South Country Central School DistrictLocal Government

Significant Deficiency 2023-001. Allowable Costs/Cost Principles United States Federal Communications Commission: COVID-19: Emergency Connectivity Fund Program ALN: 32.009 Criteria: The District is required to make purchases for only eligible devices or equipment for unmet student or staff members needs in order to comply with the program application and guidelines for the Emergency Connectivity Fund Program. This requirement is also in accordance with the allowability of reasonable costs under the Uniform Guidance Subpart E, 2 CFR §200.404. Condition: Subpart E, 2 CFR §200.404 of the Uniform guidance requires that any monies charged to the Emergency Connectivity Fund Program be reasonable costs allowable under the approved grant application, including the grant requirement that reimbursed costs for devices or equipment are only eligible for a one-per user limitation. During the current year, we noted that the District purchased and was reimbursed for additional devices or equipment beyond the unmet need and the one per-user limitation. Cause: The District’s final reimbursement of funds, incorrectly included purchases for devices and equipment, which was over the unmet need of the District and also included reimbursement for equipment and devices that exceeded the allowable one-per user limitation. Effect: Noncompliance with these requirements resulted in the District being reimbursed more than the unmet need of students and staff members, and the provision of devices or equipment that was in excess of user limitation per the grant requirements. Questioned Costs: $29,376 of reimbursements received were more than the allowable costs under the grant (92 devices or equipment at an approximate cost of $319.30 each). Context: The program guidelines specify that devices or equipment are to be provided for unmet student or staff member needs and at a one per-user limitation. During a review of the District’s current year inventory tracking system, it was discovered that there were devices or equipment purchased, distributed, and reimbursed for more students than originally applied for, and in some instances more than the one-per user limitation. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should gain a better understanding of the program application and guidelines and ensure that they comply with those guidelines and are only reimbursed for allowable items provided to eligible students and staff members per the grant terms. Under this specific grant, there was limited funding for eligible schools to purchase no more than one connected device per student or school staff member, as a result of the implications brought about by COVID-19. The District should review its determination of students and staff members with an unmet need and request reimbursement for only those devices approved in the original application. In addition, the District should contact the federal agency to see how they need to remediate the excess reimbursement received for the amount that was ineligible in accordance with the grant. Views of Responsible Officials of Auditee: The District agrees with the recommendation, and the Assistant Superintendent for Finance and Management Services will contact the federal agency to determine the appropriate action for the reimbursement of the excess funds received.

Significant Deficiency 2022-001. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Education Stabilization Funds (ESF) COVID-19: Elementary and Secondary School Emergency Relief (ESSER) Fund Assistance Listing No. 84.425D COVID-19: American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing No. 84.425U Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR ?200.430. Condition: Subpart I, 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 (PARs) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, the District?s PARs for two employees, did not accurately reflect what was charged to the grants in order to comply with Subpart I, 2 CFR ?200.430. Cause: The District budgeted costs for certain federal grants based on the required FS-10 form it submits to the State. The District then utilized the PARs to track and document the actual time and effort to support payroll costs charged to each grant. It was noted that the actual expenses charged for two employees was not supported by the PARs maintained by the District. As described in Subpart I, 2 CFR ?200.430, the District is required to document and maintain the support for salaries charged to Federal awards. Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal award. Questioned Costs: None Recommendation: The District should monitor and update the appropriate documentation to support the salaries and wages charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR ?200.430. In the event that modifications for costs charged to grants are necessary, the District should contact the New York State Department of Education (NYSED) and file the appropriate amendment, if necessary. In addition, the District should update the PARs documentation to support amounts charged to the grant. Views of Responsible Officials of Auditee: Since the grant funding periods for each of these grants are still open, the District has contacted NYSED and has been advised to submit an amended budget for these additional costs charged, as they are allowable. In addition, the District will review its internal procedure documentation for payroll costs charged to the grants to ensure that the actual costs submitted for reimbursement are supported by the PARs for each employee.

2020-001. Eligibility Department of Agriculture, Passed-through New York State, Department of Education Child Nutrition Cluster School Breakfast Program CFDA No. 10.553 Federal Snack Program CFDA No. 10.555 National School Lunch Program CFDA No. 10.555 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 forty applications tested for student eligibility (free or reduced), we noted there is no documented secondary review of this information. Criteria: Under the Child Nutrition Program, certain children enrolled through the District may be eligible to receive free and reduced priced 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 reduce priced meal, or if the child is required to pay full price for meals. Cause: The District did not have a process to perform a secondary review of the information on the applications which is entered by the designated employee into the point of sale software to determine if this information is properly entered. Potential 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. Identification of a Repeat Finding: This is a repeat finding from the prior year audit, see 2019-001. Recommendation: We recommend that the District formalize a process to include a secondary review of the information input into the District?s point of sale software to verify its accuracy to the household application for free and reduced price school meals. Views of Responsible Officials: The District agrees with the recommendation, and the Assistant Superintendent for Finance and Management Services will establish a secondary review process to verify all information input from applications for free and reduced price school meals/milk on a regular basis, and make corrections as necessary by June 30, 2021.

2020-002. Special Tests/Income Verification Department of Agriculture, Passed-through New York State, Department of Education Child Nutrition Cluster School Breakfast Program CFDA No. 10.553 Federal Snack Program CFDA No. 10.555 National School Lunch Program CFDA No. 10.555 Condition: The District determined that the sample size for verification and approved applications for the School Year 2019-20 was nine. Based on our review of the income documentation submitted for these nine households, we noted that one out of the nine verifications revealed eligibility and was improperly classified for reduced price meals when it should have been classified for free price meals, based on the income for that household. Criteria: Under the Child Nutrition Program, the District must request verification of income from households of certain students participating in the food service program each year by November 15th. Cause: Based on our inquiries and a review of a sample of the applications for free and reduced price school meals used in the District?s verification process, it was determined that there was one required change in meal status for the 2019-20 school year. The meal status for that student had not been changed in the District?s point of sale software. Potential Effect: The incorrect classification of student status for free and reduced meals results in an incorrect reporting of meals claimed, and an incorrect reimbursement amount from the state. The District has not resolved the repayment to the state for the amounts resulting from the erroneous classification for eligibility of a student for eligibility for free and reduced meals for school year 2019-20. Questioned Costs: None reported. Identification of a Repeat Finding: This is a repeat finding from the prior year, see 2019-002. Recommendation: Due to the COVID-19 pandemic and the State?s decision to establish the provision of free meals to all students during the pandemic, the District has not received formal guidance from the State on the need to perform income verifications for 2020-21. However, we recommend that the District continue to communicate with the State to verify if there is the need for the income verification requirement. Further, the District should implement controls to ensure that a secondary review for income verifications is completed to reduce the risk of misclassification. In addition, we recommend the District evaluate the one incorrect classification in 2019-20 to determine the necessary reporting and monetary adjustments. Views of Responsible Officials: The District agrees with these recommendations and will make every effort to address these by June 30, 2021.

2019-001. Eligibility Department of Agriculture, Passed-through New York State, Department of Education Child Nutrition Cluster School Breakfast Program CFDA No. 10.553 Federal Snack Program CFDA No. 10.555 National School Lunch Program CFDA No. 10.555 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 forty (40) applications tested for student eligibility (free or reduced), we noted there is no documented secondary review of this information. Criteria: Under the Child Nutrition Program, certain children enrolled through the District may be eligible to receive free and reduced priced 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 reduce priced meal, or if the child is required to pay full price for meals. Cause: The District does not have a process to perform a secondary review of the information on the applications which is entered by the designated employee into the Point of Sale software to determine if this information is properly entered. Potential 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. Identification of a Repeat Finding: This is a repeat finding from the prior year audit, see 2018-001. Recommendation: We recommend that the District establish a process for a secondary review of the information input into the District?s Point of Sale software to verify its accuracy to the household application for free and reduced price school meals. Views of Responsible Officials: The District agrees with the recommendation, and the Assistant Superintendent for Finance and Management Services will establish a secondary review process to verify all information input from applications on a regular basis, and make corrections as necessary by June 30, 2020.

2019-002. Special Tests/Income Verification Department of Agriculture, Passed-through New York State, Department of Education Child Nutrition Cluster School Breakfast Program CFDA No. 10.553 Federal Snack Program CFDA No. 10.555 National School Lunch Program CFDA No. 10.555 Condition: There was no evidence of a secondary review of the income verification process. Furthermore, the District had not calculated the amount owed back to New York State for the students incorrectly classified as free and reduced meal recipients for the 2017-18 school year. Criteria: Under the Child Nutrition Program, the District must request verification of income from households of certain students participating in the food service program each year by November 15th, and submit the School Food Authority Verification Collection Report Update. Cause: Based on our inquiries and a review of 100% of the applications used in the income verification process, it was determined that the employee responsible for this submission inadvertently thought that an additional ten-day grace period for the submission existed. In addition, the District developed a corrective action plan for calculating the overpayment amount from the improper classification of students eligible for free and reduced meals, as well as the review of the verification process, however, the plan was not fully implemented. Potential Effect: The District has not determined, nor repaid to the state, the amount resulting from the erroneous classification of students eligible for free and reduced meals for school year 2018. Questioned Costs: None reported. Identification of a Repeat Finding: This is a repeat finding from the prior year, see 2018-002. Recommendation: We recommend that the District complete its income verification and submit the School Food Authority Verification Collection Report Update no later than the required submission date. Additionally, we recommend that the District complete its review of the overpayment of federal and state reimbursements for certain students improperly classified to receive free and reduced price meals. Views of Responsible Officials: The District agrees with the recommendation, and the Business Office did complete the 2019-20 income verification timely and submitted it prior to December 15, 2019, which was in compliance with the State deadline. The District is also in the process of calculating the amount of overpayment of federal and state reimbursements for certain students improperly classified to receive free and reduced price meals, instead of full price meals and will determine the amount they need to reimburse New York State.

2019-003. Internal Control Over Compliance Department of Education, Passed-through New York State, Department of Education Title I Grants to Local Educational Agencies CFDA No. 84.010 Condition: The District had not updated their existing policies and written procedures to conform to Uniform Guidance requirements as of July 1, 2018. 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 written documentation of internal control policies and procedures, such as 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. Cause: Staffing constraints limited the District?s ability to perform a timely review and update of its existing policies and written procedures. Potential Effect: Having insufficient or non-compliant 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 should 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: The District?s Assistant Superintendent for Finance and Management Services had the policies and procedures updated in accordance with the U.S. Office of Management and Budget?s Uniform Guidance as of October 22, 2019.

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