Finding 537642 (2023-003)

Federal Agency: U.S. Department of Education Award Name: Charter Schools Program Year: 2023 Assistance Listing Number: 84.282 Compliance: Activities Allowed and Unallowed Finding Type: Significant deficiency in internal controls Criteria: Management is responsible for maintaining adequate records for payroll transactions charged to federal awards that accurately reflect payroll expenses. These records must include employee benefit election forms signed by the respective employees. Condition: During control and compliance testing, it was noted that retirement benefit forms for payroll expenses charged to the federal award were not retained. Context: Of the 9 occurrences tested, 6 were missing benefit forms.Cause of condition: The School had employed an individual to oversee the business functions previously that did not retain this documentation. Effect of condition: As a result of this condition, the School’s payroll expenditures charged to the federal grant lacked adequate control documentation. Recommendation: It is recommended that the School maintain adequate records for payroll expenditures charged to federal awards, such as an retirement benefit forms. View of Responsible Officials and Planned Corrective Action: The school will retain a paper form filled out by employees annually, which details their payroll benefit settings for the year. The form will be signed by the Head of School and the employee. If staff members adjust any deductions during the year, the form will be adjusted and initialed by the employee and the Head of School. Planned Implementation Date of Corrective Action: February 22, 2025. Person Responsible for Corrective Action: Sarah Arnold, Head of School