Long Beach City School DistrictLocal Government

Significant Deficiency 2025-001. Allowed Costs/Cost Principle United States Department of Education, Passed Through New York State, Department of Education: Special Education Cluster Special Education Grants to States: IDEA Part B ALN: 84.027 Special Education Preschool Grants: IDEA Preschool ALN: 84.173 Criteria: Salaries and wages charged to federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart E, 2 CFR §200.430. Condition: Subpart E, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employee works on more than one federal award, or a federal award and non-federal award. The preparation of personnel activity reports (PAR) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, the District did not prepare this documentation, and, therefore, did not comply with Subpart E, 2 CFR §200.430. Cause: The staff that were responsible for maintaining records that accurately reflect the work performed, as described in Subpart E, 2 CFR §200.430, to support salaries charged to federal awards, did not prepare PARs or certification reports related to work being completed. Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the federal award. Questioned Costs: Dollar amount undetermined as adequate documentation was not available. Context: The District maintains time records for employees charged to federal awards in accordance with approved budgets, and determined that individuals assigned to provide services meet the criteria necessary in accordance with the grant requirements. Identification of a Repeat Finding: This is a repeat finding from the previous audit, item No. 2024-001 related to the Special Education Cluster. Recommendation: The District should revise its procedures to prepare documentation to support actual salaries and wages charged to federal awards after the work was performed in accordance with the requirements of the Uniform Guidance at Subpart E, 2 CFR §200.430. Views of Responsible Officials of Auditee: The District will adopt procedures to ensure appropriate documentation will be prepared to comply with Subpart E, 2 CFR §200.430.

2024-001. Allowable Costs/Cost Principles United States Department of Education, Passed Through New York State, Department of Education: Special Education Cluster Special Education Grants to States: IDEA Part B ALN: 84.027 Special Education Grants to States: IDEA 611 ARP Allocations ALN: 84.027X Special Education Preschool Grants: IDEA Preschool ALN: 84.173 Special Education Preschool Grants: IDEA 619 ARP Allocations ALN: 84.173X Criteria: Salaries and wages charged to federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart E, 2 CFR §200.430. Condition: Subpart E, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employee works on more than one federal award, or a federal award and non-federal award. The preparation of personnel activity reports (PAR) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, the District prepared periodic certification equivalents, but it did not comply with Subpart E, 2 CFR §200.430. Cause: The staff that were responsible for maintaining records that accurately reflect the work performed, as described in Subpart E, 2 CFR §200.430, to support salaries charged to federal awards, prepared annual periodic certification reports using amounts based on budgets for time performance prior to the work being completed. The reports were not updated to reflect actual time performance amounts. Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the federal award. Questioned Costs: None reported. Context: The District maintains time records for employees charged to federal awards in accordance with approved budgets. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should revise its procedures to prepare documentation to support actual salaries and wages charged to federal awards after the work was performed in accordance with the requirements of the Uniform Guidance at Subpart E, 2 CFR §200.430. Views of Responsible Officials of Auditee: The District will adopt procedures to ensure appropriate documentation will be prepared to comply with Subpart E, 2 CFR §200.430.

2024-002. Eligibility United States Department of Agriculture, Passed Through New York State, Department of Education: Child Nutrition Cluster School Breakfast Program ALN: 10.553 National School Lunch Program ALN: 10.555 Criteria: Under the Child Nutrition Program, certain children enrolled through the District may be eligible to receive free and reduced price meals once a household application for free and reduced-price school meals is submitted and they meet certain criteria. Each application prepared by the household contains the household income and the number of household members. Once the information is entered into the District’s point of sale software it is compared to the published income eligibility guidelines to determine if the child is eligible for a free or reduced price meal, or if the child is required to pay full price for meals. Condition: The District has designated one employee to receive and enter the annual household applications into the District’s point of sale software. Based on our inquiries and review of thirty nine applications tested for student eligibility (free or reduced), we noted two instances where students were improperly classified to receive free or reduced meals based on the household income reported on the application. Cause: The District did not have a process to perform a secondary review of the information on the applications to that entered by the designated employee into the point of sale software to determine if this information is properly entered. Effect: With no secondary review process in place, there is a chance that the information on the application can be entered incorrectly into the point of sale software and may cause the eligibility status to be incorrectly determined. Questioned Costs: None reported. Context: The District reviewed and processed in excess of 380 household applications for free and reduced-price school meals. The District was approved to participate in the Community Eligibility Provision effective December 1, 2023 through June 30, 2027, for all buildings serving meals. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should determine if a second employee should be involved to review the information input into the software system to the completed household application. Views of Responsible Officials of Auditee: The District will adopt procedures that ensure there will be a secondary review of household applications to ensure they are processed properly.

2020-001. Cash Management Department of Agriculture, Passed-through New York State, Department of Education Child Nutrition Cluster School Breakfast Program CFDA No. 10.553 National School Lunch Program CFDA No. 10.555 Condition: The District operates an in-house food service program and utilizes a Point of Sale (POS) software to accumulate meal totals by type and claims Federal and State meal reimbursements from New York State. Based on our testing of various monthly claims submitted for reimbursement during the period September 2019 through March 13, 2020, we noted the meal totals claimed for reimbursement at some schools did not agree to the meal totals in the POS software. As the District?s POS system is its primary tracking source used to support claims for federal and state reimbursement, this resulted in discrepancies in reimbursements received. In addition, during the COVID-19 pandemic, the District provided meals free of charge to eligible families within the District. The District was responsible for tracking the free meals distributed to support the federal and state claims reimbursement made for these meals during the pandemic (March 16, 2020 through June 30, 2020). We noted that the District complied with meal distribution requirements, and the tracking of total meals distributed, however, the number of meals claimed for reimbursement from the State for breakfast and lunch was not accurate. Criteria: Under the Child Nutrition Program, claims for meals served should be reconciled to supporting information, prior to the submission of the claim for payment to the State. Cause: When the district gathered the backup to research the discrepancy that the auditor identified for November 2019 and December 2019, the district discovered an error in reporting. Instead of claiming the number of meals served to high school students attending the alternative program at the Nike site for November 2019 and December 2019, the district inadvertently reported the daily enrollment. Furthermore, when the district gathered the backup to understand the discrepancy that the auditor identified for the period March 16, 2020 through June 30, 2020, the district discovered another error in reporting. Instead of claiming the actual number of breakfast versus lunches served, the district used a distribution formula based on the initial two-week period of remote service when the Governor ordered the school closure. Although the total number of meals reported and claimed during the months of April 2020, May 2020 and June 2020 were accurate, the breakdown of breakfast versus lunch was still based on the initial two-week distribution ratio used in a forecasting model instead of the actual breakfast and lunch data. Potential Effect: Without a proper reconciliation of the meals served to the meals claimed for reimbursement from the State, the District is at risk for either receiving overpayments from the State or not receiving adequate reimbursements. Questioned Costs: None reported, as the reconciled amounts are not material and well below the $25,000 reporting level for known question costs. Recommendation: We recommend that the District review the existing process in place for reconciling the POS system meals served data to the meals reported on the monthly claims submissions. The District should also complete its reconciliation of the meals served differences for the periods of September 2019 through March 13, 2020 and March 16, 2020 through June 30, 2020 and determine whether they are due additional monies for federal and state claim reimbursements or if monies are due to the State. Views of Responsible Officials: We reviewed the existing process in place for reconciling the POS system meal data with the monthly claims submissions and decided to establish two additional controls to ensure that accurate data is reported and submitted for reimbursement. A bookkeeper from the business office will review the POS data prior to submission to ensure that all days of meal service at every location are properly reflected in the POS report. The bookkeeper will also verify in the state child nutrition portal that all claims have been submitted. Any questions will be brought to the food service director and reviewed or corrected prior to submission. In addition, the district treasurer will review the totals for the breakfast and lunch data prior to submission to calculate our expected reimbursement. She will then monitor the amounts that we receive and correlate those amounts with the data to ensure that we receive the amount expected. Furthermore, the district corrected the data and the immaterial differences in the corresponding claim in the NYSED portal. All district records, including the POS system, are now in alignment with the state and federal claim systems.

Significant Deficiency 2019-001. Internal Control Over Compliance Department of Education Special Education Cluster Special Education Grants to States CFDA No. 84.027 Special Education Preschool Grants CFDA No. 84.173 Criteria: 2 CFR section 200.303 of the Uniform Guidance requires non-Federal entities receiving Federal awards to establish and maintain internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Under the Uniform Guidance, Federal awards recipients must maintain updated written documentation of internal control policies and procedures, which include procurement policies that adhere to state and local law as well as federal regulations and statutes; procedures for documenting how costs are to be allocated to federal awards, documenting actual time and effort for payroll costs charged to federal awards; cash management procedures to minimize the time elapsed between the receipts and disbursements of federal funds; and how to safeguard personally identifiable information. Condition: The District has not updated their existing policies and written procedures to conform to Uniform Guidance requirements. Cause: Staffing constraints limited the District?s ability to perform a timely review and update of its existing policies and written procedures. Potential Effect: Not having updated written policies and procedures weaken the internal controls over the Federal award and could increase the risk of noncompliance with Federal statutes and regulations. Questioned Costs: None reported. Identification of a Repeat Finding: This is not a repeat finding from the previous audit. Recommendation: The District must review its existing written policies and procedures and update them as needed in order to comply with requirements of Uniform Guidance. Views of Responsible Officials of Auditee: We are aware of the finding for 2018-19 and would like to indicate that he required policy was adopted by the Board of Education on November 8, 2018.