Finding 261138 (2022-014)

Material Weakness
Requirement
AB
Questioned Costs
-
Year
2022
Accepted
2023-08-10
Audit: 258987
Organization: Pinecrest Academy of Nevada (NV)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: Lack of effective internal controls over compliance, specifically the absence of independent review for costs charged to federal programs.
  • Impacted Requirements: Violations of Title 2 U.S. CFR Part 200, which mandates proper internal controls and segregation of duties for managing federal awards.
  • Recommended Follow-Up: Enhance internal controls to ensure all costs charged to programs are reviewed and documented by an independent party.

Finding Text

2022-014: U.S. Department of Education Passed through State of Nevada Department of Education Charter Schools, 84.282 Passed through State of Nevada Public Charter School Authority Twenty-First Century Community Learning Centers, 84.287 COVID-19 Education Stabilization Fund, 84.425 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listings 84.282, 84.287, and 84.425 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance federal statutes, regulations, and the terms and conditions of the Federal award. A key component of effective internal control is the segregation of duties through a review and approval process. Condition: Costs charged to the program did not have evidence of review by an individual independent of the preparation of the allocation of costs to the program. Cause: The School did not have adequate internal controls to ensure review of costs charged to the program occurred and was documented. Effect: Unallowable costs may be charged to the program and not detected by the School. Questioned Costs: None noted Context/Sampling: Charter Schools, 84.282 A non-statistical sample of 11 goods and services transactions out of a population of 33 and the total population of three payroll transactions was selected for testing. There was no evidence of review on any of the 14 transactions tested. The 14 transactions totaled $780,268 out of the aggregate total expenditure population of $999,390. Twenty-First Century Community Learning Centers, 84.287 A non-statistical sample of four payroll transactions out of a population of eight was selected for testing. There was no evidence of review on any of the four transactions. The four transactions totaled $147,028 out of the aggregate total expenditure population of $223,954. Education Stabilization Fund, 84.425 A non-statistical sample of three requests for reimbursement out of a population of 7 was selected for testing. There were 61 transactions tested as part of those three requests for reimbursement. There was no evidence of review on any of the 61 transactions tested. The 61 transactions totaled $1,023,333 out of the aggregate total expenditure population of $2,437,914. Repeat Finding from Prior Year: No Recommendation: We recommend the School enhance internal controls to ensure review of costs charged to the program occurs and is documented. Views of Responsible Officials: Management agrees with this finding.

Corrective Action Plan

Finding Number: 2022-014 ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles Corrective Action Plan: A process has been put in place for the school principal to review all RFRs prior to submission to the grantor. Approval is evidenced by email sent by principal to the Director of Grant Management, which is saved with the RFR as support. Responsible Individuals: Nachum Golodner, Director of Accounting Anticipated Completion Date: June 30, 2023

Categories

Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Other Findings in this Audit

  • 261139 2022-016
    Material Weakness
  • 261140 2022-017
    Material Weakness Repeat
  • 261141 2022-014
    Material Weakness
  • 261142 2022-015
    Material Weakness
  • 261143 2022-017
    Material Weakness Repeat
  • 261144 2022-014
    Material Weakness
  • 261145 2022-017
    Material Weakness Repeat
  • 261146 2022-014
    Material Weakness
  • 261147 2022-017
    Material Weakness Repeat
  • 261148 2022-014
    Material Weakness
  • 261149 2022-017
    Material Weakness Repeat
  • 837580 2022-014
    Material Weakness
  • 837581 2022-016
    Material Weakness
  • 837582 2022-017
    Material Weakness Repeat
  • 837583 2022-014
    Material Weakness
  • 837584 2022-015
    Material Weakness
  • 837585 2022-017
    Material Weakness Repeat
  • 837586 2022-014
    Material Weakness
  • 837587 2022-017
    Material Weakness Repeat
  • 837588 2022-014
    Material Weakness
  • 837589 2022-017
    Material Weakness Repeat
  • 837590 2022-014
    Material Weakness
  • 837591 2022-017
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.555 National School Lunch Program $1.54M
84.282 Charter Schools $999,390
84.425 Education Stabilization Fund $975,708
84.027 Special Education_grants to States $691,647
84.287 Twenty-First Century Community Learning Centers $223,954
84.367 Improving Teacher Quality State Grants $211,922
84.048 Career and Technical Education -- Basic Grants to States $19,610
84.196 Education for Homeless Children and Youth $5,731
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $180