Finding 1153060 (2024-001)

This finding impacts the reporting compliance requirement for the major program, Assistance Listing Number 84.282, Charter Schools, funded by the U.S. Department of Education and passed through by the State of Rhode Island, Department of Education (RIDE). Criteria: Per the Immigration Reform and Control Act of 1986, employers must complete Form I- 9 for each individual hired for employment in the United States. The form must be completed within three business days of the employee’s start date and retained in accordance with Federal regulations. The Internal Revenue Service requires all employees to submit a properly completed Form W-4 to ensure accurate income tax withholding. Condition: During testing of twenty-five employee files, we identified eleven instances where Form I-9s were either missing or not properly completed and three instances where Form W-4s were either missing or not properly completed. Specifically: • Two files had no Form I-9s or Form W-4s on record. • Nine files contained Form I-9s with missing required fields or lacked signatures. • One file contained a Form W-4 with missing required fields or lacked signatures. Cause: The School does not have adequate internal controls to ensure consistent completion and retention of Form I-9s and Form W-4s during the hiring process. Effect: Incomplete or missing employment documentation may result in non-compliance with Federal regulations, potentially subjecting the School to penalties or fines and increasing the risk of tax withholding errors. Questioned Costs: There were no questioned costs as a result of the material weakness. Was the finding a repeat of a finding in the immediately prior year?: No Recommendation: AAFCPAs recommends the School implement a standardized checklist and conduct periodic internal reviews of onboarding documentation to ensure all required forms are properly completed and retained in accordance with Federal regulations. Management Response: The School acknowledges the exceptions noted during the audit. We recognize the importance of maintaining complete and accurate employment documentation in compliance with Federal regulations. Due to the transition from a very part-time to primarily full-time HR position, some gaps in process consistency occurred. To address this, the School is implementing a standardized onboarding checklist; all personnel folders will now include a printed version to ensure required forms, including Form I-9 and Form W-4, are completed in full at the time of hire. In addition, periodic internal reviews of personnel files will be conducted to verify ongoing compliance. HR staff will also receive additional training to reinforce proper documentation procedures and retention requirements. We are committed to strengthening internal controls and ensuring full compliance moving forward.