Finding 30401 (2022-001)

Material Weakness
Requirement
FN
Questioned Costs
$1
Year
2022
Accepted
2022-11-13

AI Summary

  • Core Issue: The District lacked proper controls for the Emergency Connectivity Fund Program, leading to noncompliance with federal requirements.
  • Impacted Requirements: Violations include improper resale of 132 devices and reimbursement requests for 127 ineligible devices, totaling questioned costs of $26,634.
  • Recommended Follow-Up: The District should enhance internal controls and review FCC compliance guidance to prevent future violations and ensure adherence to federal program rules.

Finding Text

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND REPORTABLE INSTANCE OF NONCOMPLIANCE ? FEDERAL COMMUNICATIONS COMMISSION ? COVID-19 ? EMERGENCY CONNECTIVITY FUND PROGRAM ? ALN 32.009 2022-001 Internal Control and Compliance With Federal Equipment/Real Property Management and Special Tests and Provisions Requirements Criteria ? 47 CFR ? 54.1713 prohibits the resale of eligible equipment and services purchased with Emergency Connectivity Fund support, unless it is at least three years old and considered to be obsolete. 47 CFR ? 54.1710 requires that Independent School District No. 719, Prior Lake-Savage Area Schools (the District) to only seek support for eligible equipment provided to students and school staff who would otherwise lack connected devices sufficient to engage in remote learning. Condition ? During out audit, we noted that the District did not have sufficient controls in place within its Emergency Connectivity Fund Program to assure compliance with federal equipment/real property management and special tests and provisions requirements, which resulted in noncompliance. We also noted that 132 of the 1,650 pieces of eligible equipment were resold and are no longer in the District?s equipment inventory. We also noted that the District had requested reimbursement for all 1,650 devices, however, 127 of those devices were used for the sole purpose of avoiding disruption in learning due to anticipated loss or breakage, and thus did not meet the definition of eligible equipment for which the District could seek reimbursement. Questioned Costs ? $26,634. Context ? Of the 1,650 devices, 132 were resold and 127 were not eligible to be reimbursed. This was not a statistically valid sample. Repeat Finding ? This is a current year finding. Cause ? This was an oversight by district personnel due to unfamiliarity with this new federal program. Effect ? Noncompliance with the equipment/real property management and special tests and provisions requirements could be viewed as a violation of the award agreement. Recommendation ? We recommend that the District review its internal control procedures relating to equipment/real property management and special tests and provisions for the Emergency Connectivity Fund Program. The District should review the compliance guidance issued by the Federal Communications Commission to familiarize themselves with federal compliance requirements specific to the Emergency Connectivity Fund Program. View of Responsible Official and Planned Corrective Actions ? The District agrees with the finding. The District intends to review its procedures relating to equipment/real property management and special tests and provisions requirements to ensure compliance in the future with any additional federal awards. The District has separately issued a Corrective Action Plan related to this finding.

Corrective Action Plan

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND REPORTABLE INSTANCE OF NONCOMPLIANCE ? FEDERAL COMMUNICATIONS COMMISSION ? COVID-19 ? EMERGENCY CONNECTIVITY FUND PROGRAM ? ALN 32.009 2022-001 Internal Control and Compliance With Federal Equipment/Real Property Management and Special Tests and Provisions Requirements Finding Summary 47 CFR ? 54.1713 prohibits Independent School District No. 719, Prior Lake-Savage Area Schools (the District) from the resale of eligible equipment and services purchased with Emergency Connectivity Fund (ECF) support. Also, 47 CFR ? 54.1710 requires that the District only seek support for eligible equipment provided to students and school staff who would otherwise lack connected devices sufficient to engage in remote learning. The District did not have sufficient controls in place to prevent the resale of equipment purchased with ECF support and to comply with equipment/real property management and special tests and provisions requirements as it pertains to seeking reimbursement for eligible equipment. Corrective Action Plan Actions Planned ? The District intends to review its procedures relating to equipment/real property management and special tests and provisions requirements to ensure compliance in the future with any additional federal awards. Official Responsible ? Tammy Fredrickson, Executive Director of Business Services. Planned Completion Date ? June 30, 2023. Disagreement With or Explanation of Finding ? The District agrees with this finding. Plan to Monitor ? Tammy Fredrickson, Executive Director of Business Services, will assure appropriate internal controls and procedures are updated, in place, and being followed to assure compliance with equipment/real property management and special tests and provisions requirements for the ECF Program.

Categories

Questioned Costs Equipment & Real Property Management Internal Control / Segregation of Duties Special Tests & Provisions

Other Findings in this Audit

  • 606843 2022-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
10.555 National School Lunch Program $3.10M
10.553 School Breakfast Program $800,378
84.425 Education Stabilization Fund $767,965
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $450,025
32.009 Emergency Connectivity Fund Program $398,302
84.010 Title I Grants to Local Educational Agencies $209,167
84.027 Special Education_grants to States $105,963
84.367 Supporting Effective Instruction State Grants $104,058
21.027 Coronavirus State and Local Fiscal Recovery Funds $97,799
84.173 Special Education_preschool Grants $57,624
84.365 English Language Acquisition State Grants $37,567
84.181 Special Education-Grants for Infants and Families $37,022
84.060 Indian Education_grants to Local Educational Agencies $15,229
84.048 Career and Technical Education -- Basic Grants to States $6,024
10.559 Summer Food Service Program for Children $3,000
10.575 Farm to School Grant Program $981
84.424 Student Support and Academic Enrichment Program $843