CENTRAL INDIANA MILITARY ACADEMY, INC. D/B/A ANDERSON PREPARATORY ACADEMY

2024 – 001: Audit Adjustment Type of Finding: Choose from the following: • Significant Deficiency in Internal Control over Financial Reporting Condition: The board and management share the ultimate responsibility for the School's internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. A significant audit adjustment was proposed and posted through the audit process. The adjustment was a necessary step in ensuring the financial statements were fairly stated in accordance with accounting principles generally accepted in the United States of America. Criteria or specific requirement: In an ideal control setting, the School would have a comprehensive control procedure to ensure that the financial statements, including disclosures are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable accounting principles generally accepted in the United States of America. Effect: It is possible that a misstatement of the School's financial statements could occur and not be prevented or detected by the School's internal control. Cause: The School’s controls were not able to detect the adjustments made as part of the audit. The School does not have a comprehensive review process to ensure that the financial statements, including disclosures, are complete and accurate. Repeat Finding: No. Recommendation: We recommend the board and management work with their bookkeeping company to develop a process to review and identify such items in a timely manner. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.

2023 – 001 Federal Agency: U.S Department Education Federal Program Name: Education Stabilization Funds Assistance Listing Number: 84.425D, 84.425U Pass-Through Agency: Indiana Department of Education Pass-Through Number(s): S425D210013, S425U210013, 425U200013 Award Period: July 1, 2022 – June 30, 2023 Type of Finding:  Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303, "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award 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. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the ‘Internal Control Integrated Framework’ issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). If governors, SEAs, and or subrecipients propose to use ESF funds for construction they must also comply with applicable requirements in 34 CFR section 76.600 and 34 CFR sections 75.600–617. Approved construction projects must comply with all other applicable Uniform Guidance requirements, as well as the ED’s regulations regarding construction, as applicable, at 34 CFR section 76.600. As is the case with all construction contracts using laborers and mechanics financed by federal education funds, recipients and subrecipients that use ESF funds for construction contracts over $2,000 must meet Davis-Bacon prevailing wage requirements. Condition: The School Corporation did not verify compliance with prevailing wage requirements with subcontractors for construction projects financed by federal education funds. Questioned costs: None. Context: 1 of 1 construction projects financed by federal education funds were subject to prevailing wage requirements. Cause: The School did not have a control in place to verify the construction project used the prevailing wage rate. Effect: Laborers and mechanics paid by subcontractors may have been paid below prevailing wage rates. Repeat Finding: No. Recommendation: For future construction contracts financed by federal funds, we recommend the school verify that subcontractors comply with prevailing wage requirements prior to entering into any contracts with these third parties. Views of responsible officials: There is no disagreement with the audit finding.

2021 ? 001 Audit Adjustments Type of Finding: ? Significant Deficiency in Internal Control over Financial Reporting Condition: The board and management share the ultimate responsibility for the School?s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. Several significant audit adjustments were proposed and posted through the audit process. These adjustments were a necessary step in ensuring the financial statements were fairly stated in accordance with accounting principles generally accepted in the United States of America. Criteria: In an ideal control setting, the School would have a comprehensive control procedure to ensure that the financial statements, including disclosures are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable accounting principles generally accepted in the United States of America. Effect of Finding: It is possible that a misstatement of the School?s financial statements could occur and not be prevented or detected by the School?s internal control. Cause of Finding: The School?s controls were not able to detect the adjustments made as part of the audit. The School does not have a comprehensive review process to ensure that the financial statements, including disclosures, are complete and accurate. Auditor Recommendation: We recommend the board and management work with their bookkeeping company to develop a process to review and identify such items in a timely manner. View of Responsible Officials: There is no disagreement with the audit finding.

2021 ? 002 Schedule of Expenditures of Federal Awards Preparation Federal Agency: All Federal Program Title: All Assistance Listing Number: Multiple Pass-Through Agency: Indiana Department of Education Pass-Through Number(s): Multiple Award Period: Multiple Type of Finding: ? Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR, Part 200 ? Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart F, ?200.510(b) requires that auditees prepare a schedule of expenditures of federal awards (the Schedule) for the period covered by the auditee?s financial statements which must include the total federal awards expended as determined in accordance with ?200.502. At a minimum, the Schedule must: 1. List individual federal programs by federal agency. For a cluster of programs, provide the cluster name, list individual federal programs within the cluster of programs, and provide the applicable federal agency name. For R&D, total federal awards expended must be shown either by individual federal award or by federal agency and major subdivision within the federal agency. 2. For federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. 3. Provide total federal awards expended for each individual federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. For a cluster of programs also provide the total for the cluster. 4. Include the total amount provided to subrecipients from each federal program. 5. For loan or loan guarantee programs described in ?200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total federal awards expended for loan or loan guarantee programs in the Schedule. 6. Include notes that describe that significant accounting policies used in preparing the Schedule and note whether or not the auditee elected to use the 10% de minimis cost rate as covered in ?200.414 Indirect (F&A) costs. Condition: During testing, it was noted the School's draft SEFA did not properly identify items 1-3 as noted above. Additionally, the School did not complete the footnote disclosures related to the SEFA. We noted missing Assistance Listing Numbers, improper subtotaling, no name or pass-through identifying information, and missing subparts that are required to be identified under Assistance Listing 84.425. Additionally, the SEFA was not initially prepared on the same basis of accounting as the financial statements, i.e., accrual basis, thus resulting in an adjustment of approximately $179,000. Questioned Costs: None Context: The conditions noted above were discovered as a systemic problem during the reconciliation process between the amounts recorded in the financial statements for grant expenditures and the amounts initially shown in the Schedule. The reconciliation process included all Assistance Listing numbers. Cause: The School did not have the controls in place to ensure that the Schedule was prepared and reviewed in accordance with 2 CFR, Part 200, Subpart F, ?200.510(b) and U.S. GAAP. Effect: The Schedule of the School could be materially misstated and inaccurately presented. Inaccurate presentation and clustering of programs affects the presentation of the Schedule and the conduct of the audit procedures applicable to the expenditures. Additionally, federal funds could be expended that are not accurately reported. Repeat Finding: No Recommendation: We recommend the School utilize the practice aids provided during the audit and establish controls to ensure that the Schedule is prepared in compliance with 2 CFR, Part 200 and U.S. GAAP, specifically as it relates to accrual basis of accounting and presentation. Views of Responsible Officials: There is no disagreement with the audit finding.

2020?001 Federal agency: U.S. Department of Agriculture Federal program title: Child Nutrition Cluster ? National Student Lunch Program CFDA Number: 10.555 Pass-Through Agency: Indiana Department of Education Pass-Through Number(s): N/A Award Period: July 1, 2019 ? June 30, 2020 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Management of the School should maintain policies, procedures, and internal controls sufficient to maintain all required documentation for specific program requirements for the National Student Lunch Program as noted in 7 CFR sections 245.2, 245.3, and 245.6; section 9(b)(1) of the NSLA (42 USC 1758 (b)(1)); sections 3(a)(6) and 4(e) of the CNA (42 USC 1772(a)(6) and 1773(e)). Condition: During our testing, we noted instances in two students tested that did not have their direct certification letter affirming that they could participate in the program. Additionally, three other students did not have their application or direct certification letter. Question costs: None. Context: During our testing of eligibility under the program, we noted that the three students did not have the key documentation and approvals documented for their status in the lunch program as other students tested in our sample of 40 students. During our testing of special tests and provisions under the program, we noted that five students did not have the key documentation and approvals documented for their status in the free and reduced lunch program as other students tested in our sample of 40 students Cause: The School did not obtain and/or retain all documents in the student files. Effect: Students could be participating in the program at the inappropriate level based on their eligibility. Repeat Finding: No. Recommendation: We recommend that management review processes, procedures, and controls related to document retention and update procedures as necessary to ensure complete student files are maintained to support the students? eligibility for the program. Views of responsible officials: There is no disagreement with the audit finding.