Pennsylvania Academy of The Fine Arts

2025-001 Procurement Program: Save America’s Treasures Assistance Listing Number: 15.929 Federal Award Identification Number: P24AP01634 Federal Agency: Department of Interior Federal Award Year: June 30, 2025 Condition: The Academy did not perform or document a suspension and debarment verification prior to entering into the general contractor agreement for the HVAC project. The contract also did not include a documented suspension and debarment certification. Criteria: Under 2 CFR 200.214, non-federal entities must not enter into contracts with parties that are suspended or debarred. Verification may be accomplished by checking SAM.gov, obtaining a certification from the contractor, or including a suspension and debarment clause in the contract. Cause: The Academy’s procurement procedures did not include a step requiring documentation of suspension and debarment verification for federally funded contracts. Effect: Failure to verify suspension and debarment status increases the risk that the Academy could enter into contracts with ineligible vendors, resulting in potential noncompliance with federal requirements. Questioned costs: Not Applicable Recommendation: We recommend that management update procurement policies and procedures to require documented suspension and debarment verification prior to awarding any contract funded, in whole or in part, with federal funds. Views of Responsible Officials and Planned Corrective Actions: Management agrees with this finding and will ensure staff with compliance responsibilities are appropriately trained and understand the requirements of the program.

2025-002 Special Tests & Provisions Program: Save America’s Treasures Assistance Listing Number: 15.929 Federal Award Identification Number: P24AP01634 Federal Agency: Department of Interior Federal Award Year: June 30, 2025 Condition: The Academy did not install the required signage acknowledging federal funding as of the date of our audit procedures. Criteria: The grant agreement requires recipients to publicly acknowledge federal funding support, including installation of appropriate signage recognizing funding from the Department of Interior. Cause: Management was not fully aware of the signage requirement included in the grant agreement and did not establish procedures to ensure compliance with award-specific provisions. Effect: Failure to comply with grant acknowledgment requirements represents noncompliance with the terms and conditions of the federal award. Questioned costs: Not Applicable Recommendation: We recommend that management review all award-specific compliance requirements at the time of award acceptance and establish procedures to ensure timely implementation of such requirements, including documentation of compliance. Views of Responsible Officials and Planned Corrective Actions: Management agrees with this finding and will install the required signage and implement procedures to monitor compliance with special award provisions.

Federal Award Findings and Questioned Costs Finding 2023-002: No SAS Reconciliations – Significant Deficiency Federal Program: Student Financial Aid Cluster – Federal Direct Loan Program Federal Agency: Department of Education CFDA Number: 84.268 Criteria: 34 CFR 668.162(b)(5) states that on a monthly basis the Academy must reconcile institutional records with direct loan fund records received from the Secretary and direct loan disbursement records submitted to and accepted by the Secretary. Condition: Documentation that the required monthly School Account Statement (SAS) reconciliations were completed was not available for fiscal year 2023. Questioned Costs: None Cause: The Academy did not perform the required SAS reconciliations monthly as required. Effect: Not performing the SAS reconciliation could result in variances between the Academy’s records and the U.S. Department of Education records, which could impact the student. Identification of Repeat Findings: This is not a repeat finding. Recommendation: The Academy should review and revise its controls over compliance to ensure that SAS reconciliations are performed monthly. Views of Responsible Officials: Management agrees with this finding.

Finding 2023-003: Special Reporting (Repeat Finding) Federal Program: Student Financial Aid Cluster – Significant Deficiency Federal Agency: Department of Education CFDA Number: 84.007, 84.063, 84.268, 84.033 Criteria: The Academy is required to submit the Fiscal Operations Report and Application to Participate (FISAP) annually to receive funds for the campus-based programs. Condition: The Academy incorrectly reported the Federal Work Study awards and information on tuition and fees in the FISAP submitted to the Department of Education. Questioned Costs: None Cause: The FISAP was not reconciled and reviewed prior to filing. Effect: The Academy did not operate in accordance with the special reporting compliance requirement. Recommendation: The Academy should develop procedures to have the financial aid and financial accounting information systems reconciled on a monthly basis. These reconciliation will ensure accurate reporting during periods of turnover of key personnel. Views of Responsible Officials: Management agrees with this finding.

SECTION III Federal Award Findings and Questioned Costs Finding 2022-001: Special Reporting Federal Program: Student Financial Aid Cluster Federal Agency: Department of Education CFDA Number: 84.007, 84.063, 84.268, 84.033 Criteria: The Academy is required to submit the Fiscal Operations Report and Application to Participate(FISAP) annually to receive funds for the campus-based programs. Condition: The Academy incorrectly reported the Federal Supplemental Educational Opportunity Grant, Federal Work Study awards and information on enrollment in the FISAP submitted to the Department of Education. Additionally, several required sections of the FISAP were not completed. Questioned Costs: None Cause: During the current fiscal year, the financial aid office had turnover of key employees responsible for preparing the reports used to generate FISAP reporting. As noted below, procedures are being established to comply with the reporting requirements going forward. Effect: The Academy did not operate in accordance with the special reporting compliance requirement. Perspective Information: We consider the audit finding to be an isolated instance. The Academy has a strong history of compliance with the reporting requirements of the Student Financial Aid Cluster of programs. Identification of Repeat Findings: This is not a repeat finding. Recommendation: The Academy should develop procedures to have the financial aid and financial accounting information systems reconciled on a monthly basis. These reconciliation will ensure accurate reporting during periods of turnover of key personnel. Views of Responsible Officials and Planned Corrective Actions: We agree with the finding. As of January 2023, we have incorporated and communicated the updates to our policy and procedures to ensure both information systems are reconciled monthly, as well as maintaining appropriate documentation as assigned to both the Finance Department and the Financial Aid Manager.