Greater Lowell Technical High SchoolLocal Government

Federal Program(s) Information "See Schedule of Findings and Questioned Costs for table" Type of Finding Internal Control over Compliance - Significant Deficiency Criteria or Specific Requirement Grantees must provide reasonable assurance that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Management of the District is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context A control deficiency related to allowable costs was noted as a result of the testing of internal controls. A sample of disbursements charged to the grants via journal was also tested in order to determine if in accordance with the Allowable Costs compliance requirement. As a result of internal control and compliance testing of costs charged to the grants via journal entry, it was noted that there was a duplication of invoices charged to the grant in error. Cause Weaknesses in the design and operation of controls resulting from journal entries not being properly reviewed before being charged to the grant/posted to the general ledger. Effect Due to the weakness in internal controls noted above, there is a risk that amounts charged to federal awards could not be allowable or otherwise not in accordance with the Uniform Guidance. Known questioned costs are not reported as ultimately proper supporting documentation for costs charged to the grants was provided. Recommendation The District should address the weakness in internal controls noted above in order to provide reasonable assurance that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. If journal entries are utilized to charge costs to grants, they should be reviewed by a knowledgeable individual prior to being charged to the grants/posted to the general ledger. Views of Responsible Official and Planned Corrective Action Management?s views and corrective action plan is included at the end of this report after the schedule of prior year findings.

2019-001 Improve Controls Over Special Tests and Provisions Related to Required Verifications Federal Program Information - Federal Agency: U.S. Department of Agriculture ? Food and Nutrition Service Cluster/Program: Child Nutrition Cluster Award Name: National School Lunch Program CFDA Number: 10.555 Award Year: 2019 Compliance Requirement - Special Tests and Provisions Type of Finding - Internal Control Over Compliance - Significant Deficiency Criteria or Specific Requirement - By November 15 of each school year, verification of free and reduced-price eligibility of household income from a sample of approved applications must be performed. Condition and Context- Although the District provided documentation to substantiate that the District performed the required verification of applications, there was not documented evidence that multiple individuals were involved. Management of the District is responsible for establishing and maintaining effective internal control over compliance with Federal requirements that have a direct and material effect on a Federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a Federal program on a timely basis. Cause - Weaknesses in the design and operation of controls. Effect - Due to the weaknesses in internal controls noted above, there is a risk that ineligible students could receive free or reduced-price lunches. No questioned costs are reported, as they are not quantifiable. Identification as Repeat Finding - As identified in Section IV, Schedule of Prior Year Findings, this is a repeat of finding 2018-002 with respect to internal control over compliance. Recommendation - The District should address the weaknesses in internal controls noted above in order to comply with Federal guidelines related to verification of applications for the National School Lunch Program.

2019-002 Improve Controls Over Cash Management and Program Income Federal Program Information - Federal Agency: U.S. Department of Agriculture ? Food and Nutrition Service Cluster/Program: Child Nutrition Cluster Award Name: National School Lunch Program CFDA Number: 10.555 Award Year: 2019 Compliance Requirement - Cash Management Program Income Type of Finding - Internal Control Over Compliance - Significant Deficiency Criteria or Specific Requirement - The requirements that apply to program income are contained in 2 CFR section 200.80 (definition of ?program income?), 2 CFR section 200.307 (program income), program legislation, Federal awarding agency regulations, and the terms and conditions of the Federal award. Program income is gross income earned by a non-Federal entity that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance (unless there is a requirement for disposition of program income after the end of the period of performance as provided in 2 CFR section 200.307(f)). Program income may be used in any of three methods consistent with 2 CFR section 200.307(e). Management of the District is also responsible for establishing and maintaining effective internal control over compliance with Federal requirements that have a direct and material effect on a Federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a Federal program on a timely basis. Condition and Context - Although the District has implemented certain policies and procedures over cash management and program income, there was not documented evidence that individuals not involved in the cash out process or documented evidence that an individual not involved in the receipts process verified that program income deposited to the District?s bank account agreed to cash out reports and POS system. Further, there was not documented evidence that monthly claims were verified by more than one individual. Cause - Weaknesses in the design and operation of controls. Effect - Due to the weaknesses in internal controls noted above, there is a risk that program income could be misappropriated and not detected and corrected on a timely basis. Further, there is risk that Federal claims could be incorrectly reported, requiring the return of Federal funds. Recommendation - The District should improve internal controls over program income by requiring an individual that is not involved in the receipts process to verify that program income collected was properly deposited to the District?s bank account and recorded in the general ledger. Written policies and procedures should also be amended to document this requirement and process. The District should also improve internal controls over the reporting of claims by requiring documented evidence that a second individual is involved in the process. Written policies and procedures should also be amended to document this requirement and process.

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