Corrective Action Plans

District subsequently sought and obtained CDE approval for the expenditures identified in finding 2022-003.District has initiated a procedure where any requisitions for purchases utilizing Federal funds are routed through the Director of state and federal programs prior to being approved. The director of state and federal programs, prior to approving the purchase requisition, will obtain approval from the CDE. All contracts utilizing federal funds will include language related to Federal wage rate requirements. The supervisor of Purchasing will be tasked with ensuring the contract language is present in agreements for services utilizing Federal funds.

Finding No. 2022-006 Area: Allowable Costs/Cost Principles Views of Auditee and Planned Corrective Action Disagree with the finding. Condition 1. For 1 or (2%) sample, identified as employee no. 21199, evidence of fair allocation of the employee’s payroll cost was not provided. We disagree. Evidence of fair allocation document reflecting the payroll cost (amount) was provided to the Ernst & Young audit team. Condition 2. For 2 (or 40%) transactions identified as PS-067026-US and PS-078607-US with a total cost of $131,490, evidence of prior approval of the acquisition by the federal agency was not provided. We disagree. Prior approval documents of PS-067026-US and PS-078607 were provided to the Ernst & Young audit team. Anticipated Completion Date N/A Name of Contact Person and Title Contact Person – Arlene Lizama, Director of Finance Contact – arlene.lizama@cnmipss.org

Finding No. 2022-005 Area: Allowable Costs/Cost Principles Views of Auditee and Planned Corrective Action Condition 1. Disagree with the finding. The Education Stabilization Fund (ESF) of the Public System was awarded to and was designed to provide additional funding (supplement) support to the local school system (PSS) as a result of the impact of the COVID-19 pandemic. Background: On March 16, 2020 PSS suspended classroom instruction, ease central office operation to a certain level, implemented furloughs, and effectuated cost- containment initiatives, among drastic measures to mitigate the crisis brought about by the pandemic. Of the public elementary, middle, and high schools on Saipan, Tinian, and Rota, only one school - Kagman Elementary School - was provided limited instruction (during summer of 2020). Kagman Elementary School was the first to reconfigure its facilities to maintain a safe (social distancing) facility for in-person student learning. The $802,789 as cited (Condition 1) was an ESF-approved and sanctioned funding allocation. However, the change in funding source was initiated after the payroll processing. And in order to reflect the correct funding source, the JE adjustment was initiated. Due to JE limitation these entries are not reflected to “subsidiary” ledgers. Condition 2. Disagree with the finding. 2. Retention incentive The Public School System maintains that both the Education Stabilization Fund (ESF) and American Rescue Plan Act (ARPA) spending plans were approved by the federal grantor. The Retention Incentive Plan in question is a component of both ESF and ARPA spending plans. Further, an additional communication from the U.S. Department of Education affirms the PSS authority in the ESF and ARPA spending plans, including the Retention Incentive Plan in question. Ernst and Young in its 2021 audit report (issued on April 26, 2023) on the same condition (issuance of retention incentive, see page 66) does acknowledge that “PSS sought and received prior grantor approval.” Background: The Commissioner of Education has the sole expenditure authority vested as the chief state school superintendent to come up and produce a spending plan. As such, the Commissioner of Education proposed the funding disbursements and presented it with the State Board of Education. The BOE is the governing body of PSS. The BOE approved the COE’s spending plan. Condition 3. PSS agrees with the finding. However, as of FY2023, the Federal Programs Office has instituted a stringent Standard Operating Procedure for seeking prior approval for equipment costing over $5,000.00. Anticipated Completion Date: N/A Name of Contact Person and Title Contact Person – Arlene Lizama, Director of Finance Contact – arlene.lizama@cnmipss.org

Finding No. 2022-004 Area: Allowable Costs/Cost Principles Views of Auditee and Planned Corrective Action Condition 1. Disagree with the finding. For the 25 or (63%) samples, Notice of Personnel Action (NOPA) forms were not provided for differential payments paid to employees. We disagree. There is no need for the issuance of Notice of Personnel Action (NOPA) nor is it required for the issuance and or granting of pay differential. The PSS is granted by virtue of the State BOE Policy, Rules and Regulation that in paying pay differential the requesting department should/can only issue a memorandum (memo), and must be fully signed by and approved by the Commissioner of Education, before it is provided to the Payroll division of the PSS Finance department for the payment of pay differential. Condition 2. For 2 or (40%) equipment transactions identified as PS-049031-US and PS-055730-US which were acquired within fiscal year 2022 totaling $14,299, evidence of prior approval was not provided. We agree. However, as of FY2023, the Federal Programs Office has instituted a stringent Standard Operating Procedure for seeking prior approval for equipment costing over $5,000.00. Anticipated Completion Date: N/A Name of Contact Person and Title Contact Person – Arlene Lizama, Director of Finance Contact – arlene.lizama@cnmipss.org

Finding number 2022-001 Contact person responsible for corrective action: Jonathan Warren Corrective Action: Initial guidance for utilizing ARP/ESSER purchasing practices from the state department was that only Facilities and Transportation purchases required prior approval. It was our understanding that the items listed in the finding would not fall in that category even though they exceeded the $5,000 pre-approval guidance. The state department issued a memo (COM-22-047) that clarified this issue. Since the clarification memo was issued we have worked to ensure that our purchasing practices have changed to follow the appropriate guidelines. Corrective Action Date: March 6, 2023. Respectfully, Jonathan Warren Superintendent Huntsville School District

Purchases of equipment and other capital outlay expenditures require the prior written approval of the Federal awarding agency or pass-through entity. (Reference #EDSD24422-001) We have been in contact with DESE for guidance and will continue to do so regarding this fund. We will implement proper internal controls over program expenditures . Documentation has already been received from DESE to assist in this finding.

FINDING 2022-003 Contact Person Responsible for Corrective Action: Christopher Dixon, Director of Nutrition Contact Phone Number: 574-533-8631 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: The School Corporation will document the review/oversight of disbursements from program funds prior to payment. Claims will be prepared and reviewed by Christopher Dixon, Director of Nutrition, or designee, and submitted to the Accounts Payable Specialist for payment. Claims will be initialed or signed demonstrating approval of disbursements. Accounts Payable Specialist enters claims into the financial software and pays claims after approval by the Chief Financial Officer and School Board. Documentation for claims will be kept in the business office. GCS will obtain prior written approval from IDOE and approval documents will be maintained by the Director of Nutrition. Assistant Superintendent, Dr. Barry Younhans, retired from GCS in July 2022. This corrected the finding. To ensure compliance, the payroll distribution report is reviewed and signed by the Treasurer and applicable program administrators prior to the completion of payroll by the payroll specialist. The report is reviewed to verify that employees are paid out of the correct accounting line. This process was implemented in December 2022. Anticipated Completion Date: April 2023 INDIANA STATE

Finding EDSD35222-003 Significant Deficiency Contact Person: Zane Vanderpool, Superintendent The District did not obtain prior wrjtten approval from the Department of Elementary and Secondary Education (DESE) for the purchase of two pieces of equipment with unit costs greater than the $5000 threshold as required by COM-22-047. Corrective Action Plan: The Horatio School District will get prior approval from the Department of Elementary and Secondary Education (DESE) for any purchase of equipment greater than the $5000 threshold as required by COM-22-047. The Horatio School District has followed this requirement for any equipment greater than the $5000 threshold since this purchase of this equipment in July 2021. The Horatio School District has received approval for all equipment greater than the $5000 threshold as required COM-22-047 since this purchase. Sincerly, Zane Vanderpool Superintendent

Finding 2022-001 Allowable Costs/Cost Principles Criteria or Specific requirement: Purchases of equipment and other capital expenditures require the written approval of the Federal awarding agency or pass-through entity, as specified in Office of Management and Budget (OMB) 2 CFR section 200.439. Condition: In our test of equipment purchases from the COVID-19 Education Stabilization Fund, we identified the purchase of 447 pieces of equipment with the unit costs greater than the $5,000 threshold for which the District did not obtain prior written approval from the Arkansas Division of Elementary and Secondary Education (DESE). Retroactive approval was subsequently obtained from DESE during the audit fieldwork. LRSD Response: The District will continue to monitor internal controls in regards to use of ESSER funds and ensure all prior approvals are granted by DESE before purchasing of capital assets with a unit value equal to or greater than $5,000. Responsible LRSD Staff: Kelsey Bailey, CDFO, will be responsible for ensuring compliance. Completion Date: Kelsey Bailey has made contact with Jayne Greene at DESE for guidance and retroactive approval was granted from DESE on March 9, 2023. Please let me know if additional information is needed. Respectfully, Kelsey Bailey Chief Deputy Finance & Operations Officer

Finding Number: 2022-001 Planned Corrective Action: The School District will review all purchases made with federal funds to ensure they are properly capitalized and input into the EIS system for tracking purposes. Anticipated Completion Date: April 30,2023 Responsible Contact Person: Samantha Hamilton, Treasurer

FINDING 2022-003 Contact Person Responsible for Corrective Action: Julia Smith, Business Manager Contact Phone Number: 317-788-4481 Views of Responsible Official: We concur with the findings Description of Corrective Action Plan: The Foodservice Director and Business Manager will refer to the Guidance for State Agencies and School Food Authorities manual to ensure compliance for allowable costs. Anticipated Completion Date: January 2023

RESPONSE TO AUDIT FINDING #2022-002: EDUCATION STABILIZATION FUND DISCRETIONARY GRANTS- SPECIAL TESTS AND PROVISIONS (50000) The charter has already submitted the capital expenditure request form to COE and is awaiting approval. The charter will review all required compliance requirements for all new federal funding before purchases are made. The charter anticipates receiving the approval by December 31, 2023.

Fiscal Year Audit Report: Corrective Action Plan Year ended June 30, 2022 Finding 2022-002: Education Stabilization Fund (5000) Federal Agency: U.S. Department of Education Pass through Entity: California Department of Education Program Names: Elementary and Secondary School Emergency Relief I, II, III (ESSER, ESSER II, ESSER III) (Assistance Listing 84.425D) Criteria: Consistent with 2 CFR Section 200.311 (real property), Section 200.313 (equipment), and Section 200.439 (equipment and other capital expenditures) Education Stabilization Funds may be used to purchase equipment. Capital expenditures for general and special-purpose equipment purchases are subject to prior approval by the Department of Education or the pass-through entity. Finding: The District purchased numerous equipment items above the capital threshold for federal purchases but did not obtain approval from the California Department of Education. Questioned Costs: Purchases totaling $329,699.90, were made for equipment above the capital threshold without CDE approval. Context: The finding is limited to purchases above the capital threshold requiring approval. Cause: The District was unaware of the requirement. Effect: The funds spent on this purchase may be subject to review or return to the awarding agency. Recommendation: We recommend the District submit requests for approval for the equipment or find another allowable funding source for the purchases. Action: Staff and Management will ensure that the District submits requests for approval for capital expenditures from the California Department of Education prior to purchases. Completion Date: Effective immediately Contact: Zach Klemish, Director of Fiscal Services, Adelanto Elementary School District, (760) 246-8691

2022-001 Allowable Costs/Cost Principles The ESSER Coordinator, Shane Patrick, Assistant Superintendent of Operations and the Chief Financial Officer, Terri Raskiewicz, are reviewing all actual expenses that pertain to COVID-19-Education Stabilization Fund. Shane Patrick did reach out to DESE and DESE provided our district with a letter stating these expenses would have been approved had we sent in a justification form. This item was approved by DESE in our overall ESSER plan. We implemented on July 1, 2022

Finding 1: The District did not obtain prior written approval from the Department of Elementary and Secondary Education (DESE) for the purchase of two pieces of equipment with unit costs greater than the $5,000 threshold as required by COM-22- 047. Corrective Action: The District will comply with all federal purchasing requirements, including obtaining written approval for equipment with unit costs greater than $5,000. Person Responsible for Corrective Actions: Federal Programs Coordinator Completion Date: This practice will go into effect immediately. Supplemental Findings

Corrective Action Plan: The Program has evaluated its Chapter 5 “Property & Equipment Management & Disposition” and is looking forward to including, by amendment, the provisions set for in 2 CFR 200.439 regarding the acquisition of specialized equipment with a cost of $5,000 or more and the authorization required by the Federal awarding agency. Contact Person: Zorimar Torres Mercado Anticipated Completion Date: December 31, 2023