Finding 247640 (2022-002)

-
Requirement
AB
Questioned Costs
$1
Year
2022
Accepted
2022-11-07

AI Summary

  • Core Issue: The School improperly claimed reimbursement for equipment (Chromebooks) that was not verified as used by the School.
  • Impacted Requirements: Federal funds must be used for allowable activities per Uniform Guidance and Michigan Department of Education rules.
  • Recommended Follow-up: Ensure the School retains adequate documentation to prove that all claimed expenditures were actually utilized.

Finding Text

Pass- through Entity ? Michigan Department of Education Finding Type ? Material Weakness and Material Noncompliance Criteria ? Federal funds must be used only for activities allowed in accordance with the Uniform Guidance and Michigan Department of Education compliance requirements. Condition ? During our testing, we noted that for one of the invoices tested the purchased equipment (Chromebooks) was shipped to the address of the management company and not to the School. No documents were provided to verify that the Chromebooks were provided for the purpose of the School. Questioned Costs ? $49,200 Cause/Effect ? The School claimed reimbursement for expenditures which were potentially not utilized by the School. Identification of a Repeat Finding ? This is not a repeat finding Recommendation ? We recommend that the School retain sufficient audit evidence to substantiate that all claimed expenditures were utilized by the

Corrective Action Plan

Corrective Action Steps Taken - As of August 3, 2022, the school management company Distinctive Schools, has engaged with EdOps to provide additional Financial Operations Support to Plymouth Educational Center. Future Steps to be implemented ? EdOps and Distinctive Schools have begun holding monthly review meetings with various members of the Plymouth Educational Center team to provide stronger review and greater visibility into potential budget related impacts. Based on information obtained during these meetings, annual forecasts are created and if any amendments are deemed necessary during the process, they will be presented to the board of directors. Monitoring Plan ? The CFO and Manager of Financial Strategy and Budgeting will monitor monthly the budget to actual variance and present forecasted information monthly. Additionally, an amended budget will be presented to the board for approval if necessary. Date of Completion - Nov 1, 2022 People Responsible ? Elizabeth Winke, Controller & Interim CFO & Nadine Blanco, Manager of Financial Strategy and Budgeting Finding 2022-002 Corrective Action Steps Taken ? The management company, on behalf of Plymouth Educational Center, is working with the equipment vendor to rectify the shipping issue. Future Steps to be implemented ? The technology team will include receipt dates within the equipment tracking system and will follow up on any discrepancies identified from purchasing, to receipt of goods, to payment of goods. Additionally, those governed with approval of invoices will verify receipt of equipment prior to invoice approval and payment. Monitoring Plan ? Equipment inventory will be verified quarterly for new inventory purchases versus grant reimbursements to confirm all inventory has been received and is accounted for against the grant, including appropriate tagging of equipment. Date of Completion ? November 1, 2022 Person Responsible ? Roberto Vargas, Director of IT, and Karey Henderson, Managing Director of Operations PLYMOUTH

Categories

Questioned Costs Procurement, Suspension & Debarment Cash Management Material Weakness Equipment & Real Property Management

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $1.84M
84.010 Title I Grants to Local Educational Agencies $432,489
10.555 National School Lunch Program $204,165
10.553 School Breakfast Program $111,851
84.027 Special Education_grants to States $101,972
84.424 Student Support and Academic Enrichment Program $75,622
84.367 Improving Teacher Quality State Grants $22,783
10.555 National School Lunch Program Commodities $20,598
10.559 Summer Food Service Program for Children $2,836
10.649 Pandemic Ebt Administrative Costs $614