ROCK CREEK COMMUNITY ACADEMY, INC.

2021 ? 001 Type of Finding: ? Material Weakness in Internal Control over Financial Reporting Condition: Various material journal entries including adjusting and reclassifying journal entries were required in order to correct various areas of the audit. Criteria or specific requirement: Management is responsible for establishing and maintaining internal controls, including monitoring, and for the fair presentation in the statements of financial position, changes in net assets, and cash flows, and disclosures in the statements, in conformity with accounting principles generally accepted in the United States of America. Effect: Financial statements could be materially misstated. Cause: The Academy?s controls were not able to detect the adjustments made as part of the audit. Repeat Finding: No Recommendation: The Academy should continue to review all GAAP requirements for transactions entered into to ensure conformity with GAAP and to establish and maintain internal controls including monitoring to ensure the fair presentation of the financial data. The Academy should review the draft financial statements utilizing a disclosure checklist to ensure they are properly reported in accordance with accounting principles generally accepted in the United States of America. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.

2021 ? 002 Federal agency: ALL Federal program title: ALL Assistance Listing Number: Multiple Pass-Through Agency: Multiple Pass-Through Number(s): Multiple Award Period: Multiple Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters ? Internal Control over Financial Reporting 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 (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 that the Academy?s Schedule did not properly identify items 1-3 as noted above. Additionally, the School did not complete the footnote disclosures related to the Schedule. 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 Schedule 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 $117,500. 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 Academy did not have the controls in place to ensure that the Schedule was prepared and reviewed in accordance with 2 CFR, Part 200 and U.S. GAAP. Effect: The Schedule of the Academy 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 Academy 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.