Corrective Action Plans

Federal ESSER Funding was released in waves following the COVID-19 pandemic. The compliance for reporting and audits of these pandemic-related funds was new for staff across the state of California. Given this, staff did not send a capital outlay pre-approval request for technology equipment. Furthermore, more close oversight was needed regarding a multi-year subscription for a technology firewall that exceeded the grant timelines. Moving forward, the CBO and Assistant Directors of Finance and Accounting will work to ensure there are more layers of approval for Capital Outlay expenditures, especially as they relate to restricted categorical resources.

2023-042 Oregon Department of Education Retain support for pre-approval of equipment purchases MANAGEMENT RESPONSE: We agree with this recommendation. ODE has already developed and implemented updates to the capital expenditure request review and approval process to ensure equipment approvals are retained. Early ESSER capital project tag requests were split between a committee for large projects and the individual grant finance manager. Approvals were primarily sent via email from the grant finance manager. Some of those messages are archived in the ESSER.ODE inbox, however some went out directly from staff email. Records are available for the committee decisions. When the smaller approvals moved from the finance manager to an ESSER team, many of those decisions were made in conjunction with other meetings. Some records are available; however, the Capital Expenditure Tracker was the primary location of decisions. In October 2022, staffing changes allowed the committee and team structure to become more formalized. Committee meeting decisions shifted from a “minute”- style agenda to being more systematized in an online log. Team meeting decisions followed a similar process update in April 2023. The online agenda/log allows for consistent tracking of projects that are up for discussion and which approval are put on hold for elevation approval, correction, or clarification from the district. Committee and team meetings have been established weekly. When all information is received from a district, the project is placed on the appropriate agenda for that week. Approvals are sent out within 2 business days. A column was added to the Capital Expenditure Tracker, which remains the primary location of records, to track when the approval emails were sent. Corrections have already been developed and implemented as of April 2024. Anticipated Completion Date: April 30, 2024 Contact person: Cynthia Stinson, Senior Manager of Federal Investments and Pandemic Renewal Effort

·         Equipment and Real Property Management

o   Responsible Person(s): Rashunna Rodgers, General Business Manager & Denise Palmer, AR Public School Resource Center

o   Finding:

§  Criteria or specific requirement: Purchase of real property and/or construction for improvements require the prior written approval of the Federal awarding agency or pass-through entity, as specified in OMB 2 CFR section 200.439.

§  Condition: During our examination of real property and construction improvements from the Education Stabilization Fund, we identified a facilities improvement purchase that was denied approval of Education Stabilization funding. Expenditures paid from Education Stabilization Funds for this project totaled $622,511.

§  Cause: Lack of internal controls and management oversight over program expenditures.

§  Effect or potential effect: Unallowable costs of $622,511 were paid from COVID-19 Education Stabilization Fund.

§  Questioned costs: The amount of questioned cost was $622,511.

§  Context: Examination of all payments made for construction for improvements to land, buildings, and equipment totaling $1,577.417.

o   Corrective Action Plan (Anticipated Completion Date: June 1, 2024)

The issue related to this finding will be resolved by reclassifying the fund to the appropriate fund source. The district sought the guidance of Division of Elementary and Secondary Education (DESE) to confirm the reclassification along with returning the funds to the Arkansas Department of Education. A system of checks and balances has been established for spending approval of all purchases including construction or contracted services.

The River Valley Board of Education acknowledges that the Federal government requires school districts to get approval for any purchases with a unit cost of $5,000 or more from the federal awarding agency or pass-through entity. The Board and Administration have implemented processes and procedures, which require approval from both the awarding agency or pass-through entity and the Board of Education prior to purchasing any unit at or above the $5,000 threshold.

CORRECTIVE ACTION PLAN U.S. Department of Education Thatcher Unified School District No. 4 respectfully submits the following corrective action plan for the year ended June 30, 2023. Audit period: July 1, 2022 – June 30, 2023 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDINGS— FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS Finding Number: 2023-001 Repeat Finding: Yes Program Name/Assistance Listing Title: Education Stabilization Fund Assistance Listing Number: 84.425D and 84.425U Federal Agency: U.S. Department of Education Federal Award Number: 23SSPCON-311221-01A, 21FESSII-111221-01A, 21FESIII-111221-01A Questioned Costs: None Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Equipment/Real Property Management Condition/Context: The District did not tag and track the capital assets purchased with Education Stabilization Fund monies. Action planned in response to finding: Management will establish procedures to ensure all assets are properly tagged and tracked to prevent theft, fraud, or misuse of District assets. Planned completion date for corrective action plan: For the period ending June 30, 2024. Name of the contact person responsible for corrective action: Clay Bowman, Director of Finance

FINDING 2023-003 Finding Subject: Child Nutrition Cluster - Allowable Activities and Allowable Costs Summary of Finding: The School Corporation had not properly designed or implemented a system of internal control, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting noncompliance related to allowable activities and allowable costs. The School Corporation purchased two pieces of equipment that were over $5,000 each in Fiscal Year 2023 without approval from the Federal awarding agency or pass-through entity. The first piece of equipment was a liftgate in the amount of $6,906, and the second piece of equipment was a vehicle in the amount of $7,500 for a combined total of $14,406. The financial management system of each non-federal entity must provide written procedures for determining allowability of costs in accordance with the federal regulations and the terms and conditions of the Federal Award. The policy should provide clear guidance as to what costs constitute appropriate direct and indirect charges to federal awards as well as provide for consistency in charging practices across the School Corporation. The School Corporation did not have an allowable costs policy outlining the School Corporation's processes and policies with regards to costs charged to federal grants. Contact Person Responsible for Corrective Action: Amy K. Sivley Contact Phone Number and Email Address: 260-563-2151; sivleya@apaches.k12.in.us Views of Responsible Officials: We concur with the finding. Explanation and Reasons for Disagreement: n/a Description of Corrective Action Plan: Retrain Food Service Director and Assistant Food Service Director on the process for purchasing equipment. The district will also develop and pass an Allowable Costs Policy. Anticipated Completion Date: To be completed by July 1, 2024

Finding # 2023-023 Title of Finding Equipment and Real Property Management Contact Person Sarah Wills and Christine Miller Anticipated Completion Date FY 2024 Corrective Action planned to be taken: The Board will establish procedures that will ensure compliance with requirements of the United States Department of Education's equipment management requirements and the requirements applicable to the ESSER program.

Recommendation: We recommend the District design procedures and controls to ensure adequate prior approval of construction related expenditures charged to the Education Stabilization Fund program. Explanation of disagreement with audit findings: There isno disagreement with the audit finding. District Response: Name of the contact person responsible for corrective action: Ruben Hernandez, Assistant Superintendent, Business Services. Planned completion date for corrective action plan: Immediate.

The Organization has developed appropriate controls over the review and approval of allowable costs; however, the Organization will review and strengthen these control activities by providing a more thorough examination of capital expenditures to ensure that such costs are approved by the federal awarding agency or the pass-through entity when required.

FINDING #2023-004: EDUCATION STABILIZATION FUNDS (ESF)- EQUIPMENT AND OTHER CAPITAL EXPENDITURES (50000) Corrective Action Plan: If the district would like to use Elementary and Secondary School Emergency Relief Ill (ESSER Ill) Fund (Resource 3213) to support capital expenses, the district will seek prior approval from the California Department of Education. The district will keep the approval on file.

MANAGEMENT’S CORRECTIVE ACTION PLAN: Management will complete the Prior Approval Form for the Pennsylvania Department of Education (PDE) and obtain approval from PDE in advance of incurring any future federally funded expenditures, that meet PDE’s criteria as a capital purchase, to ensure compliance with PDE and Section 2 CFR 200.439(b) of the Uniform Guidance. This procedure will be implemented during the remaining months of the 2023-2024 fiscal year, and all subsequent years, for future applicable capital purchases.

The District's procedure for purchases utilizing federal funds for goods in excess of $5,000 are submitted to the California Department of Education prior to purchase for approval. The District utilized COVID relief funds to upgrade classrooms with equipment consistent in the SVI classroom project. While the components of the SVI project are under the $5,000 threshold for prior approval collectively they are over this threshold. The components being under the $5,000 threshold resulted in an oversight of the needed preapproval for these purchases. Fiscal Services is developing a checklist of required steps in the procurement process when federal funds are being considered to ensure prior approval, if needed, is sought prior to purchase. The checklist will include an area where each component is listed to include delivery cost and installation and will include acknowledgement of whether these components collectively create one asset. This will allow other staff reviewing the checklist to determine if preapproval based on cost may be needed. The checklist will require approval of the department head of the requesting department acknowledging understanding of the federal purchasing requirements for capital expenditure as well as, approval of the Director, Fiscal Services and the District's Assistant Superintendent of Business Services.

Finding Number: 2023‐001 Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, 10.559 Contact Person: Jorge Cano, Director of Food Service Anticipated Completion Date: January 1, 2024 Planned Corrective Action: The District plans to ensure that all program costs are allowable and in adherence  to  applicable  federal  requirements.  This  includes  submitting  Capital  Expenditure  Pre‐Approval Request Forms to ADE for approval prior to purchasing equipment items that are not listed on ADE’s approved equipment list.

ORCCA plans to utilize the asset module of the accounting system to record and manage the capital assets. The Finance Director will work with the Program Fiscal Compliance Coordinator to start utilizing this system. Responsible party: Bonnie Foroudi, Finance Director Estimated completion date: December 31, 2025

Response of Responsible Society Official: We will review 2 CFR 200 Subpart E - Cost Principle to in an effort to refamiliarize ourselves with the Cost Principles.