CORRECTIVE ACTION PLAN
Oversight Agency for Audit: U.S. Department of Education
The City of Haverhill, Massachusetts respectfully submits the following corrective action plan for the year ended June 30, 2023.
Name and address of independent public accounting firm:
Powers & Sullivan, LLC
100 Quannapowitt Parkway, Suite 101
Wakefield, MA 01880
Audit period: July 1, 2022 through June 30, 2023
The finding from the June 30, 2023, schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule.
FINDINGS—FEDERAL AWARD PROGRAMS AUDITS
U.S. DEPARTMENT OF EDUCATION
Passed through the Massachusetts Department of Elementary and Secondary Education
Title I Grants to Local Educational Agencies
Title I Grants to Local Educational Agencies Federal Assistance Listing No. 84.010
Special Education Cluster
Special Education Grants to States and Special Education Preschool Grants Federal Assistance Listing Numbers, 84.027 and 84.173.
COVID-19 Education Stabilization
COVID-19 Education Stabilization Federal Assistance Listing Numbers, 84.425, 84.425C, 84.425D, 84.425U, and 84.425W
Twenty-First Century Community Learning Centers
Twenty-First Century Community Learning Centers Federal Assistance Listing Numbers, 84.287 and 84.287C
2023-001: Controls for Monitoring Payroll Charged to the Grant
Compliance Requirement: Allowable Costs/Cost Principles
Type of Finding: Compliance and Significant Deficiency in Internal Control over Compliance
Criteria or Specific Requirement: Grantees must provide reasonable assurance that Federal awards are expended only for allowable activities and that the costs of goods and services charged to Federal awards are allowable and in accordance with the applicable cost principles.
Condition: Management has not established written guidelines and procedures outlining the time and effort reporting and documentation requirements that department heads must adhere with to ensure compliance with federal and state time and effort reporting requirements. Such guidelines and procedures should indicate under what circumstances semi-annual certifications and personnel activity reports (PARS) are required and should indicate due dates for when this information must be provided to the school business office. Management also has not adopted and implemented standardized forms for semi-annual certifications and PARS that include all data required by federal and state guidelines.
Questioned Costs: None reported.
Context: Payroll expenditures charged to the programs are required to be supported with documentation substantiating that the employees are eligible to be charged to the grant and that the payroll charged relates to time spent accomplishing grant objectives. This supporting documentation should be standardized and should include all required elements in accordance with Title 2 U.S. Code of Federal Regulations Part 225 Cost Principals for State, Local, and Indian Tribal Governments.
The City did not have an adequate system of internal controls in place to provide sufficient documentation to demonstrate compliance with federal and state time and effort reporting requirements in accordance with the provisions of Title 2 U.S. Code of Federal Regulations Part 225 Cost Principals for State, Local, and Indian Tribal Governments.
Effect: The City has not complied with the federal and state time and effort reporting requirements.
Cause: Lack of documented policies, procedures and guidelines in place to ensure compliance with time and effort reporting requirements.
Repeat Finding: This matter was reported as a finding for the Title I major program and special education cluster grants in the previous year as finding 2022-001.
Recommendation: Management should establish written guidelines and procedures outlining the time and effort reporting and documentation requirements that department heads must adhere with to ensure compliance with federal and state time and effort reporting requirements. Such guidelines and procedures should indicate under what circumstances semi-annual certifications and personnel activity reports (PARS) are required and should indicate due dates for when this information must be provided to the school business office. Management should also adopt and implement standardized forms for semi-annual certifications and PARS that include all data required by federal and state guidelines. Once the written guidelines and procedures have been established, training should be provided to ensure that the program managers fully understand the time and effort reporting requirements.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will establish written guidelines and procedures outlining the time and effort reporting and documentation requirements that department heads must adhere with to ensure compliance with federal and state time and effort reporting requirements. Such guidelines and procedures will indicate under what circumstances semi-annual certifications and personnel activity reports (PARS) are required and will indicate due dates for when this information must be provided to the school business office. Management will also adopt and implement standardized forms for semi-annual certifications and PARS that include all data required by federal and state guidelines. Once the written guidelines and procedures have been established, training will be provided to ensure that the program managers fully understand the time and effort reporting requirements. Management intends to implement these procedures in fiscal 2024.
If the Oversight Agency has questions regarding this plan, please call Michael Pfifferling, Assistant Superintendent of Finance and Operations at 978-374-3400.
Sincerely yours,
Michael Pfifferling
Assistant Superintendent of Finance and Operations
City of Haverhill