Finding 2024-003 – Career and Technical Education - Perkins CFDA No. 84.048 Department of Education Massachusetts Department of Elementary and Secondary Education Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Program Condition: During our test of controls over compliance with cash management requirements as it relates to the Career and Technology 2023 AL No. 84.048 we discovered that in multiple instances requests for funds (Form RF-1) related to the grant was not based, as much as possible, on actual expenditures, rather than what is obligated. Criteria: Title 34 of the Code of Federal Regulations Section 80.20: Standards for financial management systems requires the following: (b) The financial management systems of other grantees and subgrantees must meet the following standards: 1) Financial reporting. Accurate, current, and complete disclosure of the financial results of financially assisted activities must be made in accordance with the financial reporting requirements of the grant or subgrant. 2) Accounting records. Grantees and subgrantees must maintain records which adequately identify the source and application of funds provided for financially-assisted activities. These records must contain information pertaining to grant or subgrant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays or expenditures, and income. State Finance Regulations • Form RF1 for requesting funds through an on-line process has been developed to document the Department's distribution of funds on an "as needed" basis. The requests should be based, as much as possible, on actual expenditures, rather than what is obligated. Unexpended balances should not exceed 10% of funds received to date for any DESE administered grants. It is incumbent upon grant recipients to observe their expenditures closely and submit their RF1 forms within the designated timeframe, usually the last two weeks of the month, for requesting cash advances. Grant recipients may make requests in excess of the allotment schedule but must include a justification explaining the need for additional funds and additional documentation may be required. By submitting a request the grantee certifies that the request is in compliance with the "Cash Management Act" (31CFR part 205) and EDGAR regulations (34 CFR part 80.20 and 80.21), which allow for cash advances provided grantees maintain procedures to minimize the time elapsing between the receipt and disbursement of grant funds. Additionally, the grantee certifies that the obligations incurred under this project for which funds are requested, were made within the period of availability (project duration) stated in the grant award notice. The grant records in support of each request must be in sufficient detail to properly substantiate all claims for payment and expenditures made under the grant. Effect: Cash balances in excess of needs may be earning interest in excess of federal guidelines and would need to be returned. Questioned Costs: None Context: During our test of cash disbursements for the Career and Technology 2023 Final Request for Funds indicated fully spent however the grant was not fully spent as of 10/30/23. The School had to return the drawdown on 10/30/23 which also included additional unspent funds on 1/10/24. Cause: In June 2023 Assabet’s staff member handling grants retired. They only came in once a week to help with grants until new staff could be hired. In October of 2023 our current grant manager was hired and had very limited training on grants before the retiree quit fully in January 2024. Due to this, training in Edgrants was extremely limited and the FY23 grants mentioned where not handled correctly. Identification as a Repeat Finding: This is a not a repeat finding. Recommendation: The grantee’s administrative staff should establish procedures to ensure compliance with the cash management requirements as described in 31 CFR part 205. These procedures should include a thorough review of cash needs based on expenditures incurred as of the date of an anticipated draw down and how quickly those related liabilities are anticipated to be liquidated through the normal warrant (bill) payment process. Responsible for Corrective Plan: Sabrina Howley Estimated Completion Date: 11/5/25, Ongoing Action Taken: Going further no funds will be requested unless they have been expensed.