Kiryas Joel Union Free School District

2025-002. Equipment and Real Property Management United States Department of Education, passed through New York State Department of Education: Education Stabilization Fund COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U Criteria: Education Stabilization Fund (ESF) grant awards authorized under the federal Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and American Rescue Plan Act of 2021 (ARP) may be used for equipment purchases and capital expenditures, consistent with federal regulations 2 CFR §200.313 and 2 CFR §200.439. In accordance with 2 CFR §200.313, non-federal entities receiving federal awards are required to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires non-federal entities to track the acquisition date and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property acquired with federal awards must also be taken and the results reconciled with the property inventory records at least once every two years. Condition: The District did not include the capital expenditures for the “Early Childhood Educational Center (ECEC) Door Project”, “ECEC Roof Project”, “Front Vestibule Project”, and “Playground Equipment & Rubber Surfacing of Upper Play Area” that were paid with ARP ESSER 3 funds, in its current year’s capital assets inventory record. Additionally, certain items included as additions on the capital assets appraisal inventory report, such as classrooms equipment purchased with ARP ESSER 3 funds, did not match the amounts of expenditures in the District’s financial accounting application. Cause: The District did not have adequate procedures in place to identify capital-type expenditures paid with federal grant funds, which were recorded on the District’s books as purchased services, as capitalizable assets that should be added to the capital assets inventory report and tracked. Effect: Failure to include capital assets acquired with federal awards in the District’s capital assets inventory records could lead to improper or non-compliant procedures for assets inventory management and the subsequent disposal of those capital assets. Questioned Costs: None reported. Context: The District utilized federal grant awards to pay for permissible capital improvements which have been installed in instructional buildings that are leased by the District, the District recorded those expenditures as purchased services as per the pass-through entity, New York State Education Department’s guidance. The leasehold improvements incurred and acquired as of June 30, 2024 were omitted from but subsequently added to the District’s capital assets inventory reports; however, the leasehold improvements incurred and acquired during the 2024-2025 fiscal year were not included in annual capital assets inventory report. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should revise its existing procedures for compiling annual capital assets additions information to ensure equipment and capital-type expenditures purchased with federal funds are considered and evaluated for inclusion in the District’s annual capital assets inventory records. Views of Responsible Officials of Auditee: Management acknowledges the finding. The District’s Assistant Superintendent for Human Resources and Manager of Fixed Assets will review and update the existing District policy and procedures relating to the recording and tracking of capital assets purchased with federal funds.

2025-002. Equipment and Real Property Management United States Department of Education, passed through New York State Department of Education Education Stabilization Fund COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U Condition: The District did not include the capital expenditures for the “Early Childhood Educational Center (ECEC) Door Project”, “ECEC Roof Project”, “Front Vestibule Project”, and “Playground Equipment & Rubber Surfacing of Upper Play Area” that were paid with ARP ESSER 3 funds, in its current year’s capital assets inventory record. Additionally, certain items included as additions on the capital assets appraisal inventory report, such as classrooms equipment purchased with ARP ESSER 3 funds, did not match the amounts of expenditures in the District’s financial accounting application. Recommendation: The District should revise its existing procedures for compiling annual capital assets additions information to ensure equipment and capital-type expenditures purchased with federal funds are considered and evaluated for inclusion in the District’s annual capital assets inventory records. Planned Corrective Action: The District intends to modify its Capital Assets Accounting Policy to include the assets related to our long-term building leases, such as our new HVAC systems. We will also provide the leasehold improvement information to the District's appraisal company in order to update our capital assets inventory report. Responsible Contact Person: Mr. Chaim Wercberger District Treasurer Kiryas Joel Union Free School District 48 Bakertown Road Suite 401 Monroe, NY 10950 Anticipated completion date: September 1, 2026.

2025-003. Special Tests and Provisions United States Department of Education, passed through New York State Department of Education: Education Stabilization Fund COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U Criteria: Education Stabilization Fund (ESF) grant awards authorized under the federal Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and American Rescue Plan Act of 2021 (ARP) may be used for equipment purchases and capital expenditures, consistent with federal regulations 2 CFR §200.313 and 2 CFR §200.439. Subrecipients that use ESF funds for minor remodeling, renovation or construction contracts that are over $2,000 and use laborers and mechanics must meet Davis-Bacon prevailing wage compliance requirements, described in 2 CFR Part 200, Appendix XI - Compliance Supplement, Part 4, 20.001 Wage Rate Requirements Cross-Cutting Section. Condition: The District did not have formal contracts with the contractors for some of the construction projects funded with ARP ESSER 3 funds. Although the contractors indicated in their submitted proposals that their quoted price was based on prevailing wages, there was no legally-enforceable contractual language requiring the contractors and their subcontractors to comply with the federal Wage Rate Requirements clauses and DOL regulations. Cause: The District did not have procedures in place to ensure that capital construction projects have fully-executed contracts that include language requiring contractors to comply with federal Wage Rate Requirements, such as providing certified weekly payroll reports to support their invoices for payments. Effect: The lack of written contracts with Wage Rate Requirements clauses could expose the District to financial consequences if those contractors or their subcontractors are subsequently found to have violated the Wage Rate Requirements when performing their services for the District. Questioned Costs: None reported. Context: The District utilized ARP ESSER 3 funds to pay for its “Early Childhood Educational Center (ECEC) Door Project”, “ECEC Roof Project”, “Front Vestibule Project”, and “Playground Equipment & Rubber Surfacing of Upper Play Area”. The proposals submitted by contractors for the four projects stated that their quoted prices were based on prevailing wage rates, the District approved the proposals and issued purchase orders to the contractors; only one project has a fully executed agreement by the District and the contractor. However, neither the signed agreement for the one project nor the purchase orders issued for the other three projects contained requirements for the contractor to submit certified weekly payrolls as proof of compliance with the federal Wage Rate Requirements. Certified payrolls completed by the contractors and their subcontractors sometimes did not accompany the invoices submitted for payments, the District eventually requested and received all required certified payrolls from the contractors. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should review and revise its existing procedures for reviewing and approving capital construction projects to ensure that fully-executed contracts are obtained, and that such contracts contain clauses related to the compliance with the federal Wage Rate Requirements. Views of Responsible Officials of Auditee: Management acknowledges this finding. The District will review and update the existing procedures relating to capital-type construction projects.

2025-003. Special Tests and Provisions United States Department of Education, passed through New York State Department of Education: Education Stabilization Fund COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U Condition: The District did not have formal contracts with the contractors for some of the construction projects funded with ARP ESSER 3 funds. Although the contractors indicated in their submitted proposals that their quoted price was based on prevailing wages, there was no legally-enforceable contractual language requiring the contractors and their subcontractors to comply with the federal Wage Rate Requirements clauses and DOL regulations. Recommendation: The District should review and revise its existing procedures for reviewing and approving capital construction projects to ensure that fully-executed contracts are obtained, and that such contracts contain clauses related to the compliance with the federal Wage Rate Requirements. Planned Corrective Action: The District will review and revise its existing procedures for reviewing and approving capital construction projects to ensure that fully-executed contracts are obtained with clauses mandating compliance with federal Wage Rate Requirements. Responsible Contact Person: Mr. Chaim Wercberger District Treasurer Kiryas Joel Union Free School District 48 Bakertown Road Suite 401 Monroe, NY 10950 Anticipated completion date: June 30, 2026.