Paterson Board of EducationLocal Government

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.

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.

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.

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.

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.

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.

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.

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.

Finding 2024-001 Information on the state program: CARES Emergency Relief Grant and American Rescue Plan, CFDA 84.425D/U Grant Period 3/13/20-9/30/23, and 3/13/20-9/30/24. Criteria or specific requirement: Governmental Accounting Standards Board Statement (GASBS) 34 requires school districts and other public entities to accurately track and account for fixed assets. The district did not accurately account for all fixed assets purchased during the fiscal year. Condition: There were instances where the district did not accurately account for various fixed assets purchased with grant funds during the year. Questioned Costs: Unknown Context: The district has not accurately updated the fixed asset report for fixed asset purchases made during the year. Effect: The district is not in compliance with the requirements of the CARES Emergency Relief Grant and American Rescue Plan program. Cause: The district did not account for various fixed assets purchased during the year and the district did not record the correct amount for various fixed assets included in the fixed asset report. Recommendation: The district’s fixed asset accounting and reporting system be updated to reflect additions, deletions and depreciation expense on an annual basis. Management’s response: The district will ensure that the fixed asset report is periodically updated and reviewed when fixed asset purchases are made.