakness in Internal Control Over Compliance
Criteria or Specific Requirement: Grantees must obtain prior approval from the pass-through entity for capital expenditures related to general and special purpose equipment purchases.
Condition: The City was required to obtain prior approval from the pass-through entity for capital expenditures related to general or special purpose equipment. The City purchased security camera equipment and was unable to provide evidence that prior approval was obtained.
Context: The City did not maintain sufficient documentation to demonstrate that approval was obtained prior to the purchase of capital equipment.
Effect: The City has not complied with the grant requirements.
Cause: Management has not established guidelines and procedures to ensure that approval is obtained prior to the purchase of capital equipment and that documentation of the approval is retained.
Questioned Costs: The City expended a total of $4,564,014 in Education Stabilization Funds in 2023, of which $619,967 was charged to a contract services account. Of the total charged to the contract services account, $302,687 was selected for testing and $73,629 was spent on the purchase of security camera equipment without prior approval from the pass-through entity.
Recommendation: The City should implement internal control procedures to ensure compliance with all grant requirements including the need to obtain prior approval from the pass-through entity for capital expenditures paid from the Education Stabilization Funds grants. The documentation should be filed in an organized manner and readily available upon request.
Views of Responsible Officials and Planned Corrective Actions: The School District will implement internal control procedures to ensure that the required approvals are obtained and the documentation is maintained in an organized manner. Management plans to implement these procedures in 2024.
If the Oversight Agency has questions regarding this plan, please call Samuel Rippin, School Business Manager, at 978-536-6520.
Sincerely yours,
Samuel Rippin
School Business Manager
City of Peabody