HILLSBORO-DEERING COOPERATIVE SCHOOL DISTRICT

Criteria: The School District’s responsibility for internal control over compliance extends to ensuring that adequate documentation and verification are maintained related to the eligibility status for the National School Lunch and Breakfast Programs. Condition: The School District did not provide documentation of its eligibility determinations for audit. Cause: The School District did not believe that it could provide the information as it would be disclosing personal information on families’ and households’ income. Further guidance provided to the School District by the NH Department of Education supported the School District’s opinion. Effect: We could not test compliance with the requirements. Recommendation: While we understand the need to keep information private, 7 CFR 245.6(f)(3)(i) explicitly allows for the disclosure of all eligibility information in addition to eligibility status to “persons directly connected with the administration or enforcement of programs…”. An audit is a requirement of the administration of the program. We recommend that the School District provide the requested information for future audits. If the School District still does not want to provide such student information, the School District should come up with a coding system whereby each application is assigned a corresponding number, and provide a roster of applications using the number as an indicator of each application and status. The applications should be coded to correspond to that number, and any personal information redacted when provided for the audit. Management’s Response: Please see the CFR text, in its entirety, which outlines who may see information regarding student eligibility status, as well as information from the Free and Reduced School Price Meals. The school district will follow the CFR in regard to information on applications. 7 CFR 245.6(f)(2)(i, ii, iii, iv)" Only persons directly connected with the administration or enforcement of a program or activity listed in paragraphs (f)(2) or (f)(3) of this section may have access to children's eligibility information, without parental consent." Paragraph (f)(2) states, "Disclosure of children's names and eligibility status only. The State agency or local educational agency, as appropriate, may disclose, without parental consent, children's names and eligibility status (whether they are eligible for free or reduced price meals or free milk) to persons directly connected with the administration or enforcement of: (i) A Federal education program; (ii) A State health program or State education program administered by the State or local education agency; (iii) A Federal, State, or local means-tested nutrition program with eligibility standards comparable to the National School Lunch Program (i.e., food assistance programs for households with incomes at or below 185 percent of the Federal poverty level); or (iv) A third party contractor assisting in verification of eligibility efforts by contacting households who fail to respond to requests for verification of their eligibility. 7 CFR 245.6(f)(3)(i, ii, iii) Paragraph (f)(3) states "Disclosure of all eligibility information in addition to eligibility status. In addition to children's names and eligibility status, the State agency or local educational agency, as appropriate, may disclose, without parental consent, all eligibility information obtained through the free and reduced price meals or free milk eligibility process (including all information on the application or obtained through direct certification) to: (i) Persons directly connected with the administration or enforcement of programs authorized under the Richard B. Russell National School Lunch Act or the Child Nutrition Act of 1966. This means that all eligibility information obtained for the National School Lunch Program, School Breakfast Program or Special Milk Program may be disclosed to persons directly connected with administering or enforcing regulations under the National School Lunch or School Breakfast Programs (Parts 210 and 220, respectively, of this chapter), Child and Adult Care Food Program (Part 226 of this chapter), Summer Food Service Program (Part 225 of this chapter) and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) (Part 246 of this chapter); (ii) The Comptroller General of the United States for purposes of audit and examination; and (iii) Federal, State, and local law enforcement officials for the purpose of investigating any alleged violation of the programs listed in paragraphs (g)(3) and (g)(4) of this section." Additionally, Policy Memo SP 16-2016: Disclosure Requirements Child Nutrition Programs. See the table on page 6. Lastly, upon seeking guidance from NH Department of Education Office of Nutrition Programs and Services, they stated; “Page 6 of the document provides a chart (see above) stating who is able to see the confidential information and when. Given that this is the SAU/LEA’s single audit, confidential information may not be released, and only aggregate data can be given.

Criteria: Per federal regulations 2 CFR section 200.430(i)(1)(vii), the School District must maintain time and effort distribution records for an employee who works, all or in part, under federal grants. Condition: The School District did not maintain proper time and effort records for employees who were partially funded with ESSER federal funds. Timesheets did not contain a certification clause that the information submitted accurately reflects the time and effort distribution, and the timesheet was not dated by the employee and/or supervisor. Cause: The School District was not aware of the required detail. Effect: The School District was not in compliance with all of the components of the requirements. Recommendation: We recommend that the School District ensure that all timesheets include the related employee data, clearly identified time segregated between federal and non-federal funding, and a properly signed time and effort certification statement.

Finding #2020-002 Department of Education Title I (CFDA #84.010) Special Education Cluster (CFDA #84.027 & 84.173) Pass Through Payments from the New Hampshire Department of Education Project Number(s): #20200055 #202516 Criteria or specific requirement: Federal cost principles, as identified in 2 CFR 200.430, require salaries allocated to more than one federal award activity or cost objective to be supported by records which accurately reflect the distribution of salary or wages. Budget estimates determined before the services are performed do not qualify as support for charges to the federal awards. Personnel activity reports are required when time is allocated between federal awards and cost objectives. Periodic certifications are required when an individual?s salary is charged solely to one federal award or cost objective. Condition: During our testing of compliance with the federal program, we noted that personnel activity reports to document time and effort were not completed for individuals whose salaries were allocated to more than one federal award activity as well as a single federal award activity and the District?s General Fund. Additionally, individuals charged solely to one federal award activity and cost objective did not complete periodic certifications. Questioned costs: None. Context: Of the District?s payroll charges related to the major programs during fiscal year 2020, we haphazardly selected 27 individual charges from the bi-weekly payroll periods. All employees charged to the grants were selected for testing at least once with the sample representing $33,288 of $597,832 in payroll related charges. During the examination of charges, we noted all individuals selected for testing who were compensated at either an hourly rate or were paid a stipend completed timecards or personnel activity reports to support the charges to the federal awards. The remaining nine charges were comprised of individuals who were salaried, two of which were charged 100% to the special education cluster, two were split 50% between two federal programs and one who was split 50% between the Title I program and 50% the District?s General Fund and the remaining two were allocated between two federal award programs. Effect: Failure to adequately document personnel activity in accordance with the requirements of the Code of Federal Regulations increases the risk that the District will request reimbursement for expenditures which were not related to employee time spent on the federal award. Cause: For periodic certifications of time and effort, the District?s payroll specialist previously prepared the periodic certification forms for distribution to the employees. The process was designated to the grant manager in the current year, who failed to require the employees to complete the periodic certifications. For distribution of salary related to individuals working on multiple federal awards, the District allocated the individual?s salary based on the budgeted amounts written into the grant and failed to obtain, at a minimum, monthly personnel activity reports to support the allocation of salary amongst the grants. Repeat finding: Yes, #2019-001 Recommendation: We recommend whenever an employee?s salary is allocated 100% to a federal award and single cost objective the District prepare, at a minimum, semi-annual certifications of time and effort. Additionally, when an employee?s salary is allocated to multiple federal awards or cost objectives the District should complete, at a minimum, monthly personnel activity reports showing the distribution of the employee?s time and effort. Any changes from the initial budgeted amounts written into the federal awards and actual time and effort as documented in the personnel activity reports must be adjusted such that the final amount charged to the federal award is accurate, allowable, and properly allocated. Views of responsible officials: District is in agreement with the identified finding and took corrective action with the start of fiscal year 2021.

Finding #2019-001 Department of Education Special Education Cluster (CFDA #84.027 & 84.173) Pass Through Payments from the New Hampshire Department of Education Project Number: 92505 Criteria or specific requirement: Federal cost principles, as identified in 2 CFR 200.430, require salaries allocated to more than one federal award activity or cost objective to be supported by records which accurately reflect the distribution of salary or wages. Budget estimates determined before the services are performed do not qualify as support for charges to the federal awards. Personnel activity reports are required when time is allocated between federal awards and cost objectives. Periodic certifications are required when an individual?s salary is charged solely to one federal award or cost objective. Condition: During our testing of compliance with the federal program, we noted that personnel activity reports to document time and effort were not completed for individuals whose salaries were allocated to more than one federal award activity. Additionally, individuals charged solely to one federal award activity and cost objective did not complete periodic certifications. Questioned costs: None. Context: Of the District?s payroll charges related to the cluster during fiscal year 2019, we haphazardly selected 34 individual charges from the bi-weekly payroll periods. All employees charged to the grant were selected for testing at least once with the sample representing $149,815 of $278,674 in payroll related charges. During the examination of charges, we noted all individuals selected for testing who were compensated at either an hourly rate or were paid a stipend completed timecards or personnel activity reports to support the charges to the federal awards. The remaining four charges were comprised of individuals who were salaried, two of which were charged 100% to the cluster and the remaining two were allocated between two federal award programs. Effect: Failure to adequately document personnel activity in accordance with the requirements of the Code of Federal Regulations increases the risk that the District will request reimbursement for expenditures which were not related to employee time spent on the federal award. Cause: For periodic certifications of time and effort, the District?s payroll specialist previously prepared the periodic certification forms for distribution to the employees. The process was designated to the grant manager in the current year, who failed to require the employees to complete the periodic certifications. For distribution of salary related to individuals working on multiple federal awards, the District allocated the individual?s salary based on the budgeted amounts written into the grant and failed to obtain, at a minimum, monthly personnel activity reports to support the allocation of salary amongst the grants. Recommendation: We recommend whenever an employee?s salary is allocated 100% to a federal award and single cost objective the District prepare, at a minimum, semi-annual certifications of time and effort. Additionally, when an employee?s salary is allocated to multiple federal awards or cost objectives the District should complete, at a minimum, monthly personnel activity reports showing the distribution of the employee?s time and effort. Any changes from the initial budgeted amounts written into the federal awards and actual time and effort as documented in the personnel activity reports must be adjusted such that the final amount charged to the federal award is accurate, allowable, and properly allocated.