CONDITION: The Northern Cambria School District contracted Eber HVAC, Inc. for the School District’s RTU Replacement Project which constitutes a construction-related purchase which requires prior approval from the Pennsylvania Department of Education (PDE). The School District did not obtain the required prior approval from PDE for this expenditure. This is a repeat finding (2023-001) from the prior fiscal year CRITERIA: PDE and Section 2 CFR 200.439(b) of the Uniform Guidance require prior written approval by the federal or pass-through awarding agency for capital purchases including equipment, buildings, and land. Capital expenditures for special purpose equipment with a unit cost of $5,000 or more must also have prior approval. CAUSE: School District personnel did not review the PDE and Uniform Guidance requirements for capital purchases in advance of contracting for the RTU Replacement Project. EFFECT: The Northern Cambria School District did not comply with the requirements of PDE and 2 CFR 200.439(b) of the Uniform Guidance regarding obtaining prior written approval for capital expenditures. QUESTIONED COST: $818,900 RECOMMENDATION: For all future capital expenditures utilizing federal grant funding, I am recommending that the School District properly complete the necessary PDE, or other awarding agency forms, necessary to receive prior written approval for capital expenditures in accordance with PDE and Section 2 CFR 200.439(b) of the Uniform Guidance regulations. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and has developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
CONDITION: The Northern Cambria School District contracted Eber HVAC, Inc. for the School District’s RTU Replacement Project which constitutes a construction-related purchase which requires prior approval from the Pennsylvania Department of Education (PDE). The School District did not obtain the required prior approval from PDE for this expenditure. This is a repeat finding (2023-001) from the prior fiscal year CRITERIA: PDE and Section 2 CFR 200.439(b) of the Uniform Guidance require prior written approval by the federal or pass-through awarding agency for capital purchases including equipment, buildings, and land. Capital expenditures for special purpose equipment with a unit cost of $5,000 or more must also have prior approval. CAUSE: School District personnel did not review the PDE and Uniform Guidance requirements for capital purchases in advance of contracting for the RTU Replacement Project. EFFECT: The Northern Cambria School District did not comply with the requirements of PDE and 2 CFR 200.439(b) of the Uniform Guidance regarding obtaining prior written approval for capital expenditures. QUESTIONED COST: $818,900 RECOMMENDATION: For all future capital expenditures utilizing federal grant funding, I am recommending that the School District properly complete the necessary PDE, or other awarding agency forms, necessary to receive prior written approval for capital expenditures in accordance with PDE and Section 2 CFR 200.439(b) of the Uniform Guidance regulations. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and has developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
CONDITION: The Northern Cambria School District contracted Eber HVAC, Inc. for the School District’s RTU Replacement Project which constitutes a construction-related purchase which requires prior approval from the Pennsylvania Department of Education (PDE). The School District did not obtain the required prior approval from PDE for this expenditure. This is a repeat finding (2023-001) from the prior fiscal year CRITERIA: PDE and Section 2 CFR 200.439(b) of the Uniform Guidance require prior written approval by the federal or pass-through awarding agency for capital purchases including equipment, buildings, and land. Capital expenditures for special purpose equipment with a unit cost of $5,000 or more must also have prior approval. CAUSE: School District personnel did not review the PDE and Uniform Guidance requirements for capital purchases in advance of contracting for the RTU Replacement Project. EFFECT: The Northern Cambria School District did not comply with the requirements of PDE and 2 CFR 200.439(b) of the Uniform Guidance regarding obtaining prior written approval for capital expenditures. QUESTIONED COST: $818,900 RECOMMENDATION: For all future capital expenditures utilizing federal grant funding, I am recommending that the School District properly complete the necessary PDE, or other awarding agency forms, necessary to receive prior written approval for capital expenditures in accordance with PDE and Section 2 CFR 200.439(b) of the Uniform Guidance regulations. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and has developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
CONDITION: The Northern Cambria School District contracted Eber HVAC, Inc. for the School District’s RTU Replacement Project which constitutes a construction-related purchase which requires prior approval from the Pennsylvania Department of Education (PDE). The School District did not obtain the required prior approval from PDE for this expenditure. This is a repeat finding (2023-001) from the prior fiscal year CRITERIA: PDE and Section 2 CFR 200.439(b) of the Uniform Guidance require prior written approval by the federal or pass-through awarding agency for capital purchases including equipment, buildings, and land. Capital expenditures for special purpose equipment with a unit cost of $5,000 or more must also have prior approval. CAUSE: School District personnel did not review the PDE and Uniform Guidance requirements for capital purchases in advance of contracting for the RTU Replacement Project. EFFECT: The Northern Cambria School District did not comply with the requirements of PDE and 2 CFR 200.439(b) of the Uniform Guidance regarding obtaining prior written approval for capital expenditures. QUESTIONED COST: $818,900 RECOMMENDATION: For all future capital expenditures utilizing federal grant funding, I am recommending that the School District properly complete the necessary PDE, or other awarding agency forms, necessary to receive prior written approval for capital expenditures in accordance with PDE and Section 2 CFR 200.439(b) of the Uniform Guidance regulations. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and has developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
Significant Deficiency 2024-001. Equipment and Real Property Management United States Department of Education, Passed Through New York State, Department of Education: Education Stabilization Fund COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan - Elementary and Secondary School Emergency Relief Fund ALN: 84.425U Criteria: Education Stabilization Fund (ESF) grant awards authorized under the federal Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and American Rescue Plan Act of 2021 (ARP) may be used for equipment purchases and capital expenditures, consistent with federal regulations 2 CFR §200.313 and 2 CFR §200.439. In accordance with 2 CFR §200.313, non-federal entities receiving federal awards are required to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires non-federal entities to track the acquisition date and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property acquired with federal awards must also be taken and the results reconciled with the property inventory records at least once every two years. Condition: The District did not include capital expenditures paid with CRRSA and ARP grant funds in its capital assets inventory records. Cause: The District uses specific expenditure codes in its special aid fund to identify and track capital expenditures incurred that are reimbursable under the CRRSA and ARP grant awards; those capital expenditure codes are different from the District’s standard object code (.200) for equipment purchases. Due to a clerical oversight, those capital expenditures recorded in the special aid fund were inadvertently left off the District’s end-of-year list of annual capital assets additions that would be used to update its capital assets inventory records. Effect: Not including and differentiating capital assets acquired with federal awards in the District’s capital assets inventory records could lead to improper or non-compliant procedures for the disposal of those capital assets. Questioned Costs: None reported. Context: The District upgraded the HVAC systems at its buildings using CRRSA and ARP grant awards during the 2023-2024 fiscal year. Before the CRRSA and ARP grants, the District had never used grant awards to pay for capital improvement projects and thus, District personnel was not accustomed to reviewing expenditure codes in the special aid fund other than the equipment purchases expenditure codes when compiling the listing of equipment and capital expenditures during the year for the District’s third-party capital assets management company to update its capital assets inventory record. Identification of a Repeat Finding: This is not a repeat finding from the immediately prior audit. Recommendation: The District should revise its existing procedures for compiling annual capital assets additions information to ensure equipment and capital expenditures recorded in all of the District’s governmental funds are considered and evaluated for inclusion in the District’s annual capital assets inventory records. Views of Responsible Officials of Auditee: Management agrees with the finding and will ensure that equipment and capital expenditures paid with federal funds are identified and included in the District’s fixed assets inventory records as part of the annual fixed assets reconciliation process.
Significant Deficiency 2024-001. Equipment and Real Property Management United States Department of Education, Passed Through New York State, Department of Education: Education Stabilization Fund COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan - Elementary and Secondary School Emergency Relief Fund ALN: 84.425U Criteria: Education Stabilization Fund (ESF) grant awards authorized under the federal Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and American Rescue Plan Act of 2021 (ARP) may be used for equipment purchases and capital expenditures, consistent with federal regulations 2 CFR §200.313 and 2 CFR §200.439. In accordance with 2 CFR §200.313, non-federal entities receiving federal awards are required to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires non-federal entities to track the acquisition date and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property acquired with federal awards must also be taken and the results reconciled with the property inventory records at least once every two years. Condition: The District did not include capital expenditures paid with CRRSA and ARP grant funds in its capital assets inventory records. Cause: The District uses specific expenditure codes in its special aid fund to identify and track capital expenditures incurred that are reimbursable under the CRRSA and ARP grant awards; those capital expenditure codes are different from the District’s standard object code (.200) for equipment purchases. Due to a clerical oversight, those capital expenditures recorded in the special aid fund were inadvertently left off the District’s end-of-year list of annual capital assets additions that would be used to update its capital assets inventory records. Effect: Not including and differentiating capital assets acquired with federal awards in the District’s capital assets inventory records could lead to improper or non-compliant procedures for the disposal of those capital assets. Questioned Costs: None reported. Context: The District upgraded the HVAC systems at its buildings using CRRSA and ARP grant awards during the 2023-2024 fiscal year. Before the CRRSA and ARP grants, the District had never used grant awards to pay for capital improvement projects and thus, District personnel was not accustomed to reviewing expenditure codes in the special aid fund other than the equipment purchases expenditure codes when compiling the listing of equipment and capital expenditures during the year for the District’s third-party capital assets management company to update its capital assets inventory record. Identification of a Repeat Finding: This is not a repeat finding from the immediately prior audit. Recommendation: The District should revise its existing procedures for compiling annual capital assets additions information to ensure equipment and capital expenditures recorded in all of the District’s governmental funds are considered and evaluated for inclusion in the District’s annual capital assets inventory records. Views of Responsible Officials of Auditee: Management agrees with the finding and will ensure that equipment and capital expenditures paid with federal funds are identified and included in the District’s fixed assets inventory records as part of the annual fixed assets reconciliation process.
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425U PASS-THROUGH NUMBER 1402 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 Allowable Costs/Costs Principles Criteria or specific requirement: Purchases of equipment and other capital expenditures require the prior written approval of the Federal awarding agency or pass-through entity, as specified in Office of Management and Budget (OMB) 2 CFR Section 200.439. Condition: The District did not obtain prior approval from the Arkansas Division of Elementary and Secondary Education (DESE) for the purchase/installation of HVAC units for the central cafeteria project totaling $24,018 paid from the COVID-19 Education Stabilization Fund. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $24,018 were paid from COVID-19-Education Stabilization Fund. Questioned costs: The amount of questioned costs was $24,018. Context: An examination of 11 checks (totaling $734,487) from a population of 15 checks (totaling $1,190,357). Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: At the time of the purchase for this particular building, the district had several prior approval applications for HVAC replacement submitted to DESE for approval. We believe this one had been submitted as well but was unable to confirm that with DESE. In the future, we will develop a better checklist for items submitted to DESE for prior approvals so nothing is overlooked.
Significant Deficiency 2024-001. Equipment and Real Property Management United States Department of Education, passed through New York State Department of Education: Education Stabilization Fund COVID-19: Governor's Emergency Education Relief Fund ALN: 84.425C COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Youth and Children ALN: 84.425W Condition: The District did not include the capital expenditures for the “Unit Ventilators Replacement Project” paid with CRRSA ESSER 2 funds in its current year’s capital assets inventory record. Criteria: Education Stabilization Fund (ESF) grant awards authorized under the federal Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and American Rescue Plan Act of 2021 (ARP) may be used for equipment purchases and capital expenditures, consistent with federal regulations 2 CFR §200.313 and 2 CFR §200.439. In accordance with 2 CFR §200.313, non-federal entities receiving federal awards are required to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires non-federal entities to track the acquisition date and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property acquired with federal awards must also be taken and the results reconciled with the property inventory records at least once every two years. Cause: The District recorded expenditures relating to the “Unit Ventilators Replacement Project” as purchased services instead of equipment based on instructions from the pass-through agency. As a result, the District did not identify these capital expenditures as capital assets that should be added to the capital assets inventory listing. Effect: The failure to include capital assets acquired with federal awards in the District’s capital assets inventory records could lead to improper or non-compliant procedures for assets inventory management and the subsequent disposal of those capital assets. Questioned Costs: None reported. Context: The District uses specific expenditure codes in its special aid fund to identify and track various categories of expenditures incurred that are reimbursable under various federal grants, including the CRRSA ESSER 2 grant award. The District was instructed by the New York State Education Department to include its unit ventilators replacement project costs in the District’s CRRSA ESSER 2 budget application as purchased services instead of equipment; thus, the District recorded the expenditures for the unit ventilators replacement project in a contractual expenditures object code (.400) instead of the standard expenditure object code (.200) for equipment purchases. As a result, when District personnel performed the annual review of the equipment expenditure codes of the District’s governmental funds to compile the listing of equipment additions during the year to update its capital assets inventory record, the cost of the unit ventilators replacement project was not included. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should revise its existing procedures for compiling annual capital assets additions information to ensure equipment and capital expenditures purchased with federal funds are considered and evaluated for inclusion in the District’s annual capital assets inventory records. Views of Responsible Officials of Auditee: Management agrees with the finding. The District’s Assistant Superintendent for Business and Operations will review and update the existing procedures relating to the recording and tracking of capital assets purchased with federal funds.
Significant Deficiency 2024-001. Equipment and Real Property Management United States Department of Education, passed through New York State Department of Education: Education Stabilization Fund COVID-19: Governor's Emergency Education Relief Fund ALN: 84.425C COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Youth and Children ALN: 84.425W Condition: The District did not include the capital expenditures for the “Unit Ventilators Replacement Project” paid with CRRSA ESSER 2 funds in its current year’s capital assets inventory record. Criteria: Education Stabilization Fund (ESF) grant awards authorized under the federal Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and American Rescue Plan Act of 2021 (ARP) may be used for equipment purchases and capital expenditures, consistent with federal regulations 2 CFR §200.313 and 2 CFR §200.439. In accordance with 2 CFR §200.313, non-federal entities receiving federal awards are required to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires non-federal entities to track the acquisition date and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property acquired with federal awards must also be taken and the results reconciled with the property inventory records at least once every two years. Cause: The District recorded expenditures relating to the “Unit Ventilators Replacement Project” as purchased services instead of equipment based on instructions from the pass-through agency. As a result, the District did not identify these capital expenditures as capital assets that should be added to the capital assets inventory listing. Effect: The failure to include capital assets acquired with federal awards in the District’s capital assets inventory records could lead to improper or non-compliant procedures for assets inventory management and the subsequent disposal of those capital assets. Questioned Costs: None reported. Context: The District uses specific expenditure codes in its special aid fund to identify and track various categories of expenditures incurred that are reimbursable under various federal grants, including the CRRSA ESSER 2 grant award. The District was instructed by the New York State Education Department to include its unit ventilators replacement project costs in the District’s CRRSA ESSER 2 budget application as purchased services instead of equipment; thus, the District recorded the expenditures for the unit ventilators replacement project in a contractual expenditures object code (.400) instead of the standard expenditure object code (.200) for equipment purchases. As a result, when District personnel performed the annual review of the equipment expenditure codes of the District’s governmental funds to compile the listing of equipment additions during the year to update its capital assets inventory record, the cost of the unit ventilators replacement project was not included. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should revise its existing procedures for compiling annual capital assets additions information to ensure equipment and capital expenditures purchased with federal funds are considered and evaluated for inclusion in the District’s annual capital assets inventory records. Views of Responsible Officials of Auditee: Management agrees with the finding. The District’s Assistant Superintendent for Business and Operations will review and update the existing procedures relating to the recording and tracking of capital assets purchased with federal funds.
Significant Deficiency 2024-001. Equipment and Real Property Management United States Department of Education, passed through New York State Department of Education: Education Stabilization Fund COVID-19: Governor's Emergency Education Relief Fund ALN: 84.425C COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Youth and Children ALN: 84.425W Condition: The District did not include the capital expenditures for the “Unit Ventilators Replacement Project” paid with CRRSA ESSER 2 funds in its current year’s capital assets inventory record. Criteria: Education Stabilization Fund (ESF) grant awards authorized under the federal Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and American Rescue Plan Act of 2021 (ARP) may be used for equipment purchases and capital expenditures, consistent with federal regulations 2 CFR §200.313 and 2 CFR §200.439. In accordance with 2 CFR §200.313, non-federal entities receiving federal awards are required to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires non-federal entities to track the acquisition date and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property acquired with federal awards must also be taken and the results reconciled with the property inventory records at least once every two years. Cause: The District recorded expenditures relating to the “Unit Ventilators Replacement Project” as purchased services instead of equipment based on instructions from the pass-through agency. As a result, the District did not identify these capital expenditures as capital assets that should be added to the capital assets inventory listing. Effect: The failure to include capital assets acquired with federal awards in the District’s capital assets inventory records could lead to improper or non-compliant procedures for assets inventory management and the subsequent disposal of those capital assets. Questioned Costs: None reported. Context: The District uses specific expenditure codes in its special aid fund to identify and track various categories of expenditures incurred that are reimbursable under various federal grants, including the CRRSA ESSER 2 grant award. The District was instructed by the New York State Education Department to include its unit ventilators replacement project costs in the District’s CRRSA ESSER 2 budget application as purchased services instead of equipment; thus, the District recorded the expenditures for the unit ventilators replacement project in a contractual expenditures object code (.400) instead of the standard expenditure object code (.200) for equipment purchases. As a result, when District personnel performed the annual review of the equipment expenditure codes of the District’s governmental funds to compile the listing of equipment additions during the year to update its capital assets inventory record, the cost of the unit ventilators replacement project was not included. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should revise its existing procedures for compiling annual capital assets additions information to ensure equipment and capital expenditures purchased with federal funds are considered and evaluated for inclusion in the District’s annual capital assets inventory records. Views of Responsible Officials of Auditee: Management agrees with the finding. The District’s Assistant Superintendent for Business and Operations will review and update the existing procedures relating to the recording and tracking of capital assets purchased with federal funds.
Significant Deficiency 2024-001. Equipment and Real Property Management United States Department of Education, passed through New York State Department of Education: Education Stabilization Fund COVID-19: Governor's Emergency Education Relief Fund ALN: 84.425C COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Youth and Children ALN: 84.425W Condition: The District did not include the capital expenditures for the “Unit Ventilators Replacement Project” paid with CRRSA ESSER 2 funds in its current year’s capital assets inventory record. Criteria: Education Stabilization Fund (ESF) grant awards authorized under the federal Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and American Rescue Plan Act of 2021 (ARP) may be used for equipment purchases and capital expenditures, consistent with federal regulations 2 CFR §200.313 and 2 CFR §200.439. In accordance with 2 CFR §200.313, non-federal entities receiving federal awards are required to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires non-federal entities to track the acquisition date and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property acquired with federal awards must also be taken and the results reconciled with the property inventory records at least once every two years. Cause: The District recorded expenditures relating to the “Unit Ventilators Replacement Project” as purchased services instead of equipment based on instructions from the pass-through agency. As a result, the District did not identify these capital expenditures as capital assets that should be added to the capital assets inventory listing. Effect: The failure to include capital assets acquired with federal awards in the District’s capital assets inventory records could lead to improper or non-compliant procedures for assets inventory management and the subsequent disposal of those capital assets. Questioned Costs: None reported. Context: The District uses specific expenditure codes in its special aid fund to identify and track various categories of expenditures incurred that are reimbursable under various federal grants, including the CRRSA ESSER 2 grant award. The District was instructed by the New York State Education Department to include its unit ventilators replacement project costs in the District’s CRRSA ESSER 2 budget application as purchased services instead of equipment; thus, the District recorded the expenditures for the unit ventilators replacement project in a contractual expenditures object code (.400) instead of the standard expenditure object code (.200) for equipment purchases. As a result, when District personnel performed the annual review of the equipment expenditure codes of the District’s governmental funds to compile the listing of equipment additions during the year to update its capital assets inventory record, the cost of the unit ventilators replacement project was not included. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should revise its existing procedures for compiling annual capital assets additions information to ensure equipment and capital expenditures purchased with federal funds are considered and evaluated for inclusion in the District’s annual capital assets inventory records. Views of Responsible Officials of Auditee: Management agrees with the finding. The District’s Assistant Superintendent for Business and Operations will review and update the existing procedures relating to the recording and tracking of capital assets purchased with federal funds.
Significant Deficiency 2024-001. Equipment and Real Property Management United States Department of Education, passed through New York State Department of Education: Education Stabilization Fund COVID-19: Governor's Emergency Education Relief Fund ALN: 84.425C COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Youth and Children ALN: 84.425W Condition: The District did not include the capital expenditures for the “Unit Ventilators Replacement Project” paid with CRRSA ESSER 2 funds in its current year’s capital assets inventory record. Criteria: Education Stabilization Fund (ESF) grant awards authorized under the federal Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and American Rescue Plan Act of 2021 (ARP) may be used for equipment purchases and capital expenditures, consistent with federal regulations 2 CFR §200.313 and 2 CFR §200.439. In accordance with 2 CFR §200.313, non-federal entities receiving federal awards are required to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires non-federal entities to track the acquisition date and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property acquired with federal awards must also be taken and the results reconciled with the property inventory records at least once every two years. Cause: The District recorded expenditures relating to the “Unit Ventilators Replacement Project” as purchased services instead of equipment based on instructions from the pass-through agency. As a result, the District did not identify these capital expenditures as capital assets that should be added to the capital assets inventory listing. Effect: The failure to include capital assets acquired with federal awards in the District’s capital assets inventory records could lead to improper or non-compliant procedures for assets inventory management and the subsequent disposal of those capital assets. Questioned Costs: None reported. Context: The District uses specific expenditure codes in its special aid fund to identify and track various categories of expenditures incurred that are reimbursable under various federal grants, including the CRRSA ESSER 2 grant award. The District was instructed by the New York State Education Department to include its unit ventilators replacement project costs in the District’s CRRSA ESSER 2 budget application as purchased services instead of equipment; thus, the District recorded the expenditures for the unit ventilators replacement project in a contractual expenditures object code (.400) instead of the standard expenditure object code (.200) for equipment purchases. As a result, when District personnel performed the annual review of the equipment expenditure codes of the District’s governmental funds to compile the listing of equipment additions during the year to update its capital assets inventory record, the cost of the unit ventilators replacement project was not included. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should revise its existing procedures for compiling annual capital assets additions information to ensure equipment and capital expenditures purchased with federal funds are considered and evaluated for inclusion in the District’s annual capital assets inventory records. Views of Responsible Officials of Auditee: Management agrees with the finding. The District’s Assistant Superintendent for Business and Operations will review and update the existing procedures relating to the recording and tracking of capital assets purchased with federal funds.
2024-001. Equipment and Real Property Management United States of Department of Education, Passed Through New York State, Department of Education: Education Stabilization Fund COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan - Elementary and Secondary School Emergency Relief ALN: 84.425U Criteria: Education Stabilization Fund (ESF) grant awards authorized under the federal Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and American Rescue Plan Act of 2021 (ARP) may be used for equipment purchases and capital expenditures, consistent with federal regulations 2 CFR §200.313 and 2 CFR §200.439. In accordance with 2 CFR §200.313, non-federal entities receiving federal awards are required to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires non-federal entities to track the acquisition date and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property acquired with federal awards must also be taken and the results reconciled with the property inventory records at least once every two years. Condition: The District did not include COVID grants-funded capital improvements in its capital assets inventory records. Cause: Insufficient internal controls over the tracking and reporting of federally-funded capital improvements. The District recorded expenditures for CRRSA and ARP grants-funded capital improvements and upgrades to its facilities and ventilation systems as contractual/purchased services in the special aid fund based on instructions from the pass-through entity instead of in the capital projects fund. As a result, District personnel compiling annual capital additions information did not identify the COVID grants-funded capital improvements as capital assets that should be added to the capital assets inventory listing. Effect: Failure to include capital improvements acquired with Federal awards in the District’s capital assets inventory records affects its financial reporting in conformity with Generally Accepted Accounting Principles (GAAP) and could lead to improper or non-compliant procedures for assets inventory management, and the subsequent disposal of those capital assets. Questioned Costs: None reported. Context: The District uses specific expenditure codes in its special aid fund to identify and track various categories of expenditures incurred that are reimbursable under various Federal awards, including the ESSER grant awards under the CRRSA Act and ARP. Based on instructions from the pass-through entity, the New York State Education Department (NYSED), the District included eligible capital improvement costs in its CRRSA ESSER 2 and ARP ESSER 3 budget applications as purchased services, which were approved by the NYSED, and recorded the expenditures in its special aid fund’s contractual expenditures object code (.400 code). When District personnel compiled the listing of capital improvements additions for the fiscal year to perform the annual update of the capital assets inventory record, they reviewed and included capital costs from the District’s capital projects fund, but did not review or identify the costs of the various capital improvements that were recorded in the special aid fund’s .400 contractual expenditures code. Identification of a Repeat Finding: This is not a repeat finding from the immediately prior audit. Recommendation: The District should review and revise its existing procedures for compiling annual capital assets additions information to ensure capital expenditures purchased with Federal awards that meet the District’s capitalization threshold are considered and evaluated for inclusion in the District’s annual capital assets inventory records as appropriate. Views of Responsible Officials of Auditee: The District acknowledges but does not fully agree with this finding. federally-funded expenditures were recorded in the Special Aid Fund as purchased services, both on the FS-10 budgets and the purchase orders for portion of the capital improvement projects the PO’s were issued against. These payments are partially payments to contractors for wages, labor, materials, and other items, not necessarily equipment. The methods of financing for all these costs are reported on the State SA-139 Building Project Data Forms as partially funded by grants from ARPA & ESSER and annual district appropriation budget; hence, in the District’s annual capital asset inventory report, they will eventually be reconciled with the final building project cost report and will be added and tracked as part of the whole capital improvement projects.
2024-001. Equipment and Real Property Management United States of Department of Education, Passed Through New York State, Department of Education: Education Stabilization Fund COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan - Elementary and Secondary School Emergency Relief ALN: 84.425U Criteria: Education Stabilization Fund (ESF) grant awards authorized under the federal Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and American Rescue Plan Act of 2021 (ARP) may be used for equipment purchases and capital expenditures, consistent with federal regulations 2 CFR §200.313 and 2 CFR §200.439. In accordance with 2 CFR §200.313, non-federal entities receiving federal awards are required to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires non-federal entities to track the acquisition date and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property acquired with federal awards must also be taken and the results reconciled with the property inventory records at least once every two years. Condition: The District did not include COVID grants-funded capital improvements in its capital assets inventory records. Cause: Insufficient internal controls over the tracking and reporting of federally-funded capital improvements. The District recorded expenditures for CRRSA and ARP grants-funded capital improvements and upgrades to its facilities and ventilation systems as contractual/purchased services in the special aid fund based on instructions from the pass-through entity instead of in the capital projects fund. As a result, District personnel compiling annual capital additions information did not identify the COVID grants-funded capital improvements as capital assets that should be added to the capital assets inventory listing. Effect: Failure to include capital improvements acquired with Federal awards in the District’s capital assets inventory records affects its financial reporting in conformity with Generally Accepted Accounting Principles (GAAP) and could lead to improper or non-compliant procedures for assets inventory management, and the subsequent disposal of those capital assets. Questioned Costs: None reported. Context: The District uses specific expenditure codes in its special aid fund to identify and track various categories of expenditures incurred that are reimbursable under various Federal awards, including the ESSER grant awards under the CRRSA Act and ARP. Based on instructions from the pass-through entity, the New York State Education Department (NYSED), the District included eligible capital improvement costs in its CRRSA ESSER 2 and ARP ESSER 3 budget applications as purchased services, which were approved by the NYSED, and recorded the expenditures in its special aid fund’s contractual expenditures object code (.400 code). When District personnel compiled the listing of capital improvements additions for the fiscal year to perform the annual update of the capital assets inventory record, they reviewed and included capital costs from the District’s capital projects fund, but did not review or identify the costs of the various capital improvements that were recorded in the special aid fund’s .400 contractual expenditures code. Identification of a Repeat Finding: This is not a repeat finding from the immediately prior audit. Recommendation: The District should review and revise its existing procedures for compiling annual capital assets additions information to ensure capital expenditures purchased with Federal awards that meet the District’s capitalization threshold are considered and evaluated for inclusion in the District’s annual capital assets inventory records as appropriate. Views of Responsible Officials of Auditee: The District acknowledges but does not fully agree with this finding. federally-funded expenditures were recorded in the Special Aid Fund as purchased services, both on the FS-10 budgets and the purchase orders for portion of the capital improvement projects the PO’s were issued against. These payments are partially payments to contractors for wages, labor, materials, and other items, not necessarily equipment. The methods of financing for all these costs are reported on the State SA-139 Building Project Data Forms as partially funded by grants from ARPA & ESSER and annual district appropriation budget; hence, in the District’s annual capital asset inventory report, they will eventually be reconciled with the final building project cost report and will be added and tracked as part of the whole capital improvement projects.
CONDITION: The Northern Cambria School District contracted Eber HVAC, Inc. for the School District’s RTU Replacement Project which constitutes a construction-related purchase which requires prior approval from the Pennsylvania Department of Education (PDE). The School District did not obtain the required prior approval from PDE for this expenditure. This is a repeat finding (2023-001) from the prior fiscal year CRITERIA: PDE and Section 2 CFR 200.439(b) of the Uniform Guidance require prior written approval by the federal or pass-through awarding agency for capital purchases including equipment, buildings, and land. Capital expenditures for special purpose equipment with a unit cost of $5,000 or more must also have prior approval. CAUSE: School District personnel did not review the PDE and Uniform Guidance requirements for capital purchases in advance of contracting for the RTU Replacement Project. EFFECT: The Northern Cambria School District did not comply with the requirements of PDE and 2 CFR 200.439(b) of the Uniform Guidance regarding obtaining prior written approval for capital expenditures. QUESTIONED COST: $818,900 RECOMMENDATION: For all future capital expenditures utilizing federal grant funding, I am recommending that the School District properly complete the necessary PDE, or other awarding agency forms, necessary to receive prior written approval for capital expenditures in accordance with PDE and Section 2 CFR 200.439(b) of the Uniform Guidance regulations. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and has developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
CONDITION: The Northern Cambria School District contracted Eber HVAC, Inc. for the School District’s RTU Replacement Project which constitutes a construction-related purchase which requires prior approval from the Pennsylvania Department of Education (PDE). The School District did not obtain the required prior approval from PDE for this expenditure. This is a repeat finding (2023-001) from the prior fiscal year CRITERIA: PDE and Section 2 CFR 200.439(b) of the Uniform Guidance require prior written approval by the federal or pass-through awarding agency for capital purchases including equipment, buildings, and land. Capital expenditures for special purpose equipment with a unit cost of $5,000 or more must also have prior approval. CAUSE: School District personnel did not review the PDE and Uniform Guidance requirements for capital purchases in advance of contracting for the RTU Replacement Project. EFFECT: The Northern Cambria School District did not comply with the requirements of PDE and 2 CFR 200.439(b) of the Uniform Guidance regarding obtaining prior written approval for capital expenditures. QUESTIONED COST: $818,900 RECOMMENDATION: For all future capital expenditures utilizing federal grant funding, I am recommending that the School District properly complete the necessary PDE, or other awarding agency forms, necessary to receive prior written approval for capital expenditures in accordance with PDE and Section 2 CFR 200.439(b) of the Uniform Guidance regulations. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and has developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
CONDITION: The Northern Cambria School District contracted Eber HVAC, Inc. for the School District’s RTU Replacement Project which constitutes a construction-related purchase which requires prior approval from the Pennsylvania Department of Education (PDE). The School District did not obtain the required prior approval from PDE for this expenditure. This is a repeat finding (2023-001) from the prior fiscal year CRITERIA: PDE and Section 2 CFR 200.439(b) of the Uniform Guidance require prior written approval by the federal or pass-through awarding agency for capital purchases including equipment, buildings, and land. Capital expenditures for special purpose equipment with a unit cost of $5,000 or more must also have prior approval. CAUSE: School District personnel did not review the PDE and Uniform Guidance requirements for capital purchases in advance of contracting for the RTU Replacement Project. EFFECT: The Northern Cambria School District did not comply with the requirements of PDE and 2 CFR 200.439(b) of the Uniform Guidance regarding obtaining prior written approval for capital expenditures. QUESTIONED COST: $818,900 RECOMMENDATION: For all future capital expenditures utilizing federal grant funding, I am recommending that the School District properly complete the necessary PDE, or other awarding agency forms, necessary to receive prior written approval for capital expenditures in accordance with PDE and Section 2 CFR 200.439(b) of the Uniform Guidance regulations. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and has developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
CONDITION: The Northern Cambria School District contracted Eber HVAC, Inc. for the School District’s RTU Replacement Project which constitutes a construction-related purchase which requires prior approval from the Pennsylvania Department of Education (PDE). The School District did not obtain the required prior approval from PDE for this expenditure. This is a repeat finding (2023-001) from the prior fiscal year CRITERIA: PDE and Section 2 CFR 200.439(b) of the Uniform Guidance require prior written approval by the federal or pass-through awarding agency for capital purchases including equipment, buildings, and land. Capital expenditures for special purpose equipment with a unit cost of $5,000 or more must also have prior approval. CAUSE: School District personnel did not review the PDE and Uniform Guidance requirements for capital purchases in advance of contracting for the RTU Replacement Project. EFFECT: The Northern Cambria School District did not comply with the requirements of PDE and 2 CFR 200.439(b) of the Uniform Guidance regarding obtaining prior written approval for capital expenditures. QUESTIONED COST: $818,900 RECOMMENDATION: For all future capital expenditures utilizing federal grant funding, I am recommending that the School District properly complete the necessary PDE, or other awarding agency forms, necessary to receive prior written approval for capital expenditures in accordance with PDE and Section 2 CFR 200.439(b) of the Uniform Guidance regulations. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and has developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
50000 – Equipment Real Property Management (Material Weakness and Material Non- Compliance) Federal Agency: U.S. Department of Education Pass-Through Entity: California Department of Education Program Name: COVID-19 ESSER III Fund: Learning Loss, COVID-19 ESSER III Fund, ESSER III State Reserve Emergency Needs, COVID-19 ESSER III State Reserve Learning Loss, COVID-19 American Rescue Plan – Homeless Children and Youth II Federal Financial Assistance Listing: 84.425U, 84.425W Compliance Requirement: Equipment Real Property Management Type of Finding: Material Weakness and Material Non-Compliance Criteria or Specific Requirements The Code of Federal Regulations, Title2, Subtitle A, Chapter II, Part 200, Subpart E, Section 200.439(a)(1) states: “Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or passthrough entity.” Furthermore, the California Department of Education’s (CDE) FAQs on Capital Expenditures state the following: “In accordance with 2 CFR 200.439, prior approval is required for any single big-ticket purchases at the cost of $5,000 or more using the funding sources cited above. These purchases can include general purpose equipment, buildings, and land, including material improvements. This means one costly item (or several items which make up one unit) and the cost includes all the ancillary expenses such as design costs, new electrical circuit for the item, and other related fees. To obtain approval, an LEA must fill out the Capital Expenditures Pre-Approval Application Form.” Condition The District had a total of $193,002 in capital expenditures charged to ESF that was not preapproved by CDE. Cause The cause appears to be attributed to the District’s improper monitoring and lack of knowledge over this specific requirement. Additionally, a contributing factor appears to be a turnover in a key position that provides oversight for this program. Effect As a result of the condition identified, the District was not in compliance with the Code of Federal Regulations, Title 2, Subtitle A, Chapter II, Part 200, Subpart E, Section 200.439(a)(1). Questioned Costs A total of $193,002 in questioned costs were noted based on the condition identified. Context A single transaction was identified and was selected for testing. The testing resulted in the condition identified above. Repeat Finding Yes. See prior year finding 2023-003. Recommendation The District should become familiar with all of the compliance requirements with ESF. As a resource, the District should utilize a combination of guidance provided by CDE and also by Subpart E of the Uniform Guidance that provides guidance on cost principles. Additionally, the District should establish more effective control activities and monitoring over how Federal funds are spent to ensure compliance, moving forward. Corrective Action Plan and Views of Responsible Officials The project was identified in District plans and executed immediately prior to the change in administrative leadership. After review it was noticed that prior capital approval was not obtained prior execution of the project. Applications were subsequently submitted and under review by the CDE at the time of this report preparation. The District acknowledges and has provided professional development with staff, so all are aware of dealing with items that are obtained with federal funds. Pending final answer regarding the prior approval by the CDE will determine the next action of the District.
50000 – Equipment Real Property Management (Material Weakness and Material Non- Compliance) Federal Agency: U.S. Department of Education Pass-Through Entity: California Department of Education Program Name: COVID-19 ESSER III Fund: Learning Loss, COVID-19 ESSER III Fund, ESSER III State Reserve Emergency Needs, COVID-19 ESSER III State Reserve Learning Loss, COVID-19 American Rescue Plan – Homeless Children and Youth II Federal Financial Assistance Listing: 84.425U, 84.425W Compliance Requirement: Equipment Real Property Management Type of Finding: Material Weakness and Material Non-Compliance Criteria or Specific Requirements The Code of Federal Regulations, Title2, Subtitle A, Chapter II, Part 200, Subpart E, Section 200.439(a)(1) states: “Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or passthrough entity.” Furthermore, the California Department of Education’s (CDE) FAQs on Capital Expenditures state the following: “In accordance with 2 CFR 200.439, prior approval is required for any single big-ticket purchases at the cost of $5,000 or more using the funding sources cited above. These purchases can include general purpose equipment, buildings, and land, including material improvements. This means one costly item (or several items which make up one unit) and the cost includes all the ancillary expenses such as design costs, new electrical circuit for the item, and other related fees. To obtain approval, an LEA must fill out the Capital Expenditures Pre-Approval Application Form.” Condition The District had a total of $193,002 in capital expenditures charged to ESF that was not preapproved by CDE. Cause The cause appears to be attributed to the District’s improper monitoring and lack of knowledge over this specific requirement. Additionally, a contributing factor appears to be a turnover in a key position that provides oversight for this program. Effect As a result of the condition identified, the District was not in compliance with the Code of Federal Regulations, Title 2, Subtitle A, Chapter II, Part 200, Subpart E, Section 200.439(a)(1). Questioned Costs A total of $193,002 in questioned costs were noted based on the condition identified. Context A single transaction was identified and was selected for testing. The testing resulted in the condition identified above. Repeat Finding Yes. See prior year finding 2023-003. Recommendation The District should become familiar with all of the compliance requirements with ESF. As a resource, the District should utilize a combination of guidance provided by CDE and also by Subpart E of the Uniform Guidance that provides guidance on cost principles. Additionally, the District should establish more effective control activities and monitoring over how Federal funds are spent to ensure compliance, moving forward. Corrective Action Plan and Views of Responsible Officials The project was identified in District plans and executed immediately prior to the change in administrative leadership. After review it was noticed that prior capital approval was not obtained prior execution of the project. Applications were subsequently submitted and under review by the CDE at the time of this report preparation. The District acknowledges and has provided professional development with staff, so all are aware of dealing with items that are obtained with federal funds. Pending final answer regarding the prior approval by the CDE will determine the next action of the District.
50000 – Equipment Real Property Management (Material Weakness and Material Non- Compliance) Federal Agency: U.S. Department of Education Pass-Through Entity: California Department of Education Program Name: COVID-19 ESSER III Fund: Learning Loss, COVID-19 ESSER III Fund, ESSER III State Reserve Emergency Needs, COVID-19 ESSER III State Reserve Learning Loss, COVID-19 American Rescue Plan – Homeless Children and Youth II Federal Financial Assistance Listing: 84.425U, 84.425W Compliance Requirement: Equipment Real Property Management Type of Finding: Material Weakness and Material Non-Compliance Criteria or Specific Requirements The Code of Federal Regulations, Title2, Subtitle A, Chapter II, Part 200, Subpart E, Section 200.439(a)(1) states: “Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or passthrough entity.” Furthermore, the California Department of Education’s (CDE) FAQs on Capital Expenditures state the following: “In accordance with 2 CFR 200.439, prior approval is required for any single big-ticket purchases at the cost of $5,000 or more using the funding sources cited above. These purchases can include general purpose equipment, buildings, and land, including material improvements. This means one costly item (or several items which make up one unit) and the cost includes all the ancillary expenses such as design costs, new electrical circuit for the item, and other related fees. To obtain approval, an LEA must fill out the Capital Expenditures Pre-Approval Application Form.” Condition The District had a total of $193,002 in capital expenditures charged to ESF that was not preapproved by CDE. Cause The cause appears to be attributed to the District’s improper monitoring and lack of knowledge over this specific requirement. Additionally, a contributing factor appears to be a turnover in a key position that provides oversight for this program. Effect As a result of the condition identified, the District was not in compliance with the Code of Federal Regulations, Title 2, Subtitle A, Chapter II, Part 200, Subpart E, Section 200.439(a)(1). Questioned Costs A total of $193,002 in questioned costs were noted based on the condition identified. Context A single transaction was identified and was selected for testing. The testing resulted in the condition identified above. Repeat Finding Yes. See prior year finding 2023-003. Recommendation The District should become familiar with all of the compliance requirements with ESF. As a resource, the District should utilize a combination of guidance provided by CDE and also by Subpart E of the Uniform Guidance that provides guidance on cost principles. Additionally, the District should establish more effective control activities and monitoring over how Federal funds are spent to ensure compliance, moving forward. Corrective Action Plan and Views of Responsible Officials The project was identified in District plans and executed immediately prior to the change in administrative leadership. After review it was noticed that prior capital approval was not obtained prior execution of the project. Applications were subsequently submitted and under review by the CDE at the time of this report preparation. The District acknowledges and has provided professional development with staff, so all are aware of dealing with items that are obtained with federal funds. Pending final answer regarding the prior approval by the CDE will determine the next action of the District.
50000 – Equipment Real Property Management (Material Weakness and Material Non- Compliance) Federal Agency: U.S. Department of Education Pass-Through Entity: California Department of Education Program Name: COVID-19 ESSER III Fund: Learning Loss, COVID-19 ESSER III Fund, ESSER III State Reserve Emergency Needs, COVID-19 ESSER III State Reserve Learning Loss, COVID-19 American Rescue Plan – Homeless Children and Youth II Federal Financial Assistance Listing: 84.425U, 84.425W Compliance Requirement: Equipment Real Property Management Type of Finding: Material Weakness and Material Non-Compliance Criteria or Specific Requirements The Code of Federal Regulations, Title2, Subtitle A, Chapter II, Part 200, Subpart E, Section 200.439(a)(1) states: “Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or passthrough entity.” Furthermore, the California Department of Education’s (CDE) FAQs on Capital Expenditures state the following: “In accordance with 2 CFR 200.439, prior approval is required for any single big-ticket purchases at the cost of $5,000 or more using the funding sources cited above. These purchases can include general purpose equipment, buildings, and land, including material improvements. This means one costly item (or several items which make up one unit) and the cost includes all the ancillary expenses such as design costs, new electrical circuit for the item, and other related fees. To obtain approval, an LEA must fill out the Capital Expenditures Pre-Approval Application Form.” Condition The District had a total of $193,002 in capital expenditures charged to ESF that was not preapproved by CDE. Cause The cause appears to be attributed to the District’s improper monitoring and lack of knowledge over this specific requirement. Additionally, a contributing factor appears to be a turnover in a key position that provides oversight for this program. Effect As a result of the condition identified, the District was not in compliance with the Code of Federal Regulations, Title 2, Subtitle A, Chapter II, Part 200, Subpart E, Section 200.439(a)(1). Questioned Costs A total of $193,002 in questioned costs were noted based on the condition identified. Context A single transaction was identified and was selected for testing. The testing resulted in the condition identified above. Repeat Finding Yes. See prior year finding 2023-003. Recommendation The District should become familiar with all of the compliance requirements with ESF. As a resource, the District should utilize a combination of guidance provided by CDE and also by Subpart E of the Uniform Guidance that provides guidance on cost principles. Additionally, the District should establish more effective control activities and monitoring over how Federal funds are spent to ensure compliance, moving forward. Corrective Action Plan and Views of Responsible Officials The project was identified in District plans and executed immediately prior to the change in administrative leadership. After review it was noticed that prior capital approval was not obtained prior execution of the project. Applications were subsequently submitted and under review by the CDE at the time of this report preparation. The District acknowledges and has provided professional development with staff, so all are aware of dealing with items that are obtained with federal funds. Pending final answer regarding the prior approval by the CDE will determine the next action of the District.
50000 – Equipment Real Property Management (Material Weakness and Material Non- Compliance) Federal Agency: U.S. Department of Education Pass-Through Entity: California Department of Education Program Name: COVID-19 ESSER III Fund: Learning Loss, COVID-19 ESSER III Fund, ESSER III State Reserve Emergency Needs, COVID-19 ESSER III State Reserve Learning Loss, COVID-19 American Rescue Plan – Homeless Children and Youth II Federal Financial Assistance Listing: 84.425U, 84.425W Compliance Requirement: Equipment Real Property Management Type of Finding: Material Weakness and Material Non-Compliance Criteria or Specific Requirements The Code of Federal Regulations, Title2, Subtitle A, Chapter II, Part 200, Subpart E, Section 200.439(a)(1) states: “Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or passthrough entity.” Furthermore, the California Department of Education’s (CDE) FAQs on Capital Expenditures state the following: “In accordance with 2 CFR 200.439, prior approval is required for any single big-ticket purchases at the cost of $5,000 or more using the funding sources cited above. These purchases can include general purpose equipment, buildings, and land, including material improvements. This means one costly item (or several items which make up one unit) and the cost includes all the ancillary expenses such as design costs, new electrical circuit for the item, and other related fees. To obtain approval, an LEA must fill out the Capital Expenditures Pre-Approval Application Form.” Condition The District had a total of $193,002 in capital expenditures charged to ESF that was not preapproved by CDE. Cause The cause appears to be attributed to the District’s improper monitoring and lack of knowledge over this specific requirement. Additionally, a contributing factor appears to be a turnover in a key position that provides oversight for this program. Effect As a result of the condition identified, the District was not in compliance with the Code of Federal Regulations, Title 2, Subtitle A, Chapter II, Part 200, Subpart E, Section 200.439(a)(1). Questioned Costs A total of $193,002 in questioned costs were noted based on the condition identified. Context A single transaction was identified and was selected for testing. The testing resulted in the condition identified above. Repeat Finding Yes. See prior year finding 2023-003. Recommendation The District should become familiar with all of the compliance requirements with ESF. As a resource, the District should utilize a combination of guidance provided by CDE and also by Subpart E of the Uniform Guidance that provides guidance on cost principles. Additionally, the District should establish more effective control activities and monitoring over how Federal funds are spent to ensure compliance, moving forward. Corrective Action Plan and Views of Responsible Officials The project was identified in District plans and executed immediately prior to the change in administrative leadership. After review it was noticed that prior capital approval was not obtained prior execution of the project. Applications were subsequently submitted and under review by the CDE at the time of this report preparation. The District acknowledges and has provided professional development with staff, so all are aware of dealing with items that are obtained with federal funds. Pending final answer regarding the prior approval by the CDE will determine the next action of the District.
Finding Number: 2024‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, 10.559 Federal Agency: U.S. Department of Agriculture Federal Award Numbers: 6AZ300400, 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $58,433 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment list. Cause The District was unaware that it was required to get pre‐approval from ADE for this type of purchase. Effect The District charged unallowable costs to the program. Context The District purchased two software systems related to the CNC POS for $20,920 and $29,692, and one garbage disposal for $7,821, without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment list. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should review all transactions to ensure that program costs are allowable and in adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, 10.559 Federal Agency: U.S. Department of Agriculture Federal Award Numbers: 6AZ300400, 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $58,433 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment list. Cause The District was unaware that it was required to get pre‐approval from ADE for this type of purchase. Effect The District charged unallowable costs to the program. Context The District purchased two software systems related to the CNC POS for $20,920 and $29,692, and one garbage disposal for $7,821, without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment list. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should review all transactions to ensure that program costs are allowable and in adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, 10.559 Federal Agency: U.S. Department of Agriculture Federal Award Numbers: 6AZ300400, 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $58,433 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment list. Cause The District was unaware that it was required to get pre‐approval from ADE for this type of purchase. Effect The District charged unallowable costs to the program. Context The District purchased two software systems related to the CNC POS for $20,920 and $29,692, and one garbage disposal for $7,821, without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment list. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should review all transactions to ensure that program costs are allowable and in adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, 10.559 Federal Agency: U.S. Department of Agriculture Federal Award Numbers: 6AZ300400, 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $58,433 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment list. Cause The District was unaware that it was required to get pre‐approval from ADE for this type of purchase. Effect The District charged unallowable costs to the program. Context The District purchased two software systems related to the CNC POS for $20,920 and $29,692, and one garbage disposal for $7,821, without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment list. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should review all transactions to ensure that program costs are allowable and in adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.
Item 2024-002 Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 04CH010658 Grant period – 2024 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet was not updated to reflect items that were abandoned when the Agency moved out of a leased property. Cause – The Agency did not properly update the fixed asset schedule for disposals, which resulted in items included on the listing and depreciation calculation that were disposed of previously. Effect – Failure to remove disposals and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Item 2023‐002 – Equipment and Real Property Management Education Stabilization Fund (ESF) ALN# 84.425 U.S. Department of Education Passed through the State Department of Education Grant period – Year ended September 30, 2023 (84.425U) (84.425D) Criteria – Grantees should have controls in place to ensure that all capital equipment or improvements to land, building, or equipment that were purchased with grant funds received prior approval prior to encumbrance of the expenditure. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” 2 CFR 200.313 and 2 CFR 200.439 requires that the following rules of allow ability must apply to equipment and other capital expenditures “Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass‐through entity.” Condition – Adequate controls were not in place to ensure that prior approval for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment was obtained prior to incurring the expenditure. Cause – Certain Capital Equipment and improvements to building expenditures were not included in the approved budget to grantor. There was a lack of sufficient controls over the review of capital expenditures to ensure that they were included in the approved budget. Effect – Lack of approval over equipment and capital improvements could lead to disallowed costs. We noted that certain equipment and improvement projects were not included in approved budget for ESSER Funds. Questioned Costs – $33,716 Recommendation – We recommend the strengthening of controls to ensure that proper approval is received prior to the acquisition of improvements to land, building or equipment. Management’s Response – The Board will strengthen the controls in place to provide assurance that proper approval is obtained from grantor agency prior to the purchase of equipment and real property.
Item 2023‐002 – Equipment and Real Property Management Education Stabilization Fund (ESF) ALN# 84.425 U.S. Department of Education Passed through the State Department of Education Grant period – Year ended September 30, 2023 (84.425U) (84.425D) Criteria – Grantees should have controls in place to ensure that all capital equipment or improvements to land, building, or equipment that were purchased with grant funds received prior approval prior to encumbrance of the expenditure. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” 2 CFR 200.313 and 2 CFR 200.439 requires that the following rules of allow ability must apply to equipment and other capital expenditures “Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass‐through entity.” Condition – Adequate controls were not in place to ensure that prior approval for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment was obtained prior to incurring the expenditure. Cause – Certain Capital Equipment and improvements to building expenditures were not included in the approved budget to grantor. There was a lack of sufficient controls over the review of capital expenditures to ensure that they were included in the approved budget. Effect – Lack of approval over equipment and capital improvements could lead to disallowed costs. We noted that certain equipment and improvement projects were not included in approved budget for ESSER Funds. Questioned Costs – $33,716 Recommendation – We recommend the strengthening of controls to ensure that proper approval is received prior to the acquisition of improvements to land, building or equipment. Management’s Response – The Board will strengthen the controls in place to provide assurance that proper approval is obtained from grantor agency prior to the purchase of equipment and real property.
Finding No.: 2023-002 Federal Agency: U.S. Department of Treasury AL Program: COVID-19 21.027 Coronavirus State and Local Fiscal Recovery Funds Requirement: Allowable Costs/Cost Principles Questioned Costs: $0 Criteria: According to 2 CFR 200.439, capital expenditures for special purpose equipment with a unit cost on or above $5,000 or for general purpose equipment are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. Condition: In our audit of the 21.027 funding, we identified that the Authority made capital expenditures on equipment without prior approval from the pass-through entity. Cause: The Authority did not consider the requirements for capital expenditures under 2 CFR 200.439. There was no procedure in place to ensure that equipment purchases were pre-approved by the federal awarding agency or pass-through entity. Effect: The Authority is in noncompliance with the applicable requirement. Amounts associated with the instances of noncompliance are material to the program, however as subsequent approval was received by the pass-through entity, no questioned costs result. Recommendation: The Authority should establish procedures to ensure compliance with the requirements under 2 CFR 200.439. This includes obtaining prior approval from the federal awarding agency or pass-through entity for such purchases and maintaining proper documentation to justify the necessity of the expenditures. Additionally, the Authority should train personnel responsible for managing federal awards on these requirements. Views of Responsible Officials: GMHA's corrective action plan does not indicate disagreement and provides planned corrective actions.
Item 2023‐002 – Equipment and Real Property Management Education Stabilization Fund (ESF) ALN# 84.425 U.S. Department of Education Passed through the State Department of Education Grant period – Year ended September 30, 2023 (84.425U) (84.425D) Criteria – Grantees should have controls in place to ensure that all capital equipment or improvements to land, building, or equipment that were purchased with grant funds received prior approval prior to encumbrance of the expenditure. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” 2 CFR 200.313 and 2 CFR 200.439 requires that the following rules of allow ability must apply to equipment and other capital expenditures “Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass‐through entity.” Condition – Adequate controls were not in place to ensure that prior approval for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment was obtained prior to incurring the expenditure. Cause – Certain Capital Equipment and improvements to building expenditures were not included in the approved budget to grantor. There was a lack of sufficient controls over the review of capital expenditures to ensure that they were included in the approved budget. Effect – Lack of approval over equipment and capital improvements could lead to disallowed costs. We noted that certain equipment and improvement projects were not included in approved budget for ESSER Funds. Questioned Costs – $33,716 Recommendation – We recommend the strengthening of controls to ensure that proper approval is received prior to the acquisition of improvements to land, building or equipment. Management’s Response – The Board will strengthen the controls in place to provide assurance that proper approval is obtained from grantor agency prior to the purchase of equipment and real property.
Item 2023‐002 – Equipment and Real Property Management Education Stabilization Fund (ESF) ALN# 84.425 U.S. Department of Education Passed through the State Department of Education Grant period – Year ended September 30, 2023 (84.425U) (84.425D) Criteria – Grantees should have controls in place to ensure that all capital equipment or improvements to land, building, or equipment that were purchased with grant funds received prior approval prior to encumbrance of the expenditure. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” 2 CFR 200.313 and 2 CFR 200.439 requires that the following rules of allow ability must apply to equipment and other capital expenditures “Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass‐through entity.” Condition – Adequate controls were not in place to ensure that prior approval for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment was obtained prior to incurring the expenditure. Cause – Certain Capital Equipment and improvements to building expenditures were not included in the approved budget to grantor. There was a lack of sufficient controls over the review of capital expenditures to ensure that they were included in the approved budget. Effect – Lack of approval over equipment and capital improvements could lead to disallowed costs. We noted that certain equipment and improvement projects were not included in approved budget for ESSER Funds. Questioned Costs – $33,716 Recommendation – We recommend the strengthening of controls to ensure that proper approval is received prior to the acquisition of improvements to land, building or equipment. Management’s Response – The Board will strengthen the controls in place to provide assurance that proper approval is obtained from grantor agency prior to the purchase of equipment and real property.
Finding No.: 2023-002 Federal Agency: U.S. Department of Treasury AL Program: COVID-19 21.027 Coronavirus State and Local Fiscal Recovery Funds Requirement: Allowable Costs/Cost Principles Questioned Costs: $0 Criteria: According to 2 CFR 200.439, capital expenditures for special purpose equipment with a unit cost on or above $5,000 or for general purpose equipment are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. Condition: In our audit of the 21.027 funding, we identified that the Authority made capital expenditures on equipment without prior approval from the pass-through entity. Cause: The Authority did not consider the requirements for capital expenditures under 2 CFR 200.439. There was no procedure in place to ensure that equipment purchases were pre-approved by the federal awarding agency or pass-through entity. Effect: The Authority is in noncompliance with the applicable requirement. Amounts associated with the instances of noncompliance are material to the program, however as subsequent approval was received by the pass-through entity, no questioned costs result. Recommendation: The Authority should establish procedures to ensure compliance with the requirements under 2 CFR 200.439. This includes obtaining prior approval from the federal awarding agency or pass-through entity for such purchases and maintaining proper documentation to justify the necessity of the expenditures. Additionally, the Authority should train personnel responsible for managing federal awards on these requirements. Views of Responsible Officials: GMHA's corrective action plan does not indicate disagreement and provides planned corrective actions.
Item 2023-002 – Equipment and Real Property Management Education Stabilization Fund (ESF) ALN# 84.425 U.S. Department of Education Passed through the State Department of Education Grant period – Year ended September 30, 2023 (84.425U) (84.425D) Criteria – Grantees should have controls in place to ensure that all capital equipment or improvements to land, building, or equipment that were purchased with grant funds received prior approval prior to encumbrance of the expenditure. 2 CFR 200.303 requires the non-Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in accordance with all applicable statutes, regulations, and the terms and conditions of the Federal award.” 2 CFR 200.313 and 2 CFR 200.439 requires that the following rules of allow ability must apply to equipment and other capital expenditures “Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass-through entity.” 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – There is a systemic lack of controls in place to ensure that prior approval for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment was obtained prior to incurring the expenditure. Additionally, controls were not in place to ensure that a physical inventory was taken at least once every two years. Cause – Certain capital equipment and improvements to building expenditures were not included in the approved budget to grantor. There was a lack of sufficient controls over the review of capital expenditures to ensure that they were included in the approved budget and that a physical inventory observation was made. Effect – Lack of approval over equipment and capital improvements could lead to disallowed costs. We noted that certain equipment and improvement projects were not included in approved budget for ESSER Funds. Failure to perform a physical inventory observation results in noncompliance with the grant agreement and could result in a misappropriation of assets. Questioned Costs – $57,438. Recommendation – We recommend the strengthening of controls to ensure that proper approval is received prior to the acquisition of improvements to land, building or equipment and that a physical inventory observation is conducted at least once every two years to ensure compliance with grant agreement. Management’s Response – The Board will strengthen the controls in place to provide assurance that proper approval is obtained from grantor agency prior to the purchase of equipment and real property and that a physical inventory observation is conducted at least once every two years.
Finding Number: 2023‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Federal Agency: Department of Agriculture Federal Award Number: 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $142,860 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment List. Cause The District was unaware that it was required to get pre‐approval from ADE for this type of purchase. Effect The District charged unallowable costs to the program. Context The District purchased two walk‐in freezers for $71,430 each, without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment List. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should review all transactions to ensure that program costs are allowable and in adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2023‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Federal Agency: Department of Agriculture Federal Award Number: 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $142,860 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment List. Cause The District was unaware that it was required to get pre‐approval from ADE for this type of purchase. Effect The District charged unallowable costs to the program. Context The District purchased two walk‐in freezers for $71,430 each, without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment List. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should review all transactions to ensure that program costs are allowable and in adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2023‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Federal Agency: Department of Agriculture Federal Award Number: 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $142,860 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment List. Cause The District was unaware that it was required to get pre‐approval from ADE for this type of purchase. Effect The District charged unallowable costs to the program. Context The District purchased two walk‐in freezers for $71,430 each, without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment List. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should review all transactions to ensure that program costs are allowable and in adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2023‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Federal Agency: Department of Agriculture Federal Award Number: 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $142,860 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment List. Cause The District was unaware that it was required to get pre‐approval from ADE for this type of purchase. Effect The District charged unallowable costs to the program. Context The District purchased two walk‐in freezers for $71,430 each, without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment List. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should review all transactions to ensure that program costs are allowable and in adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.
FINDING #2023-001: EDUCATION STABILIZATION FUNDS – EQUIPMENT AND OTHER CAPITAL EXPENDITURES (50000) Program Names: Elementary and Secondary School Emergency Relief II (ESSER II) Fund, Expanded Learning Opportunities (ELO) Grant: ESSER III State Reserve, Emergency Needs, and Expanded Learning Opportunities (ELO) Grant: ESSER III State Reserve, Learning Loss Assistance Listing Number: 84.425 Pass-Through Agency: California Department of Education (CDE) Federal Agency: U.S. Department of Education Criteria: Consistent with 2 CFR section 200.311 (real property), section 200.313 (equipment), and section 200.439 (equipment and other capital expenditures) ESF funds may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by ED or the pass-through entity. Condition: Through testing of a representative sample of ESF expenditures, we noted that the classroom projector project did not appear to be pre-approved by the California Department of Education (CDE). Each purchase order provided for the purchase and installation of classroom projectors with a per unit cost in excess of $5,000 (including installation and other ancillary costs). Context: The condition was identified through the testing of ESF expenditures. Cause: District oversight. Effect: The funds spent on these purchases may be subject to review by or return to the awarding agency. Questioned Costs: $718,634 Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District obtain prior approval from CDE for all capital purchases from the Education Stabilization Fund in excess of $5,000. Views of Responsible Officials: See Corrective Action Plan on following page.
FINDING #2023-001: EDUCATION STABILIZATION FUNDS – EQUIPMENT AND OTHER CAPITAL EXPENDITURES (50000) Program Names: Elementary and Secondary School Emergency Relief II (ESSER II) Fund, Expanded Learning Opportunities (ELO) Grant: ESSER III State Reserve, Emergency Needs, and Expanded Learning Opportunities (ELO) Grant: ESSER III State Reserve, Learning Loss Assistance Listing Number: 84.425 Pass-Through Agency: California Department of Education (CDE) Federal Agency: U.S. Department of Education Criteria: Consistent with 2 CFR section 200.311 (real property), section 200.313 (equipment), and section 200.439 (equipment and other capital expenditures) ESF funds may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by ED or the pass-through entity. Condition: Through testing of a representative sample of ESF expenditures, we noted that the classroom projector project did not appear to be pre-approved by the California Department of Education (CDE). Each purchase order provided for the purchase and installation of classroom projectors with a per unit cost in excess of $5,000 (including installation and other ancillary costs). Context: The condition was identified through the testing of ESF expenditures. Cause: District oversight. Effect: The funds spent on these purchases may be subject to review by or return to the awarding agency. Questioned Costs: $718,634 Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District obtain prior approval from CDE for all capital purchases from the Education Stabilization Fund in excess of $5,000. Views of Responsible Officials: See Corrective Action Plan on following page.
FINDING #2023-001: EDUCATION STABILIZATION FUNDS – EQUIPMENT AND OTHER CAPITAL EXPENDITURES (50000) Program Names: Elementary and Secondary School Emergency Relief II (ESSER II) Fund, Expanded Learning Opportunities (ELO) Grant: ESSER III State Reserve, Emergency Needs, and Expanded Learning Opportunities (ELO) Grant: ESSER III State Reserve, Learning Loss Assistance Listing Number: 84.425 Pass-Through Agency: California Department of Education (CDE) Federal Agency: U.S. Department of Education Criteria: Consistent with 2 CFR section 200.311 (real property), section 200.313 (equipment), and section 200.439 (equipment and other capital expenditures) ESF funds may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by ED or the pass-through entity. Condition: Through testing of a representative sample of ESF expenditures, we noted that the classroom projector project did not appear to be pre-approved by the California Department of Education (CDE). Each purchase order provided for the purchase and installation of classroom projectors with a per unit cost in excess of $5,000 (including installation and other ancillary costs). Context: The condition was identified through the testing of ESF expenditures. Cause: District oversight. Effect: The funds spent on these purchases may be subject to review by or return to the awarding agency. Questioned Costs: $718,634 Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District obtain prior approval from CDE for all capital purchases from the Education Stabilization Fund in excess of $5,000. Views of Responsible Officials: See Corrective Action Plan on following page.
FINDING #2023-001: EDUCATION STABILIZATION FUNDS – EQUIPMENT AND OTHER CAPITAL EXPENDITURES (50000) Program Names: Elementary and Secondary School Emergency Relief II (ESSER II) Fund, Expanded Learning Opportunities (ELO) Grant: ESSER III State Reserve, Emergency Needs, and Expanded Learning Opportunities (ELO) Grant: ESSER III State Reserve, Learning Loss Assistance Listing Number: 84.425 Pass-Through Agency: California Department of Education (CDE) Federal Agency: U.S. Department of Education Criteria: Consistent with 2 CFR section 200.311 (real property), section 200.313 (equipment), and section 200.439 (equipment and other capital expenditures) ESF funds may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by ED or the pass-through entity. Condition: Through testing of a representative sample of ESF expenditures, we noted that the classroom projector project did not appear to be pre-approved by the California Department of Education (CDE). Each purchase order provided for the purchase and installation of classroom projectors with a per unit cost in excess of $5,000 (including installation and other ancillary costs). Context: The condition was identified through the testing of ESF expenditures. Cause: District oversight. Effect: The funds spent on these purchases may be subject to review by or return to the awarding agency. Questioned Costs: $718,634 Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District obtain prior approval from CDE for all capital purchases from the Education Stabilization Fund in excess of $5,000. Views of Responsible Officials: See Corrective Action Plan on following page.
FINDING #2023-001: EDUCATION STABILIZATION FUNDS – EQUIPMENT AND OTHER CAPITAL EXPENDITURES (50000) Program Names: Elementary and Secondary School Emergency Relief II (ESSER II) Fund, Expanded Learning Opportunities (ELO) Grant: ESSER III State Reserve, Emergency Needs, and Expanded Learning Opportunities (ELO) Grant: ESSER III State Reserve, Learning Loss Assistance Listing Number: 84.425 Pass-Through Agency: California Department of Education (CDE) Federal Agency: U.S. Department of Education Criteria: Consistent with 2 CFR section 200.311 (real property), section 200.313 (equipment), and section 200.439 (equipment and other capital expenditures) ESF funds may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by ED or the pass-through entity. Condition: Through testing of a representative sample of ESF expenditures, we noted that the classroom projector project did not appear to be pre-approved by the California Department of Education (CDE). Each purchase order provided for the purchase and installation of classroom projectors with a per unit cost in excess of $5,000 (including installation and other ancillary costs). Context: The condition was identified through the testing of ESF expenditures. Cause: District oversight. Effect: The funds spent on these purchases may be subject to review by or return to the awarding agency. Questioned Costs: $718,634 Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District obtain prior approval from CDE for all capital purchases from the Education Stabilization Fund in excess of $5,000. Views of Responsible Officials: See Corrective Action Plan on following page.
FINDING #2023-001: EDUCATION STABILIZATION FUNDS – EQUIPMENT AND OTHER CAPITAL EXPENDITURES (50000) Program Names: Elementary and Secondary School Emergency Relief II (ESSER II) Fund, Expanded Learning Opportunities (ELO) Grant: ESSER III State Reserve, Emergency Needs, and Expanded Learning Opportunities (ELO) Grant: ESSER III State Reserve, Learning Loss Assistance Listing Number: 84.425 Pass-Through Agency: California Department of Education (CDE) Federal Agency: U.S. Department of Education Criteria: Consistent with 2 CFR section 200.311 (real property), section 200.313 (equipment), and section 200.439 (equipment and other capital expenditures) ESF funds may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by ED or the pass-through entity. Condition: Through testing of a representative sample of ESF expenditures, we noted that the classroom projector project did not appear to be pre-approved by the California Department of Education (CDE). Each purchase order provided for the purchase and installation of classroom projectors with a per unit cost in excess of $5,000 (including installation and other ancillary costs). Context: The condition was identified through the testing of ESF expenditures. Cause: District oversight. Effect: The funds spent on these purchases may be subject to review by or return to the awarding agency. Questioned Costs: $718,634 Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District obtain prior approval from CDE for all capital purchases from the Education Stabilization Fund in excess of $5,000. Views of Responsible Officials: See Corrective Action Plan on following page.
FINDING #2023-001: EDUCATION STABILIZATION FUNDS – EQUIPMENT AND OTHER CAPITAL EXPENDITURES (50000) Program Names: Elementary and Secondary School Emergency Relief II (ESSER II) Fund, Expanded Learning Opportunities (ELO) Grant: ESSER III State Reserve, Emergency Needs, and Expanded Learning Opportunities (ELO) Grant: ESSER III State Reserve, Learning Loss Assistance Listing Number: 84.425 Pass-Through Agency: California Department of Education (CDE) Federal Agency: U.S. Department of Education Criteria: Consistent with 2 CFR section 200.311 (real property), section 200.313 (equipment), and section 200.439 (equipment and other capital expenditures) ESF funds may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by ED or the pass-through entity. Condition: Through testing of a representative sample of ESF expenditures, we noted that the classroom projector project did not appear to be pre-approved by the California Department of Education (CDE). Each purchase order provided for the purchase and installation of classroom projectors with a per unit cost in excess of $5,000 (including installation and other ancillary costs). Context: The condition was identified through the testing of ESF expenditures. Cause: District oversight. Effect: The funds spent on these purchases may be subject to review by or return to the awarding agency. Questioned Costs: $718,634 Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District obtain prior approval from CDE for all capital purchases from the Education Stabilization Fund in excess of $5,000. Views of Responsible Officials: See Corrective Action Plan on following page.
CONDITION: The Northern Cambria School District contracted with two (2) third-party vendors - Eber HVAC, Inc. for the RTU Replacement Project and Advanced Office Systems, Inc. for the purchase of copier equipment, which constitute construction-related and capital purchases respectively which require prior approval from the Pennsylvania Department of Education (PDE). The School District did not obtain the required prior approval from PDE for these expenditures. CRITERIA: PDE and Section 2 CFR 200.439(b) of the Uniform Guidance require prior written approval by the federal or pass-through awarding agency for capital purchases including equipment, buildings, and land. Capital expenditures for special purpose equipment with a unit cost of $5,000 or more must also have prior approval. CAUSE: School District personnel did not review the PDE and Uniform Guidance requirements for capital purchases in advance of contracting for the RTU Replacement Project and copier equipment. EFFECT: The Northern Cambria School District did not comply with the requirements of PDE and 2 CFR 200.439(b) of the Uniform Guidance regarding obtaining prior written approval for capital expenditures. QUESTIONED COST: $1,501,951 (Eber HVAC-$1,475,100) (Advanced Office Systems-$26,851) RECOMMENDATION: For all future capital expenditures utilizing federal grant funding, I am recommending that the School District properly complete the necessary PDE, or other awarding agency forms, necessary to receive prior written approval for capital expenditures in accordance with PDE and Section 2 CFR 200.439(b) of the Uniform Guidance regulations. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and has developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
CONDITION: The Northern Cambria School District contracted with two (2) third-party vendors - Eber HVAC, Inc. for the RTU Replacement Project and Advanced Office Systems, Inc. for the purchase of copier equipment, which constitute construction-related and capital purchases respectively which require prior approval from the Pennsylvania Department of Education (PDE). The School District did not obtain the required prior approval from PDE for these expenditures. CRITERIA: PDE and Section 2 CFR 200.439(b) of the Uniform Guidance require prior written approval by the federal or pass-through awarding agency for capital purchases including equipment, buildings, and land. Capital expenditures for special purpose equipment with a unit cost of $5,000 or more must also have prior approval. CAUSE: School District personnel did not review the PDE and Uniform Guidance requirements for capital purchases in advance of contracting for the RTU Replacement Project and copier equipment. EFFECT: The Northern Cambria School District did not comply with the requirements of PDE and 2 CFR 200.439(b) of the Uniform Guidance regarding obtaining prior written approval for capital expenditures. QUESTIONED COST: $1,501,951 (Eber HVAC-$1,475,100) (Advanced Office Systems-$26,851) RECOMMENDATION: For all future capital expenditures utilizing federal grant funding, I am recommending that the School District properly complete the necessary PDE, or other awarding agency forms, necessary to receive prior written approval for capital expenditures in accordance with PDE and Section 2 CFR 200.439(b) of the Uniform Guidance regulations. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and has developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
CONDITION: The Northern Cambria School District contracted with two (2) third-party vendors - Eber HVAC, Inc. for the RTU Replacement Project and Advanced Office Systems, Inc. for the purchase of copier equipment, which constitute construction-related and capital purchases respectively which require prior approval from the Pennsylvania Department of Education (PDE). The School District did not obtain the required prior approval from PDE for these expenditures. CRITERIA: PDE and Section 2 CFR 200.439(b) of the Uniform Guidance require prior written approval by the federal or pass-through awarding agency for capital purchases including equipment, buildings, and land. Capital expenditures for special purpose equipment with a unit cost of $5,000 or more must also have prior approval. CAUSE: School District personnel did not review the PDE and Uniform Guidance requirements for capital purchases in advance of contracting for the RTU Replacement Project and copier equipment. EFFECT: The Northern Cambria School District did not comply with the requirements of PDE and 2 CFR 200.439(b) of the Uniform Guidance regarding obtaining prior written approval for capital expenditures. QUESTIONED COST: $1,501,951 (Eber HVAC-$1,475,100) (Advanced Office Systems-$26,851) RECOMMENDATION: For all future capital expenditures utilizing federal grant funding, I am recommending that the School District properly complete the necessary PDE, or other awarding agency forms, necessary to receive prior written approval for capital expenditures in accordance with PDE and Section 2 CFR 200.439(b) of the Uniform Guidance regulations. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and has developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
CONDITION: The Northern Cambria School District contracted with two (2) third-party vendors - Eber HVAC, Inc. for the RTU Replacement Project and Advanced Office Systems, Inc. for the purchase of copier equipment, which constitute construction-related and capital purchases respectively which require prior approval from the Pennsylvania Department of Education (PDE). The School District did not obtain the required prior approval from PDE for these expenditures. CRITERIA: PDE and Section 2 CFR 200.439(b) of the Uniform Guidance require prior written approval by the federal or pass-through awarding agency for capital purchases including equipment, buildings, and land. Capital expenditures for special purpose equipment with a unit cost of $5,000 or more must also have prior approval. CAUSE: School District personnel did not review the PDE and Uniform Guidance requirements for capital purchases in advance of contracting for the RTU Replacement Project and copier equipment. EFFECT: The Northern Cambria School District did not comply with the requirements of PDE and 2 CFR 200.439(b) of the Uniform Guidance regarding obtaining prior written approval for capital expenditures. QUESTIONED COST: $1,501,951 (Eber HVAC-$1,475,100) (Advanced Office Systems-$26,851) RECOMMENDATION: For all future capital expenditures utilizing federal grant funding, I am recommending that the School District properly complete the necessary PDE, or other awarding agency forms, necessary to receive prior written approval for capital expenditures in accordance with PDE and Section 2 CFR 200.439(b) of the Uniform Guidance regulations. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and has developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).