DENNIS-YARMOUTH REGIONAL SCHOOL DISTRICT

Enhance internal controls and implementation of enhanced monitoring of grants and overall grants administration Criteria:Established internal controls surrounding financial reporting should emphasize should ensure the importance of processing and monitoring financial activity in a timely manner. This should include, but not be limited to, posting activity to the proper accounts as activity is incurred (through requisition and purchase order processes) and routine monitoring of account balances (including reconciliation with approved grant budgets and related documentation.). Condition and Context: During our current year audit, we noted instances of journal entries being posted to reclassify expenditures from the District’s operational budget to certain grants at year end. In our professional opinion, while adjustments may be required in certain instances, generally, established internal control policies and procedures should ensure that all activity (including grant transactions) is appropriately charged as incurred. This allows for timely and accurate financial reporting. Additionally, grant administrators should work closely with accounting and business office personnel to monitor activity and ensure that it is posted to the proper accounts/grants in a timely manner. Cause and effect:The District has been working to implement corrective action; however, the District has yet to fully implement comprehensive internal control policies and procedures, inclusive of grants administration and monitoring. Improper monitoring of grants in a timely manner has the potential to result in noncompliance; this in turn could have an impact on the District’s financial statements. Perspective Information: There was a similar finding reported in the prior year audit related to enhancement of grants management. Due to the timing of the prior year audit (June 26, 2024), the finding could not be fully addressed by the District for the fiscal year ending June 30, 2024. Questioned Costs: None. Auditor’s Recommendation: We continue to recommend the District review the design and implementation of internal controls surrounding grants management, compliance and reporting. Procedures should ensure all activity within the District’s general ledger is monitored in a timely manner. We recommend additional approval (separate from posting) of the reclassification of activity (non-standard journal entries) and appropriate detail prior to posting within the accounting records. Additionally, such journal entries be posted by one individual (District), via appropriate supervisory we recommend all District established policies and procedures be reviewed on an annual basis to ensure all financial reporting and compliance objectives are achieved. It is important to note that improper monitoring of grants has the potential to result in noncompliance, which in turn could have an impact on the District’s financial statements. We continue to recommend an additional centralized monitoring program be established to ensure the District’s compliance with all federal programs.

Perform assessment of internal control policies and procedures in the food service program Criteria: Internal control policies and procedures should be reviewed and updated routinely to ensure all aspects of compliance and documentation related thereto overall administration and compliance surrounding food service program. Condition: The District participates in a procurement cooperative (bidding and awarding) performed by a third-party entity on behalf of the participants. Pursuant to the established guidelines, it is recommended that each participating entity enters into an individual contractual arrangement with each awarded vendor. The District utilizes a standard form which references the third-party entity throughout. The District should utilize standardized District contracts with all vendors to ensure all appropriate terms for the District and those applicable to federal award programs and the Uniform Guidance (Appendix E) (inclusive, but not limited to suspension, debarment, buy American, etc.) have been included. Moreover, all procurement documentation should be maintained on file by appropriate District personnel, and all invoices from vendors should be clearly documented as items/costs have been verified to the underlying procurement and contract. The following are additional considerations which have been communicated to management recommended to management in previous years, which we continue to evaluate: We recommend the enhancement of the documentation surrounding daily work, inclusive of formal sign-off/attestation by appropriate supervisory personnel, (meal counts, daily cashout). District management should continually evaluate the documentation within allowable guidance and management’s expectations. Sign-off by appropriate supervisory personnel of the monthly claims sheet, which is required to be completed daily and maintained. We recommend documentation be enhanced surrounding ordering, ensuring procurement from Ensure reporting from the point-of-sale system is utilized and signed-off/attested to for the monthly payment of meals tax. Effect: Compliance with and documentation thereof may be lacking without routine review and assessment. Questioned Costs: None Auditor’s Recommendation: We recommend the District perform an assessment of internal control policies and procedures, evaluating and enhancing accordingly to ensure all compliance and other documentary requirements are met on an annual basis. This assessment should be incorporated with a routinely implemented risk assessment program.

Completion and filing of the Single Audit in accordance with OMB guidelines. Criteria: OMB guidelines generally requires the District’s Single Audit to be completed and filed by March 31 of the following year. Condition: The District was unable to meet the filing deadline in the current year, inclusive of all required documentation for audit (inclusive of SEFA) in a timely manner. Questioned Costs:None Effect:The District’s filing is considered late by OMB. Auditor’s Recommendation:We recommend the District work to meet the required filing deadline.

Criteria: Established internal controls surrounding documentation of federal award compliance requirements should ensure that all charges to Federal awards for salaries and wages are based on records that accurately reflect the work performed. Accordingly, time and effort documentation are required to be maintained which clearly documents “after-the -fact” determinations of amounts for which individuals have worked on the federal program. These records should correspond with the internal control policies and procedures maintained by the District. Condition and Context: During our current year audit, we noted (2) instances of time and effort certifications associated with personnel charged to the Title I program were signed only by the employee and not signed by supervisory personnel. The additional (4) personnel tested were appropriately signed by both the employee and supervisory personnel. W also noted the District made certain adjusting entries during the year reflecting corrections of payroll charges to the grant. Additionally, the District was unable to file the required final reporting associated with the various grants within the 60 days. Cause and effect: In the previous fiscal year (fiscal year 2022), the District implemented a formalized grants manual. However, the District has experienced significant turnover in personnel in recent years. Current personnel continue to work to cleanup grant reporting within the ledger and reporting to the pass-through entity. Based upon our discussions with personnel, additional steps are being made to ensure personnel are charged appropriately within the accounting system annually, thereby eliminating the need for certain journal entry reclassifications. Perspective Information: In the prior year there was a finding related to time and effort certifications related to the SPED IDEA grant. In the current year, the District no longer charges personnel costs to the federal award. Findings related to continued enhanced formalization of grant compliance was previously reported. During fiscal year 2022, the District implemented a grants manual. Questioned Costs: None. Auditor’s Recommendation: We recommend the District review the adopted grants manual on an annual basis. The design and implementation of internal control over grant compliance is the ongoing responsibility of management. Grant personnel should work closely with accounting and business office personnel to ensure all activity is posted to the proper grants/accounts as incurred and all reporting can be completed in a timely manner. We recommend additional approval of subsequent reclassification of activity (non-standard journal entries). District personnel should review established policies and procedures on a routine basis to not only ensure the District’s compliance with all aspects of established policies and procedures, but also the ever-changing requirements of federal grant programs. pursuant to OMB. We recommend all District established policies and procedures be reviewed on an annual basis to ensure continued compliance with each grant’s specific requirements and requirements pursuant to OMB. We recommend an additional centralized monitoring program be established to ensure the Districts compliance with all federal programs.

Criteria: OMB guidelines generally requires the District’s Single Audit to be completed and filed by March 31 of the following year (March 31, 2024). Condition: The District was unable to meet the filing deadline in the current year. Effect: The District’s filing is considered late by OMB. Auditor’s Recommendation: We recommend the District work to meet the required filing deadline.

U.S. DEPARTMENT OF EDUCATION Passed through the Commonwealth of Massachusetts?Department of Elementary and Secondary Education Material Weakness 2022-002: Special Education Cluster ? SPED Grants to States, IDEA, Part B (Assistance Listing #84.027) Pass-through program number: 0240-577419-2022-0645; Fiscal year ending June 30, 2022 Criteria: Established internal controls surrounding documentation of federal award compliance requirements should ensure that all charges to Federal awards for salaries and wages are based on records that accurately reflect the work performed. Accordingly, time and effort documentation are required to be maintained which clearly documents ?after-the -fact? determinations of amounts for which individuals have worked on the federal program. These records should correspond with the internal control policies and procedures maintained by the District. Condition and Context: During our audit work associated with time and effort certifications, we noted a population of approximately (11) individuals being consistently charged to the grant program through the fiscal year. Of the four (4) individuals tested, no time & effort certifications were maintained on file for the fiscal year 2022. Salaries for the tested individuals were in accordance with expected pay schedule/contracts. Based upon our discussion with personnel, for fiscal year 2023, the District budgeting within the grant award has been changed to charge non-salary related allowable costs to the award ongoing. Cause and effect: Effective for fiscal year 2022, the District implemented a formalized grants manual. However, grants personnel incorrectly interpreted ?time & effort? requirements for personnel in accordance with the District?s established procedures. The District?s established procedures did not provide for adequate monitoring and review in accordance with the adopted policies and procedures. Perspective Information: There was a similar finding in the prior years related to allowable costs associated with the maintenance of appropriate time & effort certifications (2021-002; 2020-002). There was a finding related to enhanced formalization of grant compliance was previously reported in the previous years? audit reports as a finding.(2021-003; 2020-004). Questioned Costs: $236,230 represents the approximate charge to the program of salary of the (4) individuals for whom there were no time & effort certifications on file for the year ended June 30, 2022. As indicated, the actual amounts paid, corresponded with expected pay schedule/contracts. Total salaries and wages charged to the program for fiscal year 2022 was $637,307. Auditor?s Recommendation: The District should review currently established policies and procedures for maintenance of time and effort certifications as established within adopted grants manual. Personnel should review established policies and procedures on a routine basis to ensure the District?s compliance with all aspects of the District?s established policies and procedures as well as individual requirements pursuant to OMB. Established policies and procedures should be reviewed on an annual basis to ensure continued compliance with ever changing federal compliance and other financial reporting requirements. View of Responsible Official and Planned Corrective Action: The District expects significant improvement in the administration and monitoring of grant activity during the current fiscal year with additional review of the procedure manual and new personnel. Additionally, as indicated by the auditor, the budgeting for the 240 SPED allocation grant in fiscal year 2023 has been changed to exclude personnel costs (salaries & wages) subject to the ?time & effort? certifications. District personnel will review established grants policies and procedures manual with current federal awards.

Other Matters: 2022-003 Completion and filing of the Single Audit in accordance with OMB guidelines. Criteria: OMB guidelines generally requires the District?s Single Audit to be completed and filed by March 31 of the following year (March 31, 2023). Condition: The District was unable to meet the filing deadline in the current year. Effect: The District?s filing is considered late by OMB. Auditor?s Recommendation: We recommend the District work to meet the required filing deadline. View of Responsible Official and Planned Corrective Action: The District expects to meet filing deadlines in the future.

U.S. DEPARTMENT OF EDUCATION Passed through the Commonwealth of Massachusetts?Department of Elementary and Secondary Education Material Weakness 2021-002: Special Education Cluster ? SPED Grants to States, IDEA, Part B (Assistance Listing #84.027) Pass-through program number: 0240-433008-2021-0645; Fiscal year ending June 30, 2021 Criteria: Established internal controls surrounding documentation of federal award compliance requirements should ensure that all charges to Federal awards for salaries and wages are based on records that accurately reflect the work performed. Accordingly, time and effort documentation are required to be maintained which clearly documents ?after-the -fact? determinations of amounts for which individuals have worked on the federal program. These records should ensure that individuals working on federal programs and the appropriate supervisory personnel, attest to the actual time individuals spend on the program. Condition and Context: During our audit work associated with time and effort certifications, we noted a population of (12) individuals charged to the grant program. Of these individuals we noted (3) of these individuals did not have any time & effort certifications maintained on file for the fiscal year 2021. We noted an additional (1) individual whose time & effort certifications were missing supervisory signature/approval on (7) of the expected (10) months. Salaries for the (3) individuals were in accordance with expected pay schedule/contracts. Cause and effect: The District?s adopted procedures for obtaining and centralizing associated time and effort certifications did not provide for adequate monitoring to ensure the certifications were obtained in a timely manner. Additionally, given the complexities of administration during the COVID-19 pandemic and turnover in key personnel, enhancements to ensure key grant compliance administration and oversight were not able to be performed during the year. Perspective Information: This finding related to enhanced formalization of grant compliance was previously reported in the previous years? audit reports as a finding. Questioned Costs: $193,000. This represents the approximate charge of salary of the (3) individuals for whom there were no time & effort certifications on file for the year ended June 30, 2021. Auditor?s Recommendation: The District should review currently established policies and procedures for maintenance of time and effort certifications. This should include ensuring appropriate grant supervisory personnel review compliance requirements and ensure the District?s compliance with all requirements of federal award programs are met on a timely basis. It should be noted the District experienced an unexpected turnover in the business office management during the fiscal year. Current management has adopted and implemented a more formalized policies and procedures grant manual during fiscal year 2022. View of Responsible Official and Planned Corrective Action: The District expects significant improvement in the administration and monitoring of grant activity during the current fiscal year with the implementation of new procedures manual.

Other Matters: 2021-003 Recommend enhancement of formalized documentation surrounding grant compliance Criteria: Implementation of the Uniform Guidance highlighted the importance and requirement for grantees to maintain internal control policies and procedures surrounding the compliance and administration of federal grants, focusing on clearly defining the key components (control environment, risk assessment, control activities, information and communication, monitoring). Condition: The District had yet to fully formalize documentation of all aspects of internal control surrounding grant compliance and administration as recommended by federal guidelines. The District adopted and implemented a more formalized grants internal control policies and procedures manual subsequent to year end. Effect: Lack of documentation of internal controls policies and procedures may lead to situations of noncompliance with federal requirements. Perspective Information: This finding related to enhanced formalization of grant compliance was previously reported in the prior year?s audit report as a finding. Auditor?s Recommendation: We recommend the District establish comprehensive grants management policies and procedures and further enhance the documentation surrounding aspects of grant compliance. These procedures should include, but not be limited to ensuring each federal award program?s compliance, but also ensuring methodologies are developed to ensure unique situations are formally evaluated/communicated (inclusive of votes by school committee) with pass-through agencies in order to ensure timely consideration of compliance. View of Responsible Official and Planned Corrective Action: The District has adopted a formalized grants manual during fiscal year 2022. Management expects improvement regarding grant compliance during fiscal year 2022 and beyond.

Material Weakness 2020-002: Special Education Cluster ? SPED Grants to States, IDEA, Part B (CFDA #84.027) Pass-through program number: 0240-340088-2020-0645;Fiscal year ending June 30, 2020 Criteria: Established internal controls surrounding documentation of federal award compliance requirements should ensure that all charges to Federal awards for salaries and wages are based on records that accurately reflect the work performed. Accordingly, time and effort documentation are required to be maintained which clearly documents ?after-the -fact? determinations of amounts for which individuals have worked on the federal program. These records should ensure that individuals working on federal programs and the appropriate supervisory personnel, attest to the actual time individuals spend on the program. Condition and Context: During our audit work associated with time and effort certifications, we noted a population of (12) individuals charged to the grant program. Of these we selected (5) individuals for testing associated with the time & effort certifications being maintained on a monthly basis. Of the expected (50) time & effort certifications to be maintained by the District associated with this sample, we noted (26) were not signed by a supervising official. This includes one individual within the sample for which no time and effort certification was on file. Of the remaining (16) instances, (12) were associated with periods after the start of the global pandemic in March of 2020. Only one individual from the sample had all expected time & effort certifications for the expected school year. It should be noted that for one individual tested, all monthly certifications were on file and signed by both the employee and the supervisory official. We noted actual dates of sign-off were not present in all instances. Cause and effect: The District?s currently adopted procedures for obtaining and centralizing associated time and effort certifications did not provide for adequate monitoring to ensure the certifications were obtained in a timely manner. Questioned Costs: $216,099. This represents the approximate charge of salary of these individuals calculated over the anticipated (10) certifications to be maintained. Auditor?s Recommendation: The District should review currently established policies and procedures for maintenance of time and effort certifications. This should include ensuring appropriate grant supervisory personnel review compliance requirements and ensure the District?s compliance with all requirements of federal award programs are met on a timely basis. It is important for District management and personnel to implement more formalized grants management policies and procedures which implement procedures to address implementation and monitoring of time and effort certifications. Management should review appropriate methodologies (semi-annual, monthly, other) are maintained in accordance with program requirements and adopted policies, procedures and practices. It is imperative that time and effort certifications be obtained, reviewed and signed by an administrative official ?after the fact? to ensure that salary costs charged to a program accurately reflect the time spent on program activities.

Material Weakness 2020-003: Special Education Cluster ? SPED Grants to States, IDEA, Part B (#84.027) Pass-through program number: 0240-340088-2020-0645; Fiscal year ending June 30, 2020 Criteria: A recipient receiving Federal awards under the SPED IDEA cluster require activities allowed and maintenance of effort calculations be documented to ensure the grantee?s compliance with the use of such funds. The activities allowed calculation ensures that funds provided under the cluster are utilized for ?excess costs? above required per capita spending from local and state funding. Additionally, the associated maintenance of effort calculation is required to be performed and documented annually demonstrating the grantee?s compliance of meeting applicable levels of spending which meet or exceed prior periods for students with special education needs. Condition, Context and Cause: The required calculations and supporting documentation related thereto were unavailable for our review. The annually filed End of Year Pupil and Financial Report provides a worksheet which is designed to provide the District did not complete excess cost calculation as required. The District has not implemented formalized policies and procedures surrounding grant compliance to ensure required calculations are performed and maintained as required. This is a repeat finding. Effect: Costs associated with the grant may be disallowed. Auditor?s Recommendation: Current established internal control policies and procedures should be reviewed and revised accordingly to ensure that all required are documented with appropriate supporting documentation in a timely manner. We recommend the District work with the pass-through agency as deemed appropriate.

Other Matters: 2020-004 Recommend enhancement of formalized documentation surrounding grant compliance Criteria: Implementation of the Uniform Guidance highlighted the importance and requirement for grantees to maintain internal control policies and procedures surrounding the compliance and administration of federal grants, focusing on clearly defining the key components (control environment, risk assessment, control activities, information and communication, monitoring). Condition: The District has yet to fully formalize documentation of all aspects of internal control surrounding grant compliance and administration as recommended by federal guidelines. Documentation of policies and procedures over grant compliance is currently in draft form and has yet to be fully implemented. Moreover, during the fiscal year 2020, as a result of the COVID-19 pandemic, the District paid what it determined ?hazard pay? to food service personnel in order to keep the essential service of providing meals to the student community operational through the end of the school year. There were no additional documentation of school committee votes as result of their discussions related thereto, or formal communication with officials at the pass-through entity. Effect: Lack of documentation of internal controls policies and procedures may lead to situations of noncompliance with federal requirements. Perspective Information: This finding related to enhanced formalization of grant compliance was previously reported in the prior year?s audit report as a finding. Questioned Costs: The total amount of hazard pay associated with food service personnel was approximately $144,000. Auditor?s Recommendation: We recommend the District establish comprehensive grants management policies and procedures and further enhance the documentation surrounding aspects of grant compliance. These procedures should include, but not be limited to ensuring each federal award program?s compliance, but also ensuring methodologies are developed to ensure unique situations are formally evaluated/communicated (inclusive of votes by school committee) with pass-through agencies in order to ensure timely consideration of compliance.

U.S. Department of Education 2019-002 SPED IDEA Cluster; CFDA#84.027; Pass-through #240-250402-2019-0645 Passed through the Commonwealth of Massachusetts, Department of Elementary & Secondary Education Fiscal year ending June 30, 2019 Criteria: Federal compliance requirements involving activities allowed and maintenance of effort calculations require grantees to perform and document certain calculations associated which ensure the grantees? compliance with utilization of such funds. The activities allowed calculation ensures that funds provided under the IDEA cluster are utilized for ?excess costs? above required per capita spending from local and state funding. Additionally, the associated maintenance of effort calculation is required to performed and documented annually demonstrating the grantee?s compliance meeting applicable levels of spending which meet or exceed prior periods for students with special education needs. 8 Condition and cause: At the commencement of the fiscal each of these calculations were unavailable for review. Subsequently, the District provided calculations associated with maintenance of effort requirement. However, the subsequent calculation provided by the District indicated the required maintenance of effort had not been met. The District is in communication with the pass-through agency in regard to the calculations and indicated are in the process of reviewing the District?s compliance related thereto. This is a new finding in the current year. Effect or potential effect: Federal funds may be improperly utilized and may be required to be returned. Auditor?s recommendation: We recommend the District implement more comprehensive procedures to ensure all required calculations involving activities allowed and maintenance of effort are performed and documented on an annual basis. The District should ensure these calculations are clearly documented and communicated to the pass-through entity. Views of responsible officials: The District has implemented several actions to address the auditor's recommendations. Additional training will be provided for the benefits personnel as well as increased monitoring and a monthly scheduled review session to ensure accurate and timely reconciliation of all benefits activity on a monthly and yearly basis. Additional training will be provided and cross-training for several business office personnel will be implemented as needed to ensure effective and routine review of all significant account balances. The District will also review and modify the financial procedures manual to ensure compliance with all requirements.

Other Matters: 2019-003: Recommend enhancement of formalized documentation surrounding grant compliance Criteria & Condition: Implementation of the Uniform Guidance highlighted the importance and requirement for grantees to maintain internal control policies and procedures surrounding the administration of federal grants, focusing on clearly defining the key components (control environment, risk assessment, control activities, information and communication, monitoring). Due in part to new personnel, and other issues, the District has yet to address additional formalized documentation of all aspects of control environment surrounding grant administration as recommended by federal guidance. Auditor?s recommendation: We recommend the District work to establish a more formalized, central policies and procedures manual addressing the administration of federal grants. These policies and procedures manuals should focus on clearly defining the key components (control environment, risk assessment, control activities, information and communication, monitoring). All policies and procedures should be reviewed and updated on a routine basis to ensure the District?s compliance with grant/program requirements. 9 View of Responsible Official and Planned Corrective Action: As noted above, the District has implemented several actions to address the auditor's recommendations. Additional training is being provided for grants personnel and the benefits staffer and there is increased monitoring and a scheduled monthly internal audit day to review proper and timely reconciliation of all accounts. Additional training will be provided and cross- training for several business office personnel will be implemented as needed to ensure effective and routine review of all significant account balances. The District will also continue to review and modify the financial procedures manual to ensure compliance with all recommendations and requirements. The District will increase the level of supervision of the Human Resources position and the Assistant Treasurer p9sition due to personnel changes in these roles.

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