PATERSON PUBLIC SCHOOL DISTRICT

Finding 2025-003 Information on the federal program: ARP-ESSER III/ARP-Accelerated Learning Coach and Educator Support/ARP-Evidence Based Summer Learning and Enrichment/ARP-Evidence Based Comprehensive Beyond the School Day/ARP-Homeless II/Governor’s Emergency Education & Relief, Assistance Listing numbers 84.425U and 84.425V - Grant Period 3/13/20-9/30/24 and 7/1/24-8/31/25. Criteria or specific requirement: Governmental Accounting Standards Board (GASB) Statement No. 34 requires school districts and other public entities to accurately track and account for capital assets. The District did not accurately account for all fixed assets purchased during the year. Any purchases of capital equipment, improvements to land, buildings or equipment that were purchased with grants funds are subject to applicable inventory control, log maintenance, and disposition requirements consistent with Part 3, Section F, of the compliance supplement. Condition: The District failed to properly report capital assets at historical cost and/or include purchases on the capital asset report that exceed the capitalization threshold of $2,000. In addition, depreciation was not being calculated for all eligible assets. Questioned Costs: None. Context: The district did not accurately update the capital asset report for fixed assets purchased during the year. Effect: The District is not in compliance with the Equipment/Real Property requirements under the ESSER-ARP grant compliance. Cause: The District did not account for various capital assets purchased during the year. Recommendation: Procedures should be established and implemented to ensure all eligible items purchased are included on the capital asset report and depreciation is properly calculated. All eligible items should be tagged as received. Also, all items included on the capital asset report should be reviewed to ensure the items are still in use. Management’s response: The Manager of Central Stores must review and ensure all eligible purchases made with ESSER-ARP funds are accurately recorded on the Capital Asset Report.

Condition/Finding: The District failed to properly report capital assets at historical cost and/or include purchases on the capital asset report that exceed the capitalization threshold of $2,000. In addition, depreciation was not being calculated for all eligible assets. Recommendation: Procedures should be established and implemented to ensure all eligible items purchased are included in the capital asset report and depreciation is properly calculated. All eligible items should be tagged as received. Also, all items includedon the capital asset report should be reviewed to ensure the items are still in use. . Method of Implementation:Historical ledger reconstruction & system migration: The District will initiate a Request for Proposal to engage a professionalvaluation firm to perform a comprehensive reconstruction of the fixed asset ledger at historical cost. Upon completion, theresulting data file will be migrated into the district’s financial software, Edumet, to automate future depreciationcycles.

2024-001

Finding 2025-003 Information on the federal program: ARP-ESSER III/ARP-Accelerated Learning Coach and Educator Support/ARP-Evidence Based Summer Learning and Enrichment/ARP-Evidence Based Comprehensive Beyond the School Day/ARP-Homeless II/Governor’s Emergency Education & Relief, Assistance Listing numbers 84.425U and 84.425V - Grant Period 3/13/20-9/30/24 and 7/1/24-8/31/25. Criteria or specific requirement: Governmental Accounting Standards Board (GASB) Statement No. 34 requires school districts and other public entities to accurately track and account for capital assets. The District did not accurately account for all fixed assets purchased during the year. Any purchases of capital equipment, improvements to land, buildings or equipment that were purchased with grants funds are subject to applicable inventory control, log maintenance, and disposition requirements consistent with Part 3, Section F, of the compliance supplement. Condition: The District failed to properly report capital assets at historical cost and/or include purchases on the capital asset report that exceed the capitalization threshold of $2,000. In addition, depreciation was not being calculated for all eligible assets. Questioned Costs: None. Context: The district did not accurately update the capital asset report for fixed assets purchased during the year. Effect: The District is not in compliance with the Equipment/Real Property requirements under the ESSER-ARP grant compliance. Cause: The District did not account for various capital assets purchased during the year. Recommendation: Procedures should be established and implemented to ensure all eligible items purchased are included on the capital asset report and depreciation is properly calculated. All eligible items should be tagged as received. Also, all items included on the capital asset report should be reviewed to ensure the items are still in use. Management’s response: The Manager of Central Stores must review and ensure all eligible purchases made with ESSER-ARP funds are accurately recorded on the Capital Asset Report.

Condition/Finding: The District failed to properly report capital assets at historical cost and/or include purchases on the capital asset report that exceed the capitalization threshold of $2,000. In addition, depreciation was not being calculated for all eligible assets. Recommendation: Procedures should be established and implemented to ensure all eligible items purchased are included in the capital asset report and depreciation is properly calculated. All eligible items should be tagged as received. Also, all items includedon the capital asset report should be reviewed to ensure the items are still in use. . Method of Implementation:Historical ledger reconstruction & system migration: The District will initiate a Request for Proposal to engage a professionalvaluation firm to perform a comprehensive reconstruction of the fixed asset ledger at historical cost. Upon completion, theresulting data file will be migrated into the district’s financial software, Edumet, to automate future depreciationcycles.

2024-001

Finding 2025-004 Information on the federal program: Title I, Part A, Assistance Listing Number 84.010 – Grant Period 7/1/24-6/30/25 Criteria or specific requirement: The District authorized expenditures under this grant program; however, supporting documentation was not provided to verify compliance with grant requirements. Condition: There were instances in which payroll timesheets and resolutions authorizing payroll expenses were not available for review at the time of audit. Questioned Costs: Unknown. Context: The District was unable to present required grant documents at the time of audit. Effect: The absence of supporting documentation may result in noncompliance with the allowable cost requirements under the grant agreement, as well as resulting in a risk that grant funds could be used for ineligible activities. Additionally, insufficient documentation may lead to inaccurate or improper reporting under the grant reporting requirements. Cause: Controls were insufficient to ensure all required eligibility determinations and supporting documents are properly maintained and available for audit review. Recommendation: The District should ensure that all payroll timesheets and resolutions authorizing payroll expenses are available for review at the time of audit. Management’s Response: The District will develop and implement a process to ensure records are properly maintained.

Condition/Finding: There were instances in which payroll timesheets and resolutions authorizing payroll expenseswere not available for review at the time of audit. Recommendation:The District should ensure that all payroll timesheets and resolutions authorizing payroll expenses are available for review at the time of audit. Method of Implementation: The district will improve the filing and retention of payroll timesheets and resolutions authorizing payroll expenses for federal programs. All payroll documentation will be properly maintained and made readily available for review at the time of audit.

Finding 2025-004 Information on the federal program: Title I, Part A, Assistance Listing Number 84.010 – Grant Period 7/1/24-6/30/25 Criteria or specific requirement: The District authorized expenditures under this grant program; however, supporting documentation was not provided to verify compliance with grant requirements. Condition: There were instances in which payroll timesheets and resolutions authorizing payroll expenses were not available for review at the time of audit. Questioned Costs: Unknown. Context: The District was unable to present required grant documents at the time of audit. Effect: The absence of supporting documentation may result in noncompliance with the allowable cost requirements under the grant agreement, as well as resulting in a risk that grant funds could be used for ineligible activities. Additionally, insufficient documentation may lead to inaccurate or improper reporting under the grant reporting requirements. Cause: Controls were insufficient to ensure all required eligibility determinations and supporting documents are properly maintained and available for audit review. Recommendation: The District should ensure that all payroll timesheets and resolutions authorizing payroll expenses are available for review at the time of audit. Management’s Response: The District will develop and implement a process to ensure records are properly maintained.

Condition/Finding: There were instances in which payroll timesheets and resolutions authorizing payroll expenseswere not available for review at the time of audit. Recommendation:The District should ensure that all payroll timesheets and resolutions authorizing payroll expenses are available for review at the time of audit. Method of Implementation: The district will improve the filing and retention of payroll timesheets and resolutions authorizing payroll expenses for federal programs. All payroll documentation will be properly maintained and made readily available for review at the time of audit.