Finding Text
Significant Deficiency and Material Instance of Non-Compliance:
Finding 2024-001
Annual Performance Report
This finding impacts the reporting compliance requirement for the major program, Assistance Listing Number 84.425, COVID-19 - Education Stabilization Fund, funded by the Department of Education and passed through by the Commonwealth of Massachusetts, Department of Elementary and Secondary Education (DESE).
Criteria: The Schools must follow the monitoring and reporting program performance requirements set out in the Uniform Guidance Section 200.239. The Schools must submit an annual performance report (OMB. No. 1810-0749) for the Elementary and Secondary School Emergency Relief (ESSER) funding with data on expenditures, planned expenditures, subrecipients, and uses of funds. The expenditures disclosed on the report must match the expenditures stated in the Schedule of Expenditures of Federal Awards (SEFA).
Condition: During our compliance testing, we reviewed the ESSER annual performance reports submitted by the Schools. The total ESSER expenditures reported within the annual performance report for UP Academy Charter School of Boston did not agree back to the ESSER expenditures recorded on the SEFA for the year ended June 30, 2023, by approximately $402,000.
Cause: UP Academy Charter School of Boston combined fiscal year 2024 ESSER expenditures with fiscal year 2023 ESSER expenditures in the annual performance report for the year ended June 30, 2023.
Effect: Incorrect expenditure reported on the annual performance report for the year ended June 30, 2023, by approximately $402,000. This non-compliance with the Uniform Guidance requirement could potentially impact future Federal funding.
Questioned Costs: There were no questioned costs as a result of this finding.
Was the finding a repeat of a finding in the immediately prior year?: No
Recommendation: AAFCPAs recommends that management follows its internal controls as intended to ensure the annual performance reports agrees back to the SEFA for applicable reporting periods.
Management’s Response: All Federal grant drawdowns are based on the Schools’ grant tracker. Funds will only be drawn down if expenses are noted in the tracker. In addition to maintaining the grant tracker, we will implement an annual review of grant profit and loss statements to ensure that all Federal grants have no net income at the end of the fiscal year, completed by the Chief Financial Officer in conjunction with the rest of the finance team. Financial reports submitted externally will be agreed to the audited financial statements.