Assistance Listings numbers and names: 84.425D COVID-19 - Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID-19 - Coronavirus Response and Relief Supplemental Appropriations Act, 2021- Emergency Assistance to Non-Public Schools (CRRSA EANS) Award numbers and years: S425D210038, March 13, 2020 through September 30, 2023; S425R210003, January 15, 2021 through September 30, 2024 Federal agency: U.S. Department of Education Compliance requirements: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulations, the Department of Education (Department) reported inaccurate data for 4 local educational agencies (LEA) and 9 nonpublic schools on Annual Performance Reports (APR) submitted in fiscal year 2023. Specifically, the Department reported key line item information that did not agree to records and supporting documentation, as follows: • For 4 of 48 LEAs tested on the 2021 ESSER APR, certain key line items, including unique entity ID, total amount expended by activity, and allocation of ESSER resources within the LEA, did not agree to the LEAs’ files.1 • For 9 of 9 nonpublic schools tested on the 2022 CRRSA EANS APR, certain key line items, including reporting on State Education Agency obligations (including reimbursements) by allowable activity for CRRSA EANS and reporting on nonpublic schools receiving services or assistance under CRRSA EANS, did not agree to the schools’ files. The Department reported that this would likely be applicable to all 83 nonpublic schools the Department was required to report on. Effect—The Department’s reporting inaccurate program information results in the federal agency being unable to rely on the reports to effectively monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the programs’ successes. The Department is also at risk that this finding applies to other federal programs it administers. Cause—The Department did not have written policies and procedures requiring a detailed, independent review of the APRs for accuracy prior to submission to the federal agency. Department staff reported to us that they were unaware these reports needed to be independently reviewed for accuracy prior to submitting them to the federal agency. Criteria—Federal regulations and the Department’s federal award terms require it to submit annual performance reports to the U.S. Department of Education containing accurate, current, and complete information (2 CFR §§200.301 and 200.302). Further, federal regulation also requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The Department should: 1. Report accurate data in the APRs that agree to records and supporting documentation contained in the LEAs’ or schools’ files, including reviewing, correcting, and/or resubmitting any inaccurately reported information. 2. Develop and implement written policies and procedures to require a detailed, independent review of the APRs for accuracy prior to their submission to the federal agency. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The 2021 ESSER APR was due June 17, 2022; however, the Department received an extension for a submission deadline of September 9, 2022. Per the 2023 Compliance Supplement as of August 12, 2024, it is not necessary for auditors to test whether APRs were submitted in a timely manner because the federal agency is able to verify timeliness.
Assistance Listings numbers and names: 84.425D COVID-19 - Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID-19 - Coronavirus Response and Relief Supplemental Appropriations Act, 2021- Emergency Assistance to Non-Public Schools (CRRSA EANS) Award numbers and years: S425D210038, March 13, 2020 through September 30, 2023; S425R210003, January 15, 2021 through September 30, 2024 Federal agency: U.S. Department of Education Compliance requirements: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulations, the Department of Education (Department) reported inaccurate data for 4 local educational agencies (LEA) and 9 nonpublic schools on Annual Performance Reports (APR) submitted in fiscal year 2023. Specifically, the Department reported key line item information that did not agree to records and supporting documentation, as follows: • For 4 of 48 LEAs tested on the 2021 ESSER APR, certain key line items, including unique entity ID, total amount expended by activity, and allocation of ESSER resources within the LEA, did not agree to the LEAs’ files.1 • For 9 of 9 nonpublic schools tested on the 2022 CRRSA EANS APR, certain key line items, including reporting on State Education Agency obligations (including reimbursements) by allowable activity for CRRSA EANS and reporting on nonpublic schools receiving services or assistance under CRRSA EANS, did not agree to the schools’ files. The Department reported that this would likely be applicable to all 83 nonpublic schools the Department was required to report on. Effect—The Department’s reporting inaccurate program information results in the federal agency being unable to rely on the reports to effectively monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the programs’ successes. The Department is also at risk that this finding applies to other federal programs it administers. Cause—The Department did not have written policies and procedures requiring a detailed, independent review of the APRs for accuracy prior to submission to the federal agency. Department staff reported to us that they were unaware these reports needed to be independently reviewed for accuracy prior to submitting them to the federal agency. Criteria—Federal regulations and the Department’s federal award terms require it to submit annual performance reports to the U.S. Department of Education containing accurate, current, and complete information (2 CFR §§200.301 and 200.302). Further, federal regulation also requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The Department should: 1. Report accurate data in the APRs that agree to records and supporting documentation contained in the LEAs’ or schools’ files, including reviewing, correcting, and/or resubmitting any inaccurately reported information. 2. Develop and implement written policies and procedures to require a detailed, independent review of the APRs for accuracy prior to their submission to the federal agency. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The 2021 ESSER APR was due June 17, 2022; however, the Department received an extension for a submission deadline of September 9, 2022. Per the 2023 Compliance Supplement as of August 12, 2024, it is not necessary for auditors to test whether APRs were submitted in a timely manner because the federal agency is able to verify timeliness.
Assistance Listings numbers and names: 84.425D COVID-19 - Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID-19 - Coronavirus Response and Relief Supplemental Appropriations Act, 2021- Emergency Assistance to Non-Public Schools (CRRSA EANS) Award numbers and years: S425D210038, March 13, 2020 through September 30, 2023; S425R210003, January 15, 2021 through September 30, 2024 Federal agency: U.S. Department of Education Compliance requirements: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulations, the Department of Education (Department) reported inaccurate data for 4 local educational agencies (LEA) and 9 nonpublic schools on Annual Performance Reports (APR) submitted in fiscal year 2023. Specifically, the Department reported key line item information that did not agree to records and supporting documentation, as follows: • For 4 of 48 LEAs tested on the 2021 ESSER APR, certain key line items, including unique entity ID, total amount expended by activity, and allocation of ESSER resources within the LEA, did not agree to the LEAs’ files.1 • For 9 of 9 nonpublic schools tested on the 2022 CRRSA EANS APR, certain key line items, including reporting on State Education Agency obligations (including reimbursements) by allowable activity for CRRSA EANS and reporting on nonpublic schools receiving services or assistance under CRRSA EANS, did not agree to the schools’ files. The Department reported that this would likely be applicable to all 83 nonpublic schools the Department was required to report on. Effect—The Department’s reporting inaccurate program information results in the federal agency being unable to rely on the reports to effectively monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the programs’ successes. The Department is also at risk that this finding applies to other federal programs it administers. Cause—The Department did not have written policies and procedures requiring a detailed, independent review of the APRs for accuracy prior to submission to the federal agency. Department staff reported to us that they were unaware these reports needed to be independently reviewed for accuracy prior to submitting them to the federal agency. Criteria—Federal regulations and the Department’s federal award terms require it to submit annual performance reports to the U.S. Department of Education containing accurate, current, and complete information (2 CFR §§200.301 and 200.302). Further, federal regulation also requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The Department should: 1. Report accurate data in the APRs that agree to records and supporting documentation contained in the LEAs’ or schools’ files, including reviewing, correcting, and/or resubmitting any inaccurately reported information. 2. Develop and implement written policies and procedures to require a detailed, independent review of the APRs for accuracy prior to their submission to the federal agency. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The 2021 ESSER APR was due June 17, 2022; however, the Department received an extension for a submission deadline of September 9, 2022. Per the 2023 Compliance Supplement as of August 12, 2024, it is not necessary for auditors to test whether APRs were submitted in a timely manner because the federal agency is able to verify timeliness.
Assistance Listings numbers and names: 84.425D COVID-19 - Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID-19 - Coronavirus Response and Relief Supplemental Appropriations Act, 2021- Emergency Assistance to Non-Public Schools (CRRSA EANS) Award numbers and years: S425D210038, March 13, 2020 through September 30, 2023; S425R210003, January 15, 2021 through September 30, 2024 Federal agency: U.S. Department of Education Compliance requirements: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulations, the Department of Education (Department) reported inaccurate data for 4 local educational agencies (LEA) and 9 nonpublic schools on Annual Performance Reports (APR) submitted in fiscal year 2023. Specifically, the Department reported key line item information that did not agree to records and supporting documentation, as follows: • For 4 of 48 LEAs tested on the 2021 ESSER APR, certain key line items, including unique entity ID, total amount expended by activity, and allocation of ESSER resources within the LEA, did not agree to the LEAs’ files.1 • For 9 of 9 nonpublic schools tested on the 2022 CRRSA EANS APR, certain key line items, including reporting on State Education Agency obligations (including reimbursements) by allowable activity for CRRSA EANS and reporting on nonpublic schools receiving services or assistance under CRRSA EANS, did not agree to the schools’ files. The Department reported that this would likely be applicable to all 83 nonpublic schools the Department was required to report on. Effect—The Department’s reporting inaccurate program information results in the federal agency being unable to rely on the reports to effectively monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the programs’ successes. The Department is also at risk that this finding applies to other federal programs it administers. Cause—The Department did not have written policies and procedures requiring a detailed, independent review of the APRs for accuracy prior to submission to the federal agency. Department staff reported to us that they were unaware these reports needed to be independently reviewed for accuracy prior to submitting them to the federal agency. Criteria—Federal regulations and the Department’s federal award terms require it to submit annual performance reports to the U.S. Department of Education containing accurate, current, and complete information (2 CFR §§200.301 and 200.302). Further, federal regulation also requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The Department should: 1. Report accurate data in the APRs that agree to records and supporting documentation contained in the LEAs’ or schools’ files, including reviewing, correcting, and/or resubmitting any inaccurately reported information. 2. Develop and implement written policies and procedures to require a detailed, independent review of the APRs for accuracy prior to their submission to the federal agency. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The 2021 ESSER APR was due June 17, 2022; however, the Department received an extension for a submission deadline of September 9, 2022. Per the 2023 Compliance Supplement as of August 12, 2024, it is not necessary for auditors to test whether APRs were submitted in a timely manner because the federal agency is able to verify timeliness.
Assistance Listings numbers and names: 84.425D COVID-19 - Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID-19 - Coronavirus Response and Relief Supplemental Appropriations Act, 2021- Emergency Assistance to Non-Public Schools (CRRSA EANS) Award numbers and years: S425D210038, March 13, 2020 through September 30, 2023; S425R210003, January 15, 2021 through September 30, 2024 Federal agency: U.S. Department of Education Compliance requirements: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulations, the Department of Education (Department) reported inaccurate data for 4 local educational agencies (LEA) and 9 nonpublic schools on Annual Performance Reports (APR) submitted in fiscal year 2023. Specifically, the Department reported key line item information that did not agree to records and supporting documentation, as follows: • For 4 of 48 LEAs tested on the 2021 ESSER APR, certain key line items, including unique entity ID, total amount expended by activity, and allocation of ESSER resources within the LEA, did not agree to the LEAs’ files.1 • For 9 of 9 nonpublic schools tested on the 2022 CRRSA EANS APR, certain key line items, including reporting on State Education Agency obligations (including reimbursements) by allowable activity for CRRSA EANS and reporting on nonpublic schools receiving services or assistance under CRRSA EANS, did not agree to the schools’ files. The Department reported that this would likely be applicable to all 83 nonpublic schools the Department was required to report on. Effect—The Department’s reporting inaccurate program information results in the federal agency being unable to rely on the reports to effectively monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the programs’ successes. The Department is also at risk that this finding applies to other federal programs it administers. Cause—The Department did not have written policies and procedures requiring a detailed, independent review of the APRs for accuracy prior to submission to the federal agency. Department staff reported to us that they were unaware these reports needed to be independently reviewed for accuracy prior to submitting them to the federal agency. Criteria—Federal regulations and the Department’s federal award terms require it to submit annual performance reports to the U.S. Department of Education containing accurate, current, and complete information (2 CFR §§200.301 and 200.302). Further, federal regulation also requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The Department should: 1. Report accurate data in the APRs that agree to records and supporting documentation contained in the LEAs’ or schools’ files, including reviewing, correcting, and/or resubmitting any inaccurately reported information. 2. Develop and implement written policies and procedures to require a detailed, independent review of the APRs for accuracy prior to their submission to the federal agency. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The 2021 ESSER APR was due June 17, 2022; however, the Department received an extension for a submission deadline of September 9, 2022. Per the 2023 Compliance Supplement as of August 12, 2024, it is not necessary for auditors to test whether APRs were submitted in a timely manner because the federal agency is able to verify timeliness.
Assistance Listings numbers and names: 84.425D COVID-19 - Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID-19 - Coronavirus Response and Relief Supplemental Appropriations Act, 2021- Emergency Assistance to Non-Public Schools (CRRSA EANS) Award numbers and years: S425D210038, March 13, 2020 through September 30, 2023; S425R210003, January 15, 2021 through September 30, 2024 Federal agency: U.S. Department of Education Compliance requirements: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulations, the Department of Education (Department) reported inaccurate data for 4 local educational agencies (LEA) and 9 nonpublic schools on Annual Performance Reports (APR) submitted in fiscal year 2023. Specifically, the Department reported key line item information that did not agree to records and supporting documentation, as follows: • For 4 of 48 LEAs tested on the 2021 ESSER APR, certain key line items, including unique entity ID, total amount expended by activity, and allocation of ESSER resources within the LEA, did not agree to the LEAs’ files.1 • For 9 of 9 nonpublic schools tested on the 2022 CRRSA EANS APR, certain key line items, including reporting on State Education Agency obligations (including reimbursements) by allowable activity for CRRSA EANS and reporting on nonpublic schools receiving services or assistance under CRRSA EANS, did not agree to the schools’ files. The Department reported that this would likely be applicable to all 83 nonpublic schools the Department was required to report on. Effect—The Department’s reporting inaccurate program information results in the federal agency being unable to rely on the reports to effectively monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the programs’ successes. The Department is also at risk that this finding applies to other federal programs it administers. Cause—The Department did not have written policies and procedures requiring a detailed, independent review of the APRs for accuracy prior to submission to the federal agency. Department staff reported to us that they were unaware these reports needed to be independently reviewed for accuracy prior to submitting them to the federal agency. Criteria—Federal regulations and the Department’s federal award terms require it to submit annual performance reports to the U.S. Department of Education containing accurate, current, and complete information (2 CFR §§200.301 and 200.302). Further, federal regulation also requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The Department should: 1. Report accurate data in the APRs that agree to records and supporting documentation contained in the LEAs’ or schools’ files, including reviewing, correcting, and/or resubmitting any inaccurately reported information. 2. Develop and implement written policies and procedures to require a detailed, independent review of the APRs for accuracy prior to their submission to the federal agency. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The 2021 ESSER APR was due June 17, 2022; however, the Department received an extension for a submission deadline of September 9, 2022. Per the 2023 Compliance Supplement as of August 12, 2024, it is not necessary for auditors to test whether APRs were submitted in a timely manner because the federal agency is able to verify timeliness.
2023-014 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-014 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-014 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-014 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-014 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-014 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-014 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-014 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-014 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-014 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-014 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-014 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-014 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
FA 2023-001 Improve Controls over Financial Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 – Title I Grants to Local Educational Agencies Federal Award Number: S010A210010-21A (Year: 2022), S010A220010 (Year: 2023) Questioned Costs: None Identified Description: The School District did not file accurate completion reports for Title I Grants to Local Educational Agencies program. Background Information: The Georgia Department of Education (GaDOE) requires the School District to submit a completion report by October 30 after the 15-month period of performance associated with the Title I Grants to Local Educational Agencies (Title I) program ends. These completion reports are filed through the Grants Application section of the MyGaDOE webportal and reflect budgeted and actual expenditure information for the Title I program for the reporting period. If the total expenditures reflected on the completion report are more than the Title I program funds received by the School District for the grant period, a DE-0147 – Request for Reimbursement of Monthly Cash Disbursements will be automatically generated and the additional funds due to the School District will be disbursed appropriately. Conversely, if the total funds received for the grant period exceed the total expenditures reflected on the completion report, the Grants Application will prompt the School District to enter a check number for the required refund of excess funds drawn down. Therefore, it is imperative that completion reports are filed by the School District in an accurate and timely manner. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.302(a) state in part that “the non-Federal entity’s financial management systems must… be sufficient to permit the preparation of reports required by general and program-specific terms and conditions.” In addition, provisions included in the Uniform Guidance, Section 200.302(b)(2) state in part that the non-federal entity’s financial management system must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.” Condition: A review of the School District’s accounting records and the completion reports related to the Title I program revealed the following deficiencies: 1. The Title I-A, Improving the Academic Achievement of the Disadvantaged completion report for the period July 1, 2022 through June 30, 2023 was under reported by $79,636. 2. The Title I-A, Improving the Academic Achievement of the Disadvantaged completion report for the period July 1, 2023 through September 30, 2023 was over reported by $390. 3. The Title I-A, School Improvement completion report for the period July 1, 2022 through June 30, 2023 was under reported by $4,571. 4. The Title I-A, School Improvement completion report for the period July 1, 2023 through September 30, 2023 was under reported by $32. Cause: Due to high turnover within the School District finance department and lack of strong procedures and controls, the School District had a deficiency in oversight of federal programs and reviews. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. Failure to accurately report federal award expenditures through the completion report process could lead to the filing of DE-0147 reimbursement requests with GaDOE that do not support actual expenditures. Therefore, the School District may obtain more or less federal funding than they were eligible to receive. Recommendation: The School District should establish procedures to ensure that completion reports submitted to GaDOE are supported by the accounting records and reimbursement requests are prepared based upon actual expenditures incurred. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
FA 2023-001 Improve Controls over Financial Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 – Title I Grants to Local Educational Agencies Federal Award Number: S010A210010-21A (Year: 2022), S010A220010 (Year: 2023) Questioned Costs: None Identified Description: The School District did not file accurate completion reports for Title I Grants to Local Educational Agencies program. Background Information: The Georgia Department of Education (GaDOE) requires the School District to submit a completion report by October 30 after the 15-month period of performance associated with the Title I Grants to Local Educational Agencies (Title I) program ends. These completion reports are filed through the Grants Application section of the MyGaDOE webportal and reflect budgeted and actual expenditure information for the Title I program for the reporting period. If the total expenditures reflected on the completion report are more than the Title I program funds received by the School District for the grant period, a DE-0147 – Request for Reimbursement of Monthly Cash Disbursements will be automatically generated and the additional funds due to the School District will be disbursed appropriately. Conversely, if the total funds received for the grant period exceed the total expenditures reflected on the completion report, the Grants Application will prompt the School District to enter a check number for the required refund of excess funds drawn down. Therefore, it is imperative that completion reports are filed by the School District in an accurate and timely manner. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.302(a) state in part that “the non-Federal entity’s financial management systems must… be sufficient to permit the preparation of reports required by general and program-specific terms and conditions.” In addition, provisions included in the Uniform Guidance, Section 200.302(b)(2) state in part that the non-federal entity’s financial management system must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.” Condition: A review of the School District’s accounting records and the completion reports related to the Title I program revealed the following deficiencies: 1. The Title I-A, Improving the Academic Achievement of the Disadvantaged completion report for the period July 1, 2022 through June 30, 2023 was under reported by $79,636. 2. The Title I-A, Improving the Academic Achievement of the Disadvantaged completion report for the period July 1, 2023 through September 30, 2023 was over reported by $390. 3. The Title I-A, School Improvement completion report for the period July 1, 2022 through June 30, 2023 was under reported by $4,571. 4. The Title I-A, School Improvement completion report for the period July 1, 2023 through September 30, 2023 was under reported by $32. Cause: Due to high turnover within the School District finance department and lack of strong procedures and controls, the School District had a deficiency in oversight of federal programs and reviews. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. Failure to accurately report federal award expenditures through the completion report process could lead to the filing of DE-0147 reimbursement requests with GaDOE that do not support actual expenditures. Therefore, the School District may obtain more or less federal funding than they were eligible to receive. Recommendation: The School District should establish procedures to ensure that completion reports submitted to GaDOE are supported by the accounting records and reimbursement requests are prepared based upon actual expenditures incurred. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
FA 2023-003 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Number: S425U210012 (Year: 2021) Questioned Costs: None Identified Description: The School District made cash drawdowns in excess of immediate cash needs for the Elementary and Secondary School Emergency Relief Fund program. Background Information: The School District may request Elementary and Secondary Emergency Relief (ESSER) Fund program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the funds are typically disbursed to the School District through an electronic payment process the next week. The School District submitted DE-0147 requests to receive a total of $3,636,320 in ESSER funds from GaDOE during the fiscal year under review. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.305(b) state that “For non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds…the pass-through entity and the disbursement by the non-Federal entity.” In addition, the Uniform Guidance Section 200.302(b)(6) requires the entity to develop written cash management procedures. Condition: A review of all cash drawdowns and disbursements related to the ESSER program was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Cash balances in excess of program materiality were maintained for the ESSER program for 37 days. Additionally, it was noted that the School District did not have appropriate internal controls in place over the cash drawdown process. Cause: In discussing this issue with the School District, they indicated that the lack of review of federal grants resulted in excess cash drawdown requests. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures. Recommendation: The School District should establish procedures to accurately forecast the cash needs of the ESSER program and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance Section 200.302(b)(6). Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur with this finding.
Statement of condition: Lack of adequate supporting documentation for expenditures of federal awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.302-303 requires non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Additionally, all recipients and subrecipients of federal awards must maintain records which are sufficient to track expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Cause of condition: Procedures are in place which require every transaction recorded to be supported by the appropriate documentation. However, these procedures were not appropriately followed as managment has not kept or maintained records of transactions for expenditures of federal awards. Supporting documentation has either been lost or disposed. Effect of condition: Management did not maintain adequate supporting documentation for certain expenditures of federal awards, thus making it impossible to determine if funds were spent in accordance with regulations. Context: Management was unable to provide supporting documentation for 3 of the 10 non-payroll expenditures selected for testing. These expenditures totaled $15,468. Recommendation: To ensure proper records are maintained, after recording all transactions, supporting documentation for which the transaction was derived should be maintained in an organized fashion so that the records and be accessed in a timely manner. This process should be done to ensure accounting records are accurate and to provide support if questions arise from the public or any government agencies. Views of responsible officials and planned corrective actions: Management agrees with this finding and will put procedures in place to maintain adequate supporting documentation for all transactions. Action Plan: Establish clear guidelines and training on allowable costs for federally funded programs. Implement a compliance checklist for all federally funded expenditures to ensure alignment with Education Stabilization Fund requirements. Conduct internal audits every quarter to monitor compliance and document findings. Timeline: Immediate implementation; quarterly compliance reviews. Responsible Parties: Finance Director, APSRC, and Directors.
Statement of condition: Lack of adequate supporting documentation for expenditures of federal awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.302-303 requires non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Additionally, all recipients and subrecipients of federal awards must maintain records which are sufficient to track expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Cause of condition: Procedures are in place which require every transaction recorded to be supported by the appropriate documentation. However, these procedures were not appropriately followed as managment has not kept or maintained records of transactions for expenditures of federal awards. Supporting documentation has either been lost or disposed. Effect of condition: Management did not maintain adequate supporting documentation for certain expenditures of federal awards, thus making it impossible to determine if funds were spent in accordance with regulations. Context: Management was unable to provide supporting documentation for 3 of the 10 non-payroll expenditures selected for testing. These expenditures totaled $15,468. Recommendation: To ensure proper records are maintained, after recording all transactions, supporting documentation for which the transaction was derived should be maintained in an organized fashion so that the records and be accessed in a timely manner. This process should be done to ensure accounting records are accurate and to provide support if questions arise from the public or any government agencies. Views of responsible officials and planned corrective actions: Management agrees with this finding and will put procedures in place to maintain adequate supporting documentation for all transactions. Action Plan: Establish clear guidelines and training on allowable costs for federally funded programs. Implement a compliance checklist for all federally funded expenditures to ensure alignment with Education Stabilization Fund requirements. Conduct internal audits every quarter to monitor compliance and document findings. Timeline: Immediate implementation; quarterly compliance reviews. Responsible Parties: Finance Director, APSRC, and Directors.
Statement of condition: Lack of adequate supporting documentation for expenditures of federal awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.302-303 requires non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Additionally, all recipients and subrecipients of federal awards must maintain records which are sufficient to track expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Cause of condition: Procedures are in place which require every transaction recorded to be supported by the appropriate documentation. However, these procedures were not appropriately followed as managment has not kept or maintained records of transactions for expenditures of federal awards. Supporting documentation has either been lost or disposed. Effect of condition: Management did not maintain adequate supporting documentation for certain expenditures of federal awards, thus making it impossible to determine if funds were spent in accordance with regulations. Context: Management was unable to provide supporting documentation for 3 of the 10 non-payroll expenditures selected for testing. These expenditures totaled $15,468. Recommendation: To ensure proper records are maintained, after recording all transactions, supporting documentation for which the transaction was derived should be maintained in an organized fashion so that the records and be accessed in a timely manner. This process should be done to ensure accounting records are accurate and to provide support if questions arise from the public or any government agencies. Views of responsible officials and planned corrective actions: Management agrees with this finding and will put procedures in place to maintain adequate supporting documentation for all transactions. Action Plan: Establish clear guidelines and training on allowable costs for federally funded programs. Implement a compliance checklist for all federally funded expenditures to ensure alignment with Education Stabilization Fund requirements. Conduct internal audits every quarter to monitor compliance and document findings. Timeline: Immediate implementation; quarterly compliance reviews. Responsible Parties: Finance Director, APSRC, and Directors.
Finding 2023-002 – Internal Controls Over Reporting (Material Weakness) Condition: The City did not report accurate expenditures during the year in its Project and Expenditure Quarterly Reports for the uses of ARPA funding. The reports contained incorrect project amounts and expenditure classifications due to internal control failures, including insufficient review by someone other than the preparer. Criteria: Per 2 CFR 200.302(b)(3) and 2 CFR 200.328, recipients of federal funds are required to maintain accurate financial records and report expenditures in accordance with federal award terms. Specifically, recipients of ARPA funding are required to submit accurate quarterly Project and Expenditure Reports to provide transparency and ensure funds are used in compliance with allowable purposes. Cause: The inaccuracies resulted from a lack of sufficient internal controls over the reporting process. Specifically: No independent review was performed to validate the accuracy and completeness of the quarterly reports. Documentation of the expenditure allocation process was not consistently maintained to support the reported amounts. Effect: The lack of accurate reporting undermines compliance with the reporting requirements of the federal award. Although no unallowable costs were identified, the inaccuracies may necessitate correction of reported amounts in the future. Recommendation: We recommend that the City strengthen its internal controls over the reporting process by: 1. Implementing a formal review process where quarterly reports are reviewed and approved by a designated individual other than the preparer. 2. Establishing a documented process for reconciling expenditures reported to the underlying accounting records and federal award guidelines. 3. Providing training to staff responsible for the preparation and review of federal compliance reports to ensure familiarity with reporting requirements. Management’s Response: See Corrective Action Plan.
Allowable Costs and Cost Principles U.S. Department of Treasury, passed through from the Montana Department of Natural Resources and Conservation ALN: 21.027, Coronavirus State and Local Fiscal Recovery Funds Criteria: The grant award RW-22-077A scope of work is for Phase 3, 3A and 4 – LiDAR Survey of Pipeline Routes. Musselshell County also contracted with the Authority to pay for a portion of these costs. Code section 2 CFR 200.302 requires recipients to maintain appropriate records and documentation to sufficiently identify the amount, source and expenditure of federal funds for federal awards. Condition: The Authority received reimbursement for expenses incurred from the County and the Montana Department of Natural Resources and Conservation (DNRC), totaling $55,698. The same costs were incorrectly counted toward both funding sources. Context: The Authority collected revenue twice for the same costs. No funds were reimbursed to the County. For the DNRC, additional costs were incurred through June 30, 2023, that totaled $13,512, which were not included in any draws or cash receipts from DNRC through June 30, 2023. So essentially the Authority used up some of this overage before year end, resulting in an overage of $42,186. Effect: The Authority overdrew on revenue by $55,698. Questioned Costs: We question the costs reported as federal expenditures for this program totaling $42,186. Cause: The Authority made an error when submitting reimbursement for costs incurred. Auditor Recommendation: We recommend the Authority: 1) reimburse DNRC or the County for the overage, 2) strengthen internal controls over tracking of expenditures for grants to ensure duplication does not occur in the future. Authority Response: Based upon DNRC direction, the Authority will pay back DNRC with water user fees from Roundup. The Project Administrator will work with the outside accountant to assist with the record keeping of the Authority
FA 2023-003 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 84.010 - Title I Grants to Local Educational Agencies Federal Award Numbers: S010A210010-21A (Year: 2022), SO10A220010 (Year: 2023) Questioned Costs: None Identified Repeat of Prior Year Findings: FA 2022-003, FA 2021-001, FA 2020-001, FA 2019-001, FA 2018-001, FA 2017-002, FA 2016-001, FA 2015-002, FA 2014-003 Description: The School District made cash drawdowns in excess of immediate cash needs for the Title I Grants to Local Educational Agencies program. Background Information: The School District may request Title I Grants to Local Educational Agencies program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the funds are typically disbursed to the School District through an electronic payment process the next week. The School District submitted DE-0147 requests to receive a total of $426,546 in Title I funds from GaDOE during the fiscal year under review. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.305(b) state that “For non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds…the pass-through entity and the disbursement by the non-Federal entity.” In addition, the Uniform Guidance Section 200.302(b)(6) requires the entity to develop written cash management procedures. Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. lll FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Condition: A review of all cash drawdowns and disbursements related to the Title I program was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Cash balances in excess of program materiality were maintained for the Title I program for 273 days. Additionally, it was noted that the School District did not have appropriate internal controls in place over the cash drawdown process. Cause: In discussing this issue with the School District, they indicated that the lack of review of Federal grants resulted in excess cash drawdown request. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures. Recommendation: The School District should establish procedures to accurately forecast the cash needs of the Title I program and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance Section 200.302(b)(6). Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur with this finding.
FA 2023-003 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 84.010 - Title I Grants to Local Educational Agencies Federal Award Numbers: S010A210010-21A (Year: 2022), SO10A220010 (Year: 2023) Questioned Costs: None Identified Repeat of Prior Year Findings: FA 2022-003, FA 2021-001, FA 2020-001, FA 2019-001, FA 2018-001, FA 2017-002, FA 2016-001, FA 2015-002, FA 2014-003 Description: The School District made cash drawdowns in excess of immediate cash needs for the Title I Grants to Local Educational Agencies program. Background Information: The School District may request Title I Grants to Local Educational Agencies program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the funds are typically disbursed to the School District through an electronic payment process the next week. The School District submitted DE-0147 requests to receive a total of $426,546 in Title I funds from GaDOE during the fiscal year under review. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.305(b) state that “For non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds…the pass-through entity and the disbursement by the non-Federal entity.” In addition, the Uniform Guidance Section 200.302(b)(6) requires the entity to develop written cash management procedures. Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. lll FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Condition: A review of all cash drawdowns and disbursements related to the Title I program was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Cash balances in excess of program materiality were maintained for the Title I program for 273 days. Additionally, it was noted that the School District did not have appropriate internal controls in place over the cash drawdown process. Cause: In discussing this issue with the School District, they indicated that the lack of review of Federal grants resulted in excess cash drawdown request. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures. Recommendation: The School District should establish procedures to accurately forecast the cash needs of the Title I program and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance Section 200.302(b)(6). Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur with this finding.
FA 2023-004 Strengthen Controls over Financial Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 - Title I Grants to Local Educational Agencies Federal Award Numbers: SO10A210010-21A (Year: 2022), SO10A220010 (Year: 2023) Questioned Costs: $84,283 Repeat of Prior Year Finding: FA 2022-004, FA 2021-002, FA 2019-002 Description: The School District did not file accurate completion reports for the Title I Grants to Local Educational Agencies program. Background Information: The Georgia Department of Education (GaDOE) requires the School District to submit a completion report by October 30 after the 15-month period of performance associated with the Title I Grants to Local Educational Agencies (Title I) program ends. These completion reports are filed through the Grants Application section of the MyGaDOE webportal and reflect budgeted and actual expenditure information for the Title I program for the reporting period. If the total expenditures reflected on the completion report are more than the Title I program funds received by the School District for the grant period, a DE-0147 – Request for Reimbursement of Monthly Cash Disbursements will be automatically generated and the additional funds due to the School District will be disbursed appropriately. Conversely, if the total funds received for the grant period exceed the total expenditures reflected on the completion report, the Grants Application will prompt the School District to enter a check number for the required refund of excess funds drawn down. Therefore, it is imperative that completion reports are filed by the School District in an accurate and timely manner. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.302(a) state in part that “the non-Federal entity’s financial management systems must…be sufficient to permit the preparation of reports required by general and program-specific terms and conditions.” In addition, Provisions included in the Uniform Guidance Section 200.302(b)(2) state in part that the non-Federal entity’s financial management systems must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.” Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. lll FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Condition: A review of the School District’s accounting records and the completion reports related to the Title I-A, Improving Academic Achievement of the Disadvantaged and Title I-A, School Improvement programs for the period ending September 30, 2023 revealed that the expenditures were over reported by $84,283. Questioned Costs: Questioned costs of $84,283 were identified for cash drawdowns in excess of reimbursable expenditures. Cause: In discussing this deficiency with the School District, they stated these issues were a result of turnover within the central office. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. Failure to accurately report federal award expenditures through the completion report process could lead to the filing of DE-0147 reimbursement requests with GaDOE that do not support actual expenditures. Therefore, the School District obtained more federal funding than they were eligible to receive. Additionally, this funding must be returned to the GaDOE. Recommendation: The School District should establish internal control procedures to ensure that completion reports submitted to GaDOE are supported by the accounting records and DE-0147 reimbursement requests are prepared based upon actual expenditures incurred. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
FA 2023-004 Strengthen Controls over Financial Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 - Title I Grants to Local Educational Agencies Federal Award Numbers: SO10A210010-21A (Year: 2022), SO10A220010 (Year: 2023) Questioned Costs: $84,283 Repeat of Prior Year Finding: FA 2022-004, FA 2021-002, FA 2019-002 Description: The School District did not file accurate completion reports for the Title I Grants to Local Educational Agencies program. Background Information: The Georgia Department of Education (GaDOE) requires the School District to submit a completion report by October 30 after the 15-month period of performance associated with the Title I Grants to Local Educational Agencies (Title I) program ends. These completion reports are filed through the Grants Application section of the MyGaDOE webportal and reflect budgeted and actual expenditure information for the Title I program for the reporting period. If the total expenditures reflected on the completion report are more than the Title I program funds received by the School District for the grant period, a DE-0147 – Request for Reimbursement of Monthly Cash Disbursements will be automatically generated and the additional funds due to the School District will be disbursed appropriately. Conversely, if the total funds received for the grant period exceed the total expenditures reflected on the completion report, the Grants Application will prompt the School District to enter a check number for the required refund of excess funds drawn down. Therefore, it is imperative that completion reports are filed by the School District in an accurate and timely manner. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.302(a) state in part that “the non-Federal entity’s financial management systems must…be sufficient to permit the preparation of reports required by general and program-specific terms and conditions.” In addition, Provisions included in the Uniform Guidance Section 200.302(b)(2) state in part that the non-Federal entity’s financial management systems must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.” Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. lll FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Condition: A review of the School District’s accounting records and the completion reports related to the Title I-A, Improving Academic Achievement of the Disadvantaged and Title I-A, School Improvement programs for the period ending September 30, 2023 revealed that the expenditures were over reported by $84,283. Questioned Costs: Questioned costs of $84,283 were identified for cash drawdowns in excess of reimbursable expenditures. Cause: In discussing this deficiency with the School District, they stated these issues were a result of turnover within the central office. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. Failure to accurately report federal award expenditures through the completion report process could lead to the filing of DE-0147 reimbursement requests with GaDOE that do not support actual expenditures. Therefore, the School District obtained more federal funding than they were eligible to receive. Additionally, this funding must be returned to the GaDOE. Recommendation: The School District should establish internal control procedures to ensure that completion reports submitted to GaDOE are supported by the accounting records and DE-0147 reimbursement requests are prepared based upon actual expenditures incurred. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
2023-013 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-013 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-013 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-013 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-013 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-013 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-013 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-013 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-013 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-013 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-013 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-013 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-013 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness) Federal Agency: All Compliance Requirement: All Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements. Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records. Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures. Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements. Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
Lack of Supporting Documentation for Non-Payroll Disbursements - Activities Allowed or Unallowed and Allowable Costs/Cost Principles (Significant Deficiency) AL Number and Title: 84.362A - Native Hawaiian Education Program Award Number: S362A200024 Award Year: 2023 Federal Agency: Department of Education Criteria: Under 2 CFR § 200.302(b)(3) and 2 CFR § 200.403(g), non-Federal entities are required to maintain documentation to support costs charged to federal awards. Costs must be necessary, reasonable, allocable, and adequately documented to be allowable under a federal program. Internal controls should ensure proper retention of records for audit and compliance purposes. Condition: During our testing of compliance and internal controls over compliance for Activities Allowed or Unallowed and Allowable Costs/Cost Principles, we selected a haphazard sample of 40 non-payroll disbursements. The auditee was unable to provide any supporting documentation (such as invoices or receipts) for five transactions totaling $200.19. These transactions were for program and class supplies from various vendors. Cause: The lack of documentation appears to result from weaknesses in the Organization’s record-keeping practices and non-compliance with established documentation retention policies. The Organization’s internal controls did not ensure that all supporting documentation for federal expenditures was consistently maintained Effect: Without adequate supporting documentation, we were unable to determine whether these costs were allowable, allocable, and reasonable in accordance with federal grant requirements. This noncompliance increases the risk that unallowable or unauthorized costs could be charged to the federal program without detection. Repeat Finding? No Recommendation: We recommend that the Organization: 1. Enhance internal controls to ensure that all federal expenditures are properly supported and retained for compliance purposes; 2. Implement a centralized documentation retention system to track and store invoices, receipts, and other supporting records; 3. Provide staff training on documentation requirements for federal grant expenditures to ensure compliance with 2 CFR § 200.302(b)(3) and 2 CFR § 200.403(g); and 4. Conduct periodic internal reviews of disbursement records to verify that required documentation is maintained and readily available for audit purposes. Views of Responsible Officials and Planned Corrective Action: Mana Maoli agrees with the finding and the recommendation. See Part V, Corrective Action Plan.
FINDING 2023-011 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 34 SHENANDOAH SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by the Director of Curriculum without oversight or review process in place to prevent, or detect and correct, errors. All six of the submitted reports were selected for testing. One of the reports, ESSER II, Year 2, was not supported by the School Corporation's records. The School Corporation had expenditures of $583,415 from the ESSER II grant which were not included in this report. The lack of internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II, Year 2 report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 35 SHENANDOAH SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by the School Corporation's management. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, a report submitted to the IDOE was not supported by the School Corporation's underlying accounting records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure reports are supported by the ledgers or reports used to complete the report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 36
FINDING 2023-011 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 34 SHENANDOAH SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by the Director of Curriculum without oversight or review process in place to prevent, or detect and correct, errors. All six of the submitted reports were selected for testing. One of the reports, ESSER II, Year 2, was not supported by the School Corporation's records. The School Corporation had expenditures of $583,415 from the ESSER II grant which were not included in this report. The lack of internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II, Year 2 report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 35 SHENANDOAH SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by the School Corporation's management. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, a report submitted to the IDOE was not supported by the School Corporation's underlying accounting records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure reports are supported by the ledgers or reports used to complete the report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 36
FINDING 2023-011 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 34 SHENANDOAH SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by the Director of Curriculum without oversight or review process in place to prevent, or detect and correct, errors. All six of the submitted reports were selected for testing. One of the reports, ESSER II, Year 2, was not supported by the School Corporation's records. The School Corporation had expenditures of $583,415 from the ESSER II grant which were not included in this report. The lack of internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II, Year 2 report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 35 SHENANDOAH SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by the School Corporation's management. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, a report submitted to the IDOE was not supported by the School Corporation's underlying accounting records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure reports are supported by the ledgers or reports used to complete the report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 36
FINDING 2023-011 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 34 SHENANDOAH SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by the Director of Curriculum without oversight or review process in place to prevent, or detect and correct, errors. All six of the submitted reports were selected for testing. One of the reports, ESSER II, Year 2, was not supported by the School Corporation's records. The School Corporation had expenditures of $583,415 from the ESSER II grant which were not included in this report. The lack of internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II, Year 2 report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 35 SHENANDOAH SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by the School Corporation's management. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, a report submitted to the IDOE was not supported by the School Corporation's underlying accounting records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure reports are supported by the ledgers or reports used to complete the report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 36
Condition: For the fiscal year ended June 30, 2023, we requested that Day One prepare and send us a Schedule of Expenditures of Federal Awards. Requested that the expenditures reported in the SEFA be reconciled to Day One’s accounting records. We reviewed the SEFA and compared them to the accounting records; we noted that the expenditures reported were inaccurate. Criteria: Recipients of federal awards are subject to requirements documented in section of the Uniform Guidance Sections 200.510, 200.502, and 200.302. The criteria for each are as follows: § 200.510 Financial statements (b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502.” § 200.502 Basis for determining Federal awards expended (a) Determining Federal awards expended. The determination of when a federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards including grants, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, cooperative agreements, and direct appropriations; the disbursement of funds to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property; the receipt of surplus property; the receipt or use of program income; the distribution or use of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest subsidy; and the period when insurance is in force.§ 200.302 Financial management (a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements…..” Questioned Costs: None Cause: The Organization has not implemented policies and procedures requiring that the Schedule of Federal Awards to complete and accurate. Effect and Context: The Organization reported expenditures that exceeded $750,000 for 2022. In determining the major program to be audited for 2022, the auditor could not rely on the SEFA provided because the SEFA was not complete and expenditures reported were inaccurate. Which could have lead to an inaccurate reporting of federal expenditures for the Organization for 2022. Recommendation: We recommend that management implement policies and procedures requiring all federal expenditures be accurately reported in the year end Schedule of Federal Awards. Management’s Response and Corrective Action Plan: See management’s responses documented on page 46-47.