Town of Wayland

2023-001 Improve Controls over Disbursements Federal Agency: U.S. Department of Education Cluster/Program: Education Stabilization Fund Award Name: COVID-19 – Elementary and Secondary School Emergency Relief (ESSER III) Fund and COVID-19 – American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL Number(s): 84.425D/84.425U Award Year: 2023 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Compliance and Internal Control over Compliance - Significant Deficiency 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. Management 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 Supervisory approval was not obtained for 16 of 23 payroll transactions tested. Further, there was no documented evidence that multiple individuals were involved in 13 out of 16 vendor expenditures charged to the grant and one journal entry charging expenditures to the grant. Cause Weaknesses in the design and operation of controls. Effect or Potential Effect Due to the weaknesses in internal controls noted above, there is a risk that disbursements may be awarded to vendors in a manner that is not consistent with federal requirements. Known or likely questioned costs are reported equal to $214,332, as follows: AL Known or likely Questioned Number(s) Name of Federal Program or Cluster Costs 84.425D/84.425U COVID-19 – Elementary and Secondary School Emergency Relief Fund $214,332 Recommendation The Town should address the weaknesses in internal controls noted above in order to provide reasonable assurance that federal awards are expended only for allowable activities, and that the costs services charged to federal awards are allowable and in accordance with the applicable cost principles. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management’s corrective action plan is included at the end of this report.

AUDIT FINDINGS 10 SECTION II- FINANCIAL STATEMENT FINDINGS None. SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS 2023-001 Improve Controls over Disbursements Federal Agency: U.S. Department of Education Cluster/Program: Education Stabilization Fund Award Name: COVID-19 – Elementary and Secondary School Emergency Relief (ESSER III) Fund and COVID-19 – American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) AL Number(s): 84.425D/84.425U Award Year: 2023 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Compliance and Internal Control over Compliance - Significant Deficiency 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. Management 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. 2 41 Cochituate Road ∙ P.O. Box 408 ∙ Wayland, Massachusetts 01778-0408 Condition and Context Supervisory approval was not obtained for 16 of 23 payroll transactions tested. Further, there was no documented evidence that multiple individuals were involved in 13 out of 16 vendor expenditures charged to the grant and one journal entry charging expenditures to the grant. Cause Weaknesses in the design and operation of controls. Corrective Action The organization has identified the need for and implemented fiscal controls for personnel (payroll) expenditures which include, but are not limited to, proper authorization by the Director of Special Education and/or Assistant Superintendent for each Federal grant disbursement in the form of signature for approval of payment kept on file in the dated bi-weekly payroll folder. Secondly, the Director of Finance reviews, approves, and authorizes all bi-weekly payrolls electronically in two ways: through electronic signature in Munis and through email to the payroll clerk, kept on file in the dated bi-weekly warrant folder (hard copy). Lastly, the School Committee votes and approves all bi-weekly payrolls at their regularly held public sessions, which are captured in meeting minutes and as a hard copy kept on file in the Payroll office. The organization has identified the need for and implemented fiscal controls for non-personnel expenditures which include, but are not limited to, proper authorization by school principals, directors of curriculum and instruction, directors of grants and special education/student services, and/or Assistant Superintendent for each Federal grant disbursement in the form of signature on the invoice indicating “ok to pay” or through authorization via email and kept on file in the appropriate grant folder and electronic Accounts Payable weekly warrant. Secondly, the Director of Finance reviews, approves, and authorizes all requisitions before they are converted to purchase orders through electronic signature in Munis, and approves all Accounts Payable weekly warrants. Lastly, the School Committee votes and approves all Accounts Payable warrants at their regularly held public sessions, which are captured in meeting minutes and as a hard copy kept on file in the Accounts Payable office. Name of Contact Person: Susan Bottan, Director of Finance and Operations, susan_bottan@waylandps.org, 508-358-3750 Projected Completion Date Fiscal controls have been established and are being followed, as of July 10, 2023 since the Director of Finance and Operations began employment at Wayland Public Schools.

Finding 2022-002 Maintain Employees? Time and Effort Records Federal Programs Information Federal Agency: U.S. Department of Agriculture Cluster/Program: Child Nutrition Cluster Federal Program(s) Name: National School Lunch Program AL Number(s): 10.555 Pass-through Entity: Massachusetts Department of Elementary and Secondary Education Award Year: 2022 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Compliance Internal Control over Compliance - Material Weakness 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. Management of the Town 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 sample of disbursements charged to the grants was tested for supporting documentation in order to determine if in accordance with Allowable Costs/Cost Principles. As a result of testing of payroll disbursements charged to grants, certain costs were found that did not meet the time and effort documentation requirements. Specifically, time and effort support was not maintained during fiscal year 2022. Cause Weaknesses in the design and implementation of internal controls. Effect or Potential Effect There is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. DRAFT 3.29.2023 13 Questioned Costs Known and likely questioned costs of $421,643 are reported and are equal to payroll and related costs for hourly employees charged to the 10.555 Child Nutrition Cluster. Identification as a Repeat Finding As identified in Section IV, the Schedule of Prior Year Findings, this is a repeat of finding 2021- 003. Due to the timing of the fiscal year 2021 finding (reported during fiscal year 2022), the Town was unable to implement changes during fiscal year 2022. Recommendation The Town should take the steps necessary to ensure that payroll and related costs charged are allowable and in accordance with the applicable time and effort cost principles. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management?s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.

RE: Finding 2022-002, Maintain Employees' Time and Effort Records To whom it may concern: Time and Effort Records have been maintained as of the start of the 2022-2023 fiscal year. The District is now in compliance and will be going forward. Tom Lafleur Director of Finance and Operations

2021-003

Finding 2021-003 Maintain Employees? Time and Effort Records Federal Programs Information Federal Agency: U.S. Department of Education Cluster/Program: Special Education Cluster Federal Program(s) Name: Special Education Grants to States- Special Education/Preschool Grants AL Number(s): 84.027/84.173 Pass-through Entity: Massachusetts Department of Elementary and Secondary Education Award Year: 2021 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Compliance Internal Control over Compliance - Material Weakness 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. Management of the Town 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 sample of disbursements charged to the grants were tested for supporting documentation in order to determine if in accordance with Allowable Costs/Cost Principles. As a result of testing of payroll disbursements charged to grants, certain costs were found that did not meet the time and effort documentation requirements. Cause We understand that time and effort was not maintained during fiscal year 2021 due to a transition in Special Education Department personnel. Effect There is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Known and likely questioned costs of $610,524 reported are equal to all payroll and related costs charged to the 84.027/84.173 Special Education Cluster. Recommendation The Town should take the steps necessary to ensure that payroll and related costs charged are allowable and in accordance with the applicable time and effort cost principles. 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.

TO: Melanson CPA's From: Tom Lafleur, Director of Finance & Operations Date: September 19, 2022 RE: Response to Auditor on FY21 Single Audit Finding 2021-003 Maintain Employees' Time and Effort Records A sample of disbursements charged to the grants were tested for supporting documentation in order to determine if in accordance with Federal Allowable Costs/Cost Principles. As a result of testing of payroll disbursements charged to grants, certain costs were found that did not meet the time and effort documentation requirements. Planned Corrective Action: District Special Education Staff will maintain Time and Effort Activity Reports for all staff paid with funds provided by Federal Grants. Name of Contact Person and Completion Date: Tom Lafleur, Director of Finance and Operations, September 19, 2022

2020-002

Finding 2020-002 Maintain Employees? Time and Effort Records Federal Agency: U.S. Department of Education Cluster/Program: Special Education Cluster Award Name: Special Education ? Grants to States, Special Education ? Preschool Grants CFDA Number(s): 84.027/84.173 Award Year: 2020 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Compliance Internal Control over Compliance - Material Weakness 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. Management of the Town 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 sample of disbursements charged to the grants were tested for supporting documentation in order to determine if in accordance with Federal Allowable Costs/Cost Principles. As a result of testing of payroll disbursements charged to grants, certain costs were found that did not meet the time and effort documentation requirements. Specifically, time and effort documentation was not maintained for individuals charged to the grants in fiscal year 2020. Cause We understand that time and effort was not maintained due to a transition in Human Resources personnel and due to circumstances around the COVID-19 pandemic. Effect There is a risk that amounts charged to Federal awards may not be allowable or in accordance with applicable cost principles. Known and likely questioned costs of $495,128 are equal to all payroll and related costs charged to the 84.027/84.173 Special Education Cluster grants. Recommendation The Town should take the steps necessary to ensure that payroll and related costs charged to the grant are in fact allowable and in accordance with the applicable cost principles.

Corrective Action Plan in response to Section III: Finding 2020-002 regarding Time and Effort. When findings such as these are reported to the Federal Audit Clearinghouse, as required by Uniform Guidance, the Clearinghouse requires you to write a Corrective Action Plan (CAP) for each finding reported. -Audit Finding Reference: Finding 2020-002. Maintain Time and Effort Records: Financial Records are maintained on each employee charged to all Federal Grants, including the SPED 240, account number 38012330-55302-2021. All employees job salary data in Munis is coded directly to the grant and charged to the grant each pay period. The payroll reports and employees? paycheck stubs are coded with the grant account number. During the 2019-2020 school year, the school department did not collect Time and Effort survey sheets. The Town Hall was closed from mid-March. School Department employees were not regarded as essential workers, teachers worked remotely and as a result survey sheets were not collected from employees. -Planned Corrective Action: For 2020-2021 and electronic survey was created and conducted. The introduction of the Time and Effort Activity Report is as follows: "This Time and Effort Activity Report reflects the percentage of time I worked in (month) for the SPED 240 Entitlement Grant account number 38012330-55302- 2021. This report is an after-the-fact determination of actual effort expended for the period indicated and I have full knowledge of and can support 100% of these activities." The employees completing this survey provides an electronic signature. The survey questions asked of employees charged to the Federal grant are as follows: Last name, First name, Percentage of time Electronic signature Additional information tracked on this survey is the amount paid per month per employee. The Payroll Specialist enters the amounts paid into the survey by employee from the paycheck history report by pay period. -Name of Contact Person and Completion Date: Susan Bottan, Director of Finance and Operations, March 16, 2021